WAIVER AND LETTER AGREEMENT

Waiver Agreement

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XM SATELLITE RADIO HOLDINGS INC | FRANKLIN ADVISERS, INC | Sirius Satellite Radio Inc | UBS SECURITIES LLC | Vernon Merger Corporation

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Title: WAIVER AND LETTER AGREEMENT
Governing Law: New York Date: 7/17/2008
Industry: Broadcasting and Cable TV Sector: Services

Execution Copy

WAIVER AND LETTER AGREEMENT

WAIVER AND LETTER AGREEMENT, dated as of July 14, 2008 (this “ Agreement ”), by and among XM Satellite Radio Inc., a Delaware corporation (“ XM Inc. ” or the “ Company ”), XM Satellite Radio Holdings Inc. (“ XM Holdings ”), the undersigned beneficial owners (or investment managers or advisors with authority for the beneficial owners) of the Notes (as defined below) identified on Schedule A to this Agreement on the date of this Agreement (each a “ Beneficial Noteholder ” and collectively, the “ Beneficial Noteholders ”).

WHEREAS, the Beneficial Noteholders of the 9.75% Senior Notes due 2014 of XM Inc., guaranteed by XM Holdings (the “ Notes ”) issued pursuant to the Indenture, dated as of May 1, 2006, among XM Inc., XM Holdings, XM Equipment Leasing LLC as subsidiary guarantor, XM Radio Inc. as subsidiary guarantor, and The Bank of New York as trustee (the “ Trustee ”) relating to the Notes (the “ Indenture ”), hold a majority in aggregate principal amount of the Notes as of the time of execution hereof and desire to agree to waivers of the change of control provisions of the Indenture.

WHEREAS, the proposed merger of XM Holdings with Vernon Merger Corporation (“ Merger Sub ”), a wholly-owned subsidiary of Sirius Satellite Radio Inc. (“ Sirius ”), pursuant to the terms of an Agreement and Plan of Merger, dated as of February 19, 2007, as it may be amended, modified or extended (the “ Merger Agreement ”), among XM Holdings, Merger Sub and Sirius, or other business combination in which XM Holdings and Sirius become affiliated (the “ Merger ”) may trigger certain obligations of the Company pursuant to the Indenture.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the parties signatory to this Agreement hereby agrees as follows:

1. Waiver . Each of the Beneficial Noteholders hereby irrevocably agrees and consents that, to the extent that the consummation of the Merger constitutes a “Change of Control” as defined under Section 1.01 of the Indenture, the requirements pursuant to Section 4.14 (Offer to Repurchase Upon Change of Control) of the Indenture that the Company repurchase Notes or make an offer to the holders of the Notes to repurchase the Notes and to give notice of such Change of Control or Offer to Repurchase Upon a Change of Control are, subject to the other provisions of this Agreement, hereby waived in respect of such “Change of Control” (the “ Waiver ”). The Waiver will be set forth in a supplemental indenture substantially in the form attached hereto as Exhibit A , and pursuant to the terms of the Indenture all holders of the Notes will be bound thereby. The Trustee is hereby instructed by each of the Beneficial Noteholders, and will be instructed by the registered holders under Section 4, to execute the supplemental indenture referred to in the preceding sentence. Each Beneficial Noteholder acknowledges and agrees that the Waiver shall be binding upon their respective successors, assigns, trustees in bankruptcy and other legal representatives.

2. Termination of Effectiveness .

(a) The Waiver shall become effective upon signing and shall cease to be effective as of August 31, 2008 unless the following events have occurred on or prior to such date:

(i) the consummation of the Merger;

(ii) the Company having caused funds to be raised in the amount of at least $400,000,000 through the issuance of (A) a new series of senior notes (the “ New Senior Notes ”) or (B) other securities, both of which will be equal to or junior in right of payment to the Exchange Notes (as defined in Section 3 below), to fund the cash portion of the consideration payable in the Exchange Offer (as defined below);

(iii) the Company or XM Holdings having raised at least $500,000,000 through a contribution to the Company’s equity capital, the issuance and sale of convertible or exchangeable notes that will be junior in right of payment to the Exchange Notes or the issuance and sale of equity securities (it being understood that, the financing conditions in subsection (ii) above and this subsection (iii) are independent of each other resulting in an aggregate condition of $900,000,000 of financing);

(iv) the Company or XM Holdings having funded or contributed the necessary funds into a segregated account to fund the mandatory offer to repurchase all Senior Floating Rate Notes due 2013 of XM Inc. (the “ Floating Rate Notes ”) triggered by the Merger;

(v) the Company or XM Holdings having funded or contributed the necessary funds into a segregated account to fund the mandatory offer to repurchase transponders of the XM-4 satellite, triggered by the Merger under the sale and leaseback transaction pursuant to (A) the Participation Agreement, dated as of February 13, 2007, by and among XM Holdings, Wells Fargo Bank Northwest in its capacity as Owner Trustee and other parties, (B) the lease agreement, dated as of February 13, 2007, by and between Wells Fargo Bank Northwest, as Owner Trustee, and the Company and (C) the other related documents (the “ Sale-Leaseback Transaction ”);

(vi) the Company or XM Holdings having repaid all borrowings under Section 13 and related “credit facility” portions of the Third Amended and Restated Distribution and Credit Agreement, dated as of February 6, 2008, by and among General Motors Corporation, XM Holdings and XM Inc.;

(vii) with respect to XM Holdings’ 1.75% Convertible Senior Notes due 2009 (the “ Convertible Senior Notes ”), XM Holdings having obtained the consent of holders of at least 98% of the aggregate principal amount of such Convertible Senior Notes to waive a change of control offer, if any, triggered by the Merger with the interest rate on such Convertible Senior Notes to be increased to 10% subject to the Merger being completed; and

(viii) the absence of any occurrence of an event that, with notice or lapse of time or both, would constitute a default, in the due performance or observance of any term, covenant or condition contained in the indenture governing the Exchange Notes (as defined below).

3. The Company’s Obligations to Make the Exchange Offer . The Company agrees to commence the exchange offer for the Notes held by the Beneficial Noteholders and other “qualified institutional buyers” (as defined in the Securities Act) (“ QIBs ”) (and at the Company’s option, the other registered holders of the Notes) for $600,000,000 (assuming the offer is for all outstanding Notes) of aggregate consideration which shall be paid (a) two thirds in cash and (b) the remaining one third in new senior unsecured notes (the “ Exchange Notes ”) on the terms and conditions set forth in the description of notes attached hereto as Exhibit B hereto (the “ Exchange Offer ”); provided , that for each dollar in excess of $400,000,000 raised by the Company in the offering contemplated by Section 2(a)(ii) hereof (other than securities that rank junior in right of payment to Exchange Notes), the Company will increase the cash portion and concurrently reduce the Exchange Notes portion of the consideration in the Exchange Offer. The Exchange Notes will have the same coupon as the New Senior Notes. The exchange ratio for each $1000 principal amount of Notes exchanged in the Exchange Offer will be $1,000 divided by the price on the Exchange Notes (expressed as a decimal) that equates to a yield to maturity (to the investor) of the greater of (a) 13.92% or (b) the yield to maturity of the New Senior Notes (calculated solely based on the coupon of the New Senior Notes and the price at which they are sold to investors). If less than $150 million of New Senior Notes are issued, then the coupon of the Exchange Notes will be 13% and the yield to maturity used to calculate the exchange ratio will be the greater of (a) 15% or (b) the yield to maturity of the New Senior Notes (calculated solely based on the coupon of the New Senior Notes and the price at which they are sold to investors). The Company agrees that it will commence the Exchange Offer as promptly as practicable following the Merger, but in no event later than five business days following the consummation of the Merger and to do all things reasonably necessary and appropriate in furtherance thereof, including filing any related documents with the Securities and Exchange Commission (the “ Commission ”), if applicable, and to use its best efforts to consummate the Exchange Offer within 30 business days of its commencement.

4. Instruction to Registered Holders . Section 9.02 of the Indenture provides that the Holders (defined as the registered holders) of a majority in aggregate principal amount of the Notes then outstanding may waive compliance with certain provisions of the Indenture, subject to the limitations set forth therein. Each of the Beneficial Noteholders hereby covenants and agrees to instruct its registered holder or holders of the Notes to execute a waiver, as of the date hereof, substantially in the form attached hereto as Exhibit C , implementing the Waiver and instructing the Trustee to execute the supplemental indenture referred to in Section 1 and agrees to take any additional action as may be reasonably requested by the Company in order to give effect to the Waiver and to make the supplemental indenture effective.

5. Effectiveness of this Agreement . This Agreement shall become effective immediately upon the execution hereof by the parties listed on the signature pages hereto.

6. Termination of Agreement . Notwithstanding anything to the contrary set forth in this Agreement, this Agreement and the Waiver shall terminate upon termination of the Merger Agreement without the Merger having been consummated upon or prior to such termination.

7. Representations and Warranties .

(a) Each of XM Holdings and the Company represents and warrants to each of the Beneficial Noteholders that:

(i) each of XM Holdings and XM Inc. is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite corporate, partnership or other power and authority to enter into this Agreement and to carry out the transactions contemplated by, and perform its respective obligations under, this Agreement;

(ii) the execution and delivery of this Agreement and the performance of its obligations hereunder have been duly authorized by all necessary corporate, partnership or other action on its part;

(iii) the execution, delivery and performance by it of this Agreement do not and shall not (A) violate any provision of law, rule or regulation applicable to either of XM Holdings or XM Inc. or their respective certificate of incorporation or bylaws or other organizational documents or (B) conflict with, result in the breach of or constitute (with due notice or lapse of time or both) a default under any material contractual obligations to which either of XM Holdings or XM Inc. is a party or under their respective certificate of incorporation, bylaws or other governing instruments;

(iv) the execution, delivery and performance by it of this Agreement do not and shall not require any registration or filing with, the consent or approval of, notice to, or any other action with respect to, any Federal, state or other governmental authority or regulatory body, except for (A) the registration under the Securities Act of 1933, as amended (the “ Securities Act ”), of the securities to be issued in the Exchange Offer in the event that the Company determines to register the Exchange Offer under the Securities Act and (B) such consents, approvals, authorizations, registrations or qualifications as may be required under the state securities or Blue Sky laws in connection with the Exchange Offer and such other filings as may be necessary or required by the Commission; and

(v) assuming the due execution and delivery of this Agreement by each of the other parties hereto, this Agreement is the legally valid and binding obligation of it, enforceable against it in accordance with its terms.

(b) Each of the Beneficial Noteholders severally and not jointly represents and warrants to the Company and XM Holdings that:

(i) it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite corporate, partnership or other

power and authority to enter into this Agreement and to carry out the transactions contemplated by, and perform its respective obligations under, this Agreement;

(ii) the execution and delivery of this Agreement and the performance of its obligations hereunder have been duly authorized by all necessary corporate, partnership or other action on its part;

(iii) assuming the due execution and delivery of this Agreement by each of the other parties hereto, this Agreement is the legally valid and binding obligation of it, enforceable against it in accordance with its terms;

(iv) as of the date of this Agreement, such Beneficial Noteholder is the beneficial owner of, or the investment adviser or manager for the beneficial owners of, the principal amount at maturity of the Notes, set forth opposite such Beneficial Noteholder’s name on Schedule A hereto, with the power and authority to vote and dispose of such Notes;

(v) as of the date of this Agreement, such Beneficial Noteholder is not aware, after due inquiry, of any event that, due to any fiduciary or similar duty to any other Person, would prevent it from taking any action required of it under this Agreement;

(vi) it is a “qualified institutional buyer” (as such term is defined in Rule 144A promulgated under the Securities Act);

(vii) the knowledge and experience of such Beneficial Noteholder in financial and business matters is such that it, together with its advisors, is capable of evaluating the merits and risks of entering into this Agreement;

(viii) such Beneficial Noteholder acknowledges that no representations, express or implied, are being made with respect to XM Holdings or any of its subsidiaries or affiliates or representatives, Sirius or any of its subsidiaries or affiliates or representatives or otherwise, other than those expressly set forth herein;

(ix) in making its decision to enter into this Agreement, such Beneficial Noteholder has relied upon independent investigations made by such Beneficial Noteholder (and has not relied on XM Holdings or any of its subsidiaries or affiliates, Sirius or any of its subsidiaries or affiliates or J.P. Morgan Securities Inc. or any of its subsidiaries or affiliates (collectively, “ JPMorgan ”)) and, to the extent believed by such Beneficial Noteholder to be appropriate, such Beneficial Noteholder’s representatives, including such Beneficial Noteholder’s own legal, tax and other advisors;

(x) such Beneficial Noteholder and its representatives have been given the opportunity to examine documents and to ask questions of, and to receive answers from, XM Holdings and XM Inc. or any of their subsidiaries concerning the terms and conditions of the transactions contemplated hereby; and

(xi) such Beneficial Noteholder has been represented by counsel in connection with this Agreement and the transactions contemplated by this Agreement.

8. Amendments and Modifications . Except as otherwise expressly provided in this Agreement, this Agreement shall not be amended, modified or supplemented, except in writing signed by the Company, XM Holdings and each of the Beneficial Noteholders.

9. No Other Waivers . Each of the signatories to this Agreement expressly acknowledges and agrees that, except as expressly provided in this Agreement, nothing in this Agreement is intended to, or does, in any manner waive, limit, impair or restrict the ability of any party to this Agreement to protect and preserve all of its rights, remedies and interests, including, without limitation, with respect to its claims against the Company and XM Holdings.

10. Further Assurances . Each of the signatories to this Agreement hereby further covenants and agrees to execute and deliver all further documents and agreements and take all further action that may be reasonably necessary or desirable in order to enforce and effectively implement the terms and conditions of this Agreement, including instructing the registered holder of the Notes to take the actions described in Section 4 hereof.

11. Complete Agreement . This Agreement, including the Schedules and Exhibits hereto, constitutes the complete agreement between the signatories to this Agreement with respect to the subject matter hereof and supersedes all prior negotiations, agreements and understandings with respect to the subject matter hereof. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the intent of the signatories to this Agreement.

12. Notices . All notices, requests, demands, claims and other communications hereunder shall be in writing and shall be (a) transmitted by hand delivery, or (b) mailed by first class, registered or certified mail, postage prepaid, or (c) transmitted by overnight courier, or (d) transmitted by telecopy, and in each case, if to the Company or XM Holdings, at the address set forth below:

XM Satellite Radio Inc.
XM Satellite Radio Holdings Inc.
1500 Eckington Place, N.E.
Washington, DC 20002
Fax: (202) 380-4000
Attention: General Counsel

with a copy to: Chief Financial Officer

if to a Beneficial Noteholder, to the address set forth on the signature pages to this Agreement, with a copy to the Beneficial Noteholders’ counsel:

Notices mailed or transmitted in accordance with the foregoing shall be deemed to have been given upon receipt.

13. Governing Law . This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

14. Jurisdiction . Each party hereto irrevocably submits to the jurisdiction of (i) the Supreme Court of the State of New York, New York County, and (ii) the United States District

Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of this Agreement or any transaction contemplated hereby. Each party hereto agrees to commence any action, suit or proceeding relating hereto either in the United States District Court for the Southern District of New York or, if such suit, action or other proceeding may not be brought in such court for reasons of subject matter jurisdiction, in the Supreme Court of the State of New York, New York County. Each party hereto irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in (A) the Supreme Court of the State of New York, New York County, or (B) the United States District Court for the Southern District of New York, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

15. Consent to Service of Process . Each of the signatories to this Agreement irrevocably consents to service of process by mail at the address listed with the signature of each such party on the signature pages to this Agreement. Each of the signatories to this Agreement agrees that its submission to jurisdiction and consent to service of process by mail is made for the express benefit of each of the other signatories to this Agreement.

16. Specific Performance . It is understood and agreed by each of the signatories to this Agreement that money damages would not be a sufficient remedy for any breach of this Agreement by any party and the sole remedy for each non-breaching party shall be specific performance as remedy for any such breach.

17. Headings . The headings of the sections, paragraphs and subsections of this Agreement are inserted for convenience only and shall not affect the interpretation hereof.

18. Successors and Assigns . This Agreement is intended to bind and inure to the benefit of the signatories to this Agreement and their respective successors, permitted assigns, heirs, executors, administrators and representatives. The agreements, representations and obligations of the undersigned parties under this Agreement are, in all respects, several and not joint.

19. Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page by facsimile shall be effective as delivery of a manually executed counterpart.

20. No Third-Party Beneficiaries . Unless expressly stated in this Agreement, this Agreement shall be solely for the benefit of the signatories to this Agreement, and no other person or entity shall be a third-party beneficiary hereof, except that (i) each person or entity to which a Beneficial Noteholder transfers a Note from and after the execution hereof shall have the right to enforce XM Holdings’ and its subsidiaries’ obligations under Section 3, for so long as such person or entity holds such Note and (ii) JPMorgan shall be a third party beneficiary of the representations and warranties of the Beneficial Noteholders in Section 7(b).

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed and delivered by its duly authorized officers as of the date first written above.


		XM SATELLITE RADIO INC.

		By:		/s/ Joseph J. Euteneuer

		Name: Joseph J. Euteneuer
		Title: EVP & CFO

		XM SATELLITE RADIO HOLDINGS INC.

		By:		/s/ Joseph J. Euteneuer

		Name: Joseph J. Euteneuer
		Title: EVP & CFO


		FRANKLIN ADVISERS, INC.

		By:		/s/ Edward D. Perks

		Name: Edward D. Perks
		Title: Senior Vice President


		UBS SECURITIES LLC

		By:		/s/ Robert Del Grande

		Name: Robert Del Grande
		Title: Executive Director

		By:		/s/ James B. Fuqua

		Name: James B. Fuqua
		Title: Managing Director and Counsel


		JOHN HANCOCK

		By:		/s/ Diane R. Landers

		Name: Diane R. Landers
		Title: Chief Administrative Officer

SCHEDULE A

BENEFICIAL OWNERS

EXHIBIT A

Supplemental Indenture Regarding Waiver

EXHIBIT A

FORM OF SUPPLEMENTAL INDENTURE

SUPPLEMENTAL INDENTURE, dated as of July , 2008 (this “ First Supplemental Indenture ”), among XM Satellite Radio Inc., a Delaware corporation (the “ Issuer ”), XM Satellite Radio Holdings Inc. (“ XM Holdings ”), XM Equipment Leasing LLC as subsidiary guarantor, XM Radio Inc. as subsidiary guarantor (together with XM Equipment Leasing LLC, the “Subsidiary Guarantors ”), and The Bank of New York Mellon, as trustee under the Indenture referred to below (the “ Trustee ”).

W I T N E S S E T H:

WHEREAS, the Issuer, XM Holdings, the Subsidiary Guarantors and the Trustee have heretofore executed and delivered an Indenture, dated as of May 1, 2006 (the “ Indenture ”), providing for the issuance of 9.75% Senior Notes due 2014 (the “ Notes ”);

WHEREAS, Section 9.02 of the Indenture provides that compliance with any provision of the Indenture may be waived with the consent of the Holders (as defined in the Indenture) of a majority in aggregate principal amount of the then outstanding Notes;

WHEREAS, the Issuer, XM Holdings and certain beneficial owners of the Notes (the “ Beneficial Noteholders ”) have entered into a Waiver and Letter Agreement, dated as of July , 2008 (the “ Waiver and Letter Agreement ”), pursuant to which the Beneficial Noteholders, holding a majority in aggregate principal amount of the Notes, have duly agreed and consented that, to the extent the consummation of the Merger constitutes a “Change of Control” as defined under Section 1.01 of the Indenture, the requirements pursuant to Section 4.14 (Offer to Repurchase Upon Change of Control) of the Indenture that the Issuer repurchase the Notes or make an offer to the Holders of the Notes to repurchase the Notes and to give notice of such Change of Control or Offer to Repurchase Upon a Change of Control are waived in respect of such “Change of Control”; and

WHEREAS, the execution and delivery of this First Supplemental Indenture have been duly authorized by all necessary corporate or limited liability company, as the case may be, action on the part of the Issuer, XM Holdings and the Subsidiary Guarantors and all conditions and requirements necessary to make this instrument a valid and binding agreement have been duly performed and complied with.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Issuer, XM Holdings, the Subsidiary Guarantors and the Trustee mutually covenant and agree, for the equal and ratable benefit of the Holders of the Notes, as follows:

ARTICLE I — WAIVER OF COMPLIANCE

Section 1.1. Waiver of the “Change of Control” Provision in the Indenture .

(a) To the extent that the consummation of the Merger constitutes a “Change of Control” as defined under Section 1.01 of the Indenture, the requirements pursuant to Section 4.14 (Offer to Repurchase Upon Change of Control) of the Indenture that the Issuer repurchase the Notes or make an offer to the Holders of the Notes to repurchase the Notes are waived in respect of such “Change of Control” (the “ Waiver ”).

(b) The Waiver shall become effective upon signing and shall cease to be effective as of August 31, 2008 unless the following events have occurred on or prior to that date:

(i) the consummation of the Merger;

(ii) the Issuer or XM Holdings having caused funds to be raised in the amount of at least $400,000,000 through the issuance of (A) a new series of senior notes (the “ New Senior Notes ”) or (B) other securities that will be equal or junior in right of payment to the new senior unsecured notes to be issued on substantially the terms set forth on Exhibit B to the Waiver and Letter Agreement (the “ Exchange Notes ”), to fund the cash portion of the consideration payable in the exchange offer to be made for the Notes held by the Beneficial Noteholders and other “qualified institutional buyers” (as defined in the Securities Act of 1933, as amended) (and at the Issuer’s option, the other Holders of the Notes) (the “ Exchange Offer ”);

(iii) the Issuer or XM Holdings having raised at least $500,000,000 through a contribution to the Issuer’s equity capital, the issuance and sale of convertible or exchangeable notes that will be junior in right of payment to the Exchange Notes or the issuance and sale of equity securities (it being understood that the financing conditions in subsection (ii) above and this subsection (iii) are independent of each other resulting in an aggregate condition of $900,000,000 of financing);

(iv) the Issuer or XM Holdings having funded or contributed the necessary funds into a segregated account to fund the mandatory offer to repurchase all Senior Floating Rate Notes due 2013 of the Issuer (the “ Floating Rate Notes ”) triggered by the Merger;

(v) the Issuer or XM Holdings having funded or contributed the necessary funds into a segregated account to fund the mandatory offer to repurchase transponders of the XM-4 satellite, triggered by the Merger under the sale and leaseback transaction pursuant to (A) the Participation Agreement, dated as of February 13, 2007, by and among XM Holdings, Wells Fargo Bank Northwest in its capacity as Owner Trustee and other parties, (B) the lease agreement, dated as of February 13, 2007, by and between Wells Fargo Bank Northwest, as Owner Trustee, and the Issuer and (C) the other related documents (the “ Sale-Leaseback Transaction ”);

(vi) the Issuer or XM Holdings having repaid all borrowings under Section 13 and related “credit facility” portions of the Third Amended and Restated Distribution and Credit Agreement, dated as of February 6, 2008, by and among General Motors Corporation, XM Holdings and the Issuer;

ARTICLE II — MISCELLANEOUS

Section 2.1. Effect of Supplemental Indenture . From and after the effective date of this First Supplemental Indenture, the Indenture and the Notes shall be supplemented in accordance herewith, and this First Supplemental Indenture shall form a part of the Indenture and the Notes for all purposes, and every Holder of Notes heretofore or hereafter authenticated and delivered under the Indenture shall be bound thereby.

Section 2.2. Indenture Remains in Full Force and Effect . Except as supplemented by this First Supplemental Indenture, all provisions in the Indenture and the Notes shall remain in full force and effect.

Section 2.3. References to Supplemental Indenture . Any and all notices, requests, certificates and other instruments executed and delivered after the execution and delivery of this First Supplemental Indenture may refer to the Indenture without making specific reference to this First Supplemental Indenture, but nevertheless all such

references shall include this First Supplemental Indenture unless the context requires otherwise.

Section 2.4. Conflict with Trust Indenture Act (“TIA”) . If any provision of this First Supplemental Indenture limits, qualifies or conflicts with any provision of the TIA that is required under the TIA to be part of and govern any provision of this First Supplemental Indenture, the provision of the TIA shall control. If any provision of this First Supplemental Indenture modifies or excludes any provision of the TIA that may be so modified or excluded, the provision of the TIA shall be deemed to apply to the Indenture as so modified or to be excluded by this First Supplemental Indenture, as the case may be.

Section 2.5. Severability . If any court of competent jurisdiction shall determine that any provision in this First Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 2.6. Terms Defined in the Indenture . All capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Indenture.

Section 2.7. Headings . The Article and Section headings of this First Supplemental Indenture have been inserted for convenience of reference only, are not to be considered a part of this First Supplemental Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

Section 2.8. Benefits of First Supplemental Indenture . Nothing in this First Supplemental Indenture or the Notes, express or implied, shall give to any Person, other than the parties hereto and thereto and their successors hereunder and thereunder and the Holders of the Notes any benefit of any legal or equitable right, remedy or claim under the Indenture, this First Supplemental Indenture or the Notes.

Section 2.9. Successors . All agreements of the Issuer and XM Holdings in this First Supplemental Indenture shall bind their respective successors. All agreements of the Trustee in this First Supplemental Indenture shall bind its successors.

Section 2.10. Trustee Not Responsible for Recitals . The recitals contained herein shall be taken as the statements of the Issuer and XM Holdings and the Trustee assumes no responsibility for their correctness.

Section 2.11. Certain Duties and Responsibilities of the Trustee . In entering into this First Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Indenture and the Notes relating to the conduct or affecting the liability or affording protection to the Trustee, whether or not elsewhere herein so provided.

Section 2.12. Governing Law . This First Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York.

Section 2.13. Counterpart Originals . The parties may sign any number of copies of this First Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

Section 2.14. Effectiveness . This First Supplemental Indenture shall become effective upon execution hereof by the parties listed on the signature pages hereto.

Section 2.15. Confirmation . Each of the Issuer, XM Holdings, the Subsidiary Guarantors and the Trustee hereby confirms and reaffirms the Indenture in every particular except as amended and supplemented by this First Supplemental Indenture.

Section 2.16. Notation on Notes . Pursuant to Section 9.05 of the Indenture, new Notes reflecting the amendments to the Indenture made hereby shall not be issued; however, corresponding changes to the Notes to reflect the amendments made hereby shall be deemed to be made to the Notes as of the date of this First Supplemental Indenture. The Trustee may, but shall not be required to, place an appropriate notation as to this First Supplemental Indenture on any Note hereafter authenticated in accordance with Section 9.05 of the Indenture.

Section 2.17. Entire Agreement . This First Supplemental Indenture, together with the Indenture as amended hereby and the Notes, contains the entire agreement of the parties, and supersedes all other representations, warranties, agreements and understandings between the parties, oral or otherwise, with respect to the matters contained herein and therein.

IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed as of the date first above written.


		XM SATELLITE RADIO INC.

		By:
				Name:
				Title:

		XM SATELLITE RADIO HOLDINGS INC.

		By:
				Name:
				Title:

		XM EQUIPMENT LEASING LLC

		By:
				Name:
				Title:

		XM RADIO INC.

		By:
				Name:
				Title:


THE BANK OF NEW YORK MELLON, as Trustee

By:
		Name:
		Title:

[XM Satellite Radio Inc. Supplemental Indenture]

EXHIBIT B

Description of Notes

EXHIBIT B

DESCRIPTION OF NOTES

For purposes of this description, references to the “Company,” “we,” “our” and “us” refers XM Satellite Radio Inc. (not including its parent company or any of its subsidiaries). The term “Outstanding Notes” refers to the 9.75% Senior Notes due 2014 and the term “Notes” refers to
the % Senior Notes due 2014 offered hereby in accordance with Section 3(a)(9) of the Securities Act.

The Outstanding Notes were and the Notes will be issued under an Indenture between the Company and The Bank of New York Mellon, as Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act.

Certain terms used in this description are defined under the subheading “—Certain definitions”. Certain defined terms used in this description but not defined herein have the meanings assigned to them in the Indenture. The following description is only a summary of the material provisions of the Indenture. We urge you to read the Indenture because it, not this description, defines your rights as holders of these Notes. You may request copies of the Indenture at our address set forth under the heading “Where you can find more information”.

Brief description of Notes

These Notes:

	•		are unsecured senior obligations of the Company;

	•		are senior in right of payment to any existing and future Subordinated Obligations of the Company;

	•		will be unconditionally guaranteed by the Guarantors (including Holdings) on a senior basis, subject to the limitations described below under the caption “Note Guarantee”; and

	•		are effectively junior to all of the existing and future liabilities of any of the Company’s Subsidiaries that are not Subsidiary Guarantors.

Principal, maturity and interest

The Company issued the Outstanding Notes initially with an aggregate principal amount of $600 million. The Company issued the Outstanding Notes in denominations of $1,000 and any integral multiple of $1,000. As long as we are subject to the debt incurrence covenants under the Existing Sale and Leaseback Transaction and subject to the indentures governing the Company’s 9.75% Senior Notes due 2014 or the Company’s Senior Floating Rate Notes due 2013, the Notes will have a maturity of , 2014. If at any time prior to , 2013, the Company is no longer either (i) subject to the debt incurrence covenants under the Existing Sale and Leaseback Transaction or (ii) subject to the indentures governing the Company’s 9.75% Senior Notes due 2014 and the Company’s Senior Floating Rate Notes due 2013, to the extent any notes issued thereunder remain outstanding following the refinancing

transactions described in this offering memorandum, the Notes will mature on , 2013. Subject to our compliance with the covenant described under the subheading “—Certain covenants—Limitation on indebtedness”, we will be permitted to issue more Notes from time to time under the Indenture (the “ Additional Notes ”). The Notes and the Additional Notes, if any, will be treated as a single class for all purposes of the Indenture, including waivers, amendments, redemptions and offers to purchase. Unless the context otherwise requires, for all purposes of the Indenture and this “Description of Notes”, references to the Notes include any Additional Notes actually issued.

Interest on these Notes will accrue at the rate of % per annum and will be payable semiannually in arrears on and of each year, commencing on . We will make each interest payment to the holders of record of these Notes on the immediately preceding and . We will pay interest on overdue principal at 1% per annum in excess of the above rate and will pay interest on overdue installments of interest at such higher rate to the extent lawful.

Interest on these Notes will accrue from the date of original issuance or, if interest has already been paid, from the most recent interest payment date. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

Payments on the Notes; paying agent and registrar

We will pay principal of, premium, if any, and interest on the Notes at the office or agency designated by the Company in the Borough of Manhattan, The City of New York, except that we may, at our option, pay interest on the Notes by check mailed to holders of the Notes at their registered address as it appears in the Registrar’s books. We have initially designated the corporate trust office of the Trustee in New York, New York to act as our Paying Agent and Registrar. We may, however, change the Paying Agent or Registrar without prior notice to the holders of the Notes, and the Company or any of its Restricted Subsidiaries may act as Paying Agent or Registrar.

We will pay principal of, premium, if any, and interest on, Notes in global form registered in the name of or held by The Depository Trust Company or its nominee in immediately available funds to The Depository Trust Company or its nominee, as the case may be, as the registered holder of such global Note.

Transfer and exchange

A holder may transfer or exchange Notes in accordance with the Indenture. The Registrar and the Trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents. No service charge will be imposed by the Company, the Trustee or the Registrar for any registration of transfer or exchange of Notes, but the Company may require a holder to pay a sum sufficient to cover any transfer tax or other governmental taxes and fees required by law or permitted by the Indenture. The Company is not required to transfer or exchange any Note selected for redemption. Also, the Company is not required to transfer or exchange any Note for a period of 15 days before a selection of Notes to be redeemed.

The registered holder of a Note will be treated as the owner of it for all purposes.

Optional redemption

We may, at our option, redeem some or all of the Notes at any time and from time to time at a redemption price equal to the greater of the following amounts, plus, in each case, accrued and unpaid interest on the principal amount being redeemed to the applicable redemption date:

	•		100% of the principal amount of the Notes to be redeemed; and

	•		the sum of the present values of the principal amount and the remaining scheduled payments of interest on the Notes to be redeemed (not including any portion of payments of interest accrued as of the applicable redemption date), discounted to the applicable redemption date in accordance with customary market practice on a semi-annual basis at a rate equal to the sum of the Treasury Rate plus 0.50%.

The redemption prices will be calculated by the Independent Investment Banker assuming a 360-day year consisting of twelve 30-day months. For purposes of calculating the redemption prices, the following terms will have the meanings set forth below.

“Comparable Treasury Issue” means the U.S. Treasury security or securities selected by the Independent Investment Banker as having a maturity comparable to the remaining term of the Notes to be redeemed that would be used, at the time of selection and in accordance with customary market practice, in pricing new issues of corporate debt securities of a comparable maturity to the remaining term of such Notes.

“Comparable Treasury Price” means, with respect to any redemption date,

	•		the bid-side price for the Comparable Treasury Issue as of the third Business Day preceding the redemption date, as set forth in the daily statistical release (or any successor release) published by the Wall Street Journal in the table entitled “Treasury Bonds, Notes, and Bills,” as determined by the Independent Investment Banker, or

	•		if such release (or any successor release) is not published or does not contain such prices on such Business Day:

	o		the average of the Reference Treasury Dealer Quotations for that redemption date, after excluding the highest and lowest of the Reference Treasury Dealer Quotations;

	o		if the Trustee obtains fewer than four Reference Treasury Dealer Quotations, the average of all Reference Treasury Dealer Quotations so received; or

	o		if only one Reference Treasury Dealer Quotation is received, such quotation.

“Independent Investment Banker” means one of the Reference Treasury Dealers selected by the Trustee after consultation with us.

“Reference Treasury Dealer” means each of four primary U.S. Government securities dealers in New York City (each a “Primary Treasury Dealer”), consisting of (i) J.P. Morgan Securities Inc. (or its affiliate), (ii) Morgan Stanley & Co. Incorporated (or its affiliate), (iii) UBS Securities LLC and (iv) another nationally recognized investment banking firm (or its affiliate) that we select in connection with the particular redemption, and their respective successors, provided that if any of them ceases to be a Primary Treasury Dealer, we will substitute another nationally recognized investment banking firm (or its affiliate) that is a Primary Treasury Dealer.

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 3:30 p.m., New York City time, on the third Business Day preceding that redemption date.

“Treasury Rate” means, with respect to any redemption date, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated on the third Business Day preceding the applicable redemption date, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for that redemption date.

Unless we default in the payment of the redemption price, on and after the applicable redemption date, interest will cease to accrue on the Notes or portions of the Notes called for redemption.

If the optional redemption date is on or after an interest record date and on or before the related interest payment date, the accrued and unpaid interest, if any, will be paid to the Person in whose name the Note is registered at the close of business, on such record date, and no additional interest will be payable to holders whose Notes will be subject to redemption by the Company.

Selection and notice of redemption

If we are redeeming less than all the Notes at any time, the Registrar will select Notes to be redeemed using any method that it deems fair and appropriate. However, if the Notes are solely registered in the name of Cede & Co. and traded through The Depository Trust Company, then The Depository Trust Company will select the Notes to be redeemed in accordance with its practices.

We will redeem Notes of $1,000 or less in whole and not in part. We will cause notices of redemption to be mailed by first-class mail at least 30 but not more than 60 days before the redemption date to each holder of Notes to be redeemed at its registered address.

If any Note is to be redeemed in part only, the notice of redemption that relates to that Note will state the portion of the principal amount thereof to be redeemed. We will issue a new Note in a principal amount equal to the unredeemed portion of the original Note in the name of the holder upon cancellation of the original Note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on Notes or portions of them called for redemption.

Mandatory redemption; offers to purchase; open market purchases

We are not required to make any mandatory redemption or sinking fund payments with respect to the Notes. However, under certain circumstances, we may be required to offer to purchase Notes as described under the captions “—Change of control” and “—Certain covenants—Limitation on sales of assets and subsidiary stock”. We may at any time and from time to time purchase Notes in the open market or otherwise.

Ranking

Senior indebtedness versus Notes

The indebtedness evidenced by these Notes will be unsecured and will rank pari passu in right of payment to any other Senior Indebtedness of the Company. Secured debt and other secured obligations of the Company will be effectively senior to the Notes to the extent of the value of the assets securing such debt or other obligations.

As of March 31, 2008, on a pro forma basis after giving effect to the refinancing transactions described in this offering memorandum, including the offering of the Notes and the application of the proceeds therefrom, Holdings, the Company and the Subsidiary Guarantors would have had approximately $2,107.6 million of Indebtedness outstanding, of which $407.6 million is secured Indebtedness. The amounts we will receive as a result of the refinancing transactions described in this offering memorandum may vary from those described in this offering memorandum depending on several factors, including changes in our refinancing plans as a result of market conditions or other factors, the extent to which holders of existing indebtedness may elect not to accept our offer to refinance their indebtedness, the timing of the merger and other factors. For more information on the sources and uses of proceeds associated with the refinancing transactions described in this offering memorandum, you should read the table under the caption “Use of proceeds” as well as “The merger,” “Capitalization” and “Summary of historical consolidated financial data” appearing elsewhere in this offering memorandum.

Liabilities of subsidiaries versus Notes

A portion of our operations are conducted through our Subsidiaries. Claims of creditors of Subsidiaries that are not Subsidiary Guarantors, including trade creditors and creditors holding indebtedness issued by such non-Guarantor Subsidiaries, and claims of preferred stockholders of such non-Guarantor Subsidiaries generally will have priority with respect to the assets and earnings of such non-Guarantor Subsidiaries over the claims of our creditors, including holders of the Notes. Accordingly, the Notes will be effectively subordinated to creditors (including trade creditors) and preferred stockholders, if any, of our non-Guarantor Subsidiaries.

As of March 31, 2008, on a pro forma basis after giving effect to the refinancing transactions described in this offering memorandum, including the offering of the Notes, non-Guarantor Subsidiaries would have had $25.9 million of liabilities, including trade and other payables.

Although the Indenture limits the Incurrence of Indebtedness and preferred stock by certain of our Subsidiaries, such limitation is subject to a number of significant qualifications. Moreover, the Indenture does not impose any limitation on the Incurrence by such Subsidiaries of liabilities that are not considered Indebtedness under the Indenture. See “—Certain covenants—Limitation on indebtedness”.

Note Guarantees

Upon consummation of the Escrow LLC-Company Merger, the Notes will be guaranteed by Holdings and each of the Company’s current and future Material Subsidiaries. Currently, XM Equipment Leasing LLC and XM Radio Inc. (to the extent permitted by FCC rules and regulations) are the only Subsidiary Guarantors. These Note Guarantees will be joint and several obligations of the Guarantors. The Subsidiary Guarantees will be effectively subordinated to any secured Indebtedness of the applicable Guarantor to the extent of the value of the assets securing such Indebtedness. The obligations of each Guarantor under its Note Guarantee will be limited as necessary to prevent that Note Guarantee from constituting a fraudulent conveyance under applicable law. See “Risk Factors—Federal and state statutes allow courts, under specific circumstances, to void or subordinate guarantees and require noteholders to return payments received from guarantors.”

A Guarantor may not sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person, other than the Company or another Guarantor, unless:

(1) immediately after giving effect to that transaction, no Default or Event of Default exists; and

(2) either:

(a) the Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or merger assumes all the obligations of that Guarantor under the Indenture and its Note Guarantee pursuant to a supplemental indenture satisfactory to the Trustee; or

(b) the Net Proceeds of such sale or other disposition are applied in accordance with the applicable “Asset Sale” provisions of the Indenture.

The Note Guarantee of a Guarantor will be released with respect to the Notes:

(1) in connection with any sale or other disposition of all or substantially all of the assets of that Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) the Company or a Restricted Subsidiary

of the Company, if the sale or other disposition does not violate the “Asset Sale” provisions of the Indenture;

(2) in connection with any sale or other disposition of all of the Capital Stock of that Guarantor to a Person that is not (either before or after giving effect to such transaction) the Company or a Restricted Subsidiary of the Company, if the sale or other disposition does not violate the “Asset Sale” provisions of the Indenture;

(3) if the Company designates any Restricted Subsidiary that is a Guarantor to be an Unrestricted Subsidiary in accordance with the applicable provisions of the Indenture; or

(4) upon legal defeasance or satisfaction and discharge of the Indenture as provided below under the captions “—Defeasance” and “—Satisfaction and discharge.”

See “—Limitation on sales of assets and subsidiary stock.”

Book-entry, delivery and form

The Notes will initially be represented in the form of one or more global notes (the “Global Notes”) in fully-registered book-entry form without interest coupons that will be deposited upon issuance with the Trustee under the Indenture, The Bank of New York Mellon, as custodian for The Depository Trust Company, or “DTC,” and registered in the name of DTC or its nominee, in each case for credit to an account of a direct or indirect participant as described below.

Except as set forth below, the global notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the global notes may not be exchanged for notes in certificated form (the “Certificated Notes”) except in the limited circumstances described below. See “—Exchange of global notes for certificated notes.” In addition, transfer of beneficial interests in the global notes will be subject to the applicable rules and procedures of DTC and its direct or indirect participants, which may change from time to time. The Notes may be presented for registration of transfer and exchange at the Corporate Trust Office of the Trustee.

Depository procedures

The following description of the operations and procedures of DTC is provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to changes by them. We take no responsibility for these operations and procedures and urge investors to contact the system or their participants directly to discuss these matters.

DTC has advised us that DTC is a limited-purpose trust company organized under the laws of the State of New York, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for its participating organizations (collectively, the “ participants ”) and to facilitate the clearance and

settlement of transactions in those securities between participants through electronic book-entry changes in accounts of its participants. The participants include securities brokers and dealers (including the initial purchasers of the Outstanding Notes), banks, trust companies, clearing corporations and certain other organizations. Access to DTC’s system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly (collectively, the " indirect participants ”). Persons who are not participants may beneficially own securities held by or on behalf of DTC only through the participants or the indirect participants. The ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the participants and indirect participants.

DTC has also advised us that, pursuant to procedures established by it:

	(1)		upon deposit of the Global Notes, DTC will credit the accounts of participants designated by the initial purchasers of the Outstanding Notes with portions of the principal amount of the Global Notes; and

	(2)		ownership of these interests in the Global Notes will be shown on, and the transfer of ownership of these interests will be effected only through, records maintained by DTC (with respect to the participants) or by the participants and the indirect participants (with respect to other owners of beneficial interests in the Global Notes).

Investors in the Global Notes who are participants in DTC’s system may hold their interests therein directly through DTC. Investors in the Global Notes who are not participants may hold their interests therein indirectly through organizations which are participants in such system. All interests in a Global Note may be subject to the procedures and requirements of DTC. The laws of some states require that certain Persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a Global Note to such Persons will be limited to that extent. Because DTC can act only on behalf of participants, which in turn act on behalf of indirect participants, the ability of a Person having beneficial interests in a Global Note to pledge such interests to Persons that do not participate in the DTC system, or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests.

Except as described below, owners of an interest in the Global Notes will not have Notes registered in their names, will not receive physical delivery of Notes in certificated form and will not be considered the registered owners or “Holders” thereof under the Indenture for any purpose.

Payments in respect of the principal of, and interest and premium and additional interest, if any, on a Global Note registered in the name of DTC or its nominee will be payable to DTC in its capacity as the registered Holder under the Indenture. Under the terms of the Indenture, the Company and the Trustee will treat the Persons in whose names the Notes, including the Global Notes, are registered as the owners of the Notes for the purpose of receiving payments and for all other purposes. Consequently, neither the Company, the Trustee nor any agent of the Company or the Trustee has or will have any responsibility or liability for:

	(1)		any aspect of DTC’s records or any participant’s or indirect participant’s records relating to or payments made on account of beneficial ownership interests in the Global Notes or for maintaining, supervising or reviewing any of DTC’s records or any participant’s or indirect participant’s records relating to the beneficial ownership interests in the Global Notes; or

	(2)		any other matter relating to the actions and practices of DTC or any of its participants or indirect participants.

Transfers between participants in DTC will be effected in accordance with DTC’s procedures, and will be settled in same-day funds.

DTC has advised us that its current practice, upon receipt of any payment in respect of securities such as the Notes (including principal and interest), is to credit the accounts of the relevant participants with the payment on the payment date unless DTC has reason to believe it will not receive payment on such payment date. Each relevant participant is credited with an amount proportionate to its beneficial ownership of an interest in the principal amount of the relevant security as shown on the records of DTC. Payments by the participants and the indirect participants to the beneficial owners of Notes will be governed by standing instructions and customary practices and will be the responsibility of the participants or the indirect participants and will not be the responsibility of DTC, the Trustee or the Company. Neither the Company nor the Trustee will be liable for any delay by DTC or any of its participants in identifying the beneficial owners of the Notes, and the Company and the Trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee for all purposes.

DTC has advised the Company that it will take any action permitted to be taken by a Holder of Notes only at the direction of one or more participants to whose account DTC has credited the interests in the Global Notes and only in respect of such portion of the aggregate principal amount of the Notes as to which such participant or participants has or have given such direction. However, if there is an Event of Default under the Notes, DTC reserves the right to exchange the Global Notes for legended Notes in certificated form, and to distribute such Notes to its participants.

Although DTC has agreed to the foregoing procedures in order to facilitate transfers of interests in the Global Notes among participants, it is under no obligation to perform such procedures, and such procedures may be discontinued or changed at any time. Neither the Company nor the Trustee nor any of their respective agents will have any responsibility for the performance by DTC or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

Exchange of global notes for certificated notes

A Global Note is exchangeable for Certificated Notes if:

(1)

DTC (A) notifies the Company that it is unwilling or unable to continue as depositary for the Global Notes or (B) has ceased to be a clearing agency registered under the Exchange Act and, in each case, a successor depositary is not appointed;

	(2)		the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of the Certificated Notes; or

	(3)		there has occurred and is continuing an Event of Default with respect to the Notes.

In addition, beneficial interests in a Global Note may be exchanged for Certificated Notes upon prior written notice given to the Trustee by or on behalf of DTC in accordance with the Indenture. In all cases, Certificated Notes delivered in exchange for any Global Note or beneficial interests in Global Notes will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary (in accordance with its customary procedures).

Exchange of certificated notes for global notes

Certificated Notes may not be exchanged for beneficial interests in any Global Note unless the transferor first delivers to the Trustee a written certificate (in the form provided in the Indenture) to the effect that such transfer will comply with the appropriate transfer restrictions applicable to such Notes.

Same day settlement and payment

The Company will make payments in respect of the Notes represented by the Global Notes (including principal, premium, if any, interest and additional interest, if any) by wire transfer of immediately available funds to the accounts specified by the Global Note Holder. The Company will make all payments of principal, interest, premium and additional interest, if any, with respect to Certificated Notes by wire transfer of immediately available funds to the accounts specified by the Holders of the Certificated Notes or, if no such account is specified, by mailing a check to each such Holder’s registered address. The Notes represented by the Global Notes are expected to be eligible to trade in DTC’s Same-Day Funds Settlement System, and any permitted secondary market trading activity in such Notes will, therefore, be required by DTC to be settled in immediately available funds. The Company expects that secondary trading in any Certificated Notes will also be settled in immediately available funds.

Because of time zone differences, the securities account of a Euroclear or Clearstream participant purchasing an interest in a Global Note from a participant will be credited, and any such crediting will be reported to the relevant Euroclear or Clearstream participant, during the securities settlement processing day (which must be a Business Day for Euroclear and Clearstream) immediately following the settlement date of DTC. DTC has advised us that cash received in Euroclear or Clearstream as a result of sales of interests in a Global Note by or through a Euroclear or Clearstream participant to a Participant will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the Business Day for Euroclear or Clearstream following DTC’s settlement date.

Change of control

Upon the occurrence of any of the following events (each a “ Change of Control ”), each Holder shall have the right to require that the Company repurchase such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof on the date of purchase plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date):

	(1)		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 (1) 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 Company or Sirius Satellite Radio Inc. (for the purposes of this clause (1), 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 above in this clause (1)), directly or indirectly, of more than 50% of the voting power of the Voting Stock of such parent entity);

	(2)		the first day on which a majority of the members of the Board of Directors of the Company or Sirius Satellite Radio Inc. are not Continuing Directors, other than in connection with the Merger;

	(3)		the adoption of a plan relating to the liquidation or dissolution of the Company or Sirius Satellite Radio Inc.; or

	(4)		the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its Restricted Subsidiaries taken as a whole, or of Sirius Satellite Radio Inc. and its Subsidiaries taken as a whole, to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act);

Notwithstanding the foregoing, the consummation of none of the Merger, a Holdings-Company Merger, the Escrow LLC-Company Merger, a Company-Sirius Merger or a Holdings-Sirius Merger will constitute a Change of Control under the Indenture.

Within 30 days following any Change of Control, we will mail a notice to each Holder with a copy to the Trustee (the “ Change of Control Offer ”) stating:

(1)

that a Change of Control has occurred and that such Holder has the right to require us to purchase such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof on the date of purchase, plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest on the relevant interest payment date);

	(2)		the circumstances and relevant facts regarding such Change of Control (including information with respect to pro forma historical income, cash flow and capitalization, in each case after giving effect to such Change of Control);

	(3)		the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and

	(4)		the instructions, as determined by us, consistent with the Indenture and the covenant described hereunder, that a Holder must follow in order to have its Notes purchased.

We will not be required to make a Change of Control Offer following a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by us and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.

We will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the Indenture and the covenant described hereunder, we will comply with the applicable securities laws and regulations and shall not be deemed to have breached our obligations under the Indenture and the covenant described hereunder by virtue of our compliance with such securities laws or regulations.

The Change of Control purchase feature of the Notes may in certain circumstances make more difficult or discourage a sale or takeover of the Company or Sirius Satellite Radio Inc. and, thus, the removal of incumbent management. The Change of Control purchase feature is a result of negotiations between the Company and the initial purchasers. We have no present intention to, and we have no present knowledge of a present intention by Sirius Satellite Radio Inc. to, engage in a transaction involving a Change of Control, although it is possible that we or Sirius Satellite Radio Inc. could decide to do so in the future. Subject to the limitations discussed below, we or Sirius Satellite Radio Inc. could, in the future, enter into certain transactions, including acquisitions, refinancings or other recapitalizations, that would not constitute a Change of Control under the Indenture, but that could increase the amount of indebtedness outstanding at such time or otherwise affect our capital structure or credit ratings. Restrictions on our ability to Incur additional Indebtedness are affected by the covenants described under “—Certain covenants—Limitation on indebtedness”, “—Limitation on liens” and “—Limitation on sale/leaseback transactions”. Such restrictions can only be waived with the consent of the holders of a majority in principal amount of the Notes then outstanding. Except for the limitations contained in such covenants, however, the Indenture will not contain any covenants or provisions that may afford holders of the Notes protection in the event of a highly leveraged transaction.

Future indebtedness that we may Incur may contain prohibitions on the occurrence of certain events that would constitute a Change of Control or require the repurchase of such indebtedness upon a Change of Control. Moreover, the exercise by the holders of their right to require us to repurchase their Notes could cause a default under existing or future indebtedness,

even if the Change of Control itself does not, due to the financial effect of such repurchase on us. Finally, our ability to pay cash to the holders of Notes following the occurrence of a Change of Control may be limited by our then existing financial resources. There can be no assurance that sufficient funds will be available when necessary to make any required repurchases.

The definition of “Change of Control” includes a disposition of all or substantially all of the assets of the Company or Sirius Satellite Radio Inc. to any Person. Although there is a limited body of case law interpreting the phrase “substantially all”, there is no precise established definition of the phrase under applicable law. Accordingly, in certain circumstances there may be a degree of uncertainty as to whether a particular transaction would involve a disposition of “all or substantially all” of the assets of the Company or Sirius Satellite Radio Inc. As a result, it may be unclear as to whether a Change of Control has occurred and whether a holder of Notes may require the Company to make an offer to repurchase the Notes as described above.

The provisions under the Indenture relative to our obligation to make an offer to repurchase the Notes as a result of a Change of Control may be waived or modified with the written consent of the holders of a majority in principal amount of the Notes.

Certain covenants

Changes in covenants when Notes rated investment grade

With respect to the Notes, if on any date following the date of the Indenture:

(1) the Notes are rated Baa3 or better by Moody’s and BBB- or better by Standard & Poor’s (or, if either such entity ceases to rate the Notes for reasons outside of the control of the Company, the equivalent investment grade credit rating from any other “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the Company as a replacement agency); and

(2) no Default or Event of Default shall have occurred and be continuing under the Indenture, then, beginning on that day, the covenants specifically listed under the following captions in this offering memorandum will no longer be applicable to the series of Notes:

(1) “—Limitation on sales of assets and subsidiary stock;”

(2) “—Limitation on restricted payments;”

(3) “—Limitation on indebtedness;”

(4) clauses (1)(A) and (3) of the covenant described under the caption “—Limitation on sale/leaseback transactions;”

(5) “—Limitation on affiliate transactions;”

(6) clause (3) of the covenant described below under the caption “—Merger and consolidation;” and

(7) “—Limitation on restrictions on distributions from restricted subsidiaries.”

There can be no assurance that the Notes will ever achieve an investment grade rating or that any such rating will be maintained.

The Indenture contains covenants including, among others, the following:

Limitation on indebtedness

(a) The Company will not, and will not permit any Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness; provided, however , that the Company and any Subsidiary Guarantor will be entitled to Incur Indebtedness if, on the date of such Incurrence and after giving effect thereto on a pro forma basis, the Consolidated Leverage Ratio would be less than 6.00 to 1.

(b) Notwithstanding the foregoing paragraph (a), the Company and the Restricted Subsidiaries will be entitled to Incur any or all of the following Indebtedness:

	(1)		Indebtedness incurred by the Company or any of its Restricted Subsidiaries under this clause (1) that, after giving effect to any such Incurrence, does not exceed $150 million at any time outstanding;

	(2)		Indebtedness of the Company in an aggregate principal amount which, when taken together with all other Indebtedness of the Company Incurred pursuant to this clause (2) and then outstanding, does not exceed 175% of the Net Cash Proceeds received by the Company since immediately after the Issue Date from the issue or sale of Capital Stock of the Company or cash contributed to the capital of the Company, including cash contributions received by the Company following a Holdings-Company Merger, (in each case other than proceeds of Disqualified Stock or sales of Capital Stock to the Company or any of its Subsidiaries); provided, however , that (A) any Indebtedness Incurred under this clause (2) after June 1, 2012 shall have a weighted Average Life that is greater than the then remaining weighted Average Life of the Notes and (B) any Indebtedness Incurred under this clause (2) shall consist only of Subordinated Obligations; provided further, however , that any Net Cash Proceeds or cash contributions received by the Company pursuant to this clause (2) and used to Incur Indebtedness pursuant to this clause (2), shall be excluded from the calculation of amounts under clause (a)(3)(B) of the covenant described under “—Limitation on restricted payments”.

	(3)		Indebtedness owed to and held by the Company or a Restricted Subsidiary; provided, however , that (A) any subsequent issuance or transfer of any Capital Stock which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of such Indebtedness (other than to the Company or a Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such Indebtedness by the obligor thereon and (B) if the Company is the obligor on such Indebtedness, such Indebtedness is expressly

			subordinated to the prior payment in full in cash of all obligations with respect to the Notes;

	(4)		the Notes (other than any Additional Notes) and the Guarantees;

	(5)		Indebtedness outstanding on the Issue Date or Incurred in connection with the refinancing transactions described in this offering memorandum; provided, that the Indebtedness for borrowed money outstanding immediately prior to the release of escrowed funds on the Escrow Release Date shall not exceed $1.7 billion on a pro forma basis after giving effect to the Refinancing Transactions (exclusive of any additional amount of Indebtedness that may be outstanding as a result of holders of the Company’s 9.75% Senior Notes due 2014, Senior Floating Rate Notes due 2013, 10% Senior Secured Discount Convertible Notes due 2009 and the Existing Sale and Leaseback Transaction having declined mandatory offers to repurchase or an exchange offer in respect of such Indebtedness); provided further , that the aggregate principal amount of Senior Indebtedness outstanding immediately prior to the release of escrowed funds on the Escrow Release Date shall not exceed $1.0 billion on a pro forma basis after giving effect to the Refinancing Transactions (exclusive of any additional amount of Indebtedness that may be outstanding as a result of holders of the Company’s 9.75% Senior Notes due 2014, Senior Floating Rate Notes due 2013, 10% Senior Secured Discount Convertible Notes due 2009 and the Existing Sale and Leaseback Transaction having declined mandatory offers to repurchase or an exchange offer in respect of such Indebtedness);

	(6)		Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior to the date on which such Subsidiary was acquired by the Company (other than Indebtedness Incurred in connection with, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Subsidiary became a Subsidiary or was acquired by the Company); provided, however , that on the date of such acquisition and after giving pro forma effect thereto, the Company would have been entitled to Incur at least $1.00 of additional Indebtedness pursuant to paragraph (a) of this covenant;

	(7)		Refinancing Indebtedness in respect of Indebtedness Incurred pursuant to paragraph (a) or pursuant to clause (2), (4), (5) or (6) or this clause (7); provided, however , that to the extent such Refinancing Indebtedness directly or indirectly Refinances Indebtedness of a Subsidiary Incurred pursuant to clause (6), such Refinancing Indebtedness shall be Incurred only by such Subsidiary;

	(8)		Hedging Obligations directly related to Indebtedness permitted to be Incurred by the Company and its Restricted Subsidiaries pursuant to the Indenture;

	(9)		obligations in respect of workers’ compensation claims, self-insurance obligations, performance, bid and surety bonds and completion guarantees

			provided by the Company or any Restricted Subsidiary in the ordinary course of business;

	(10)		Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided, however , that such Indebtedness is extinguished within five Business Days of its Incurrence;

	(11)		Unsecured Subordinated Obligations or Disqualified Stock of the Company in an aggregate principal amount not in excess of $250 million outstanding (at any one time) incurred to finance the construction, expansion, development or acquisition of music libraries and other recorded music programming, furniture, fixtures and equipment (including satellites, ground stations and related equipment) if such Subordinated Obligations or Disqualified Stock, as applicable, has a weighted Average Life longer than the weighted Average Life of the Notes and has a final Stated Maturity of principal later than the Stated Maturity of principal of the Notes;

	(12)		Indebtedness arising from agreements of the Company or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred or assumed in connection with the disposition of any business, assets or Capital Stock of a Restricted Subsidiary, provided, however , the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and its Restricted Subsidiaries in connection with such disposition;

	(13)		Any Indebtedness which becomes an Obligation of the Company as a result of a Holdings-Company Merger or a Company-Sirius Merger;

	(14)		Replacement Satellite Vendor Indebtedness; and

	(15)		unsecured Subordinated Obligations or Disqualified Stock of the Company in an aggregate principal amount (or liquidation preference, as applicable) (including the aggregate principal amount (or liquidation preference, as applicable) of all Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness or Disqualified Stock, as applicable, incurred pursuant to this clause (15)) at any time outstanding not to exceed the product of (a) $100.00 and (b) the number of Subscribers at such time if such subordinated Indebtedness or Disqualified Stock, as applicable, has a weighted Average Life longer than the weighted Average Life of the Notes and has a final maturity date later than the final maturity date of the Notes.

(c) Notwithstanding the foregoing, the Company will not be entitled to Incur any Indebtedness pursuant to the foregoing paragraph (b) if the proceeds thereof are used, directly or indirectly, to Refinance any Subordinated Obligations of the Company unless such Indebtedness shall be subordinated to the Notes to at least the same extent as such Subordinated Obligations.

(d) For purposes of determining compliance with this covenant:

	(1)		in the event that an item of Indebtedness (or any portion thereof) meets the criteria of more than one of the types of Indebtedness described above, the Company, in its sole discretion, will classify such item of Indebtedness (or any portion thereof) at the time of Incurrence and will only be required to include the amount and type of such Indebtedness in one of the above clauses;

	(2)		the Company will be entitled to divide and classify (and later reclassify) an item of Indebtedness in more than one of the types of Indebtedness described above;

	(3)		any Indebtedness Incurred under clauses (1) or (2) of paragraph (b) above shall cease to be deemed Incurred or outstanding for purposes of those clauses, respectively, but instead shall be deemed to be Incurred for purposes of paragraph (a) above from and after the first date on which the Company could have Incurred such Indebtedness under paragraph (a) without reliance on any of such clauses;

	(4)		Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included;

	(5)		any Disqualified Stock of the Company or Preferred Stock of a Restricted Subsidiary will be deemed to have a principal amount equal to the greater of the maximum mandatory redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the liquidation preference thereof; and

	(6)		Increases in the amount of Indebtedness solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an Incurrence of Indebtedness for purposes of this covenant.

Limitation on restricted payments

(a) The Company will not, and will not permit any Restricted Subsidiary, directly or indirectly, to make a Restricted Payment if at the time the Company or such Restricted Subsidiary makes such Restricted Payment:

	(1)		a Default shall have occurred and be continuing (or would result therefrom);

	(2)		the Company is not entitled to Incur an additional $1.00 of Indebtedness pursuant to paragraph (a) of the covenant described under “—Limitation on indebtedness” after giving effect, on a pro forma basis, to such Restricted Payment; or

	(3)		the aggregate amount of such Restricted Payment and all other Restricted Payments since the Issue Date would exceed the sum of (without duplication):

(A)

100% of Consolidated Operating Cash Flow accrued during the period (treated as one accounting period) from the beginning of the first fiscal quarter during which the Company generates positive Consolidated Operating Cash Flow to the end of the most recent fiscal quarter for which

			internal financial statements are available less 1.4 times the Consolidated Interest Expense for the same period; plus

	(B)		100% of the aggregate Net Cash Proceeds received by the Company from the issuance or sale of its Capital Stock (other than Disqualified Stock) subsequent to the Issue Date (other than an issuance or sale to a Subsidiary of the Company), 100% of any cash capital contribution received by the Company from its shareholders subsequent to the Issue Date, 100% of the fair market value (as determined by the Board of Directors) of the consideration (if other than cash) from the issue or sale of Capital Stock (other than Disqualified Stock) of the Company and 100% of the fair market value (as determined by the Board of Directors) of the actual or deemed capital contributions to the common equity capital of the Company by Holdings from the issuance of Capital Stock of Holdings in exchange for the retirement of Indebtedness of the Company that ranks equal to the Notes in right of payment ; provided, however , that any Net Cash Proceeds received by the Company from the issue or sale of its Capital Stock or cash capital contributions received by the Company and used to Incur Indebtedness pursuant to clause (b)(2) of the covenant described under “—Limitation on indebtedness”, shall be excluded from the calculation of Net Cash Proceeds and cash capital contributions under this clause (B) until and to the extent any Indebtedness Incurred pursuant to such clause (b)(2) in respect of such Net Cash Proceeds or cash capital contributions has been treated, pursuant to clause (d)(3) of such covenant, as Incurred pursuant to paragraph (a) of such covenant; plus

	(C)		the amount by which Indebtedness of the Company or any Restricted Subsidiary is reduced on the Company’s balance sheet upon the conversion or exchange subsequent to the Issue Date of any Indebtedness convertible or exchangeable for Capital Stock (other than Disqualified Stock) of Holdings or the Company (less the amount of any cash, or the fair value (as determined in good faith by the Board of Directors) of any other property, distributed by Holdings or the Company upon such conversion or exchange); plus

	(D)		an amount equal to the sum of (i) the net reduction in the Investments (other than Permitted Investments) made by the Company or any Restricted Subsidiary in any Person resulting from repurchases, repayments or redemptions of such Investments by such Person, proceeds realized on the sale of such Investment and proceeds representing the return of capital (excluding dividends and distributions to the extent included in Consolidated Operating Cash Flow), in each case received by the Company or any Restricted Subsidiary, and (ii) to the extent such Person is an Unrestricted Subsidiary, the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value (as determined in good faith by the Board of Directors) of the net assets of such Unrestricted Subsidiary at the time such Unrestricted Subsidiary is

designated a Restricted Subsidiary; provided, however , that the foregoing sum shall not exceed, in the case of any such Person or Unrestricted Subsidiary, the amount of Investments (excluding Permitted Investments) previously made (and treated as a Restricted Payment) by the Company or any Restricted Subsidiary in such Person or Unrestricted Subsidiary.

(b) The preceding provisions will not prohibit:

	(1)		any Restricted Payment made within 90 days of the receipt of Net Cash Proceeds from the sale of, or made by exchange for, Capital Stock of the Company (other than Disqualified Stock) or a substantially concurrent cash capital contribution received by the Company; provided, however , that (A) such Restricted Payment shall be excluded from subsequent calculations of the amount of Restricted Payments and (B) the Net Cash Proceeds from such sale or such cash capital contribution (to the extent so used for such Restricted Payment) shall be excluded from the calculation of amounts under clause (3)(B) of paragraph (a) above;

	(2)		any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Obligations (other than Permitted Subordinated Obligations) of the Company made within 90 days by exchange for, or out of the proceeds of, the Incurrence of Indebtedness of such Person which is permitted to be Incurred pursuant to the covenant described under “—Limitation on indebtedness”; provided, however , that such purchase, repurchase, redemption, defeasance or other acquisition or retirement for value shall be excluded from subsequent calculations of the amount of Restricted Payments;

	(3)		any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Obligations of the Company Incurred pursuant to clause (b)(11) of the covenant described under “—Limitation on indebtedness” made by exchange for, or out of the proceeds of the substantially concurrent Incurrence of, Subordinated Obligations that have, at the time of Incurrence, a weighted Average Life that is greater than the then remaining weighted Average Life of the Notes and a Stated Maturity that is later than the date that is 91 days after the Stated Maturity of the Notes; provided, however , that such purchase, repurchase, redemption, defeasance or other acquisition or retirement for value shall be excluded from subsequent calculations of the amount of Restricted Payments;

	(4)		dividends paid within 60 days after the date of declaration thereof if at such date of declaration such dividend would have complied with this covenant; provided, however , that such dividend shall be included in subsequent calculations of the amount of Restricted Payments;

	(5)		the declaration or payment of dividends on Disqualified Stock issued pursuant to the covenant described under “—Limitation on indebtedness”; provided, however , that at the time of declaration of such dividend, no Default shall have occurred and be continuing (or result therefrom); provided further, however , that such

			dividends shall be excluded from subsequent calculations of the amount of Restricted Payments;

	(6)		repurchases of Capital Stock deemed to occur upon exercise of stock options, warrants or other convertible securities if such Capital Stock represents a portion of the exercise price thereof; provided, however , that such Restricted Payments shall be excluded from subsequent calculations of the amount of Restricted Payments;

	(7)		cash payments in lieu of the issuance of fractional shares in connection with a reverse stock split of the Capital Stock of the Company or the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of the Company; provided, however , that any such cash payment shall not be for the purpose of evading the limitation of the covenant described under this subheading (as determined in good faith by the Board of Directors); provided further, however , that such payments shall be excluded in subsequent calculations of the amount of Restricted Payments;

	(8)		in the event of a Change of Control or to the extent permitted by the covenant described under “—Limitation on sales of assets and subsidiary stock”, and if no Default shall have occurred and be continuing, the payment, purchase, redemption, defeasance or other acquisition or retirement of Subordinated Obligations of the Company, in each case, at a purchase price not greater than 101% of the principal amount of such Subordinated Obligations, plus any accrued and unpaid interest thereon; provided, however , that prior to such payment, purchase, redemption, defeasance or other acquisition or retirement, the Company (or a third party to the extent permitted by the Indenture) has made a Change of Control Offer, or sale of assets offer, with respect to the Notes and has repurchased all Notes validly tendered and not withdrawn in connection with such Change of Control Offer, or sale of assets offer; provided further, however , that such payments, purchases, redemptions, defeasances or other acquisitions or retirements shall be excluded from subsequent calculations of the amount of Restricted Payments;

	(9)		payments of intercompany subordinated Indebtedness, the Incurrence of which was permitted under clause (3) of paragraph (b) of the covenant described under “—Limitation on indebtedness”; provided, however , that no Default has occurred and is continuing or would otherwise re

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