CANADIAN SATELLITE RADIO HOLDINGS INC., as Grantor CANADIAN SATELLITE RADIO INC.
Execution
Copy
EXHIBIT
4.3
CANADIAN
SATELLITE RADIO HOLDINGS INC.,
as
Grantor
Dated
as
of February 10, ▇▇▇▇
▇▇▇
▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ TRUST COMPANY OF NEW YORK
as
Interest Reserve Agent and Trustee
THIS
INTEREST RESERVE AND SECURITY AGREEMENT is
entered into on February 10, 2006 (this “Agreement”),
by
and among THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK, in its capacities
as Interest Reserve Agent, depositary bank and securities intermediary
(collectively in such capacities, the “Interest
Reserve Agent”),
THE
BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK, in its capacity as trustee under
the Indenture described below (the “Trustee”),
CANADIAN SATELLITE RADIO HOLDINGS INC., a corporation organized under the laws
of the Province of Ontario, Canada (the “Grantor”)
and
CANADIAN SATELLITE RADIO INC., a corporation organized under the laws of the
Province of Ontario, Canada (the “Guarantor”).
RECITALS
Pursuant
to that certain indenture (the “Indenture”)
dated
as of February 10, 2006, by and between the Grantor, the Guarantor and the
Trustee, the Grantor will issue $100.0 million in aggregate principal amount
of
its 12¾% Senior Notes due 2014 (the “Notes”).
The
Notes are being issued in a private placement (the “Offering”)
pursuant to that certain purchase agreement dated as of February 7, 2006 (the
“Purchase
Agreement”),
among
the Grantor, the Guarantor and BEAR, ▇▇▇▇▇▇▇ & CO. INC. and RBC CAPITAL
MARKETS CORPORATION (together, the “Initial
Purchasers”).
In
connection with the private placement of the Notes, the Grantor and the
Guarantor prepared an Offering Memorandum dated February 7, 2006 (the
“Offering
Memorandum”).
In
accordance with Section 3.3(e) hereof, capitalized terms that are used but
not
defined herein have the meanings assigned to them in the Indenture.
The
Grantor has agreed with the Initial Purchasers in the Purchase Agreement and
with the Trustee in the Indenture to enter into this Agreement and to deposit
an
amount in cash with the Interest Reserve Agent precisely determined in order
to
provide sufficient funds to enable the Grantor to make the first six interest
payments when due with respect to the Notes.
The
Grantor, the Trustee and the Interest Reserve Agent hereby agree that, in
consideration of the mutual promises and covenants contained herein, the
Interest Reserve Agent will hold in an account and will distribute Interest
Reserve Property (as defined below) in accordance with and subject to the
following:
1.
INSTRUCTIONS
1.1.
Interest
Reserve Property.
The
initial funds to be deposited with the Interest Reserve Agent will be as
follows:
| (a) |
Concurrently
with the execution and delivery hereof and the issuance of the Notes,
the
Grantor will deposit with the Interest Reserve Agent US$38,250,000
(thirty
eight million two hundred fifty thousand) in cash or by wire transfer
in
immediately available funds (the “Grantor’s
Closing Date Deposit”),
which amount represents an amount sufficient to enable the Grantor
to make
the first six interest payments when due with respect to the Notes.
|
| (b) |
To
the extent the Grantor issues Additional Notes under the Indenture
prior
to the payment of the first six interest payments on the Notes, the
Grantor will deposit with the Interest Reserve Agent additional funds
in
cash or by wire transfer in immediately available funds (the “Grantor’s
Additional Deposit”
and together with the Grantor’s Initial Deposit (as defined below), the
“Grantor’s
Deposit”),
which amount shall represent, when invested in Government Securities,
an
amount sufficient to enable the Grantor to make any remaining payments
of
the first six interest payments when due with respect to the Notes
and the
Additional Notes.
|
| (c) |
The
Interest Reserve Agent will accept the Grantor’s Deposit and will hold
such funds, all investments thereof, any Distributions (as hereinafter
defined) and the proceeds of the foregoing in account number 03070-17
maintained by the Interest Reserve Agent in the State of New York,
United
States, which account shall contain only the Interest Reserve Property
(defined below), in the name of the Grantor (such account, together
with
any other account maintained by the Interest Reserve Agent hereunder,
the
“Interest
Reserve Account”)
for disbursement in accordance with the provisions hereof. For purposes
of
perfecting its security interest in the Interest Reserve Account
the
Trustee will be the entitlement holder and customer of the Interest
Reserve Agent with respect to the Interest Reserve Account. The
Grantor will not have any access to the Interest Reserve Account
or funds,
investments or other assets credited thereto, other than the right
to have
the funds applied to discharge when due the Grantor’s interest payments on
the Notes and the right to receive the Interest Reserve Property
under the
circumstances specified in Section 1.4 hereof. The
Grantor’s Deposit, the Interest Reserve Account and all funds, securities
or other property now or hereafter credited to the Interest Reserve
Account, all investments of any of the foregoing, plus all interest,
dividends and other distributions and payments on any of the foregoing
(collectively the “Distributions”)
received or receivable by the Interest Reserve Agent, less any property
and/or funds distributed or paid in accordance with this Agreement,
together with all proceeds of any of the foregoing are collectively
referred to herein as “Interest
Reserve Property.”
|
1.2.
Grantor’s
Rights in Interest Reserve Property; Security Interest.
| (a) |
It
is the intention of the parties hereto that the Grantor will not
have any
access to the Interest Reserve Account or the funds, investments
or other
assets credited thereto, other than the right to have the funds applied
to
discharge, when due, the Grantor’s interest payments on the Notes and the
right to receive the Interest Reserve Property under the circumstances
specified in Section 1.4 hereof, it being understood that Grantor
is the
beneficial owner of the Interest Reserve
Account.
|
| (b) |
As
security for the due and punctual payment when due of all amounts
that may
be payable from time to time under the Indenture and the Notes, now
or
hereafter arising, the Grantor hereby pledges, assigns and grants
to the
Trustee, for the benefit of the holders of the Notes, a continuing
security interest in, and a lien on, all of the Grantor’s rights under
this Agreement. As security for the due and punctual payment when
due of
all amounts that may be payable from time to time under the Indenture
and
the Notes, now or hereafter arising, the Grantor hereby pledges,
assigns
and grants to the Trustee, for the benefit of the holders of the
Notes, a
continuing security interest in, and a lien on, the Interest Reserve
Property. The Grantor represents and warrants that the security interest
of the Trustee in this Agreement and, to the extent that the Grantor
has
rights therein, the Interest Reserve Property, will at all times
be valid,
perfected and enforceable as a first priority security interest by
the
Trustee against the Grantor and all third parties in accordance with
the
terms of this Agreement.
|
| (c) |
The
parties hereto acknowledge and agree that: (i) the Interest Reserve
Account will be treated as a “Securities Account,” (ii) the Interest
Reserve Property will be treated as “Financial Assets,” (iii) this
Agreement governs the Interest Reserve Account and provides rules
governing the priority among possible “Entitlement Orders” received by the
Interest Reserve Agent as “Securities Intermediary” from the Grantor, the
Trustee and any other persons entitled to give “Entitlement Orders” with
respect to such Financial Assets and (iv) the “Securities Intermediary’s
Jurisdiction” is the State of New York. The Interest Reserve Agent
represents and warrants that the Interest Reserve Agent is a “Securities
Intermediary” with respect to the Interest Reserve Account and the
“Financial Assets” credited to the Interest Reserve Account. Except as
specifically provided herein, the terms of the New York Uniform Commercial
Code, as amended, or any successor provision (the “Code”),
will apply to this Agreement, and all terms quoted in this clause
(c) and
clause (e) will have the meanings assigned to them by Article 8 of
the
Code.
|
| (d) |
The
Interest Reserve Agent hereby agrees that all property delivered
to the
Interest Reserve Agent for crediting to the Interest Reserve Account
will
be promptly credited to the Interest Reserve Account by the Interest
Reserve Agent. The Interest Reserve Agent represents and warrants
that it
has not entered into, and agrees that it will not enter into, any
control
agreement or any other agreement relating to the Interest Reserve
Account
with any other third party without the prior written consent of the
Grantor, the Trustee and the Initial
Purchasers.
|
| (e) |
Each
of the parties hereto acknowledge and agree that the Interest Reserve
Account will be under the control (within the meanings of Sections
8-106,
9-106 and 9-104 of the Code) of the Trustee and, notwithstanding
any other
provision of this Agreement, the Interest Reserve Agent will comply
with
all “Entitlement Orders” and instructions given by the Trustee with
respect to the Interest Reserve Account or Interest Reserve Property
without further consent of the Grantor or any other person, provided
that
in giving instructions to the Interest Reserve Agent the Trustee
shall be
governed by the rights, obligations and entitlements of the Indenture
and
this Agreement. The Grantor shall have no right to give any Entitlement
Orders or instructions.
|
| (f) |
The
Grantor agrees to take all steps reasonably requested by the Trustee
in
connection with the perfection of the Trustee’s security interest in this
Agreement and the Interest Reserve Property and, without limiting
the
generality of the foregoing, the Grantor hereby authorizes the Trustee
and
the Initial Purchasers on behalf of the Trustee to file one or more
UCC
financing statements (or the equivalent thereof in any domestic or
foreign
jurisdiction other than the District of Columbia) in such jurisdictions
and filing offices and containing such description of collateral
as the
Trustee, or the Initial Purchasers on behalf of the Trustee, may
determine
is necessary or advisable in order to perfect the security interest
granted herein. The Grantor represents and warrants that it is duly
formed
and validly existing as a corporation under the laws of the Province
of
Ontario, Canada, and is not organized under the laws of any other
jurisdiction, and the Grantor hereby agrees that, prior to the termination
of this Agreement, it will not change its name or jurisdiction of
organization without giving the Trustee not more than 60 or less
than 30
days’ prior written notice thereof.
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| (g) |
Upon
the release of any Interest Reserve Property pursuant to Section
1.4
hereof, the security interest of the Trustee for the benefit of the
holders of the Notes will automatically terminate with respect to
any such
Interest Reserve Property released without any further action and
such
released Interest Reserve Property will be delivered to the recipient
free
and clear of any and all liens, claims or encumbrances of any person,
including, without limitation, the Interest Reserve Agent, the Trustee
and
the holders of the Notes. The Trustee will take all steps necessary
to
terminate any financing statements and will execute such other documents
without recourse, representation or warranty of any kind as the Grantor
may reasonably request in writing to evidence or confirm the termination
of the security interest in such released Interest Reserve
Property.
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1.3.
Investment
of Interest Reserve Property.
| (a) |
Upon
written directions from the Grantor, the Interest Reserve Agent will
invest or reinvest the Interest Reserve Property, without distinction
between principal and income, in cash and United States Government
Securities. The Interest Reserve Agent will credit all such investments
to
the Interest Reserve Account and hereby agrees to treat any such
investment as a “Financial Asset” within the meaning of Section
8-102(a)(9) of the Code.
|
| (b) |
The
Interest Reserve Agent will have no liability for any investment
losses,
fees, taxes or other charges arising from or related to any such
investment, reinvestment or liquidation of an investment other than
in
accordance with Section 2.1 hereof.
|
| (c) |
The
Interest Reserve Agent will have no obligation to invest or reinvest
the
Interest Reserve Property if deposited with the Interest Reserve
Agent
after 11:00 a.m. New York City time on such day of deposit. Instructions
received after 11:00 a.m. New York City time will be treated as if
received on the following Business Day. Any interest or other income
received on such investment and reinvestment of the Interest Reserve
Property will become part of the Interest Reserve Property and any
losses
incurred on such investment and reinvestment of the Interest Reserve
Property will be debited against the Interest Reserve Property. The
Interest Reserve Property will remain uninvested with no liability
for
interest therein if written directions are not given to the Interest
Reserve Agent. Notwithstanding the foregoing, the Interest Reserve
Agent
will have the power to sell or liquidate the foregoing investments
whenever the Interest Reserve Agent is required to release all or
any
portion of the Interest Reserve Property pursuant to Section 1.4
hereof.
In no event will the Interest Reserve Agent be deemed an investment
manager or adviser in respect of any selection of investments hereunder.
It is understood and agreed that the Interest Reserve Agent or its
affiliates are permitted to receive additional compensation that
could be
deemed to be in the Interest Reserve Agent’s economic self-interest for
(1) serving as investment adviser, administrator, shareholder servicing
agent, custodian or sub-custodian with respect to certain of the
investments, (2) using affiliates to effect transactions in certain
investments or (3) effecting transactions in
investments.
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1.4.
Distribution
of Interest Reserve Property.
Subject
to Section 1.2(e), the Interest Reserve Agent is directed to hold and distribute
the Interest Reserve Property in the following manner:
| (a) |
The
Interest Reserve Agent will only release the Interest Reserve Property
in
the cases specifically provided for in this Section
1.4.
|
| (b) |
[Intentionally
Omitted].
|
| (c) |
(i)
to the trustee to pay interest on the Notes when due and, upon certain
repurchases or redemptions of the Notes, provided such repurchases
or
redemptions are permitted under the Indenture, to pay principal of
and
premium, if any, thereon; or
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(ii)
to
the Grantor provided that no Event of Default will have occurred or be
continuing or result therefrom (A) promptly upon the Interest Reserve Agent’s
investment in Government Securities in accordance with Section 1.3 hereof of
that portion of the Grantor’s Closing Date Deposit that,
when
invested in Government Securities, represents an amount sufficient to enable
the
Grantor to make the first six interest payments when due with respect to the
Notes (the “Grantor’s
Initial Deposit”),
an
amount equal to the difference between the Grantor’s Closing Date Deposit and
the Grantor’s Initial Deposit (B) to the extent that the Grantor redeems,
retires or repurchases any of the then outstanding Notes prior to the end of
the
Interest Reserve Period, in the amount of the Interest Reserve Property in
excess of the amounts necessary to pay the reserve interest on the remaining
Notes when due shall be released to the Grantor or (C) to the extent of any
Interest Reserve Property remaining after the Grantor makes the first six
interest payments on the Notes.
In
the
case of each distribution in accordance with (i) or (ii) above, such
distribution will be by wire transfer of immediately available funds in
accordance with the appropriate wire transfer instructions set forth in Section
1.6(a) hereof.
| (d) |
If
the Interest Reserve Agent receives a written notice and instruction
from
the Trustee that the principal amount of and accrued and unpaid interest
on the Notes has become immediately due and payable pursuant to Article
VI
of the Indenture, then the Interest Reserve Agent will, within one
Business Day after receipt of such written notice and instruction
from the
Trustee, liquidate all Interest Reserve Property then held by it
and
release all of the Interest Reserve Property as
follows:
|
| (i) |
first,
to the Trustee, an amount of Interest Reserve Property in cash equal
to
amounts owing to the Trustee in respect of fees and expenses of the
Trustee under the Indenture;
|
| (ii) |
second,
to the Paying Agent for payment to the holders of the Notes, an amount
of
Interest Reserve Property sufficient to pay such accelerated principal
amount and accrued and unpaid interest, if any, thereon; such release
of
Interest Reserve Property to the Paying Agent under the Indenture
will be
made by wire transfer of immediately available funds in accordance
with
the wire instructions set forth in Section 1.6(b) hereof;
and
|
| (iii) |
third,
to the Grantor, any Interest Reserve Property remaining after
distributions in clauses (d)(i) and (ii) above, by wire transfer
of
immediately available funds in accordance with the wire instructions
set
forth in Section 1.6(a) hereof.
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1.5.
Addresses.
Notices,
instructions and other communications will be sent as follows:
| (a) |
to
Interest Reserve
|
Agent:
The
Bank
of Nova Scotia Trust Company of New York
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn.:
Vice President
Telecopier:
(▇▇▇) ▇▇▇-▇▇▇▇
| (b) |
|
to
Trustee:
The
Bank of Nova Scotia Trust Company of New
York
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn.:
Corporate Trust Administration
Telecopier:
(▇▇▇) ▇▇▇-▇▇▇▇
| (c) |
|
to
Grantor:
Canadian
Satellite Radio Holdings Inc.
▇▇▇▇▇
▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇
Trust Tower, BCE Place
Attn.:
Chief Financial Officer
Telecopier:
(▇▇▇) ▇▇▇-▇▇▇▇
with
a
copy to: Stikeman
Elliott LLP
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attn.:
▇▇▇ ▇▇▇▇▇▇
Telecopier:
(▇▇▇) ▇▇▇-▇▇▇▇
| (d) |
|
to
Initial Purchasers:
Bear
▇▇▇▇▇▇▇ & Co. Inc.
RBC
Dominion Securities Inc.
c/o
Bear
▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn.:
Corporate Finance Department
Telecopier:
(▇▇▇) ▇▇▇-▇▇▇▇
with
a
copy to: ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn.:
▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier:
(▇▇▇) ▇▇▇-▇▇▇▇
1.6.
Wire
Transfer Instructions.
| (a) |
All
cash (including the cash proceeds from liquidation of any Interest
Reserve
Property) distributed from the Interest Reserve Account to the Grantor
will be transferred by wire transfer of immediately available funds
in
accordance with the following wire transfer
instructions:
|
|
Bank:
|
Canadian
Imperial Bank of Commerce, Toronto
|
|
Intermediary
Bank
|
Bank
of America, New York
|
|
ABA
No.:
|
▇▇▇▇▇▇▇▇▇
|
|
Account
Name:
|
|
|
Account
No.: (BNF)
|
05-45619
|
|
Transit
# (BBK)
|
//CC001000002
|
If,
upon
termination of this Agreement and after any required liquidation or distribution
of Interest Reserve Property for the benefit of any person other than the
Grantor pursuant to Section 1.4 hereof, any Interest Reserve Property consists
of assets other than cash and is to be released to the Grantor, the Interest
Reserve Agent shall liquidate such Interest Reserve Property into cash and
distribute it to the Grantor pursuant to this Section 1.6(a) unless the Grantor
has provided a prior written request to the Interest Reserve Agent not to
liquidate such Interest Reserve Property and to deliver such non-cash Interest
Reserve Property in kind to the Grantor at such account(s) or location(s)
specified by the Grantor in such written request. If the Interest Reserve Agent
receives such a request, it shall deliver such non-cash Interest Reserve
Property to the Grantor as promptly as practicable. No request by the Grantor
pursuant to this paragraph shall constitute an “Entitlement Order” or
instruction with respect to the Interest Reserve Property prior to the
termination of this Agreement.
| (b) |
All
cash distributed from the Interest Reserve Account to the Paying
Agent for
payment on the Notes will be transferred by wire transfer of immediately
available funds in accordance with the following wire transfer
instructions:
|
|
Bank:
|
The
Bank of Nova Scotia, NYA
|
|
ABA
No.
|
▇▇▇▇▇▇▇▇▇
|
|
F/F/C:
|
BNST,
as Escrow Agent
|
|
Account
No.
|
03070-17
|
|
Account
Name:
|
CSR
Holdings
|
|
Attention:
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇
|
1.7.
Compensation.
| (a) |
Upon
execution of this Agreement, the Grantor will pay the Interest Reserve
Agent an administration fee of US$3,000, and US$ 3,000 annually in
advance
thereafter on each anniversary date plus reasonable out-of-pocket
expenses
and disbursements incurred from time to time during the term of this
Agreement (including the reasonable expenses and disbursements of
the
Interest Reserve Agent’s counsel and
agents).
|
| (b) |
The
Grantor will pay all activity charges in accordance with the Interest
Reserve Agent’s fee schedule as then in
effect.
|
| (c) |
The
Grantor will be responsible for and will reimburse the Interest Reserve
Agent upon demand for all reasonable expenses, disbursements and
advances
incurred or made by the Interest Reserve Agent for its own account
in
connection with this Agreement (including the reasonable expenses
and
disbursements of the Interest Reserve Agent’s counsel and
agents).
|
| (d) |
If
any reasonable fees, expenses or costs incurred by, or any obligations
owed to the Interest Reserve Agent (or its counsel) hereunder are
not paid
when due, the Interest Reserve Agent may set off such amounts against
any
Interest Reserve Property released to the Grantor from the Interest
Reserve Account in accordance with Section 1.4 hereof. The Interest
Reserve Agent shall have no right to set off against, and hereby
waives
any lien it may otherwise have against, any Interest Reserve Property
prior to its release from the Interest Reserve Account or which is
released or to be released to a person other than the Grantor in
accordance with the terms of this Agreement. Grantor shall remain
liable
for any unpaid reasonable fees, expenses or costs incurred by, or
any
obligations owed to the Interest Reserve Agent (or its counsel)
hereunder.
|
| (e) |
The
obligation of the Grantor in respect of any sum due to the Interest
Reserve Agent will, notwithstanding any judgment in a currency other
than
U.S. dollars, not be discharged until the first Business Day following
receipt by the Interest Reserve Agent of any sum adjudged to be so
due in
such other currency, on which (and only to the extent that) the Interest
Reserve Agent may in accordance with normal banking procedures purchase
U.S. dollars with such other currency; if the U.S. dollars so purchased
are less than the sum originally due to the Interest Reserve Agent
hereunder, the Grantor agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Interest Reserve
Agent
against such loss. If the amount of U.S. dollars so purchased is
greater
than the sum originally due to the Interest Reserve Agent hereunder,
the
Interest Reserve Agent agrees to pay to the Grantor an amount equal
to the
excess amount of the dollars so purchased over the sum originally
due to
the Interest Reserve Agent
hereunder.
|
| (f) |
The
obligations of the Grantor contained in this Section 1.7 will survive
the
termination of this Agreement or the earlier resignation or removal
of the
Interest Reserve Agent.
|
2.
TERMS
AND CONDITIONS
2.1.
Rights,
Duties and Immunities of Interest Reserve Agent.
| (a) |
Scope
of Duties.
The duties, responsibilities and obligations of the Interest Reserve
Agent
will be limited to those expressly set forth herein and no duties,
responsibilities or obligations will be inferred or implied. The
Interest
Reserve Agent will not be required to inquire as to the performance
or
observation of any obligation, term or condition under any other
agreement
or arrangement to which the Grantor is a party, even though reference
thereto may be made herein. The Interest Reserve Agent will not be
required to comply with any direction or instruction (other than
those
contained herein or delivered in accordance with this Agreement)
from the
Grantor or any entity acting on its behalf. The Interest Reserve
Agent
will not be required to, and will not, expend or risk any of its
own funds
or otherwise incur any financial liability in the performance of
any of
its duties hereunder.
|
| (b) |
Limitation
on Liability.
The Interest Reserve Agent will not be liable for any action taken
or
omitted or for any loss or injury resulting from its actions or its
performance or lack of performance of its duties hereunder in the
absence
of gross negligence, willful misconduct or bad faith on its part.
In no
event will the Interest Reserve Agent be liable (i) for any consequential,
punitive or special damages, regardless of the form of action and
whether
or not any such damages were foreseeable and contemplated, (ii) for
the
acts or omissions of its nominees, correspondents, designees, subagents
or
subcustodians, so long as the same are selected with due care, (iii)
for
an amount in excess of the value of the Interest Reserve Property
or (iv)
for any loss (including any shortfall in the funds required to make
the
first six interest payments when due with respect to the Notes) resulting
from the investment or reinvestment of any cash held by it hereunder
in
accordance with the terms hereof, including without limitation any
liability for any delays (not resulting from its gross negligence,
willful
misconduct or bad faith) in the investment, reinvestment or liquidation
of
the Interest Reserve Property, or any loss of interest or income
incident
to any such delay.
|
| (c) |
Further
Limitation on Liability.
The Interest Reserve Agent will not incur any liability for not performing
any act or fulfilling any duty, obligation or responsibility hereunder
by
reason of any occurrence beyond the control of the Interest Reserve
Agent
(including but not limited to any act or provision of any present
or
future law or regulation or governmental authority, any act of God
or war,
or the unavailability of the Federal Reserve Bank wire or telex or
other
wire or communication facility).
|
| (d) |
Right
to Consult Counsel.
The Interest Reserve Agent may consult with legal counsel of its
own
choosing, at the expense of the Grantor in accordance with Section
1.7
hereof, as to any matter relating to or arising from this Agreement,
and
the Interest Reserve Agent will not incur any liability in acting
in good
faith in accordance with any advice from such
counsel.
|
| (e) |
Duty
of Care.
The Interest Reserve Agent will not be under any duty to give the
Interest
Reserve Property held by it hereunder any greater degree of care
than it
gives its own similar property and will not be required to invest
any
funds held hereunder except as directed in accordance with in this
Agreement. Uninvested funds held hereunder will not earn or accrue
interest.
|
| (f) |
Collection.
All funds and other property deposited into the Interest Reserve
Account
or otherwise collected for deposit therein will be subject to the
Interest
Reserve Agent’s usual collection practices or terms regarding items
received by the Interest Reserve Agent for deposit or collection.
The
Interest Reserve Agent will not be required, or have any duty, to
notify
any Person of any payment or maturity under the terms of any instrument
deposited hereunder, or to take any legal action to enforce payment
of any
check, note or security deposited hereunder or to exercise any right
or
privilege that may be afforded to the holder of any such
security.
|
| (g) |
Statements.
The Interest Reserve Agent will provide to the Grantor, the Trustee
and
the Initial Purchasers monthly statements identifying transactions,
transfers or holdings of Interest Reserve Property, and each such
statement will be deemed to be correct and final upon receipt thereof
by
the Grantor unless the Interest Reserve Agent is notified in writing
to
the contrary within 30 Business Days of the date of such
statement.
|
| (h) |
Disclaimer
with Respect to Interest Reserve Property.
The Interest Reserve Agent will not be responsible in any respect
for the
form, execution, validity, value or genuineness of documents or securities
deposited into the Interest Reserve Account or held hereunder, or
for any
description therein, or for the identity, authority or rights of
persons
executing or delivering or purporting to execute or deliver any such
document, security or endorsement. The Interest Reserve Agent makes
no
representation as to the validity, value, genuineness or the
collectability of any security or other document or instrument held
by or
delivered to it. The Interest Reserve Agent will not be called upon
to
advise any party as to the wisdom in selling or retaining or taking
or
refraining from any action with respect to any securities or other
property deposited hereunder.
|
| (i) |
Ambiguity
or Uncertainty.
In the event of any ambiguity or uncertainty hereunder or in any
notice,
instruction or other communication received by the Interest Reserve
Agent
hereunder, the Interest Reserve Agent may, in its sole discretion,
refrain
from taking any action other than retaining possession of the Interest
Reserve Property, unless the Interest Reserve Agent receives written
instructions, signed by each of the Grantor and the Trustee which
eliminates such ambiguity or
uncertainty.
|
| (j) |
Conflicting
Claims.
In the event of any dispute between or conflicting claims by or among
the
Grantor and/or any other person or entity with respect to any Interest
Reserve Property, the Interest Reserve Agent will be entitled, in
its sole
discretion, to refuse to comply with any and all claims, demands
or
instructions with respect to such Interest Reserve Property so long
as
such dispute or conflict continues, and the Interest Reserve Agent
will
not be or become liable in any way to the Grantor for failure or
refusal
to comply with such conflicting claims, demands or instructions.
The
Interest Reserve Agent will be entitled to refuse to act until, in
its
sole discretion, either (i) such conflicting or adverse claims or
demands
have been determined by a final order, judgment or decree of a court
of
competent jurisdiction, which order, judgment or decree is not subject
to
appeal, or settled by agreement between the conflicting parties as
evidenced in a writing satisfactory to the Interest Reserve Agent
or (ii)
the Interest Reserve Agent has received security or an indemnity
satisfactory to it sufficient to hold it harmless from and against
any and
all Losses (as defined in Section 2.2 hereof) which it may incur
by reason
of so acting. The Interest Reserve Agent may, in addition, elect,
in its
sole discretion, to commence an interpleader action or seek other
judicial
relief or orders as it may deem, in its sole discretion, necessary.
The
costs and expenses (including reasonable attorneys’ fees and expenses)
incurred in connection with such proceeding will be paid by, and
will be
solely an obligation of, the
Grantor.
|
|
(k)
|
Compliance
with Judicial Orders.
If at any time the Interest Reserve Agent is served with any judicial
or
administrative order, judgment, decree, writ or other form of judicial
or
administrative process that in any way affects Interest Reserve Property,
including but not limited to orders of attachment or garnishment
or other
forms of levies or injunctions or stays relating to the transfer
of
Interest Reserve Property (an “Order”),
the Interest Reserve Agent is authorized to comply therewith in any
manner
as it or its legal counsel of its own choosing deems appropriate;
and if
the Interest Reserve Agent complies with any such Order, the Interest
Reserve Agent will not be liable to any of the parties hereto or
to any
other person or entity even though such Order may be subsequently
modified
or vacated or otherwise determined to have been without legal force
or
effect.
|
| (l) |
Right
to Rely on Communications.
The Interest Reserve Agent will be entitled to conclusively rely
upon any
order, judgment, certification, demand, instruction, notice, instrument
or
other writing delivered to it hereunder without being required to
determine the authenticity or the correctness of any fact stated
therein
or the propriety or validity or the service thereof. The Interest
Reserve
Agent may act in conclusive reliance upon any instrument or signature
believed by it to be genuine and may assume that any person purporting
to
give receipt or advice to make any statement or execute any document
in
connection with the provisions hereof has been duly authorized to
do so.
When the Interest Reserve Agent acts on any information, instructions,
communications (including, but not limited to, communications with
respect
to the delivery of securities or the wire transfer of funds) sent
by
facsimile, email or other form of electronic or data transmission,
the
Interest Reserve Agent, absent gross negligence, willful misconduct
or bad
faith, will not be responsible or liable in the event such communication
is not an authorized or authentic communication of the Grantor or
Trustee,
as the case may be, or is not in the form the Grantor or Trustee
sent or
intended to send (whether due to fraud, distortion or otherwise).
The
Grantor will indemnify the Interest Reserve Agent against any loss,
liability, claim or expense (including legal fees and expenses) it
may
incur as a result of acting in accordance with any such
communication.
|
| (m) |
Right
to Request Instruction.
At any time the Interest Reserve Agent may request an instruction
in
writing from the Grantor and the Trustee and may, at its own option,
include in such request the course of action it proposes to take
and the
date on which it proposes to act, regarding any matter arising in
connection with its duties and obligations hereunder. The Interest
Reserve
Agent will not be liable for acting in accordance with such a proposal
on
or after the date specified therein; provided
that (i) the specified date will be at least five Business Days after
each
of the Grantor and the Trustee receives the Interest Reserve Agent’s
request for instructions and its proposed course of action and (ii)
prior
to so acting, the Interest Reserve Agent has not received the written
instructions requested.
|
| (n) |
Liability
for Taxes.
Except as otherwise set forth herein, the Interest Reserve Agent
does not
have any interest in the Interest Reserve Property deposited hereunder
but
is serving as holder only and having only possession thereof. The
Grantor
will pay or reimburse the Interest Reserve Agent upon request for
any
transfer taxes or other taxes relating to the Interest Reserve Property
incurred in connection herewith and will indemnify and hold harmless
the
Interest Reserve Agent with respect to any amounts that it is obligated
to
pay in the way of such taxes, in each case to the reasonable satisfaction
of the Interest Reserve Agent. Any payments of income from the Interest
Reserve Account will be subject to withholding regulations then in
force
with respect to United States taxes. The parties hereto will provide
the
Interest Reserve Agent with appropriate W-9 forms for tax I.D. number
certifications, or W-8 forms for non-resident alien certifications,
as
requested. It is understood that the Interest Reserve Agent will
be
responsible for income reporting only with respect to income earned
on
investment of funds which are a part of the Interest Reserve Property
and
is not responsible for any other reporting. The provisions of this
Section
2.1(n) will survive the termination of this Agreement or the earlier
resignation or removal of the Interest Reserve Agent. For greater
certainty, all income and gains are those of the Grantor for tax
purposes
and the Grantor is to report in its tax returns (unless there is
a Default
and the Grantor ceases to be the beneficial owner of the Interest
Reserve
Account).
|
2.2.
Indemnity.
The
Grantor will be liable for and will reimburse and indemnify the Interest Reserve
Agent and hold the Interest Reserve Agent harmless from and against any and
all
claims, losses, liabilities, costs, damages or expenses (including reasonable
attorneys’ fees and expenses) (collectively, “Losses”)
arising from or in connection with or related to this Agreement or being
Interest Reserve Agent hereunder (including but not limited to Losses incurred
by the Interest Reserve Agent in connection with its successful defense, of
any
claim of gross negligence or willful misconduct on its part); provided,
however,
that
nothing contained herein will require the Interest Reserve Agent to be
indemnified for Losses caused by its gross negligence, willful misconduct or
bad
faith. The provisions of this Section 2.2 will survive the termination of this
Agreement or the earlier resignation or removal of the Interest Reserve
Agent.
2.3.
Removal
of Interest Reserve Agent.
| (a) |
The
Grantor may, with the consent of the Trustee, remove the Interest
Reserve
Agent at any time by giving to the Interest Reserve Agent 15 days’ prior
notice in writing signed by the Grantor. The Interest Reserve Agent
may
resign at any time by giving to the Grantor 15 days’ prior written notice
thereof.
|
| (b) |
Within
10 Business Days after giving the foregoing notice of removal to
the
Interest Reserve Agent or receiving the foregoing notice of resignation
from the Interest Reserve Agent, the Grantor and the Trustee will
jointly
agree on and appoint a successor Interest Reserve Agent. The Grantor
will
cause any successor Interest Reserve Agent to assume the obligations
of
the Interest Reserve Agent hereunder or to enter into such other
interest
reserve and security agreement as may be acceptable to the Trustee
in its
sole discretion. If a successor Interest Reserve Agent has not accepted
such appointment by the end of such 10-day period or such successor
Interest Reserve Agent has not become so bound, the Interest Reserve
Agent
may, jointly with the Trustee, agree to appoint a replacement Interest
Reserve Agent with its place of business in the City of New York,
New
York, and deliver the Interest Reserve Property to such replacement
Interest Reserve Agent in the City of New York, New York or may apply
to a
court of competent jurisdiction for the appointment of a successor
Interest Reserve Agent or for other appropriate relief. The costs
and
expenses (including reasonable attorneys’ fees and expenses) incurred by
the Interest Reserve Agent in connection with such proceeding will
be paid
by, and be deemed to be solely an obligation of, the
Grantor.
|
| (c) |
Upon
receipt of the identity of the successor Interest Reserve Agent,
the
Interest Reserve Agent will either deliver the Interest Reserve Property
then held hereunder to the successor Interest Reserve Agent, less
the
Interest Reserve Agent’s fees, costs and expenses or other obligations
owed to the Interest Reserve Agent, or hold such Interest Reserve
Property
(or any portion thereof), pending distribution, until all such fees,
costs
and expenses or other obligations owing to the Interest Reserve Agent
are
paid. Upon delivery of the Interest Reserve Property to the successor
Interest Reserve Agent, the Interest Reserve Agent will have no further
duties, responsibilities or obligations
hereunder.
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2.4.
Termination.
This
Agreement will terminate upon the distribution of all Interest Reserve Property
from the Interest Reserve Account in accordance with the provisions of Section
1.4 hereof. Section 1.7 hereof, the provisions of these Terms and Conditions
and
the Miscellaneous provisions below will survive termination of this Agreement
and/or the resignation or removal of the Interest Reserve Agent.
3.
MISCELLANEOUS
3.1.
Notices.
All
notices and other communications under this Agreement will be in writing in
English and will be deemed given (i) on the date of delivery when delivered
personally, or (ii) on the next Business Day after delivery to a recognized
overnight courier or mailed first class (postage prepaid) or when sent by
facsimile to the parties (which facsimile copy will be followed by delivery
of
an original by other method of delivery) at the addresses set forth in Section
1.5 hereof (or to such other address as a party may have specified by notice
given to the other parties pursuant to this provision). Whenever under the
terms
hereof the time for giving a notice or performing an act falls upon a day that
is not a Business Day, such time will be extended to the next Business Day.
Attached as Schedule
3.1
hereto
and made a part hereof is a list of those persons initially entitled to give
notices, instructions and other communications to the Trustee and/or the
Interest Reserve Agent on behalf of the Grantor hereunder (each such
representative, and “Authorized
Person”).
Schedule 3.1 may be amended from time to time by written notice from the Grantor
to the Interest Reserve Agent and the Trustee, with a copy to the Initial
Purchasers.
3.2.
Representations
and Warranties.
The
Grantor hereby represents and warrants (a) that this Agreement has been duly
authorized, executed and delivered on its behalf and constitutes its legal,
valid and binding obligation and (b) that the execution, delivery and
performance of this Agreement by the Grantor do not and will not violate any
applicable law or regulation.
3.3.
Governing
Law; Consent to Jurisdiction; Construction.
| (A) |
THIS
AGREEMENT WILL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER
JURISDICTION WOULD BE REQUIRED
THEREBY.
|
| (b) |
The
Interest Reserve Agent’s jurisdiction for purposes of Sections 8-110 and
9-304 of the Code will be the State of New
York.
|
| (c) |
Each
party hereto irrevocably agrees that any legal action or proceeding
arising out of or based upon this Agreement or the transactions
contemplated hereby will be brought in the federal courts located
in the
Borough of Manhattan in the City of New York, and irrevocably submits
to
the exclusive jurisdiction of such courts in any such action or
proceeding. The parties hereby irrevocably and unconditionally waive
any
objection to the laying of venue of any lawsuit, action or other
proceeding in any such court, and hereby further irrevocably and
unconditionally waive and agree not to plead or claim in any such
court
that any such lawsuit, action or other proceeding brought in any
such
court has been brought in an inconvenient forum. The parties further
agree
that service of any process, summons, notice or document by certified
or
registered mail, return receipt requested, to such party’s address set
forth in Section 1.5 hereof (or directed to it at the address last
specified for notices hereunder) will be effective service of process
for
any lawsuit, action or other proceeding brought in any such court,
and
such service will be deemed completed 10 days after the same is so
mailed;
provided that the Grantor and the Guarantor hereby appoint CT Corporation
System of New York, New York, as their respective agent for service
of
process in any lawsuit, action or proceeding arising out of or based
upon
this Agreement or the transaction contemplated hereby. Each party
hereto
hereby waives the right to trial by jury in any such lawsuit, action
or
other proceeding.
|
| (d) |
Time
is of the essence in this
Agreement.
|
| (e) |
Except
as set forth in Section 1.2(c), capitalized terms that are used but
not
defined in this Agreement have the meanings assigned to them in the
Indenture. The term “will” as used in this Agreement shall be interpreted
to express a command. The term “or” is not exclusive. Words in the
singular include the plural and words in the plural include the
singular.
|
3.4.
Rights
and Remedies.
The
rights and remedies conferred upon the parties hereto and the Initial Purchasers
will be cumulative, and the exercise or waiver of any such right or remedy
will
not preclude or inhibit the exercise of any additional rights or remedies.
The
waiver of any right or remedy hereunder will not preclude the subsequent
exercise of such right or remedy.
3.5.
Benefit
of the Parties.
This
Agreement will be binding upon the parties hereto and each of their successors
and assigns. This Agreement will inure solely to the benefit of the parties
hereto, the Initial Purchasers and (subject to Section 3.6 hereof) each of
their
respective successors and assigns, and no other person will have or be construed
to have any legal or equitable right, remedy or claim under, in respect of,
or
by virtue of this Agreement.
3.6.
Assignment.
This
Agreement and the rights and obligations hereunder of parties hereto may not
be
assigned except with the prior written consent of the other parties hereto
and
the Initial Purchasers, and any purported assignment without such consent will
be null and void.
3.7.
Merger.
This
Agreement constitutes the entire agreement of the parties hereto with respect
to
the subject matter contained herein and supersedes all prior oral or written
agreements in regard thereto.
3.8.
Amendment.
Except
as
otherwise permitted herein, this Agreement may be amended, supplemented or
otherwise modified only by a written amendment signed by all the parties hereto
and the Initial Purchasers, and no waiver of any provision hereof will be
effective unless expressed in a writing signed by all of the parties hereto
and
the Initial Purchasers.
3.9.
Severability.
The
invalidity, illegality or unenforceability of any provision of this Agreement
will in no way affect the validity, legality or enforceability of any other
provision, and if any provision is held to be enforceable as a matter of law,
the other provisions will not be affected thereby and will remain in full force
and effect.
3.10.
Headings
and Captions.
The
headings and captions included in this Agreement are included solely for
convenience of reference and will have no effect on the interpretation or
operation of this Agreement.
3.11.
Counterparts.
This
Agreement may be executed in one or more counterparts, each of which
counterpart, when so executed and delivered, will be deemed to be an original
and all such counterparts together will constitute one and the same
instrument.
IN
WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
by
a duly authorized officer as of the day and year first written
above.
Canadian
Satellite Radio Holdings Inc.,
as
Grantor
By:
/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title:
Chief Financial Officer
By:
/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title:
Chief Financial Officer
The
Bank of Nova Scotia
Trust
Company of New York,
as
Interest Reserve Agent
By:
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
Vice President
The
Bank of Nova Scotia
Trust
Company of New York,
as
Trustee
By:
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
Vice President
SCHEDULE
3.1*
The
following persons are entitled to give notices, instructions and other
communications to the Interest Reserve Agent on behalf of the
Grantor:
|
Name
|
Title
|
|
|
▇▇▇▇
▇. ▇▇▇▇▇▇
|
Chairman
and Chief Executive Officer
|
|
|
▇▇▇▇▇▇▇
▇▇▇▇
|
President
and Chief Operating Officer
|
|
|
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
|
Chief
Financial Officer, Treasurer and Secretary
|
|
|
▇▇▇▇▇▇▇
▇▇▇▇▇
|
Executive
Vice President
|
* This
Schedule 3.1 may be amended from time to time by written notice from the Grantor
to the Interest Reserve Agent and the Trustee.