TERM CREDIT AGREEMENT

Exhibit 10.26

EXECUTION COPY

 

TERM CREDIT AGREEMENT

dated as of

February 17, 2009,

among

SIRIUS XM RADIO INC.,

The Lenders Party Hereto

and

LIBERTY MEDIA CORPORATION

as Administrative Agent and Collateral Agent

 

TABLE OF CONTENTS

 

SCHEDULES:

 

CREDIT AGREEMENT dated as of February 17, 2009, among SIRIUS XM RADIO INC., a Delaware corporation (the “ Borrower ”), the LENDERS from time to time party hereto and LIBERTY MEDIA CORPORATION, as Administrative Agent and Collateral Agent.

The Borrower has requested the Lenders (such term and each other capitalized term used and not otherwise defined herein having the meaning assigned to it in Article I) to extend credit in the form of Term Loans to the Borrower in US Dollars in an aggregate principal amount of $250,000,000 and Purchase Money Loans to the Borrower in US Dollars in an aggregate principal amount of not more than $30,000,000. The proceeds of the Term Loans are to be used (i) to repay the aggregate principal outstanding of the 2  ¹ / 2 % Convertible Notes at maturity and (ii) for general corporate purposes of the Borrower and its Subsidiaries. The proceeds of the Purchase Money Loans are to be used to finance the acquisition of assets, including additions and improvements, of the Borrower and its Subsidiaries.

The Lenders are willing to make the Loans upon the terms and subject to the conditions set forth herein. Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Defined Terms . As used in this Agreement, the following terms have the meanings specified below:

“ 2  ¹ / 2 % Convertible Notes ” means the 2  ¹ / 2 % Convertible Notes of the Borrower due 2009 issued pursuant to the 2  ¹ / 2 % Convertible Notes Indenture.

“ 2  ¹ / 2 % Convertible Notes Indenture ” means the Indenture dated as of May 23, 2003, between the Borrower and The Bank of New York, as trustee.

“ 9  ⁵ / 8 % Senior Notes Indenture ” means the Indenture dated as of August 9, 2005, between the Borrower and The Bank of New York, as trustee.

“ 9  ⁵ / 8 % Senior Notes ” means the 9  ⁵ / 8 % Senior Notes of the Borrower due 2013 issued pursuant to the 9  ⁵ / 8 % Senior Notes Indenture.

“ 8  ³ / 4 % Subordinated Notes ” means the 8  ³ / 4 % Convertible Subordinated Notes of the Borrower due 2009 issued pursuant to the Indenture dated as of September 29, 1999, between the Borrower and United States Trust Company of Texas, N.A., as trustee.

“ Additional Assets ” means (a) any property, plant, license or equipment used in a Related Business, (b) the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Borrower or another Restricted Subsidiary or (c) Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary; provided, however, that any such Restricted Subsidiary described in clause (b) or (c) above is engaged in a Related Business.

“ Administrative Agent ” means Liberty, in its capacity as administrative agent for the Lenders hereunder.

“ Administrative Questionnaire ” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“ Affiliate ” of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes hereof, “ control ”, when used with respect to any Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “ controlling ” and “ controlled ” have meanings correlative to the foregoing. For purposes of Section 6.05 only, “Affiliate” shall also mean any beneficial owner of Capital Stock representing 10% or more of the total voting power of the Voting Stock (on a fully diluted basis) of the Borrower (excluding any Person permitted to report such ownership on Schedule 13G under the Exchange Act) or of rights or warrants to purchase such Capital Stock (whether or not currently exercisable) and any Person who would be an Affiliate of any such beneficial owner pursuant to the first sentence hereof.

“ Affiliate Transaction ” has the meaning assigned to such term in Section 6.05.

“ Agents ” means the Administrative Agent and the Collateral Agent.

“ Asset Disposition ” means any sale, lease, transfer or other disposition (or series of related sales, leases, transfers or dispositions) by the Borrower or any Restricted Subsidiary, including any disposition by means of a merger, consolidation or similar transaction (each referred to for the purposes of this definition as a “ disposition ”), of:

(a) any shares of Capital Stock of a Restricted Subsidiary (other than directors’ qualifying shares or shares required by applicable law to be held by a Person other than the Borrower or a Restricted Subsidiary);

(b) all or substantially all the assets of any division or line of business of the Borrower or any Restricted Subsidiary; or

(c) any other assets of the Borrower or any Restricted Subsidiary outside of the ordinary course of business of the Borrower or such Restricted Subsidiary;

other than, in the case of clauses (a), (b) and (c) above,

(i) a disposition by a Restricted Subsidiary to the Borrower or by the Borrower or a Restricted Subsidiary to a Restricted Subsidiary;

(ii) for purposes of Sections 2.07 and 6.04 only, a disposition that constitutes a Restricted Payment (or would constitute a Restricted Payment but for the exclusions from the definition thereof) and that is not prohibited by Section 6.02 and the making of an Asset Swap;

 

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(iii) a disposition of assets with a fair market value of less than $10,000,000;

(iv) a disposition of cash or Temporary Cash Investments;

(v) the creation of a Lien (but not the sale or other disposition of the property subject to such Lien);

(vi) the licensing or sublicensing of intellectual property or other general intangibles and licenses, leases or subleases of other property, provided, however, that such licensing or sublicensing shall not interfere in any material respect with the Borrower’s or such Restricted Subsidiary’s continuing use of such intellectual property or other general intangibles and licenses, leases or subleases of other property; and

(vii) foreclosure on assets.

“ Asset Swap ” means concurrent purchase and sale or exchange of Related Business Assets between the Borrower or any of its Restricted Subsidiaries and another Person; provided that any cash received must be applied in accordance with Section 2.07.

“ Assignment and Assumption ” means an Assignment and Assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.

“ Attributable Debt ” in respect of a Sale/Leaseback Transaction means, as at the time of determination, the present value (discounted at the interest rate then borne by the 9  ⁵ / 8 % Senior Notes or, if none shall be outstanding, by the Loans, compounded annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended); provided, however, that if such Sale/Leaseback Transaction results in a Capital Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of the term of “Capital Lease Obligation”.

“ Available Purchase Money Loan Commitment ” shall mean, with respect to any Lender at any time, an amount equal to the excess, if any, of (a) the amount of the Purchase Money Loan Commitment of such Lender at such time over (b) the aggregate principal amount of all Purchase Money Loans made by such Lender prior to such time.

“ Average Life ” means, as of the date of determination, with respect to any Indebtedness, the quotient obtained by dividing:

(a) the sum of the products of the numbers of years from the date of determination to the dates of each successive scheduled principal payment of or redemption or similar payment with respect to such Indebtedness multiplied by the amount of such payment by

(b) the sum of all such payments.

 

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“ Board of Directors ” means the Board of Directors of the Borrower or any committee thereof duly authorized to act on behalf of such Board.

“ Board of Governors ” means the Board of Governors of the Federal Reserve System of the United States of America.

“ Borrower ” has the meaning assigned to such term in the heading of this Agreement.

“ Borrower-Holdings Merger ” means (a) a merger or consolidation of XM Satellite Radio Holdings Inc. with or into Sirius XM Radio Inc. or a merger or consolidation of Sirius XM Radio Inc. with or into XM Satellite Radio Holdings Inc. or (b) any assignment, transfer, conveyance or other disposition of all or substantially all of the properties or assets of XM Satellite Radio Holdings Inc. to Sirius XM Radio Inc. or of Sirius XM Radio Inc. to XM Satellite Radio Holdings Inc.

“ Borrower-XM Merger ” means (a) a merger or consolidation of XM Satellite Radio Inc. with or into Sirius XM Radio Inc. or a merger or consolidation of Sirius XM Radio Inc. with or into XM Satellite Radio Inc. or (b) any assignment, transfer, conveyance or other disposition of all or substantially all of the properties or assets of XM Satellite Radio Inc. to Sirius XM Radio Inc. or of Sirius XM Radio Inc. to XM Satellite Radio Inc.

“ Borrowing Request ” means a request by the Borrower for a Loan in accordance with Section 2.03(a).

“ Business Day ” means any day that is not a Saturday, a Sunday or a day on which banking institutions are not required to be open in the State of New York.

“ Call Premium ” means, with respect to any applicable prepayment under Section 2.07(a) or 2.08, an amount equal to 5.0% of the aggregate principal amount of such prepayment.

“ Capital Lease Obligation ” means an obligation that is required to be classified and accounted for as a capital lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation shall be the capitalized amount of such obligation determined in accordance with GAAP; and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty. For purposes of Section 6.08, a Capital Lease Obligation will be deemed to be secured by a Lien on the property being leased.

“ Capital Stock ” of any Person means any and all shares, interests (including partnership interests), rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity.

 

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“ Casualty Event ” means any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of the Borrower or any Restricted Subsidiary with a fair market value immediately prior to such event equal to or greater than $500,000.

“ Change of Control ” means the occurrence of any of the following events:

(a) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause (a) such person shall be deemed to have “beneficial ownership” of all shares that any such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the total voting power of the Voting Stock of the Borrower (for the purposes of this clause (a), such other person shall be deemed to beneficially own any Voting Stock of a Person held by any other Person (the “parent entity”), if such other person is the beneficial owner (as defined in this clause (a)), directly or indirectly, of more than 50% of the voting power of the Voting Stock of such parent entity);

(b) individuals who on the date of this Agreement constituted the Board of Directors (together with any new directors whose election by such Board of Directors or whose nomination for election by the stockholders of the Borrower was approved by a vote of a majority of the directors of the Borrower then still in office who were either directors on the date of this Agreement or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors then in office; or

(c) the merger or consolidation of the Borrower with or into another Person or the merger of another Person with or into the Borrower, or the sale of all or substantially all the assets of the Borrower (determined on a consolidated basis) to another Person.

Notwithstanding the foregoing, none of the consummation of a Borrower-Holdings Merger, the consummation of a Borrower-XM Merger, the consummation of a Holdings-XM Merger or the formation, by merger or otherwise, of a parent entity of the Borrower shall constitute a Change of Control under paragraph (c) above if holders of securities that represented 100% of the Voting Stock of the Borrower immediately prior to such transaction (or other securities into which such securities are converted as part of such transaction) own, directly or indirectly, at least a majority of the Voting Power of the Voting Stock of the Borrower immediately after such transaction.

“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.

“ Collateral ” means any and all “Collateral”, as defined in any applicable Security Document.

 

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“ Collateral Agent ” means Liberty, in its capacity as the collateral agent for the Secured Parties.

“ Collateral Agreements ” means the collective reference to the Term Loan Guarantee and Collateral Agreement and the Purchase Money Guarantee and Collateral Agreement.

“ Commitments ” means the collective reference to Term Loan Commitments and the Purchase Money Loan Commitments.

“ Consolidated Income Tax Expense ” means, with respect to the Borrower for any period, the provision for federal, state, local and foreign taxes based on income or profits (including franchise taxes) payable by the Borrower and its Restricted Subsidiaries for such period, as determined on a consolidated basis in accordance with GAAP.

“ Consolidated Interest Expense ” means, for any period, (a) the total interest expense of the Borrower and its Restricted Subsidiaries for such period, whether paid or accrued and whether or not capitalized (including amortization of debt issuance costs and original issue discount), plus (b) to the extent not included in such interest expense, without duplication, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations and Attributable Debt and commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and net of (c) the effect of all payments made or received pursuant to Hedging Obligations.

“ Consolidated Leverage Ratio ” as of any date of determination means the ratio of (a) the aggregate amount of Indebtedness of the Borrower and its Restricted Subsidiaries as of such date of determination to (b) Consolidated Operating Cash Flow for the most recent four consecutive fiscal quarters ending prior to such date of determination for which financial information is available (the “ Reference Period ”); provided, however, that:

(i) if the transaction giving rise to the need to calculate the Consolidated Leverage Ratio is an Incurrence of Indebtedness, the amount of such Indebtedness shall be calculated after giving effect on a pro forma basis to such Indebtedness;

(ii) if the Borrower or any Restricted Subsidiary has repaid, repurchased, defeased or otherwise discharged any Indebtedness that was outstanding as of the end of such fiscal quarter or if any Indebtedness is to be repaid, repurchased, defeased or otherwise discharged on the date of the transaction giving rise to the need to calculate the Consolidated Leverage Ratio (other than, in each case, Indebtedness Incurred under any revolving credit facility), the aggregate amount of Indebtedness shall be calculated on a pro forma basis and Consolidated Operating Cash Flow shall be calculated as if the Borrower or such Restricted Subsidiary had not earned the interest income, if any, actually earned during the Reference Period in respect of cash or Temporary Cash Investments used to repay, repurchase, defease or otherwise discharge such Indebtedness;

 

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(iii) if since the beginning of the Reference Period the Borrower or any Restricted Subsidiary shall have made any Asset Disposition, the Consolidated Operating Cash Flow for the Reference Period shall be reduced by an amount equal to the Consolidated Operating Cash Flow (if positive) directly attributable to the assets that are the subject of such Asset Disposition for the Reference Period or increased by an amount equal to the Consolidated Operating Cash Flow (if negative) directly attributable thereto for the Reference Period;

(iv) if since the beginning of the Reference Period the Borrower or any Restricted Subsidiary (by merger or otherwise) shall have made an Investment in any Restricted Subsidiary (or any Person that becomes a Restricted Subsidiary) or an acquisition of assets that constitutes all or substantially all of an operating unit of a business, Consolidated Operating Cash Flow for the Reference Period shall be calculated after giving pro forma effect thereto (including the Incurrence of any Indebtedness) as if such Investment or acquisition had occurred on the first day of the Reference Period; and

(v) if since the beginning of the Reference Period any Person (that subsequently became a Restricted Subsidiary or was merged with or into the Borrower or any Restricted Subsidiary since the beginning of such Reference Period) shall have made any Asset Disposition, any Investment or acquisition of assets that would have required an adjustment pursuant to clause (iii) or (iv) above if made by the Borrower or a Restricted Subsidiary during the Reference Period, Consolidated Operating Cash Flow for the Reference Period shall be calculated after giving pro forma effect thereto as if such Asset Disposition, Investment or acquisition had occurred on the first day of the Reference Period.

For purposes of this definition, whenever pro forma effect is to be given to an acquisition of assets, the amount of income or earnings relating thereto and the amount of Consolidated Interest Expense associated with any Indebtedness Incurred in connection therewith, the pro forma calculations shall be determined in accordance with GAAP in good faith by a Financial Officer of the Borrower. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Interest Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement has a remaining term in excess of 12 months). If any Indebtedness is Incurred under a revolving credit facility and is being given pro forma effect, the interest on such Indebtedness shall be calculated based on the average daily balance of such Indebtedness for the four fiscal quarters subject to the pro forma calculation to the extent such Indebtedness was Incurred solely for working capital purposes.

 

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“ Consolidated Net Income ” means, for any period, the net income of the Borrower and its consolidated Subsidiaries; provided, however, that there shall not be included in such Consolidated Net Income:

(a) any net income of any Person (other than the Borrower) if such Person is not a Restricted Subsidiary, except that:

(i) subject to the exclusion contained in clauses (c), (d) and (e) below, the Borrower’s equity in the net income of any such Person for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such period to the Borrower or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution paid to a Restricted Subsidiary, to the limitations contained in clause (b) below); and

(ii) the Borrower’s equity in a net loss of any such Person for such period shall be included in determining such Consolidated Net Income to the extent such loss has been funded with cash from the Borrower or a Restricted Subsidiary;

(b) any net income of any Restricted Subsidiary if such Restricted Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to the Borrower, except that:

(i) subject to the exclusion contained in clauses (c), (d) and (e) below, the Borrower’s equity in the net income of any such Restricted Subsidiary for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash that could have been distributed by such Restricted Subsidiary during such period to the Borrower or another Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution paid to another Restricted Subsidiary, to the limitation contained in this clause); and

(ii) the Borrower’s equity in a net loss of any such Restricted Subsidiary for such period shall be included in determining such Consolidated Net Income;

(c) any gain (or loss) realized upon the sale or other disposition of any assets of the Borrower or its consolidated Subsidiaries (including pursuant to any Sale/Leaseback Transaction) that is not sold or otherwise disposed of in the ordinary course of business and any gain (or loss) realized upon the sale or other disposition of any Capital Stock of any Person;

(d) extraordinary gains or losses; and

(e) the cumulative effect of a change in accounting principles,

in each case, for such period. Notwithstanding the foregoing, for the purpose of Section 6.02 only, there shall be excluded from Consolidated Net Income any repurchases, repayments or redemptions of Investments, proceeds realized on the sale of Investments or return of capital to the Borrower or a Restricted Subsidiary to the extent such repurchases, repayments, redemptions, proceeds or returns increase the amount of Restricted Payments permitted under such Section pursuant to paragraph (a)(iii)(D) thereof.

 

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“ Consolidated Operating Cash Flow ” means, with respect to the Borrower and its Restricted Subsidiaries on a consolidated basis, for any period, an amount equal to Consolidated Net Income for such period increased (without duplication) by the sum of:

(a) Consolidated Income Tax Expense accrued for such period to the extent deducted in determining Consolidated Net Income for such period;

(b) Consolidated Interest Expense for such period to the extent deducted in determining Consolidated Net Income for such period; and

(c) depreciation, amortization and any other noncash items for such period to the extent deducted in determining Consolidated Net Income for such period (other than any noncash item that requires the accrual of, or a reserve for, cash charges for any future period) of the Borrower and the Restricted Subsidiaries (including amortization of capitalized debt issuance costs for such period, any noncash compensation expense realized for grants of stock options or other rights to officers, directors, consultants and employees and noncash charges related to equity granted to third parties), all of the foregoing determined on a consolidated basis in accordance with GAAP, and decreased by noncash items to the extent they increase Consolidated Net Income (including the partial or entire reversal of reserves taken in prior periods, but excluding reversals of accruals or reserves for cash charges taken in prior periods) for such period.

“ Consolidated Total Assets ” means the total assets of the Borrower and its consolidated Restricted Subsidiaries, as shown on the most recent balance sheet of the Borrower, determined on a consolidated basis in accordance with GAAP.

“ Default ” means any event or condition that is, or after notice or passage of time or both would, unless cured or waived, become an Event of Default.

“ Designated Joint Ventures ” means any Person formed for the purpose of, or whose principal business is, offering a satellite radio service outside the continental United States; provided, however, that the aggregate Investment in such Persons by the Borrower and its Restricted Subsidiaries does not exceed $100,000,000 in the aggregate at any time outstanding (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value).

“ Disqualified Stock ” means, with respect to any Person, any Capital Stock that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder) or upon the happening of any event:

(a) matures or is mandatorily redeemable (other than redeemable only for Capital Stock of such Person that is not itself Disqualified Stock) pursuant to a sinking fund obligation or otherwise;

 

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(b) is convertible or exchangeable at the option of the holder for Indebtedness or Disqualified Stock; or

(c) is mandatorily redeemable or must be purchased upon the occurrence of certain events or otherwise, in whole or in part;

in each case on or prior to the date that is 91 days after the Maturity Date; provided, however, that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof the right to require such Person to purchase or redeem such Capital Stock upon the occurrence of an “asset sale” or “change of control” shall not constitute Disqualified Stock if:

(i) the “asset sale” or “change of control” provisions applicable to such Capital Stock are not more favorable to the holders of such Capital Stock than the provisions of Sections 4.06 and 4.10 of the 9  ⁵ / 8 % Senior Notes Indenture, as in effect on the date of this Agreement; and

(ii) any such requirement only becomes operative after compliance with the provisions set forth herein, including Section 2.07.

The amount of any Disqualified Stock that does not have a fixed redemption, repayment or repurchase price will be calculated in accordance with the terms of such Disqualified Stock as if such Disqualified Stock were redeemed, repaid or repurchased on any date on which the amount of such Disqualified Stock is to be determined pursuant to this Agreement; provided, however, that if such Disqualified Stock could not be required to be redeemed, repaid or repurchased at the time of such determination, the redemption, repayment or repurchase price will be the book value of such Disqualified Stock as reflected in the most recent financial statements of such Person.

“ Domestic Subsidiary ” means any Subsidiary organized and existing under the laws of the United States of America, any State thereof or the District of Columbia.

“ Effective Date ” means the date on which the conditions specified in Sections 4.01 and 4.02 are satisfied, or waived in accordance with Section 9.02, with respect to the Term Loans made hereunder.

“ Environmental Laws ” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, Release or threatened Release of any Hazardous Material or to health and safety matters.

“ Environmental Liability ” means any liability, obligation, damage, loss, claim, action, suit, judgment, order, fine, penalty, fee, expense or cost, contingent or otherwise (including any liability for natural resource damages, costs of environmental remediation or indemnities), directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release or

 

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threatened Release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ ERISA Affiliate ” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

“ ERISA Event ” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Plan (other than an event for which the 30-day notice period is waived), (b) prior to the effectiveness of the applicable provisions of the Pension Act, the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA) or, on and after the effectiveness of the applicable provisions of the Pension Act, any failure by any Plan to satisfy the minimum funding standard (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such Plan, in each case whether or not waived, (c) the filing pursuant to, prior to the effectiveness of the applicable provisions of the Pension Act, Section 412(d) of the Code or Section 303(d) of ERISA or, on and after the effectiveness of the applicable provisions of the Pension Act, Section 412(c) of the Code or Section 302(c) of ERISA, of an application for a waiver of the minimum funding standard with respect to any Plan, (d) on and after the effectiveness of the applicable provisions of the Pension Act, a determination that any Plan is, or is expected to be, in “at-risk” status (as defined in Section 303(i)(4) of ERISA or Section 430(i)(4) of the Code), (e) the incurrence by the Borrower or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan, (f) the receipt by the Borrower or any of its ERISA Affiliates from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or to appoint a trustee to administer any Plan, (f) the incurrence by the Borrower or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA or, on and after the effectiveness of the applicable provisions of the Pension Act, in endangered or critical status, within the meaning of Section 305 of ERISA.

“ Event of Default ” has the meaning assigned to such term in Article VII.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Excluded Taxes ” means, with respect to any Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income by the United States of America (or any political subdivision thereof), or by the jurisdiction under

 

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which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profit taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction described in clause (a) above and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 2.17(b)), any withholding tax that (i) is in effect and would apply to amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to any withholding tax pursuant to Section 2.15(a), or (ii) is attributable to such Foreign Lender’s failure to comply with Section 2.15(e).

“ FCC ” means the Federal Communications Commission, and any successor entity performing similar functions.

“ FCC Licenses ” means all authorizations, orders, licenses and permits issued by the FCC to the Borrower or any of its Restricted Subsidiaries under which the Borrower or any of its Restricted Subsidiaries is authorized to provide satellite digital radio service in the United States, to launch and operate any of its Satellites and the TT&C Stations related thereto or to operate any of its transmit only, receive only or transmit and receive earth stations.

“ FCC Licenses Subsidiary ” means Satellite CD Radio, Inc., a Delaware corporation and a Wholly Owned Subsidiary, and any other Restricted Subsidiary formed for the sole purpose of holding FCC Licenses and all of the issued and outstanding Capital Stock of which is owned by a Loan Party.

“ Fee Letter ” means the fee letter dated as of the date hereof between the Borrower and Liberty.

“ Financial Officer ” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower.

“ Foreign Lender ” means any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is located. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

“ Foreign Pledge Agreement ” means a pledge or charge agreement with respect to each portion of the Collateral that constitutes Capital Stock of a Foreign Subsidiary, in form and substance reasonably satisfactory to the Administrative Agent.

“ Foreign Subsidiary ” means any Subsidiary that is not a Domestic Subsidiary.

“ GAAP ” means generally accepted accounting principles in the United States of America.

 

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“ Governmental Authority ” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“ Guarantee ” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any Person and any obligation, direct or indirect, contingent or otherwise, of such Person:

(a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take-or-pay or to maintain financial statement conditions or otherwise); or

(b) entered into for the purpose of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part);

provided, however, that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” when used as a verb shall have a corresponding meaning.

“ Hazardous Materials ” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes, and all other substances or wastes of any nature regulated, limited or prohibited pursuant to any Environmental Law.

“ Hedging Agreement ” means any interest rate protection agreement or foreign currency exchange agreement or other interest or currency exchange rate hedging arrangement.

“ Hedging Obligations ” of any Person means the obligations of such Person under:

(a) currency exchange or interest rate swap agreements, currency exchange or interest rate cap agreements or currency exchange or interest rate collar agreements; or

(b) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange or interest rate prices.

“ Holdings-XM Merger ” means (a) a merger or consolidation of XM Satellite Radio Inc. with or into XM Satellite Radio Holdings Inc. or a merger or consolidation of XM Satellite Radio Holdings Inc. with or into XM Satellite Radio Inc. or (b) any assignment, transfer, conveyance or other disposition of all or substantially all of the properties or assets of XM Satellite Radio Inc. to XM Satellite Radio Holdings Inc. or of XM Satellite Radio Holdings Inc. to XM Satellite Radio Inc.

“ Incur ” means issue, assume, Guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness of a Person existing at the time such Person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be

 

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deemed to be Incurred by such Person at the time it becomes a Restricted Subsidiary. The term “Incurrence” when used as a noun shall have a correlative meaning. Solely for purposes of determining compliance with Section 6.01:

(a) amortization of debt discount or the accretion of principal with respect to a non-interest bearing or other discount security;

(b) the payment of regularly scheduled interest in the form of additional Indebtedness of the same instrument or the payment of regularly scheduled dividends on Capital Stock in the form of additional Capital Stock of the same class and with the same terms; and

(c) the obligation to pay a premium in respect of Indebtedness arising in connection with the issuance of a notice of redemption or making of a mandatory offer to purchase such Indebtedness will not be deemed to be the Incurrence of Indebtedness. Will not be deemed to the Incurrence of Indebtedness.

“ Indebtedness ” means, with respect to any Person on any date of determination (without duplication):

(a) the principal in respect of (i) indebtedness of such Person for money borrowed and (ii) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable, including, in each case, any premium on such indebtedness to the extent such premium has become due and payable;

(b) all Capital Lease Obligations of such Person and all Attributable Debt in respect of Sale/Leaseback Transactions entered into by such Person;

(c) all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement (but excluding any accounts payable or other liability to trade creditors arising in the ordinary course of business), in each case only if and to the extent due more than 12 months after the delivery of property;

(d) the principal component of all obligations of such Person for the reimbursement of any obligor on any letter of credit, bankers’ acceptance or similar credit transaction (other than obligations with respect to letters of credit securing obligations (other than obligations described in clauses (a) through (c) above) entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the tenth Business Day following payment on the letter of credit);

(e) the principal component of the amount of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock of such Person or, with respect to any Preferred Stock of any Restricted Subsidiary of such Person, the principal amount of such Preferred Stock to be determined in accordance with this Agreement (but excluding, in each case, any accrued dividends);

 

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(f) all obligations of the type referred to in clauses (a) through (e) of other Persons and all dividends of other Persons for the payment of which, in either case, such Person is responsible or liable, directly or indirectly, as obligor, guarantor or otherwise, including by means of any Guarantee;

(g) all obligations of the type referred to in clauses (a) through (f) of other Persons secured by any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person), the amount of such obligation being deemed to be the lesser of the fair market value of such property or assets and the amount of the obligation so secured; and

(h) to the extent not otherwise included in this definition, Hedging Obligations of such Person.

Notwithstanding the foregoing, in connection with the purchase by the Borrower or any Restricted Subsidiary of any business, the term “Indebtedness” will exclude post-closing payment adjustments to which the seller may become entitled to the extent such payment is determined by a final closing balance sheet or such payment depends on the performance of such business after the closing; provided, however, that, at the time of closing, the amount of any such payment is not determinable and, to the extent such payment thereafter becomes fixed and determined, the amount is paid within 30 days thereafter. Furthermore, in no event shall the Borrower’s obligations to pay amounts under any programming or content acquisition arrangements, in each case, consistent with past practice, be considered Indebtedness.

The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all obligations as described above; provided, however, that in the case of Indebtedness sold at a discount, the amount of such Indebtedness at any time will be the accreted value thereof at such time.

“ Indemnified Taxes ” means Taxes other than Excluded Taxes.

“ Indemnitee ” has the meaning ascribed to such term in Section 9.03.

“ Independent Qualified Party ” means an investment banking firm, accounting firm or appraisal firm of national standing; provided, however, that such firm is not an Affiliate of the Borrower.

“ Interest Rate Agreement ” means any interest rate swap agreement, interest rate cap agreement or other financial agreement or arrangement with respect to exposure to interest rates.

“ Investment ” in any Person means any direct or indirect advance, loan (other than advances to customers in the ordinary course of business that are recorded as accounts receivable on the balance sheet of the lender) or other extensions of credit (including by way of Guarantee or similar arrangement) or capital contribution to (by means of any transfer of cash or other

 

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property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by such Person. If the Borrower or any Restricted Subsidiary issues, sells or otherwise disposes of any Capital Stock of a Person that is a Restricted Subsidiary such that, after giving effect thereto, such Person is no longer a Restricted Subsidiary, any Investment by the Borrower or any Restricted Subsidiary in such Person remaining after giving effect thereto will be deemed to be a new Investment at such time. Except as otherwise provided for herein, the amount of an Investment shall be its fair market value at the time the Investment is made and without giving effect to subsequent changes in value; provided that none of the following will be deemed to be an Investment:

(i) Hedging Obligations entered into in the ordinary course of business and in compliance with this Agreement;

(ii) endorsements of negotiable instruments and documents in the ordinary course of business;

(iii) an acquisition of assets by the Borrower or a Subsidiary for consideration to the extent such consideration consists of Common Stock of the Borrower; and

(iv) advances, deposits, escrows or similar arrangements in respect of retail or automotive distribution arrangements, programming or content acquisitions or extensions.

For purposes of the definition of “Unrestricted Subsidiary”, the definition of “Restricted Payment” and Section 6.02, the term “Investment” shall include:

(A) the portion (proportionate to the Borrower’s equity interest in such Subsidiary) of the fair market value of the net assets of any Subsidiary of the Borrower at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Borrower shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to (1) the Borrower’s “Investment” in such Subsidiary at the time of such redesignation less (2) the portion (proportionate to the Borrower’s equity interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time of such redesignation; and

(B) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer, in each case as determined in good faith by the Board of Directors.

“ Investment Agreement ” means the Investment Agreement dated as of the date hereof between the Borrower and Liberty.

“ Investment Agreement Termination Date ” has the meaning assigned to such term in Section 2.08(a).

 

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“ IP Security Agreements ” means, collectively, (a) the Copyright Security Agreement between the Loan Parties party thereto and the Collateral Agent, substantially in the form of Exhibit C-1, and (b) the Patent and Trademark Security Agreement between the Loan Parties party thereto and the Collateral Agent, substantially in the form of Exhibit C-2.

“ Lenders ” means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that shall have ceased to be a party hereto pursuant to an Assignment and Assumption.

“ Liberty ” means Liberty Media Corporation.

“ Liberty Parties ” has the meaning ascribed to such term in the Investment Agreement.

“ Lien ” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

“ Loan Documents ” means this Agreement, the Collateral Agreements, the other Security Documents and each promissory note delivered pursuant to this Agreement.

“ Loan Parties ” means the Borrower and the Subsidiary Guarantors.

“ Loans ” means the collective reference to the Term Loans and Purchase Money Loans.

“ Loral Credit Agreement ” means the Customer Credit Agreement dated as of May 31, 2006, between the Borrower and Space Systems/Loral, Inc.

“ Material Adverse Effect ” means a material adverse effect on (a) the business, assets, operations or financial condition of the Borrower and the Restricted Subsidiaries, taken as a whole, or (b) the rights of or benefits available to the Lenders under any Loan Document.

“ Material Indebtedness ” means Indebtedness (including Hedging Obligations, but excluding Loans and Guarantees of the Obligations) of the Borrower and the Subsidiaries in an aggregate principal amount of $25,000,000 or more, provided that, without regard to the amounts outstanding thereunder, if any, the obligations of the Borrower under the Loral Credit Agreement shall be deemed to constitute Material Indebtedness. For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Borrower or any Subsidiary in respect of any Hedging Obligations at any time shall be the aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such Hedging Obligations were terminated at such time.

 

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“ Material Subsidiary ” means, on any date of determination, (a) each FCC Licenses Subsidiary and (b) each other Restricted Subsidiary, other than Restricted Subsidiaries that do not represent more than 5% for any such Subsidiary individually, or more than 10% in the aggregate for all such Subsidiaries, of either (a) Consolidated Total Assets or (b) consolidated total revenues of the Borrower as of the end of, or for the period of, four fiscal quarters most recently ended for which financial statements are available.

“ Maturity Date ” means December 20, 2012.

“ Moody’s ” means Moody’s Investors Service, Inc. and any successor to its rating agency business.

“ Mortgage ” means a mortgage, deed of trust, assignment of leases and rents, leasehold mortgage or other security document granting a Lien on any Mortgaged Property to secure the Obligations. Each Mortgage shall be reasonably satisfactory in form and substance to the Administrative Agent.

“ Mortgaged Property ” means (a) each parcel of real property and the improvements thereto owned by a Loan Party (i) that has an estimated fair market value of $2,500,000 or more or (ii) on which any TT&C Station is located (if located in the United States) and (b) each leasehold interest in real property held by a Loan Party to the extent such leasehold interest is material to the business or operations of the Borrower and its Restricted Subsidiaries and could not readily be replaced on terms not materially less favorable to the lessee.

“ Multiemployer Plan ” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“ Net Available Cash ” means:

(a) with respect to any Asset Disposition, any Asset Swap or any Casualty Event, payments in cash and cash equivalents received therefrom (including any cash and cash equivalent payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise and proceeds from the sale or other disposition of any securities received as consideration, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring Person of Indebtedness or other obligations relating to such properties or assets or received in any other form that is not cash or cash equivalents), in each case net of:

(i) all legal, title and recording tax expenses, commissions and other fees and expenses incurred, and all Federal, state, provincial, foreign and local taxes required to be accrued as a liability under GAAP, as a consequence of such event;

(ii) all payments made on any Indebtedness (other than Loans and Secured Indebtedness Incurred pursuant to Section 6.01(a) or 6.01(b)(i) (except if such Secured Indebtedness constitutes Purchase Money Indebtedness)) that is secured by any assets subject to such event, in accordance with the terms of any Lien upon or other security agreement of any kind with respect to such assets, or,

 

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in the case of an Asset Disposition or an Asset Swap, that must by its terms, or in order to obtain a necessary consent to such Asset Disposition or Asset Swap, or by applicable law, be repaid out of the proceeds from such Asset Disposition or Asset Swap;

(iii) all distributions and other payments required to be made to minority interest holders in Restricted Subsidiaries as a result of such event;

(iv) in the case of any Asset Disposition or Asset Swap, the deduction of appropriate amounts provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the property or other assets disposed in such Asset Disposition or such Asset Swap and retained by the Borrower or any Restricted Subsidiary after such Asset Disposition or such Asset Swap; and

(v) in the case of any Asset Disposition or Asset Swap, any portion of the purchase price from such Asset Disposition or such Asset Swap placed in escrow, whether as a reserve for adjustment of the purchase price, for satisfaction of indemnities in respect of such Asset Disposition or such Asset Swap or otherwise in connection therewith; provided, however, that upon the termination of that escrow, Net Available Cash will be increased by any portion of funds in the escrow that are released to the Borrower or any Restricted Subsidiary; and

(b) in the case of any Incurrence of Indebtedness, the Net Cash Proceeds therefrom.

“ Net Cash Proceeds ”, with respect to any issuance or sale of Capital Stock or Indebtedness, means the cash proceeds of such issuance or sale, net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, discounts or commissions and brokerage, consultant and other fees actually incurred in connection with such issuance or sale and net of taxes paid or payable as a result thereof.

“ Notes Issue Date ” means August 9, 2005.

“ Obligations ” means (a) the due and punctual payment by the Borrower of (i) the principal of and premium (including, without limitation, the Call Premium), if any, and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (ii) all other monetary obligations of the Borrower to any of the Secured Parties under this Agreement or any other Loan Document, including obligations to pay fees, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) and (b) the due and punctual payment or performance of all other obligations of any Loan Party under or pursuant to this Agreement or any other Loan Document.

“ Offer Period ” has the meaning assigned to such term in Section 2.08(a).

 

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“ Other Taxes ” means any and all present or future recording, stamp, documentary, excise, transfer, sales, property or similar taxes, charges or levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

“ Payment Date ” means the last day of each March, June, September and December and, with respect to any Loan, the date of any repayment or prepayment made in respect of such Loan.

“ PBGC ” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

“ Pension Act ” means the Pension Protection Act of 2006, as amended from time to time.

“ Perfection Certificate ” means a certificate in the form of Exhibit D or any other form approved by the Administrative Agent.

“ Permitted Holder ” means (a) any Liberty Party and (b) any other Person, directly or indirectly, controlled by any of the foregoing.

“ Permitted Investment ” means the following Investments by the Borrower or any Restricted Subsidiary:

(a) Investments in the Borrower, a Restricted Subsidiary or a Person that will, upon the making of such Investment, become a Restricted Subsidiary; provided, however, that the primary business of such Restricted Subsidiary is a Related Business;

(b) another Person if, as a result of such Investment, such other Person is merged or consolidated with or into, or transfers or conveys all or substantially all its assets to, the Borrower or a Restricted Subsidiary; provided, however, that such Person’s primary business is a Related Business;

(c) Investments in cash and Temporary Cash Investments;

(d) Investments in receivables owing to the Borrower or any Restricted Subsidiary if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided, however, that such trade terms may include such concessionary trade terms as the Borrower or any such Restricted Subsidiary deems reasonable under the circumstances;

(e) payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business;

(f) loans or advances to employees made in the ordinary course of business consistent with past practices of the Borrower or such Restricted Subsidiary;

 

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(g) Investments in stock, obligations or securities received in settlement of debts created in the ordinary course of business and owing to the Borrower or any Restricted Subsidiary or in satisfaction of judgments or pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of a debtor;

(h) Investments in any Person to the extent such Investment represents the non-cash portion of the consideration received for (i) an Asset Disposition as permitted pursuant to Section 6.04 or (ii) a disposition of assets not constituting an Asset Disposition;

(i) Investments in any Person where such Investment was acquired by the Borrower or any of its Restricted Subsidiaries (i) in exchange for any other Investment or accounts receivable held by the Borrower or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable or (ii) as a result of a foreclosure by the Borrower or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

(j) Investments in any Person to the extent such Investments consist of prepaid expenses, negotiable instruments held for collection and lease, utility and workers’ compensation, performance and other similar deposits made in the ordinary course of business by the Borrower or any Restricted Subsidiary;

(k) Investments in any Person to the extent such Investments consist of Hedging Obligations otherwise permitted under Section 6.01;

(l) Investments in any Person to the extent such Investment exists on the date of this Agreement, and any extension, modification or renewal of any such Investments existing on the date of this Agreement, but only to the extent not involving additional advances, contributions or other Investments of cash or other assets or other increases thereof (other than as a result of the accrual or accretion of interest or original issue discount or the issuance of pay-in-kind securities, in each case, pursuant to the terms of such Investment as in effect on the date of this Agreement);

(m) Investments in Persons to the extent such Investments, when taken together with all other Investments made pursuant to this clause (m) that are at the time outstanding, do not exceed the greater of (i) $300,000,000 or (ii) 15% of Consolidated Total Assets (as determined based on the consolidated balance sheet of the Borrower as of the end of the most recent fiscal quarter for which financial statements are available prior to such Investment) at the time of such Investment (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

(n) Designated Joint Ventures;

(o) Investments in a joint venture with XM Satellite Radio Inc., or an Affiliate or successor thereof, the proceeds of which Investments are used solely to develop interoperable radio technology capable of receiving and processing radio system signals

 

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broadcast by both the Borrower and XM Satellite Radio Inc., for the licensing of other satellite radio technology from the Borrower and XM Satellite Radio Inc. in connection therewith and for activities reasonably ancillary thereto in accordance with the Joint Development Agreement between the Borrower and XM Satellite Radio Inc., as in effect on the date of this Agreement or as it may be amended in a manner not materially adverse to the Borrower;

(p) Any Investment that becomes an Investment of the Borrower as a result of a Borrower-Holdings Merger or a Borrower-XM Merger; and

(q) any Asset Swap made in accordance with Section 4.06.

“ Permitted Liens ” means, with respect to any Person:

(a) pledges or deposits by such Person under worker’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or United States government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;

(b) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in each case for sums not yet due or being contested in good faith by appropriate proceedings, or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review and Liens arising solely by virtue of any statutory or common law provision relating to banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution, provided, however, that (i) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by the Borrower or a Restricted Subsidiary in excess of those set forth by regulations promulgated by the Federal Reserve Board and (ii) such deposit account is not intended by the Borrower or any Restricted Subsidiary to provide collateral to the depository institution;

(c) Liens for taxes, assessments or other governmental charges not yet subject to penalties for non-payment or which are being contested in good faith by appropriate proceedings;

(d) Liens in favor of issuers of surety bonds or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business, provided, however, that such letters of credit do not constitute Indebtedness;

(e) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property or Liens incidental to the conduct of the business of such Person or to the

 

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ownership of its properties and that were not Incurred in connection with Indebtedness and do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

(f) Liens securing Indebtedness Incurred to finance the construction, purchase or lease of, or repairs, improvements or additions to, property, plant or equipment of such Person; provided, however, that the Lien may not extend to any other property owned by such Person or any of its Restricted Subsidiaries at the time the Lien is Incurred (other than assets and property affixed or appurtenant thereto), and the Indebtedness (other than any interest thereon) secured by the Lien may not be Incurred more than 180 days after the later of the acquisition, completion of construction, repair, improvement, addition or commencement of full operation of the property subject to the Lien;

(g) Liens existing on the date of this Agreement and set forth on Schedule 6.08;

(h) Liens on property or shares of Capital Stock of another Person at the time such other Person becomes a Restricted Subsidiary of such Person; provided, however, that the Liens may not extend to any other property owned by such Person or any of its Restricted Subsidiaries (other than assets and property affixed or appurtenant thereto);

(i) Liens on property at the time such Person or any of its Restricted Subsidiaries acquires the property, including any acquisition by means of a merger or consolidation with or into such Person or a Subsidiary of such Person; provided, however, that the Liens may not extend to any other property owned by such Person or any of its Restricted Subsidiaries (other than assets and property affixed or appurtenant thereto);

(j) Liens securing Indebtedness or other obligations of a Subsidiary of such Person owing to such Person or a Wholly Owned Subsidiary of such Person;

(l) Liens to secure Indebtedness Incurred under (i) Section 6.01(b)(i); provided however that any Liens securing Refinancing Indebtedness in respect of the Senior Secured Term Credit Agreement shall rank equally and ratably with the Liens securing the Obligations on terms reasonably satisfactory to the Administrative Agent or, in the Borrower’s sole discretion, be subordinated to the Liens securing the Obligations and (ii) Section 6.01(b)(viii) to the extent such Hedging Obligations can be secured pursuant to the terms of the Senior Secured Term Credit Agreement;

(m) leases, licenses, subleases and sublicenses of assets (including real property and intellectual property rights) that do not materially interfere with the ordinary conduct of the business of the Borrower or any of its Restricted Subsidiaries;

(n) Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by the Borrower and its Restricted Subsidiaries in the ordinary course of business;

 

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(o) Liens in connection with advances, deposits, escrows and similar arrangements in the ordinary course of business in respect of retail or automotive distribution arrangements and programming and content acquisitions or extensions;

(p) any Lien that becomes a Lien of the Borrower as a result of a Borrower-Holdings Merger or a Borrower-XM Merger; and

(q) Liens to secure any Refinancing Indebtedness (including Refinancing Indebtedness with respect to such Refinancing Indebtedness) that Refinances, as a whole or in part, any Indebtedness secured by any Lien referred to in the foregoing clause (f), (g), (h) or (i); provided, however, that:

(i) such new Lien shall be limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien (plus improvements and accessions to, such property or proceeds or distributions thereof); and

(ii) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clause (f), (g), (h) or (i) at the time the original Lien became a Permitted Lien and (B) an amount necessary to pay any fees and expenses, including premiums, related to such Refinancing.

Notwithstanding the foregoing, the term “Permitted Liens” will not include any Lien described in clause (f), (h) or (i) above to the extent such Lien applies to any Additional Assets acquired directly or indirectly with Net Available Cash pursuant to Section 2.07. For purposes of this definition, the term “Indebtedness” shall be deemed to include interest on such Indebtedness.

“ Permitted Subordinated Obligations ” means Subordinated Obligations of the Borrower that at the time of Incurrence have a weighted Average Life of not less than the lesser of five years and the remaining weighted Average Life of the Loans and that are convertible at the option of the holders thereof into Capital Stock (other than Disqualified Stock) of the Borrower.

“ Person ” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, Governmental Authority or any other entity.

“ Phase II Funding Date ” means the day on which the XM Credit Agreement becomes effective pursuant to its terms and the lenders thereunder make their loans available to XM Satellite Radio Inc. pursuant to the terms thereto.

“ Plan ” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

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“ Preferred Stock ”, as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) that is preferred as to the payment of dividends or distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person.

“ Prepayment Event ” means:

(a)(i) any Asset Disposition (including any Sale/Leaseback Transaction constituting an Asset Disposition) and (ii) any Asset Swap;

(b) any Casualty Event; and

(c) the Incurrence by the Borrower or any Restricted Subsidiary after the date of this Agreement of any Indebtedness (including any Refinancing Indebtedness in respect of the Senior Secured Term Credit Agreement) with a weighted Average Life at the time of such Incurrence that is less than that of the Loans, to the extent such Indebtedness is Incurred pursuant to Section 6.01(a) (other than solely as a result of Section 6.01(d)(iii)), 6.01(b)(i) or 6.01(b)(xv).

“ Purchase Money Collateral Agreement ” means the Guarantee and Collateral Agreement among the Borrower, the Subsidiary Guarantors and the Collateral Agent, substantially in the form of Exhibit B-2, and all supplements thereto.

“ Purchase Money Collateral and Guarantee Requirement ” means, at any time, the requirement that:

(a) the Administrative Agent shall have received from each Loan Party (i) a counterpart of the Purchase Money Collateral Agreement duly executed and delivered on behalf of such Loan Party and (ii) in the case of any Person that becomes a Loan Party after the date of this Agreement, a supplement to the Purchase Money Collateral Agreement, in the form specified therein, duly executed and delivered on behalf of such Loan Party;

(b) all documents and instruments, including Uniform Commercial Code financing statements, required by law or reasonably requested by the Collateral Agent to be filed, registered or recorded to create the Liens intended to be created by the Purchase Money Collateral Agreement and perfect such Liens to the extent required by, and with the priority required by, the Collateral Agreement, shall have been filed, registered or recorded or delivered to the Collateral Agent for filing, registration or recording;

(c) each Loan Party shall have obtained all consents and approvals required to be obtained by it in connection with the execution and delivery of all Security Documents to which it is a party, the performance of its obligations thereunder and the granting by it of the Liens thereunder;

provided, that the foregoing definition shall not require the creation or perfection of pledges of or security interests in, or the obtaining of title insurance or legal opinions with respect to, particular assets of the Loan Parties if and for so long as, in the reasonable judgment of the

 

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Collateral Agent, the cost (including the burden of compliance with applicable law) of creating or perfecting such pledges or security interests in such assets or obtaining title insurance or legal opinions with respect of such assets shall be excessive in view of the benefits to be obtained by the Lenders therefrom. The Collateral Agent may grant extensions of time for the perfection of security interests in or the obtaining of title insurance or legal opinions with respect to particular assets (including extensions beyond the date of this Agreement) where it determines that such action cannot be accomplished without undue effort or expense by the time or times at which it would otherwise be required by this Agreement or the Security Documents.

“ Purchase Money Indebtedness ” means Indebtedness:

(a) consisting of the deferred purchase price of an asset, conditional sale obligations, obligations under any title retention agreement and other purchase money obligations, in each case where the maturity of such Indebtedness does not exceed the anticipated useful life of the asset being financed, and

(b) Incurred to finance the acquisition by the Borrower or a Restricted Subsidiary of such asset, including additions and improvements;

provided, however, that such Indebtedness is Incurred within 180 days after the acquisition by the Borrower or a Restricted Subsidiary of such asset.

“ Purchase Money Loan ” has the meaning set forth in Section 2.01.

“ Purchase Money Loan Borrowing Request ” means a request by the Borrower for a Purchase Money Loan in accordance with Section 2.03(b).

“ Purchase Money Loan Commitment ” means, with respect to each Lender at any time, the commitment of such Lender to make Purchase Money Loans hereunder, expressed as an amount representing the maximum principal amount of the Purchase Money Loan to be made by such Lender hereunder at such time, as set forth on Schedule 2.02 or, if such Lender has entered into one or more Assignment and Assumptions, set forth for such Lender in the Register maintained by the Administrative Agent pursuant to Section 9.04(d), as such amount may be reduced at or prior to such time pursuant to Section 2.07(d). The aggregate amount of the Purchase Money Loan Commitments as of the date hereof is $30,000,000.

“ Purchase Money Loan Commitment Fee ” has the meaning provided in Section 2.10(b).

“ Purchase Money Loan Commitment Fee Rate ” means, with respect to the Available Purchase Money Loan Commitment on any day, 2.0%  per annum .

“ Purchase Money Loan Termination Date ” means the earliest of (a) December 31, 2009, (b) the date on which the Purchase Money Loan Commitments are terminated in accordance with Section 2.07(d) and (c) the first date on which the aggregate amount of Purchase Money Loans is equal to the Purchase Money Loan Commitments then in effect.

 

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“ Purchase Money Secured Parties ” has the meaning assigned to such term in the Purchase Money Collateral Agreement.

“ Refinance ” means, in respect of any Indebtedness, to refinance, extend, renew, refund, repay, prepay, purchase, redeem, defease or retire, or to issue other Indebtedness in exchange or replacement for, such Indebtedness. The terms “Refinanced” and “Refinancing” shall have correlative meanings.

“ Refinancing Indebtedness ” means Indebtedness that Refinances any Indebtedness of the Borrower or any Restricted Subsidiary existing on the date of this Agreement or Incurred in compliance with this Agreement, including Indebtedness that Refinances Refinancing Indebtedness; provided, however, that:

(a) such Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being Refinanced;

(b) such Refinancing Indebtedness has an Average Life at the time such Refinancing Indebtedness is Incurred that is equal to or greater than the Average Life of the Indebtedness being Refinanced;

(c) such Refinancing Indebtedness has an aggregate principal amount (or if Incurred with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if Incurred with original issue discount, the aggregate accreted value) then outstanding (plus fees and expenses, including any premium and defeasance costs) under the Indebtedness being Refinanced; and

(d) if the Indebtedness being Refinanced is subordinated in right of payment to the Obligations, such Refinancing Indebtedness (i) is subordinated in right of payment to the Obligations at least to the same extent as the Indebtedness being Refinanced, (ii) has a Stated Maturity that is after the later of (A) at least 91 days after the Maturity Date and (B) the Stated Maturity of the Indebtedness being Refinanced and (iii) has an Average Life at the time such Refinancing Indebtedness is Incurred that is greater than (A) the Average Life of the Loans and (B) the Average Life of the Indebtedness being Refinanced;

(e) to the extent otherwise permitted hereunder, any Liens securing Refinancing Indebtedness in respect of the Senior Secured Term Credit shall rank equally and ratably with the Liens securing the Obligations on terms reasonably satisfactory to the Administrative Agent or, in the Borrower’s sole discretion, be subordinated to the Liens securing the Obligations.

provided further, however, that Refinancing Indebtedness shall not include (A) Indebtedness of a Subsidiary that Refinances Indebtedness of the Borrower or (B) Indebtedness of the Borrower or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary.

“ Register ” has the meaning set forth in Section 9.04(d).

 

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“ Related Business ” means any business in which the Borrower or any of the Restricted Subsidiaries was engaged on the date of this Agreement and any business related, ancillary or complementary to such business or any business the assets of which, in the good faith determination of the Board of Directors, are useful or may be used in any such business.

“ Related Business Assets ” means assets used or useful in a Related Business.

“ Related Parties ” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, trustees, agents and advisors of such Person and such Person’s Affiliates.

“ Release ” means any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the environment or within or upon any building, structure, facility or fixture.

“ Replacement Satellite Vendor Indebtedness ” means Indebtedness of the Borrower provided by a satellite or satellite launch vendor, insurer or insurance agent or Affiliate thereof for (a) the construction, launch and insurance of all or part of one or more replacement satellites or satellite launches for such satellites, where “replacement satellite” means a satellite that is used for continuation of the Borrower’s satellite service as a replacement for, or supplement to, a satellite that is retired or relocated (due to a deterioration in operating useful life) within the existing service area or reasonably determined by the Borrower to no longer meet the requirements for such service, or (b) the replacement of a spare satellite that has been launched or that is no longer capable of being launched or suitable for launch.

“ Required Facility Lenders ” means (i) with respect to the Term Loans, at any time, Lenders having aggregate Term Loans (or, prior to the borrowings hereunder, Term Loan Commitments) representing more than 50% of the aggregate principal amount of the Term Loans hereunder (or, prior to the initial borrowings hereunder, the Term Loan Commitments) at such time and (ii) with respect to the Purchase Money Loans, at any time, Lenders having aggregate Purchase Money Loans (or, prior to the initial borrowings hereunder of the Purchase Money Loans, Purchase Money Loan Commitments) representing more than 50% of the aggregate principal amount of the Purchase Money Loans (or, prior to the borrowings hereunder, Purchase Money Loan Commitments) at such time.

“ Required Lenders ” means, at any time, Lenders having aggregate Loans (or, prior to the borrowings hereunder, Commitments) representing more than 50% of the aggregate principal amount of the Loans (or, prior to the initial borrowings hereunder, the Commitments) at such time.

“ Restricted Payment ” with respect to any Person means:

(a) the declaration or payment of any dividends or any other distributions of any sort in respect of its Capital Stock (including any payment in connection with any merger or consolidation involving such Person) or similar payment to the direct or indirect holders of its Capital Stock (other than (i) dividends or distributions payable solely in its Capital Stock (other than Disqualified Stock), (ii) dividends or distributions payable solely to the Borrower or a Restricted Subsidiary and (iii)  pro rata dividends or

 

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other distributions made by a Subsidiary that is not a Wholly Owned Subsidiary to minority stockholders (or owners of an equivalent interest in the case of a Subsidiary that is an entity other than a corporation));

(b) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of any Capital Stock of the Borrower held by any Person (other than by a Restricted Subsidiary) or of any Capital Stock of a Restricted Subsidiary held by any Affiliate of the Borrower (other than by a Restricted Subsidiary), including in connection with any merger or consolidation and including the exercise of any option to exchange any Capital Stock (other than into Capital Stock of the Borrower that is not Disqualified Stock);

(c)(i) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of Permitted Subordinated Obligations of the Borrower or (ii) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment of any Subordinated Obligations of the Borrower (other than, in the case of this clause (ii), (A) from the Borrower or a Restricted Subsidiary or (B) the purchase, repurchase, redemption, defeasance or other acquisition or retirement of Subordinated Obligations (other than Permitted Subordinated Obligations) purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such purchase, repurchase, redemption, defeasance or other acquisition or retirement); or

(d) the making of any Investment (other than a Permitted Investment) in any Person.

“ Restricted Subsidiary ” means any Subsidiary that is not an Unrestricted Subsidiary.

“ S&P ” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor to its rating agency business.

“ Sale/Leaseback Transaction ” means an arrangement relating to property owned by the Borrower or a Restricted Subsidiary on the Effective Date or thereafter acquired by the Borrower or a Restricted Subsidiary whereby the Borrower or a Restricted Subsidiary transfers such property to a Person and the Borrower or a Restricted Subsidiary leases it from such Person.

“ Satellite ” means any satellite owned by, or leased to, the Borrower or any Restricted Subsidiary and any satellite that is the subject of any satellite purchase agreement between or among the Borrower or any Restricted Subsidiary, on the one hand, and any prime contractor and manufacturer of such satellite, on the other hand (whether such satellite is in the process of manufacture, has been delivered for launch or is in orbit (whether or not in operational service)).

“ Secured Indebtedness ” means any Indebtedness of the Borrower or a Restricted Subsidiary secured by a Lien on any property or assets of the Borrower or a Restricted Subsidiary.

 

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“ Secured Parties ” means, collectively, the Term Loan Secured Parties and the Purchase Money Secured Parties.

“ Security Documents ” means the Collateral Agreements, the IP Security Agreements, the Mortgages, the Foreign Pledge Agreements and each other security agreement or other instrument or document executed and delivered pursuant to Section 5.11 or 5.12 to secure any of the Obligations.

“ Senior Secured Term Credit Agreement ” means the Term Credit Agreement, dated as of June 20, 2007, among the Borrower, the lenders party thereto and Morgan Stanley Senior Funding Inc., as administrative agent and collateral agent.

“ Specified FCC Licenses ” means the FCC Licenses held in the name of the Borrower that are set forth on Schedule 6.11 hereto.

“ Stated Maturity ” means, with respect to any Indebtedness, the date specified in the documents evidencing or governing such Indebtedness as the fixed date on which the final payment of principal of such Indebtedness is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repayment or repurchase of such Indebtedness at the option of the holder thereof upon the happening of any contingency unless such contingency has occurred).

“ Subordinated Obligation ” means, with respect to a Person, any Indebtedness of such Person (whether outstanding on the date of this Agreement or thereafter Incurred) that is subordinate or junior in right of payment to the Obligations pursuant to a written agreement to that effect (which agreement (a) shall be in substance, in all material respects, at least as favorable to the Lenders as the subordination provisions applicable to the 8  ³ / 4 % Subordinated Notes or (b) shall be in form and substance satisfactory to the Administrative Agent).

“ subsidiary ” means, with respect to any Person (the “ parent ”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the total voting power of the Voting Stock or, in the case of a partnership, more than 50% of the equity or more than 50% of the general partnership interests are, as of such date, owned, controlled or held by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

“ Subsidiary ” means any subsidiary of the Borrower.

“ Subsidiary Guarantor ” means any Restricted Subsidiary that is a Domestic Subsidiary and a Material Subsidiary.

“ Taxes ” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.

 

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“ Temporary Cash Investments ” means any of the following:

(a) any investment in direct obligations of the United States of America or any agency thereof or obligations guaranteed by the United States of America or any agency thereof;

(b) investments in demand and time deposit accounts, certificates of deposit and money market deposits maturing within 365 days of the date of acquisition thereof issued by a bank or trust company that is organized under the laws of the United States of America, any State thereof or any foreign country recognized by the United States of America, and which bank or trust company has capital, surplus and undivided profits aggregating in excess of $50,000,000 (or the foreign currency equivalent thereof) and has outstanding debt that is rated “A” (or such similar equivalent rating) or higher by at least one nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act of 1933, as amended) or any money-market fund sponsored by a registered broker dealer or mutual fund distributor;

(c) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (a) above entered into with a bank meeting the qualifications described in clause (b) above;

(d) investments in commercial paper, maturing not more than 365 days after the date of acquisition, issued by a corporation (other than an Affiliate of the Borrower) organized and in existence under the laws of the United States of America or any foreign country recognized by the United States of America with a rating at the time as of which any investment therein is made of “P-2” (or higher) according to Moody’s or “A-2” (or higher) according to S&P;

(e) auction rate preferred stock issued by a corporation and certificates issued by a corporation or municipality or government entity (other than an Affiliate of the Borrower) organized and in existence under the laws of the United States of America or any foreign country recognized by the United States with a rating at the time as of which any investment therein is made of “A” (or higher) according to Moody’s or S&P;

(f) investments in securities with maturities of twelve months or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, and rated at least “A” by Moody’s or “A” by S&P; and

(g) investments in money market funds that, in the aggregate, have at least $1,000,000,000 in assets.

“ Term Loan ” has the meaning set forth in Section 2.01.

“ Term Loan Collateral Agreement ” means the Guarantee and Collateral Agreement among the Borrower, the Subsidiary Guarantors and the Collateral Agent, substantially in the form of Exhibit B-1, and all supplements thereto.

 

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“ Term Loan Collateral and Guarantee Requirement ” means, at any time, the requirement that:

(a) the Administrative Agent shall have received from each Loan Party either (i) a counterpart of the Term Loan Collateral Agreement duly executed and delivered on behalf of such Loan Party or (ii) in the case of any Person that becomes a Loan Party after the date of this Agreement, a supplement to the Term Loan Collateral Agreement, in the form specified therein, duly executed and delivered on behalf of such Loan Party;

(b) all outstanding Capital Stock of each FCC Licenses Subsidiary and each other Material Subsidiary shall have been pledged pursuant to the Term Loan Collateral Agreement or, in the case of Foreign Subsidiaries, at the request of the Collateral Agent, pursuant to a Foreign Pledge Agreement (except that the Loan Parties shall not be required to pledge more than 65% of the outstanding voting Capital Stock of any Foreign Subsidiary), and, to the extent required under the Term Loan Collateral Agreement, the Collateral Agent shall have received certificates or other instruments representing all such Capital Stock, together with undated stock powers or other instruments of transfer with respect thereto endorsed in blank;

(c) all Indebtedness (other than any such Indebtedness of the Borrower or a Subsidiary in an aggregate principal amount of less than $500,000) of the Borrower and each Subsidiary that is owing to any Loan Party shall be evidenced by a promissory note and shall have been pledged pursuant to the Term Loan Collateral Agreement and, to the extent required under the Term Loan Collateral Agreement, the Collateral Agent shall have received all such promissory notes, together with undated instruments of transfer with respect thereto endorsed in blank;

(d) all documents and instruments, including Uniform Commercial Code financing statements, required by law or reasonably requested by the Collateral Agent to be filed, registered or recorded to create the Liens intended to be created by the Term Loan Collateral Agreement and perfect such Liens to the extent required by, and with the priority required by, the Collateral Agreement, shall have been filed, registered or recorded or delivered to the Collateral Agent for filing, registration or recording;

(e) the Collateral Agent shall have received (i) counterparts of a Mortgage with respect to each Mortgaged Property duly executed and delivered by the record owner or, subject to receipt of any required consent of the applicable lessor, the lessee, as the case may be, of such Mortgaged Property, (ii) a policy or policies of title insurance issued by a nationally recognized title insurance company insuring the Lien of each such Mortgage as a valid first Lien on the Mortgaged Property described therein, free of any other Liens except as expressly permitted by Section 6.08, together with such endorsements, coinsurance and reinsurance as the Collateral Agent may reasonably request, and (iii) such surveys, abstracts, appraisals, legal opinions and other documents as the Collateral Agent may reasonably request with respect to any Mortgage or Mortgaged Property; and

 

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(f) each Loan Party shall have obtained all consents and approvals required to be obtained by it in connection with the execution and delivery of all Security Documents to which it is a party, the performance of its obligations thereunder and the granting by it of the Liens thereunder;

provided, that the foregoing definition shall not require the creation or perfection of pledges of or security interests in, or the obtaining of title insurance or legal opinions with respect to, particular assets of the Loan Parties if and for so long as, in the reasonable judgment of the Collateral Agent, the cost (including the burden of compliance with applicable law) of creating or perfecting such pledges or security interests in such assets or obtaining title insurance or legal opinions with respect of such assets shall be excessive in view of the benefits to be obtained by the Lenders therefrom. Without limiting the foregoing, the Collateral Agent agrees that it shall not request Capital Stock of any Foreign Subsidiary be pledged pursuant to a Foreign Pledge Agreement unless the Borrower consents thereto (such consent not to be unreasonably withheld, taking into account the benefits to be afforded by such Foreign Pledge Agreement to the ability of the Collateral Agent to exercise its rights under, or otherwise enforce, the Liens granted to it on such Capital Stock pursuant to the Security Documents in relation to the cost of preparation of such Foreign Pledge Agreement). The Collateral Agent may grant extensions of time for the perfection of security interests in or the obtaining of title insurance or legal opinions with respect to particular assets (including extensions beyond the date of this Agreement) where it determines that such action cannot be accomplished without undue effort or expense by the time or times at which it would otherwise be required by this Agreement or the Security Documents.

“ Term Loan Commitment ” means, with respect to each Lender, the commitment of such Lender to make Term Loans hereunder on the date of this Agreement, expressed as an amount representing the maximum principal amount of the Term Loan to be made by such Lender hereunder. The amount of each Lender’s Term Loan Commitment is set forth on Schedule 2.01. The aggregate amount of the Term Loan Commitments on the date hereof is $250,000,000.

“ Term Loan Secured Parties ” has the meaning assigned to such term in the Term Loan Guarantee and Collateral Agreement

“ Transactions ” means the execution, delivery and performance by the Loan Parties of the Loan Documents, the borrowing of Loans and the use of the proceeds of the Loans.

“ TT&C Station ” means an earth station operated by the Borrower or any Restricted Subsidiary for the purpose of providing tracking, telemetry, control and monitoring of any Satellite.

“ Unrestricted Subsidiary ” means:

(a) any Subsidiary of the Borrower that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors in the manner provided below;

(b) XM; and

 

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(c) any subsidiary of an Unrestricted Subsidiary.

The Board of Directors may designate any Subsidiary of the Borrower (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness of, or holds any Lien on any property of, the Borrower or any other Subsidiary of the Borrower that is not a subsidiary of the Subsidiary to be so designated; provided, however, that (a) either (i) the Subsidiary to be so designated has total assets of $1,000 or less or (ii) if such Subsidiary has assets greater than $1,000, such designation would be permitted under Section 6.02, (b) no FCC Licenses Subsidiary may be designated as an Unrestricted Subsidiary and (c) so long as the 9  ⁵ / 8 % Senior Notes Indenture, or any indenture or other agreement governing any Refinancing Indebtedness with respect to the 9  ⁵ / 8 Senior Notes, is in effect and permits designations of Subsidiaries as “unrestricted subsidiaries”, no Subsidiary may be designated as an Unrestricted Subsidiary hereunder unless such Subsidiary shall have been designated as an “unrestricted subsidiary” under the 9  ⁵ / 8 % Senior Notes Indenture or such other indenture or agreement.

The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that immediately after giving effect to such designation (a) the Borrower could Incur $1.00 of additional Indebtedness under Section 6.01(a), (b) no Default shall have occurred and be continuing and (c) all actions required to be taken with respect to such designated Subsidiary or its assets under Sections 5.11 and 5.12 shall have been taken. Any such designation by the Board of Directors shall be evidenced to the Administrative Agent by promptly delivering to the Administrative Agent a copy of the resolution of the Board of Directors giving effect to such designation and a certificate signed by two Financial Officers of the Borrower, certifying that such designation complied with the foregoing provisions.

“ USA PATRIOT Act ” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

“ US Dollars ” or “ $ ” means the lawful money of the United States of America.

“ Voting Stock ” of a Person means all classes of Capital Stock of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof.

“ Wholly Owned Subsidiary ” means a Restricted Subsidiary all the Capital Stock of which (other than directors’ qualifying shares) is owned by the Borrower or one or more other Wholly Owned Subsidiaries.

“ Withdrawal Liability ” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

“ XM ” means XM Satellite Radio Holdings Inc., a Delaware corporation.

“ XM Credit Agreement ” means the credit agreement dated as of the date hereof among XM Satellite Radio Inc., XM, the lenders party thereto and Liberty, as administrative agent.

 

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SECTION 1.02. Terms Generally . The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine