Indenture (First Supplemental) - Sirius Satellite Radio Inc. and the Bank of New York
EXECUTION COPY
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SIRIUS SATELLITE RADIO INC.
AND
THE BANK OF NEW YORK,
as Trustee
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FIRST SUPPLEMENTAL INDENTURE
Dated as of May 23, 2003
TO
Indenture
Dated as of May 23, 2003
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3 1/2% Convertible Notes due 2008
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FIRST SUPPLEMENTAL INDENTURE, dated as of the 23rd day of
May 2003 (this "First Supplemental Indenture"), between Sirius
Satellite Radio Inc., a corporation duly organized and existing
under the laws of the State of Delaware (the "Company"), and
The Bank of New York, a New York banking corporation, as
trustee (the "Trustee"), under the Indenture, dated as of May
23, 2003, between the Company and the Trustee (the
"Indenture").
The Company executed and delivered the Indenture to the Trustee to
provide for the future issuance of its Securities, to be issued from time to
time in series as might be determined by the Company under the Indenture, in
an unlimited aggregate principal amount which may be authenticated and
delivered thereunder as in the Indenture provided.
Pursuant to the terms of the Indenture, the Company desires to
provide for the establishment of a new series of its Securities to be known as
its 3 1/2% Convertible Notes due 2008 (the "Series 3 1/2% Notes"), the form of
such Series 3 1/2% Notes and the terms, provisions and conditions thereof to
be as provided in the Indenture and this First Supplemental Indenture.
The Company has requested the Trustee to join with it in the
execution and delivery of this First Supplemental Indenture. All requirements
necessary to make this First Supplemental Indenture a valid instrument,
enforceable in accordance with its terms, and to make the Series 3 1/2% Notes,
when executed by the Company and authenticated and delivered by the Trustee,
the valid obligations of the Company, have been performed and fulfilled, and
the execution and delivery of this First Supplemental Indenture and the Series
3 1/2% Notes, have been in all respects duly authorized.
NOW, THEREFORE, in consideration of the purchase and acceptance of
the Series 3 1/2% Notes by the Holders thereof, and for the purpose of setting
forth, as provided in the Indenture, the form of the Series 3 1/2% Notes and
the terms, provisions and conditions thereof, the Company covenants and agrees
with the Trustee as follows:
ARTICLE I
General Terms and Conditions of
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the Series 3 1/2% Notes
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SECTION 1.01. Title and Terms. There shall be and is hereby
authorized a series of Securities designated the "3 1/2% Convertible Notes due
2008", limited in aggregate principal amount to $201,250,000. The Series 3
1/2% Notes shall mature and the principal thereof shall be due and payable,
together with all accrued and unpaid interest thereon, on June 1, 2008. The
Series 3 1/2% Notes shall be convertible into shares of common stock, $0.001
par value, of the Company, as such shares shall be constituted at the time of
conversion ("Common Stock"), in accordance with Article III hereof. The Series
3 1/2% Notes and the Trustee's certificate of authentication shall be
substantially in
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the form of Exhibit A, which is hereby incorporated in and expressly made part
of this Indenture. The Series 3 1/2% Notes may have notations, legends or
endorsements required by law, stock exchange rule, agreements to which the
Company is subject, if any, or usage (provided that any such notation, legend
or endorsement is in a form acceptable to the Company). Each Series 3 1/2%
Note shall be dated the date of its authentication. The terms of the Series 3
1/2% Notes set forth in Exhibit A are part of the terms of this Supplemental
Indenture.
ARTICLE II
Repurchase at Option of Holders upon a Fundamental Change
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SECTION 2.01. Right to Require Repurchase. In the event that a
Fundamental Change (as defined herein) shall occur, each Holder shall have the
right, at the Holder's option, to require the Company to repurchase, and upon
the exercise of such right the Company shall repurchase, all of such Holder's
Series 3 1/2% Notes, or any portion of the principal amount thereof that is an
integral multiple of $1,000 (provided that no single Series 3 1/2% Note may be
repurchased in part unless the portion of the principal amount of such Series
3 1/2% Note to be outstanding after such repurchase is equal to $1,000 or an
integral multiple of $1,000), on the date (the "Repurchase Date") that is 30
days after the date of the occurrence of a Fundamental Change or, if such 30th
day is not a Business Day, the first Business Day thereafter, for cash at a
purchase price equal to 100% of the principal amount to be repurchased plus
interest accrued and unpaid thereon to, but excluding, the Repurchase Date
(subject to the right of Holders of record on the Regular Record Date to
receive interest on the relevant Interest Payment Date) (the "Repurchase
Price"). If the Repurchase Date is between a Regular Record Date and the
related Interest Payment Date, then the interest payable on such Interest
Payment Date shall be paid to the Holder of record of the Series 3 1/2% Note
on such Regular Record Date.
SECTION 2.02. Notices; Method of Exercising Repurchase Right, Etc.
(a) On or before the 10th day after the occurrence of a Fundamental Change,
the Company shall mail notice to all Holders (and to beneficial owners as
required by applicable law) of Series 3 1/2% Notes (the "Company Notice") of
the occurrence of the Fundamental Change and of the repurchase right set forth
herein arising as a result thereof. If the Company gives such notice, the
Company shall also deliver a copy of such notice to the Trustee.
Each Company Notice shall include the form of a Fundamental Change
Purchase Notice (as defined below) to be completed by the Holder and shall
state:
(1) the date of such Fundamental Change and, briefly, the
events causing such Fundamental Change;
(2) the date by which the Fundamental Change Purchase
Notice must be delivered;
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(3) the Repurchase Date;
(4) the Repurchase Price;
(5) a description of the procedure which a Holder must
follow to exercise its repurchase right under this Section 2.02;
(6) the procedures for withdrawing a Fundamental Change
Purchase Notice by a Holder, including a form of notice of
withdrawal;
(7) the place or places where such Series 3 1/2% Notes are
to be surrendered for payment of the Repurchase Price;
(8) briefly, the conversion rights of Holders of Series 3
1/2% Notes;
(9) the Conversion Rate and any adjustments thereto, the
date on which the right to convert the Series 3 1/2% Notes will
terminate and the places where such Series 3 1/2% Notes may be
surrendered for conversion; and
(10) that Holders who want to convert Series 3 1/2% Notes
must satisfy the requirements set forth in the Series 3 1/2% Notes
in order to convert the Series 3 1/2% Notes.
No failure of the Company to give the foregoing notice or defect
therein shall limit any Holder's right to exercise its repurchase right or
affect the validity of the proceedings for the repurchase of Series 3 1/2%
Notes.
(b) To exercise its repurchase right, a Holder shall deliver to the
Paying Agent or an office or agency maintained by the Company for such purpose
in the Borough of Manhattan, The City of New York, prior to the close of
business on or before the Repurchase Date written notice of the Holder's
exercise of such right (the "Fundamental Change Purchase Notice"), which
notice shall set forth (i) the name of the Holder, (ii) the principal amount
of the Series 3 1/2% Notes to be repurchased (and, if any Series 3 1/2% Note
is to be repurchased in part, the portion of the principal amount thereof to
be repurchased and the name of the Person in which the portion thereof to
remain outstanding after such repurchase is to be registered), (iii) a
statement that an election to exercise the repurchase right is being made
thereby pursuant to the applicable provisions of the Series 3 1/2% Notes, and
(iv) the certificate numbers of the Series 3 1/2% Notes with respect to which
the repurchase right is being exercised.
(c) In the event a repurchase right shall be exercised in accordance
with the terms hereof, the Company shall pay or cause to be paid to the Paying
Agent the Repurchase Price in cash, for payment to the Holder on the
Repurchase Date, payable with respect to the Series 3 1/2% Notes (or portion
thereof) as to which the repurchase right has been exercised; provided,
however, that such Series 3 1/2% Note for which a repurchase right has been
exercised has been delivered to the Paying Agent at any time after the notice
of exercise of a repurchase right shall have been given. Payment of the
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Repurchase Price for such Series 3 1/2% Note shall be made promptly following
the later of the Business Day following the Repurchase Date and time of
delivery of the Series 3 1/2% Note. If the Paying Agent holds money sufficient
to pay the Repurchase Price on the Business Day following the Repurchase Date,
then, immediately after the Repurchase Date, such Series 3 1/2% Note shall
cease to be outstanding and interest will cease to accrue and will be deemed
paid regardless of whether such Series 3 1/2% Note has been delivered to the
Paying Agent, and all other rights of the Holder shall terminate (other than
the right of such Holder to receive the Repurchase Price upon delivery of such
Series 3 1/2% Note).
(d) On or prior to the Repurchase Date, the Company shall deposit
with the Trustee or with a Paying Agent (or, if the Company is acting as its
own Paying Agent, segregate and hold in trust as provided in Section 10.3 of
the Indenture) an amount of money sufficient to pay the Repurchase Price of
the Series 3 1/2% Notes which are to be repaid on the Repurchase Date.
(e) If any Series 3 1/2% Note (or portion thereof) surrendered for
repurchase shall not be so paid on the Business Day following the Repurchase
Date, the principal amount of such Series 3 1/2% Note (or portion thereof, as
the case may be) shall, until paid, bear interest from the Repurchase Date at
the rate of 3 1/2% per annum, and each Series 3 1/2% Note shall remain
convertible into Common Stock in accordance with Article III herein until the
principal of such Series 3 1/2% Note (or portion thereof, as the case may be)
shall have been paid or duly provided for.
(f) Any Series 3 1/2% Note which is to be repurchased only in part
shall be surrendered to the Trustee (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or its attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Series 3 1/2% Note without service charge, a new Series 3 1/2% Note or Series
3 1/2% Notes, containing identical terms and conditions, each in an authorized
denomination in aggregate principal amount equal to and in exchange for the
portion of the principal of the Series 3 1/2% Note so surrendered that was not
repurchased.
(g) Any Holder that has delivered to the Trustee a Fundamental
Change Purchase Notice shall have the right to withdraw such notice at any
time prior to the close of business on the Business Day immediately preceding
the Repurchase Date by delivery of a written notice of withdrawal to the
Paying Agent prior to the close of business on such date. The notice of
withdrawal shall state the principal amount and the certificate numbers of the
Series 3 1/2% Notes as to which the withdrawal notice relates and the
principal amount, if any, which remains subject to the notice of exercise of a
repurchase right. A Series 3 1/2% Note in respect of which a Holder has
exercised its option to require repurchase upon a Fundamental Change may
thereafter be converted into Common Stock only if such Holder withdraws its
notice in accordance with the preceding sentence.
SECTION 2.03. Certain Definitions. For purposes of this Article II:
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(a) the term "beneficial owner" shall be determined in accordance
with Rules l3d-3 and 13d-5 promulgated by the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), except that
a Person shall be deemed to have "beneficial ownership" of all securities that
such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time; and
(b) the term "Person" shall include any syndicate or group which
would be deemed to be a "Person" under Section 13(d)(3) of the Exchange Act.
SECTION 2.04. Fundamental Change. A "Fundamental Change" shall mean
any transaction or event (whether by means of an exchange offer, liquidation,
tender offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise) in connection with which all or substantially
all of the Common Stock outstanding is exchanged for, converted into, acquired
for or constitutes solely the right to receive, consideration which is not all
or substantially all common stock that:
(a) is listed on, or immediately after the transaction or event will
be listed on, a United States national securities exchange; or
(b) is approved, or immediately after the transaction or event will
be approved, for quotation on the Nasdaq National Market or any similar United
States system of automated dissemination of quotations of securities prices.
ARTICLE III
Conversion
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SECTION 3.01. Conversion Privilege. A Holder of a Series 3 1/2% Note
may convert such Series 3 1/2% Note into Common Stock at any time during the
period stated in paragraph 7 of the Series 3 1/2% Notes. The number of shares
of Common Stock issuable upon conversion of a Series 3 1/2% Note per $1,000 of
Principal Amount thereof (the "Conversion Rate") shall be that set forth in
paragraph 7 in the Series 3 1/2% Notes, subject to adjustment as herein set
forth.
A Holder may convert a portion of the Principal Amount of a Series 3
1/2% Note if the portion is $1,000 or an integral multiple of $1,000.
Provisions of this First Supplemental Indenture that apply to conversion of
all of a Series 3 1/2% Note also apply to conversion of a portion of a Series
3 1/2% Note.
SECTION 3.02. Conversion Procedure. To convert a Series 3 1/2% Note
a Holder must satisfy the requirements contained in paragraph 7 of the Series
3 1/2% Notes. The date on which a Holder of Series 3 1/2% Notes satisfies all
those requirements is the conversion date (the "Conversion Date"). As soon as
practicable after the Conversion Date, the Company shall deliver to the
Holder, through the Conversion Agent, a certificate for the number of full
shares of Common Stock issuable upon the conversion and cash in lieu of any
fractional share determined pursuant to Section 3.03. The Person in whose name
the certificate is registered shall be treated as a stockholder of record on
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and after the Conversion Date; provided, however, that no surrender of a
Series 3 1/2% Note on any date when the stock transfer books of the Company
shall be closed shall be effective to constitute the Person or Persons
entitled to receive the shares of Common Stock upon such conversion as the
record holder or holders of such shares of Common Stock on such date, but such
surrender shall be effective to constitute the Person or Persons entitled to
receive such shares of Common Stock as the record holder or holders thereof
for all purposes at the close of business on the next succeeding day on which
such stock transfer books are open; such conversion shall be at the Conversion
Rate in effect on the date that such Series 3 1/2% Note shall have been
surrendered for conversion, as if the stock transfer books of the Company had
not been closed. Upon conversion of a Series 3 1/2% Note, such Person shall no
longer be a Holder of such Series 3 1/2% Note unless the Company defaults in
the delivery of shares of Common Stock in respect of such conversion and such
default continues for a period of 10 days.
No payment or adjustment will be made for dividends or other
distribution with respect to any Common Stock except as provided in this
Article III.
If the Holder converts more than one Series 3 1/2% Note at the same
time, the number of shares of Common Stock issuable upon the conversion shall
be based on the total Principal Amount of the Series 3 1/2% Notes converted.
Upon surrender of a Series 3 1/2% Note that is converted in part,
the Company shall execute, and the Trustee shall authenticate and make
available for delivery to the Holder, a new Series 3 1/2% Note in an
authorized denomination equal in Principal Amount to the unconverted portion
of the Series 3 1/2% Note surrendered.
If the last day on which a Series 3 1/2% Note may be converted is a
Legal Holiday in a place where the Conversion Agent is located, the Series 3
1/2% Note may be surrendered to the Conversion Agent on the next succeeding
day that is not a Legal Holiday.
SECTION 3.03. Fractional Shares. The Company will not issue a
fractional share of Common Stock upon conversion of a Series 3 1/2% Note.
Instead, the Company will deliver cash for the current market value of the
fractional share. The current market value of a fractional share shall be
determined to the nearest 1/10,000th of a share by multiplying the last
reported sale price (determined as set forth in the definition of Current
Market Price), on the last Trading Day prior to the Conversion Date, of a full
share by the fractional amount and rounding the product to the nearest whole
cent.
SECTION 3.04. Taxes On Conversion. The Company shall pay any
documentary, stamp or similar issue or transfer tax due on the issue of shares
of Common Stock upon the conversion of a Series 3 1/2% Note in accordance with
Section 3.01. However, the Holder shall pay any such tax which is due because
the Holder requests the shares to be issued in a name other than the Holder's
name. The Conversion Agent may refuse to deliver the certificates representing
the Common Stock being issued in a name other than the Holder's name until the
Conversion Agent receives
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a sum sufficient to pay any tax that will be due because the shares are to be
issued in a name other than the Holder's name. Nothing herein shall preclude
any tax withholding required by law or regulations.
SECTION 3.05. Company To Provide Stock. The Company shall, prior to
issuance of any Series 3 1/2% Notes hereunder, and from time to time as may be
necessary, reserve out of its authorized but unissued Common Stock a
sufficient number of shares of Common Stock to permit the conversion of the
Series 3 1/2% Notes.
All shares of Common Stock delivered upon conversion of the Series 3
1/2% Notes shall be newly issued shares or treasury shares, shall be duly and
validly issued and fully paid and nonassessable and shall be free from
preemptive rights and free of any lien or adverse claim, other than any lien
or claim created by the Holder.
The Company shall endeavor promptly to comply with all Federal and
state securities laws regulating the offer and delivery of shares of Common
Stock upon conversion of Series 3 1/2% Notes, if any, and will use its best
efforts to list or cause to have quoted such shares of Common Stock on each
national securities exchange or in the over-the-counter or other domestic
market on which the Common Stock is then listed or quoted.
SECTION 3.06. Adjustment For Change In Capital Stock. In case the
Company shall (i) pay a dividend, or make a distribution, in shares of its
Common Stock, on its Common Stock, (ii) subdivide its outstanding Common Stock
into a greater number of shares, or (iii) combine its outstanding Common Stock
into a smaller number of shares, the Conversion Rate in effect immediately
prior thereto shall be adjusted so that the Holder of any Series 3 1/2% Note
thereafter surrendered for conversion shall be entitled to receive the number
of shares of Common Stock which it would have owned or have been entitled to
receive after the happening of any of the events described above had such
Series 3 1/2% Note been converted immediately prior to the happening of such
event. If any dividend or distribution of the type described in clause (i)
above is not so paid or made, the Conversion Rate shall again be adjusted to
the Conversion Rate which would then be in effect if such dividend or
distribution had not been declared. An adjustment made pursuant to this
Section 3.06 shall become effective immediately after the record date, in the
case of a dividend, and shall become effective immediately after the effective
date, in the case of subdivision or combination.
SECTION 3.07. Adjustment For Rights Issue. In case the Company shall
issue rights or warrants to all holders of its Common Stock entitling them
(for a period expiring within 45 days after the record date mentioned below)
to subscribe for or purchase Common Stock at a price per share less than the
Current Market Price (as defined herein) per share of Common Stock at the
record date for the determination of stockholders entitled to receive such
rights or warrants, the Conversion Rate in effect immediately prior thereto
shall be increased by multiplying the Conversion Rate in effect immediately
prior to the date of issuance of such rights or warrants by a fraction of
which the numerator shall be the number of shares of Common Stock outstanding
on the date of issuance of such rights or warrants plus the number of
additional shares of Common
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Stock offered for subscription or purchase, and of which the denominator shall
be the number of shares of Common Stock outstanding on the date of issuance of
such rights or warrants plus the number of shares which the aggregate offering
price of the total number of shares so offered would purchase at such Current
Market Price. Such adjustment shall be made successively whenever any such
rights or warrants are issued, and shall become effective immediately after
the opening of business on the day following the record date for the
determination of the stockholders entitled to receive such rights or warrants.
To the extent that shares of Common Stock are not delivered after the
expiration of such rights or warrants, the Conversion Rate shall be readjusted
to the Conversion Rate which would then be in effect had the adjustments made
upon the issuance of such rights or warrants been made on the basis of
delivery of only the number of shares of Common Stock actually delivered. If
such rights or warrants are not so issued, the Conversion Rate shall again be
adjusted to be the Conversion Rate which would then be in effect if such
record date for the determination of stockholders entitled to receive such
rights or warrants had not been fixed. In determining whether any rights or
warrants entitle the holders to subscribe for or purchase shares of Common
Stock at less than such Current Market Price, and in determining the aggregate
offering price of such shares of Common Stock, there shall be taken into
account any consideration received by the Company for such rights or warrants,
the value of such consideration, if other than cash, to be determined by the
Board of Directors of the Company.
SECTION 3.08. Adjustment For Other Distributions. (a) In case the
Company shall distribute to all holders of its Common Stock (excluding any
distribution in connection with the liquidation, dissolution or winding up of
the Company, whether voluntary or involuntary) any shares of any class of
capital stock of the Company (other than Common Stock) or evidences of its
indebtedness or assets (other than cash) or rights or warrants to subscribe
for or purchase any of its securities (excluding those referred to in Section
3.07) (any of the foregoing hereinafter in this Section 3.08(a) called the
"Distributed Securities") then, in each case, the Conversion Rate shall be
increased by multiplying the Conversion Rate in effect immediately prior to
the date of such distribution by a fraction of which the numerator shall be
the Current Market Price per share of the Common Stock on the record date
mentioned below, and the denominator shall be the Current Market Price per
share of the Common Stock on such record date less the fair market value on
such record date (as determined by the Board of Directors of the Company,
whose determination shall be conclusive, and described in a certificate filed
with the Trustee; provided, however, that in the case of Distributed
Securities that are capital stock of, or similar equity interests in, a
subsidiary or other business unit of the Company that are listed or quoted on
a national or regional exchange or market, the fair market value of such
Distributed Securities shall be the average closing sales prices of such
Distributed Securities for the ten Trading Days commencing on and including
the fifth trading day after the date on which "ex-dividend trading" commences
for such distribution on the Nasdaq National Market or such other national or
regional exchange or market on which the Distributed Securities are then
listed or quoted) of the Distributed Securities so distributed applicable to
one share of Common Stock. Such adjustment shall become effective immediately
after the record date for the determination of stockholders entitled to
receive such distribution.
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(b) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock cash (excluding (x) any quarterly cash
dividend on the Common Stock to the extent the aggregate cash dividend per
share of Common Stock in any fiscal quarter does not exceed 1.25% of the
average of the last reported sales prices of the Common Stock (determined as
provided in the definition of Current Market Price) during the ten Trading
Days next preceding the date of declaration of such dividend and (y) any
dividend or distribution in connection with the liquidation, dissolution or
winding up of the Company, whether voluntary or involuntary), then, in such
case, unless the Company elects to reserve such cash for distribution to the
Holders of the Series 3 1/2% Notes upon the conversion of the Series 3 1/2%
Notes so that any such Holder of Series 3 1/2% Notes will receive upon such
conversion, in addition to the shares of Common Stock to which such Holder is
entitled, the amount of cash that such Holder would have received if such
Holder had, immediately prior to the record date for such distribution of
cash, converted its Series 3 1/2% Notes for Common Stock, the Conversion Rate
shall be increased by multiplying the Conversion Rate in effect immediately
prior to the record date by a fraction of which the numerator shall be such
Current Market Price of the Common Stock and the denominator shall be the
Current Market Price of the Common Stock on the record date less the amount of
cash so distributed (and not excluded as provided above) applicable to one
share of Common Stock, such increase to be effective immediately prior to the
opening of business on the day following the record date.
(c) In case a tender or exchange offer made by the Company or any
Subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender or exchange offer shall involve the payment by the
Company or such Subsidiary of consideration per share of Common Stock having a
fair market value (as determined by the Board of Directors of the Company or,
to the extent permitted by applicable law, a duly authorized committee
thereof, whose determination shall be conclusive, and described in a
resolution of such Board of Directors or such duly authorized committee
thereof, as the case may be, at the last time (the "Expiration Time") tenders
or exchanges may be made pursuant to such tender or exchange offer (as it
shall have been amended)) that exceeds the Current Market Price of the Common
Stock on the Trading Day next succeeding the Expiration Time, the Conversion
Rate shall be increased by multiplying the Conversion Rate in effect
immediately prior to the Expiration Time by a fraction of which the numerator
shall be the sum of (x) the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the acceptance (up to
any maximum specified in the terms of the tender or exchange offer) of all
shares validly tendered or exchanged and not withdrawn as of the Expiration
Time (the shares deemed so accepted, up to any such maximum, being referred to
as the "Purchased Shares") and (y) the product of the number of shares of
Common Stock outstanding (excluding any Purchased Shares) at the Expiration
Time and the Current Market Price of the Common Stock on the Trading Day next
succeeding the Expiration Time, and the denominator shall be the number of
shares of Common Stock outstanding (including any Purchased Shares) at the
Expiration Time multiplied by the Current Market Price of the Common Stock on
the Trading Day next succeeding the Expiration Time, such increase to become
effective immediately prior to the opening of business on the day following
the Expiration Time. In the event that the Company or such Subsidiary is
obligated to purchase shares pursuant to any such tender or exchange
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offer, but the Company or such Subsidiary is permanently prevented by
applicable law from effecting any such purchases or all such purchases are
rescinded, the Conversion Rate shall again be adjusted to be the Conversion
Rate, that would then be effect if such tender or exchange offer had not been
made.
(d) In case a tender or exchange offer made by a Person other than
the Company or any Subsidiary of the Company for an amount that increases the
offeror's ownership of Common Stock to more than 25% of the Common Stock
outstanding shall expire and such tender or exchange offer shall involve the
payment by such Person of consideration per share of Common Stock having a
fair market value (as determined by the Board of Directors of the Company or,
to the extent permitted by applicable law, a duly authorized committee
thereof, whose determination shall be conclusive, and described in a
resolution of such Board of Directors or such duly authorized committee
thereof, as the case may be) at the Expiration Time that exceeds the Current
Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time, and in which, as of the Expiration Time the Board of
Directors of the Company is not recommending rejection of the offer, the
Conversion Rate shall be increased by multiplying the Conversion Rate in
effect immediately prior to the Expiration Time by a fraction of which the
numerator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender or exchange
offer) of all Purchased Shares and (y) the product of the number of shares of
Common Stock outstanding (excluding any Purchased Shares) at the Expiration
Time and the Current Market Price of the Common Stock on the Trading Day next
succeeding the Expiration Time, and the denominator shall be the number of
shares of Common Stock outstanding (including any Purchased Shares) at the
Expiration Time multiplied by the Current Market Price of the Common Stock on
the Trading Day next succeeding the Expiration Time, such increase to become
effective immediately prior to the opening of business on the day following
the Expiration Time. In the event that such Person is obligated to purchase
shares pursuant to any such tender or exchange offer, but such Person is
permanently prevented by applicable law from effecting any such purchases or
all such purchases are rescinded, the Conversion Rate shall again be adjusted
to be the Conversion Rate that would then be in effect if such tender or
exchange offer had not been made.
Notwithstanding the foregoing, the adjustment described in this
Section 3.08(d) shall not be made if, as of the Expiration Time, the offering
documents with respect to such offer disclose a plan or intention to cause the
Company to engage in any transaction described in Article 8 of the Indenture.
SECTION 3.09. When Adjustment May Be Deferred. No adjustment in the
Conversion Rate need be made unless the adjustment would require an increase
or decrease of at least 1% in the Conversion Rate. Any adjustments that are
not made shall be carried forward and taken into account in any subsequent
adjustment.
All calculations under this Article III shall be made to the nearest
cent or to the nearest 1/l0,000th of a share, as the case may be.
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SECTION 3.10. When No Adjustment Required. No adjustment need be
made for rights to purchase Common Stock pursuant to a Company plan for
reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no par
value of the Common Stock.
To the extent the Series 3 1/2% Notes become convertible or
exchangeable into cash, assets, property or securities (other than capital
stock of the Company), no adjustment need be made thereafter as to the cash,
assets, property or such securities. Interest will not accrue on the cash.
SECTION 3.11. Notice Of Adjustment. Whenever the Conversion Rate is
adjusted, the Company shall promptly mail to the Holders of the Series 3 1/2%
Notes a notice of such adjustment. The Company shall file with the Trustee and
the Conversion Agent such notice. The notice shall, absent manifest error, be
conclusive evidence that the adjustment is correct. Neither the Trustee nor
any Conversion Agent shall be under any duty or responsibility with respect to
any such notice except to exhibit the same to any Holder desiring inspection
thereof.
SECTION 3.12. Voluntary Increase. The Company may make such
increases in the Conversion Rate, in addition to those required by Sections
3.06, 3.07 and 3.08, as the Board of Directors of the Company considers to be
advisable to avoid or diminish any income tax to holders of Common Stock or
rights to purchase Common Stock resulting from any dividend or distribution of
stock (or rights to acquire stock) or from any event treated as such for
income tax purposes. To the extent permitted by applicable law, the Company
from time to time may increase the Conversion Rate by any amount for any
period of time if the period is at least 20 days, the increase is irrevocable
during such period and the Board of Directors of the Company shall have made a
determination that such increase would be in the best interests of the
Company, which determination shall be conclusive. Whenever the Conversion Rate
is so increased, the Company shall mail to the Holders of the Series 3 1/2%
Notes and file with the Trustee and the Conversion Agent a notice of the
increase. The Company shall mail the notice at least 15 days before the date
the increased Conversion Rate takes effect. The notice shall state the
increased Conversion Rate and the period it will be in effect.
SECTION 3.13. Notice Of Certain Transactions. If:
(1) the Company makes any distribution or dividend that
would require an adjustment in the Conversion Rate pursuant to
Section 3.06, 3.07 or 3.08;
(2) the Company takes any action that would require a
supplemental indenture pursuant to Section 3.14; or
(3) there is a liquidation or dissolution of the Company;
11
<PAGE>
then the Company shall mail or shall deliver to the Trustee and direct the
Trustee to mail to Holders of the Series 3 1/2% Notes and file with the
Trustee and the Conversion Agent a notice stating the proposed record date for
a dividend or distribution or the proposed effective date of a subdivision,
combination, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up. The Company shall file and mail the
notice at least 15 days before such date. Failure to file or mail the notice
or any defect in it shall not affect the validity of the transaction.
SECTION 3.14. Effect Of Reclassification, Consolidation, Merger Or
Sale. If any of the following events occur, namely (i) any reclassification of
outstanding shares of Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result
of a subdivision or combination), (ii) any consolidation, merger or
combination of the Company with another Person as a result of which holders of
Common Stock shall be entitled to receive stock, securities or other property
or assets (including cash) with respect to or in exchange for such Common
Stock, or (iii) any sale or conveyance of the properties and assets of the
Company as, or substantially as, an entirety to any other Person as a result
of which holders of Common Stock shall be entitled to receive stock,
securities or other property or assets (including cash) with respect to or in
exchange for such Common Stock, then the Company or the successor or
purchasing Person, as the case may be, shall execute with the Trustee a
supplemental indenture providing that each Series 3 1/2% Note shall be
convertible into the kind and amount of shares of stock and other securities
or property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, combination, sale or conveyance by a Holder of
a number of shares of Common Stock issuable upon conversion of such Series 3
1/2% Notes immediately prior to such reclassification, change, consolidation,
merger, combination, sale or conveyance. Such supplemental indenture shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article.
The Company shall cause the Trustee to mail notice of the execution
of such supplemental indenture to each Holder of Series 3 1/2% Notes at its
address appearing on the Series 3 1/2% Note register provided for in Section
7.4 of the Indenture.
The above provisions of this Section shall similarly apply to
successive reclassifications, consolidations, mergers, combinations and sales.
If this Section applies, none of Sections 3.06, 3.07 or 3.08 shall
apply.
SECTION 3.15. Company Determination Final. Any determination that
the Company, or the Board of Directors of the Company or a duly authorized
committee thereof must make pursuant to Section 3.03, 3.06, 3.07, 3.08, 3.09,
3.10, 3.14 or 3.17 is conclusive.
SECTION 3.16. Trustee's Adjustment Disclaimer. The Trustee has no
duty to determine when an adjustment under this Article III should be made,
how it should be made or what it should be. The Trustee has no duty to
determine whether a supplemental indenture under Section 3.14 need be entered
into or whether any
12
<PAGE>
provisions of any supplemental indenture are correct. The Trustee shall not be
accountable for, and makes no representation as to, the validity or value of
any securities or assets issued upon conversion of Series 3 1/2% Notes. The
Trustee shall not be responsible for the Company's failure to comply with this
Article III. Each Conversion Agent shall have the same protection under this
Section 3.16 as the Trustee.
SECTION 3.17. Simultaneous Adjustments. In the event that this
Article III requires adjustments to the Conversion Rate under more than one of
Sections 3.06, 3.07, 3.08(a) or 3.08(b), and the record dates for the
distributions giving rise to such adjustments shall occur on the same date,
then such adjustments shall be made by applying, first, the provisions of
Section 3.08(a); second, the provisions of Section 3.08(b); third, the
provisions of Section 3.06; and fourth, the provisions of Section 3.07.
SECTION 3.18. Successive Adjustments. After an adjustment to the
Conversion Rate under this Article III, any subsequent event requiring an
adjustment under this Article III shall cause an adjustment to the Conversion
Rate as so adjusted.
SECTION 3.19. General Considerations. Whenever successive
adjustments to the Conversion Rate are called for pursuant to this Article
III, such adjustments shall be made to the Current Market Price as may be
necessary or appropriate to effectuate the intent of this Article and to avoid
unjust or inequitable results as determined in good faith by the Board of
Directors of the Company.
Each share of Common Stock issued upon conversion of Series 3 1/2%
Notes pursuant to this Article III shall be entitled to receive the
appropriate number of common stock or preferred stock purchase rights, as the
case may be (the "Rights"), if any, that shares of Common Stock are entitled
to receive and the certificates representing the Common Stock issued upon such
conversion shall bear such legends, if any, in each case as may be provided by
the terms of any stockholder rights agreement adopted by the Company, as the
same may be amended from time to time (in each case, a "Rights Agreement").
Provided that such Rights Agreement requires that each share of Common Stock
issued upon conversion of Series 3 1/2% Notes at any time prior to the
distribution of separate certificates representing the Rights be entitled to
receive such Rights, then, notwithstanding anything else to the contrary in
this Article III there shall not be any adjustment to the conversion privilege
or Conversion Rate as a result of the issuance of Rights, but an adjustment to
the Conversion Rate shall be made pursuant to Section 3.08(b) (to the extent
required thereby) upon the separation of the Rights from the Common Stock.
SECTION 3.20. Definitions
"Current Market Price" per share of the Common Stock on any date of
determination means the average of the last reported sale prices of the Common
Stock for the ten consecutive Trading Days ending on and including such date
of determination. The last reported sale price (the "Closing Sale Price") for
any Trading Day shall be (i) if the Common Stock is then listed or admitted
for trading on any national securities
13
<PAGE>
exchange, the last sale price, or the closing bid price if no sale occurred,
of the Common Stock on such Trading Day on the principal securities exchange
on which the Common Stock is listed, (ii) if the Common Stock is not listed or
admitted for trading as described in clause (i), the last reported sale price
of the Common Stock on such Trading Day on the Nasdaq National Market, or any
similar system of automated dissemination of quotations of securities prices
then in common use, if so quoted, or (iii) if not listed or quoted as
described in clause (i) or (ii), the mean between the high bid and low asked
quotations on such Trading Day for the Common Stock as reported by the
National Quotation Bureau Incorporated if at least two securities dealers have
inserted both bid and asked quotations for the Common Stock on at least five
of the ten preceding Trading Days. If none of the conditions set forth above
is met, the last reported sale price of the Common Stock on any Trading Day or
the average of such last reported sale prices for any period shall be the fair
market value of the Common Stock as determined by a member firm of the New
York Stock Exchange selected by the Company. Notwithstanding the foregoing,
the Current Market Price per share of Common Stock for the purpose of any
adjustment to the Conversion Ratio pursuant to (x) Section 3.08(a) of this
First Supplemental Indenture in respect of Distributed Securities that are
capital stock of, or similar equity interests in, a subsidiary or other
business unit of the Company that are listed or quoted on a national or
regional exchange or market, means the average closing sales prices of the
Common Stock for the ten Trading Days commencing on and including the fifth
trading day after the date on which "ex-dividend trading" commences for such
distribution on the Nasdaq National Market or such other national or regional
exchange or market on which the Common Stock are then listed or quoted and (y)
Section 3.08(c) or Section 3.08(d) of this First Supplemental Indenture means
the Closing Sale Price on the date of determination.
"Trading Day" means a day during which trading in securities
generally occurs on the Nasdaq National Market or, if the applicable security
is not quoted on the Nasdaq National Market, or if the applicable security is
not listed on the Nasdaq National Market, on the principal other national or
regional securities exchange or market on which the applicable security is
then listed or traded.
ARTICLE IV
Defaults and Remedies
---------------------
SECTION 4.01. Events of Default. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(1) default in the payment of any interest upon any Series
3 1/2% Note when it becomes due and payable, and continuance of such
default for a period of 30 days; or
14
<PAGE>
(2) default in the payment of the principal of any Series
3 1/2% Note when it becomes due and payable; or
(3) failure by the Company to provide the notice of a
Fundamental Change in accordance with Section 2.02 hereof or default
in the payment of the Repurchase Price in respect of any Series
3 1/2% Note on the Repurchase Date therefor; or
(4) failure by the Company to deliver shares of Common
Stock (together with cash in lieu of fractional shares) when such
Common Stock (or cash in lieu of fractional shares) is required to
be delivered following conversion of a Series 3 1/2% Note and
continuation of such default for a period of 10 days; or
(5) default in the performance, or breach, of any covenant
of the Company contained in the Series 3 1/2% Notes, the Indenture
or in this First Supplemental Indenture (other than or those
referred to in clauses (1) through (4) above), and continuance of
such default or breach for a period of 60 days after there has been
given, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least
25% in aggregate principal amount of the Series 3 1/2% Notes then
Outstanding, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(6) the entry by a court having jurisdiction in the
premises of (A) a decree or order for relief in respect of the
Company or a Subsidiary in an involuntary case or proceeding under
any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order
adjudging the Company or a Subsidiary bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the
Company or a Subsidiary under any applicable Federal or state law,
or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or a
Subsidiary or of any substantial part of their respective
properties, or ordering the winding up or liquidation of the affairs
of the Company or a Subsidiary, and the continuance of any such
decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days; or
(7) the commencement by the Company or a Subsidiary of a
voluntary case or proceeding under any applicable Federal or state
bankruptcy, insolvency, reorganization or other similar law or of
any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by either the Company or a Subsidiary to
the entry of a decree or order for relief in respect of the Company
or a Subsidiary in an involuntary case or proceeding under any
applicable Federal or state
15
<PAGE>
bankruptcy, insolvency, reorganization or other similar law or to
the commencement of any bankruptcy or insolvency case or proceeding
against either the Company or a Subsidiary, or the filing by either
the Company or a Subsidiary of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or
state law, or the consent by either the Company or a Subsidiary to
the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or a
Subsidiary or of any substantial part of their respective
properties, or the making by either the Company or a Subsidiary of
an assignment for the benefit of creditors, or the admission by
either the Company or a Subsidiary in writing of an inability to pay
the debts of either the Company or a Subsidiary generally as they
become due, or the taking of corporate action by the Company or a
Subsidiary in furtherance of any such action.
SECTION 4.02. Acceleration of Maturity; Rescission and Annulment. If
an Event of Default (other than an Event of Default specified in Section
4.01(6) or (7) with respect to the Company) occurs and is continuing, then in
every such case the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Series 3 1/2% Notes then Outstanding may declare the
principal of, and accrued interest on, all the Series 3 1/2% Notes to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal and
any accrued interest thereon shall become immediately due and payable. If an
Event of Default specified in Section 4.01(6) or (7) occurs with respect to
the Company, the principal of, and accrued interest on, all the Series 3 1/2%
Notes shall automatically, and without any declaration or other action on the
part of the Trustee or any Holder, become immediately due and payable.
At any time after such a declaration of acceleration has been made
and before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter in this Article IV provided, the Holders of a
majority in aggregate principal amount of the Series 3 1/2% Notes then
Outstanding, by written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a
sum sufficient to pay:
(A) all overdue interest on all Series 3 1/2%
Notes,
(B) the principal of (and premium, if any, on)
any Series 3 1/2% Notes which have become due otherwise
than by such declaration of acceleration, and interest
thereon from the required payment date at an annual rate
of 1% above the rate borne by the Series 3 1/2% Notes,
16
<PAGE>
(C) to the extent that payment of such interest
is lawful, interest upon overdue interest from the
required payment date at an annual rate of 1% above the
rate borne by the Series 3 1/2% Notes, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
(2) all Events of Default, other than the nonpayment of
the principal of, and accrued interest on, Series 3 1/2% Notes which
have become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 5.13 of the Indenture.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 4.03. Company Notice to Trustee. The Company shall file with
the Trustee written notice of the occurrence of any Event of Default within
five Business Days of the Company's becoming aware of such Event of Default.
ARTICLE V
Original Issue of Series 3 1/2% Notes
-------------------------------------
SECTION 5.01. Original Issue. Series 3 1/2% Notes in the aggregate
principal amount equal to $175,000,000 may, upon execution of this First
Supplemental Indenture, be executed by the Company and delivered to the
Trustee for authentication, and the Trustee shall thereupon authenticate and
make available for delivery said Series 3 1/2% Notes to or upon a Company
Order. Upon delivery to the Trustee of a Company Order certifying that the
option for an additional amount described in the Terms Agreement relating to
the Series 3 1/2% Notes dated May 20, 2003 between the Company and the
underwriters listed therein has been validly exercised, up to an additional
$26,250,000 of Series 3 1/2% Notes may be authenticated by the Trustee.
ARTICLE VI
Defeasance and Covenant Defeasance
----------------------------------
SECTION 6.01. Applicability. The Company hereby elects, pursuant to
Section 14.1 of the Indenture, to make Sections 14.2 and 14.3 thereof
applicable to the Series 3 1/2% Notes.
SECTION 6.02. References. (a) With respect to the Series 3 1/2%
Notes, references to Section 5.1 or 5.2 of the Indenture shall be deemed to be
references to Section 4.01 or 4.02 hereof.
17
<PAGE>
(b) With respect to the Series 3 1/2% Notes, references in Section
14.4(a) of the Indenture to "Stated Maturity" shall be deemed to mean "Stated
Maturity, or any Redemption Date or Repurchase Date, or upon conversion or
otherwise". References in Section 14.4(a) of the Indenture to "Trustee" shall
be deemed to mean "Trustee, the Paying Agent or the Conversion Agent".
ARTICLE VII
Miscellaneous Provisions
------------------------
SECTION 7.01. Defined Terms. Except as otherwise expressly provided
in this First Supplemental Indenture or in the form of Series 3 1/2% Note or
otherwise clearly required by the context hereof or thereof, all terms used
herein or in said form of Series 3 1/2% Note that are defined in the Indenture
shall have the several meanings respectively assigned to them thereby.
SECTION 7.02. Indenture. The Indenture, as supplemented by this
First Supplemental Indenture, is in all respects ratified and confirmed. This
First Supplemental Indenture shall be deemed part of the Indenture in the
manner and to the extent herein and therein provided.
SECTION 7.03. Trustee. The recitals herein contained are made by the
Company and not by the Trustee, and the Trustee assumes no responsibility for
the correctness thereof. The Trustee makes no representation as to the
validity or sufficiency of this First Supplemental Indenture or of the Series
3 1/2% Notes. The Trustee shall not be accountable for the use or application
by the Company of the Series 3 1/2% Notes or the proceeds thereof.
SECTION 7.04. Execution in Counterparts. This First Supplemental
Indenture may be executed in any number of counterparts each of which shall be
an original; but such counterparts shall together constitute but one and the
same instrument.
18
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed as of the day and year first above
written.
SIRIUS SATELLITE RADIO INC.,
by
-----------------------------
Patrick L. Donnelly
Executive Vice President,
General Counsel and Secretary
THE BANK OF NEW YORK, as Trustee,
by
-----------------------------
Name:
Title:
19
<PAGE>
Exhibit A
[FORM OF FACE OF SECURITY]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN. THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN
THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY
MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.]1
20
<PAGE>
SIRIUS SATELLITE RADIO INC.
CUSIP No. 82966U AA 1 No. 1
ISIN No. US82966UAA16
3 1/2% CONVERTIBLE NOTE DUE 2008
Sirius Satellite Radio Inc., a Delaware corporation (the "Company",
which term shall include any successor corporation under the Indenture
referred to on the reverse hereof), promises to pay to Cede & Co., or
registered assigns, the principal sum of Dollars on June 1, 2008 [or such
greater or lesser amount as is indicated on the Schedule of Exchanges of
Securities on the other side of this Security].3
Interest Payment Dates: June 1 and December 1, beginning December 1,
2003
Record Dates: May 15 and November 15
This Security is convertible as specified on the reverse hereof.
Additional provisions of this Security are set forth on the reverse hereof.
SIGNATURE PAGE FOLLOWS
21
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.
SIRIUS SATELLITE RADIO INC.
By:
----------------------------------
Name:
Title:
Trustee's Certificate of Authentication: This is one
of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK,
as Trustee,
By:
------------------------------------
Authorized Signatory
22
<PAGE>
[FORM OF REVERSE SIDE OF SECURITY]
SIRIUS SATELLITE RADIO INC.
3 1/2% CONVERTIBLE NOTE DUE 2008
1. Interest
--------
Sirius Satellite Radio Inc., a Delaware corporation (the "Company",
which term shall include any successor corporation under the Indenture
hereinafter referred to), promises to pay interest on the principal amount of
this Security at the rate of 3.50% per annum. The Company shall pay interest
semiannually on June 1 and December 1 of each year, commencing December 1,
2003. Interest on the Securities shall accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from May 23,
2003; provided, however, that if there is not an existing Default in the
payment of interest and if this Security is authenticated between a record
date referred to on the face hereof and the next succeeding interest payment
date, interest shall accrue from such interest payment date. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. The Company
will pay interest on overdue principal at the rate borne by the Securities
plus 1% per annum, and it will pay interest on overdue installments of
interest at the same rate as interest on the overdue principal to the extent
lawful.
2. Method of Payment
-----------------
The Company shall pay interest on this Security (except defaulted
interest) to the person who is the Holder of this Security at the close of
business on May 15 or November 15, as the case may be, next preceding the
related interest payment date. The Holder must surrender this Security to a
Paying Agent to collect payment of principal. The Company will pay principal
and interest in money of the United States that at the time of payment is
legal tender for payment of public and private debts. The Company may,
however, pay principal and interest in respect of any Certificated Security by
check or wire transfer payable in such money; provided, however, that a Holder
with an aggregate principal amount in excess of $2,000,000 will be paid by
wire transfer in immediately available funds at the election of such Holder.
The Company may mail an interest check to the Holder's registered address.
Notwithstanding the foregoing, so long as this Security is registered in the
name of a Depositary or its nominee, all payments hereon shall be made by wire
transfer of immediately available funds to the account of the Depositary or
its nominee.
3. Paying Agent, Registrar and Conversion Agent
--------------------------------------------
Initially, The Bank of New York (the "Trustee," which term shall
include any successor trustee under the Indenture hereinafter referred to)
will act as Paying Agent, Registrar and Conversion Agent. The Company may
change any Paying Agent, Registrar or Conversion Agent without notice to the
Holder. The Company or any of its
23
<PAGE>
Subsidiaries may, subject to certain limitations set forth in the Indenture,
act as Paying Agent or Registrar.
4. Indenture Limitations
---------------------
This Security is one of a duly authorized issue of Securities of the
Company designated as its 3 1/2% Convertible Notes due 2008 (the "Securities")
issued under an Indenture dated as of May 23, 2003, as supplemented by the
First Supplemental Indenture dated as of May 23, 2003 (as so supplemented,
together with any other supplemental indentures thereto, the "Indenture"),
between Sirius Satellite Radio Inc. (the "Company"), and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. The terms of this Security include those stated in the
Indenture and those required by or made part of the Indenture by reference to
the Trust Indenture Act of 1939, as amended, as in effect on the date of the
Indenture. This Security is subject to all such terms, and the Holder of this
Security is referred to the Indenture and said Act for a statement of them.
The Securities are senior unsecured obligations of the Company limited to
$201,250,000 aggregate principal amount. The Indenture does not limit other
debt of the Company, secured or unsecured, including Senior Indebtedness.
5. Optional Redemption
-------------------
The Company shall not have the option to redeem the Securities prior
to June 1, 2008.
6. Purchase of Securities at Option of Holder Upon a Fundamental Change
--------------------------------------------------------------------
At the option of the Holder, and subject to the terms and conditions
of the Indenture, the Company shall become obligated to purchase all or any
part specified by the Holder (so long as the principal amount of such part is
$1,000 or an integral multiple of $1,000 in excess thereof) of the Securities
held by such Holder on the date that is 30 days (or if such 30th day is not a
Business Day, the next succeeding Business Day) after the date of the notice
of the occurrence of a Fundamental Change provided to Holders as provided in
Section 2.02, at a purchase price equal to 100% of the principal amount
thereof together with accrued interest up to, but excluding, the Repurchase
Date. The Holder shall have the right to withdraw any Fundamental Change
Purchase Notice (in whole or in a portion thereof that is $1,000 or an
integral multiple of $1,000 in excess thereof) at any time prior to the close
of business on the Business Day immediately preceding the Repurchase Date by
delivering a written notice of withdrawal to the Paying Agent in accordance
with the terms of the Indenture.
7. Conversion
----------
A Holder of a Security may convert the principal amount of such
Security (or any portion thereof equal to $1,000 or any integral multiple of
$1,000 in excess thereof) into shares of Common Stock at any time prior to the
close of business on
24
<PAGE>
June 1, 2008; provided, however, that if the Security is subject to purchase
upon a Fundamental Change, the conversion right will terminate at the close of
business on the Business Day immediately preceding the Fundamental Change
Purchase Date for such Security or such earlier date as the Holder presents
such Security for purchase (unless the Company shall default in making the
Repurchase Payment when due, in which case the conversion right shall
terminate at the close of business on the date such default is cured and such
Security is purchased). The initial Conversion Rate is 724.6377 shares of
Common Stock per $1,000 principal amount of Securities, subject to adjustment
under certain circumstances. The number of shares of Common Stock issuable
upon conversion of a Security is determined by multiplying the number of
$1,000 principal amount Securities to be converted by the Conversion Rate in
effect on the Conversion Date. No fractional shares will be issued upon
conversion; in lieu thereof, an amount will be paid in cash based upon the
Closing Price (as defined in the Indenture) of the Common Stock on the Trading
Day immediately prior to the Conversion Date. To convert a Security, a Holder
must (a) complete and manually sign the conversion notice set forth below and
deliver such notice to a Conversion Agent, (b) surrender the Security to a
Conversion Agent, (c) furnish appropriate endorsements and transfer documents
if required by a Registrar or a Conversion Agent, and (d) pay any transfer or
similar tax, if required. Securities so surrendered for conversion (in whole
or in part) during the period from the close of business on any regular record
date to the opening of business on the next succeeding interest payment date
(excluding Securities or portions thereof that are subject to purchase
following a Fundamental Change on a date during the period beginning at the
close of business on a regular record date and ending at the opening of
business on the first Business Day after the next succeeding interest payment
date, or if such interest payment date is not a Business Day, the second such
Business Day) shall also be accompanied by payment in funds acceptable to the
Company of an amount equal to the interest payable on such interest payment
date on the principal amount of such Security then being converted, and such
interest shall be payable to such registered Holder notwithstanding the
conversion of such Security, subject to the provisions of the Indenture and
the First Supplemental Indenture relating to the payment of defaulted interest
by the Company. If the Company defaults in the payment of interest payable on
such interest payment date, the Company shall promptly repay such funds to
such Holder. A Holder may convert a portion of a Security equal to $1,000 or
any integral multiple thereof. A Security in respect of which a Holder had
delivered a Fundamental Change Purchase Notice exercising the option of such
Holder to require the Company to purchase such Security may be converted only
if the Fundamental Change Purchase Notice is withdrawn in accordance with the
terms of the Indenture and the First Supplemental Indenture.
8. Denominations, Transfer, Exchange
---------------------------------
The Securities are in registered form without coupons in
denominations of $1,000 and integral multiples of $1,000. A Holder may
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents
25
<PAGE>
and to pay any taxes or other governmental charges that may be imposed in
relation thereto by law or permitted by the Indenture.
9. Persons Deemed Owners
---------------------
The Holder of a Security may be treated as the owner of it for all
purposes.
10. Unclaimed Money
---------------
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent will pay the money back to the
Company at its written request. After that, Holders entitled to money must
look to the Company for payment.
11. Amendment, Supplement and Waiver
--------------------------------
Subject to certain exceptions, the Indenture or the Securities may
be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the Securities then outstanding, and an
existing Event of Default and its consequence or compliance with any provision
of the Indenture or the Securities may be waived in a particular instance with
the consent of the Holders of a majority in principal amount of the Securities
then outstanding. Without the consent of or notice to any Holder, the Company
and the Trustee may amend or supplement the Indenture or the Securities to,
among other things, cure any ambiguity, defect or inconsistency or make any
other change that does not adversely affect the rights of any Holder.
12. Successor Person
----------------
When a successor Person assumes all the obligations of its
predecessor under the Securities and the Indenture in accordance with the
terms and conditions of the Indenture, the predecessor Person will (except in
certain circumstances specified in the Indenture) be released from those
obligations.
13. Defaults and Remedies
---------------------
Under the Indenture, an Event of Default includes:
(1) default in the payment of any interest upon any
Security when it becomes due and payable, and continuance of such
default for a period of 30 days; or
(2) default in the payment of the principal of any
Security when it becomes due and payable; or
(3) failure by the Company to provide the notice of a
Fundamental Change in accordance with Section 2.02 of the First
Supplemental
26
<PAGE>
Indenture or default in the payment of the Repurchase Price in
respect of any Security on the Repurchase Date therefor; or
(4) failure by the Company to deliver shares of Common
Stock (together with cash in lieu of fractional shares) when such
Common Stock (or cash in lieu of fractional shares) is required to
be delivered following conversion of a Security and continuation of
such default for a period of 10 days; or
(5) default in the performance, or breach, of any covenant
of the Company contained in the Securities, the Indenture or the
First Supplemental Indenture (other than or those referred to in
clauses (1) through (4) above), and continuance of such default or
breach for a period of 60 days after there has been given notice by
the Trustee or by the Holders of at least 25% in aggregate principal
amount of the Securities then Outstanding; or
(6) certain events of bankruptcy or insolvency with
respect to the Company and its Subsidiaries.
If an Event of Default (other than an event of default as described
in clause (6) with respect to the Company) occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the Securities
then outstanding may declare all unpaid principal to the date of acceleration
on the Securities then outstanding to be due and payable immediately, all as
and to the extent provided in the Indenture. If an Event of Default occurs as
a result of certain events of bankruptcy, insolvency or reorganization with
respect to the Company as described in clause (6) herein, unpaid principal of
the Securities then outstanding shall become due and payable immediately
without any declaration or other act on the part of the Trustee or any Holder,
all as and to the extent provided in the Indenture. Holders may not enforce
the Indenture or the Securities except as provided in the Indenture. The
Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Securities. Subject to certain limitations, Holders of a
majority in principal amount of the Securities then outstanding may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of any continuing default (except a default in payment of
principal or interest) if it determines that withholding notice is in their
interests. The Company is required to file periodic reports with the Trustee
as to the absence of an Event of Default.
14. Trustee Dealings with the Company
---------------------------------
The Bank of New York, the Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from and
perform services for the Company or an Affiliate of the Company, and may
otherwise deal with the Company or an Affiliate of the Company, as if it were
not the Trustee.
27
<PAGE>
15. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture nor for any claim based on, in respect of or
by reason of such obligations or their creation. The Holder of this Security
by accepting this Security waives and releases all such liability. The waiver
and release are part of the consideration for the issuance of this Security.
16. Authentication
--------------
This Security shall not be valid until the Trustee or an
authenticating agent manually signs the certificate of authentication on the
other side of this Security.
17. Abbreviations and Definitions
-----------------------------
Customary abbreviations may be used in the name of the Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and UGMA (= Uniform Gifts to Minors
Act). All terms defined in the Indenture and used in this Security but not
specifically defined herein are defined in the Indenture and are used herein
as so defined.
21. Indenture to Control; Governing Law
-----------------------------------
In the case of any conflict between the provisions of this Security
and the Indenture, the provisions of the Indenture shall control. This
Security shall be governed by, and construed in accordance with, the laws of
the State of New York without regard to principles of conflicts of law which
would require the application of the laws of another jurisdiction.
The Company will furnish to any Holder, upon written request and
without charge, a copy of the Indenture. Requests may be made to: Sirius
Satellite Radio Inc., 1221 Avenue of the Americas, 36th Floor, New York, NY
10020, Attention: Patrick L. Donnelly, Executive Vice President, General
Counsel and Secretary.
28
<PAGE>
ASSIGNMENT FORM
---------------
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
------------------------------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him or her.
Your Signature:
Date:
------------------ ------------------------------------------
(Sign exactly as your name appears
on the other side of this Security)
*Signature guaranteed by:
By:
--------------------
29
<PAGE>
* Signature(s) must be guaranteed by a qualified guarantor
institution with membership in an approved signature
guarantee program pursuant to Rule 17Ad-15 under the
Securities Exchange Act of 1934.
30
<PAGE>
CONVERSION NOTICE
-----------------
To convert this Security into Common Stock of Sirius Satellite Radio
Inc.,
check the box: [ ]
To convert only part of this Security, state the principal amount to
be converted (must be $1,000 or a multiple of $1,000): $______________.
If you want the stock certificate made out in another person's name,
fill in the form below:
------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
(Print or type assignee's name, address and zip code)
Your Signature:
Date:
------------------ ------------------------------------------
(Sign exactly as your name appears
on the other side of this Security)
*Signature guaranteed by:
By:
--------------------
* Signature(s) must be guaranteed by a qualified guarantor
institution with membership in an approved signature
guarantee program pursuant to Rule 17Ad-15 under the
Securities Exchange Act of 1934.
31
<PAGE>
OPTION TO ELECT REPURCHASE
UPON A CHANGE OF CONTROL
------------------------
To: Sirius Satellite Radio Inc.
The undersigned registered owner of this Security hereby irrevocably
acknowledges receipt of a notice from Sirius Satellite Radio Inc. (the
"Company") as to the occurrence of a Fundamental Change with respect to the
Company, and requests and instructs the Company to redeem the entire principal
amount of this Security, or the portion thereof (which is $1,000 or an
integral multiple thereof) below designated, in accordance with the terms of
the Indenture referred to in this Security at the Fundamental Change Purchase
Price, together with accrued interest to, but excluding, such date, to the
registered Holder hereof.
Date:
------------------ ------------------------------------------
Signature(s)
Signature(s) must be guaranteed by a
qualified guarantor institution with
membership in an approved signature
guarantee program pursuant to Rule
17Ad-15 under the Securities Exchange
Act of 1934.
---------------------------------------
Signature Guaranty
Principal amount to be redeemed (in an
integral multiple of $1,000, if less than all):
---------------------------------------------
NOTICE: The signature to the foregoing Election must correspond to the Name
as written upon the face of this Security in every particular,
without alteration or any change whatsoever.
32
<PAGE>
SCHEDULE OF EXCHANGES OF SECURITIES4
-----------------------------------
The following exchanges, redemptions, repurchases or conversions of
a part of this global Security have been made:
<TABLE>
<CAPTION>
Principal Amount Amount of Decrease Amount of Increase
of this in in
Global Security Authorized Principal Amount of Principal Amount
Following Such Signatory of this of this
Date Decrease (or Securities Global Global
of Exchange Increase) Custodian Security Security
----------- --------------- --------------- ------------------ ------------------
<S> <C> <C> <C> <C>
</TABLE>
1. These paragraphs should be included only if the Security is a Global
Security.
3. This phrase should be included only if the Security is a Global
Security
4. This schedule should be included only if the Security is a
Global Security.
33