Exhibit 4.62





Exhibit 4.62




Execution Version




 





COLLATERAL AGREEMENT




made by




SIRIUS XM RADIO INC.,




and certain of its Subsidiaries of from time to time party hereto,




to and in favor of




U.S. BANK NATIONAL ASSOCIATION,

as Collateral Agent




Dated as of August 24, 2009




 






 


 









 







TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	SECTION 1. DEFINED TERMS
	 	 	2	 
	 
	 	 	 	 
	1.1. Definitions
	 	 	2	 
	1.2. Other Definitional Provisions
	 	 	13	 
	 
	 	 	 	 
	SECTION 2. GRANT OF SECURITY INTEREST; CONTINUING
LIABILITY UNDER COLLATERAL
	 	 	13	 
	 
	 	 	 	 
	2.1. Grant of Security
	 	 	13	 
	2.2. Refinancing Intercreditor Agreement
	 	 	15	 
	 
	 	 	 	 
	SECTION 3. REPRESENTATIONS AND WARRANTIES
	 	 	15	 
	 
	 	 	 	 
	3.1. [Reserved]
	 	 	15	 
	3.2. Title; No Other Liens
	 	 	15	 
	3.3. Perfected First Priority Liens
	 	 	15	 
	3.4. Name; Jurisdiction of Organization, etc.
	 	 	16	 
	3.5. [Reserved]
	 	 	16	 
	3.6. [Reserved]
	 	 	16	 
	3.7. Investment Property
	 	 	16	 
	3.8. [Reserved]
	 	 	18	 
	3.9. [Reserved]
	 	 	18	 
	3.10. Intellectual Property
	 	 	18	 
	3.11. [Reserved]
	 	 	21	 
	3.12. [Reserved]
	 	 	21	 
	3.13. Commercial Tort Claims
	 	 	21	 
	 
	 	 	 	 
	SECTION 4. COVENANTS
	 	 	21	 
	 
	 	 	 	 
	4.1. [Reserved]
	 	 	21	 
	4.2. Delivery and Control of Instruments, Chattel Paper,
Negotiable Documents and Investment Property
	 	 	21	 
	4.3. Maintenance of Insurance
	 	 	22	 
	4.4. [Reserved]
	 	 	23	 
	4.5. Maintenance of Perfected Security Interest; Further Documentation
	 	 	23	 
	4.6. Changes in Locations, Name, Jurisdiction of Incorporation, etc.
	 	 	23	 
	4.7. Notices
	 	 	24	 
	4.8. Investment Property
	 	 	24	 
	4.9. Accounts
	 	 	26	 
	4.10. [Reserved]
	 	 	26	 
	4.11. Intellectual Property
	 	 	26	 
	4.12. Satellites
	 	 	28	 
	4.13. Further Covenants
	 	 	29	 
	4.14. Additional Secured Debt
	 	 	30	 






 


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	 	 	Page	 
	 
	 	 	 	 
	SECTION 5. REMEDIAL PROVISIONS
	 	 	30	 
	 
	 	 	 	 
	5.1. Certain Matters Relating to Accounts
	 	 	30	 
	5.2. Communications with Obligors; Grantors Remain Liable
	 	 	31	 
	5.3. Pledged Securities
	 	 	31	 
	5.4. Proceeds to be Turned Over To Collateral Agent
	 	 	32	 
	5.5. Application of Proceeds
	 	 	33	 
	5.6. Code and Other Remedies
	 	 	33	 
	5.7. Registration Rights
	 	 	34	 
	5.8. Waiver; Deficiency
	 	 	35	 
	5.9. FCC Licenses
	 	 	36	 
	5.10. Voting
	 	 	36	 
	5.11. Exercise of Remedies Generally
	 	 	37	 
	 
	 	 	 	 
	SECTION 6. THE COLLATERAL AGENT
	 	 	37	 
	 
	 	 	 	 
	6.1. Collateral Agent’s Appointment as Attorney-in-Fact, etc.
	 	 	37	 
	6.2. Duty of Collateral Agent
	 	 	39	 
	6.3. No Duty of the Collateral Agent
	 	 	39	 
	6.4. Execution of Financing Statements
	 	 	40	 
	6.5. Authority of Collateral Agent
	 	 	40	 
	6.6. Appointment of Co-Collateral Agents
	 	 	40	 
	6.7. Applicable Authorized Representative
	 	 	41	 
	 
	 	 	 	 
	SECTION 7. MISCELLANEOUS
	 	 	41	 
	 
	 	 	 	 
	7.1. Amendments in Writing
	 	 	41	 
	7.2. Notices
	 	 	41	 
	7.3. No Waiver by Course of Conduct; Cumulative Remedies
	 	 	41	 
	7.4. Enforcement Expenses; Indemnification
	 	 	41	 
	7.5. Successors and Assigns
	 	 	42	 
	7.6. Set-Off
	 	 	42	 
	7.7. Counterparts
	 	 	43	 
	7.8. Severability
	 	 	43	 
	7.9. Section Headings
	 	 	43	 
	7.10. Integration
	 	 	43	 
	7.11. GOVERNING LAW
	 	 	43	 
	7.12. Submission to Jurisdiction; Waivers
	 	 	43	 
	7.13. Acknowledgments
	 	 	44	 
	7.14. Additional Grantors
	 	 	44	 
	7.15. Additional Secured Obligations
	 	 	44	 
	7.16. Certain Actions Upon a Company-XM Merger
	 	 	44	 
	7.17. Releases
	 	 	45	 
	7.18. Effects of Certain Errors or Omissions
	 	 	46	 
	7.19. MSSFI Collateral Agreement
	 	 	46	 
	7.20. WAIVER OF JURY TRIAL
	 	 	46	 






 


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SCHEDULES:

Schedule 1 — Notice Addresses of Grantors

Schedule 2 — Description of Pledged Investment Property

Schedule 3 — [Reserved]

Schedule 4 — Name, Jurisdiction or Organization and Chief Executive Office

Schedule 5 — Commercial Tort Claims

Schedule 6 — Intellectual Property

Schedule 7 — [Reserved]

Schedule 8 — [Reserved]

Schedule 9 — Pledged LLC Interests and Pledged Partnership Interests




EXHIBITS:

Exhibit A — Form of Acknowledgment and Consent

Exhibit B — Form of Grant of Security Interest in Patents and Trademarks

Exhibit C — Form of Grant of Security Interest in Copyrights

Exhibit D — Assumption and Joinder Agreement

Exhibit E — Form of Refinancing Intercreditor Agreement

Exhibit F — Form of Supplemental Collateral Agreement



 


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COLLATERAL AGREEMENT, dated as of August 24, 2009, made by each of the signatories hereto
other than the Collateral Agent, the Trustee and any Authorized Representative for any Additional
Secured Debtholder referred to below (together with any other entity that may become a party hereto
as provided herein, the “Grantors”), to and in favor of U.S. Bank National Association, as
Collateral Agent for the ratable benefit of the Secured Parties, and accepted and agreed to by U.S.
Bank National Association, as the Trustee (as defined below) and each other Authorized
Representative for any Additional Secured Debtholder from time to time party hereto.



W I T N E S S E T H:




WHEREAS, pursuant to the 9.75% Senior Secured Notes Indenture dated as of the date hereof (as
amended, amended and restated, supplemented, or otherwise modified from time to time, the
“Indenture”) by and among the Company, the Guarantors, and U.S. Bank National Association,
as Trustee, the Company issued 9.75% senior secured notes due 2015 (the “Notes”) to the
Noteholders in accordance with the terms thereof;



WHEREAS, the Collateral Agent has agreed to act as collateral agent for the Secured Parties
for the purposes of holding any and all security for the payment and performance of the obligations
of the Company under the Indenture, the Notes and the other Indenture Documents, as well as any
Additional Secured Obligations;



WHEREAS, pursuant to the Indenture Documents, each Guarantor agreed to unconditionally
guarantee the payment of the Company Note Obligations;



WHEREAS, each Grantor is a member of an affiliated group of companies that includes each other
Grantor;



WHEREAS, the Grantors are engaged in related businesses, and each Grantor will derive
substantial direct and indirect benefit from the issuance of the Notes under the Indenture and the
other Indenture Documents and each Grantor is, therefore, willing to enter into this Agreement; and



WHEREAS, as a condition to entry into the Indenture, each Grantor is required to execute and
deliver this Agreement to the Collateral Agent for its benefit and for the ratable benefit of the
Secured Parties as security for the payment and performance of such Grantor’s obligations under the
Indenture, the Notes, the other Indenture Documents and the Additional Secured Debt Documents to
which it is a party.



NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, each of Grantors hereby
agrees with the Collateral Agent, for the ratable benefit of the Secured Parties, as follows:


 


 









 





SECTION 1. DEFINED TERMS




1.1. Definitions. (a) Unless otherwise defined herein, terms defined in the Indenture
and used herein shall have the meanings given to them in the Indenture.



(b) The following terms which are defined in the New York UCC are used herein as so defined:
Accounts, Account Debtor, Authenticate, Certificated Security, Chattel Paper, Commercial Tort
Claim, Commodity Account, Commodity Contract, Commodity Intermediary, Documents, Electronic Chattel
Paper, Entitlement Order, Equipment, Farm Products, Financial Asset, Fixtures, Goods, Instruments,
Inventory, Letter of Credit Rights, Money, Payment Intangibles, Securities Account, Securities
Intermediary, Security, Security Entitlement, Supporting Obligations, Tangible Chattel Paper and
Uncertificated Security.




(c) The following terms shall have the following meanings:




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




“Additional Company Secured Debt Obligations”: the unpaid principal of and
interest on (including interest accruing after the maturity of the Additional Secured Debt
and disbursements in respect of letters of credit issued thereunder, if any, and interest
accruing after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Company, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding) the
Additional Secured Debt and all other Obligations and liabilities of the Company to each
Authorized Representative of any Additional Secured Debtholder, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, each Additional Secured Debt Document, any
letters of credit issued thereunder, or any other document made, delivered or given in
connection therewith, whether on account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses (including all fees, charges and disbursements of counsel
to each Authorized Representative or to any Additional Secured Debtholder that are required
to be paid by the Company) or otherwise.




“Additional Guarantor Secured Debt Obligations”: with respect to any
Guarantor, all Obligations and liabilities of such Guarantor which may arise under or in
connection with any Guarantee in respect of the Additional Company Secured Debt Obligations
or any Additional Secured Debt Document to which such Guarantor is a party, in each case
whether on account of guarantee obligations, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees and disbursements of
counsel to any Additional Secured Debtholder or any Authorized Representative that are
required to be paid by such Guarantor pursuant to the terms of any Additional Secured Debt
Document).



 


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“Additional Secured Debt”: (a) the Refinanced Term Debt, if any, and (b) the
unpaid amount of Indebtedness of the Company or any Guarantor under any Additional Secured
Debt Document, in either case, which Indebtedness (i) is permitted to be
incurred by the Company or the Guarantors under the Indenture and each Additional
Secured Debt Document, (ii) is permitted under the Indenture and each Additional Secured
Debt Document to be secured equally and ratably with the Notes Obligations and any other
Additional Secured Debt, and (iii) the Company and each Guarantor takes the steps necessary
under the Refinancing Intercreditor Agreement in order for such Indebtedness to be secured
equally and ratably.




“Additional Secured Debt Documents”: the agreements evidencing any Additional
Secured Obligations and the Collateral Documents, including, without limitation, the
Refinanced Term Credit Agreement, if any.




“Additional Secured Debtholder”: at any time, a Person which then is a holder
of any Additional Secured Debt; provided that the Company and the Authorized
Representative of such Additional Secured Debtholder shall have executed and delivered a
Joinder Agreement in accordance with Section 5.13 of the Refinancing Intercreditor
Agreement.




“Additional Secured Obligations”: the Additional Company Secured Debt
Obligations and the Additional Guarantor Secured Debt Obligations.




“Agreement”: this Collateral Agreement, as the same may be amended, restated
supplemented or otherwise modified from time to time.




“Applicable Authorized Representative”: as defined in the Refinancing
Intercreditor Agreement.




“Authorized Representative”: (i) the Trustee, (ii) the Refinanced Term Agent,
if any, and (iii) any other trustee or agent designated as an “Authorized Representative”
for any Additional Secured Debtholder in a Joinder Agreement delivered to the Collateral
Agent in accordance with Section 5.13 of the Refinancing Intercreditor Agreement for so long
as the Additional Secured Obligations for which such party is serving in such capacity
constitutes Secured Obligations hereunder; provided that so long as there are no
Additional Secured Obligations, the Trustee will be deemed to be the only Authorized
Representative for the Secured Parties.




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




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




“Collateral”: as defined in Section 2(a).


 


3









 






“Collateral Account”: any collateral account established by the Collateral
Agent as provided in Section 5.1 or 5.4.




“Collateral Agent”: U.S. Bank National Association, acting as collateral agent
on behalf of the Noteholders and other Secured Parties or any successor collateral agent
appointed hereunder, and its successors and permitted assigns.




“Collateral Documents”: this Agreement, the Refinancing Intercreditor
Agreement, if any, and each of the security agreements and other instruments and documents
executed and delivered pursuant to the foregoing or pursuant to Article 11 of the Indenture
or pursuant to any Additional Secured Debt Document.




“Company”: Sirius XM Radio Inc., a Delaware corporation.




“Company Note Obligations”: means the unpaid principal of and interest on
(including interest accruing after the maturity of the Notes) and interest accruing after
the filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Company, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) all Obligations and
liabilities of the Company to the Trustee or to any Noteholder, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, the Indenture, any other Indenture Document,
or any other document made, delivered or given in connection therewith, whether on account
of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses
(including all fees, charges and disbursements of counsel to the Trustee, the Collateral
Agent or to any Noteholder that are required to be paid by the Company) or otherwise.




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




“Copyright Licenses”: any written agreement, now or hereafter in effect,
naming any Grantor as licensor or licensee (including, without limitation, those listed in
Schedule 6 as the same may be amended, restated, supplemented, replaced or otherwise
modified from time to time), granting any right to any third party under any Copyright now
or hereafter owned by any Grantor or that such Grantor otherwise has the right to license,
or granting any right to any Grantor under any copyright now or hereafter owned by any third
party, and all rights of such Grantor under any such agreement.




“Copyrights”: (i) all domestic and foreign copyright rights, whether as
author, assignee, transferee or otherwise, and (ii) all registrations of and applications to
register



 


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the rights corresponding thereto throughout the world, including registrations,
supplemental registrations and pending applications for registration in the United States
Copyright Office, including, without limitation, each registration and application
identified in Schedule 6 as the same may be amended, restated, supplemented,
replaced or otherwise modified from time to time.




“Deposit Account”: (i) all “deposit accounts” as defined in Article 9 of the
UCC, and (ii) all other accounts maintained with any financial institution (other than
Securities Accounts or Commodity Accounts) together, in each case, with all funds held
therein and all certificates or instruments representing any of the foregoing.




“Disposition”: with respect to any property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer, exchange or other disposition thereof; and the
terms “Dispose” and “Disposed of” shall have correlative meanings.




“Excluded Assets”: (i) any Accounts Receivable, (ii) any cash or Temporary
Cash Investments, (iii) subject to the proviso set forth in the definition thereof, any
Excluded Satellite Collateral, (iv) any Excluded Inventory, (v) the Excluded Equity
Interests, (vi) 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 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 (vii) 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 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; provided, further, that in the
case of any Excluded Assets referred to above, such security interest shall attach
immediately and such property shall become Collateral at any time when such property or
assets constitute collateral or otherwise secure Indebtedness with respect to the MSSFI
Credit Agreement or any Refinanced Term Debt.




“Excluded Equity Interests”: the issued and outstanding voting Equity Interests
of any Foreign Subsidiary in excess of 65% of the aggregate issued and outstanding voting
Equity Interests of such Foreign Subsidiary.




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


 


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“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 Company or any Restricted
Subsidiary owed to a Satellite Vendor and incurred in accordance with the Indenture to
finance the construction or purchase by the Company or a Restricted Subsidiary of a
“replacement satellite” (as defined in the definition of Replacement Satellite Vendor
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 Collateral pursuant to clause (vii) of the
definition of “Excluded Assets”, 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 Note 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 Vendor 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 the Collateral, Satellite, General Intangibles or
the Proceeds thereof that does not result in any of the consequences specified in this
definition.




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




“General Intangibles”: all “general intangibles” as such term is defined in
Section 9-102(a)(42) of the New York UCC and, in any event, including, without limitation,
with respect to any Grantor, all rights of such Grantor to receive any tax refunds,
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 and any letter of
credit, guarantee, claim, security interest or other security to which such Grantor is a
party or under which such Grantor has any right, title or interest or to which such Grantor
or any property of such Grantor is subject.




“Grantors”: as defined in the Preamble to this Agreement.




“Guarantors”: the collective reference to each Grantor other than the Company.




“Guarantor Note Obligations”: with respect to any Guarantor, all Obligations
and liabilities of such Guarantor which may arise under or in connection with the Indenture
(including, without limitation, Article 10 thereof) or any other Indenture Document to which
such Guarantor is a party, in each case whether on account of guarantee obligations,
reimbursement obligations, fees, indemnities, costs, expenses or otherwise



 


6









 






(including,
without limitation, all fees and disbursements of counsel to any Secured Party
that are required to be paid by such Guarantor pursuant to the terms of any Indenture
Document).




“Indenture Documents”: the Indenture and the other documentation from time to
time executed and delivered in connection therewith, including any supplemental indentures.




“Insurance”: shall mean: (i) all insurance policies covering any or all of
the Collateral (regardless of whether the Collateral Agent is the loss payee thereof) and
(ii) any key man life insurance policies.




“Intellectual Property”: all intellectual property of every kind and nature
now owned or hereafter acquired by any Grantor, including, without limitation, all (i)
Copyrights, (ii) Copyright Licenses, (iii) Patents, (iv) Patent Licenses, (v) Trademarks,
(vi) Trademark Licenses, (vii) Trade Secrets, (viii) Trade Secret Licenses, (ix) inventions,
(x) designs, (xi) confidential or proprietary technical and business information, (xii)
know-how, show-how or other data or information, (xiii) software and databases and all
embodiments or fixations thereof and related documentation, (xiv) registrations and
franchises, and (xv) all additions, improvements and accessions to, and books and records
describing or used in connection with, any of the foregoing.




“Intercompany Note”: any promissory note evidencing loans made by any Grantor
to Company or any of its Subsidiaries.




“Investment Property”: the collective reference to (i) all “investment
property” as such term is defined in Section 9-102(a)(49) of the New York UCC including,
without limitation, all Certificated Securities and Uncertificated Securities, all Security
Entitlements, all Securities Accounts, all Commodity Contracts and all Commodity Accounts
(other than any Voting Stock of a Foreign Subsidiary constituting Excluded Equity Interests
and excluded from the definition of “Pledged Equity Interests”), (ii) security entitlements,
in the case of any United States Treasury book-entry securities, as defined in 31 C.F.R.
section 357.2, or, in the case of any United States federal agency book-entry securities, as
defined in the corresponding United States federal regulations governing such book-entry
securities, and (iii) whether or not constituting “investment property” as so defined, all
Pledged Notes, all Pledged Equity Interests, all Pledged Security Entitlements and all
Pledged Commodity Contracts.




“Issuers”: the collective reference to each issuer of a Pledged Security.




“Joinder Agreement”: as defined in the Refinancing Intercreditor Agreement.




“Lien” means, any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any conditional sale or other title retention agreement or
lease in the nature thereof).




“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations or financial condition of Company and its Subsidiaries taken as a



 


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whole,
(b) the ability of the Company and the Guarantors to perform any of their
respective obligations under any Secured Debt Document or (c) the validity or
enforceability of any Secured Debt Document or the rights or remedies of the Collateral
Agent or any Secured Party thereunder.




“Material Contract”: any agreement, contract or license (other than any FCC
License) or other arrangement (other than an agreement, contract or arrangement representing
indebtedness for borrowed money) to which any Grantor is a party that is material to the
Grantors and their Subsidiaries, taken as a whole, and for which breach, nonperformance,
cancellation or failure to renew could reasonably be expected to materially adversely affect
the business or financial condition of the Company or the Guarantors.




“MSSFI”: Morgan Stanley Senior Funding, Inc., as administrative agent and
collateral agent under the MSSFI Credit Agreement.




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




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




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




“Noteholder”: a Person in whose name a Note is registered in the register
maintained by the Registrar pursuant to the Indenture.




“Note Obligations”: the Company Note Obligations and the Guarantor Note
Obligations.




“Notes”: the notes issued and outstanding under the Indenture (or under any
supplemental indenture) at any time and from time to time, including any additional notes.




“Obligations”: any principal, interest (including any interest accruing
subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding
at the rate provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable state, federal or foreign law), penalties,
fees, indemnifications, reimbursements (including reimbursement obligations with respect to
letters of credit and banker’s acceptances), damages and other liabilities, and guarantees
of payment of such principal, interest, penalties, fees, indemnifications, reimbursements,
damages and other liabilities, payable under the documentation governing any Indebtedness.




“Patent License”: any written agreement, now or hereafter in effect, providing
for the grant by or to any Grantor of any right to make, use or sell any invention covered
by a



 


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Patent, including, without limitation, any of the foregoing referred to in Schedule
6 as the
same may be amended, restated, supplemented, replaced or otherwise modified from time
to time.




“Patents”: (i) all United States, foreign, and multinational patents and
patent applications, and all registrations and recordings thereof, including, without
limitation, each issued patent and patent application identified in Schedule 6 as
the same may be amended, restated, supplemented, replaced or otherwise modified from time to
time, all certificates of invention or similar property rights, (ii) all reissues,
divisions, continuations, continuations-in-part, renewals, and extensions of any of the
foregoing, (iii) all inventions described and claimed therein, and (iv) the right to make,
use and/or sell the inventions disclosed or claimed therein.




“Permitted Liens”: with respect to each Grantor, any Lien permitted on such
Grantor’s Collateral pursuant to the Indenture Documents and any Additional Secured Debt
Documents applicable to such Grantor.




“Pledged Alternative Equity Interests”: all interests of any Grantor in
participation or other interests in any equity or profits of any Person and the
certificates, if any, representing such interests and all payments of principal or interest,
dividends, cash, instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all of such
interests and any other warrant, right or option to purchase or acquire any of the
foregoing; provided, however, that Pledged Alternative Equity Interests
shall not include any Pledged Stock, Pledged Partnership Interests, Pledged LLC Interests
and Pledged Trust Interests.




“Pledged Commodity Contracts”: all commodity contracts listed on
Schedule 2 (as the same may be amended, restated, supplemented, replaced or
otherwise modified from time to time) and all other commodity contracts to which any Grantor
is party from time to time.




“Pledged Debt Securities”: all debt securities now owned or hereafter acquired
by any Grantor, including, without limitation, the debt securities listed on Schedule
2, (as the same may be amended, restated, supplemented, replaced or otherwise modified
from time to time) together with the promissory notes and any other instruments evidencing
such debt securities.




“Pledged Equity Interests”: all Pledged Stock, Pledged LLC Interests, Pledged
Partnership Interests, Pledged Trust Interests and Pledged Alternative Equity Interests.




“Pledged LLC Interests”: all interests of any Grantor now owned or hereafter
acquired in any limited liability company including, without limitation, all limited
liability company interests listed on Schedule 2 hereto under the heading “Pledged
LLC Interests” (as such schedule may be amended from time to time) and the certificates, if
any, representing such limited liability company interests and any interest of such Grantor
on the books and records of such limited liability company and all payments of principal or
interest, dividends, cash, instruments and other property or proceeds from



 


9









 






time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of such limited liability company interests and any other warrant, right or
option to purchase or acquire any of the foregoing.




“Pledged Partnership Interests”: all interests of any Grantor now owned or
hereafter acquired in any general partnership, limited partnership, limited liability
partnership or other partnership including, without limitation, all partnership interests
listed on Schedule 2 hereto under the heading “Pledged Partnership Interests” (as
such schedule may be amended, restated, supplemented, replaced or otherwise modified from
time to time) and the certificates, if any, representing such partnership interests and any
interest of such Grantor on the books and records of such partnership and all payments of
principal or interest, dividends, cash, instruments and other property or proceeds from time
to time received, receivable or otherwise distributed in respect of or in exchange for any
or all of such partnership interests and any other warrant, right or option to purchase or
acquire any of the foregoing.




“Pledged Notes”: all promissory notes now owned or hereafter acquired by any
Grantor including, without limitation, those listed on Schedule 2 (as the same may
be amended, restated, supplemented, replaced or otherwise modified from time to time) and
all Intercompany Notes at any time issued to any Grantor.




“Pledged Securities”: the collective reference to the Pledged Debt Securities,
the Pledged Notes and the Pledged Equity Interests.




“Pledged Security Entitlements”: all security entitlements with respect to the
financial assets listed on Schedule 2 (as the same may be amended, restated,
supplemented, replaced or otherwise modified from time to time) and all other security
entitlements of any Grantor.




“Pledged Stock”: all shares of capital stock now owned or hereafter acquired
by such Grantor, including, without limitation, all shares of capital stock described on
Schedule 2 hereto under the heading “Pledged Stock” (as such schedule may be
amended, restated, supplemented, replaced or otherwise modified from time to time), and the
certificates, if any, representing such shares and any interest of such Grantor in the
entries on the books of the issuer of such shares and all payments of principal or interest,
dividends, cash, instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all of such
 shares and any other warrant, right or option to purchase or acquire any of the foregoing;
provided, however, in the event that a pledge of the Equity Interests in any
Foreign Subsidiary shall result in an adverse tax consequence to the Company, no Excluded
Equity Interests shall be required to be pledged hereunder.




“Pledged Trust Interests”: all interests of any Grantor now owned or hereafter
acquired in a Delaware business trust or other trust including, without limitation, all
trust interests listed on Schedule 2 hereto under the heading “Pledged Trust
Interests” (as such schedule may be amended, restated, supplemented, replaced or otherwise
modified from time to time) and the certificates, if any, representing such trust interests
and any interest



 


10









 






of such Grantor on the books and records of such trust or on the books and
records of any
Securities Intermediary pertaining to such interest and all payments of principal or
interest, dividends, cash, instruments and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange for any or all of
such trust interests and any other warrant, right or option to purchase or acquire any of
the foregoing.




“Proceeds”: all “proceeds” as such term is defined in Section 9-102(a)(64) of
the New York UCC from time to time and, in any event, shall include, without limitation, all
dividends or other income from the Pledged Securities, collections thereon or distributions
or payments with respect thereto.




“Refinanced Term Agent”: the administrative agent or collateral agent, as the
case may be, for holders of Refinanced Term Debt under the Refinanced Term Credit Agreement
and related security documents.




“Refinanced Term Credit Agreement”: any credit agreement or similar senior
secured bank debt agreement evidencing the amendment, waiver, modification, refinancing or
replacement of Indebtedness outstanding pursuant to the MSSFI Credit Agreement.




“Refinanced Term Debt”: Indebtedness outstanding under any Refinanced Term
Credit Agreement, to the extent permitted to be incurred pursuant to the Indenture and any
Additional Secured Debt Documents.




“Refinancing Intercreditor Agreement”: an intercreditor agreement in
substantially the form of Exhibit E hereto to be entered into by and among Company, the
Guarantors, the Trustee, each Authorized Representative (as defined therein), and the
Collateral Agent, if any.




“Required Secured Parties”: at any time, the holders of more than 50% of the
aggregate outstanding amount of the Secured Obligations then outstanding (together with, in
the case of the Additional Secured Obligations, other than in connection with the exercise
of remedies, if applicable, the aggregate unfunded commitments to extend credit which, when
funded, would constitute Secured Obligations), voting as a single class. For this purpose
only, Secured Obligations (or, if applicable, any such unfunded commitments in respect
thereof) registered in the name of, or beneficially owned by, the Company or any affiliate
of the Company shall be deemed not to be outstanding.




“Requirement of Law”: as to any Person, the certificate of incorporation and
by-laws or other organizational or governing documents of such Person, and any law, treaty,
rule or regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject.




“Satellite” means any satellite owned by, or leased to, the Company or any
Restricted Subsidiary and any satellite that is the subject of any satellite purchase
agreement between or among the Company or any Restricted Subsidiary, on the one



 


11









 






hand, and
any prime contractor and manufacturer of such satellite, on the other hand
(whether such satellite is in the process of manufacture, has been delivered for launch
or is in orbit (whether or not in operational service)).




“Satellite Codes”: as defined in Section 4.12(a).




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




“Secured Debt Documents”: collectively, the Indenture Documents and the
Additional Secured Debt Documents.




“Secured Parties”: (a) the Collateral Agent, (b) the Trustee and the
Noteholders at any time and from time to time and (c) the Additional Secured Debtholders and
their Authorized Representatives; provided that the Company and the Authorized
Representative of such Additional Secured Debtholders comply with Section 5.13 of the
Refinancing Intercreditor Agreement and execute a Joinder Agreement in accordance with the
terms thereof.




“Secured Obligations”: collectively, (a) the Note Obligations and (b) the
Additional Secured Obligations.




“Securities Act”: the Securities Act of 1933, as amended.




“Supplemental Collateral Agreement”: an agreement substantially in the form of
Exhibit F.




“Trademark License”: any written agreement, now or hereafter in effect,
providing for the grant by or to any Grantor of any right in, to, or under any Trademark,
including, without limitation, any of the foregoing referred to in Schedule 6 as the
same may be amended, restated, supplemented, replaced or otherwise modified from time to
time.




“Trademarks”: (i) all trademarks, service marks, trade names, corporate names,
company names, business names, fictitious business names, trade dress, trade styles, logos,
designs and general intangibles of like nature, or other indicia of business or source
identification, and all registrations and applications to register any of the foregoing,
whether in the United States Patent and Trademark Office or in any similar office or agency
of the United States, any state thereof or any other country, or any political subdivision
of any of the foregoing and all extensions or renewals thereof, including, without
limitation, each registration and application identified in Schedule 6, as the same
may be amended, restated, supplemented, replaced or otherwise modified from time to time,
(ii) all goodwill of the business connected with the use of, and symbolized by, each of the
above, and (iii) all other assets, rights and interests that uniquely reflect or embody such
goodwill.




“Trade Secret License”: any written agreement, now or hereafter in effect,
providing for the grant by or to any Grantor of any right in, to, or under any Trade Secret.


 


12









 






“Trade Secrets”: all trade secrets and all confidential and proprietary
information, including know-how, manufacturing and production processes and techniques,
inventions, research and development information, technical data, financial, marketing and
business data, pricing and cost information, business and marketing plans, and customer and
supplier lists and information.




“Trustee”: U.S. Bank National Association, acting as trustee for the
Noteholders and any successor trustee appointed under the Indenture and its successors and
permitted assigns.




“XM Security Documents”: each security agreement, each collateral agreement,
each pledge agreement, the collateral agency agreement and each other document and
instrument filed, registered, recorded, delivered, executed or possessed to create, perfect
or enforce a lien on the collateral securing the 11.25% Senior Secured Notes due 2013 of XM
Satellite Radio Inc.



1.2. Other Definitional Provisions. (a) The words “hereof”, “herein”, “hereto” and
“hereunder” and words of similar import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement, and Section and Schedule
references are to this Agreement unless otherwise specified.



(a) The meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.



(b) Where the context requires, terms relating to the Collateral or any part thereof, when
used in relation to a Grantor, shall refer to such Grantor’s Collateral or the relevant part
thereof.



(c) The expression “paid in full” and any other similar terms or phrases when used herein with
respect to the Secured Obligations shall mean the unconditional, final and irrevocable payment in
full, in immediately available funds, of all of the Secured Obligations, except for those
contingent obligations and indemnification obligations which are not then due and payable.



(d) For the avoidance of doubt, all notices, requests, directions, demands or other forms of
communications delivered to the Collateral Agent pursuant to this Agreement shall be in writing.



(f) All other rules of construction set forth in Section 1.03 of the Indenture are
incorporated herein by reference.



SECTION 2. GRANT OF SECURITY INTEREST;

CONTINUING LIABILITY UNDER COLLATERAL




2.1. Grant of Security.



(a) Each Grantor hereby assigns and transfers to the Collateral Agent, and hereby grants to
the Collateral Agent, for the ratable benefit of the Secured Parties, a security interest in,



 


13









 






the
following property, in each case, wherever located and now owned or at any time hereafter acquired
by such Grantor or in which such Grantor now has or at any time in the future may acquire any
right, title or interest (collectively, the “Collateral”), as collateral security for the
prompt and complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Secured Obligations:




(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);




(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;




(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 5;




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




(xiv) to the extent not otherwise included, 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.



Notwithstanding anything to the contrary in this Agreement, (a) none of the Excluded Assets
shall constitute Collateral for so long as such property or assets constitute



 


14









 






Excluded Assets and
(b) to the extent any property or assets of the type described in the definition of “Excluded
Assets” no longer constitute “Excluded Assets,” such property or assets shall be deemed to be
“Collateral” for purposes hereof.



(b) Notwithstanding anything herein to the contrary, (i) each Grantor shall remain liable for
all obligations under the Collateral and nothing contained herein is intended or shall be a
delegation of duties to the Collateral Agent or any Secured Party, (ii) each Grantor shall remain
liable under and each of the agreements included in the Collateral, including, without limitation,
any Accounts, any contracts relating to the Collateral and any agreements relating to Pledged
Partnership Interests or Pledged LLC Interests, to perform all of the obligations undertaken by it
thereunder all in accordance with and pursuant to the terms and provisions thereof and neither the
Collateral Agent nor any Secured Party shall have any obligation or liability under any of such
agreements by reason of or arising out of this Agreement or any other document related thereto nor
shall the Collateral Agent nor any Secured Party have any obligation to make any inquiry as to the
nature or sufficiency of any payment received by it or have any obligation to take any action to
collect or enforce any rights under any agreement included in the Collateral, including, without
limitation, any agreements relating to any Accounts, any contracts relating to the Collateral and
any agreements relating to Pledged Partnership Interests or Pledged LLC Interests and (iii) the
exercise by the Collateral Agent of any of its rights hereunder shall not release any Grantor from
any of its duties or obligations under the contracts and agreements included in the Collateral.




2.2. Refinancing Intercreditor Agreement.



Notwithstanding anything herein to the contrary, the rights and remedies of Collateral Agent
hereunder shall be subject to and governed by the terms of the Refinancing Intercreditor Agreement,
to the extent then in effect.



SECTION 3. REPRESENTATIONS AND WARRANTIES




Each of the Grantors represents and warrants and covenants and agrees, acknowledging and
confirming that the Collateral Agent and each other Secured Party is relying on such
representations, warranties, covenants and agreements, that:




3.1. [Reserved].



3.2. Title; No Other Liens. Such Grantor has the right, title and interest that it
purports to have in each item of the Collateral, free and clear of any and all Liens or claims,
including, without limitation, liens arising as a result of such Grantor becoming bound (as a
result of merger or otherwise) as Grantor under a security agreement entered into by another
Person, except for Permitted Liens. Except for Permitted Liens, no financing statement, mortgage
or other public notice with respect to all or any part of the Collateral is on file or of record in
any public office, except such as have been filed in favor of the Collateral Agent, for the ratable
benefit of the Secured Parties, pursuant to this Agreement or as are otherwise permitted by the
Indenture Documents and each Additional Secured Debt Documents.



3.3. Perfected First Priority Liens. (a) Except as otherwise contemplated by the
terms of the Indenture and each Additional Secured Debt Document, and except with respect




 


15











 




to Letter of Credit Rights, the Liens created under the
Collateral Documents and the security interests granted pursuant to this Agreement (i)
constitute valid fully perfected security interests in all of the Collateral in favor of
the Collateral Agent, for the ratable benefit of the Secured Parties, as collateral security for
such Grantor’s Secured Obligations, enforceable in accordance with the terms hereof and (ii) are
prior to all other Liens on the Collateral except for Liens otherwise expressly permitted by the
terms of the Indenture and each Additional Secured Debt Document to have priority over the Liens
created under the Collateral Documents. Without limiting the foregoing, but subject to Section
7.19 hereof and subject to the terms of the Refinancing Intercreditor Agreement, each Grantor has
taken all actions necessary, including without limitation those specified in Section 4.2 to (A)
establish the Collateral Agent’s “control” (within the meanings of Sections 8-106 and 9-106 of the
UCC) over any portion of the Investment Property constituting Certificated Securities or
Uncertificated Securities except to the extent such Investment Property constitutes cash or
Temporary Cash Investments only, (B) establish the Collateral Agent’s control (within the meaning
of Section 9-105 of the UCC) over all Electronic Chattel Paper in excess of $5,000,000
individually, or $10,000,000 in the aggregate, and (C) establish the Collateral Agent’s “control”
(within the meaning of Section 16 of the Uniform Electronic Transaction Act as in effect in the
applicable jurisdiction (“UETA”)) over all “transferable records” (as defined in UETA) in excess of
$5,000,000 individually, or $10,000,000 in the aggregate.



3.4. Name; Jurisdiction of Organization, etc. On the date hereof, such Grantor’s exact legal name (as indicated on the public record of such
Grantor’s jurisdiction of formation or organization), jurisdiction of organization, organizational
identification number, if any, and the location of such Grantor’s chief executive office or sole
place of business are specified on Schedule 4. Each Grantor is organized solely under the
law of the jurisdiction so specified and has not filed any certificates of domestication, transfer
or continuance in any other jurisdiction. Except as otherwise indicated on Schedule 4 as
the same may be amended, restated, supplemented, replaced or otherwise modified from time to time,
the jurisdiction of each such Grantor’s organization of formation is required to maintain a public
record showing the Grantor to have been organized or formed. Except as specified on Schedule
4 as the same may be amended, restated, supplemented, replaced or otherwise modified from time
to time, it has not changed its name, jurisdiction of organization, chief executive office or sole
place of business or its corporate structure in any way (e.g. by merger, consolidation, change in
corporate form or otherwise) within the past five years and has not within the last five years
become bound (whether as a result of merger or otherwise) as Grantor under a security agreement
entered into by another Person, which has not heretofore been terminated.



3.5. [Reserved].



3.6. [Reserved].



3.7. Investment Property.
(a) Schedule 2 hereto (as the same may be amended, restated, supplemented, replaced or
otherwise modified from time to time) sets forth under the headings “Pledged Stock,” “Pledged LLC
Interests,” “Pledged Partnership Interests” and “Pledged Trust Interests,” respectively, all of the
Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests and Pledged Trust Interests, in
each case, of the Subsidiaries owned by any Grantor and such Pledged Equity Interests constitute
the percentage of issued and


 


16









 





outstanding shares of stock, percentage of membership interests,
percentage of partnership interests or percentage of beneficial interest of the respective issuers
thereof indicated on such Schedule. Schedule 2 hereto (as the same may be amended,
restated, supplemented, replaced or otherwise modified from time to time) sets forth under the
heading “Pledged Debt Securities” or “Pledged Notes” all of the Pledged Debt Securities and Pledged
Notes, in each case, of the Subsidiaries owned by any Grantor and all of such Pledged Debt
Securities and Pledged Notes have been duly authorized, authenticated or issued, and delivered and
are the legal, valid and binding obligations of the Issuers thereof enforceable in accordance with
their terms and are not in default and constitute all of the issued and outstanding inter-company
indebtedness evidenced by an instrument or certificated security of the respective issuers thereof
owing to such Grantor. Schedule 2 hereto (as such schedule may be amended from time to
time) sets forth under the headings “Securities Accounts”, “Commodities Accounts”, and, to the
extent constituting Collateral in accordance with the terms hereof or any Supplemental Collateral
Agreement , “Deposit Accounts”, respectively, all of the Securities Accounts, Commodities Accounts
and, to the extent constituting Collateral in accordance with the terms hereof or any Supplemental
Collateral Agreement , Deposit Accounts, in each case which contain assets of more than $1,000,000,
in which each Grantor has an interest. Each Grantor is the sole entitlement holder or customer of
each such account, and such Grantor has not consented to, and is not otherwise aware of, any Person
(other than the Collateral Agent pursuant hereto, or any party acting for the benefit of the
Collateral Agent) having “control” (within the meanings of Sections 8-106, 9-106 and 9-104 of the
New York UCC) over, or any other interest in, any such Securities Account, Commodity Account or, to
the extent constituting Collateral in accordance with the terms hereof or any Supplemental
Collateral Agreement with respect thereto, Deposit Account, or any securities, commodities or other
property credited thereto.



(a) The shares of Pledged Equity Interests pledged by such Grantor hereunder constitute all of
the issued and outstanding shares of all classes of the Equity Interests of each Issuer owned by
such Grantor or, in the case of Voting Stock of any Foreign Subsidiary, if less (as a result of any
Voting Stock of a Foreign Subsidiary constituting Excluded Equity Interests and being excluded from
the definition of “Pledged Equity Interests”), 65% of the outstanding Voting Stock of any Foreign
Subsidiary of each relevant Issuer.



(b) All the shares of the Pledged Equity Interests of such Grantor’s Subsidiaries have been
duly and validly issued and are fully paid and nonassessable.



(c) Part 1 of Schedule 9 (as the same may be amended, restated, supplemented, replaced
or otherwise modified from time to time) lists all uncertificated Pledged LLC Interests
and Pledged Partnership Interests of any Subsidiary of any Grantor the terms of which
expressly provide that they are governed by Article 8 of the Uniform Commercial Code of any
jurisdiction and Part 2 of Schedule 9 (as the same may be amended, restated, supplemented,
replaced or otherwise modified) from time to time lists all uncertificated Pledged LLC Interests
and Pledged Partnership Interests of any Subsidiary of any Grantor the terms of which do not
expressly provide that they are governed by Article 8 of the Uniform Commercial Code of any
jurisdiction.



(d) Part 3 of Schedule 9 (as the same may be amended, restated, supplemented, replaced
or otherwise modified from time to time) lists all certificated Pledged LLC Interests and Pledged
Partnership Interests of any Subsidiary of any Grantor the terms of which expressly


 


17









 





provide that
they are governed by Article 8 of the Uniform Commercial Code of any jurisdiction and Part 4 of
Schedule 9 (as the same may be amended, restated, supplemented, replaced or otherwise
modified from time to time ) lists all certificated Pledged LLC Interests and Pledged Partnership
Interests of any Subsidiary of any Grantor the terms of which do not expressly
provide that they are governed by Article 8 of the Uniform Commercial Code of any jurisdiction.



(e) Such Grantor is the record and beneficial owner of the Investment Property pledged by it
hereunder, free of any and all Liens or options in favor of, or claims of, any other Person, except
Permitted Liens and there are no outstanding warrants, options or other rights to purchase, or
shareholder, voting trust or similar agreements outstanding with respect to, or property that is
convertible into, or that requires the issuance or sale of, any Pledged Equity Interests in any
majority-owed Subsidiary of such Grantor.



(f) Each Issuer that is not a Grantor and is a Subsidiary of a Grantor hereunder has executed
and delivered to the Collateral Agent an Acknowledgment and Consent, in substantially the form of
Exhibit A, to the pledge of its Pledged Securities pursuant to this Agreement.



3.8. [Reserved].



3.9. [Reserved].



3.10. Intellectual Property.
(a) Schedule 6 (as the same may be amended, restated, supplemented, replaced or otherwise
modified from time to time) sets forth a true and complete list of all Intellectual Property owned
by such Grantor in its own name on the date hereof that is registered or applied to be registered
in the United States Patent and Trademark Office, the United States Copyright Office or any similar
state, national or international offices or registries, and the registration number or application
number applicable to such Intellectual Property. Except as set forth in Schedule 6 (as the
same may be amended, restated, supplemented, replaced or otherwise modified from time to time),
such Grantor is the sole and exclusive owner of the entire and unencumbered right, title, and
interest in and to such Intellectual Property and is otherwise entitled to use, and grant others
the right to use, all such Intellectual Property, without limitation, subject only to the license
terms of the licensing or franchise agreements referred to in paragraph (c) below, except where the
failure to have such rights could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.



(a) On the date hereof, all Intellectual Property registered or applied to be registered in
the United States Patent and Trademark Office, the United States Copyright Office or any similar
state, national or international office or registry owned by such Grantor is subsisting and
unexpired and has not been abandoned, cancelled, or dedicated to the public, except where any such
abandonment, cancellation, or dedication to the public could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. Neither the operation of such
Grantor’s business as currently conducted or as contemplated to be conducted nor the use of the
Intellectual Property in connection therewith conflicts with, infringes upon, misappropriates,
dilutes, or otherwise violates the Intellectual Property rights of any other Person, except where
any such infringement, misappropriation, dilution, or violation


 


18









 





could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.



(b) Except as set forth in Schedule 6, on the date hereof (i) none of the Intellectual
Property registered or applied to be registered in the United States Patent and Trademark Office,
the United States Copyright Office or any similar state, national or international office or
registry owned by such Grantor is the subject of any licensing or franchise agreement pursuant to
which such Grantor is the licensor or franchisor, and (ii) there are no other agreements,
obligations, orders or judgments which affect the ownership, use, validity, enforceability, or
registration of any such Intellectual Property, except where, in each case, the existence of such
agreements, obligations, orders or judgments could not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.



(c) To such Grantor’s knowledge, there is currently no infringement or unauthorized use of any
item of such Intellectual Property of such Grantor by any third party that could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.



(d) No holding, decision or judgment has been rendered by any Governmental Authority which
would limit, cancel or question the validity, enforceability, ownership, or registration of, or
such Grantor’s rights in, any Intellectual Property registered or applied to be registered in the
United States Patent and Trademark Office, the United States Copyright Office or any similar state,
national or international office or registry owned by such Grantor, except where any such holding,
decision, or judgment could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. Such Grantor is not aware of any uses of any item of Intellectual
Property owned or used by such Grantor that could reasonably be expected to lead to such item
becoming invalid or unenforceable including, without limitation, unauthorized uses by third parties
and uses which were not supported by the goodwill of the business connected with Trademarks and
Trademark Licenses used in the conduct of such business, except where such use could not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect.



(e) No action or proceeding is pending or, to the knowledge of such Grantor, threatened, on
the date hereof (i) seeking to limit, cancel or question the validity, enforceability, ownership,
registration, or use of any Intellectual Property registered or applied to be registered in the
United States Patent and Trademark Office, the United States Copyright Office or any
similar state,
national or international office or registry owned by such Grantor, (ii) alleging that any services
provided by, processes used by, or products manufactured or sold by such Grantor infringes upon,
misappropriates, dilutes, or otherwise violates, as the case may be, any such Intellectual Property
right of any third party, (iii) alleging that any such Intellectual Property owned by such Grantor
is being licensed, sublicensed or used in violation of any Intellectual Property right of any third
party, or (iv) which, if adversely determined, would have a material adverse effect on the value of
any such Intellectual Property owned by such Grantor, except where such action or proceeding could
not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
To the knowledge of such Grantor, no Person is engaging in any activity that infringes upon the
Intellectual Property registered or applied to be registered in the United States Patent and
Trademark Office, the United States Copyright Office or any


 


19









 





similar state, national or
international office or registry owned or held by such Grantor, except where any such infringement
could not reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect. Except as set forth in Schedule 6 hereto (as the same may be amended, restated,
supplemented, replaced or otherwise modified from time to time), such Grantor has not granted any
license, release, covenant not to sue, non-assertion assurance, or other right to any person with
respect to any such Intellectual Property owned by such Grantor, except where such grant could not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The
consummation of the transactions contemplated by this Agreement will not result in the termination
or impairment of any Intellectual Property owned or, to such Grantor’s knowledge, held by such
Grantor, except where any such termination or impairment could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.



(f) With respect to each written Copyright License, written Trademark License and written
Patent License the loss of which could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect: (i) such license is valid and binding and in full force and
effect and represents the entire agreement between the respective licensor and licensee with
respect to the subject matter of such license; (ii) such license will not cease to be valid and
binding and in full force and effect on terms identical to those currently in effect as a result of
the rights and interests granted herein, nor will the grant of such rights and interests constitute
a breach or default under such license or otherwise give the licensor or licensee a right to
terminate such license; (iii) such Grantor has not received any notice of termination or
cancellation under such license; (iv) such Grantor has not received any notice of a breach or
default under such license, which breach or default has not been cured; (v) such Grantor has not
granted to any other third party any rights, adverse or otherwise, under such license; and (vi)
such Grantor is not in breach or default in any material respect, and no event has occurred that,
with notice and/or lapse of time, would constitute such a breach or default or permit termination,
modification or acceleration under such license.



(g) Except as set forth in Schedule 6 (as the same may be amended, restated,
supplemented, replaced or otherwise modified from time to time), such Grantor has performed all
acts, including, without limitation, recordation of its interests in Patents and Trademarks with
the United States Patent and Trademark Office and in corresponding national and international
patent offices, and recordation of its interests in Copyrights with the United States Copyright
Office and in corresponding national and international copyright offices, and has paid all required
fees and taxes to maintain each and every item of Intellectual Property owned by such Grantor in
full force and effect and to protect and maintain its interest therein, except, in each case, where
the failure to do so could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. Such Grantor has used proper statutory notice in connection with its use
of each material Patent, Trademark and Copyright included in the Intellectual Property owned or
held by such Grantor, except where the failure to do so could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.



(h) (i) None of the Trade Secrets of such Grantor has been used, divulged, disclosed or
appropriated to the detriment of such Grantor for the benefit of any other Person and (ii) no
employee, independent contractor or agent of such Grantor is in default or breach of any term of
any employment agreement, non-disclosure agreement, assignment of inventions


 


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agreement or similar
agreement or contract relating in any way to the protection, ownership, development, use or
transfer of such Grantor’s Intellectual Property, except where such use, divulgence, appropriation,
default or breach could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.



(i) No Grantor is subject to any settlement or consents, judgment, injunction, order, decree,
covenants not to sue, non-assertion assurances or releases that would impair the validity,
enforceability, ownership, use, registration of, or such Grantor’s rights in, any Intellectual
Property, except, in each case, where any such settlement or other agreement or order could not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.



3.11. [Reserved].



3.12. [Reserved].



3.13. Commercial Tort Claims.
As of the date hereof, no Grantor has any Commercial Tort Claims individually in excess of
$5,000,000.



SECTION 4. COVENANTS




Each Grantor covenants and agrees with the Secured Parties that, from and after the date of
this Agreement until the Secured Obligations shall have been paid in full (for avoidance of doubt,
for purposes of calculating the aggregate permitted amounts under Section 4.2 hereof if the Grantor
takes the action required by such sections with respect to any particular item of Collateral, e.g.
to deliver or establish the Collateral Agent’s control over any particular item of Collateral or
otherwise ensure the perfection and priority of the Collateral Agent’s
security interest to the extent specified therein, then such item of Collateral shall no
longer be counted towards the aggregate permitted amounts set forth therein):



4.1. [Reserved].




4.2. Delivery and Control of Instruments, Chattel Paper, Negotiable Documents and
Investment Property.
(a) If any of the Collateral the fair market value of which is in excess of $5,000,000
individually, or $10,000,000 in the aggregate, is or shall become evidenced or represented by any
Instrument, Certificated Security, Negotiable Document or Tangible Chattel Paper, such Instrument
(other than checks received in the ordinary course of business), Certificated Security, Negotiable
Document or Tangible Chattel Paper shall be promptly delivered to the Collateral Agent (subject to
Section 7.19 hereof and subject to the terms of the Refinancing Intercreditor Agreement), duly
endorsed in a manner reasonably satisfactory to the Collateral Agent, to be held as Collateral
pursuant to this Agreement.



(a) If any of the Collateral the fair market value of which is in excess of $5,000,000
individually, or $10,000,000 in the aggregate, is or shall become “Electronic Chattel Paper”,
subject to Section 7.19 hereof and subject to the terms of the Refinancing Intercreditor Agreement,
such Grantor shall ensure that (i) a single authoritative copy exists which is unique,
identifiable, unalterable (except as provided in clauses (iii), (iv) and (v) of this paragraph),
(ii) that such authoritative copy identifies the Collateral Agent as the assignee and is
communicated


 


21









 





to and maintained by the Collateral Agent or its designee, (iii) that copies or
revisions that add or change the assignee of the authoritative copy can only be made with the
written consent of the Collateral Agent, (iv) that each copy of the authoritative copy and any copy
of a copy is readily identifiable as a copy and not the authoritative copy and (v) any revision of
the authoritative copy is readily identifiable as an authorized or unauthorized revision.



(b) If any of the Collateral the fair market value of which is in excess of $5,000,000,
individually or $10,000,000, in the aggregate is or shall become evidenced or represented by an
Uncertificated Security, subject to Section 7.19 hereof and subject to the terms of the Refinancing
Intercreditor Agreement, such Grantor shall cause the Issuer thereof either (i) to register the
Collateral Agent as the registered owner of such Uncertificated Security, upon original issue or
registration of transfer or (ii) to agree in writing with such Grantor and the Collateral Agent
that such Issuer will comply with instructions with respect to such Uncertificated Security
originated by the Collateral Agent without further consent of such Grantor, such agreement to be in
a form reasonably acceptable to the Collateral Agent.



(c) [Reserved].



(d) If any of the Collateral is or shall become evidenced or represented by a Commodity
Contract with a value in excess of $5,000,000 individually, or $10,000,000 in the aggregate, if
requested by the Collateral Agent in writing or upon the direction of the Authorized Representative
or Authorized Representatives representing the Required Secured Parties, in each case, subject to
Section 7.19 hereof and subject to the terms of the Refinancing Intercreditor
Agreement, as applicable, each Grantor shall use commercially reasonable efforts to cause the
Commodity Intermediary with respect to such Commodity Contract to agree in writing with such
Grantor and the Collateral Agent that such Commodity Intermediary will apply any value distributed
on account of such Commodity Contract as directed by the Collateral Agent without further consent
of such Grantor, such agreement to be in a form reasonably acceptable to the Collateral Agent.



4.3. Maintenance of Insurance.
(a) Such Grantor will maintain, with financially sound and reputable insurance companies,
insurance on the Collateral in at least such amounts and against at least such risks as are usually
insured against in the same or similar locations by companies engaged in the same or a similar
business; and furnish to the Collateral Agent with copies for each Secured Party, upon written
request by the Collateral Agent or upon the direction of the Authorized Representative or
Authorized Representatives representing the Required Secured Parties, full information as to the
insurance carried; provided that, notwithstanding the foregoing, satellite insurance shall
not be required. All insurance shall provide that no cancellation, material reduction in amount or
material change in coverage thereof shall be effective until at least 15 days after receipt by the
Collateral Agent of written notice thereof.



(a) Such Grantor shall deliver to the Collateral Agent on behalf of the Secured Parties, (i)
on the date hereof, a certificate dated such date showing the amount and types of insurance
coverage as of such date, (ii) upon request of any Secured Party from time to time, full
information as to the insurance carried, (iii) promptly following receipt of notice from any
insurer, a copy of any notice of cancellation or material change in coverage from that existing on


 


22









 





the Closing Date, (iv) forthwith, notice of any cancellation or nonrenewal of coverage by such
Grantor, and (v) promptly after such information is available to such Grantor, full information as
to any claim for an amount in excess of $7,500,000 with respect to any property and casualty
insurance policy maintained by such Grantor. The Collateral Agent for the benefit of the Secured
Parties shall be named as additional insured on all such liability insurance policies of such
Grantor and the Collateral Agent shall be named as loss payee on all property and casualty
insurance policies of such Grantor; provided that such Grantor shall only be required to
use its best efforts to cause the Collateral Agent to be named as additional insured or loss payee,
as applicable, in accordance with this clause (b), on insurance policies obtained after the date
hereof and prior to the amendment or Refinancing of the MSSFI Credit Agreement to the extent the
insurance provider on such policy refuses to name more than one additional insured or loss payee,
as applicable, on such insurance policy.



4.4. [Reserved].



4.5. Maintenance of Perfected Security Interest; Further Documentation.
(a) Such Grantor shall maintain the security interest created by this Agreement and any
Supplemental Collateral Agreement as a perfected security interest having at least the priority
described in Section 3.3 and shall defend such security interest against the claims and demands of
all Persons whomsoever subject to Permitted Liens.



(a) Such Grantor will furnish to the Secured Parties from time to time statements and
schedules further identifying and describing the Collateral and such other reports in connection
with the assets and property of such Grantor as the Collateral Agent may reasonably request, all in
reasonable detail.



(b) At any time and from time to time, including upon the written request of the Collateral
Agent or, upon and during the effectiveness of the Refinancing Intercreditor Agreement, the
Applicable Authorized Representative, and at the sole expense of such Grantor, such Grantor will
promptly and duly authorize, execute and deliver, and have recorded, such further instruments and
documents and take such further actions for the purpose of obtaining or preserving the full
benefits of this Agreement and any Supplemental Collateral Agreement and of the rights and powers
herein or therein granted, including, without limitation, (i) the filing of any financing or
continuation statements under the Uniform Commercial Code (or other similar laws) in effect in any
jurisdiction with respect to the security interests created hereby, (ii) the filing of security
agreements or other documents with the United States Patent & Trademark Office, the United States
Copyright Office and the office of any similar registries, and (iii) and in the case of Investment
Property, and any other relevant Collateral, taking any actions necessary to enable the Collateral
Agent to obtain “control” (within the meaning of the applicable Uniform Commercial Code) with
respect thereto, subject to Section 7.19 hereof and subject to the terms of the Refinancing
Intercreditor Agreement.



4.6. Changes in Locations, Name, Jurisdiction of Incorporation, etc.
Such Grantor will not, except upon 15 days’ prior written notice to the Collateral Agent and
delivery to the Collateral Agent of duly authorized and, where required, executed copies of all
additional financing statements and other documents to maintain the validity, perfection and
priority of the security interests provided for herein:


 


23









 





(i) [Reserved];




(ii) without limiting the prohibitions on mergers involving the Grantors contained in
the Indenture or any Additional Secured Debt Document, change its legal name, jurisdiction
of organization or the location of its chief executive office or sole place of business from
that referred to in Section 3.4; or




(iii) change its legal name, identity or structure to such an extent that any financing
statement filed by the Collateral Agent in connection with this Agreement would become
misleading.



4.7. Notices.
Such Grantor will advise the Secured Parties promptly, in reasonable detail, of:



(a) any Lien with respect to an obligation in excess of $2,000,000 (other than any Permitted
Lien) on any of the Collateral;



(b) of the occurrence of any other event which could reasonably be expected to have a Material
Adverse Effect on the aggregate value of the Collateral or on the security interests created
hereby; and



(c) any Governmental Authority becoming party to any Material Contract, which notice shall be
delivered not more than 15 days from such occurrence thereof.



4.8. Investment Property.
(a) If such Grantor shall become entitled to receive or shall receive any stock or other ownership
certificate (including, without limitation, any certificate representing a stock dividend or a
distribution in connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in respect of the
Equity Interests (including any Pledged Equity Interest) of any Issuer that is a Subsidiary,
whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of
or other ownership interests in the Pledged Securities, or otherwise in respect thereof, subject to
Section 7.19 hereof and subject to the terms of the Refinancing Intercreditor Agreement, such
Grantor shall accept the same as the agent of the Secured Parties, hold the same in trust for the
Secured Parties and deliver the same forthwith to the Collateral Agent in the exact form received,
duly endorsed by such Grantor to the Collateral Agent, if required, together with an undated stock
power covering such certificate duly executed in blank by such Grantor and with, if the Collateral
Agent so requests, signature guaranteed, to be held by the Collateral Agent, subject to the terms
hereof, as additional collateral security for the Secured Obligations. Subject to Section 7.19
hereof and subject to the terms of the Refinancing Intercreditor Agreement, any sums paid upon or
in respect of the Pledged Securities upon the liquidation or dissolution of any Issuer shall be
paid over to the Collateral Agent to be held by it hereunder as additional collateral security for
the Secured Obligations, and in case any distribution of capital shall be made on or in respect of
the Pledged Securities or any property shall be distributed upon or with respect to the Pledged
Securities pursuant to the recapitalization or reclassification of the capital of any Issuer or
pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject
to a perfected security interest in favor of the Collateral Agent, be delivered to the Collateral
Agent to be held by it hereunder as additional


 


24









 





collateral security for the Secured Obligations. If
any sums of money or property so paid or distributed in respect of the Pledged Securities in excess
of $1,000,000 shall be received by such Grantor, subject to Section 7.19 hereof and subject to the
terms of the Refinancing Intercreditor Agreement, such Grantor shall, until such money or property
is paid or delivered to the Collateral Agent, hold such money or property in trust for the Secured
Parties, segregated from other funds of such Grantor, as additional collateral security for the
Secured Obligations.



(a) Without the prior written consent of the Collateral Agent, such Grantor will not (i)
Dispose of, or grant any option with respect to, any of the Investment Property or Proceeds thereof
or any interest therein (except, in each case, pursuant to a transaction permitted by the Indenture
Documents and each Additional Secured Debt Documents), (ii) create, incur or permit to exist any
Lien or option in favor of, or any claim of any Person with respect to, any of the Investment
Property or Proceeds thereof, or any interest therein, except for the security interests created by
this Agreement, the security interest in favor of MSSFI granted under the MSSFI Collateral
Agreement, non-consensual Liens arising by operation of law or any security
interest permitted in accordance with the terms of, and governed by, the Refinancing
Intercreditor Agreement, (iii) except as otherwise expressly permitted by the Indenture Documents
and each Additional Secured Debt Document, enter into any agreement or undertaking restricting the
right or ability of such Grantor or the Collateral Agent to sell, assign or transfer any of the
Investment Property or Proceeds thereof or any interest therein or (iv) with respect to any Issuer
that is a Subsidiary of a Grantor, without the prior written consent of the Collateral Agent, cause
or permit such Issuer of any Pledged Partnership Interests or Pledged LLC Interests which are not
securities (for purposes of the New York UCC or the UCC applicable in any relevant jurisdiction) on
the date hereof to elect or otherwise take any action to cause such Pledged Partnership Interests
or Pledged LLC Interests to be treated as securities for purposes of the New York UCC or the UCC
applicable in any relevant jurisdiction; provided, however, notwithstanding the
foregoing, if such Issuer of any Pledged Partnership Interests or Pledged LLC Interests takes any
such action in violation of the foregoing in this clause (iv), such Grantor shall promptly notify
the Collateral Agent in writing of any such election or action and, in such event, shall take all
steps necessary or advisable to establish the Collateral Agent’s “control” thereof, subject to
Section 7.19 hereof and subject to the terms of the Refinancing Intercreditor Agreement.



(b) In the case of each Grantor which is an Issuer, such Issuer agrees that (i) it will be
bound by the terms of this Agreement relating to the Pledged Securities issued by it and will
comply with such terms insofar as such terms are applicable to it, (ii) it will notify the
Collateral Agent promptly in writing of the occurrence of any of the events described in Section
4.8(a) with respect to the Pledged Securities issued by it and (iii) the terms of Sections 5.3(c)
and 5.7 shall apply to it, mutatis mutandis, with respect to all actions that may
be required of it pursuant to Section 5.3(c) or 5.7 with respect to the Pledged Securities issued
by it. In addition, each Grantor which is either an Issuer or an owner of any Pledged Security
hereby consents to the grant by each other Grantor of the security interest hereunder in favor of
the Collateral Agent and to the transfer of any Pledged Security to the Collateral Agent or its
nominee following an Event of Default and to the substitution of the Collateral Agent or its
nominee as a partner, member or shareholder of the related Issuer (subject to Section 7.19 hereof
and subject to the terms of the Refinancing Intercreditor Agreement).


 


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4.9. Accounts.
(a) Other than in the ordinary course of business, and consistent with its current practices
and in accordance with prudent and standard practices used in the industry in which such Grantor is
engaged, and so long as no Event of Default shall have occurred and be continuing, such Grantor
will not (i) grant any extension of the time of payment of any Accounts Receivable, (ii) compromise
or settle any Accounts Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Accounts Receivable, (iv) allow any credit or
discount whatsoever on any Accounts Receivable or (v) amend, supplement or modify any Accounts
Receivable in any manner that could adversely affect the value thereof, in each case, if any such
Accounts individually have a value in excess of $1,000,000, and in each case, solely to the extent
such Accounts Receivable constitute Collateral in accordance with the terms hereof or any
Supplemental Collateral Agreement.



(a) Such Grantor will deliver prompt notice to the Collateral Agent a copy of any legal claim
filed against it with respect to the validity or enforceability of more than 5% of the aggregate
amount of the then outstanding Accounts to the extent such Accounts constitute Collateral upon and
after delivery of a Supplemental Collateral Agreement with respect thereto.



4.10. [Reserved].



4.11. Intellectual Property.
(a) Except where the failure to take such action could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, such Grantor (either itself or through
licensees) will (i) continue to use each material Trademark owned by such Grantor on each and every
trademark class of goods applicable to its current line as reflected in its current catalogs,
brochures and price lists in order to maintain such Trademark in full force free from any claim of
abandonment for non-use, (ii) maintain as in the past the quality of products and services offered
under such Trademark and take all necessary steps to ensure that all licensed users of such
Trademark maintain as in the past such quality, (iii) use such Trademark with the appropriate
notice of registration and all other notices and legends required by applicable Requirements of
Law, (iv) not adopt or use any mark which is confusingly similar or a colorable imitation of such
Trademark unless the Collateral Agent, for the ratable benefit of the Secured Parties, shall obtain
a perfected security interest in such mark pursuant to this Agreement and the Intellectual Property
Security Agreement, and (v) not (and not permit any licensee or sublicensee thereof to) do any act
or knowingly omit to do any act whereby such Trademark may become invalidated or impaired in any
way.



(a) Such Grantor (either itself or through licensees) will not do any act, or omit to do any
act, whereby any material Patent owned by such Grantor may become forfeited, abandoned or dedicated
to the public, except where such forfeiture, abandonment or dedication could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.



(b) Except where the failure to take such action could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, such Grantor (either itself or through
licensees) (i) will employ each material Copyright owned by such Grantor, and (ii) will not (and
will not permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby any such Copyright may become invalidated or otherwise impaired or placed into the public
domain.


 


26









 





(c) Such Grantor (either itself or through licensees) will not do any act that infringes,
misappropriates or violates the Intellectual Property rights of any other Person, except, where any
such infringement, misappropriation or violation could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.



(d) Such Grantor (either itself or through licensees) will use proper statutory notice in
connection with the use of each material Patent, Trademark and Copyright owned by
such Grantor, except where the failure to use such notice could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.



(e) Such Grantor will notify the Secured Parties immediately if it knows, or has reason to
know, that any application or registration relating to any Intellectual Property owned by such
Grantor may become forfeited, abandoned or dedicated to the public, or of any adverse determination
or development (including, without limitation, the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark Office, the United States
Copyright Office or any court or tribunal in any country) regarding such Grantor’s registration or
ownership of, or the validity or enforceability of, any such Intellectual Property or such
Grantor’s right to register the same or to own and maintain the same.



(f) Whenever such Grantor, either by itself or through any agent, employee, licensee or
designee, shall file an application for the registration of any Intellectual Property with the
United States Patent and Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof, such Grantor shall report all
such filings to the Collateral Agent annually (and, in any event within 90 days after the end of
each fiscal year of the Company). Upon request of the Collateral Agent or, upon and during the
effectiveness of the Refinancing Intercreditor Agreement, the Applicable Authorized Representative,
such Grantor shall execute and deliver, and have recorded, any and all agreements, instruments,
documents, and papers as the Collateral Agent or the Applicable Authorized Representative may so
request to evidence the Secured Parties’ security interest in any Copyright, Patent, Trademark or
other Intellectual Property and the goodwill and general intangibles of such Grantor relating
thereto or represented thereby.



(g) Except where the failure to take such action could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, such Grantor will take all reasonable
and necessary steps, including, without limitation, in any proceeding before the United States
Patent and Trademark Office, the United States Copyright Office or any similar office or agency in
any other country or any political subdivision thereof, to maintain and pursue each application
(and to obtain the relevant registration) and each registration of material Intellectual Property
owned by such Grantor, including, without limitation, the payment of required fees and taxes, the
filing of responses to office actions issued by the United States Patent and Trademark Office and
the United States Copyright Office, the filing of applications for renewal or extension, the filing
of affidavits of use and affidavits of incontestability, and the participation in interference,
reexamination, opposition, cancellation, infringement and misappropriation proceedings.


 


27









 





(h) Such Grantor (either itself or through licensees) will not, without the prior written
consent of the Collateral Agent, discontinue use of, cancel, or otherwise abandon any Intellectual
Property owned by such Grantor, or abandon any application or any right to file an application for
any Patent, Trademark, or Copyright, unless such Grantor shall have previously determined that such
use or the maintenance of such Intellectual Property is no longer desirable in the conduct of such
Grantor’s business and that the loss thereof could not reasonably be expected to have a Material
Adverse Effect and, in such case, such Grantor shall give prompt written notice of any such
abandonment to the Collateral Agent in accordance herewith.



(i) In the event that any material Intellectual Property owned by any Grantor is infringed,
misappropriated or diluted by a third party, such Grantor shall (i) take such actions as such
Grantor shall reasonably deem appropriate under the circumstances to protect such Intellectual
Property and (ii) if such Intellectual Property is of material economic value, promptly notify the
Collateral Agent in writing after it learns thereof and, in its reasonable business judgment, sue
for infringement, misappropriation or dilution, to seek injunctive relief where appropriate and to
recover any and all damages for such infringement, misappropriation or dilution, except where such
infringement, misappropriation or dilution could not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect,.



(j) Such Grantor agrees that, should it create, develop, or otherwise acquire or obtain an
ownership interest in any item of material Intellectual Property which is not now a part of the
Collateral (the “After-Acquired Intellectual Property”), (i) the provisions of Section 2
shall automatically apply thereto, (ii) any such After-Acquired Intellectual Property, and in the
case of Trademarks, the goodwill of the business connected therewith or symbolized thereby, shall
automatically become part of the Collateral, and (iii) it shall provide the Collateral Agent
annually (and, in any event within 90 days after the end of each fiscal year of the Company) with
an amended Schedule 6 (as the same may be amended, restated, supplemented, replaced or
otherwise modified from time to time ) hereto and take the actions specified in 4.11(l).



(k) Such Grantor agrees to execute short form security agreements with respect to Intellectual
Property owned or held by such Grantor and with respect to any After-Acquired Intellectual Property
in substantially the form of Exhibits B and C in order to record the security interest granted
herein to the Collateral Agent for the ratable benefit of the Secured Parties with the United
States Patent and Trademark Office, the United States Copyright Office, and any other applicable
Governmental Authority.



(l) Such Grantor shall take all steps reasonably necessary consistent with industry standards
to protect the confidentiality of all Trade Secrets used or held in its business, including,
without limitation, entering into confidentiality agreements with employees and labeling and
restricting access to confidential and proprietary information and documents.



4.12. Satellites.
(a) Such Grantor will, and will cause each of its Restricted Subsidiaries to, at such
Grantor’s 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


 


28









 





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 such Grantor 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.



(b) Such Grantor will, and will cause each of its Restricted Subsidiaries to, at such
Grantor’s 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 Company 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 such Grantor’s
and its 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, such Grantor
shall, and shall cause its 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.



(c) In the event that the United States signs and ratifies the Protocol on Space Assets to the
Capetown Convention on Mobile Equipment, then each Grantor 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 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.



4.13. Further Covenants.


 


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(a) Such Grantor shall not use or permit any Collateral to be used unlawfully or in violation
of any provision of this Agreement or any applicable statute, regulation or ordinance or any policy
of insurance covering the Collateral;



(b) such Grantor shall make payment of (i) all taxes, assessments, license fees, levies and
other charges of Governmental Authorities imposed upon it which if unpaid, would be reasonably
likely to become a Lien on the Collateral that is not a Permitted Lien, and (ii) all claims
(including, without limitation, claims for labor, services, materials and supplies) for sums; and



(c) upon such Grantor or any officer of such Grantor obtaining knowledge thereof, it shall
promptly notify Collateral Agent in writing of the levy of any legal process against the Collateral
or any portion thereof.



4.14. Additional Secured Debt.
On or prior to (a) the date on which any Refinanced Term Credit Agreement is entered into or
the MSSFI Credit Agreement is otherwise amended, modified or replaced or (b) the date on which any
other Additional Secured Debt Documents is executed or and any other Additional Secured Debt
contemplated thereby is incurred, the Grantors shall (i) cause the Refinanced Term Agent or the
Authorized Representative for any other Additional Secured Debtholders, as the case may be, to
enter into the Refinancing Intercreditor Agreement, (ii) enter into a Supplemental Collateral
Agreement or other Security Document, pursuant to which the Grantors shall grant to the Collateral
Agent, for the ratable benefit of the Secured Parties, a security interest in any assets or
property of the Grantors not otherwise granted pursuant to this Agreement or any other Indenture
Document prior to such date, to the extent the Grantors grant a security interest in such other
assets to the Refinanced Term Agent, the Authorized Representative, or any other Additional Secured
Debtholders, as the case may be, and which Supplemental Collateral Agreement or other Security
Document shall contain such additional customary covenants, representations, conditions (including
the delivery of legal opinions) and other provisions relating to such additional assets or the
granting of such security interest, in each case, as the Collateral Agent may reasonably request
and (iii) enter into and file such other agreements, amendments, financing statements or other
documents as the Collateral Agent shall reasonably request in furtherance of the foregoing or as
are necessary in order to comply with the requirements of this Agreement (including Section 4.5)
and any Supplemental Collateral Agreement.



SECTION 5. REMEDIAL PROVISIONS




5.1.  Certain Matters Relating to Accounts. (a) [Reserved].




(a) If and to the extent Accounts constitute Collateral pursuant to the terms hereof or any
Supplemental Collateral Agreement, the Collateral Agent hereby authorizes each Grantor to collect
such Grantor’s Accounts and each Grantor hereby agrees to continue to collect all amounts due or to
become due to such Grantor under the Accounts and any Supporting Obligation and diligently exercise
each material right it may have under any Account and any Supporting Obligation, in each case, at
its own expense; provided, however, that, subject to Section 7.19, the Collateral
Agent may curtail or terminate said authority at any time after the occurrence and during the
continuance of an Event of Default. If and to the extent Accounts


 


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constitute Collateral pursuant to the terms hereof or any Supplemental Collateral Agreement,
if required by the Collateral Agent at any time after the occurrence and during the continuance of
an Event of Default, subject to Section 7.19, any payments of Accounts, when collected by any
Grantor, (i) shall be forthwith (and, in any event, within two Business Days) deposited by such
Grantor in the exact form received, duly endorsed by such Grantor to the Collateral Agent if
required, in a Collateral Account maintained under the sole dominion and control of the Collateral
Agent, subject to withdrawal by the Collateral Agent for the account of the Secured Parties only as
provided in Section 5.5, and (ii) until so turned over, shall be held by such Grantor in trust for
the Secured Parties, segregated from other funds of such Grantor. Each such deposit of Proceeds of
Accounts shall be accompanied by a report identifying in reasonable detail the nature and source of
the payments included in the deposit.



(b) [Reserved].



5.2. Communications with Obligors; Grantors Remain Liable.
If and to the extent Accounts constitute Collateral pursuant to the terms hereof or any
Supplemental Collateral Agreement:



(a) subject to Section 7.19, the Collateral Agent in its own name or in the name of others may at
any time after the occurrence and during the continuance of an Event of Default communicate with
obligors under any Accounts with a value in excess of $1,000,000, and parties to the Contracts to
verify with them to the Collateral Agent’s satisfaction the existence, amount and terms of any such
Accounts or such Contracts;



(b) subject to Section 7.19, after the occurrence and during the continuance of an Event of
Default, the Collateral Agent may upon written notice to the applicable Grantor, notify, or require
any Grantor to notify, the Account Debtor or counterparty to make all payments under the Accounts
and/or Contracts directly to the Collateral Agent; and



(c) anything herein to the contrary notwithstanding, each Grantor shall remain liable under
each of the Accounts and Contracts to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of any agreement giving
rise thereto.



5.3. Pledged Securities.



(a) Unless an Event of Default shall have occurred and be continuing and the Collateral Agent
shall have given notice to the relevant Grantor of the Collateral Agent’s intent to exercise its
corresponding rights pursuant to Section 5.3(b), each Grantor shall be permitted to receive all
cash dividends paid in respect of the Pledged Equity Interests and all payments made in respect of
the Pledged Notes, in each case paid in the normal course of business of the relevant Issuer and
consistent with past practice, to the extent permitted in the Indenture Documents and any
Additional Secured Debt Documents, and to exercise all voting and corporate rights with
respect to the Pledged Securities; provided, however, that no vote shall be cast or
corporate or other ownership right exercised or other action taken which would materially impair
the Collateral or which would result in any violation of any provision of this Agreement, any other
Indenture Documents or any Additional Secured Debt Documents.




 


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(b) If an Event of Default shall occur and be continuing: (i) all rights of each Grantor to
exercise or refrain from exercising the voting and other consensual rights which it would otherwise
be entitled to exercise pursuant hereto shall cease and all such rights shall thereupon become
vested in the Collateral Agent who shall thereupon have the sole right, but shall be under no
obligation, to exercise or refrain from exercising such voting and other consensual rights and (ii)
the Collateral Agent shall have the right, without notice to any Grantor, to transfer all or any
portion of the Investment Property to its name or the name of its nominee or agent. In addition,
the Collateral Agent shall have the right at any time, without notice to any Grantor, to exchange
any certificates or instruments representing any Investment Property for certificates or
instruments of smaller or larger denominations. In order to permit the Collateral Agent to
exercise the voting and other consensual rights which it may be entitled to exercise pursuant
hereto and to receive all dividends and other distributions which it may be entitled to receive
hereunder each Grantor shall promptly execute and deliver (or cause to be executed and delivered)
to the Collateral Agent all proxies, dividend payment orders and other instruments as the
Collateral Agent may from time to time reasonably request and each Grantor acknowledges that the
Collateral Agent may utilize the power of attorney set forth herein.



(c) Each Grantor hereby authorizes and instructs each Issuer of any Pledged Securities pledged by
such Grantor hereunder to (i) comply with any instruction received by it from the Collateral Agent
in writing that (x) states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or further instructions
from such Grantor, and each Grantor agrees that each Issuer shall be fully protected in so
complying, and (ii) unless otherwise expressly permitted hereby, if an Event of Default shall have
occurred and be continuing, pay any dividends or other payments with respect to the Pledged
Securities directly to the Collateral Agent.



5.4. Proceeds to be Turned Over To Collateral Agent. (a) In addition to the rights of
the Secured Parties specified in Section 5.1 with respect to payments of Accounts, if an Event of
Default shall occur and be continuing, all Proceeds received by any Grantor consisting of cash,
Temporary Cash Investments, checks and other near-cash items shall be held by such Grantor in trust
for the Secured Parties, segregated from other funds of such Grantor, and shall, forthwith upon
receipt by such Grantor, be turned over to the Collateral Agent in the exact form received by such
Grantor (duly endorsed by such Grantor to the Collateral Agent, if required). All Proceeds
received by the Collateral Agent hereunder shall be held by the Collateral Agent in a Collateral
Account maintained under its sole dominion and control. All Proceeds while held by the Collateral
Agent in a Collateral Account (or by such Grantor in trust for the Secured Parties) shall continue
to be held as collateral security for all the Secured Obligations and shall not constitute payment
thereof until applied as provided in Section 5.5.



(b) If any Event of Default shall occur and be continuing, upon the request of the Collateral
Agent, the Company and any Guarantor shall immediately take all actions necessary or desirable to
enable the Collateral Agent to obtain “control” (within the meaning of the applicable Uniform
Commercial Code) with respect to any Investment Property, Deposit Accounts (if and to the extent
such Deposit Accounts constitute Collateral pursuant to the terms hereof or any Supplemental
Collateral Agreement) and any other relevant Collateral, including without limitation, executing
and delivering and causing the relevant depositary bank or



 


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securities intermediary to execute and deliver a control agreement in a form satisfactory to
the Collateral Agent in its sole discretion.



5.5. Application of Proceeds. If an Event of Default shall have occurred and be
continuing, at any time at the Collateral Agent’s election, the Collateral Agent shall apply all or
any part of the net Proceeds (after deducting fees and expenses as provided in Section 5.6)
constituting Collateral realized through the exercise by the Collateral Agent of its remedies
hereunder, whether or not held in any Collateral Account, and any proceeds of the guarantee set
forth in the Indenture and any Additional Secured Debt Document, in payment of the Secured
Obligations in such order of application as is required by the Indenture or, upon and during the
effectiveness of the Refinancing Intercreditor Agreement, the Refinancing Intercreditor Agreement.



5.6. Code and Other Remedies. (a)  If an Event of Default shall occur and be continuing,
the Collateral Agent may take all such actions and exercise all such rights and remedies set forth
in this clause (a). The Collateral Agent, on behalf of the Secured Parties, may exercise, in
addition to all other rights and remedies granted to them in this Agreement and in any other
instrument or agreement securing, evidencing or relating to the Secured Obligations, all rights and
remedies of a secured party under the New York UCC (whether or not the New York UCC applies to the
affected Collateral) or its rights under any other applicable law or in equity. Without limiting
the generality of the foregoing, the Collateral Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any notice required by
law referred to below) to or upon any Grantor or any other Person (all and each of which demands,
defenses, advertisements and notices are hereby waived), may in such circumstances forthwith
collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith Dispose of or give option or options to purchase and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale
or sales, at any exchange, broker’s board or office of any Secured Party or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or
on credit or for future delivery without assumption of any credit risk. Each Secured Party shall
have the right upon any such public sale or sales, and, to the extent permitted by law, upon any
such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of
any right or equity of redemption in any Grantor, which right or equity is hereby waived and
released. Each purchaser at any such sale shall hold the property sold absolutely free from any
claim or right on the part of any Grantor, and each Grantor hereby waives (to the extent permitted
by applicable law) all rights of redemption, stay and/or appraisal which it now has or may at any
time in the future have under any rule of law or statute now existing or hereafter enacted. Each
Grantor agrees that, to the extent notice of sale shall be required by law, at least ten (10) days
notice to such Grantor of the time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The Collateral Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having been given. The
Collateral Agent may adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. The Collateral Agent may sell the Collateral without giving
any warranties as to the Collateral. The Collateral Agent may specifically disclaim or modify any
warranties of title or the like. This procedure will not be considered to adversely affect the
commercial reasonableness of any sale of the Collateral. Each



 


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Grantor agrees that it would not be commercially unreasonable for the Collateral Agent to Dispose
of the Collateral or any portion thereof by using Internet sites that provide for the auction of
assets of the types included in the Collateral or that have the reasonable capability of doing so,
or that match buyers and sellers of assets. Each Grantor hereby waives any claims against the
Collateral Agent arising by reason of the fact that the price at which any Collateral may have been
sold at such a private sale was less than the price which might have been obtained at a public
sale, even if the Collateral Agent accepts the first offer received and does not offer such
Collateral to more than one offeree (it being understood and agreed that the Collateral Agent or
any Secured Party may bid at a private sale only if permitted by Section 9-610(c)(2) of the New
York UCC and Grantor reserves the right to object to commercial reasonableness of any private sale
if buyer at such private sale is the Collateral Agent or a Secured Party). Each Grantor further
agrees, at the Collateral Agent’s request, to assemble the Collateral and make it available to the
Collateral Agent at places which the Collateral Agent shall reasonably select, whether at such
Grantor’s premises or elsewhere. The Collateral Agent shall have the right to enter onto the
property where any Collateral is located and take possession thereof with or without judicial
process.



(a) The Collateral Agent shall apply the net proceeds of any action taken by it pursuant to
this Section 5.6, after deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any of the Collateral or in any
way relating to the Collateral or the rights of the Secured Parties hereunder, including, without
limitation, reasonable attorneys’ fees and disbursements, to the payment in whole or in part of the
Secured Obligations as set forth in Section 5.5 and only after such application and after the
payment by the Collateral Agent of any other amount required by any provision of law, including,
without limitation, Section 9-615(a) of the New York UCC, need the Collateral Agent account for the
surplus, if any, to any Grantor. If the Collateral Agent sells any of the Collateral upon credit,
the Grantor will be credited only with payments actually made by purchaser and received by the
Collateral Agent and applied to indebtedness of the purchaser. In the event the purchaser fails to
pay for the Collateral, the Collateral Agent may resell the Collateral and the Grantor shall be
credited with proceeds of the sale. To the extent permitted by applicable law, each Grantor waives
all claims, damages and demands it may acquire against any Secured Party arising out of the
exercise by any of them of any rights hereunder.



(b) In the event of any Disposition of any of the Intellectual Property, the goodwill of the
business connected with and symbolized by any Trademarks subject to such Disposition shall be
included, and the applicable Grantor shall supply the Collateral Agent or its designee with such
Grantor’s know-how and expertise, and with documents and things embodying the same, relating to the
manufacture, distribution, advertising and sale of products or the provision of services relating
to any Intellectual Property subject to such Disposition, and such Grantor’s customer lists and
other records and documents relating to such Intellectual Property and to the manufacture,
distribution, advertising and sale of such products and services.



5.7. Registration Rights. (a)  Subject to the terms of the Refinancing Intercreditor
Agreement, if applicable, if the Collateral Agent shall determine to exercise its right to sell any
or all of the Pledged Equity Interests or the Pledged Debt Securities pursuant to Section 5.6, and
the Required Secured Parties direct the Collateral Agent, to have the Pledged Equity Interests or
the Pledged Debt Securities, or that portion thereof to be sold, registered



 


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under the provisions of the Securities Act, the relevant Grantor will cause the Issuer thereof (if
such Issuer is a direct or indirect wholly-owned Subsidiary of the Issuer) to (i) execute and
deliver, and cause the directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may be necessary to
register the Pledged Equity Interests or the Pledged Debt Securities, or that portion thereof to be
sold, under the provisions of the Securities Act, (ii) use its best efforts to cause the
registration statement relating thereto to become effective and to remain effective for a period of
one year from the date of the first public offering of the Pledged Equity Interests or the Pledged
Debt Securities, or that portion thereof to be sold, and (iii) make all amendments thereto and/or
to the related prospectus which are necessary, all in conformity with the requirements of the
Securities Act and the rules and regulations of the SEC applicable thereto. Each Grantor agrees to
cause such Issuer to comply with the provisions of the securities or “Blue Sky” laws of any and all
jurisdictions as required by the sale to make available to its security holders, as soon as
practicable, an earnings statement (which need not be audited) which will satisfy the provisions of
Section 11(a) of the Securities Act.



(a) Each Grantor recognizes that the Collateral Agent may be unable to effect a public sale of
any or all the Pledged Equity Interests or the Pledged Debt Securities, by reason of certain
prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and
may be compelled to resort to one or more private sales thereof to a restricted group of purchasers
which will be obliged to agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or resale thereof. Each Grantor
acknowledges and agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that
any such private sale shall be deemed to have been made in a commercially reasonable manner. The
Collateral Agent shall be under no obligation to delay a sale of any of the Pledged Equity
Interests or the Pledged Debt Securities for the period of time necessary to permit the Issuer
thereof (is such Issuer is a direct or indirect wholly-owned Subsidiary of the Issuer) to register
such securities for public sale under the Securities Act, or under applicable state securities
laws, even if such Issuer would agree to do so.



(b) Each Grantor agrees to use its best efforts to do or cause to be done all such other acts
as may be necessary to make such sale or sales of all or any portion of the Pledged Equity
Interests or the Pledged Debt Securities pursuant to this Section 5.7 valid and binding and in
compliance with any and all other applicable Requirements of Law. Each Grantor further agrees that
a breach of any of the covenants contained in this Section 5.7 will cause irreparable injury to the
Secured Parties, that the Secured Parties have no adequate remedy at law in respect of such breach
and, as a consequence, that each and every covenant contained in this Section 5.7 shall be
specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to
assert any defenses against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred and is continuing under the Indenture or any
Additional Secured Debt Document, as applicable, or a defense of payment.



5.8. Waiver; Deficiency. Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other Disposition of the Collateral are insufficient to pay its Secured
Obligations and the fees and disbursements of any attorneys employed by any Secured Party to
collect such deficiency. Each Grantor hereby expressly waives and covenants not to assert any



 


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appraisement, valuation, extension, redemption or similar laws, now or at any time hereafter
in force, which delay, prevent or otherwise impede the performance or enforcement of this
Agreement.



5.9. FCC Licenses. Notwithstanding anything to the contrary contained in this
Agreement, the Indenture Documents, any Additional Secured Debt Document or in any other agreement,
instrument or document executed by any Grantor in connection with the Indenture Documents or any
Additional Secured Debt Document, to the extent that any FCC License is included in the Collateral,
the Collateral Agent will not take any action pursuant to any document referred to above which
would constitute or result in any assignment of any FCC License or any change of control (whether
de jure or de facto) of any Grantor or Subsidiary of any Grantor if such assignment of any FCC
License or change of control would require, under then existing law, the prior approval of the FCC
without first obtaining such prior approval of the FCC. Upon the occurrence and during the
continuance of an Event of Default, subject to terms and conditions of this Agreement, each Grantor
agrees to take any action that the Collateral Agent may reasonably request in order to obtain from
the FCC such approval as may be necessary to enable the Collateral Agent to exercise and enjoy the
full rights and benefits granted to the Collateral Agent by this Agreement and the other documents
referred to above, including specifically, at the cost and expense of each Grantor, the use of its
best efforts to assist in obtaining approval of the FCC for any action or transaction contemplated
by this Agreement for which such approval is or shall be required by law, and specifically, without
limitation, upon request, to prepare, sign and file with the FCC the assignor’s or transferor’s
portion of any application or applications for consent to the assignment of license or transfer of
control necessary or appropriate under the FCC’s rules and regulations for approval of (i) any sale
or other disposition of the Collateral by or on behalf of the Collateral Agent, or (ii) any
assumption by the Collateral Agent of voting rights in the Collateral effected in accordance with
the terms of this Agreement. It is understood and agreed that all foreclosure and related actions
will be made in accordance with the Communications Act of 1934, as amended from time to time, and
other applicable FCC regulations and published policies and decisions.




5.10. Voting.



(a) The provisions of this Section 5.10 shall apply solely after incurrence of the Additional
Secured Obligations. The provisions of the Indenture shall apply prior to the incurrence of any
such Additional Secured Obligations.



(b) Subject to the Refinancing Intercreditor Agreement, if applicable, the Required Secured
Parties shall have the right to direct the Collateral Agent, following the occurrence of an Event
of Default which is continuing, to foreclose on, or exercise its other rights with respect to, the
Collateral (or exercise other remedies with respect to the Collateral). For the purposes of
determining the Required Secured Parties and their directions in accordance with this Section, each
Secured Party or its Authorized Representative shall provide to the Collateral Agent certificates,
in form and substance reasonably satisfactory to the Collateral Agent, setting forth the respective
amounts of outstanding principal obligations owing to such Secured Parties and their direction or
vote and the Collateral Agent shall be fully entitled to rely on such certificates.


 


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(c) Any action taken or not taken without the vote of any Secured Party or Secured Parties
under this Section 5.10 shall nevertheless be binding on such Secured Party or Secured Parties.



(d) In the case of an Event of Default which is continuing, the Collateral Agent will be
permitted, subject to applicable law and to the terms of the Refinancing Intercreditor Agreement,
if applicable, to exercise remedies and sell the Collateral under this Agreement at the direction
of the Required Secured Parties. If the Collateral Agent has asked the Secured Parties for
instruction and the applicable Secured Parties have not yet responded to such request, the
Collateral Agent shall be authorized to take, but shall not be required to take, and shall in no
event have any liability for the taking, any delay in taking or the failure to take, such actions
with regard to a Default or Event of Default which is continuing which the Collateral Agent, in
good faith, believes to be reasonably required to promote and protect the interests of the Secured
Parties and to preserve the value of the Collateral and shall give the Secured Parties appropriate
notice of such action; provided that once instructions with respect to such request have been
received by the Collateral Agent from the applicable Secured Parties, the actions of the Collateral
Agent shall be governed thereby and the Collateral Agent shall not take any further action which
would be contrary thereto.



5.11. Exercise of Remedies Generally. Notwithstanding anything to the contrary
contained herein, nothing in the MSSFI Credit Agreement, the MSSFI Collateral Agreement or any
other document relating thereto shall prohibit or otherwise restrict, the Collateral Agent’s or
Secured Parties’ rights set forth in this Section 5, and the Collateral Agent’s or Secured Parties’
ability to exercise such rights, shall not be limited or restricted in any manner on account of any
rights granted to MSSFI under the MSSFI Credit Agreement or the MSSFI Collateral Agreement.



SECTION 6. THE COLLATERAL AGENT




6.1. Collateral Agent’s Appointment as Attorney-in-Fact, etc. (a)  Each Grantor hereby
irrevocably constitutes and appoints the Collateral Agent and any officer or agent thereof, with
full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of such Grantor and in the name of such Grantor or in its own
name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate
action and to execute any and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing,
each Grantor hereby gives the Collateral Agent the power and right, on behalf of such Grantor,
without notice to or assent by such Grantor, to do any or all of the following:




(i) in the name of such Grantor or its own name, or otherwise, take possession of and
endorse and collect any checks, drafts, notes, acceptances or other instruments for the
payment of moneys due under any Account or Contract or with respect to any other Collateral
and file any claim or take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Collateral Agent for


 


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the purpose of collecting any and all such moneys due under any Account or Contract or
with respect to any other Collateral whenever payable;




(ii) in the case of any Intellectual Property, execute and deliver, and have recorded,
any and all agreements, instruments, documents and papers as the Collateral Agent may
request to evidence the Secured Parties’ security interest in such Intellectual Property and
the goodwill and general intangibles of such Grantor relating thereto or represented
thereby;




(iii) pay or discharge taxes and Liens levied or placed on or threatened against the
Collateral, effect any repairs or any insurance called for by the terms of this Agreement
and pay all or any part of the premiums therefor and the costs thereof;




(iv) execute, in connection with any sale provided for in Section 5.6 or 5.7, any
endorsements, assignments or other instruments of conveyance or transfer with respect to the
Collateral; and




(v) (1) direct any party liable for any payment under any of the Collateral to make
payment of any and all moneys due or to become due thereunder directly to the Collateral
Agent or as the Collateral Agent shall direct; (2) ask or demand for, collect, and receive
payment of and receipt for, any and all moneys, claims and other amounts due or to become
due at any time in respect of or arising out of any Collateral; (3) sign and endorse any
invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other documents in connection with
any of the Collateral; (4) commence and prosecute any suits, actions or proceedings at law
or in equity in any court of competent jurisdiction to collect the Collateral or any portion
thereof and to enforce any other right in respect of any Collateral; (5) defend any suit,
action or proceeding brought against such Grantor with respect to any Collateral; (6)
settle, compromise or adjust any such suit, action or proceeding and, in connection
therewith, give such discharges or releases as the Collateral Agent may deem appropriate;
(7) assign any Copyright, Patent or Trademark (along with the goodwill of the business to
which any such Copyright, Patent or Trademark pertains), throughout the world for such term
or terms, on such conditions, and in such manner, as the Collateral Agent shall in its sole
discretion determine; and (8) generally, sell, transfer, pledge and make any agreement with
respect to or otherwise deal with any of the Collateral as fully and completely as though
the Collateral Agent were the absolute owner thereof for all purposes, and do, at the
Collateral Agent’s option and such Grantor’s expense, at any time, or from time to time, all
acts and things which the Collateral Agent deems necessary to protect, preserve or realize
upon the Collateral and the Secured Parties’ security interests therein and to effect the
intent of this Agreement, all as fully and effectively as such Grantor might do.



Anything in this Section 6.1(a) to the contrary notwithstanding, the Collateral Agent agrees
that, except as provided in Section 6.1(b), it will not exercise any rights under the power of
attorney provided for in this Section 6.1(a) unless an Event of Default shall have occurred and be
continuing.


 


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(b) If any Grantor fails to perform or comply with any of its agreements contained herein, the
Collateral Agent, at its option, but without any obligation so to do, may perform or comply, or
otherwise cause performance or compliance, with such agreement; provided, however,
that unless an Event of Default has occurred and is continuing or time is of the essence, the
Collateral Agent shall not exercise this power without first making demand on the Grantor and the
Grantor failing to promptly comply therewith. Notwithstanding the foregoing, the Collateral Agent
may not take any of the actions set forth in Sections 5.2(a) and (b) except in compliance with
those sections.



(c) The expenses of the Collateral Agent incurred in connection with actions undertaken as
provided in this Section 6.1, together with interest, from the date of payment by the Collateral
Agent to the date reimbursed by the relevant Grantor, shall promptly be paid by such Grantor to the
Collateral Agent.



(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done
by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled
with an interest and are irrevocable until this Agreement is terminated and the security interests
created hereby are released.



6.2. Duty of Collateral Agent. The Collateral Agent’s sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its possession, under Section
9-207 of the New York UCC or otherwise, shall be to deal with it in the same manner as the
Collateral Agent deals with similar property for its own account. Neither the Collateral Agent,
nor any other Secured Party nor any of their respective officers, directors, partners, employees,
agents, attorneys and other advisors, attorneys-in-fact or affiliates shall be liable for failure
to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise Dispose of any Collateral upon the request of any Grantor
or any other Person or to take any other action whatsoever with regard to the Collateral or any
part thereof. The powers conferred on the Secured Parties hereunder are solely to protect the
Secured Parties’ interests in the Collateral and shall not impose any duty upon any Secured Party
to exercise any such powers (it being understood and agreed that the Secured Parties will have the
obligations of a secured party under the New York UCC). The Secured Parties shall be accountable
only for amounts that they actually receive as a result of the exercise of such powers, and neither
they nor any of their officers, directors, partners, employees, agents, attorneys and other
advisors, attorneys-in-fact or affiliates shall be responsible to any Grantor for any act or
failure to act hereunder, except to the extent that any such act or failure to act is found by a
final and nonappealable decision of a court of competent jurisdiction to have resulted solely and
proximately from their own gross negligence or willful misconduct in breach of a duty owed to such
Grantor.



6.3. No Duty of the Collateral Agent. The powers conferred on Collateral Agent
hereunder are solely to protect the interests of Collateral Agent for the ratable benefit of the
Secured Parties in the Collateral and shall not impose any duty upon Collateral Agent to exercise
any such powers. Collateral Agent shall be accountable only for amounts that it actually receives
as a result of the exercise of such powers, and neither it nor any of its officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure to act hereunder,
except to the extent that any such act or failure to act is found by a final and nonappealable



 


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decision of a court of competent jurisdiction to have resulted solely and proximately from
their own gross negligence or willful misconduct. No provision of this Agreement shall require
Collateral Agent to expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to it.



6.4. Execution of Financing Statements. Each Grantor acknowledges that pursuant to
Section 9-509(b) of the New York UCC and any other applicable law, each Grantor authorizes the
Collateral Agent to file or record financing or continuation statements, and amendments thereto,
and other filing or recording documents or instruments with respect to the Collateral in such form
and in such offices as the Collateral Agent reasonably determines appropriate to perfect or
maintain the perfection of the security interests of the Collateral Agent under this Agreement.
Each Grantor agrees that such financing statements may describe the collateral in the same manner
as described in the Security Documents or as “all assets” or “all personal property” of the
undersigned, whether now owned or hereafter existing or acquired by the undersigned or such other
description as the Collateral Agent, in its sole judgment, determines is necessary or advisable;
provided that such financing statements shall exclude any FCC Licenses. A photographic or
other reproduction of this Agreement shall be sufficient as a financing statement or other filing
or recording document or instrument for filing or recording in any jurisdiction. Notwithstanding
any provision herein to the contrary, the Collateral Agent may, but shall be under no obligation to
(except at the direction of the Authorized Representative or Authorized Representatives
representing the Required Secured Parties), file or record financing or continuation statements, or
amendments thereto, or any other filing or recording document or instrument with respect to the
Collateral to perfect or maintain the perfection of the security interests in the Collateral
granted under this Agreement.



6.5. Authority of Collateral Agent. Each Grantor acknowledges that the rights and
responsibilities of the Collateral Agent under this Agreement with respect to any action taken by
the Collateral Agent or the exercise or non-exercise by the Collateral Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or resulting or arising out
of this Agreement shall, as between the Collateral Agent and the other Secured Parties, be governed
by the Refinancing Intercreditor Agreement, to the extent then in effect, and by such other
agreements with respect thereto as may exist from time to time among them, but, as between the
Collateral Agent and the Grantors, the Collateral Agent shall be conclusively presumed to be acting
as agent for the Secured Parties with full and valid authority so to act or refrain from acting,
and no Grantor shall be under any obligation, or entitlement, to make any inquiry respecting such
authority.



6.6. Appointment of Co-Collateral Agents. At any time or from time to time, in order
to comply with any Requirement of Law, the Collateral Agent may appoint another bank or trust
company or one of more other persons, either to act as co-agent or, with the consent of the
Company, as agents on behalf of the Secured Parties with such power and authority as may be
necessary for the effectual operation of the provisions hereof and which may be specified in the
instrument of appointment (which may, in the discretion of the Collateral Agent, include provisions
for indemnification and similar protections of such co-agent or separate agent).


 


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6.7. Applicable Authorized Representative. Notwithstanding anything to the contrary
herein and for the avoidance of doubt, the rights, duties and obligations of the Collateral Agent
hereunder shall be subject to the terms of the Refinancing Intercreditor Agreement, to the extent
in effect, and any rights, duties and obligations of the Applicable Authorized Representative (as
defined in the Refinancing Intercreditor Agreement) thereunder.



SECTION 7. MISCELLANEOUS




7.1. Amendments in Writing. None of the terms or provisions of this Agreement may be
waived, amended, supplemented or otherwise modified except by a written instrument executed by each
affected Grantor, and the Collateral Agent or, upon and during the effectiveness of the Refinancing
Intercreditor Agreement, the Applicable Authorized Representative, and such other parties as shall
be required in accordance with the terms of the Refinancing Intercreditor Agreement, as applicable,
and (ii) the Company may amend any Schedule referred to herein after the date hereof to reflect any
change in facts after the date hereof if necessary in connection with the making of any
representation set forth herein, provided the Company delivers such revised Schedule to the
Collateral Agent and any applicable Authorized Representative promptly following such revision.



7.2. Notices. All notices, requests and demands to or upon the Collateral Agent or
any Grantor hereunder shall be effected in the manner provided for in Section 12.01 of the
Indenture; provided that any such notice, request or demand to or upon any Grantor shall be
addressed to such Grantor at its notice address set forth on Schedule 1 (as the same may be
amended, restated, supplemented, replaced or otherwise modified from time to time).



7.3. No Waiver by Course of Conduct; Cumulative Remedies. No Secured Party shall by
any act (except by a written instrument pursuant to Section 7.1), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of
any Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege. A waiver by any
Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar
to any right or remedy which such Secured Party would otherwise have on any future occasion. The
rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are
not exclusive of any other rights or remedies provided by law.



7.4. Enforcement Expenses; Indemnification. (a)  Each Grantor agrees to pay or reimburse
each Secured Party for all its costs and expenses incurred in collecting against such Grantor under
the guarantee pursuant to the Indenture or otherwise enforcing or preserving any rights under this
Agreement and the other Indenture Documents to which such Grantor is a party, including, without
limitation, the fees and disbursements of counsel to each Secured Party.



(a) Each Grantor agrees to pay, and to save the Secured Parties harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise,
sales or other taxes which may be payable or determined to be payable with respect to



 


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any of the Collateral or in connection with any of the transactions contemplated by this
Agreement.



(b) Each Grantor agrees to pay, and to save the Secured Parties harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement to the extent the Company would be
required to do so pursuant to Section 7.07 of the Indenture.



(c) The agreements in this Section shall survive repayment of the Secured Obligations and all
other amounts payable under the Indenture and the other Indenture Documents.



(d) Each Grantor agrees that the provisions of Section 7.07 of the Indenture are hereby
incorporated herein by reference, mutatis mutandis, and each Secured Party shall be
entitled to rely on each of them as if they were fully set forth herein.



7.5. Successors and Assigns. This Agreement shall be binding upon the successors and
assigns of each Grantor and shall inure to the benefit of the Secured Parties and their successors
and assigns; provided that, except in connection with the Company-XM Merger or the
Company-XM Holdings Merger, no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the Collateral Agent and any
such assignment, transfer or delegation without such consent shall be null and void.



7.6. Set-Off. Subject to the requirements of the Refinancing Intercreditor Agreement,
each Grantor hereby irrevocably authorizes each Secured Party at any time and from time to time
while an Event of Default shall have occurred and be continuing, without notice to such Grantor or
any other Grantor, any such notice being expressly waived by each Grantor, to set-off and
appropriate and apply any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any currency, in each
case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Secured Party to or for the credit or the account of such Grantor, or any part
thereof in such amounts as such Secured Party may elect, against and on account of the obligations
and liabilities of such Grantor to such Secured Party hereunder and claims of every nature and
description of such Secured Party against such Grantor, in any currency, whether arising hereunder,
under the Indenture, any other Indenture Document, any Additional Debt Document or otherwise, as
such Secured Party may elect, whether or not any Secured Party has made any demand for payment and
although such obligations, liabilities and claims may be contingent or unmatured. Each Secured
Party shall notify such Grantor promptly of any such set-off and the application made by such
Secured Party of the proceeds thereof; provided that the failure to give such notice shall
not affect the validity of such set-off and application. The rights of each Secured Party under
this Section are in addition to other rights and remedies (including, without limitation, other
rights of set-off) which such Secured Party may have.


 


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7.7. Counterparts. This Agreement may be executed by one or more of the parties to
this Agreement on any number of separate counterparts (including by telecopy), and all of said
counterparts taken together shall be deemed to constitute one and the same instrument.



7.8. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.



7.9. Section Headings. The Section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or be taken into
consideration in the interpretation hereof.



7.10. Integration. This Agreement and the other Collateral Documents represent the
agreement of the Grantors, the Collateral Agent and the other Secured Parties with respect to the
subject matter hereof and thereof, and there are no promises, undertakings, representations or
warranties by any Secured Party relative to subject matter hereof and thereof not expressly set
forth or referred to herein or in the other Collateral Documents.



7.11. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.



7.12. Submission to Jurisdiction; Waivers. Each Grantor hereby irrevocably and
unconditionally:




(a) submits for itself and its property in any legal action or proceeding relating to
this Agreement and the other Collateral Documents to which it is a party, or for recognition
and enforcement of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts from any thereof;




(b) consents that any such action or proceeding may be brought in such courts and
waives any objection that it may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;




(c) agrees that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially similar form of
mail), postage prepaid, to such Grantor at its address referred to in Section 7.2 or at such
other address of which the Collateral Agent shall have been notified pursuant thereto;




(d) agrees that nothing herein shall affect the right to effect service of process in
any other manner permitted by law or shall limit the right to sue in any other jurisdiction;
and


 


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(e) waives, to the maximum extent not prohibited by law, any right it may have to claim
or recover in any legal action or proceeding referred to in this Section any special,
exemplary, punitive or consequential damages.




7.13. Acknowledgments. Each Grantor hereby acknowledges that:



(a) it has been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Collateral Documents to which it is a party;



(b) no Secured Party has any fiduciary relationship with or duty to any Grantor arising out of
or in connection with this Agreement or any of the other Collateral Documents, and the relationship
between the Grantors, on the one hand, and the Secured Parties, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and



(c) no joint venture is created hereby or by the other Collateral Documents or otherwise
exists by virtue of the transactions contemplated hereby among the Secured Parties or among the
Grantors and the Secured Parties.



7.14. Additional Grantors. Each Subsidiary of the Company that is required to become
a party to this Agreement pursuant to Section 10.06 of the Indenture or any similar provisions of
any Additional Debt Document shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption and Joinder Agreement in the form of
Exhibit D hereto.



7.15. Additional Secured Obligations. On or after the date hereof and from time to
time, upon the compliance by any Additional Secured Debtholder with the terms of Section 5.13 of
the Refinancing Intercreditor Agreement and Section 4.14 hereof, the Additional Secured Obligations
of such Additional Secured Debtholder shall be deemed to be Additional Secured Obligations
hereunder. Each Authorized Representative agrees that upon the satisfaction of the provisions of
such Section 5.13 of the Refinancing Intercreditor Agreement and Section 4.14 hereof, the
Collateral Agent shall act as agent under and subject to the terms of this Agreement and the
Refinancing Intercreditor Agreement for the benefit of all Secured Parties, including any
Additional Secured Debtholders that hold any such Additional Secured Obligations, and each
Authorized Representative agrees to the appointment, and acceptance of the appointment, of the
Collateral Agent as agent for the holders of such Additional Secured Obligations as set forth in
the Joinder Agreement, and the Authorized Representative providing such Joinder Agreement shall, on
behalf of itself and each Additional Secured Debtholder it represents, be bound by this Agreement.
For purposes of this Agreement, all Obligations arising under or in connection with the Notes
(including Additional Notes) constitute Note Obligations rather than Additional Secured
Obligations; however upon the issuance of Additional Notes, the Company shall deliver to the
Collateral Agent a certificate signed by the chief financial officer of the Company setting forth
the particulars of the Additional Notes including the aggregate principal amount or face amount
thereof and certifying that such issuance of Additional Notes complies with the terms of the
Indenture.



7.16. Certain Actions Upon a Company-XM Merger. On the date of any Company-XM Merger,
the Grantors shall (a) execute and deliver to the Collateral Agent and the



 


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Secured Parties, and the Collateral Agent and the Secured Parties shall become a party to, the
XM Security Documents on terms reasonably acceptable to the Collateral Agent, (b) deliver to the
Collateral Agent customary lien searches and (c) execute and deliver all other opinions, documents
and instruments, required by law or reasonably requested by the Collateral Agent to be filed,
registered, recorded, delivered, executed or possessed in order to create a first-priority
perfected lien on the Collateral (subject to Liens which are permitted under the Indenture
Documents and the Additional Secured Debt Documents to rank equal or prior to the Liens securing
the Secured Obligations). At any time on or after the date of the Company-XM Merger, the Company
will, and the Trustee and the Collateral Agent will have the right but not the obligation, file
such financing statements and amendments and continuations thereof and take such other actions as
required by law or as it deems reasonably necessary to ensure that, as of the date of such
Company-XM Merger, the Liens created by the XM Security Documents for the benefit of the holders of
the Notes have the same priority as they would have had, had they been executed, and filings in
respect thereof had been made, on the date hereof.



7.17. Releases. (a)  At such time as the Secured Obligations shall have been paid in full,
the commitments (if any) have been terminated or expired and no letters of credit shall be
outstanding (or shall have been cash collateralized in an amount equal to 100% of the aggregate
face amount plus any accrued and unpaid interest and fees that are expected to be payable until the
expiration thereof on a first priority secured basis), the Collateral shall be automatically
released from the Liens created hereby, and upon receipt by the Collateral Agent of an officer’s
certificate stating that the Secured Obligations have been paid in full, the commitments (if any)
have been terminated or expired and no letters of credit are outstanding (or shall have been cash
collateralized in an amount equal to 100% of the aggregate face amount plus any accrued and unpaid
interest and fees that are expected to be payable until the expiration thereof on a first priority
secured basis), this Agreement and all obligations (other than those expressly stated to survive
such termination) of the Collateral Agent and each Grantor hereunder shall terminate, all without
delivery of any instrument or performance of any act by any party, and all rights to the Collateral
shall revert to the Grantors. At the request and sole expense of any Grantor following any such
termination, the Collateral Agent shall deliver to such Grantor any Collateral held by the
Collateral Agent hereunder, and execute and deliver to such Grantor such documents as such Grantor
shall reasonably request to evidence such termination.



(a) If any of the Collateral shall be Disposed of by any Grantor in a transaction permitted by
the Indenture and each Additional Secured Debt Document (other than a transaction in which all or
substantially all of the Collateral is Disposed of, even if so permitted by the Indenture and each
such Additional Secured Debt Document), the Liens created hereby on such Collateral shall be
automatically released. At the request and sole expense of the Company, a Guarantor shall be
released from its obligations hereunder in the event that all the Equity Interests of such
Guarantor shall be Disposed of in a transaction permitted by the Indenture and each Additional
Secured Debt Document.



(b) Each Grantor acknowledges that it is not authorized to file any financing statement or
amendment or termination statement with respect to any financing statement originally filed in
connection herewith without the prior written consent of the Collateral Agent subject to such
Grantor’s rights under Section 9-509(d)(2) of the New York UCC.


 


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7.18. Effects of Certain Errors or Omissions. Notwithstanding anything to the
contrary contained herein, the Company, the Guarantors, the applicable Authorized Representatives
and the Collateral Agent may amend this Agreement without the consent of any Secured Party to cure
any ambiguity, omission, defect or inconsistency or to make any change that does not adversely
affect the rights of any Secured Party and such amendment shall become effective without any
further action or consent of the Required Secured Parties.



7.19. MSSFI Collateral Agreement. Notwithstanding anything herein to the contrary,
all rights of the Collateral Agent hereunder shall be subject to the terms of the MSSFI Collateral
Agreement for so long as such agreement is outstanding, and until the Refinancing, amendment,
modification or termination of the MSSFI Credit Agreement, any obligation of any Grantor hereunder
or under any other Security Document with respect to the delivery or control of any Collateral
shall be deemed to be satisfied if the Grantor complies with the requirements of the relevant
provision of the MSSFI Credit Agreement or the MSSFI Collateral Agreement, as applicable.



7.20. WAIVER OF JURY TRIAL. EACH GRANTOR AND THE COLLATERAL AGENT HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.


 


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IN WITNESS WHEREOF, each of the undersigned has caused this Collateral Agreement to be duly
executed and delivered as of the date first above written.



	 	 	 	 	 
	 	SIRIUS XM RADIO INC.

 	 
	 	By:  	/s/ PATRICK L. DONNELLY
 	 
	 	 	Name:  	Patrick L. Donnelly 	 
	 	 	Title:  	Executive Vice President, General 

Counsel and Secretary 	 
	 
	 	SATELLITE CD RADIO, INC.

 	 
	 	By:  	/s/ PATRICK L. DONNELLY
 	 
	 	 	Name:  	Patrick L. Donnelly 	 
	 	 	Title:  	Secretary 	 
	 
	 	SIRIUS ASSET MANAGEMENT COMPANY LLC

 	 
	 	By:  	/s/ PATRICK L. DONNELLY
 	 
	 	 	Name:  	Patrick L. Donnelly 	 
	 	 	Title:  	Secretary 	 



 


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	 	U.S. BANK NATIONAL ASSOCIATION,

as Collateral Agent

 	 
	 	By:  	/s/ JEAN CLARKE
 	 
	 	 	Name:  	Jean Clarke 	 
	 	 	Title:  	Assistant Vice President 	 
	 
	 	U.S. BANK NATIONAL ASSOCIATION,

as Trustee

 	 
	 	By:  	/s/ JEAN CLARKE
 	 
	 	 	Name:  	Jean Clarke 	 
	 	 	Title:  	Assistant Vice President 	 




 


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