Exhibit 10.27

EXECUTION COPY

 

 

 

TERM LOAN GUARANTEE AND COLLATERAL AGREEMENT

dated as of

February 17, 2009,

among

SIRIUS XM RADIO INC.,

ITS SUBSIDIARIES IDENTIFIED HEREIN

and

LIBERTY MEDIA CORPORATION,

as Collateral Agent

 

 

 

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TABLE OF CONTENTS

 

ARTICLE I Definitions

   1

SECTION 1.01. Credit Agreement

   1

SECTION 1.02. Other Defined Terms

   1

ARTICLE II Guarantee

   5

SECTION 2.01. Guarantee

   5

SECTION 2.02. Guarantee of Payment

   6

SECTION 2.03. No Limitations

   6

SECTION 2.04. Reinstatement

   7

SECTION 2.05. Agreement to Pay; Subrogation

   7

SECTION 2.06. Information

   8

ARTICLE III Pledge of Securities

   8

SECTION 3.01. Pledge

   8

SECTION 3.02. Delivery of the Pledged Collateral

   8

SECTION 3.03. Representations, Warranties and Covenants

   9

SECTION 3.04. Certification of Limited Liability Company and Limited Partnership
Interests

   10

SECTION 3.05. Registration in Nominee Name; Denominations

   10

SECTION 3.06. Voting Rights; Dividends and Interest

   10

ARTICLE IV Security Interests in Personal Property

   12

SECTION 4.01. Security Interest

   12

SECTION 4.02. Representations and Warranties

   14

SECTION 4.03. Covenants

   15

SECTION 4.04. Other Actions

   18

SECTION 4.05. Covenants Regarding Patent, Trademark and Copyright Collateral

   19

ARTICLE V Remedies

   20

SECTION 5.01. Remedies Upon Default

   20

SECTION 5.02. Application of Proceeds

   22

SECTION 5.03. Grant of License to Use Intellectual Property

   23

SECTION 5.04. Securities Act

   23

SECTION 5.05. Registration

   24

ARTICLE VI Indemnity, Subrogation and Subordination

   24

SECTION 6.01. Indemnity and Subrogation

   24

SECTION 6.02. Contribution and Subrogation

   25

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SECTION 6.03. Subordination

   25

ARTICLE VII Miscellaneous

   25

SECTION 7.01. Notices

   25

SECTION 7.02. Waivers; Amendment

   26

SECTION 7.03. Collateral Agent’s Fees and Expenses; Indemnification

   26

SECTION 7.04. Successors and Assigns

   27

SECTION 7.05. Survival of Agreement

   27

SECTION 7.06. Counterparts; Effectiveness; Several Agreement

   27

SECTION 7.07. Severability

   28

SECTION 7.08. Right of Set-Off

   28

SECTION 7.09. Governing Law; Jurisdiction; Consent to Service of Process

   28

SECTION 7.10. WAIVER OF JURY TRIAL

   29

SECTION 7.11. Headings

   29

SECTION 7.12. Security Interest Absolute

   29

SECTION 7.13. Termination or Release

   29

SECTION 7.14. Additional Subsidiaries

   30

SECTION 7.15. Collateral Agent Appointed Attorney-in-Fact

   30

SECTION 7.16. Specific Performance

   31

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Schedules

 

Schedule I    Subsidiary Guarantors Schedule II    Pledged Equity Interests;
Debt Securities Schedule III    Intellectual Property Schedule IV    Commercial
Tort Claims

Exhibits

 

Exhibit I    Form of Supplement

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TERM LOAN GUARANTEE AND COLLATERAL AGREEMENT dated as of February 17, 2009,
among SIRIUS XM RADIO INC., a Delaware corporation (the “Borrower”), the
subsidiaries of the Borrower from time to time party hereto and LIBERTY MEDIA
CORPORATION (“LMC”), as Collateral Agent.

Reference is made to the Term Credit Agreement dated as of February 17, 2009 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the Borrower, the Lenders from time to time party thereto and
LMC, as Administrative Agent and Collateral Agent. The Term Loan Lenders have
agreed to extend credit to the Borrower subject to the terms and conditions set
forth in the Credit Agreement. The obligations of the Lenders to extend such
credit are conditioned upon, among other things, the execution and delivery of
this Agreement. The Subsidiary Guarantors are Affiliates of the Borrower, will
derive substantial benefits from the extension of credit to the Borrower
pursuant to the Credit Agreement and are willing to execute and deliver this
Agreement in order to induce the Term Loan Lenders to extend such credit.
Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Credit Agreement. (a) Capitalized terms used in this Agreement
(including the preamble hereto) and not otherwise defined herein have the
meanings specified in the Credit Agreement. All terms used in this Agreement and
not defined herein or in the Credit Agreement have the meanings specified in
Article 8 or 9 of the New York UCC (as defined herein).

(b) The rules of construction specified in Section 1.02 of the Credit Agreement
also apply to this Agreement.

SECTION 1.02. Other Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:

“Accounts Receivable” means any right to payment of a monetary obligation from
customers of the Borrower or any of its Subsidiaries, earned by the Borrower or
any of its Subsidiaries by the performance of services rendered by it in the
ordinary course of business.

“Account Debtor” means any Person who is or who may become obligated to any Loan
Party under, with respect to or on account of an Account.

“Article 9 Collateral” has the meaning assigned to such term in Section 4.01.

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

“Claiming Party” has the meaning assigned to such term in Section 6.02.

“Collateral” means Article 9 Collateral and Pledged Collateral.

 

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“Contributing Party” has the meaning assigned to such term in Section 6.02.

“Copyright License” means any written agreement, now or hereafter in effect,
granting any right to any third party under any copyright now or hereafter owned
by any Loan Party or that such Loan Party otherwise has the right to license, or
granting any right to any Loan Party under any copyright now or hereafter owned
by any third party, and all rights of such Loan Party under any such agreement.

“Copyrights” means all of the following now owned or hereafter acquired by any
Loan Party: (a) all copyright rights in any work subject to the copyright laws
of the United States or any other country, whether as author, assignee,
transferee or otherwise, and (b) all registrations and applications for
registration of any such copyright in the United States or any other country,
including registrations, supplemental registrations and pending applications for
registration in the United States Copyright Office, including those listed on
Schedule III.

“Credit Agreement” has the meaning assigned to such term in the preliminary
statement of this Agreement.

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.

“Excluded Equity Interests” has the meaning assigned to such term in
Section 3.01.

“Excluded Inventory” means finished goods, chip sets and other raw material
components used in manufacturing radios.

“Excluded Satellite Collateral” means (a) so long as the Loral Credit Agreement
is in effect, the “Collateral”, as defined thereunder on the date hereof, and
(b) so long as any Replacement Satellite Vendor Indebtedness of the Borrower or
any Restricted Subsidiary owed to a Satellite Vendor and incurred in accordance
with the Credit Agreement to finance the construction or purchase by the
Borrower or a Restricted Subsidiary of a “replacement satellite” (as defined in
the definition of Replacement Satellite Vender Indebtedness) is outstanding,
(i) the replacement satellite being financed thereunder (including any
work-in-progress thereof), (ii) any General Intangibles arising under any
contract or agreement for the construction or purchase of such Satellite, to the
extent such General Intangibles are excluded from the Article 9 Collateral
pursuant to clause (G) of the first proviso to Section 4.01(a), and (iii) any
Proceeds of the foregoing, in each case if and for so long as the grant of a
security interest therein to secure the Term Loan Obligations shall constitute
or result in a breach or termination pursuant to the terms of, or a default
under, the Loral Credit Agreement or the agreements governing or evidencing such
other Replacement Satellite Vender Indebtedness, as applicable; provided that
such security interest shall attach immediately at such time as the condition
causing such breach, termination or default shall cease to be applicable and, to
the extent severable, shall attach immediately to any portion of such
“Collateral”, Satellite, General Intangibles or the Proceeds thereof that does
not result in any of the consequences specified in this definition.

 

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“Federal Securities Laws” has the meaning assigned to such term in Section 5.04.

“General Intangibles” means all choses in action and causes of action and all
other intangible personal property of every kind and nature (other than
Accounts) now owned or hereafter acquired by any Loan Party, including corporate
or other business records, indemnification claims, contract rights (including
rights under leases, whether entered into as lessor or lessee, Hedging
Agreements and other agreements), Intellectual Property, goodwill,
registrations, franchises, tax refund claims and any letter of credit,
guarantee, claim, security interest or other security held by or granted to any
Loan Party to secure or support payment by an Account Debtor of any of the
Accounts.

“Intellectual Property” means all intellectual property of every kind and nature
now owned or hereafter acquired by any Loan Party, including inventions,
designs, Patents, Copyrights, Licenses, Trademarks, trade secrets, confidential
or proprietary technical and business information, know-how, show-how or other
data or information, software and databases and all embodiments or fixations
thereof and related documentation, registrations and franchises, and all
additions, improvements and accessions to, and books and records describing or
used in connection with, any of the foregoing.

“License” means any Patent License, Trademark License, Copyright License or
other license or sublicense agreement relating to intellectual property to which
any Loan Party is a party, including those listed on Schedule III.

“LMC” has the meaning assigned to such term in the preliminary statement of this
Agreement.

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

“MSSFI” means Morgan Stanley Senior Funding, Inc., as Administrative Agent and
Collateral Agent under the MSSFI Credit Agreement.

“MSSFI Collateral Agreement” means that certain Guarantee and Collateral
Agreement dated as of June 20, 2007 among MSSFI, the Borrower and the Subsidiary
Guarantors.

“MSSFI Credit Agreement” means that certain Term Credit Agreement dated as of
June 20, 2007 among MSSFI, the Borrower and the Subsidiary Guarantors, without
giving effect to any amendments, restatements or other modifications thereof.

“New York UCC” means the Uniform Commercial Code as from time to time in effect
in the State of New York.

“Patent License” means any written agreement, now or hereafter in effect,
granting to any third party any right to make, use or sell any invention on
which a patent, now or hereafter owned by any Loan Party or that any Loan Party
otherwise has the right to license, is in existence, or granting to any Loan
Party any right to make, use or sell any invention on which a patent, now or
hereafter owned by any third party, is in existence, and all rights of any Loan
Party under any such agreement.

 

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“Patents” means all of the following now owned or hereafter acquired by any Loan
Party: (a) all letters patent of the United States or the equivalent thereof in
any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or the equivalent thereof
in any other country, including registrations, recordings and pending
applications in the United States Patent and Trademark Office or any similar
offices in any other country, including those listed on Schedule III, and
(b) all reissues, continuations, divisions, continuations-in-part, renewals or
extensions thereof, and the inventions disclosed or claimed therein, including
the right to make, use and/or sell the inventions disclosed or claimed therein.

“Pledged Collateral” has the meaning assigned to such term in Section 3.01.

“Pledged Debt Securities” has the meaning assigned to such term in Section 3.01.

“Pledged Equity Interests” has the meaning assigned to such term in
Section 3.01.

“Pledged Securities” means any promissory notes, stock certificates or other
securities now or hereafter included in the Pledged Collateral, including all
certificates, instruments or other documents representing or evidencing any
Pledged Collateral.

“Purchase Money Obligations” means (a) the due and punctual payment by the
Borrower of (i) the principal of and premium, if any, and interest (including
interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Purchase Money Loans, when and as due,
whether at maturity, by acceleration, upon one or more dates set for prepayment
or otherwise, and (ii) all other monetary obligations of the Borrower to any of
the Purchase Money Lenders under the Credit Agreement or any other Loan
Document, including obligations to pay fees, expenses and indemnities, whether
primary, secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), and (b) the due and punctual payment or
performance of all other obligations of any Loan Party to any Purchase Money
Lender under or pursuant to this Agreement or any other Loan Document

“Satellite Codes” has the meaning assigned to such term in Section 4.03(f).

“Satellite Vendor” means, with respect to any satellite, the prime contractor
and manufacturer of such satellite.

“Security Interest” has the meaning assigned to such term in Section 4.01.

“Subsidiary Guarantors” means (a) the Subsidiaries identified on Schedule I and
(b) each other Subsidiary that becomes a party to this Agreement as a Subsidiary
Guarantor after the Effective Date.

“Term Loan Obligations” means all Obligations other than the Purchase Money
Obligations.

 

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“Term Loan Lenders” means the Lenders having Term Loans (or, prior to the
borrowings under the Credit Agreement, Term Loan Commitments).

“Term Loan Secured Parties” means (a) the Term Loan Lenders (b) the
Administrative Agent, (c) the Collateral Agent, (d) the beneficiaries of each
indemnification obligation undertaken by any Loan Party under any Loan Document,
(e) each other Person to whom any of the Term Loan Obligations is owed and
(f) the permitted successors and assigns of each of the foregoing.

“Trademark License” means any written agreement, now or hereafter in effect,
granting to any third party any right to use any trademark now or hereafter
owned by any Loan Party or that any Loan Party otherwise has the right to
license, or granting to any Loan Party any right to use any trademark now or
hereafter owned by any third party, and all rights of any Loan Party under any
such agreement.

“Trademarks” means all of the following now owned or hereafter acquired by any
Loan Party: (a) all trademarks, service marks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, trade
dress, logos, other source or business identifiers, designs and general
intangibles of like nature, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all registration and recording
applications filed in connection therewith, including registrations and
registration applications in the United States Patent and Trademark Office or
any similar offices in any State of the United States or any other country or
any political subdivision thereof, and all extensions or renewals thereof,
including those listed on Schedule III, (b) all goodwill associated therewith or
symbolized thereby and (c) all other assets, rights and interests that uniquely
reflect or embody such goodwill.

ARTICLE II

Guarantee

SECTION 2.01. Guarantee. (a) Each Subsidiary Guarantor unconditionally
guarantees, jointly with the other Subsidiary Guarantors and severally, as a
primary obligor and not merely as a surety, the due and punctual payment of the
Term Loan Obligations. Each Subsidiary Guarantor further agrees that the Term
Loan Obligations may be extended, increased or renewed, in whole or in part, or
amended or modified without notice to or further assent from it, and that it
will remain bound upon its guarantee notwithstanding any extension, increase or
renewal, or amendment or modification, of any Term Loan Obligation. Each
Subsidiary Guarantor does hereby (i) waive notice of acceptance of this
guarantee; (ii) waive any notices or demands that are not required by this
Agreement or the Credit Agreement, as well as any other notices or demands that
may otherwise be imposed by law; (iii) waive any and all rights that such
Subsidiary Guarantor may have under any anti deficiency statute or similar
protections; (iv) agree not to assert any defense, right of set off or other
claim which such Subsidiary Guarantor may have against the Borrower; and
(v) waive presentment, demand for performance, notice of nonperformance or
dishonor, protest and notice of protest, promptness, diligence in collection and
any and all formalities which otherwise might be legally required to charge such
Subsidiary Guarantor with liability.

 

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(b) Without limiting the generality of the foregoing, each Subsidiary
Guarantor’s liability shall be extended to all amounts that constitute part of
the Term Loan Obligations and would be owed by any other Loan Party to any Agent
or Term Loan Lender under or in respect of the Loan Documents but for the fact
that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving such other Loan
Party.

(c) Each Subsidiary Guarantor, and by its acceptance of this guarantee, each
Agent and each Term Loan Lender, hereby confirms that it is the intention of all
such Persons that this guarantee and the Term Loan Obligations of each
Subsidiary Guarantor hereunder not constitute a fraudulent transfer or
conveyance for purposes of Title 11 U.S. Code, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal or
state law to the extent applicable to this guarantee and the Term Loan
Obligations of each Subsidiary Guarantor hereunder. To effectuate the foregoing
intention, the Collateral Agent, on behalf of the Term Loan Lenders, and the
Subsidiary Guarantors hereby irrevocably agree that the Term Loan Obligations of
each Subsidiary Guarantor under this guarantee at any time shall be limited to
the maximum amount as will result in the Term Loan Obligations of such
Subsidiary Guarantor under this guarantee not constituting a fraudulent
conveyance or transfer.

SECTION 2.02. Guarantee of Payment. Each Subsidiary Guarantor further agrees
that its guarantee hereunder constitutes a guarantee of payment when due and not
of collection, and waives any right to require that any resort be had by the
Collateral Agent or any other Secured Party to any security held for the payment
of the Term Loan Obligations or to any balance of any deposit account or credit
on the books of the Collateral Agent or any other Secured Party in favor of the
Borrower or any other Person.

SECTION 2.03. No Limitations. (a) Except for termination of a Subsidiary
Guarantor’s obligations hereunder as expressly provided in Section 7.13, the
obligations of each Subsidiary Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including any
claim of waiver, release, surrender, alteration or compromise of any of the Term
Loan Obligations, and shall not be subject to any defense or set-off,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Term Loan Obligations or otherwise.
Without limiting the generality of the foregoing, the obligations of each
Subsidiary Guarantor hereunder shall not be discharged or impaired or otherwise
affected by (i) the failure of the Collateral Agent or any other Term Loan
Secured Party to assert any claim or demand or to enforce any right or remedy
under the provisions of any Loan Document or otherwise; (ii) any rescission,
waiver, amendment or modification of, or any release from any of the terms or
provisions of, any Loan Document or any other agreement, including with respect
to any other Subsidiary Guarantor under this Agreement; (iii) the release of, or
any impairment of or failure to perfect any Lien on or security interest in, any
security held by the Collateral Agent or any other Term Loan Secured Party for
the Term Loan Obligations or any of them; (iv) any default, failure or delay,
willful or otherwise, in the performance of the Term Loan Obligations; or
(v) any other act or omission that may or might in any manner or to any extent
vary the risk of any Subsidiary Guarantor or otherwise operate as a discharge of
any Subsidiary Guarantor as a matter of law or equity (other than the
indefeasible payment in full in cash of all the Term Loan Obligations). Each
Subsidiary Guarantor expressly authorizes the Secured Parties to take and hold
security for the payment and performance of the Term Loan Obligations, to
exchange, waive or release any or all such

 

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security (with or without consideration), to enforce or apply such security and
direct the order and manner of any sale thereof in their sole discretion or to
release or substitute any one or more other Subsidiary Guarantors or obligors
upon or in respect of the Term Loan Obligations, all without affecting the
obligations of any Subsidiary Guarantor hereunder.

(b) To the fullest extent permitted by applicable law, each Subsidiary Guarantor
waives any defense based on or arising out of any defense of the Borrower or any
other Subsidiary Guarantor or the unenforceability of the Term Loan Obligations
or any part thereof from any cause, or the cessation from any cause of the
liability of the Borrower or any other Subsidiary Guarantor, other than the
indefeasible payment in full in cash of all the Term Loan Obligations. The
Collateral Agent and the other Secured Parties may, at their election, foreclose
on any security held by one or more of them by one or more judicial or
nonjudicial sales, accept an assignment of any such security in lieu of
foreclosure, compromise or adjust any part of the Term Loan Obligations, make
any other accommodation with the Borrower or any Subsidiary Guarantor or
exercise any other right or remedy available to them against the Borrower or any
Subsidiary Guarantor, without affecting or impairing in any way the liability of
any Subsidiary Guarantor hereunder except to the extent the Term Loan
Obligations have been fully and indefeasibly paid in full in cash. To the
fullest extent permitted by applicable law, each Subsidiary Guarantor waives any
defense arising out of any such election even though such election operates,
pursuant to applicable law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of such Subsidiary
Guarantor against the Borrower or any other Subsidiary Guarantor, as the case
may be, or any security. Each Subsidiary Guarantor acknowledges that it will
receive substantial direct benefits from the financing arrangements contemplated
by the Loan Documents and that the waivers set forth in this Section 2.03 are
knowingly made in contemplation of such benefits.

SECTION 2.04. Reinstatement. Each Subsidiary Guarantor agrees that its guarantee
hereunder shall continue to be effective or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any Term Loan Obligation is
rescinded or must otherwise be restored by the Collateral Agent or any other
Term Loan Secured Party upon the bankruptcy or reorganization of the Borrower,
any Subsidiary Guarantor or otherwise.

SECTION 2.05. Agreement to Pay; Subrogation. In furtherance of the foregoing and
not in limitation of any other right that the Collateral Agent or any other Term
Loan Secured Party has at law or in equity against any Subsidiary Guarantor by
virtue hereof, upon the failure of the Borrower or any Subsidiary Guarantor to
pay any Term Loan Obligation when and as the same shall become due, whether at
maturity, by acceleration, after notice of prepayment or otherwise, each
Subsidiary Guarantor hereby promises to and will forthwith pay, or cause to be
paid, to the Collateral Agent for distribution to the applicable Term Loan
Secured Parties in cash the amount of such unpaid Term Loan Obligation. Upon
payment by any Subsidiary Guarantor of any sums to the Collateral Agent as
provided above, all rights of such Subsidiary Guarantor against the Borrower or
any other Subsidiary Guarantor arising as a result thereof by way of right of
subrogation, contribution, reimbursement, indemnity or otherwise shall in all
respects be subject to Article VI.

 

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SECTION 2.06. Information. Each Subsidiary Guarantor assumes all responsibility
for being and keeping itself informed of the Borrower’s and each other
Subsidiary Guarantor’s financial condition and assets, and of all other
circumstances bearing upon the risk of nonpayment of the Term Loan Obligations
and the nature, scope and extent of the risks that such Subsidiary Guarantor
assumes and incurs hereunder, and agrees that none of the Collateral Agent or
the other Term Loan Secured Parties will have any duty to advise such Subsidiary
Guarantor of information known to it or any of them regarding such circumstances
or risks.

ARTICLE III

Pledge of Securities

SECTION 3.01. Pledge. As security for the payment in full of the Term Loan
Obligations, each Loan Party hereby pledges to the Collateral Agent, its
permitted successors and assigns, for the benefit of the Term Loan Secured
Parties, and hereby grants to the Collateral Agent, its successors and assigns,
for the benefit of the Term Loan Secured Parties, a security interest in, all of
such Loan Party’s right, title and interest in, to and under (a)(i) the shares
of capital stock and other Equity Interests owned by it on the date hereof
(including all such shares and other Equity Interests listed on Schedule II),
(ii) any other Equity Interests obtained in the future by such Loan Party and
(iii) the certificates representing all such Equity Interests (all the foregoing
being called the “Pledged Equity Interests”); provided that the Pledged Equity
Interests shall not include more than 65% of the issued and outstanding voting
Equity Interests of any Foreign Subsidiary (the Equity Interests so excluded
being called the “Excluded Equity Interests”); (b)(i) the debt securities owned
by such Loan Party on the date hereof (including all such debt securities listed
on Schedule II), (ii) any debt securities in the future issued to such Loan
Party and (iii) the promissory notes and any other instruments evidencing such
debt securities (all the foregoing being called the “Pledged Debt Securities”);
provided that the Pledged Debt Securities shall not include Temporary Cash
Investments; (c) all other property that may be delivered to and held by the
Collateral Agent pursuant to the terms of this Section 3.01; (d) subject to
Section 3.06, all payments of principal or interest, dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of, in exchange for or upon the conversion of,
and all other Proceeds received in respect of, the securities referred to in
clauses (a) and (b) above; (e) subject to Section 3.06, all rights and
privileges of such Loan Party with respect to the securities and other property
referred to in clauses (a), (b), (c) and (d) above; and (f) all Proceeds of any
of the foregoing (the items referred to in clauses (a) through (f) above being
collectively referred to as the “Pledged Collateral”).

TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Collateral Agent, its successors and assigns, for the benefit of the
Term Loan Secured Parties, forever; subject, however, to the terms, covenants
and conditions hereinafter set forth.

SECTION 3.02. Delivery of the Pledged Collateral. (a) Each Loan Party agrees
promptly to deliver or cause to be delivered to the Collateral Agent any and all
Pledged Securities except to the extent that such Pledged Securities are
required to be delivered to MSSFI under the MSSFI Collateral Agreement.

 

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(b) Upon delivery to the Collateral Agent, (i) all Pledged Securities shall be
accompanied by undated stock powers duly executed in blank or other undated
instruments of transfer satisfactory to the Collateral Agent and duly executed
in blank and by such other instruments and documents as the Collateral Agent may
reasonably request and (ii) all other property comprising part of the Pledged
Collateral shall be accompanied by proper instruments of assignment duly
executed by the applicable Loan Party and such other instruments or documents as
the Collateral Agent may reasonably request. Each delivery of Pledged Securities
shall be accompanied by a schedule describing such securities, which schedule
shall be attached hereto as a supplement to Schedule II and made a part hereof;
provided that failure to attach any such schedule hereto shall not affect the
validity of such pledge of such Pledged Securities.

SECTION 3.03. Representations, Warranties and Covenants. The Loan Parties
jointly and severally represent, warrant and covenant to and with the Collateral
Agent, for the benefit of the Term Loan Secured Parties, that:

(a) Schedule II correctly sets forth the percentage of the issued and
outstanding units of each class of the Equity Interests of the issuer thereof
represented by the Pledged Equity Interests and includes all Equity Interests,
debt securities and promissory notes required to be pledged hereunder in order
to satisfy the Collateral and Guarantee Requirement;

(b) the Pledged Equity Interests and Pledged Debt Securities have been duly and
validly authorized and issued by the issuers thereof and (i) in the case of
Pledged Equity Interests (other than interests in any limited liability
company), are fully paid and nonassessable and (ii) in the case of Pledged Debt
Securities, are legal, valid and binding obligations of the issuers thereof, and
there exists no defense, offset or counterclaim to any obligation of the maker
or issuer of any Pledged Debt Securities;

(c) except for restrictions and limitations imposed by the Loan Documents, the
Communications Act of 1934, as amended, and the regulations promulgated
thereunder or securities laws generally, the Pledged Collateral is and will
continue to be freely transferable and assignable, and none of the Pledged
Collateral is or will be subject to any option, right of first refusal,
shareholders agreement or charter or by-law provisions that might prohibit,
impair or delay the pledge of such Pledged Collateral hereunder, the sale or
disposition thereof pursuant hereto or the exercise by the Collateral Agent of
rights and remedies hereunder;

(d) each Loan Party has the power and authority to pledge the Pledged Collateral
pledged by it hereunder in the manner hereby done or contemplated;

(e) no consent or approval of any Governmental Authority, any securities
exchange or any other Person was or is necessary to the validity of the pledge
effected hereby (other than such as have been obtained and are in full force and
effect);

(f) by virtue of the execution and delivery by the Loan Parties of this
Agreement, when any Pledged Securities are delivered to the Collateral Agent in
accordance with this Agreement, the Collateral Agent will obtain, for the
benefit of the Term Loan Secured Parties, a legal, valid and perfected first
priority lien upon and security interest in such Pledged Securities as security
for the payment of the Term Loan Obligations; and

 

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(g) each pledge effected hereby is effective to vest in the Collateral Agent,
for the benefit of the Term Loan Secured Parties, the rights of the Collateral
Agent in the Pledged Collateral as set forth herein.

SECTION 3.04. Certification of Limited Liability Company and Limited Partnership
Interests. Each of the Loan Parties (a) represents and warrants that none of the
interests in any limited liability company or limited partnership controlled by
such Loan Party and pledged hereunder are represented by a certificate or are
“securities” within the meaning of Article 8 of the New York UCC and
(b) covenants and agrees that it shall at no time elect to treat any such
interest as a “security” within the meaning of Article 8 of the New York UCC or
issue any certificate representing such interest unless, in each case, it
provides prior written notice to the Collateral Agent of such election and
immediately pledges and, except to the extent that such Pledged Securities are
required to be delivered to MSSFI under the MSSFI Collateral Agreement, delivers
any such certificate to the Collateral Agent pursuant to the terms hereof.

SECTION 3.05. Registration in Nominee Name; Denominations. At any time that the
Pledged Securities are not required to be delivered to MSSFI under the MSSFI
Collateral Agreement, the Collateral Agent, on behalf of the Term Loan Secured
Parties, shall have the right (in its sole and absolute discretion) to hold the
Pledged Securities in its own name as pledgee, the name of its nominee (as
pledgee or as sub-agent) or the name of the applicable Loan Party, endorsed or
assigned in blank or in favor of the Collateral Agent. Each Loan Party will
promptly give to the Collateral Agent copies of any notices or other
communications received by it with respect to Pledged Securities registered in
the name of such Loan Party. Upon the occurrence and during the continuance of
an Event of Default at any time that the Pledged Securities are not required to
be delivered to MSSFI under the MSSFI Collateral Agreement, the Collateral Agent
shall at all times have the right to exchange the certificates representing
Pledged Securities for certificates of smaller or larger denominations for any
purpose consistent with this Agreement.

SECTION 3.06. Voting Rights; Dividends and Interest. (a) Unless and until an
Event of Default shall have occurred and be continuing and the Collateral Agent
shall have notified the Loan Parties that their rights under this Section 3.06
are being suspended:

(i) Each Loan Party shall be entitled to exercise any and all voting and/or
other consensual rights and powers inuring to an owner of Pledged Securities or
any part thereof for any purpose consistent with the terms of this Agreement,
the Credit Agreement and the other Loan Documents; provided that such rights and
powers shall not be exercised in any manner that could materially and adversely
affect the rights inuring to a holder of any Pledged Securities or the rights
and remedies of any of the Collateral Agent or the other Term Loan Secured
Parties under this Agreement or the Credit Agreement or any other Loan Document
or the ability of the Term Loan Secured Parties to exercise the same.

(ii) The Collateral Agent shall execute and deliver to each Loan Party, or cause
to be executed and delivered to such Loan Party, all such proxies, powers of
attorney and other instruments as such Loan Party may reasonably request for the
purpose of enabling such Loan Party to exercise the voting and/or consensual
rights and powers it is entitled to exercise pursuant to paragraph (a)(i) above.

 

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(iii) Each Loan Party shall be entitled to receive and retain any and all
dividends, interest, principal and other distributions paid on or distributed in
respect of the Pledged Securities to the extent and only to the extent that such
dividends, interest, principal and other distributions are permitted by, and
otherwise paid or distributed in accordance with, the terms and conditions of
the Credit Agreement, the other Loan Documents and applicable laws; provided
that any noncash dividends, interest, principal or other distributions that
would constitute Pledged Equity Interests or Pledged Debt Securities, whether
resulting from a subdivision, combination or reclassification of the outstanding
Equity Interests of the issuer of any Pledged Securities or received in exchange
for Pledged Securities or any part thereof, or in redemption thereof, or as a
result of any merger, consolidation, acquisition or other exchange of assets to
which such issuer may be a party or otherwise, shall be and become part of the
Pledged Collateral, and, if received by any Loan Party, shall not be commingled
by such Loan Party with any of its other funds or property but shall be held
separate and apart therefrom, shall be held in trust for the benefit of the
Collateral Agent and the other Term Loan Secured Parties and shall be forthwith
delivered to the Collateral Agent in the same form as so received (with any
necessary endorsements, stock powers and other instruments of transfer).

(b) Upon the occurrence and during the continuance of an Event of Default, after
the Collateral Agent shall have notified the Loan Parties of the suspension of
their rights under paragraph (a)(iii) of this Section 3.06, then all rights of
any Loan Party to dividends, interest, principal or other distributions that
such Loan Party is authorized to receive pursuant to paragraph (a)(iii) of this
Section 3.06 shall cease, and all such rights shall thereupon become vested in
the Collateral Agent, which shall have the sole and exclusive right and
authority to receive and retain such dividends, interest, principal or other
distributions to the extent such dividends, interest, principal or other
distributions are not required to be delivered to MSSFI under the MSSFI
Collateral Agreement at such time. All dividends, interest, principal or other
distributions received by any Loan Party contrary to the provisions of this
Section 3.06 shall be held in trust for the benefit of the Collateral Agent and
the other Term Loan Secured Parties, shall be segregated from other property or
funds of such Loan Party and shall be forthwith delivered to the Collateral
Agent upon demand in the same form as so received (with any necessary
endorsement). Any and all money and other property paid over to or received by
the Collateral Agent pursuant to the provisions of this paragraph (b) shall be
retained by the Collateral Agent in an account to be established by the
Collateral Agent upon receipt of such money or other property and shall be
applied in accordance with the provisions of Section 5.02. After all Events of
Default have been cured or waived, and the Borrower has delivered to the
Collateral Agent a certificate to that effect, the Collateral Agent shall
promptly repay to each Loan Party (without interest) all dividends, interest,
principal or other distributions that such Loan Party would otherwise be
permitted to retain pursuant to the terms of paragraph (a)(iii) of this
Section 3.06 and that remain in such account.

(c) Upon the occurrence and during the continuance of an Event of Default, after
the Collateral Agent shall have notified the Loan Parties of the suspension of
their rights under paragraph (a)(i) of this Section 3.06, then all rights of any
Loan Party to exercise the voting and

 

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consensual rights and powers it is entitled to exercise pursuant to
paragraph (a)(i) of this Section 3.06, and the obligations of the Collateral
Agent under paragraph (a)(ii) of this Section 3.06, shall cease, and all such
rights shall thereupon become vested in the Collateral Agent, which shall have
the sole and exclusive right and authority to exercise such voting and
consensual rights and powers, subject to any rights of MSSFI to exercise such
rights and powers pursuant to the MSSFI Collateral Agreement; provided that,
unless otherwise directed by the Required Lenders, the Collateral Agent shall
have the right from time to time following and during the continuance of an
Event of Default to permit the Loan Parties to exercise such rights. After all
Events of Default have been cured or waived, as the case may be, and the
Borrower has delivered to the Collateral Agent a certificate to that effect, all
rights vested in the Collateral Agent pursuant to this paragraph shall cease,
and the Loan Parties shall have the voting and consensual rights and powers they
would otherwise be entitled to exercise pursuant to paragraph (a)(i) of this
Section 3.06.

(d) Any notice given by the Collateral Agent to the Loan Parties suspending
their rights under paragraph (a) of this Section 3.06 (i) may be given by
telephone if promptly confirmed in writing, (ii) may be given to one or more of
the Loan Parties at the same or different times and (iii) may suspend the rights
of the Loan Parties under paragraph (a)(i) or paragraph (a)(iii) in part without
suspending all such rights (as specified by the Collateral Agent in its sole and
absolute discretion) and without waiving or otherwise affecting the Collateral
Agent’s rights to give additional notices from time to time suspending other
rights so long as an Event of Default has occurred and is continuing.

ARTICLE IV

Security Interests in Personal Property

SECTION 4.01. Security Interest. (a) As security for the payment in full of the
Term Loan Obligations, each Loan Party hereby pledges to the Collateral Agent,
its permitted successors and assigns, for the benefit of the Term Loan Secured
Parties, and hereby grants to the Collateral Agent, its successors and assigns,
for the benefit of the Term Loan Secured Parties, a security interest (the
“Security Interest”) in, all right, title or interest in or to any and all of
the following assets and properties now owned or at any time hereafter acquired
by such Loan Party or in which such Loan Party now has or at any time in the
future may acquire any right, title or interest (collectively, the “Article 9
Collateral”):

(i) all Accounts;

(ii) all Chattel Paper;

(iii) all Documents;

(iv) all Equipment (including (A) the Satellites (including the Satellites
commonly referred to as FM-1, FM-2, FM-3 and FM-4) and associated equipment
(including all ground segment equipment for tracking, telemetry, control and
monitoring of the Satellites located at any TT&C Station) and (B) all software
embedded therein and used for tracking, telemetry, control and monitoring of the
Satellites located at any TT&C Station);

 

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(v) all Goods, including Fixtures;

(vi) all Instruments;

(vii) all Investment Property;

(viii) all Software and all other Intellectual Property;

(ix) all rights under or relating to the FCC Licenses, subject to the exclusion
in clause (F) of the proviso below;

(x) all other General Intangibles (including any agreements relating to the
Satellites or associated equipment referred to in clause (a)(iv) above
(including any agreement for the construction or purchase of any Satellite, any
agreement relating to the tracking, telemetry, control and monitoring of any
Satellite, all rights to the geostationary position of any Satellite and any
policy of insurance covering risk of loss or damage to any Satellite));

(xi) all Letter-of-Credit Rights;

(xii) all Commercial Tort Claims specified on Schedule IV;

(xiii) all books and records pertaining to the Article 9 Collateral; and

(xiv) to the extent not otherwise included, all Proceeds and products of any and
all of the foregoing and all collateral security and guarantees given by any
Person with respect to any of the foregoing and all Supporting Obligations
relating thereto;

provided that the Article 9 Collateral shall not include, (A) any Accounts
Receivable, (B) any cash or Temporary Cash Investments, (C) subject to the
proviso set forth in the definition thereof, any Excluded Satellite Collateral,
(D) any Excluded Inventory, (E) the Excluded Equity Interests, (F) to the extent
(but only to the extent) that at any time the Collateral Agent may not validly
possess a security interest in any FCC License pursuant to the Communications
Act of 1934, as amended, and the regulations promulgated thereunder, as in
effect at such time, such FCC License, provided that the Article 9 Collateral
does include, to the maximum extent permitted by law, all rights incident or
appurtenant to such FCC License and the right to receive all proceeds derived
from or in connection with the sale, assignment or transfer of such FCC Licenses
and (G) any General Intangibles arising under any license, contract or agreement
(including any such contract or agreement for the construction or purchase of a
Satellite) if and for so long as the grant of such security interest shall
constitute or result in a breach or termination pursuant to the terms of, or a
default under, such license, contract or agreement (other than to the extent
that any such term would be rendered ineffective pursuant to Section 9-406,
9-407, 9-408 or 9-409 of the New York UCC or any other applicable law or
principles of equity), provided, however, that such security interest shall
attach

 

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immediately at such time as the condition causing such breach, termination or
default shall cease to be applicable and, to the extent severable, shall attach
immediately to any portion of such license, contract or agreement that does not
result in any of the consequences specified this clause, including any Proceeds
of such contract or agreement.

(b) Each Loan Party hereby irrevocably authorizes the Collateral Agent at any
time and from time to time to file in the proper jurisdictions any initial
financing statements (including fixture filings) with respect to the Article 9
Collateral or any part thereof and amendments thereto and continuations thereof
that contain the information required by Article 9 of the Uniform Commercial
Code of each applicable jurisdiction for the filing of any financing statement
or amendment, including (i) statements as to whether such Loan Party is an
organization, the type of organization and any organizational identification
number issued to such Loan Party and (ii) in the case of a financing statement
filed as a fixture filing, a sufficient description of the real property to
which such Article 9 Collateral relates. Each Loan Party agrees to provide such
information to the Collateral Agent promptly upon request.

Each Loan Party also ratifies its authorization for the Collateral Agent to file
in any proper jurisdiction any initial financing statements or amendments
thereto if filed prior to the date hereof.

The Collateral Agent is further authorized to file with the United States Patent
and Trademark Office or United States Copyright Office (or any successor office
or any similar office in any other country) such documents as may be necessary
or advisable for the purpose of perfecting, confirming, continuing, enforcing or
protecting the Security Interest granted by each Loan Party, without the
signature of any Loan Party, and naming any Loan Party or the Loan Parties as
debtors and the Collateral Agent as secured party.

(c) The Security Interest is granted as security only and shall not subject the
Collateral Agent or any other Secured Party to, or in any way alter or modify,
any obligation or liability of any Loan Party with respect to or arising out of
the Article 9 Collateral (other than the duties expressly created hereunder).

SECTION 4.02. Representations and Warranties. The Loan Parties jointly and
severally represent and warrant to the Collateral Agent and the other Term Loan
Secured Parties that:

(a) Each Loan Party has good and valid rights in and title to the Article 9
Collateral with respect to which it has purported to grant a Security Interest
hereunder and has full power and authority to grant to the Collateral Agent, for
the benefit of the Term Loan Secured Parties, the Security Interest in such
Article 9 Collateral pursuant hereto and to execute, deliver and perform its
obligations in accordance with the terms of this Agreement, without the consent
or approval of any other Person other than any consent or approval that has been
obtained.

 

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(b) The Perfection Certificate has been duly prepared, completed and executed
and the information set forth therein, including the exact legal name and place
of organization of each Loan Party, is correct and complete as of the Effective
Date. The Uniform Commercial Code financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations prepared by the Collateral Agent based upon the information
provided to the Collateral Agent in the Perfection Certificate for filing in
each governmental, municipal or other office specified in Schedule 6 to the
Perfection Certificate (or specified by notice from the Borrower to the
Collateral Agent after the Effective Date in the case of filings, recordings or
registrations required by Section 5.11 or 5.12 of the Credit Agreement), are all
the filings, recordings and registrations (other than filings required to be
made in the United States Patent and Trademark Office and the United States
Copyright Office in order to perfect the Security Interest in Article 9
Collateral consisting of United States Patents, Trademarks and Copyrights) that
are necessary to publish notice of, perfect and protect the validity of and to
establish a legal, valid and perfected security interest in favor of the
Collateral Agent (for the benefit of the Term Loan Secured Parties) in respect
of all Article 9 Collateral in which the Security Interest may be perfected by
filing, recording or registration in the United States (or any political
subdivision thereof) and its territories and possessions, and no further or
subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as provided under
applicable law with respect to the filing of continuation statements.

(c) The Article 9 Collateral is owned by the Loan Parties free and clear of any
Lien, except for Liens created under the Loan Documents and the Permitted Liens.
None of the Loan Parties has filed or consented to the filing of (i) any
financing statement or analogous document under the Uniform Commercial Code or
any other applicable laws covering any Article 9 Collateral, (ii) any assignment
in which any Loan Party assigns any Collateral or any security agreement or
similar instrument covering any Article 9 Collateral with the United States
Patent and Trademark Office or the United States Copyright Office or (iii) any
assignment in which any Loan Party assigns any Article 9 Collateral or any
security agreement or similar instrument covering any Article 9 Collateral with
any foreign governmental, municipal or other office, which financing statement
or analogous document, assignment, security agreement or similar instrument is
still in effect, except, in each case, for Liens created under the Loan
Documents and the Permitted Liens.

SECTION 4.03. Covenants. (a) Upon the occurrence and during the continuance of
an Event of Default, each Loan Party shall, upon reasonable request of the
Collateral Agent, promptly prepare and deliver to the Collateral Agent a duly
certified schedule or schedules in form and detail satisfactory to the
Collateral Agent showing the identity, amount and location of any and all
Article 9 Collateral.

(b) Each Loan Party agrees, at its own expense, to execute, acknowledge, deliver
and cause to be duly filed all such further instruments and documents and take
all such actions as the Collateral Agent may from time to time reasonably
request to better assure, preserve, protect and perfect the Security Interest
and the rights and remedies created hereby, including the payment of any fees
and taxes required in connection with the execution and delivery of this
Agreement, the granting of the Security Interest and the filing of any financing
statements (including fixture filings) or other documents in connection herewith
or therewith.

 

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Without limiting the generality of the foregoing, each Loan Party hereby
authorizes the Collateral Agent, with prompt notice thereof to the Loan Parties,
to supplement this Agreement by supplementing Schedule III or adding additional
schedules hereto to specifically identify any asset or item that may constitute
Copyrights, Licenses, Patents or Trademarks; provided that any Loan Party shall
have the right, exercisable within 10 days after it has been notified by the
Collateral Agent of the specific identification of such Collateral, to advise
the Collateral Agent in writing of any inaccuracy (i) with respect to such
supplement or additional schedule or (ii) of the representations and warranties
made by such Loan Party hereunder with respect to such Collateral. Each Loan
Party agrees that it will use its commercially reasonable efforts to take such
action as shall be necessary in order that all representations and warranties
hereunder shall be true and correct with respect to such Collateral within
30 days after the date it has been notified by the Collateral Agent of the
specific identification of such Collateral.

(c) At its option, the Collateral Agent may, upon the occurrence and during the
continuance of an Event of Default, discharge past due taxes, assessments,
charges, fees and Liens at any time levied or placed on the Article 9 Collateral
and not permitted pursuant to Section 5.07 or 6.08 of the Credit Agreement, and
may pay for the maintenance and preservation of the Article 9 Collateral to the
extent any Loan Party fails to do so as required by the Credit Agreement or this
Agreement, and each Loan Party jointly and severally agrees to reimburse the
Collateral Agent on demand for any payment made or any expense incurred by the
Collateral Agent pursuant to the foregoing authorization; provided that nothing
in this paragraph shall be interpreted as excusing any Loan Party from the
performance of, or imposing any obligation on the Collateral Agent or any Term
Loan Secured Party to cure or perform, any covenants or other promises of any
Loan Party with respect to taxes, assessments, charges, fees or Liens and
maintenance as set forth herein or in the other Loan Documents.

(d) Each Loan Party shall remain liable to observe and perform all the
conditions and obligations to be observed and performed by it under each
contract, agreement or instrument relating to the Article 9 Collateral, all in
accordance with the terms and conditions thereof.

(e) Each Loan Party irrevocably makes, constitutes and appoints the Collateral
Agent (and all officers, employees or agents designated by the Collateral Agent)
as such Loan Party’s true and lawful agent (and attorney-in-fact) for the
purpose, after the occurrence and during the continuance of an Event of Default,
of making, settling and adjusting claims in respect of Article 9 Collateral
under policies of insurance, endorsing the name of such Loan Party on any check,
draft, instrument or other item of payment for the proceeds of such policies of
insurance and for making all determinations and decisions with respect thereto.
In the event that any Loan Party at any time or times shall fail to obtain or
maintain any of the policies of insurance required by the Credit Agreement or to
pay any premium in whole or part relating thereto, the Collateral Agent may,
without waiving or releasing any obligation or liability of the Loan Parties
hereunder or any Event of Default, in its sole discretion, obtain and maintain
such policies of insurance and pay such premium and take any other actions with
respect thereto as the Collateral Agent deems advisable. All sums disbursed by
the Collateral Agent in connection with this paragraph, including reasonable
attorneys’ fees, court costs, expenses and other charges relating thereto, shall
be payable, upon demand, by the Loan Parties to the Collateral Agent and shall
be additional Term Loan Obligations secured hereby.

 

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(f) Each Loan Party will, and will cause each of the Restricted Subsidiaries to,
at the Loan Parties’ expense, promptly following the request of the Collateral
Agent (which may only be made following the occurrence and during the
continuance of an Event of Default), (i) deliver to the Collateral Agent,
subject to having obtained any consent or approval of, or registration or filing
with, any Governmental Authority for such delivery, all access codes, command
codes and command encryption necessary to establish access to and perform
tracking, telemetry, control and monitoring of any Satellite, including
activation and control of any spacecraft subsystems and payload components and
the transponders thereon (such access codes, command codes and command
encryption being collectively referred to as the “Satellite Codes”), in each
case where such Satellite Codes are in possession, or subject to the control, of
the Borrower or any Restricted Subsidiary, (ii) use its reasonable best efforts
to obtain any consent or approval of, or registration or filing with, any
Governmental Authority referred to in clause (i) above or otherwise required to
effect any transfer of operational control over any Satellite and related
technical data (including any license approving the export or re-export of such
Satellite to any Person as designated by the Collateral Agent) and (iii) deliver
to the Collateral Agent written evidence of the issuance of any such consent,
approval, registration or filing once such consent, approval, registration or
filing has been obtained.

(g) Each Loan Party will, and will cause each of the Restricted Subsidiaries to,
at the Loan Parties’ expense, promptly following the request of the Collateral
Agent (which may only be made following the occurrence and during the
continuance of an Event of Default), use its reasonable best efforts to obtain
from each provider (other than the Borrower or any Restricted Subsidiary) of
tracking, telemetry, control and monitoring services for any Satellite, an
agreement of such provider with the Collateral Agent (i) to deliver to the
Collateral Agent, promptly following notification by the Collateral Agent that
an Event of Default has occurred and is continuing, subject to having obtained
any consent or approval of, or registration or filing with, any Governmental
Authority for such delivery, all Satellite Codes in possession, or subject to
the control, of such provider and, following delivery thereof, not change any
such Satellite Codes without promptly furnishing to the Collateral Agent the new
Satellite Codes, (ii) to use its reasonable best efforts, upon notification by
the Collateral Agent that an Event of Default has occurred and is continuing, to
obtain any consent or approval of, or registration or filing with, any
Governmental Authority referred to in clause (i) above or otherwise required to
effect any transfer of operational control over any Satellite for which such
provider is providing any of the abovementioned services and related technical
data and (iii) to deliver to the Collateral Agent written evidence of the
issuance of any such consent, approval, registration or filing once such
consent, approval, registration or filing has been obtained. If, notwithstanding
the Loan Parties’ and the Restricted Subsidiaries’ having used their reasonable
best efforts to obtain the agreements referred to in this paragraph, any such
agreement shall not have been so obtained, each Loan Party shall, and shall
cause the Restricted Subsidiaries to, instruct each such provider of tracking,
telemetry, control and monitoring services (and each manufacturer of any
Satellite that has not yet been launched) to cooperate in providing the
Satellite Codes, consents, approvals, registrations and filings referred to in
this paragraph.

(h) In the event that the United States signs and ratifies the Protocol on Space
Assets to the Capetown Convention on Mobile Equipment, then each Loan Party
shall ensure that any international interests (as defined in such Convention)
with respect to space assets (as defined in such Protocol) are properly
registered with the international registry referred to therein

 

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and shall otherwise take all actions reasonably requested by the Collateral
Agent to ensure that the security interest of the Collateral Agent is fully
perfected and protected under such Protocol and such Convention.

SECTION 4.04. Other Actions. In order to further insure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
the Security Interest, each Loan Party agrees, in each case at such Loan Party’s
own expense, to take the following actions with respect to the following
Article 9 Collateral:

(a) Instruments. If any Loan Party shall at any time hold or acquire any
Instruments constituting Collateral, such Loan Party shall, to the extent that
such Instruments are not required to be delivered to MSSFI under the MSSFI
Collateral Agreement), forthwith endorse, assign and deliver the same to the
Collateral Agent, accompanied by such undated instruments of endorsement,
transfer or assignment duly executed in blank as the Collateral Agent may from
time to time reasonably request.

(b) Investment Property. Except to the extent otherwise provided in Article III
or IV, if any Loan Party shall at any time hold or acquire any certificated
securities, such Loan Party shall, to the extent that such certificated
securities are not required to be delivered to MSSFI under the MSSFI Collateral
Agreement, forthwith endorse, assign and deliver the same to the Collateral
Agent, accompanied by such undated instruments of transfer or assignment duly
executed in blank as the Collateral Agent may from time to time specify. If any
securities now or hereafter acquired by any Loan Party are uncertificated and
are issued to such Loan Party or its nominee directly by the issuer thereof,
such Loan Party shall immediately notify the Collateral Agent thereof and, at
the Collateral Agent’s request and option, pursuant to an agreement in form and
substance reasonably satisfactory to the Collateral Agent, either, subject to
any prior rights of MSSFI in connection with the MSSFI Collateral Agreement,
(i) cause the issuer to agree to comply with instructions from the Collateral
Agent as to such securities, without further consent of any Loan Party or such
nominee, or (ii) arrange for the Collateral Agent to become the registered owner
of the securities. If any securities, whether certificated or uncertificated, or
other Investment Property now or hereafter acquired by any Loan Party are held
by such Loan Party or its nominee through a securities intermediary or commodity
intermediary, such Loan Party shall immediately notify the Collateral Agent
thereof and, at the Collateral Agent’s request and option, pursuant to an
agreement in form and substance reasonably satisfactory to the Collateral Agent,
either, subject to any prior rights of MSSFI in connection with the MSSFI
Collateral Agreement, (i) cause such securities intermediary or (as the case may
be) commodity intermediary to agree to comply with entitlement orders or other
instructions from the Collateral Agent to such securities intermediary as to
such security entitlements, or to apply any value distributed on account of any
commodity contract as directed by the Collateral Agent to such commodity
intermediary, in each case without further consent of any Loan Party or such
nominee, or (ii) in the case of Financial Assets or other Investment Property
held through a securities intermediary, arrange for the Collateral Agent to
become the entitlement holder with respect to such Investment Property, with the
Loan Party being permitted, only with the consent of the Collateral Agent, to
exercise rights to withdraw or otherwise deal with such Investment Property. The
Collateral Agent agrees with each of the Loan Parties that the Collateral Agent
shall not give any such entitlement orders or instructions or directions to any
such issuer, securities intermediary or commodity intermediary, and shall not

 

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withhold its consent to the exercise of any withdrawal or dealing rights by any
Loan Party, unless an Event of Default has occurred and is continuing, or, after
giving effect to any such investment and withdrawal rights would occur. The
provisions of this paragraph shall not apply to any Financial Assets credited to
a securities account for which the Collateral Agent is the securities
intermediary.

(c) Commercial Tort Claims. If any Loan Party shall at any time hold or acquire
a commercial tort claim in an amount reasonably estimated to exceed $500,000,
the Loan Party shall promptly notify the Collateral Agent thereof in a writing
signed by such Loan Party including a summary description of such claim and
grant to the Collateral Agent for the benefit of the Term Loan Secured Parties
in such writing a security interest therein and in the proceeds thereof, all
upon the terms of this Agreement, with such writing to be in form and substance
reasonably satisfactory to the Collateral Agent.

SECTION 4.05. Covenants Regarding Patent, Trademark and Copyright Collateral.
(a) Each Loan Party agrees that it will not do any act or omit to do any act
(and will exercise commercially reasonable efforts to prevent its licensees from
doing any act or omitting to do any act) whereby any Patent that is material to
the conduct of such Loan Party’s business may become invalidated or dedicated to
the public, and agrees that it shall continue to mark any products covered by
such a Patent with the relevant patent number as required under applicable law
and as is necessary and sufficient to establish and preserve its maximum rights
under applicable patent laws.

(b) Each Loan Party will, and will use its commercially reasonable efforts to
cause its licensees or its sublicensees to, for each Trademark material to the
conduct of such Loan Party’s business, (i) maintain such Trademark in full
force, free from any adjudication of abandonment or invalidity for non-use,
(ii) maintain the quality of products and services offered under such Trademark,
(iii) if registered, display such Trademark with notice of Federal or foreign
registration as required by applicable law to the extent necessary and
sufficient to establish and preserve its maximum rights under applicable law and
(iv) not knowingly use or knowingly permit the use of such Trademark in
violation of any third party rights.

(c) Each Loan Party will, and will use its commercially reasonable efforts to
cause its licensees or sublicensees to, for each work covered by a Copyright
material to the conduct of such Loan Party’s business, continue to publish,
reproduce, display, adopt and distribute the work with appropriate copyright
notice as required under applicable law and as is necessary and sufficient to
establish and preserve its maximum rights under applicable copyright laws.

(d) Each Loan Party shall notify the Collateral Agent promptly if it knows or
has reason to know that any Patent, Trademark or Copyright material to the
conduct of its business may become abandoned, lapsed or dedicated to the public,
or of any materially adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, United States Copyright Office or
any court or similar office of any country) regarding such Loan Party’s
ownership of any such Patent, Trademark or Copyright, its right to register the
same, or its right to keep and maintain the same.

 

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(e) In the event that any Loan Party, either itself or through any agent,
employee, licensee or designee, file an application for the registration of any
Patent, Trademark or Copyright with the United States Patent and Trademark
Office, United States Copyright Office or any office or agency in any political
subdivision of the United States or in any other country or any political
subdivision thereof, it shall inform the Collateral Agent within 15 Business
Days of such application and, upon request of the Collateral Agent, execute and
deliver any and all agreements (including any IP Security Agreements),
instruments, documents and papers as the Collateral Agent may reasonably request
(and provide) to evidence the Collateral Agent’s security interest in such
Patent, Trademark or Copyright, and each Loan Party hereby appoints the
Collateral Agent as its attorney-in-fact to execute and file such writings for
the foregoing purposes, all acts of such attorney being hereby ratified and
confirmed; such power, being coupled with an interest, is irrevocable.

(f) Each Loan Party will take all necessary steps that are consistent with the
practice in any proceeding before the United States Patent and Trademark Office,
the United States Copyright Office or any office or agency in any political
subdivision of the United States or in any other country or any political
subdivision thereof, to maintain and pursue each application relating to the
Patents, Trademarks and/or Copyrights (and to obtain the relevant grant or
registration) material to the conduct of such Loan Party’s business and to
maintain each issued Patent and each registration of the Trademarks and
Copyrights that is material to the conduct of any Loan Party’s business,
including, when applicable, timely filings of applications for renewal,
affidavits of use, affidavits of incontestability and payment of maintenance
fees, and, if consistent with reasonable business judgment of such Loan Party,
to initiate opposition, interference and cancellation proceedings against third
parties.

(g) In the event that any Loan Party believes that any Article 9 Collateral
consisting of a Patent, Trademark or Copyright material to the conduct of any
Loan Party’s business has been or is about to be materially infringed,
misappropriated or diluted by a third party, such Loan Party promptly shall
notify the Collateral Agent and shall take such actions as may be reasonably
appropriate under the circumstances, which may include, if consistent with
reasonable business judgment of such Loan Party, suit for infringement,
misappropriation or dilution and recovery of any and all damages for such
infringement, misappropriation or dilution.

(h) Upon and during the continuance of an Event of Default, each Loan Party
shall use its commercially reasonable efforts to obtain all requisite consents
or approvals by the licensor of each Copyright License, Patent License or
Trademark License to effect the assignment or sublicense of all such Loan
Party’s right, title and interest thereunder to the Collateral Agent or its
designee for the benefit of the Term Loan Secured Parties.

ARTICLE V

Remedies

SECTION 5.01. Remedies Upon Default. Upon the occurrence and during the
continuance of an Event of Default, each Loan Party agrees to deliver, on
demand, each item of Collateral to the Collateral Agent or any Person designated
by the Collateral Agent, and it is agreed that the Collateral Agent shall have
the right to take any of or all the following actions at

 

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the same or different times: (a) with respect to any Article 9 Collateral
consisting of Intellectual Property, on demand, to cause the Security Interest
to become an assignment, transfer and conveyance of any of or all such Article 9
Collateral by the applicable Loan Parties to the Collateral Agent (for the
benefit of the Term Loan Secured Parties), or to license or sublicense, whether
general, special or otherwise, and whether on an exclusive or nonexclusive
basis, any such Article 9 Collateral throughout the world on such terms and
conditions and in such manner as the Collateral Agent shall determine (other
than in violation of any then-existing licensing arrangements to the extent that
waivers cannot be obtained), and (b) with or without legal process and with or
without prior notice or demand for performance, to take possession of the
Article 9 Collateral and without liability for trespass to enter any premises
where the Article 9 Collateral may be located for the purpose of taking
possession of or removing the Article 9 Collateral and, generally, to exercise
any and all rights afforded to a secured party under the Uniform Commercial Code
or other applicable law. Without limiting the generality of the foregoing, each
Loan Party agrees that the Collateral Agent shall have the right, subject to the
mandatory requirements of applicable law, to sell or otherwise dispose of all or
any part of the Collateral at a public or private sale or at any broker’s board
or on any securities exchange, for cash, upon credit or for future delivery as
the Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized at any such sale of securities (if it deems it advisable to do so) to
restrict the prospective bidders or purchasers to Persons who will represent and
agree that they are purchasing the Collateral for their own account for
investment and not with a view to the distribution or sale thereof, and upon
consummation of any such sale the Collateral Agent shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any sale of Collateral shall hold the
property sold absolutely, free from any claim or right on the part of any Loan
Party, and each Loan Party hereby waives (to the extent permitted by law) all
rights of redemption, stay and appraisal which such Loan Party now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted.

The Collateral Agent shall give the applicable Loan Parties 10 days’ written
notice (which each Loan Party agrees is reasonable notice within the meaning of
Section 9-611 of the New York UCC or its equivalent in other jurisdictions) of
the Collateral Agent’s intention to make any sale of Collateral. Such notice, in
the case of a public sale, shall state the time and place for such sale and, in
the case of a sale at a broker’s board or on a securities exchange, shall state
the board or exchange at which such sale is to be made and the day on which the
Collateral, or portion thereof, will first be offered for sale at such board or
exchange. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as the Collateral Agent may
fix and state in the notice (if any) of such sale. At any such sale, the
Collateral, or portion thereof, to be sold may be sold in one lot as an entirety
or in separate parcels, as the Collateral Agent may (in its sole and absolute
discretion) determine. The Collateral Agent shall not be obligated to make any
sale of any Collateral if it shall determine not to do so, regardless of the
fact that notice of sale of such Collateral shall have been given. The
Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for sale, and such sale may, without further notice,
be made at the time and place to which the same was so adjourned. In case any
sale of all or any part of the Collateral is made on credit or for future
delivery, the Collateral so sold may be retained by the Collateral Agent until
the sale price is paid by the purchaser or purchasers thereof, but the
Collateral Agent and the other Term Loan

 

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Secured Parties shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Collateral so sold and, in case
of any such failure, such Collateral may be sold again upon like notice. At any
public (or, to the extent permitted by law, private) sale made pursuant to this
Agreement, any Term Loan Secured Party may bid for or purchase, free (to the
extent permitted by law) from any right of redemption, stay, valuation or
appraisal on the part of any Loan Party (all said rights being also hereby
waived and released to the extent permitted by law), the Collateral or any part
thereof offered for sale and may make payment on account thereof by using any
claim then due and payable to such Term Loan Secured Party from any Loan Party
as a credit against the purchase price, and such Term Loan Secured Party may,
upon compliance with the terms of sale, hold, retain and dispose of such
property without further accountability to any Loan Party therefor. For purposes
hereof, a written agreement to purchase the Collateral or any portion thereof
shall be treated as a sale thereof; the Collateral Agent shall be free to carry
out such sale pursuant to such agreement and no Loan Party shall be entitled to
the return of the Collateral or any portion thereof subject thereto,
notwithstanding the fact that after the Collateral Agent shall have entered into
such an agreement all Events of Default shall have been remedied and the Term
Loan Obligations paid in full. As an alternative to exercising the power of sale
herein conferred upon it, the Collateral Agent may proceed by a suit or suits at
law or in equity to foreclose this Agreement and to sell the Collateral or any
portion thereof pursuant to a judgment or decree of a court or courts having
competent jurisdiction or pursuant to a proceeding by a court-appointed
receiver. Any sale pursuant to the provisions of this Section 5.01 shall be
deemed to conform to the commercially reasonable standards as provided in
Section 9-610(b) of the New York UCC or its equivalent in other jurisdictions.

The Collateral Agent acknowledges that the exercise of its rights and remedies
hereunder, including the rights set forth in Sections 3.06(b) and 3.06(c) and
this Section 5.01, may require prior approval of, or notice to, the FCC pursuant
to the Communications Act of 1934, as amended, and the regulations promulgated
thereunder.

SECTION 5.02. Application of Proceeds. The Collateral Agent shall apply the
proceeds of any collection or sale of Collateral as follows:

FIRST, to the payment of all costs and expenses incurred by the Collateral Agent
in connection with such collection or sale or otherwise in connection with this
Agreement, any other Loan Document or any of the Term Loan Obligations,
including all court costs and the reasonable fees and expenses of its agents and
legal counsel, the repayment of all advances made by the Collateral Agent
hereunder or under any other Loan Document on behalf of any Loan Party and any
other costs or expenses incurred in connection with the exercise of any right or
remedy hereunder or under any other Loan Document;

SECOND, to the payment in full of the Term Loan Obligations (the amounts so
applied to be distributed among the Term Loan Secured Parties pro rata in
accordance with the amounts of the Term Loan Obligations owed to them on the
date of any such distribution); and

THIRD, to the Loan Parties, their successors or assigns, or as a court of
competent jurisdiction may otherwise direct.

 

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The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.

SECTION 5.03. Grant of License to Use Intellectual Property. Solely for the
purpose of enabling the Collateral Agent to exercise rights and remedies under
this Agreement at such time as the Collateral Agent shall be lawfully entitled
to exercise such rights and remedies, each Loan Party hereby grants to the
Collateral Agent an irrevocable (except upon the indefeasible payment in full in
cash of all the Term Loan Obligations), nonexclusive license (exercisable
without payment of royalty or other compensation to the Loan Parties) to use,
license or sublicense any of the Article 9 Collateral consisting of Intellectual
Property now or hereafter owned by such Loan Party, and wherever the same may be
located, and including in such license reasonable access to all media in which
any of the licensed items may be recorded or stored and to all computer software
and programs used for the compilation or printout thereof. The use of such
license by the Collateral Agent may be exercised, at the option of the
Collateral Agent, only upon the occurrence and during the continuation of an
Event of Default as part of the Collateral Agent’s exercise of remedies
hereunder.

SECTION 5.04. Securities Act. In view of the position of the Loan Parties in
relation to the Pledged Collateral, or because of other current or future
circumstances, a question may arise under the Securities Act of 1933, as now or
hereafter in effect, or any similar statute hereafter enacted analogous in
purpose or effect (such Act and any such similar statute as from time to time in
effect being called the “Federal Securities Laws”) with respect to any
disposition of the Pledged Collateral permitted hereunder. Each Loan Party
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Collateral Agent if the Collateral Agent were
to attempt to dispose of all or any part of the Pledged Collateral, and might
also limit the extent to which or the manner in which any subsequent transferee
of any Pledged Collateral could dispose of the same. Similarly, there may be
other legal restrictions or limitations affecting the Collateral Agent in any
attempt to dispose of all or part of the Pledged Collateral under applicable
Blue Sky or other state securities laws or similar laws analogous in purpose or
effect. Each Loan Party recognizes that in light of such restrictions and
limitations the Collateral Agent may, with respect to any sale of the Pledged
Collateral, limit the purchasers to those who will agree, among other things, to
acquire such Pledged Collateral for their own account, for investment, and not
with a view to the distribution or resale thereof. Each Loan Party acknowledges
and agrees that in light of such restrictions and limitations, the Collateral
Agent, in its sole and absolute discretion (a) may proceed to make such a sale
whether or not a registration statement for the purpose of registering such
Pledged Collateral or part thereof shall have been filed under the Federal
Securities Laws and (b) may approach and negotiate with a single potential
purchaser to effect such sale. Each Loan Party acknowledges and agrees that any
such sale might result in prices and other terms less favorable to the seller
than if such sale were a public sale without such restrictions. In the event of
any such sale, the Collateral Agent and the other Term Loan Secured Parties
shall incur no responsibility or

 

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liability for a sale of all or any part of the Pledged Collateral at a price
that the Collateral Agent, in its sole and absolute discretion, may in good
faith deem reasonable under the circumstances, notwithstanding the possibility
that a substantially higher price might have been realized if the sale were
deferred until after registration as aforesaid or if more than a single
purchaser were approached. The provisions of this Section 5.04 will apply
notwithstanding the existence of a public or private market upon which the
quotations or sales prices may exceed substantially the price at which the
Collateral Agent sells.

SECTION 5.05. Registration. Each Loan Party agrees that, upon the occurrence and
during the continuance of an Event of Default, if for any reason the Collateral
Agent desires to sell any of the Pledged Collateral at a public sale, it will,
at any time and from time to time, upon the written request of the Collateral
Agent, use its reasonable best efforts to take or to cause the issuer of such
Pledged Collateral to take such action and prepare, distribute and/or file such
documents, as are required or advisable in the reasonable opinion of counsel for
the Collateral Agent to permit the public sale of such Pledged Collateral. Each
Loan Party further agrees to indemnify, defend and hold harmless the Collateral
Agent, each other Term Loan Secured Party, any underwriter and their respective
officers, directors, affiliates and controlling persons from and against all
loss, liability, expenses, costs of counsel (including, without limitation,
reasonable fees and expenses to the Collateral Agent of legal counsel), and
claims (including the costs of investigation) that they may incur insofar as
such loss, liability, expense or claim arises out of or is based upon any
alleged untrue statement of a material fact contained in any prospectus (or any
amendment or supplement thereto) or in any notification or offering circular, or
arises out of or is based upon any alleged omission to state a material fact
required to be stated therein or necessary to make the statements in any thereof
not misleading, except insofar as the same may have been caused by any untrue
statement or omission based upon information furnished in writing to such Loan
Party or the issuer of such Pledged Collateral by the Collateral Agent or any
other Secured Party expressly for use therein. Each Loan Party further agrees,
upon such written request referred to above, to use its reasonable best efforts
to qualify, file or register, or cause the issuer of such Pledged Collateral to
qualify, file or register, any of the Pledged Collateral under the Blue Sky or
other securities laws of such states as may be requested by the Collateral Agent
and keep effective, or cause to be kept effective, all such qualifications,
filings or registrations. Each Loan Party will bear all costs and expenses of
carrying out its obligations under this Section 5.05. Each Loan Party
acknowledges that there is no adequate remedy at law for failure by it to comply
with the provisions of this Section 5.05 and that such failure would not be
adequately compensable in damages, and therefore agrees that its agreements
contained in this Section 5.05 may be specifically enforced.

ARTICLE VI

Indemnity, Subrogation and Subordination

SECTION 6.01. Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Subsidiary Guarantors may have under applicable
law (but subject to Section 6.03), the Borrower agrees that (a) in the event a
payment of an obligation shall be made by any Subsidiary Guarantor under this
Agreement, the Borrower shall indemnify such Subsidiary Guarantor for the full
amount of such payment and such Subsidiary Guarantor shall be subrogated to the
rights of the Person to whom such payment shall have been made to

 

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the extent of such payment and (b) in the event any assets of any Subsidiary
Guarantor shall be sold pursuant to this Agreement or any other Security
Document to satisfy in whole or in part an obligation owed to any Secured Party,
the Borrower shall indemnify such Subsidiary Guarantor in an amount equal to the
greater of the book value or the fair market value of the assets so sold.

SECTION 6.02. Contribution and Subrogation. Each Subsidiary Guarantor (a
“Contributing Party”) agrees (subject to Section 6.03) that, in the event a
payment shall be made by any other Subsidiary Guarantor hereunder in respect of
any Obligation or assets of any other Subsidiary Guarantor shall be sold
pursuant to any Security Document to satisfy any Obligation (other, in each
case, than an Obligation for the incurrence of which such other Subsidiary
Guarantor received fair and adequate consideration) and such other Subsidiary
Guarantor (the “Claiming Party”) shall not have been fully indemnified by the
Borrower as provided in Section 6.01, the Contributing Party shall indemnify the
Claiming Party in an amount equal to the amount of such payment or the greater
of the book value or the fair market value of such assets, as the case may be,
in each case multiplied by a fraction of which the numerator shall be the net
worth of the Contributing Party on the date hereof and the denominator shall be
the aggregate net worth of all the Subsidiary Guarantors on the date hereof (or,
in the case of any Subsidiary Guarantor becoming a party hereto pursuant to
Section 7.14, the date of the supplement hereto executed and delivered by such
Subsidiary Guarantor). Any Contributing Party making any payment to a Claiming
Party pursuant to this Section 6.02 shall be subrogated to the rights of such
Claiming Party under Section 6.01 to the extent of such payment.

SECTION 6.03. Subordination. (a) Notwithstanding any provision of this Agreement
to the contrary, all rights of the Subsidiary Guarantors under Sections 6.01 and
6.02 and all other rights of indemnity, contribution or subrogation under
applicable law or otherwise shall be fully subordinated to the indefeasible
payment in full in cash of the Term Loan Obligations. No failure on the part of
any Subsidiary Guarantor to make the payments required by Sections 6.01 and 6.02
(or any other payments required under applicable law or otherwise) shall in any
respect limit the obligations and liabilities of any Subsidiary Guarantor with
respect to its Term Loan Obligations hereunder, and each Subsidiary Guarantor
shall remain liable for the full amount of the obligations of such Subsidiary
Guarantor hereunder.

(b) Each Subsidiary Guarantor hereby agrees that all Indebtedness and other
monetary obligations owed to it by Borrower, any other Subsidiary Guarantor or
any other Subsidiary shall be fully subordinated to the indefeasible payment in
full in cash of the Term Loan Obligations.

ARTICLE VII

Miscellaneous

SECTION 7.01. Notices. All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and given as provided in
Section 9.01 of the Credit Agreement. All communications and notices hereunder
to any Subsidiary Guarantor shall be given to it in care of the Borrower as
provided in Section 9.01 of the Credit Agreement.

 

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SECTION 7.02. Waivers; Amendment. (a) No failure or delay by the Collateral
Agent or any other Secured Party in exercising any right or power hereunder or
under any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Collateral Agent, the Administrative Agent and the other
Term Loan Secured Parties hereunder and under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or consent to any
departure by any Loan Party therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) of this Section 7.02, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. Without limiting the generality of the foregoing, the
making of a Loan shall not be construed as a waiver of any Default, regardless
of whether the Collateral Agent, any Term Loan Lender or any other Person may
have had notice or knowledge of such Default at the time. No notice or demand on
any Loan Party in any case shall entitle any Loan Party to any other or further
notice or demand in similar or other circumstances.

(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Collateral Agent and the Loan Party or Loan Parties with respect to which
such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 9.02 of the Credit Agreement.

SECTION 7.03. Collateral Agent’s Fees and Expenses; Indemnification. (a) The
parties hereto agree that the Collateral Agent shall be entitled to
reimbursement of its expenses incurred hereunder as provided in Section 9.03 of
the Credit Agreement.

(b) Without limitation of its indemnification obligations under the other Loan
Documents, each Loan Party jointly and severally agrees to indemnify the
Collateral Agent and the other Indemnitees (as defined in Section 9.03(b) of the
Credit Agreement) against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the
reasonable fees, charges and disbursements of counsel, incurred by or asserted
against any Indemnitee arising out of, in connection with, or as a result of
(i) the execution or delivery of this Agreement or (ii) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing or to the Collateral, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto and whether
or not such claim, litigation, investigation or proceeding is brought by any
Loan Party or any of its Affiliates or a third party; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee. To
the extent permitted by applicable law, none of the Loan Parties shall assert,
and each Loan Party hereby waives, any claim against the Collateral Agent or any
other Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby, the
Transactions, any Loan or the use of the proceeds thereof.

 

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(c) Any such amounts payable as provided hereunder shall be additional Term Loan
Obligations secured hereby and by the other Security Documents relating to the
Term Loan Obligations. The provisions of this Section 7.03 shall survive and
remain in full force and effect regardless of the termination of this Agreement
or any other Loan Document relating to the Term Loan Obligations, the
consummation of the transactions contemplated hereby, the repayment of any of
the Term Loan Obligations, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document relating to the Term Loan
Obligations, or any investigation made by or on behalf of the Collateral Agent
or any other Term Loan Secured Party. All amounts due under this Section 7.03
shall be payable promptly after written demand therefor.

SECTION 7.04. Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Loan Party or the Collateral Agent that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.

SECTION 7.05. Survival of Agreement. All covenants, agreements, representations
and warranties made by the Loan Parties herein or in any other Loan Document or
in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto or thereto and shall survive
the execution and delivery of this Agreement and any other Loan Document and the
making of any Loans, regardless of any investigation made by any such other
party or on its behalf and notwithstanding that the Collateral Agent or any
other Secured Party may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended under the Credit
Agreement, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under any Loan Document is outstanding and unpaid.

SECTION 7.06. Counterparts; Effectiveness; Several Agreement. This Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original but all of which when
taken together shall constitute a single contract. This Agreement shall become
effective as to any Loan Party when a counterpart hereof executed on behalf of
such Loan Party shall have been delivered to the Collateral Agent and a
counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter shall be binding upon such Loan Party and the Collateral Agent
and their respective permitted successors and assigns, and shall inure to the
benefit of such Loan Party, the Collateral Agent and the other Term Loan Secured
Parties and their respective successors and assigns, except that no Loan Party
shall have the right to assign or transfer its rights or obligations hereunder
or any interest herein or in the Collateral (and any such assignment or transfer
shall be void) except as expressly contemplated by this Agreement or the Credit
Agreement. This Agreement shall be construed as a separate agreement with
respect to each Loan Party and may be amended, modified, supplemented, waived or
released with respect to any Loan Party without the approval of any other Loan
Party and without affecting the obligations of any other Loan Party hereunder.

 

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SECTION 7.07. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction. The
parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

SECTION 7.08. Right of Set-Off. If an Event of Default shall have occurred and
be continuing, each Agent, each Term Loan Lender and each of their Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final and in whatever currency denominated) at
any time held and other obligations at any time owing by such Agent, Term Loan
Lender or Affiliate to or for the credit or the account of the Subsidiary
Guarantors against any overdue obligations of such Subsidiary Guarantor now or
hereafter existing under this Agreement or any other Loan Document that are held
by such Agent or Term Loan Lender, irrespective of whether or not such Agent or
Term Loan Lender shall have made any demand under this Agreement or such other
Loan Document. The rights of each Term Loan Lender under this Section are in
addition to other rights and remedies (including other rights of setoff) which
such Agent or Term Loan Lender may have.

SECTION 7.09. Governing Law; Jurisdiction; Consent to Service of Process. (a)
This Agreement shall be construed in accordance with and governed by the law of
the State of New York.

(b) Each of the Loan Parties hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Loan Document shall affect any right that
the Collateral Agent or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against any
Loan Party, or its properties in the courts of any jurisdiction.

(c) Each of the Loan Parties hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (b) of this Section 7.09. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

 

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(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 7.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.

SECTION 7.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 7.10.

SECTION 7.11. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

SECTION 7.12. Security Interest Absolute. All rights of the Collateral Agent
hereunder, the Security Interest, the grant of a security interest in the
Collateral and all obligations of each Loan Party hereunder shall be absolute
and unconditional irrespective of (a) any lack of validity or enforceability of
the Credit Agreement, any other Loan Document, any agreement with respect to any
of the Term Loan Obligations or any other agreement or instrument relating to
any of the foregoing, (b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Term Loan Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement, any other Loan Document or any other agreement or instrument, (c) any
exchange, release or non-perfection of any Lien on other collateral, or any
release or amendment or waiver of or consent under or departure from any
guarantee, securing or guaranteeing all or any of the Term Loan Obligations, or
(d) any other circumstance that might otherwise constitute a defense available
to, or a discharge of, any Loan Party in respect of the Obligations or this
Agreement.

SECTION 7.13. Termination or Release. (a) This Agreement, the Guarantees made
herein, the Security Interest and all other security interests granted hereby
shall terminate when all the Term Loan Obligations (other than, with respect to
the termination of the Security Interest and all other security interests
granted hereby only, any Term Loan Obligations that consists solely of
contingent obligations) have been indefeasibly paid in full and the Lenders have
no further commitment to lend under the Credit Agreement. In connection with any

 

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termination pursuant to this paragraph, the Collateral Agent shall execute and
deliver to any Subsidiary Guarantor, at such Subsidiary Guarantor’s expense, all
Uniform Commercial Code termination statements and any other documents that such
Subsidiary Guarantor shall reasonably request to evidence such termination. Any
execution and delivery of documents pursuant to this Section 7.13 shall be
without recourse to, or representation of warranty by, the Collateral Agent or
any other Term Loan Secured Party.

(b) Release of any Subsidiary Guarantor from its obligations hereunder and of
the Security Interest in any Collateral shall be governed by Section 9.13 of the
Credit Agreement.

SECTION 7.14. Additional Subsidiaries. Pursuant to Section 5.11 of the Credit
Agreement, certain Subsidiaries not originally parties hereto may be required
from time to time to enter in this Agreement as Subsidiary Guarantors. Upon
execution and delivery by the Collateral Agent and a Subsidiary of an instrument
in the form of Exhibit I hereto, such Subsidiary shall become a Subsidiary
Guarantor hereunder with the same force and effect as if originally named as a
Subsidiary Guarantor herein. The execution and delivery of any such instrument
shall not require the consent of any other Loan Party hereunder. The rights and
obligations of each Loan Party hereunder shall remain in full force and effect
notwithstanding the addition of any new Loan Party as a party to this Agreement.

SECTION 7.15. Collateral Agent Appointed Attorney-in-Fact. Each Loan Party
hereby appoints the Collateral Agent the attorney-in-fact of such Loan Party for
the purpose of carrying out the provisions of this Agreement and taking any
action and executing any instrument that the Collateral Agent may deem necessary
or advisable to accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest. Without limiting the generality of the foregoing,
the Collateral Agent shall have the right, but only upon the occurrence and
during the continuance of an Event of Default, with full power of substitution
either in the Collateral Agent’s name or in the name of such Loan Party (a) to
receive, endorse, assign and/or deliver any and all notes, acceptances, checks,
drafts, money orders or other evidences of payment relating to the Collateral or
any part thereof; (b) to demand, collect, receive payment of, give receipt for
and give discharges and releases of all or any of the Collateral; (c) to sign
the name of any Loan Party on any invoice or bill of lading relating to any of
the Collateral; (d) to send verifications of Accounts to any Account Debtor;
(e) to commence and prosecute any and all suits, actions or proceedings at law
or in equity in any court of competent jurisdiction to collect or otherwise
realize on all or any of the Collateral or to enforce any rights in respect of
any Collateral; (f) to settle, compromise, compound, adjust or defend any
actions, suits or proceedings relating to all or any of the Collateral; (g) to
notify, or to require any Loan Party to notify, Account Debtors to make payment
directly to the Collateral Agent; and (h) to use, sell, assign, transfer,
pledge, make any agreement with respect to or otherwise deal with all or any of
the Collateral, and to do all other acts and things necessary to carry out the
purposes of this Agreement, as fully and completely as though the Collateral
Agent were the absolute owner of the Collateral for all purposes; provided that
nothing herein contained shall be construed as requiring or obligating the
Collateral Agent to make any commitment or to make any inquiry as to the nature
or sufficiency of any payment received by the Collateral Agent, or to present or
file any claim or notice, or to take any action with respect to the Collateral
or any part thereof or the moneys due or to become due in respect thereof or any
property covered thereby. The Collateral Agent and the other Term Loan Secured
Parties shall be accountable only for

 

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amounts actually received as a result of the exercise of the powers granted to
them herein, and neither they nor their officers, directors, employees or agents
shall be responsible to any Loan Party for any act or failure to act hereunder,
except for their own gross negligence, bad faith or willful misconduct.

SECTION 7.16. Specific Performance. The parties agree that irreparable damage
would occur and that the Term Loan Secured Parties would not have any adequate
remedy at law in the event that any provision of Sections 4.03(f), 4.03(g) and
4.03(h) were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the Administrative Agent and
the Required Lenders shall be entitled to an injunction or injunctions to
prevent breaches of such Sections by any Loan Party and to enforce specifically
the terms and provisions of this Agreement in any court referred to in
Section 7.09(b), this being in addition to any other remedy to which they are
entitled at law or in equity. Each Loan Party hereby irrevocably waives any
defense based on the adequacy of a remedy at law and any other defense that
might be asserted to bar the remedy of specific performance referred to in the
immediately preceding sentence that may be brought by the Administrative Agent
or the Required Lenders.

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

 

SIRIUS XM RADIO INC., by    /s/ Patrick Donnelly  

Name:

Title:

 

Patrick Donnelly

Executive Vice President,

General Counsel and

Secretary

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SUBSIDIARY GUARANTOR

SIGNATURE PAGE TO THE

TERM LOAN GUARANTEE

AND COLLATERAL AGREEMENT

 

SATELLITE CD RADIO INC. by    /s/ Patrick Donnelly  

Name: Patrick Donnelly

Title: Secretary

 

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SUBSIDIARY GUARANTOR

SIGNATURE PAGE TO THE

TERM LOAN GUARANTEE

AND COLLATERAL AGREEMENT

 

SIRIUS ASSET MANAGEMENT
COMPANY LLC by    /s/ Patrick Donnelly  

Name: Patrick Donnelly

Title: Secretary

 

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LIBERTY MEDIA CORPORATION, as
Collateral Agent, by    /s/ David Flowers  

Name: David Flowers

Title: SVP & Treasurer

 

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