Stock Purchase Agreement - Sirius Satellite Radio Inc. and DaimlerChrysler Corp.
================================================================================
STOCK PURCHASE AGREEMENT
between
SIRIUS SATELLITE RADIO INC.
and
DAIMLERCHRYSLER CORPORATION
Dated as of January 28, 2000
================================================================================
<PAGE>
Page
----
TABLE OF CONTENTS
ARTICLE 1DEFINITIONS......................................................... 1
1.1 Definitions....................................................... 1
ARTICLE 2PURCHASE AND SALE OF SECURITIES..................................... 5
2.1 Purchase and Sale of Securities................................... 5
2.2 Closing........................................................... 5
ARTICLE 3REPRESENTATIONS AND WARRANTIES OF THE COMPANY....................... 6
3.1 Corporate Existence and Power..................................... 6
3.2 Subsidiaries...................................................... 6
3.3 Corporate Authorization; No Contravention......................... 6
3.4 Governmental Authorization; Third Party Consents.................. 7
3.5 Binding Effect.................................................... 7
3.6 Capitalization of the Company..................................... 7
3.7 SEC Filings; Financial Statements................................. 8
3.8 Absence of Certain Developments................................... 8
3.9 Compliance with Laws.............................................. 9
3.10 Licenses......................................................... 9
3.11 Litigation....................................................... 9
3.12 Intellectual Property............................................ 9
3.13 Private Offering................................................ 10
3.14 Rights Agreement................................................ 10
3.15 Board Approval; Delaware GCL 203................................ 10
3.16 Brokers or Finders.............................................. 10
3.17 OEM Matters...................................................... 11
ARTICLE 4REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.................... 11
4.1 Existence and Power.............................................. 11
4.2 Corporate Authorization; No Contravention........................ 11
4.3 Governmental Authorization; Third Party Consents................. 11
4.4 Binding Effect................................................... 11
4.5 Purchase for Own Account......................................... 12
4.6 Brokers or Finders............................................... 12
ARTICLE 5COVENANTS OF THE COMPANY........................................... 12
5.1 Conduct of Business.............................................. 12
5.2 Indemnification of Brokerage..................................... 13
5.3 Rule 144......................................................... 13
5.4 Rights Agreement................................................. 13
5.5 Matching Right................................................... 13
ARTICLE 6COVENANTS OF THE PURCHASER......................................... 14
6.1 Indemnification of Brokerage..................................... 14
6.2 Lock-Up Agreement................................................ 14
6.3 Transfer Restrictions............................................ 15
<PAGE>
Page
----
ARTICLE 7CONDITIONS PRECEDENT TO THE OBLIGATION OF THE PURCHASER TO CLOSE... 15
7.1 Representations and Covenants.................................... 15
7.2 Consents and Approvals........................................... 15
7.3 No Claims........................................................ 15
ARTICLE 8CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO CLOSE..... 16
8.1 Representations and Covenants.................................... 16
8.2 Consents and Approvals........................................... 16
8.3 No Claims........................................................ 16
ARTICLE 9REGISTRAION RIGHTS................................................. 17
9.1Requested Registration............................................. 17
9.2 Company Registration............................................. 17
9.3 Transferability.................................................. 18
9.4 Expenses of Registration......................................... 18
9.5 Registration Procedures........................................... 18
9.6 Indemnification.................................................. 20
ARTICLE 10TERMINATION OF AGREEMENT.......................................... 22
10.1 Termination..................................................... 22
10.2 Survival After Termination...................................... 23
ARTICLE 11MISCELLANEOUS..................................................... 23
11.1 Expenses........................................................ 23
11.2 Notices......................................................... 23
11.3 Successors and Assigns.......................................... 24
11.4 Amendment and Waiver............................................ 24
11.5 Counterparts.................................................... 24
11.6 Headings........................................................ 24
11.7 GOVERNING LAW................................................... 24
11.8 Severability.................................................... 24
11.9 Entire Agreement................................................ 25
11.10 Further Assurances............................................. 25
11.11 Public Announcements........................................... 25
SCHEDULE 3.2 Subsidiaries of the Company
SCHEDULE 3.3 Defaults
SCHEDULE 3.4 Required Consents
SCHEDULE 3.11 Litigation
<PAGE>
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of January 28, 2000 (this
"Agreement"), by and between SIRIUS SATELLITE RADIO INC., a Delaware corporation
(the "Company"), and DAIMLERCHRYSLER CORPORATION, a Delaware corporation (the
"Purchaser").
WHEREAS, the Company proposes to issue and sell to the Purchaser,
and the Purchaser proposes to buy, for an aggregate purchase price of One
Hundred Million Thirty Nine Dollars ($100,000,039), a total of 2,290,322 shares
of Common Stock, par value $.001 per share, of the Company;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms shall have the meanings set
forth below:
"Affiliate" means a Person that directly, or indirectly through one
or more intermediaries, Controls or is Controlled by, or is under common Control
with the Person specified.
"Agreement" means this Stock Purchase Agreement, as the same may be
amended, supplemented or modified in accordance with the terms hereof.
"Beneficial Owner" shall mean, with respect to any securities, a
Person who beneficially owns such securities within the meaning of Rule 13d-3
under the Exchange Act, and "beneficially owned" and "beneficial ownership"
shall have correlative meanings.
"Board of Directors" means the board of directors of the Company or
any duly authorized committee thereof.
"Broker" has the meaning assigned to such term in Section 3.16.
"Business Day" means any day other than Saturday, Sunday or other
day on which commercial banks in the State of New York are authorized or
required by law or executive order to close.
<PAGE>
2
"Bylaws" means the bylaws of the Company, as the same may have been
amended and in effect as of the Closing Date.
"Certificate of Incorporation" means the Amended and Restated
Certificate of Incorporation of the Company, as the same may have been amended
and in effect as of the Closing Date.
"Claims" means actions, causes of action, suits, claims, complaints,
demands, litigations or legal, administrative or arbitral proceedings.
"Closing" has the meaning assigned to such term in Section 2.2.
"Closing Date" has the meaning assigned to such term in Section 2.2.
"Commission" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Securities Act.
"Common Stock" means the common stock, par value $.001 per share, of
the Company, or any other capital stock of the Company into which such stock is
reclassified or reconstituted.
"Company Options" has the meaning assigned to such term in Section
3.6.
"Contemplated Transaction" means the purchase of shares of Common
Stock contemplated by this Agreement, including without limitation the purchase
and sale of the Purchased Shares.
"Contractual Obligation" means, as to any Person, any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other instrument to
which such Person is a party or by which it or any of its property is bound.
"Control" (including the terms "controlling," "controlled by" and
"under common control with") means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Convertible Subordinated Notes" means the Company's 8-3/4%
Convertible Subordinated Notes due 2009.
"Delaware GCL" means the Delaware General Corporation Law.
"Demand Notice" has the meaning assigned to such term in Section
9.1(a).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder.
<PAGE>
3
"Existing Plans" has the meaning assigned to such term in Section
3.6.
"FCC" has the meaning assigned to such term in Section 3.8.
"Ford" has the meaning assigned to such term in Section 3.17.
"GAAP" means United States generally accepted accounting principles
as in effect from time to time.
"Governmental Authority" means the government of any nation, state,
city, locality or other political subdivision of any thereof, and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government or any international regulatory body
having or asserting jurisdiction over a Person, its business or its properties.
"Intellectual Property" has the meaning assigned to such term in
Section 3.12.
"Licenses" has the meaning assigned to such term in Section 3.10.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, encumbrance, lien (statutory or other), restriction or other
security interest of any kind or nature whatsoever.
"Lock-up Period" has the meaning assigned to such term in Section
6.2.
"Lock-up Request" has the meaning assigned to such term in Section
6.2.
"Loral" means Loral Space & Communications, Ltd., a Bermuda
corporation.
"Material Adverse Effect" has the meaning assigned to such term in
Section 3.8.
"NASD" means the National Association of Securities Dealers, Inc.
"OEM" means an original equipment manufacturer of vehicles, such as
Ford, BMW AG, Honda Motor Corp. and Toyota.
"Offering" has the meaning assigned to such term in Section 6.2.
"Person" means any individual, firm, corporation, partnership,
limited liability company, trust, incorporated or unincorporated association,
joint venture, joint stock company, Governmental Authority or other entity of
any kind.
"Prospectus" shall mean the prospectus included in any Registration
Statement (including without limitation a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A
<PAGE>
4
promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion
of the Purchased Shares covered by such Registration Statement and all other
amendments and supplements to such prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such prospectus.
"Purchased Shares" has the meaning assigned to such term in Section
2.1.
"Purchaser" has the meaning assigned to such term in the preamble.
"Registration Statement" shall mean any registration statement of
the Company under the Securities Act that covers any of the Purchased Shares
pursuant to the provisions of this Agreement, including the related Prospectus,
all amendments and supplements to such registration statement (including
post-effective amendments), all exhibits and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement.
"Required Consents" has the meaning assigned to such term in Section
3.4.
"Requirement of Law" means, as to any Person, the Certificate of
Incorporation and Bylaws or other organizational or governing documents of such
Person, and any law, treaty, rule, regulation, qualification, license or
franchise or determination (including, without limitation, those related to
taxes) of an arbitrator or a court or other Governmental Authority or of the
NASD or the Nasdaq National Market or any national securities exchange on which
the Common Stock is listed or admitted to trading, in each case applicable or
binding upon such Person or any of its property or to which such Person or any
of its property is subject or pertaining to the transactions contemplated
hereby.
"Rights Agreement" has the meaning assigned to such term in Section
3.14(a).
"Rule 144" shall mean Rule 144 promulgated by the Commission under
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission.
"SEC Reports" means all proxy statements, registration statements,
reports and other documents filed or required to be filed by the Company or any
of its Subsidiaries with the Commission pursuant to the Securities Act or the
Exchange Act since December 31, 1998.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder.
"Series A Preferred Stock" means the Company's 9.2% Series A Junior
Cumulative Convertible Preferred Stock, par value $.001 per share.
"Series B Preferred Stock" means the Company's 9.2% Series B Junior
Cumulative Convertible Preferred Stock, par value $.001 per share.
<PAGE>
5
"Series C Preferred Stock" means the Company's 102% Series C
Convertible Preferred Stock, par value $.001 per share.
"Series C Warrants" has the meaning assigned to such term in Section
3.6.
"Series D Preferred Stock" means the Company's 9.2% Series D Junior
Cumulative Convertible Preferred Stock, par value $.001 per share.
"Subsidiary" means, in respect of any Person, any other Person
which, at the time as of which any determination is made, such Person or one or
more of its Subsidiaries has, directly or indirectly, voting control.
"Termination Date" has the meaning assigned to such term in Section
10.1(a).
"Transfer" means any sale, assignment, hypothecation, transfer or
other disposition. "Transferor" and "Transferee" shall have correlative
meanings.
ARTICLE 2
PURCHASE AND SALE OF SECURITIES
2.1 Purchase and Sale of Securities. Subject to the terms set forth
herein and in reliance upon the representations set forth below, the Company
agrees to sell to the Purchaser, and the Purchaser agrees to purchase from the
Company, on the Closing Date, an aggregate of 2,290,322 shares of Common Stock
for the aggregate purchase price of $100,000,039 (all of the shares of Common
Stock being purchased pursuant hereto being referred to herein as the "Purchased
Shares").
2.2 Closing. The purchase and issuance of the Purchased Shares shall
take place at a closing (the "Closing") to be held at the offices of the
Company, 1221 Avenue of the Americas, New York, New York 10020, at 10:00 A.M.,
local time, on the fifth Business Day after the conditions to closing set forth
in Articles 7 and 8 (other than those to be satisfied at the Closing, which
shall be satisfied or waived at the Closing) have been satisfied or waived by
the party entitled to waive such conditions or such other day as may be mutually
agreed to by the parties hereto (the "Closing Date"). At the Closing, the
Company shall deliver to the Purchaser certificates representing the Purchased
Shares, duly registered in the name of the Purchaser, and the Purchaser shall
deliver to the Company the aggregate purchase price therefor by wire transfer of
immediately available funds to an account designated in writing by the Company
to the Purchaser at least two Business Days before the Closing.
<PAGE>
6
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser as
follows:
3.1 Corporate Existence and Power. The Company (a) is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware; (b) has all requisite corporate power and authority to own
and operate its property, to lease the property it operates as lessee and to
conduct the business in which it is engaged; and (c) has the corporate power and
authority to execute, deliver and perform its obligations under this Agreement.
The Company is duly qualified to do business as a foreign corporation in, and is
in good standing under the laws of, each jurisdiction in which the conduct of
its business or the nature of the property owned requires such qualification.
3.2 Subsidiaries. Except as set forth on Schedule 3.2, the Company
has no Subsidiaries and no interest or investments in any corporation,
partnership, limited liability company, trust or other entity or organization.
Each Subsidiary listed on Schedule 3.2 has been duly organized, is validly
existing and in good standing under the laws of the jurisdiction of its
organization, has the corporate power and authority to own its properties and to
conduct its business and is duly registered, qualified and authorized to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or the nature of its properties requires such
registration, qualification or authorization. Except as disclosed on Schedule
3.2, all of the issued and outstanding capital stock (or equivalent interests)
of each Subsidiary set forth on Schedule 3.2 has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by the Company
free and clear of any Liens and there are no rights, options or warrants
outstanding or other agreements to acquire shares of capital stock (or
equivalent interests) of such Subsidiary.
3.3 Corporate Authorization; No Contravention. The execution,
delivery and performance by the Company of this Agreement and the Contemplated
Transaction, including, without limitation, the sale, issuance and delivery of
the Purchased Shares, (a) have been duly authorized by all necessary corporate
action of the Company; (b) do not contravene the terms of the Certificate of
Incorporation or Bylaws of the Company or the organizational documents of its
Subsidiaries; and (c) do not violate or result in any breach or contravention
of, or the creation of any Lien under, any material Contractual Obligation of
the Company or its Subsidiaries or any Requirement of Law applicable to the
Company or its Subsidiaries. Except as set forth on Schedule 3.3, no event has
occurred and no condition exists which, upon notice or the passage of time (or
both), would constitute a default or change of control under any indenture,
mortgage, deed of trust, credit agreement, note or other evidence of
indebtedness or other material agreement of the Company or its Subsidiaries or
the Certificate of Incorporation or Bylaws or the organizational documents of
the Company's Subsidiaries.
3.4 Governmental Authorization; Third Party Consents. Except for the
approvals and consents as listed on Schedule 3.4 hereto (collectively, the
"Required Consents"), no
<PAGE>
7
approval, consent, exemption, authorization or other action by, or notice to, or
filing with, any Governmental Authority or any other Person in respect of any
Requirement of Law, Contractual Obligation or otherwise, and no lapse of a
waiting period under a Requirement of Law, is necessary or required in
connection with the execution, delivery or performance by the Company, or
enforcement against the Company, of this Agreement or the Contemplated
Transaction.
3.5 Binding Effect. This Agreement has been duly executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company enforceable against the Company in accordance with its terms,
except as the enforceability thereof may be limited by considerations of public
policy and subject to the effects of bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
3.6 Capitalization of the Company. The authorized capital stock of
the Company consists of (i) 200,000,000 shares of Common Stock, of which, as of
January 21, 2000 (a) 29,428,869 shares were issued and outstanding and (b)
33,635,862 shares were reserved for issuance upon (x) the exercise of
outstanding stock options or warrants to purchase Common Stock and (y) the
conversion of outstanding shares of Series A Preferred Stock, Series B Preferred
Stock and Series C Preferred Stock, shares of Series C Preferred Stock issuable
pursuant to warrants to purchase Series C Preferred Stock and the Convertible
Subordinated Notes, and (ii) 50,000,000 shares of Preferred Stock, of which, as
of January 21, 2000 (a) 1,461,270 shares of Series A Preferred Stock were issued
and outstanding, (b) 655,407 shares of Series B Preferred Stock were issued and
outstanding and (c) 1,152,427 shares of Series C Preferred Stock were issued and
outstanding. Each share of Series A Preferred Stock and Series B Preferred Stock
may be converted at any time, at the option of the holder, unless previously
redeemed, into a number of shares of Common Stock calculated by dividing the
$100 liquidation preference of the Series A Preferred Stock and Series B
Preferred Stock (without accrued and unpaid dividends) by $30 (as adjusted from
time to time in accordance with the relevant certificate of designations as
currently in effect). Each share of Series C Preferred Stock may be converted at
any time, at the option of the holder, unless previously redeemed, into a number
of shares of Common Stock calculated by dividing the $100 liquidation preference
of the Series C Preferred Stock (without accrued and unpaid dividends) by $18
(as adjusted from time to time in accordance with the relevant certificate of
designations as currently in effect). The Company has previously provided the
Purchaser with a true and correct list of all outstanding options or warrants to
purchase shares of any class or series of capital stock of the Company other
than Series C Preferred Stock and other than capital stock which may be
purchased under the Existing Plans (collectively, the "Company Options"), a true
and correct list of all outstanding options or warrants to purchase Series C
Preferred Stock (collectively, the "Series C Warrants") and a true and correct
list of each of the Company's stock option, incentive or other plans pursuant to
which options or warrants to purchase capital stock of the Company may be
issued, including any such plan adopted as of the date hereof but which remain
subject to stockholder approval (collectively, the "Existing Plans"). Except as
set forth above and except for the Stock Purchase Agreement, dated as of
December 23, 1999, between the Company and Blackstone Capital Partners III
Merchant Banking Fund L.P. relating to the proposed issue and sale by the
Company of the Series
<PAGE>
8
D Preferred Stock, there exists no options or warrants to purchase any series or
class of preferred stock of the Company. Except (a) as set forth in this Section
3.6, (b) shares of Common Stock issued (i) pursuant to the exercise of
outstanding Company Options or (ii) on the conversion of outstanding shares of
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock, Convertible Subordinated Notes or shares of Series C
Preferred Stock issuable upon the exercise of outstanding Series C Warrants and
(c) options granted under Existing Plans, on the Closing Date there will be no
shares of Common Stock or any other equity security of the Company issuable upon
conversion or exchange of any security of the Company nor will there be any
rights, options or warrants outstanding or other agreements to acquire shares of
capital stock of the Company nor will the Company be contractually obligated to
purchase, redeem or otherwise acquire any of its outstanding shares of capital
stock. The Company has not created any "phantom stock," stock appreciation
rights or other similar rights the value of which is related to or based upon
the price or value of the Common Stock, Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock or Series D Preferred Stock. None of
the Company's outstanding debt or debt instruments provide voting rights with
respect to the Company to the holders thereof. Other than Loral and Ford, no
stockholder of the Company is entitled to any preemptive or similar rights to
subscribe for shares of capital stock of the Company. All of the issued and
outstanding shares of Common Stock, Series A Preferred Stock, Series B Preferred
Stock and Series C Preferred Stock are, and the Purchased Shares (when issued
hereunder) after payment of the purchase price therefor to the Company, will be,
duly authorized, validly issued, fully paid and nonassessable.
3.7 SEC Filings; Financial Statements. (a) The Company has timely
filed all SEC Reports. The SEC Reports complied in all material respects with
the applicable requirements of the Securities Act or the Exchange Act, as
applicable, and did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements in the SEC Reports, in light of the circumstances under
which they were made, not misleading.
(b) Each of the Company's financial statements (including, in each
case, any related notes) contained in the SEC Reports complied as to form in all
material respects with applicable published rules and regulations of the
Commission with respect thereto, was prepared in accordance with GAAP applied on
a consistent basis throughout the periods involved (except as may be indicated
in the notes to such financial statements) and fairly presented the financial
position of the Company and its Subsidiaries as at the respective dates and for
the periods indicated, except that the unaudited financial statements were
subject to normal and recurring year-end adjustments which were not or are not
expected to be material in amount or effect.
3.8 Absence of Certain Developments. Since November 1, 1999, except
as described in the SEC Reports filed with the Commission prior to the date
hereof, there has been no material adverse change, or any development involving
a prospective material adverse change, in or affecting the business, management
or condition, financial or otherwise, of the Company and its Subsidiaries, taken
as a whole (a "Material Adverse Effect"). For purposes of this Agreement,
"Material Adverse Effect" shall include, without limitation, any material
adverse change in or affecting the technical feasibility of the Company's
proposed satellite broadcast system (including,
<PAGE>
9
without limitation, its terrestrial repeater transmitter network or customer
end-user components such as integrated circuits, adapters for existing radios
and antennas), existing or proposed Federal Communications Commission ("FCC")
approvals and proposed agreements with one or more consumer electronics
manufacturers, in each case as may be required in connection with the Company's
planned operations as described in the SEC Reports filed as of the date hereof,
but shall not include any change or prospective change which principally affects
the date on which the Company will commence commercial operations but does not
do any of the following: (a) affect the underlying technical feasibility of the
Company's operations, (b) materially increase the total cost of achieving
commercial operability or (c) affect the timing of any FCC approval.
3.9 Compliance with Laws. None of the Company or its Subsidiaries is
in material violation of any Requirement of Law to which it is subject.
3.10 Licenses. The Company has no reason to believe that either (a)
it will not finally obtain any license, permit, franchise or other
authorizations (collectively, "Licenses") necessary for it to conduct its
business as described in the SEC Reports or (b) any such Licenses will not be
obtained on a timely basis. As of the date hereof, the Company and its
Subsidiaries possess all Licenses necessary to conduct their business as
currently being conducted, except for the failure to possess such Licenses as
would not reasonably be expected to result in a Material Adverse Effect.
3.11 Litigation. Except as set forth on Schedule 3.11, there is no
legal action, suit, arbitration or other legal, administrative or other
governmental investigation, inquiry or proceeding pending or, to the best
knowledge of the Company, threatened against or affecting the Company or its
Subsidiaries which, if determined adversely to the Company, could reasonably be
expected to have a Material Adverse Effect.
3.12 Intellectual Property. The Company and its Subsidiaries own,
free and clear of all Liens, and have good and marketable title to, or hold
adequate licenses or otherwise possess all such rights as are necessary to use
all patents (and applications therefor), patent disclosures, trademarks, service
marks, trade names, copyrights (and applications therefor), inventions,
discoveries, processes, know-how, scientific, technical, engineering and
marketing data, formulae and techniques (collectively, "Intellectual Property")
used or proposed to be used in or necessary for the conduct of their business as
now conducted or as proposed to be conducted in the SEC Reports. The Company has
not received notice or otherwise has reason to know of any conflict or alleged
conflict with the rights of others pertaining to the Company's Intellectual
Property. To the best of the Company's knowledge, the business of the Company as
presently conducted and as proposed to be conducted in the SEC Reports does not
infringe upon or violate any Intellectual Property rights of others.
3.13 Private Offering. No form of general solicitation or general
advertising was used by the Company or its representatives in connection with
the offer or sale of the Purchased Shares. No registration of the Purchased
Shares pursuant to the provisions of the Securities Act or any state securities
or "blue sky" laws will be required by the offer, sale, or issuance of the
<PAGE>
10
Purchased Shares pursuant to this Agreement, assuming the accuracy of the
Purchaser's representation contained in Section 4.5.
3.14 Rights Agreement.
(a) The execution and delivery of this Agreement by the Company and
the consummation of the Contemplated Transaction does not and will not (i)
result in the ability of any person to exercise any Rights under the Rights
Agreement, dated as of October 22, 1997, between the Company and Continental
Stock Transfer & Trust Company, as rights agent (as amended, the "Rights
Agreement"), (ii) enable or require the Rights (as defined in the Rights
Agreement) to separate from the shares of Common Stock to which they are
attached or to be triggered or become exercisable, (iii) cause any "Distribution
Date" or "Shares Acquisition Date" (as such terms are defined in the Rights
Agreement) to occur or (iv) prior to the Closing Date, cause the Purchaser to
"beneficially own" (as such term is defined in the Rights Agreement) any shares
of Common Stock.
(b) No "Distribution Date" or "Shares Acquisition Date" (as such
terms are defined in the Rights Agreement) has occurred or will occur as a
result of the Contemplated Transaction.
3.15 Board Approval; Delaware GCL 203
(a) The Board of Directors, at a meeting duly called and held, has
determined the Contemplated Transaction to be advisable and in the best
interests of the Company and its stockholders and has approved the Contemplated
Transaction.
(b) The Company has taken all action necessary to cause the
restriction contained in Section 203 of the Delaware GCL to be inapplicable to
the Contemplated Transaction and to approve the transactions which resulted in
the Purchaser becoming an "interested stockholder" within the meaning of Section
203 of the Delaware GCL.
3.16 Brokers or Finders. The Company represents and warrants to the
Purchaser that no broker, finder, agent or similar intermediary (a "Broker") has
acted on behalf of the Company or its Subsidiaries in connection with this
Agreement or the Contemplated Transaction, and that there are no brokerage
commissions, finder's fees or similar fees or commissions payable in connection
therewith based on any agreement, arrangement or understanding with the Company
or any of its Subsidiaries or any action taken by the Company or any of its
Subsidiaries.
3.17 OEM Matters. To the knowledge of the Company, no OEM owns any
shares of Common Stock, any rights, options, warrants or other agreements which
entitle the holder thereof to purchase any shares of Common Stock or any
securities which are convertible into, or exchangeable for, shares of Common
Stock, other than (a) 800,000 shares of Common Stock and (b) a warrant to
purchase 4,000,000 shares of Common Stock issued by the Company to Ford Motor
Company ("Ford") on June 11, 1999.
<PAGE>
11
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company as
follows:
4.1 Existence and Power. The Purchaser (a) is duly incorporated,
validly existing and in good standing under the laws of the State of Delaware;
(b) has all corporate power and authority to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which it
is engaged; and (c) has the corporate power and authority to execute, deliver
and perform its obligations under this Agreement.
4.2 Corporate Authorization; No Contravention. The execution,
delivery and performance by the Purchaser of this Agreement and the Contemplated
Transaction (a) have been duly authorized by all necessary corporate action, (b)
do not contravene the terms of the Purchaser's organizational documents, or any
amendment thereof, and (c) do not violate, conflict with or result in any breach
or contravention of, or the creation of any Lien under, any Contractual
Obligation of the Purchaser or any Requirement of Law applicable to the
Purchaser, except for such violation, conflict, breach or Lien which will not
result in a material adverse effect on the Purchaser's ability to consummate the
Contemplated Transaction.
4.3 Governmental Authorization; Third Party Consents. Except for the
Required Consents, no approval, consent, exemption, authorization, or other
action by, or notice to, or filing with, any Governmental Authority or any other
Person in respect of any Requirement of Law, and no lapse of a waiting period
under a Requirement of Law, is necessary or required in connection with the
execution, delivery or performance by the Purchaser, or enforcement against the
Purchaser, of this Agreement or the consummation of the Contemplated
Transaction.
4.4 Binding Effect. This Agreement has been duly executed and
delivered by the Purchaser and constitutes the legal, valid and binding
obligation of the Purchaser, enforceable against it in accordance with its
terms, except as the enforceability thereof may be limited by considerations of
public policy and subject to the effects of bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
4.5 Purchase for Own Account. The Purchased Shares are being
acquired by the Purchaser for its own account and with no intention of
distributing or reselling such Purchased Shares or any part thereof in any
transaction that would be in violation of the securities laws of the United
States of America or any state, without prejudice, however, to the rights of the
Purchaser at all times to sell or otherwise dispose of all or any part of such
Purchased Shares under an effective registration statement under the Securities
Act or under an exemption from said registration available under the Securities
Act. The Purchaser understands and agrees that if the
<PAGE>
12
Purchaser should in the future decide to dispose of any Purchased Shares, it may
do so only in compliance with the Securities Act and applicable state securities
laws, as then in effect. The Purchaser agrees to the imprinting, so long as
required by law, of a legend on all certificates representing such Purchased
Shares to the following effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED FOR SALE, SOLD
OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
4.6 Brokers or Finders. The Purchaser represents and warrants to the
Company that no Broker has acted on behalf of the Purchaser or its Affiliates in
connection with this Agreement or the Contemplated Transaction, and that there
are no brokerage commissions, finder's fees or similar fees or commissions
payable in connection therewith based on any agreement, arrangement or
understanding with the Purchaser or any of its Affiliates or any action taken by
the Purchaser or any of its Affiliates.
ARTICLE 5
COVENANTS OF THE COMPANY
5.1 Conduct of Business. From the date hereof through the Closing
Date, the Company and its Subsidiaries shall conduct their businesses in a
manner such that the representations and warranties contained in Article 3 shall
continue to be true and correct in all material respects on and as of the
Closing Date (except for representations and warranties made as of a specific
date) as if made on and as of the Closing Date. The Company shall give the
Purchaser prompt notice of any event, condition or circumstance occurring from
the date hereof through the Closing Date that would constitute a violation or
breach of (i) any representation or warranty, whether made as of the date hereof
or as of the Closing Date, or (ii) any covenant of the Company contained in this
Agreement; provided, however, that no such notification shall relieve or cure
any such breach or violation of any such representation, warranty or covenant or
otherwise affect the accuracy of any such representation or warranty for the
purposes of Section 7.1.
5.2 Indemnification of Brokerage. The Company agrees to indemnify
and hold harmless the Purchaser from any Claim for commission or other
compensation by any Broker claiming to have been employed by or on behalf of the
Company or any of its Subsidiaries and to bear the cost of legal expenses
incurred in defending against any such claim.
<PAGE>
13
5.3 Rule 144. The Company shall file all reports required to be
filed by it under the Securities Act and the Exchange Act and shall take such
further action as the Purchaser may reasonably request, all to the extent
required to enable the Purchaser to sell the Purchased Shares pursuant to and in
accordance with Rule 144. Such action shall include, but not be limited to,
making available adequate current public information meeting the requirements of
paragraph (c) of Rule 144.
5.4 Rights Agreement. On or before the Closing Date, the Company
shall amend its Rights Agreement to provide that the Purchaser shall not be or
become an "Acquiring Person" (as that term is defined in the Rights Agreement)
by virtue of the acquisition and ownership by itself of the (i) Purchased
Shares; and (ii) a warrant to purchase up to 4,000,000 shares of Common Stock.
5.5 Matching Right. If any OEM or any of their respective Affiliates
enters into an agreement with the Company to purchase shares of Common Stock or
other securities that are convertible into, or exchangeable or exercisable for,
Common Stock, and as a result of such purchase such OEM and its Affiliates could
then beneficially own a greater number of shares of Common Stock than the number
of shares of Common Stock beneficially owned collectively by the Purchaser and
its Affiliates, then the Company shall offer in writing to sell to the Purchaser
such shares of Common Stock or, in the event such OEM is not purchasing Common
Stock, such other securities that are convertible into, or exchangeable or
exercisable for, Common Stock that are being sold to such other OEM or its
Affiliates in an amount such that, after consummation of such proposed sale, the
Purchaser and its Affiliates, collectively, could beneficially own the same
number of shares of Common Stock as such OEM and its Affiliates, collectively.
Such offer shall remain open for three Business Days and the price to the
Purchaser of any such securities shall be the same price per share as that
contained in the agreement between the Company and the applicable OEM or its
Affiliate.
ARTICLE 6
COVENANTS OF THE PURCHASER
6.1 Indemnification of Brokerage. The Purchaser agrees to indemnify
and hold harmless the Company from any Claim for commission or other
compensation by any Broker claiming to have been employed by or on behalf of the
Purchaser or any of its Affiliates, and to bear the cost of legal expenses
incurred in defending against any such claim.
6.2 Lock-Up Agreement. At any time prior to the earlier of (a)
January 28, 2003 and (b) the date that the Purchaser ceases to beneficially own
5% or more of the Common Stock, the Company and its underwriters, by written
notice from the Company and its lead underwriter to the Purchaser (a "Lock-up
Request"), given as provided herein on or after the time of the initial filing
with the Commission of any registration statement with respect to any offering
of Common Stock or securities convertible into Common Stock (the "Offering"),
may request that the
<PAGE>
14
Purchaser agree not to offer, sell or transfer any of the Purchased Shares or
engage in any hedging or similar transactions with respect to the Purchased
Shares during the 180-day period (the "Lock-up Period") beginning on a date
specified in the Lock-up Request, which date may be as early as five (5)
Business Days prior to the closing date of the Offering (but no later than the
closing date of the Offering), and the Purchaser agrees to consent to and be
bound by the restrictions specified in any such Lock-up Request. The foregoing
notwithstanding, no Lock-up Request shall be effective and binding upon the
Purchaser unless a similar lock-up is imposed upon all Persons beneficially
owning 5% or more of the Common Stock with respect to which the Company then has
the power to request or impose such lock-up. Any such lock-up imposed upon any
other Person shall be for the shorter of (i) the Lock-up Period and (ii) the
maximum period the Company has the right or power to impose upon such other
Person. The Lock-up Period may be terminated as to the Purchaser on written
notice from either the Company or the lead underwriter of the Offering, and
automatically shall be terminated immediately as to the Purchaser in the event
it is terminated as to any other Person (including the Company and its
Affiliates) or any other Person is otherwise released from any lock-up
obligations with respect to the Offering. The Company shall specify the expected
effective date of any Offering by notice to the Purchaser given not later than
two (2) Business Days prior to the beginning of the Lock-up Period. The
Purchaser shall cause each Person, together with its Affiliates, to whom it
Transfers, in one or a series of related transactions, 100,000 or more shares of
Common Stock to execute and deliver to the Company a letter agreement pursuant
to which such transferee agrees (and to cause each other Person to whom it
Transfers any shares of Common Stock if, after giving effect to such Transfer,
such Person, together with its Affiliates, would beneficially own 100,000 or
more shares of Common Stock to execute and deliver to the Company a similar
letter agreement) to comply with the requirements of this Section 6.2 (including
this sentence) to the same extent and subject to the same terms and conditions
as the Purchaser.
6.3 Transfer Restrictions. Until the first anniversary of the
Closing Date, the Purchaser shall not sell, transfer, assign or otherwise
dispose of any of the Purchased Shares without the prior written consent of the
Company.
ARTICLE 7
CONDITIONS PRECEDENT TO THE OBLIGATION OF THE PURCHASER TO CLOSE
The obligations of the Purchaser to enter into and complete the
Closing are subject to the fulfillment on or prior to the Closing Date of the
following conditions, any one or more of which may be waived by the Purchaser:
7.1 Representations and Covenants. The representations and
warranties of the Company contained in this Agreement shall be true and correct
in all material respects (other than those which are qualified as to
materiality, Material Adverse Effect or other similar term, which shall be true
and correct in all respects) on and as of the Closing Date with the same force
and effect as though made on and as of the Closing Date; the Company shall have
performed and complied in all material respects with all covenants and
agreements required by this Agreement to
<PAGE>
15
be performed or complied with by the Company on or prior to the Closing Date;
and the Company shall have delivered to the Purchaser a certificate, dated the
Closing Date and signed by an executive officer of the Company, to the foregoing
effect.
7.2 Consents and Approvals. All Required Consents shall have been
obtained and be in full force and effect, and the Purchaser shall have been
furnished with evidence reasonably satisfactory to it that such Required
Consents have been granted and obtained.
7.3 No Claims. (a) No Claims shall be pending before any
Governmental Authority (including investigations instituted by the United States
Department of Justice or the Federal Trade Commission in connection with
antitrust regulations) to restrain or prohibit this Agreement or the
consummation of the Contemplated Transaction.
(b) No law, order, decree, rule or injunction shall have been
enacted, entered, promulgated or enforced by any Governmental Authority that
prohibits or makes illegal the consummation of any of the Contemplated
Transaction.
ARTICLE 8
CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO CLOSE
The obligation of the Company to enter into and complete the Closing
is subject to the fulfillment on or prior to the Closing Date of the following
conditions, any one or more of which may be waived by the Company:
8.1 Representations and Covenants. The representations and
warranties of the Purchaser contained in this Agreement shall be true and
correct in all material respects (other than those which are qualified as to
materiality, Material Adverse Effect or other similar term, which shall be true
and correct in all respects) on and as of the Closing Date with the same force
and effect as though made on and as of the Closing Date; the Purchaser shall
have performed and complied in all material respects with all covenants and
agreements required by this Agreement to be performed or complied with by it on
or prior to the Closing Date; and the Purchaser shall have delivered to the
Company a certificate, dated the Closing Date and signed by an officer of the
Purchaser, to the foregoing effect.
8.2 Consents and Approvals. All Required Consents shall have been
obtained and be in full force and effect.
8.4 No Claims. (a) No Claims shall be pending before any
Governmental Authority (including investigations instituted by the United States
Department of Justice or the Federal Trade Commission in connection with
antitrust regulations) to restrain or prohibit this Agreement or the
consummation of the Contemplated Transaction.
<PAGE>
16
(b) No law, order, decree, rule or injunction shall have been
enacted, entered, promulgated or enforced by any Governmental Authority that
prohibits or makes illegal the consummation of the Contemplated Transaction.
ARTICLE 9
REGISTRATION RIGHTS
9.1 Requested Registration. (a) If, at any time after January 28,
2002, the Company shall receive from the Purchaser a written request (which
shall specify whether the distribution will be made by means of an underwriting)
that the Company effect a registration (a "Demand Notice") with respect to all
or a part of the Purchased Shares, which Demand Notice shall request
registration of not less than 1,000,000 shares of Common Stock or all remaining
shares of Common Stock then held by the Purchaser, the Company will, as soon as
practicable, use its reasonable best efforts to effect such registration under
the Securities Act (which shall be a "shelf" Registration Statement pursuant to
Rule 415 under the Securities Act (or a successor provision), if so requested by
the Purchaser in the Demand Notice and if the Company is eligible therefor at
such time) as may be so requested and as would permit or facilitate the sale and
distribution of the Purchased Shares as are specified in such request. After the
Company has effected two (2) such registrations pursuant to this Section 9.1(a),
the related Registration Statements have been declared effective and the
distribution contemplated thereunder completed, the Company shall have no
further obligation under this Section 9.1(a).
(b) Notwithstanding any other provision of this Section 9.1, if the
Company shall furnish to the Purchaser a certificate signed by the President or
the Chief Executive Officer of the Company stating that the requested
registration and offering would require the disclosure of material non-public
information and, in the good faith judgment of the Board of Directors of the
Company, such disclosure in a Registration Statement to be filed pursuant to
Section 9.1(a) would be seriously detrimental to the Company and its
stockholders and it is therefore desirable and in the best interests of the
Company to defer the filing of such Registration Statement, then the Company
shall have the right to defer such filing for a period of time after receipt of
such request; provided, however, that the Company may not make such a request
more than twice in any 12-month period and the aggregate period of time during
which the Company may defer such filing shall not exceed 90 days.
(c) In connection with any underwritten offering pursuant to this
Section 9.1, the Purchaser shall have the right to select the underwriter or
underwriters, which shall be a nationally recognized investment banking firm or
firms reasonably acceptable to the Company.
9.2 Company Registration. (a) If the Company shall determine to
register any shares of Common Stock for the account of a security holder or
holders or otherwise (other than a registration relating solely to employee
benefit plans, or a registration relating solely to a merger, exchange offer or
a transaction of the type specified in Rule 145(a) under the Securities Act),
the Company will promptly deliver to the Purchaser a written notice of such
proposed
<PAGE>
17
transaction at least 20 Business Days prior to the filing of a Registration
Statement and include in such registration, and in any underwriting involved
therein, all Purchased Shares specified in a written request made by the
Purchaser within ten Business Days after receipt of the written notice from the
Company described above. The Purchaser shall be entitled to have its shares
included in an unlimited number of registrations pursuant to this Section 9.2.
(b) If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so
advise the Purchaser as a part of the written notice given pursuant to Section
9.2(a). In such event, the right of the Purchaser to registration pursuant to
Section 9.2(a) shall be conditioned upon the Purchaser's participation in such
underwriting and the inclusion of the Purchased Shares in the underwriting to
the extent provided herein. If the Purchaser shall have elected to exercise its
rights under Section 9.2(a), it shall enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected for underwriting by the Company. Notwithstanding any other provision of
this Section 9.2, if the representative determines and so advises the Company in
writing that marketing factors require a limitation on the number of shares to
be underwritten, the Company shall so advise the Purchaser. In such an event,
the number of Purchased Shares that may be included in the registration and
underwriting by the Purchaser shall be reduced, on a pro rata basis (based on
the number of shares of Common Stock held by the Purchaser and each other Person
(other than the Company) registering shares under such registration), by such
minimum number of shares as is necessary to comply with such limitation. If the
Purchaser disapproves of the terms of any such underwriting, it may elect to
withdraw therefrom by written notice to the Company and the underwriter. Any
Purchased Shares excluded or withdrawn from such underwriting shall be withdrawn
from such registration.
9.3 Transferability. The registration rights granted pursuant to
this Article 9 shall be assignable, in whole but not in part, to any Transferee
of the Purchased Shares; provided, however, that the rights granted under
Section 9.1 shall be assignable only to a Transferee who, after giving effect to
such Transfer, beneficially owns at least 1,000,000 shares of Common Stock and
such Transferee shall also be deemed to be the Purchaser for purposes of this
Article 9.
9.4 Expenses of Registration. In connection with any registration
pursuant to Section 9.1 or Section 9.2, the Company shall pay all registration,
filing and NASD fees, all fees and expenses of complying with securities or
"blue sky" laws; provided, however, that the Purchaser shall pay its pro rata
share of any commissions, fees and disbursements of underwriters customarily
paid by sellers of securities (based on offering proceeds to be received by it).
In any registration pursuant to Section 9.1 or Section 9.2, the Company shall be
responsible for the fees and disbursements of counsel for the Company, the
Company's independent public accountants and any expert retained by the Company
in connection with any such registration and premiums and other costs of
policies of insurance against liabilities arising out of the public offering of
the Purchased Shares.
9.5 Registration Procedures. In the case of each registration
effected by the Company pursuant to this Article 9, the Company shall:
<PAGE>
18
(a) furnish to the Purchaser prior to the filing of the requisite
Registration Statement copies of drafts of such Registration Statement as is
proposed to be filed (and give such holders and their counsel a reasonable
opportunity to comment on such documents), and thereafter such number of copies
of such Registration Statement, each amendment and supplement thereto (in each
case including all exhibits thereto), the Prospectus included in such
Registration Statement (including each preliminary prospectus) and such other
documents in such quantities as the Purchaser may reasonably request from time
to time in order to facilitate its distribution;
(b) notify the Purchaser promptly of any request by the Commission
for the amending or supplementing of such Registration Statement or Prospectus
or for additional information and promptly deliver to the Purchaser and its
counsel copies of any comments received by the Commission;
(c) notify the Purchaser, promptly after the Company shall receive
notice thereof, of the time when the Registration Statement becomes effective or
when any amendment or supplement or any prospectus forming a part of the
Registration Statement has been filed;
(d) advise the Purchaser promptly after the Company shall receive
notice or obtain knowledge of the issuance of any stop order by the Commission
suspending the effectiveness of any such Registration Statement or amendment
thereto or of the initiation or threatening of any proceeding for that purpose,
and promptly use its best efforts to prevent the issuance of any stop order or
to obtain its withdrawal promptly if such stop order should be issued;
(e) use all reasonable efforts to register or qualify the Purchased
Shares under such other securities or blue sky laws of such jurisdictions as the
Purchaser (or the managing underwriter, in the case of underwritten offerings)
reasonably request; provided that the Company shall not be required to qualify
to do business or become subject to service of process or taxation in any
jurisdiction in which it is not already so qualified or subject;
(f) use all reasonable efforts to cause the Purchased Shares
included in the Registration Statement to be listed on any securities exchange
or authorized for quotation on any national quotation system on which any of the
Common Stock is then listed;
(g) notify the Purchaser, at any time when a prospectus relating to
the proposed sale is required to be delivered under the Securities Act, of the
happening of any event as a result of which the Prospectus included in such
Registration Statement or amendment contains an untrue statement of a material
fact or omits to state any material fact required to be stated therein in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading, and the Company will prepare a supplement or
amendment to such Prospectus so that, as thereafter delivered to the purchasers
of the Purchased Shares, such Prospectus will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated therein
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading;
<PAGE>
19
(h) enter into customary agreements (including without limitation,
an underwriting agreement in customary form) and take such other actions
(including, without limitation, making senior management of the Company
available to participate in road show presentations on a customary basis) as are
reasonably required in order to expedite or facilitate the disposition of the
Purchased Shares included in the Registration Statement;
(i) in the case of a Registration Statement filed pursuant to
Section 9.1 involving a shelf Registration Statement, prepare and file with the
Commission such amendments and supplements to such shelf Registration Statement
and the Prospectus used in connection therewith as may be necessary to keep such
shelf Registration Statement effective until the earlier of (i) the sale of all
Purchased Securities covered thereby or (ii) two years (exclusive of any period
during which the distribution is postponed pursuant to Section 9.1), and to
comply with the provisions of the Securities Act with respect to the sale or
other disposition of all Purchased Shares covered by such Registration
Statement;
(j) make available, upon reasonable prior notice and during normal
business hours in New York City, for inspection by the Purchaser, any
underwriter participating in any disposition pursuant to the Registration
Statement and any attorney, accountant or other agent retained by the Purchaser
or any such underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Company and cause the Company's
officers, directors and employees, upon reasonable prior notice and during
normal business hours in New York City, to supply all relevant information
reasonably requested by the Purchaser or any such underwriter, attorney,
accountant or agent in connection with the Registration Statement;
(k) request the Company's independent public accountants to provide
to the underwriters, if any, and the Purchaser, if permissible, a comfort letter
in customary form and covering such matters of the type customarily covered by
comfort letters to underwriters in connection with public offerings; and
(l) cooperate and assist in any filings required to be made with the
NASD and in the performance of any due diligence investigation by any
underwriter in an underwritten offering.
The Purchaser agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 9.5(g), the Purchaser
will forthwith discontinue disposition of Purchased Shares pursuant to a
Registration Statement until the Purchaser's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 9.5(g), and, if so
directed by the Company, the Purchaser will deliver to the Company (at the
Company's expense), all copies in its possession, other than permanent file
copies then in the Purchaser's possession, of the Prospectus covering such
Purchased Shares current at the time of receipt of such notice.
9.6 Indemnification. (a) The Company will indemnify the Purchaser,
each of its officers and directors, and each Person controlling the Purchaser
within the meaning of Section 15 of the Securities Act and the rules and
regulations thereunder, with respect to each registration which has been
effected pursuant to this Article 9, and each underwriter, if any, and each
Person who controls any underwriter within the meaning of Section 15 of the
Securities Act and the rules
<PAGE>
20
and regulations thereunder, against all claims, losses, damages and liabilities
(or actions in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any Prospectus or
other document (including any related registration statement, notification or
the like) incident to any such registration or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the
Company of the Securities Act or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Company in
connection with any such registration and will reimburse the Purchaser, each of
its officers and directors, and each Person controlling the Purchaser, each such
underwriter and each Person who controls any such underwriter, for any legal and
any other expenses reasonably incurred in connection with investigating and
defending any such claim, loss, damage, liability or action, provided that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission based upon information furnished in writing to the Company
by the Purchaser with respect to the Purchaser and stated to be specifically for
use therein. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of any the Purchaser and shall survive
the transfer of the Purchased Shares by the Purchaser.
(b) The Purchaser will, if Purchased Shares held by it are included
in the securities as to which such registration is being effected, indemnify the
Company, each of its directors and officers and each underwriter, if any, of the
Company's securities covered by such a registration statement, each Person who
controls the Company or such underwriter within the meaning of Section 15 of the
Securities Act and the rules and regulations thereunder, against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact with respect to the Purchaser contained in any such registration statement,
prospectus or other document made by the Purchaser, or any omission (or alleged
omission) to state therein a material fact with respect to the Purchaser
required to be stated therein or necessary to make the statements by the
Purchaser therein not misleading, and will reimburse the Company and such other
directors, officers, partners, persons, underwriters or control Persons for any
legal or any other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such registration
statement, prospectus or other document in reliance upon and in conformity with
information furnished in writing to the Company by the Purchaser with respect to
the Purchaser and stated to be specifically for use therein; provided, however,
that the obligations of the Purchaser hereunder shall be limited to an amount
equal to the proceeds to the Purchaser of securities sold as contemplated
herein.
(c) If the indemnification provided for in this Section 9.6 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, liability, claim, damage or expense referred to
herein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions which resulted in
<PAGE>
21
such loss, liability, claim, damage or expense, as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and of
the indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
ARTICLE 10
TERMINATION OF AGREEMENT
10.1 Termination. This Agreement may be terminated prior to the
Closing as follows:
(a) by the Purchaser or the Company if the Closing shall not
have occurred before the Termination Date (as defined below); provided, however,
that the right to terminate this Agreement under this Section 10.1(a) shall not
be available to any party whose failure to perform any covenant or obligation
under this Agreement or willful breach of a representation or warranty has been
the cause of or resulted in the failure of the Closing to occur on or before
such date. The "Termination Date" shall be May 28, 2000; or
(b) at the election of the Purchaser, if prior to the Closing
Date there shall have been a breach of any of the Company's representations,
warranties, covenants or agreements, which breach would result in the failure to
satisfy any of the conditions set forth in Section 7.1, and such breach shall be
incapable of being cured or, if capable of being cured, shall not have been
cured within 30 days after written notice thereof shall have been received by
the Company; or
(c) at the election of the Company, if prior to the Closing
Date there shall have been a breach of the Purchaser's representations,
warranties, covenants or agreements, which breach would result in the failure to
satisfy any of the conditions set forth in Section 8.1, and such breach shall be
incapable of being cured or, if capable of being cured, shall not have been
cured within 30 days after written notice thereof shall have been received by
the Purchaser; or
(d) at the election of the Company or the Purchaser, if any
legal proceeding is commenced and pending by any Governmental Authority seeking
to prevent the consummation of the Closing or the Contemplated Transaction and
the Company or the Purchaser, as the case may be, reasonably and in good faith
deems it impracticable or inadvisable to proceed in view of such legal
proceeding; or
(e) at any time on or prior to the Closing Date, by mutual
written consent of the Company and the Purchaser.
<PAGE>
22
If this Agreement so terminates, it shall become null and void and
have no further force or effect, except as provided in Section 10.2.
10.2 Survival After Termination. If this Agreement terminates
pursuant to Section 10.1 and the Contemplated Transaction is not consummated,
this Agreement shall become null and void and have no further force or effect,
except that any such termination shall be without prejudice to the rights of any
party on account of the nonsatisfaction of the conditions set forth in Articles
7 and 8 resulting from the intentional or willful breach or violation of the
representations, warranties, covenants or agreements of another party under this
Agreement. Notwithstanding anything in this Agreement to the contrary, the
provisions of Sections 5.2, 5.3, 5.5 and 6.1, Article 9, this Section 10.2 and
Sections 11.1, 11.7 and 11.9 shall survive the Closing.
ARTICLE 11
MISCELLANEOUS
11.1 Expenses. Each of the Company and the Purchaser shall pay its
own expenses incurred in connection with the negotiation, execution, delivery
and performance of this Agreement.
11.2 Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be delivered personally,
telecopied, sent by reputable overnight courier or sent by certified, registered
or express mail, postage prepaid. Any such notice shall be deemed given if
delivered personally or telecopied, on the date of such delivery, if sent by
reputable overnight courier, on the first Business Day following the date of
such sending, or if sent by certified, registered or express mail, on the third
Business Day following the date of such mailing, as follows:
(a) if to the Company:
Sirius Satellite Radio Inc.
1221 Avenue of the Americas, 36th Floor
New York, New York 10020
Attention: Patrick L. Donnelly
Telecopy: (212) 584-5353
(b) if to the Purchaser:
DaimlerChrysler Corporation
1000 Chrysler Drive
CIMS 485-14-78
Auburn Hills, Michigan 48326-2766
Attention: Assistant Secretary
<PAGE>
23
Telecopy: (248) 512-1771
Any party may by notice given in accordance with this Section 10.3 designate
another address or person for receipt of notices hereunder.
11.3 Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of the
parties hereto. No Person other than the parties hereto and their successors and
permitted assigns is intended to be a beneficiary of this Agreement. No party
hereto may assign its rights under this Agreement without the prior written
consent of the other party hereto; provided that the Purchaser shall have the
right to assign this Agreement to any wholly-owned subsidiary of the Purchaser.
11.4 Amendment and Waiver.
(a) No failure or delay on the part of the Company or the Purchaser
in exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the Company or
the Purchaser at law, in equity or otherwise.
(b) Any amendment, supplement or modification of or to any provision
of this Agreement and any waiver of any provision of this Agreement shall be
effective only if it is made or given in writing and signed by the Company and
the Purchaser.
11.5 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, all of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
11.6 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
11.7 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND THE DUTIES OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
11.8 Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.
<PAGE>
24
11.9 Entire Agreement. This Agreement, together with the schedules
hereto, is intended by the parties as a final expression of their agreement and
intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, warranties or undertakings, other
than those set forth or referred to herein or therein. This Agreement, together
with the schedules hereto, supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
11.10 Further Assurances. Each of the parties shall execute such
documents and take, or cause to be taken, all appropriate action, and shall do
or cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the Contemplated
Transaction and obtaining any consents, exemptions, authorizations, or other
actions by, or giving any notices to, or making any filings with, any
Governmental Authority or any other Person.
11.11 Public Announcements. Except to the extent required by law or
the regulations of any national securities exchange or the Nasdaq National
Market, no party hereto will issue or make any reports, statements or releases
to the public with respect to this Agreement or the Contemplated Transaction
without consulting the other.
(Signature page to follow)
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their respective officers hereunto duly authorized
as of the date first above written.
SIRIUS SATELLITE RADIO INC.
By: /s/ Patrick L. Donnelly
------------------------------------
Patrick L. Donnelly
Senior Vice President and
General Counsel
DAIMLERCHRYSLER CORPORATION
By: /s/ James P. Holden
------------------------------------
James P. Holden
President