Document:

Exhibit 10.1 - Arlington Claim.

Exhibit 10.1

	
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Mineral Titles Online Viewer

	 	 
	 	
Public Access 

	 	 
	 	
Tenure Detail

	 	 
	 	 
	 	
Tenure Number ID
	
516049
	
View Tenure

	 	
Tenure Type
	
Mineral (M)

	 	
Tenure Sub Type
	
Claim (C)

	 	
Title Type
	
Mineral Cell Title Submission (MCX)

	 	
Mining Division
	 
	 	
Good To Date
	
2007/MAR/31

	 	
Issue Date
	
2005/JUL/05

	 	
Termination Type
	 
	 	
Termination Comments
	 
	 	
Termination Date
	 
	 	
Tag Number
	 
	 	
Claim Name
	 
	 	
Old Tenure Code
	 
	 	
Area in Hectares 
	
942.445

	 	 	 
	 	
Map Numbers:

	 	 	
082E

	 	 
	 	
Owners:

	 	 	
147186
	
PAUL DOUGLAS BROCK   100.0%
	 
	 	 	 	 	 
	 	
Tenure Events:
	 	
Submitter
	
Event
	
Effective Date 

	 	 	
147186
	
PAUL DOUGLAS BROCK
	
CONV Claim Conversion (4039273)
	
2005/JUL/05

	 	 	
147186
	
PAUL DOUGLAS BROCK
	
CIL Payment Instead of Work (4076841)
	
2006/MAR/30

	 	 	
147186
	
PAUL DOUGLAS BROCK
	
CIL Payment Instead of Work (4089516)
	
2006/JUN/23Exhibit 10.1

     

     

    EXHIBIT
      10.1

    

     

    EXECUTION
      VERSION

     

     

    

    
      

      

    

     

    

     

    

     

    CREDIT
      AGREEMENT

     

    among

     

    CANADIAN
      SATELLITE RADIO INC.,

     

    as
      Borrower 

     

    CANADIAN
      SATELLITE RADIO HOLDINGS INC.,

     

    as
      Guarantor

     

    and

     

    XM
      SATELLITE RADIO HOLDINGS INC.

     

    as
      Lender

     

    

     

    

     

    

     

    Dated
      as of the 17th day of November 2005

     

     

    
      

      

    

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Table
      of Contents

     

     

    
      
        	1.	
                DEFINITIONS 

              	
                 1

              
	 	1.1 	Certain Definitions 	
                 1

              
	 	1.2. 	Other Definitional Provisions 	
                 10

              
	2. 	LOAN AND TERMS OF
                PAYMENT 	
                 10

              
	 	2.1 	Loan Commitment 	
                 10

              
	 	2.2. 	
                Manner
                  of Borrowing 

              	
                 10

              
	 	2.3. 	
                Interest 

              	
                 11

              
	 	2.4. 	
                Payments
                  and Notes 

              	
                 11

              
	 	2.5. 	
                Payment
                  at Maturity or Upon Conversion

              	
                 12

              
	 	2.6. 	
                Prepayment 

              	
                 12

              
	3. 	CONVERSION
                PROVISIONS 	
                 12

              
	 	3.1 	Optional Conversion Right 	
                 12

              
	 	3.2  	Mandatory Conversion 	
                 13

              
	 	3.3 	Issuance of Certificates 	
                 13

              
	 	3.4 	
                No
                  Fractional Shares 

              	
                 13

              
	 	3.5 	Reclassification of CSR Common
                Stock 	
                 14

              
	 	3.6	Reservation of CSR Common
                Stock 	
                 14

              
	 	3.7 	Taxes 	
                 14

              
	 	3.8 	No Rights or Liabilities as
                Stockholders	
                 15

              
	 	3.9. 	Determination of Initial Conversion
                Price. 	
                 15

              
	4.   	CONDITIONS
                PRECEDENT  	
                 15

              
	 	4.1. 	Conditions to Initial Advance 	
                 15

              
	 	4.2. 	Conditions to Each Advance 	
                 17

              
	5. 	REPRESENTATIONS AND WARRANTIES
                OF
                THE LENDER 	
                 18

              
	 	51.  	Risks of Investment 	
                 18

              
	 	5.2.  	Ability to Bear Risk 	
                 18

              
	 	5.3.   	Receipt and Review of
                Documentation 	
                 18

              
	 	5.4.  	Acquisition for Own Account	
                 18

              
	 	5.5. 	Residency, Accredited
                Investor 	
                 18

              
	 	5.6.  	No Public Market; Rule 144 	
                 19

              
	 	5.7.  	Organization, Good Standing, Corporate
                Authority 	
                 19

              
	 	5.8.  	Due Authorization 	
                 19

              
	6. 	COVENANTS 	
                 19

              
	 	6.1	Indebtedness 	
                 19

              
	 	6.2  	Ranking of Obligations 	
                 20

              
	 	6.3  	Liens 	
                 20

              
	 	6.4  	Consent Rights 	
                 20

              
	 	6.5  	Restriction on Dividends 	
                 21

              
	 	6.6   	Reporting Obligations 	
                 21

              
	 	6.7  	Inspection Rights 	
                 22

              
	 	6.8 	Lines of Business 	
                 22

              
	 	6.9 	Legal Requirements 	
                 23

              
	 	6.10 	Insurance 	
                 23

              
	 	6.11    	Corporate Existence and
                Performance 	
                 23

              
	 	6.12  	Further Assurances 	
                 23

              
	7.  	REPRESENTATIONS, WARRANTIES
                AND
                AGREEMENTS OF THE BORROWER AND HOLDINGS 	
                 23

              
	 	7.1.  	Incorporation, Standing,
                Subsidiaries 	
                 23

              
	 	7.2.  	Authorization of Agreement 	
                 23

              
	 	7.3.  	Absence of Defaults and
                Conflicts 	
                 24

              
	 	7.4.  	Governmental Consents 	
                 24

              
	 	7.5  	Indebtedness 	
                 24

              
	 	7.6   	Ranking of Obligations 	
                 24

              

      

       

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      
        	 	7.8  	Disclosure; Financial
                Statements 	
                 24

              
	 	7.9  	Taxes 	
                 25

              
	8. 	DEFAULTS
                AND REMEDIES 	
                 25

              
	 	8.1. 	Events of Default 	
                 25

              
	 	8.2. 	Acceleration 	
                 27

              
	 	8.3.  	Other Remedies 	
                 27

              
	 	8.4. 	Waiver of Past Defaults 	
                 27

              
	 9. 	RESTRICTIONS ON
                TRANSFER 	
                 27

              
	 	9.1. 	Restrictions; Restrictive
                Legend 	
                 27

              
	10. 	EXPENSES 	
                 29

              
	11. 	SURVIVAL 	 	
                 29

              
	12. 	AMENDMENTS AND
                WAIVERS 	
                 29

              
	 	12.1 	Amendments and Waivers 	
                 29

              
	13. 	GUARANTEES 	
                 29

              
	 	13.1. 	Execution and Delivery of Agreement
                Subsidiary Guarantees 	
                 29

              
	 	13.2. 	Subsidiary
                Guarantors May Consolidate, Etc. on Certain Terms 	
                 29

              
	 	13.3. 	Releases Following Sale of
                Assets 	
                 29

              
	 	13.4. 	Application of Certain Terms and Provisions
                to the Subsidiary Guarantors 	
                 30

              
	 	13.5. 	Addition of Subsidiary
                Guarantors 	
                 30

              
	 	13.6. 	Holdings Guarantee 	
                 30

              
	14. 	NOTICES 	
                 30

              
	15.	SECURITY 	
                 31

              
	 	15.1 	Borrower Security Required 	
                 31

              
	 	15.2 	Registration 	
                 32

              
	 	15.3 	Additional Security by the
                Borrower 	
                 32

              
	 	15.4. 	Release of Collateral 	
                 33

              
	 	15.5. 	Termination
                of Security Interest	
                 33

              
	 	15.6. 	Termination of Security Interest to
                Permit
                High Yield Debt Offering 	
                 33

              
	 	15.7. 	Intercreditor Agreement 	
                 33

              
	16. 	EXECUTION IN
                COUNTERPARTS 	
                 33

              
	17. 	BINDING EFFECT 	
                 33

              
	18. 	
                GOVERNING
                  LAW; CHOICE OF FORUM; JURY TRIAL WAIVER 

              	
                 33

              
	19. 	
                MISCELLANEOUS 

              	
                 34

              
	 	19.1. 	
                Severability 

              	
                 34

              
	 	19.2.  	No Waiver 	
                 34

              
	 	19.3. 	Further Assurances 	
                 34

              
	 	19.4.  	Interest Act Disclosure 	
                 34

              
	 	19.5  	Canadian Currency 	
                 34

              
	 	19.6  	Construction 	
                 34

              

      

    

     

          

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

    

     

    Exhibit
      A   Form
      of
      Request for Advance

     

    Exhibit
      B   Form
      of
      Agreement Subsidiary Guarantee 

     

    Exhibit
      C   Form
      of
      Holdings Guarantee

     

    

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

    CREDIT
      AGREEMENT

     

    CREDIT
      AGREEMENT (this “Agreement”), dated as of the 17th
      day of
      November 2005, by and among CANADIAN SATELLITE RADIO INC., a corporation
      incorporated under the laws of Canada (the “Borrower”),
      CANADIAN SATELLITE RADIO HOLDINGS INC., a corporation incorporated under the
      laws of Ontario, as the parent guarantor (“Holdings,”
      and
      together with the Borrower, “CSR”),
      and XM
      SATELLITE RADIO HOLDINGS INC., a Delaware corporation (the “Lender”).

     

    WITNESSETH

     

    WHEREAS
      CSR is engaged in the development of a satellite digital audio radio service
      in
      Canada;

     

    WHEREAS
      CSR requires significant incremental capital to fund its capital expenditures
      and operations;

     

    WHEREAS
      CSR desires to purchase from time to time from XM Satellite Radio Inc., a
      Delaware corporation (“XM”)
      terrestrial repeaters and associated equipment, including any required services
      to prepare such terrestrial repeaters for sale (the “Repeaters”);

     

    WHEREAS
      CSR and XM have entered into the XM System Licence Agreement dated on or about
      the date hereof (the “XM
      System Licence Agreement”),
      pursuant to which XM is owed payments by CSR for certain subscription fees
      received by CSR (the “Subscription
      Fee Payments”);

     

    WHEREAS
      in order to assist the Borrower with its capital requirements, the Lender has
      agreed to finance (i) the payment obligations of CSR from time to time owing
      to
      XM from the sale of Repeaters to CSR (the “Repeater
      Obligations”)
      and
      (ii) the payment obligations from time to time owing to XM from the obligation
      of CSR to make Subscription Fee Payments (the “Subscription
      Fee Obligations”),
      by
      allowing the Borrower to make monthly draws in an aggregate amount of up to
      Cdn$45,000,000 under this Agreement; and

     

    WHEREAS
      the Parties desire to set forth the terms and conditions of such
      financing.

     

    NOW
      THEREFORE for good and valuable consideration, the receipt and sufficiency
      of
      which is hereby acknowledged, the Parties hereby agree as follows:

     

     

    
      	
              1.

            	
              Definitions

            

    

     

     

    
      	 	
              1.1.

            	
              Certain
                Definitions

            

    

     

    The
      following terms when used in this Agreement, including its preamble and
      recitals, shall, except where the context otherwise requires, have the following
      meanings:

     

    “Advances”
      means
      advances to the Borrower by the Lender pursuant to Sections 2.2(b) or
      2.3(b).

     

    “Affiliate”
      of any
      specified Person means any other Person directly or indirectly controlling
      or
      controlled by or under direct or indirect common control with such specified
      Person. For purposes of this definition, “control,” as used with respect to any
      Person, shall mean the possession, directly or indirectly, of the power to
      direct or cause the direction of the management or policies of such Person,
      whether through the ownership of voting securities, by agreement or otherwise;
      provided
      that
      beneficial ownership of 10% or more of the Voting Stock of a Person shall be
      deemed to be control. For purposes of this definition, the terms “controlling,”
“controlled by” and “under common control with” shall have correlative
      meanings.

     

    “Agreement”
      means
      this Loan Agreement (including any Schedules and Exhibits hereto), as it may
      from time to time be amended, supplemented or modified in accordance with its
      terms.

     

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    “Agreement
      Subsidiary Guarantee”
      means
      any guarantee entered into in favor of the Lender pursuant to Section 13.5
      hereof.

     

    “Attributable
      Debt”
      in
      respect of a sale and leaseback transaction means, at the time of determination,
      the present value of the obligation of the lessee for net rental payments during
      the remaining term of the lease included in such sale and leaseback transaction
      including any period for which such lease has been extended or may, at the
      option of the lessor, be extended. Such present value shall be calculated using
      a discount rate equal to the rate of interest implicit in such transaction,
      determined in accordance with GAAP.

     

    “Borrower”
      has the
      meaning set forth in the recitals to this Agreement.

     

    “Business
      Day”
      means
      any day other than a Legal Holiday.

     

    “Canadian
      Licences” shall
      mean the CRTC Licence and the Industry Canada Licences. 

     

    “Capital
      Lease Obligation”
      means,
      at the time any determination thereof is to be made, the amount of the liability
      in respect of a capital lease that would at that time be required to be
      capitalized on a balance sheet in accordance with GAAP.

     

    “Capital
      Stock”
      means:

     

    (1) in
      the
      case of a corporation, corporate stock; 

     

    (2) in
      the
      case of an association or business entity, any and all shares, interests,
      participations, rights or other equivalents (however designated) of corporate
      stock; 

     

    (3) in
      the
      case of a partnership or limited liability company, partnership or membership
      interests (whether general or limited); and 

     

    (4) any
      other
      interest or participation that confers on a Person the right to receive a share
      of the profits and losses of, or distributions of assets of, the issuing
      Person.

     

    “Change
      of Control” means
      (i)
      Holdings owning less than 100% of the equity of the Borrower, (ii) CSR InvestCo
      owning less than 15% of the voting shares or equity of Holdings, or (iii) John
      Bitove and Bitove Affiliates (as defined below) holding, directly or indirectly,
      less than 50.01% of the voting rights of CSR InvestCo or less than the lower
      of
      (x) 33-1/3% of the equity of CSR InvestCo or (y) 50%
      of
      the number of shares of
      CSR
      InvestCo that John Bitove and Bitove Affiliates own
      on
      the date hereof (as adjusted for any recapitalization), treating in the case
      of
      both (x) and (y) any portion of the equity of or shares in CSR
      InvestCo subject to a Hedge (as defined below) as not being held by John Bitove
      or Bitove Affiliates. “Hedge” means a forward sale, swap, cap or collar
      agreements, or other agreement or arrangement designed to protect against
      fluctuations in the value of equity or shares or under which a counterparty
      or
      person other than John Bitove or Bitove Affiliates has the primary economic
      interest in such equity or shares or any appreciation in the value thereof.
      “Bitove Affiliates” means John Bitove’s Family Members or a custodian, trustee
      (including an RRSP, RIF, IRA or similar retirement or investment fund) or other
      fiduciary for John Bitove and/or his Family Members, where “Family Members”
means, in respect of an individual, any parent, spouse, child, spouse of a
      child, grandchild and/or sibling.

     

    “Closing”
      means
      the consummation of the transactions contemplated by this
      Agreement.

     

    “Closing
      Date”
      means
      the date of the Closing.

     

    “Collateral”
      means
      the Collateral (as defined in the Security Documents).

     

    “Commitment
      Period”
      shall
      mean the period commencing on the effective date of the GM Distribution
      Agreement, and ending upon the earlier of (i) termination of the GM
      Distribution Agreement and (ii) the first Business Day after the fifth
      anniversary of the Trigger
      Date.

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Conversion”
      means
      the conversion of all or a portion of the aggregate principal amount of Advances
      into shares of CSR Common Stock in accordance with the provisions of Section
      3
      of this Agreement.

     

    “Conversion
      Date”
      means
      the date a Conversion pursuant to Section 3.1 or 3.2 hereof becomes
      effective.

     

    “Conversion
      Price”
      means
      the Initial Conversion Price, or, if no Initial Conversion Price has been
      established, the Fair Market Value as of the date that the Lender provides
      written notice to the Borrower of its intention to effect a Conversion or as
      of
      the date that the Borrower is required to undertake a Mandatory
      Conversion.

     

    “Conversion
      Stock”
      means
      the shares of CSR Common Stock that may be issued upon Conversion in accordance
      with the provisions of Section 3 of this Agreement.

     

    “CRTC”
      means
      the Canadian Radio-television and Telecommunications Commission or any successor
      thereto.

     

    “CRTC
      Licence”
      means
      the Licence issued by the CRTC to the Borrower which together with the Industry
      Canada licences constitute the “Canadian Licences”.

     

    “CSR”
      has
      the
      meaning set forth in the recitals to this Agreement.

     

    “CSR
      Common Stock”
      means
      the Class A Subordinate Voting Shares of Holdings.

     

    “CSR
      InvestCo”
      means
      Canadian Satellite Radio Investments Inc., a corporation existing under the
      laws
      of the Province of Ontario.

     

    “Debt
      Obligors”
      has the
      meaning set forth in Section 6.1 of this Agreement.

     

    “Default”
      means
      any event that is, or with the passage of time or the giving of notice or both
      would be, an Event of Default. 

     

    “EBITDA”
      means,
      for any period, net income (or net loss) plus
      the sum
      of (a) interest expense, (b) income tax expense, (c) depreciation expense and
      (d) amortization expense, in each case determined in accordance with GAAP for
      such period.

     

    “Equity
      Interest”
      means
      Capital Stock and all warrants, options or other rights to acquire Capital
      Stock
      (but excluding any debt security that is convertible into, or exchangeable
      for,
      Capital Stock).

     

    “Event
      of Default”
      has the
      meaning set forth in Section 8.1 of this Agreement.

     

    “Excess
      Cash”
      means,
      for any Quarterly Period, the excess, if any, of (a) the sum, without
      duplication, of (i) consolidated net income of Borrower and its Subsidiaries
      for
      such Quarterly Period, (ii) an amount equal to the amount of all non-cash
      charges (including depreciation and amortization) deducted in arriving at such
      consolidated net income, (iii) decreases in consolidated working capital of
      Borrower and its Subsidiaries for such Quarterly Period, (iv) an amount equal
      to
      the aggregate net non-cash loss on the disposition of property by Borrower
      and
      its Subsidiaries during such Quarterly Period (other than sales of inventory
      in
      the ordinary course of business), to the extent deducted in arriving at such
      consolidated net income and (v) the net increase during such Quarterly Period
      (if any) in deferred tax accounts of Borrower and its Subsidiaries over (b)
      the
      sum, without duplication, of (i) an amount equal to the amount of all non-cash
      credits included in arriving at such consolidated net income, (ii) the aggregate
      amount actually paid by Borrower and its Subsidiaries in cash during such
      Quarterly Period on account of capital expenditures, (iii) the aggregate amount
      of all prepayments of all amounts then outstanding to the Lender under this
      Agreement during such Quarterly Period, (iv) the aggregate amount of all
      regularly scheduled principal payments of obligations made during such Quarterly
      Period with respect to outstanding indebtedness of Borrower and its
      Subsidiaries, (v) increases in consolidated working capital of Borrower and
      its
      Subsidiaries for such Quarterly Period, (vi) an amount equal to the aggregate
      net non-cash gain on the disposition of property by Borrower and its
      Subsidiaries during such Quarterly Period (other than sales of inventory in
      the
      ordinary course of business), to the extent included in arriving at such
      consolidated net income, and (vii) the net decrease during such fiscal year
      (if
      any) in deferred tax accounts of Borrower and its Subsidiaries. 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    “Excluded
      Collateral”
      has the
      meaning set forth in clause (1) of the definition of “Permitted
      Liens.”

     

    “Fair
      Market Value”
      as of a
      certain date shall mean the price per share of CSR Common Stock equal to (a)
      in
      case CSR Common Stock is publicly traded, the weighted-average closing price
      as
      listed on a major U.S. or Canadian stock exchange where it is publicly traded
      for the ten (10) Trading Days immediately prior to such date or (b) in case
      CSR
      Common Stock is not publicly traded on such date, the most recent price per
      share of Common Stock paid in the purchase of at least Cdn$5,000,000 of CSR
      Common Stock by a Person unaffiliated with John Bitove or CSR InvestCo or other
      Affiliate of Holdings. In the event that Fair Market Value cannot be determined
      pursuant to the foregoing as a result of CSR Common Stock not being publicly
      traded or no equity purchase transactions having taken place whenever the Lender
      elects to effect a Conversion, the Lender and the Borrower shall each hire
      at
      their own cost an independent financial advisor to prepare an appraisal as
      to
      the “Fair Market Value” of a price per share of CSR Common Stock as of such
      date. In the event that the Borrower and Lender still cannot come to an
      agreement on “Fair Market Value”, the Lender and the Borrower shall hire a third
      independent financial advisor (whose costs and expenses shall be shared equally
      between the Borrower and the Lender) to prepare another appraisal as to “Fair
      Market Value” of a per share of CSR Common Stock as of such date. In such an
      event, “Fair Market Value” as of such date shall be the median value obtained
      from all three appraisals.

     

    “Funding
      Date” has
      the
      meaning set forth in Section 2.2 of this Agreement.

     

    “GAAP”
      means
      generally accepted accounting principles in Canada, provided that to the extent
      that a change in GAAP materially affects the calculation of any of the covenants
      herein, GAAP shall mean, solely with respect to the covenants so affected,
      the
      generally accepted accounting principles as in effect on the date of this
      Agreement.

     

    “GM
      Canada”
      means
      General Motors of Canada Limited, a Canadian corporation.

     

    “GM
      Distribution Agreement”
      means
      the proposed Distribution Agreement to be entered into by and among GM Canada,
      CSR and XM, provided that the final version of such agreement shall be
      satisfactory in form and substance to the Lender in its reasonable discretion.
      

     

    “Governmental
      Entity”
      means
      any international body or any nation or government, any province or state of
      political subdivision thereof, any entity exercising executive, legislative,
      judicial, regulatory or administrative functions of or pertaining to government
      any corporation or other entity owned or controlled, through stock or capital
      or
      otherwise, by any of the foregoing.

     

    “Guarantee”
      means a
      guarantee other than by endorsement of negotiable instruments for collection
      in
      the ordinary course of business, direct or indirect, in any manner including
      by
      way of a pledge of assets or through letters of credit or reimbursement
      agreements in respect thereof, of all or any part of any
      Indebtedness.

     

    “Hedging
      Obligations”
      means,
      with respect to any specified Person, the obligations of such Person under:
      

     

    (1) interest
      rate swap agreements, interest rate cap agreements and interest rate collar
      agreements; and 

     

    (2)
       other
      agreements or arrangements designed to protect such Person against fluctuations
      in interest rates or currency values. 

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “High
      Yield Debt” means unsecured
      Pari Passu Indebtedness which is evidenced by the issuance of notes in a public
      offering or private placement to investors under Rule 144A promulgated under
      the
      Securities Act or similar rule applicable to private placements in
      Canada.

     

    “Holdings”
      has the
      meaning set forth in the recitals to this Agreement.

     

    “Holdings
      Guarantee”
      means
      the Guarantee made by Holdings for the benefit of the Lender substantially
      in
      the form of Exhibit C.

     

    “Indebtedness”
      means,
      with respect to any specified Person, any indebtedness of such Person without
      duplication, whether or not contingent, in respect of: 

     

    (1) borrowed
      money; 

     

    (2) evidenced
      by bonds, notes, debentures or similar instruments or letters of credit (or
      reimbursement agreements in respect thereof); 

     

    (3) banker’s
      acceptances; 

     

    (4) representing
      Capital Lease Obligations; 

     

    (5) the
      balance deferred and unpaid of the purchase price of any property,
      except
      any such balance that constitutes an accrued expense or trade
      payable;
      

     

    (6) representing
      any Hedging Obligations; or

     

    (7) all
      obligations customarily treated as indebtedness and on which interest is
      customarily paid, except any such balance that constitutes an accrued expense
      or
      trade payable;

     

    if
      and to
      the extent any of the preceding items (other than letters of credit and Hedging
      Obligations) would appear as a liability upon a balance sheet of the specified
      Person prepared in accordance with GAAP. In addition, the term “Indebtedness”
shall include (a) all Indebtedness of others secured by a Lien on any asset
      of
      the specified Person (whether or not such Indebtedness is assumed by the
      specified Person), (b) to the extent not otherwise included, the Guarantee
      by
      the specified Person of any indebtedness of any other Person and (c) all
      Attributable Debt of such Person. 

     

    The
      amount of any Indebtedness outstanding as of any date shall be: 

     

    (1) the
      accreted value thereof, in the case of any Indebtedness issued with original
      issue discount; and 

     

    (2) the
      principal amount thereof, together with any interest thereon that is more than
      30 days past due, in the case of any other Indebtedness.

     

    “Industry
      Canada” shall
      mean the Canadian federal Department of Industry, including any successors
      or
      assigns thereof.

     

    “Industry
      Canada Licences” shall
      mean those radio spectrum licences issued by Industry Canada to the Borrower
      which, together with the CRTC Licence, constitute the “Canadian Licences”.

     

    “Initial
      Conversion Price”
      shall
      mean the share price of CSR Common Stock in a Qualified Initial Public
      Offering/Major Placement or, in the event such a Qualified Initial Public
      Offering/Major Placement has not occurred at the time of a proposed Conversion,
      the Initial Conversion Price shall mean 120% of the price per share paid in
      the
      purchase of at least Cdn$5,000,000 of CSR Common Stock by a Person unaffiliated
      with John Bitove or CSR InvestCo or other Affiliate of Holdings in the
      transaction closest to, but not after, the date the Borrower satisfies all
      of
      the conditions set forth in Section 4.1 of this Agreement for the making of
      the
      initial Advance (or, in either case, if the share price is adjusted following
      such transaction, whether due to antidilution adjustment provisions or
      otherwise, such adjusted share price). If the Qualified Initial Public
      Offering/Major Placement is a private placement, then (a) if only preference
      shares are issued in the transaction, the Initial Conversion Price shall equal
      the share price of CSR Common Stock issuable upon immediate conversion of such
      preference shares, less a 25% discount (if the preference shares generally
      have
      the same rights as common shares other than a liquidation preference) or 33%
      discount (if the preference shares generally have greater rights than common
      shares in addition to a liquidation preference) to reflect the superior features
      of the preference shares, and (b) any amounts paid or refunded to the investors
      in or arising out of the transaction shall be treated as attributable to, and
      resulting in a reduction of, the share price.

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    “Initial
      Public Offering”
      means
      the initial public offering exceeding Cdn$25,000,000 (or USD $25,000,000, in
      the
      case of a U.S. stock exchange listing) in gross proceeds and public listing
      of
      the CSR Common Stock on any major U.S. or Canadian stock exchange or
      market.

     

    “Interest
      Payment Date”
      means
      the last day of each Quarterly Period; provided,
      that if
      any Interest Payment Date is not a Business Day, the Interest Payment Date
      will
      be deferred until the next succeeding Business Day.

     

    “Interest
      Rate”
      means,
      for any day during a Quarterly Period, a rate equal to 9.0% per
      annum.

     

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

     

    “Legal
      Holiday”
      means a
      Saturday, a Sunday or a day on which banking institutions in the City of New
      York and Toronto, Canada are authorized by law, regulation or executive order
      to
      remain closed.

     

    “Lender”
      has the
      meaning set forth in the recitals to this Agreement.

     

    “LIBOR
      Rate”
      means
      for any date, the rate that is reported on such date as the 3-month London
      Interbank Offered Rate in The Wall Street Journal’s listing of Money Rates, or
      if such newspaper shall have ceased publishing, then in any successor
      publication designated by the Lender.

     

    “Lien”
      means,
      with respect to any asset, any mortgage, lien, pledge, charge, security interest
      or encumbrance of any kind in respect of such asset, whether or not filed,
      recorded or otherwise perfected under applicable law, including any conditional
      sale or other title retention agreement, any lease in the nature thereof, any
      option or other agreement to give a security interest.

     

    “Loan
      Commitment”
      shall
      mean the obligation of the Lender to make Advances to the Borrower in the
      maximum aggregate principal amount of Cdn$45,000,000 Canadian dollars on the
      terms and conditions set forth herein, as such amount may be reduced pursuant
      to
      Section 2.6(c).

     

    “Loan
      Parties”
      means
      Holdings and the Borrower.

     

    “Mandatory
      Conversion”
      has the
      meaning set forth in Section 3.2 of this Agreement.

     

    “Mandatory
      Conversion Event”
      means
      the occurrence of all of the following events: (i) CSR having achieved three
      consecutive Quarterly Periods of positive EBITDA, (b) CSR Common Stock being
      listed on a major U.S. or Canadian stock exchange in an Initial Public Offering
      exceeding Cdn$25,000,000 (or USD $25,000,000, in the case of a U.S. stock
      exchange listing) in gross proceeds and (c) CSR’s publicly traded stock closing
      at a price greater than 250% of the Initial Public Offering stock price for
      ten
      (10) consecutive Trading Days.

     

    “Material
      Adverse Effect”
      means a
      material adverse affect on the assets, business or financial position of the
      Borrower, Holdings or any of their respective Subsidiaries, as considered as
      a
      whole.

     

    “Maturity
      Date”
      means
      December 31, 2012.

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    “Obligated”
      has the
      meaning set forth in Section 6.1 of this Agreement.

     

    “Obligations”
      means
      any principal, interest, penalties, indemnifications, reimbursements, damages
      and other liabilities payable to the Lender hereunder or under the other
      Transaction Documents.

     

    “Officer”
      means,
      with respect to any Person, the Chairman of the Board, the Chief Executive
      Officer, the President, the Chief Operating Officer, the Chief Financial
      Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary
      or any Vice-President of such Person.

     

    “Pari
      Passu Indebtedness”
      means,
      with respect to the Borrower or Holdings, Indebtedness of the Borrower or
      Holdings that is pari
      passu
      in right
      of payment to the Indebtedness under this Agreement and the other Transaction
      Documents.

     

    Permitted
      Debt”
      has the
      meaning set forth in Section 6.1 of this Agreement.

     

    “Permitted
      Liens”
      means:

     

    (1) Liens
      on
      any assets of the Borrower, Holdings, or any of their Subsidiaries to secure
      Senior Bank Indebtedness incurred pursuant to Section 6.1(ii), other than (i)
      Liens on any Repeaters financed by Advances under this Agreement not
      subordinated to the Liens granted (or to be granted) in favor of the Lender
      under the Security Documents (as defined below) on subordination terms
      reasonably satisfactory to the Lender, (ii) Liens on the Canadian Licences
      or
      the shares of any Subsidiary where the primary asset of such Subsidiary is
      any
      Canadian Licence, or (iii) Liens on any assets that are not also subject to
      a
      perfected lien in favor of the Lender pursuant to the Security Documents or
      other documentation satisfactory to the Lender (such assets described in clauses
      (i), (ii) and (iii) of this proviso, the “Excluded
      Collateral”);

     

    (2) Liens
      on
      property existing at the time of acquisition thereof by the Borrower or Holdings
      or any of their Subsidiaries, provided
      that
      such Liens were not incurred in contemplation of such acquisition; 

     

    (3) Liens
      to
      secure the performance of bids, tenders, leases (limited to rental deposits),
      statutory obligations, surety or appeal bonds, performance bonds or other
      obligations of a like nature incurred in the ordinary course of business, but
      not in connection with the borrowing of money or obtaining credit; 

     

    (4) Liens
      for
      taxes, assessments or governmental charges or claims that are not yet delinquent
      or that are being contested in good faith by appropriate proceedings promptly
      instituted and diligently concluded, provided that any reserve or other
      appropriate provision as shall be required in conformity with GAAP shall have
      been made therefor; 

     

    (5) Liens
      incurred or deposits made in the ordinary course of business in connection
      with
      workers’ compensation, unemployment insurance and other types of social security
      not at the time due; 

     

    (6) judgment
      Liens which do not give rise to an Event of Default; 

     

    (7) easements,
      rights-of-way, zoning restrictions, public utility and other similar charges
      or
      encumbrances in respect of real property not interfering in any material respect
      with the ordinary conduct of the business of the Borrower, Holdings or any
      of
      their Subsidiaries or the value of such real property; 

     

    (8) leases
      or
      subleases granted to others that do not materially interfere with the ordinary
      course of business of the Borrower, Holdings or any of their Subsidiaries;
      

     

    (9) Liens
      in
      favor of customs and revenue authorities arising as a matter of law to secure
      payment of customer duties in connection with the importation of goods;

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (10) carriers’,
      warehousemen’s, mechanics’, landlords’, materialmen’s, repairmen’s or other
      similar Liens arising in the ordinary course of business that are not delinquent
      or remain payable without penalty; 

     

    (11) Liens
      encumbering property or other assets under construction in the ordinary course
      of business arising from progress or partial payments by a customer of the
      Company or its Subsidiaries relating to such property or other assets;

     

    (12) Liens
      arising out of conditional sale, title retention, consignment or similar
      arrangements for the sale of goods entered into by the Borrower, Holdings or
      any
      of their Subsidiaries in the ordinary course of business; 

     

    (13) the
      right
      reserved to or vested in any Governmental Entity by any statutory provision
      or
      by the terms of any lease, licence, franchise, grant or permit of Borrower,
      to
      terminate any such lease, licence, franchise, grant or permit, or to require
      annual or other payments as a condition to the continuance thereof;

     

    (14) Liens
      disclosed in Schedule
      1.1.PL(14)
      but only
      to the extent such Liens conform to their description in Schedule
      1.1.PL(14)
      and
      includes any extension or renewal thereof provided the amount so secured does
      not exceed the original amount secured immediately prior to the extension,
      renewal or refinancing and the scope of security creating the Lien is not
      extended; and

     

    (15) Liens
      granted under the Security Documents or any other Transaction
      Document.

     

    “Person”
      means
      any individual, corporation, partnership (whether general, limited or
      undeclared), joint venture, association, joint-stock company, trust,
      unincorporated organization, limited liability company or government or other
      entity. 

     

     “Pre-Marketing
      Cash Flow”
      means
      EBITDA but excluding from such calculation all marketing, advertising,
      subscriber acquisition and distribution expenses.

     

    “Qualified
      Initial Public Offering/Major Placement”
      means
      for the period commencing on the Trigger Date and ending on the first
      anniversary thereof, the transaction that results in the highest price per
      share
      from (a) an Initial Public Offering exceeding Cdn$25,000,000 (or USD
      $25,000,000, in the case of a U.S. stock exchange listing) in gross proceeds,
      or
      (b) a private placement of CSR Common Stock with gross proceeds exceeding
      Cdn$25,000,000 (or USD $25,000,000 in the event of a transaction denominated
      in
      U.S. dollars).

     

    “Quarterly
      Date”
      means
      the 31st day of March, the 30th day June, the 30th day of September and the
      31st
      day of December of each year; provided that (i) if any Quarterly Date is not
      a
      Business Day, the Quarterly Date will be deferred to the next following Business
      Day, and (ii) if any Quarterly Date would occur after the Maturity Date, such
      Quarterly Date shall be the Maturity Date.

     

    “Quarterly
      Period”
      means,
      with respect to the first Quarterly Period, the period commencing on the date
      of
      the first Advance through but not including, the next following Quarterly Date,
      and thereafter each period commencing on and including a Quarterly Date through,
      but not including, the next following Quarterly Date.

     

    “Reclassified
      Securities”
      has the
      meaning set forth in Section 3.5 of this Agreement.

     

    “Registration
      Rights Agreement”
      means
      the Registration Rights Agreement, dated on or about the date hereof, by and
      among Holdings and the other parties named on the signature pages thereof,
      as
      such agreement may be amended, modified or supplemented from time to
      time.

     

    “Regulatory
      Event”
      means
      the violation of any applicable law, including the Restrictions, relating to
      the
      Canadian Licences then held by the Borrower, Holdings or any Subsidiary of
      Holdings or Borrower.

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    “Repeaters”
      has the
      meaning set forth in the recitals to this Agreement.

     

    “Repeater
      Obligations”
      has the
      meaning set forth in the recitals to this Agreement.

     

    “Request
      for Advance”
      has the
      meaning set forth in Section 2.2(a).

     

    “Restrictions”
      shall
      mean all decisions, orders, rules, regulations, policies and Cabinet Directions
      relating to the ownership and control in fact of Canadian communications
      companies that hold licences under the Broadcasting
      Act
      (Canada).

     

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

     

    “Security
      Documents”
      shall
      have the meaning set forth in Section 15.1.

     

    “Senior
      Bank Indebtedness”
      means
      Indebtedness to a bank or other commercial lender incurred by the Borrower
      pursuant to Section 6.1(ii) for the purpose of funding the Borrower’s business
      which shall be senior in right of payment to the Obligations.

     

    “Share
      Issuance Agreement” means
      the
      Share Issuance Agreement, dated on or about the date hereof, among the Borrower,
      Holdings and the Lender.

     

    “Subscription
      Fee Obligations”
      has the
      meaning set forth in the recitals to this Agreement.

     

    “Subscription
      Fee Payments”
      has the
      meaning set forth in the recitals to this Agreement.

     

    “Subsidiary”
      means,
      with respect to any specified Person: 

     

    (1) any
      corporation, association or other business entity of which more than 50% of
      the
      total voting power of shares of Voting Stock is at the time owned or controlled,
      directly or indirectly, by such Person or one or more of the other Subsidiaries
      of that Person (or a combination thereof); and 

     

    (2) any
      partnership (a) the sole general partner or the managing general partner of
      which is such Person or a Subsidiary of such Person or (b) the only general
      partners of which are such Person or one or more Subsidiaries of such Person
      (or
      any combination thereof). 

     

    “Subsidiary
      Guarantor”
      means
      any entity that enters into an Agreement Subsidiary Guarantee pursuant to
      Section 13.5 hereof. As of the date hereof, there are no Subsidiary
      Guarantors.

     

    “Tax”
      means
      any federal, provincial, local, foreign and other tax (including without
      limitation, income, gross receipts, Licence, payroll, employment, excise,
      severance, stamp, occupation, premium, windfall profits, environmental, customs
      duties, capital stock, franchise, profits, withholding, social security (or
      similar), unemployment, disability, real property, personal property, sales,
      use, transfer, registration, value added, alternative or add-on minimum,
      estimated, or other tax, fee, levy, duty, tariff, impost and other charges
      of
      any kind whatsoever, including any interest, penalty, or addition thereto,
      whether disputed or not imposed by any governing or taxing
      authority).

     

    “Trading
      Day”
      means
      any day on which CSR Common Stock is traded on a major U.S. or Canadian market
      or exchange on which the CSR Common Stock is then listed or quoted.

     

    “Transaction
      Documents”
      means
      all documents delivered in connection with the transactions contemplated by
      this
      Agreement, including the Security Documents, the Holdings Guarantee, each
      Agreement Subsidiary Guarantee, the Registration Rights Agreement and the
      Distribution Agreement. 

     

    “Trigger
      Date”
      has the
      meaning set forth in the GM Distribution Agreement.

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    “Unused
      Loan Commitment Amount”
      means,
      at any time of determination, (i) the Loan Commitment then in effect
less
      (ii) the
      aggregate principal amount of all Advances outstanding at such
      time.

     

    “Voting
      Stock”
      of any
      Person as of any date means the Capital Stock of such Person that is at the
      time
      entitled to vote in the election of directors, general partners, managers or
      trustees of such Person.

     

    “XM”
      has the
      meaning set forth in the recitals to this Agreement.

     

    “XM
      System Licence Agreement”
      has the
      meaning set forth in the recitals to this Agreement.

     

     

    
      	 	
              1.2.

            	
              Other
                Definitional Provisions

            

    

     

    The
      words
“hereof,” “herein,” 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. Defined terms in the singular shall
      include the plural and vice
      versa.

     

     

    
      	
              2.
                

            	
              Loan
                and Terms of Payment

            

    

     

     

    
      	 	
              2.1.

            	
              Loan
                Commitment

            

    

     

    (a) Advances.
      Subject
      to the terms of this Agreement, the Lender agrees to make Advances to the
      Borrower during the Commitment Period in an aggregate principal amount not
      to
      exceed the Unused Loan Commitment Amount.

     

    (b) Use
      of
      Proceeds.
      The
      Borrower shall use the Advances solely to pay the Repeater Obligations and
      the
      Subscription Fee Obligations owed to XM. Under no circumstances shall Advances
      be used to fund payments due in relation to: (i) reimbursement of XM for its
      actual costs incurred in the provision of outsourced services to CSR, including,
      among other services, back office services, customer support services and
      technical and engineering support, (ii) payments due XM under the XM System
      Licence Agreement arising from net revenues from premium, data or other non-core
      services, (iii) payments due XM under the XM System Licence Agreement arising
      from the activation by XM of CSR’s subscribers, or (iv) for greater certainty,
      payments due to XM under the Transaction Documents (as defined in the XM System
      Licence Agreement) other than the Repeater Obligations and the Subscription
      Fee
      Obligations.

     

    (c) Purpose.
      Without
      limiting the provisions of this Agreement regarding the ability of the Borrower
      to request Advances hereunder, the parties acknowledge that this Agreement
      is to
      provide the Borrower with a “stand-by” credit facility that is generally
      intended to be used only when required by the Borrower to make the payments
      to
      XM that are permitted uses of proceeds hereunder.

     

     

    
      	 	
              2.2.

            	
              Manner
                of Borrowing

            

    

     

    (a) Request
      for Advance.
      Borrower may request an Advance by delivering to the Lender a completed Request
      for Advance in the form attached hereto as Exhibit
      A
      (a
“Request
      for Advance”) not
      later
      than 11:00 a.m., Washington, D.C. time on the Business Day prior to the date
      such Advance is to be funded. Such Request for Advance shall be signed by an
      authorized Officer of the Borrower and shall indicate the amount of the
      requested Advance, the amount of the Repeater Obligations and Subscription
      Fee
      Obligations, as applicable, for which such Advance is being requested, and
      the
      date for such Advance, which shall be the date on which the Repeater Obligations
      and the Subscription Fee Obligations, as applicable, being funded by such
      Advance become due and owing (the “Funding
      Date”).
      Each
      Request for Advance shall be irrevocable and effective only upon receipt by
      the
      Lender. Only one (1) Request for Advance may be made per calendar
      month.

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

                (b) Funding.
      Subject
      to Sections 4.1 and 4.2, the Lender shall, to the extent of the Unused Loan
      Commitment Amount, pursuant to the irrevocable instructions of the Borrower,
      make the proceeds of each Advance on the date requested available to Borrower
      to
      pay XM for the Repeater Obligations and Subscription Fee Obligations, as
      applicable, due and owing by the Borrower to XM on the date of the Advance
      in an
      amount equal to the amount of the Advance and as set forth in the applicable
      Request for Advance. Such funds shall be made available to the Borrower for
      payment to XM by the Lender by transferring the proceeds of the Advance to
      XM,
      which will acknowledge receipt of the amount received from the Lender as payment
      by the Borrower to XM in such amount. Upon the making of an Advance, the Lender
      shall make a notation on its books of account as to the amount and time of
      the
      Advance. 

     

     

    
      	 	
              2.3.

            	
              Interest

            

    

     

    (a) Interest
      Accrual.
      Interest shall accrue at the Interest Rate on a daily basis during each
      Quarterly Period on the aggregate unpaid principal amount of all Advances.
      Such
      interest shall be due and payable in arrears on each Interest Payment Date
      for
      the most recent Quarterly Period then ended. 

     

    (b) Interest
      Payment.
      If
      on any
      Interest Payment Date (i) there exists an Unused Loan Commitment Amount and
      (ii)
      the conditions set forth in Section 4.2 hereof, including all certificates
      required thereunder (other than Section 4.2(a)), have been satisfied as of
      such
      Interest Payment Date, then interest due and owing on such Interest Payment
      Date
      that is not paid by the Borrower shall automatically be added to the principal
      amount of the outstanding Advances on such Interest Payment Date in an amount
      not to exceed the Unused Loan Commitment Amount. For greater certainty, any
      interest not applied to increase the principal amount of the Advances pursuant
      to this Section 2.3(b) shall be paid to the Lender in immediately available
      funds on such Interest Payment Date. 

     

    (c) Default
      Interest.
      In the
      event the Borrower shall fail to make any payment of the principal or interest
      when due as provided in Section 2.3(a) and (b), after giving effect to any
      applicable grace period provided for in this Agreement, the Borrower shall
      pay
      interest on such unpaid amount, payable from time to time on demand, from the
      date such amount shall have become due to the date of payment thereof (after
      as
      well as before judgment), accruing on a daily basis, at a per annum rate equal
      to the LIBOR Rate on the date such amount shall have become due plus
      ten
      percent (10.0%) per annum (“Default
      Interest”),
      but in
      no event shall such default rate exceed the maximum rate permitted under
      applicable provincial and federal laws.

     

     

    
      	 	
              2.4.

            	
              Payments
                and Notes

            

    

     

    (a) Form
      of Payment.
      Except
      to
      the extent that Advances have been converted pursuant to Section 3, each payment
      of principal or interest will be made to the Lender by wire transfer of
      immediately available funds to such account as the Lender specifies in writing
      to the Borrower at least five (5) Business Days before such payment is to be
      made (or if it is not feasible to pay by wire transfer due to technological
      failure or other cause beyond the control of the Borrower, payment may be made
      by certified or bank cashier’s check to such address as is specified by the
      Lender). 

     

    (b) Application
      of Insufficient Payments.
      If at
      any time insufficient funds are received by and available to the Lender to
      pay
      fully all amounts of principal and interest, due hereunder, such funds shall
      be
      applied (i) first,
      to pay
      Default Interest and then other interest due hereunder, and (ii) second,
      to pay
      principal then due hereunder. 

     

    (c) Promissory
      Note.
      The
      Lender may request that the Advances be evidenced by a promissory note (a
“Note”). In
      such
      event, the Borrower shall prepare, execute and deliver to the Lender a Note
      payable to the Lender and in a form approved by the Lender. In the event that
      a
      Note is issued, the Borrower will pay all sums becoming due hereunder for
      interest or principal, without the presentation or surrender of the Note or
      the
      making of any notation thereon, except that if the Note is paid in full,
      following such payment, the Note shall be surrendered to the Borrower for
      cancellation.
      For
      greater certainty, the issuance of a Note shall not preclude the Borrower from
      paying interest due thereon pursuant to Section 2.3(b) hereof.

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
      	 	
              2.5.

            	
              Payment
                at Maturity or Upon
                Conversion

            

    

     

    (a) The
      outstanding principal amount of all Advances, together with any accrued interest
      thereon, shall be due and payable in full in immediately available Canadian
      dollars on the earlier of: (i) the Maturity Date, or (ii) such earlier date
      as
      the Advances become due and payable pursuant to this Agreement.

     

    (b)
       Upon
      the
      Conversion of any or all of the Advances (or any part thereof) or interest
      thereon in accordance with the terms of Section 3 of this Agreement, (i) the
      principal amount of each Advance so converted, or part thereof or interest
      thereon, as the case may be, shall be deemed to have been satisfied and paid
      in
      full and (ii) the Loan Commitment shall be reduced pursuant to Section 2.6(c).
      

     

     

    
      	 	
              2.6.

            	
              Prepayment

            

    

     

    (a) Optional
      Prepayment.
      Each of
      the Advances, including all accrued interest thereon, may be prepaid only in
      whole and not in part at any time, without premium or penalty; provided that
      (i)
      the Borrower shall give the Lender written notice no later than 12:00 p.m.,
      Washington, D.C. time, on the Business Day prior to making such prepayment,
      specifying the amount to be prepaid and the date of prepayment and (ii) all
      accrued interest with respect to the Advances shall be paid on the date of
      such
      prepayment. Each such notice of prepayment shall be irrevocable upon receipt
      by
      the Lender. 

     

    (b) Mandatory
      Prepayments. 

     

    (i) Commencing
      with the first Quarterly Period after the fifth anniversary of the Trigger
      Date,
      the Borrower shall on or before the fifth Business Day after the end of each
      Quarterly Period, prepay the outstanding Advances, including all accrued
      interest thereon, without premium or penalty, in an amount equal to the lesser
      of (x) fifty percent (50%) of Excess Cash for such Quarterly Period and
      (y) the amount necessary to prepay the Obligations in full.

     

    (ii) In
      the
      event that either Holdings or the Borrower shall, other than in accordance
      with
      Section 13.2, directly or indirectly consolidate or merge with or into another
      Person (whether or not the Borrower or Holdings is the surviving entity), or
      sell, assign, transfer, convey or otherwise dispose of all or substantially
      all
      of its properties or assets, in any such case, other than in connection with
      a
      consolidation, sale, transfer or merger with Persons owned or controlled by
      the
      Lender, then all of the Advances shall be immediately prepaid. In the event
      that a Change of Control occurs, then all of the Advances shall be prepaid,
      including all accrued interest thereon, without premium or penalty, within
      three
      (3) Business Days of such event. An Initial Public Offering shall not trigger
      the mandatory prepayment requirements of this Section 2.6(b)(ii).

     

    (c) Loan
      Commitment Termination or Reduction.
      Any
      amounts prepaid pursuant to this Section 2.6 or converted pursuant to Article
      3
      shall result in a permanent reduction of the Loan Commitment in the principal
      amount prepaid or converted, and may not be reborrowed. Any prepayment or
      conversion in whole of all the outstanding Advances shall constitute a
      termination of the Loan Commitment in its entirety.

     

     

    
      	
              3.

            	
              Conversion
                Provisions

            

    

     

     

    
      	 	
              3.1

            	
              Optional
                Conversion Right

            

    

     

    At
      any
      time following the earlier to occur of (i) an Initial Public Offering and (ii)
      the Lender becoming the owner of 10% or more of the Voting Stock of CSR under
      agreements or arrangements separate from this Agreement and the other
      Transaction Documents, the Lender shall have the right, at its option, at any
      time, subject to the Restrictions and the provisions contained in Section 3.3
      regarding the exercise of such right, and the other terms and provisions of
      this
      Agreement, as applicable, to convert the unpaid principal amount of the Advances
      or any portion thereof owing to the Lender (or any portion thereof and together
      with interest accrued thereon) into shares of Conversion Stock at the Conversion
      Price, promptly after the delivery of a written notice of Conversion (with
      respect to such Conversion, a “Conversion
      Notice”)
      specifying the principal amount of Advances to be converted (together with
      such
      interest) duly executed, to Holdings and Borrower at any time during usual
      business hours at the principal offices of Holdings. Notwithstanding the
      foregoing, the Lender shall not have any right or obligation to convert the
      principal amount of the Advances or any portion if such Conversion or the right
      or obligation to effect such Conversion would result in a Regulatory Event.
      

     

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	 	
              3.2
                

            	
              Mandatory
                Conversion

            

    

     

    To
      the
      extent permitted by applicable law including the Restrictions, on the first
      Business Day after the occurrence of a Mandatory Conversion Event,
      all of the outstanding Advances (together with any interest accrued thereon)
      shall be mandatorily converted (the “Mandatory
      Conversion”)
      into
      shares of Conversion Stock at the Conversion Price on such Business
      Day
      within
      three (3) Business Days of such event. 

     

     

    
      	 	
              3.3

            	
              Issuance
                of Certificates

            

    

     

    In
      the
      event that a Conversion of the Advances by the Lender pursuant to Section 3.1
      or
      3.2 requires approval by any Governmental Entity, Lender and Holdings shall
      promptly make all filings, which may be required in connection with such
      Conversion under any applicable laws, rules or regulations. Holdings and the
      Lender shall provide each other with such necessary information and assistance
      as may reasonably be requested in connection with such filings. As promptly
      as
      practicable after the delivery of a Conversion Notice or the Mandatory
      Conversion (or, if applicable, the receipt of required approvals from
      Governmental Entities), as provided in Section 3.1 or 3.2 (but in no event
      later
      than three Trading Days after such delivery in the event of a Conversion
      pursuant to Section 3.1 or one Trading Day in the event of a Conversion pursuant
      to section 3.2, in the absence of any required approvals from Governmental
      Entities), Holdings at its expense shall deliver or cause to be delivered at
      its
      principal office to or upon the written order of the Lender (a) certificates
      bearing, if required by the terms hereof, the restrictive legends set forth
      in
      Section 9.1 hereof, representing the number of fully paid and non-assessable
      shares of Conversion Stock into which the Advances (or any portion thereof
      and
      including any accrued interest thereon) are being converted in accordance with
      the provisions hereof and (b) in the event of a Conversion pursuant to Section
      3.1, if requested by the Lender, a replacement Note, representing the portion
      of
      the principal amount, if any, of the Advances that are not attributable to
      the
      principal amount being Converted at such time. Subject to the following
      provisions of this Section 3.3, such Conversion shall be deemed to have been
      made at the close of business on the Conversion Date (or, if applicable, the
      expiration of any applicable waiting period), so that (i) the rights of the
      Lender shall cease at such time with respect to the principal amount of the
      Advances (including any accrued interest) being converted, (ii) there shall
      be
      no loss of interest on the portion of the Advances not attributable to the
      principal amount converted, and (iii) the Lender shall be treated for all
      purposes as having become the record holder of such shares of Conversion Stock
      at such time; provided,
      however,
      that no
      Conversion on any date when the stock transfer books of Holdings shall be closed
      shall be effective to constitute the Lender to receive the shares of Conversion
      Stock upon such Conversion as the record holder of such shares of Conversion
      Stock on such date, but such Conversion shall be effective to constitute the
      Lender to receive such shares of Conversion Stock as the record holder thereof
      for all purposes at the close of business on the next succeeding day on which
      such stock transfer books are open. 

     

     

    
      	 	
              3.4

            	
              No
                Fractional
                Shares

            

    

     

    If,
      but
      for the provisions of this Section 3.4, the Conversion of any Advances for
      Conversion Stock were to result in the issuance by Holdings of a fraction of
      a
      share of CSR Common Stock, Holdings, at its option, shall either (a) round
      up
      such fraction to the nearest whole share, or (b) pay an amount in cash to the
      Lender equal to the product of (i) such fraction, multiplied by (ii) the Fair
      Market Value of a share of CSR Common Stock on the date of the Conversion Notice
      or the date of the Mandatory Conversion, as applicable, computed to the nearest
      whole cent, in lieu of issuing a fractional share.

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      	 	
              3.5

            	
              Reclassification
                of CSR Common Stock

            

    

     

    In
      case
      of any reclassification, stock split, subdivision, dividend or distribution
      payable in shares of CSR Common Stock (or other securities or rights convertible
      into, or entitling the holder thereof to receive directly or indirectly shares
      of CSR Common Stock), or similar recapitalization or event with respect to
      shares of CSR Common Stock (other than a change in par value, or from par value
      to no par value, but including any change in the shares of CSR Common Stock
      into
      two or more classes or series of shares) or in case of any consolidation or
      merger of another corporation into Holdings, which is otherwise permitted
      pursuant to the terms of this Agreement, in which Holdings is the surviving
      corporation and in which there is a reclassification or change of the shares
      of
      CSR Common Stock (other than a change in par value, or from par value to no
      par
      value, but including any change in the shares of CSR Common Stock into two
      or
      more classes or series of shares), Holdings shall provide that the Lender shall
      have the right thereafter to convert the Advances into the kind and amount
      of
      shares of stock and other securities and property or cash receivable upon such
      reclassification or similar recapitalization or event or such consolidation
      or
      merger (“Reclassified
      Securities”)
      by a
      holder of the number of shares of CSR Common Stock into which the Advances
      might
      have been converted immediately prior to such reclassification or similar
      recapitalization or event of such consolidation or merger. The above provisions
      hereof shall similarly apply to successive reclassifications and changes of
      shares of CSR Common Stock and to successive consolidations, mergers, sales
      or
      conveyances involving such reclassifications and changes of shares of CSR Common
      Stock. Holdings shall not effect any such consolidation, merger, sale, transfer
      or other disposition, which is otherwise permitted pursuant to the terms of
      this
      Agreement, unless prior to or simultaneously with the consummation thereof
      the
      successor corporation (if other than Holdings) resulting from such consolidation
      or merger or the corporation purchasing or otherwise acquiring such properties
      shall assume, by written instrument executed and mailed or delivered to the
      Lender, the obligation to deliver to the Lender such Reclassified Securities
      as,
      in accordance with the foregoing provisions, the Lender may be entitled to
      acquire. The above provisions of this subparagraph shall similarly apply to
      successive reorganizations, reclassifications, consolidations, mergers, sales,
      transfers, or other dispositions.

     

     

    
      	 	
              3.6

            	
              Reservation
                of CSR Common Stock

            

    

     

    Holdings
      covenants that it will reserve and keep available out of its authorized CSR
      Common Stock, a sufficient number of shares for the purposes of issuance upon
      Conversion of all or any portion of the Advances (together with interest accrued
      thereon) which may be converted pursuant to Section 3.1 or 3.2 hereof. Holdings
      covenants that all shares of CSR Common Stock which shall be so issuable shall
      be duly and validly issued and fully paid and non-assessable, free from
      preemptive or similar rights on the part of the holders of any shares of stock
      or other securities of Holdings, and free from all Liens or other charges with
      respect to the issuance thereof. Holdings will take all such action as may
      be
      necessary to ensure that such shares of CSR Common Stock are approved for
      listing on a major Canadian or U.S. exchange or market (subject to notice of
      issuance) and generally may be so issued without violation by Holdings of any
      applicable law or regulation, or of any requirements of any such securities
      market or exchange or trading market upon which the CSR Common Stock may be
      listed or quoted at the time of Conversion of all or any portion of the Advances
      (together with interest accrued thereon). 

     

     

    
      	 	
              3.7

            	
              Taxes

            

    

     

    The
      issuance of certificates for shares of Conversion Stock upon the Conversion
      of
      the Advances (or any portion thereof), shall be made without charge to the
      Lender for any Tax in respect of the issuance of such certificates, and such
      certificates shall be issued in the name of, or in such name as may be directed
      by, the Lender; provided,
      however,
      that
      Holdings shall not be required to pay any Tax which may be payable in respect
      of
      any transfer involved in the issuance and delivery of any such certificate
      in a
      name other than that of the Lender or its Affiliates, and Holdings shall not
      be
      required to issue or deliver such certificates unless or until the Person or
      Persons requiring the issuance thereof shall have paid to Holdings the amount
      of
      such Tax or shall have established to the satisfaction of Holdings that such
      Tax
      has been paid. For greater certainty, Lender shall be responsible for the
      payment of all Taxes applicable to the Lender in connection with the Conversion
      of any such Advances (or any part thereof).

     

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

     

    
      	 	
              3.8

            	
              No
                Rights or Liabilities as
                Stockholders

            

    

     

    Except
      as
      a result of any Conversion, the making of Advances by the Lender shall not
      entitle the Lender to any of the rights of a Holdings stockholder. No provision
      of this Agreement, in the absence of the actual Conversion of the Advances
      or
      any part thereof into Conversion Stock issuable upon such Conversion shall
      give
      rise to any liability on the part of the Lender as a stockholder of Holdings,
      whether such liability shall be asserted by Holdings or by creditors of
      Holdings.

     

     

    
      	 	
              3.9.

            	
              Determination
                of Initial Conversion
                Price.

            

    

     

    Upon
      the
      determination of the “Initial Conversion Price” pursuant to the definition
      thereof, the Borrower shall promptly give written notice of the “Initial
      Conversion Price” to the Lender and provide copies of all documents relating to
      the transaction pursuant to which the “Initial Conversion Price” was determined.
      Within 90 days after receipt of such notice and such documentation the Lender
      shall have the right to object to the determination of the “Initial Conversion
      Price.” In the event that the Lender and Borrower cannot agree on the “Initial
      Conversion Price”, the Lender and Borrower agree to hire (with each party paying
      50% of the costs) a mutually-acceptable independent investment banker to
      determine the “Initial Conversion Price” to be applied for purposes of this
      Article 3, and the determination of such investment banker shall be final and
      binding upon the parties hereto.

     

     

    
      	
              4.

            	
              Conditions
                Precedent

            

    

     

     

    
      	 	
              4.1.

            	
              Conditions
                to Initial Advance

            

    

     

    The
      obligation of the Lender to make the initial Advance is subject to the receipt
      of each of the following, in form and substance reasonably satisfactory to
      the
      Lender, and to the Lender’s determination that the following conditions
      precedent have been satisfied on or prior to the date of the Initial
      Advance:

     

    (a) The
      Borrower shall have duly executed and delivered the Security Documents and
      such
      other documents, instruments and agreements as the Lender may reasonably request
      in connection therewith, and the Borrower shall be in full compliance with
      all
      conditions and other provisions under or associated with Article 15 hereof
      and
      the Security Documents, including without limitation the provisions requiring
      that particular Liens be granted in favor of the Lender, the required priority
      of such Liens and that the Borrower and its assets not be subject to any Liens
      other than Permitted Liens.

     

    (b) All
      registrations necessary in the reasonable judgment of Lender in connection
      with
      any of the Transaction Documents shall have been made.

     

    (c) The
      GM
      Distribution Agreement shall be in full force and effect, all conditions to
      its
      effectiveness have been satisfied and no defaults (or events which, with the
      giving of notice or lapse of time or both would result in a default) on the
      part
      of the Borrower, and to the knowledge of the Borrower, or on the part of GM
      Canada, shall have occurred and be continuing thereunder.

     

    (d) The
      Borrower shall have raised sufficient capital for its business plan from
      Canadian sources so that the initial Advance will be consistent and comply
      with
      all requirements of all of its Canadian licences and applicable Canadian laws,
      including the CRTC Licence, required approval rights from Industry Canada,
      and
      all orders, decisions, rulings and policies of the CRTC and Industry Canada
      requiring holders of the Canadian licences to maintain a minimum investment
      from
      Canadian sources (collectively, “Canadian
      Regulatory and Minimum Canadian Investment Requirements”).
      The
      Lender shall have received a certificate of the Chief Financial Officer, the
      Treasurer or any Assistant Treasurer of the Borrower, dated the date of the
      Funding Date, in form and substance reasonably satisfactory to the Lender,
      containing a detailed description of all capital raised to finance the
      Borrower’s business plan and an analysis demonstrating that, such initial
      Advance will be consistent and comply with the Canadian Regulatory and Minimum
      Canadian Investment Requirements and certifying that the Borrower will be in
      full compliance with such requirements after receipt of such Advance (assuming
      for such purposes that Advances will not be treated as from Canadian
      sources).

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    (e) With
      respect to each of the Borrower and Holdings, 

     

    (i) Copies
      of
      resolutions of the Board of Directors (or other similar authorizing documents)
      certified by an Officer which authorize its execution, delivery, and performance
      of this Agreement and the other Transaction Documents to which it is or is
      to be
      a party;

     

    (ii) A
      copy of
      a certificate of status or similar certificate for each corporation issued
      by
      their respective governing jurisdictions, dated reasonably near the date hereof,
      stating it is duly qualified and in good standing as a foreign corporation
      in
      such jurisdiction;

     

    (iii) A
      certificate, signed on its behalf by an Officer, dated near the date hereof,
      containing true and correct copies of (1) the articles of incorporation and
      all
      articles of amendment thereto and (2) all by-laws in effect on the date on
      which
      all resolutions referred to in clause(e) (i) above were adopted;

     

    (iv) A
      certificate of non-restriction signed on its behalf by an Officer dated near
      the
      date hereof, certifying inter
      alia
      the
      corporation is not restricted from executing, delivering or performing any
      of
      the obligations under the Transaction Documents it is or is to be party to
      and
      such other matters as the Lender may reasonably require; and

     

    (v) A
      certificate of an Officer certifying the names and true signatures of the
      officers authorized to sign each Transaction Document to which it is or is
      to be
      a party and the other documents to be delivered hereunder and
      thereunder.

     

    For
      greater certainty, where appropriate, two or more of such certificates may
      be
      contained in the same document.

     

    (f) The
      representations and warranties made by the Borrower and Holdings in Section
      7
      hereof shall be true and correct in all material respects when made, and shall
      be true and correct in all material respects at the date of the Initial Advance
      with the same force and effect as if they had been made on and as of said date,
      and shall be so certified by an Officer of the Borrower. 

     

    (g) All
      covenants, agreements and conditions contained in this Agreement and the other
      Transaction Documents to which the Borrower is a party shall have been performed
      or complied with in all material respects.

     

    (h) There
      shall not then be in effect any legal or other order enjoining or restraining
      the transactions contemplated by this Agreement and the other Transaction
      Documents to which the Borrower or Holdings is party.

     

    (i) Each
      of
      the Lender, the Borrower or Holdings shall have entered into the other
      Transaction Documents to which it is a party.

     

    (j) The
      Lender shall have received a completely executed copy of each of the Transaction
      Documents to which it is a party.

     

    (k) The
      XM
      System Licence Agreement shall have been duly executed and delivered by the
      parties thereto and shall be in full force and effect.

     

    (l) CSR
      shall
      have received all Licences and approvals from the CRTC and any other
      Governmental Entity necessary to operate its business in a manner consistent
      with its Licence application pending before the CRTC immediately prior to the
      date hereof.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    (m) Holdings
      shall have duly executed and delivered the Holdings Guarantee.

     

    (n) The
      Lender shall have received favorable legal opinions (in form and substance
      satisfactory to the Lender acting reasonably) of counsel to the Borrower and
      Holdings, respectively, relating to the Borrower and Holdings, as the case
      may
      be, and the applicable Transaction Documents, including the validity,
      enforceability and, where applicable, the registration and priority of
      same.

     

     

    4.2. Conditions
      to Each Advance

     

    The
      obligation of the Lender to make each Advance, including the initial Advance,
      is
      subject to the receipt of each of the following, in form and substance
      reasonably satisfactory to the Lender, and to the Lender’s reasonable
      determination that the following conditions precedent have been satisfied on
      or
      prior to the Funding Date with respect to such Advance:

     

    (a) The
      Borrower shall have delivered to the Lender a Request for Advance satisfying
      the
      requirements set forth in Section 2.2(a).

     

    (b) Lender
      shall have received a certificate of the Chief Financial Officer, the Treasurer
      or any Assistant Treasurer of the Borrower, dated the date of the Funding Date,
      certifying satisfaction of the following conditions:

     

    (i) Maximum
      Additional Debt.
      The
      Borrower shall be in compliance with the covenants herein, including without
      limitation Section 6.1 and the agreements of the Borrower set forth in Article
      15 hereof regarding the permitted amounts of debt or indebtedness.

     

    (ii) Pre-Marketing
      Cash Flow.
      Holdings shall have Pre-Marketing Cash Flow of not less than the amount set
      forth below opposite the fiscal year most recently then ended prior to the
      Funding Date: 

     

    

    
      	
              Fiscal
                Year

            	
              Pre-Marketing
                Cash Flow

            
	
              2006

            	
              Cdn$(27,955,214)

            
	
              2007

            	
              (12,461,431)

            
	
              2008

            	
              5,943,728

            
	
              2009

            	
              21,017,043

            
	
              2010

            	
              39,626,167

            
	
              2011

            	
              58,490,135

            
	
              2012

            	
              77,131,862

            

    

    

    

    (c) The
      GM
      Distribution Agreement shall be in full force and effect, and no notice of
      termination shall have been given thereunder.

     

    (d) The
      Borrower shall have raised sufficient equity and other capital for its business
      plan from Canadian sources so that the Advance will be consistent and comply
      with all requirements of all Canadian Regulatory and Minimum Canadian Investment
      Requirements. The Lender shall have received a certificate of the Chief
      Financial Officer, the Treasurer or any Assistant Treasurer of the Borrower,
      dated the date of the Funding Date, in form and substance reasonably
      satisfactory to the Lender, containing a detailed description of all capital
      raised to finance the Borrower’s business plan and an analysis demonstrating
      that, such Advance will be consistent and comply with the Canadian Regulatory
      and Minimum Canadian Investment Requirements and certifying that the Borrower
      will be in full compliance with such requirements after receipt of such Advance
      (assuming for such purposes that Advances will not be treated as from Canadian
      sources).

     

    (e) The
      representations and warranties made by the Borrower and Holdings in Section
      7
      hereof shall be true and correct in all material respects when made, and shall
      be true and correct in all material respects at the date of the Advance with
      the
      same force and effect as if they had been made on and as of said date, and
      shall
      be so certified by an Officer of the Borrower. 

     

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (f) All
      covenants, agreements and conditions contained in this Agreement and the other
      Transaction Documents to which the Borrower is a party shall have been performed
      or complied with in all material respects.

     

    (g) There
      shall not then be in effect any legal or other order enjoining or restraining
      the transactions contemplated by this Agreement and the other Transaction
      Documents to which the Borrower or Holdings is party.

     

    (h) No
      Default or Event of Default shall have occurred and be continuing on such
      Funding Date.

     

     

    
      	
              5.

            	
              Representations
                and Warranties of the
                Lender

            

    

     

    The
      Lender represents and warrants to and agrees with the Borrower and Holdings
      that
      as of the date hereof: 

     

     

    
      	 	
              5.1.

            	
              Risks
                of Investment

            

    

     

    Its
      management recognizes that the purchase of the CSR Common Stock which may be
      issued in lieu of repayment of the Advances involves a high degree of risk
      including, but not limited to, the following: (i) an investment in CSR is highly
      speculative, and only investors who can afford the loss of their entire
      investment should consider investing in CSR and accepting the CSR Common Stock;
      (ii) the Lender may not be able to liquidate its investment;
      (iii) transferability of the CSR Common Stock is restricted; (iv) in the
      event of a disposition of the CSR Common Stock, the Lender could sustain the
      loss of its entire investment and (v) CSR does not anticipate the payment
      of dividends in the foreseeable future. 

     

     

    
      	 	
              5.2.

            	
              Ability
                to Bear Risk

            

    

     

    By
      reason
      of its management’s business or financial experience the Lender has the capacity
      to protect its own interests in connection with the transaction contemplated
      hereby, and is able to bear the economic risk which it hereby
      assumes.

     

     

    
      	 	
              5.3.

            	
              Receipt
                and Review of
                Documentation

            

    

     

    Its
      management has been furnished by CSR during the course of this transaction
      with
      information regarding CSR which such Lender’s management has requested, has been
      afforded the opportunity to ask questions of and receive answers from duly
      authorized officers or other representatives of CSR concerning the terms and
      conditions of the CSR Common Stock, and has received any additional information
      which its management has requested.

     

     

    
      	 	
              5.4.

            	
              Acquisition
                for Own Account

            

    

     

    The
      Lender is accepting the CSR Common Stock for its own account for investment
      only, and not with a view towards their distribution in violation of applicable
      securities laws.

     

     

    
      	 	
              5.5.

            	
              Residency,
                Accredited Investor 

            

    

     

    The
      Lender is a resident of the United States and is an “accredited investor” within
      the meaning of Rule 501 of the Securities Act. 

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

     

    
      	 	
              5.6.

            	
              No
                Public Market; Rule 144

            

    

     

    (a) Its
      management understands and hereby acknowledges that Holdings is under no
      obligation to:

     

    
      	 	
              (i)

            	
              register
                the CSR Common Stock under the Securities Act or any state securities
                or
                “blue sky” laws; or 

            

    

     

    
      	 	
              (ii)

            	
              qualify
                the CSR Common Stock for resale under any equivalent Canadian
                statutes,

            

    

     

    except
      in
      the case of (i) and (ii) pursuant to the Registration Rights
      Agreement;

     

    (b) The
      Lender’s management acknowledges and agrees that the shares of CSR Common Stock
      that the Lender may receive hereunder must be held indefinitely unless such
      shares are subsequently registered under the Securities Act and/or qualified
      for
      resale under equivalent Canadian securities laws or an exemption from such
      registration and/or prospectus requirements is available. 

     

     

    
      	 	
              5.7.

            	
              Organization,
                Good Standing, Corporate
                Authority

            

    

     

    It
      is
      duly organized and validly existing as a corporation and in good standing under
      the laws of the State of Delaware, with requisite power and authority (corporate
      and other) to own its properties and conduct its business.

     

     

    
      	 	
              5.8.

            	
              Due
                Authorization

            

    

     

    The
      execution and delivery of, and the performance by the Lender of its obligations
      under this Agreement has been duly and validly authorized and, upon execution
      and delivery thereof, this Agreement will constitute a legal, valid, binding
      obligation of Lender, enforceable against Lender in accordance with its terms,
      subject to applicable bankruptcy, insolvency, reorganization, moratorium and
      similar laws affecting creditors’ rights generally, and subject, as to
      enforceability, to general principles of equity (regardless of whether
      enforcement is sought in a proceeding in equity or at law).

     

     

    
      	
              6.

            	
              Covenants

            

    

     

    The
      Borrower covenants and agrees with the Lender, that at the time of each Advance
      and at each time when any principal amount or interest is outstanding hereunder,
      it will be in compliance with the following:

     

     

    
      	 	
              6.1

            	
              Indebtedness

            

    

     

    Neither
      the Borrower, Holdings nor any Subsidiary thereof (the “Debt
      Obligors”)
      shall
      be directly or indirectly liable, contingently or otherwise, as obligor,
      guarantor or otherwise (“Obligated”)
      with
      respect to any Indebtedness, except for the following items of Indebtedness
      (collectively, “Permitted
      Debt”):

     

    (i) Indebtedness
      incurred by the Borrower under this Agreement;

     

    (ii) Senior
      Bank Indebtedness in an aggregate principal amount which does not exceed
      Cdn$75,000,000; provided,
      however,
      to the
      extent that this Agreement is utilized by the Borrower to fund Repeater
      Obligations, the amount of permitted Senior Bank Indebtedness shall be reduced
      dollar-for-dollar by the amount of Repeater Obligations funded hereunder, and
      provided further, that this paragraph shall not apply if any of the Debt
      Obligors is then Obligated with respect to any High Yield Debt; 

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    (iii) High
      Yield Debt in an aggregate principal amount which does not exceed USD $125
      million; provided,
      however,
      that
      this paragraph shall not apply if any of the Debt Obligors is then Obligated
      with respect to any Senior Bank Indebtedness;

     

    (iv) other
      Pari Passu Indebtedness,
      the
      aggregate principal amount which does not exceed USD
      $5
      million,
      which
      to the extent such Indebtedness is for a working capital facility, may be
      secured by accounts receivable, and otherwise shall be unsecured;

     

    (v) Indebtedness
      existing on the Closing Date and set forth on Schedule
      6.1(v)
      hereto;

     

    (vi) Hedging
      Obligations that relate to fixing or hedging fluctuation in currency values
      between U.S. and Canadian dollars where the Borrower’s aggregate liability or
      exposure does not exceed USD $10 million at
      any
      one time outstanding and which shall be unsecured;

     

    (vi) the
      Guarantee by Holdings of Indebtedness of the Borrower that is otherwise
      permitted by this Section 6.1; and

     

    (vii) the
      incurrence by the Borrower or any of its Subsidiaries of intercompany
      Indebtedness between the Borrower and its Subsidiaries; provided,
      however
      that if
      the Borrower is the obligor of such Indebtedness, such Indebtedness must be
      expressly subordinated to the prior payment in full of the Obligations
      hereunder.

     

     

    
      	 	
              6.2

            	
              Ranking
                of Obligations

            

    

     

    Except
      for the Indebtedness permitted pursuant to Section 6.1(ii) above, none of the
      Debt Obligors shall be Obligated with respect to any Indebtedness that ranks
      senior in right of payment to the Obligations.

     

     

    
      	 	
              6.3

            	
              Liens

            

    

     

    There
      shall not exist or be effective any Lien of any kind (i) upon the Canadian
      Licences (other than item number thirteen (13) in the definition of Permitted
      Liens hereunder) or the shares of any Subsidiary where the primary asset of
      such
      Subsidiary is any Canadian Licence or (ii) except for Permitted Liens, upon
      any
      of the property or assets of the Debt Obligors (other than the Canadian Licences
      or the shares of any Subsidiary where the primary asset of such Subsidiary
      is
      any Canadian Licence), now owned or hereafter acquired.

     

     

    
      	 	
              6.4

            	
              Consent
                Rights

            

    

     

    As
      long
      as at least Cdn $3,000,000 principal amount of Advances is outstanding under
      this Agreement, the prior written consent of the Lender shall be required for
      any of the following actions: 

     

    (i) any
      amendment, modification, supplement or waiver (in a manner that would be
      materially adverse to the interests of the Lender under this Agreement) to
      the
      certificate of incorporation or by-laws of the Borrower, Holdings, or any of
      their Subsidiaries;

     

    (ii) other
      than as contemplated by Section 13.2, either Holdings, the Borrower, or any
      of
      their Subsidiaries shall directly or indirectly (a) consolidate or merge with
      or
      into another Person (whether or not Holdings, the Borrower or such Subsidiary
      is
      the surviving entity), or sell, assign, transfer, convey or otherwise dispose
      of
      all or substantially all of its properties or assets, in any such case, other
      than in connection with a consolidation, sale, transfer or merger with Persons
      owned or controlled by the Lender, when any such consolidation, merger, sale
      or
      transfer would result in the Lender receiving less than full payment of all
      outstanding Obligations, or (b) sell, assign or otherwise dispose of any
      property or assets securing the Obligations pursuant to the Security Documents
      (other than sales in the ordinary course of business of less than Cdn $500,000
      per sale and less than Cdn $2,500,000 over
      the
      term of this Agreement, or the sale, assignment or other disposition of obsolete
      assets or property of less than Cdn $500,000 per sale and less than Cdn
      $2,500,000 over
      the
      term of this Agreement);

     

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    (iii) Holdings,
      the Borrower or any of their Subsidiaries being a party to any agreement,
      contract, instrument or other arrangement that restricts the ability of
      Holdings, the Borrower or any Subsidiary to comply with the terms of this
      Agreement;

     

    (iv) any
      optional redemption, repurchase or other acquisition by Holdings, the Borrower
      or any of their Subsidiaries of any Indebtedness or securities of Holdings,
      the Borrower or any of their Subsidiaries
      that is
      junior in right of payment to the Obligations;

     

    (v) except
      as
      permitted pursuant to Section 6.1, the Debt Obligors being Obligated with
      respect to any Indebtedness or securities by Holdings, the Borrower or any
      of
      their Subsidiaries that is pari
      passu
      with or
      having a preference over the Obligations hereunder; and

     

    (vi) the
      principal nature of the business of Holdings, the Borrower or any of their
      Subsidiaries being different from the business permitted under Section
      6.8.

     

     

    
      	 	
              6.5

            	
              Restriction
                on Dividends

            

    

     

    Neither
      Holdings or Borrower shall directly or indirectly (through a Subsidiary or
      otherwise): (i) declare or pay any dividend or make any other payment or
      distribution on account of Equity Interests of either the Borrower or Holdings,
      or (ii) purchase redeem or otherwise acquire or retire for value any Equity
      Interests of Holdings or the Borrower (the transactions in the foregoing clause
      (i)  and clause (ii)  are referred to as “Restricted
      Payments”),
      except
      that so long as no Default has occurred and is continuing or would be caused
      thereby, the foregoing provisions shall not prohibit: (1) the Conversion of
      the
      Advances pursuant to Article 3 hereof, (2) Restricted Payments to the
      Lender or any of its Affiliates, and (3) the exercise by the Lender or any
      of
      its Affiliates of rights pursuant to the Share Issuance Agreement or
      Shareholders Agreement dated on or about the date hereof. 

     

     

    
      	 	
              6.6

            	
              Reporting
                Obligations

            

    

     

    The
      Borrower will furnish to the Lender:

     

    (a) Default
      Notice.
      As soon
      as possible and in any event within two Business Days after the occurrence
      of
      any Default or any event, development or occurrence reasonably likely to have
      a
      material adverse effect continuing on the date of such statement, a statement
      of
      the chief financial officer of the Borrower setting forth details of such
      occurrence, and the action that the Borrower has taken and proposes to take
      with
      respect thereto.

     

    (b) Annual
      Financials.
      As soon
      as available and in any event within 90 days after the end of each fiscal year,
      a copy of the annual audit report for such year for Holdings and its
      Subsidiaries, including therein Consolidated and consolidating balance sheets
      of
      Holdings and its Subsidiaries as of the end of such fiscal year and Consolidated
      and consolidating statements of income and a Consolidated statement of cash
      flows of Holdings and its Subsidiaries for such fiscal year, in each case
      accompanied by an opinion of independent public accountants of recognized
      standing, together with  a certificate of the chief financial officer of
      Holdings stating that no Default has occurred and is continuing or, if a default
      has occurred and is continuing, a statement as to the nature thereof and the
      action that the Borrower has taken and proposes to take with respect
      thereto.

     

    (c) Quarterly
      Financials.
      As soon
      as available and in any event within 45 days after the end of each of the first
      three quarters of each fiscal year, Consolidated and consolidating balance
      sheetsof Holdings and its Subsidiaries as of the end of such quarter and
      Consolidated and consolidating statements of income and a Consolidated statement
      of cash flows of Holdings and its Subsidiaries for the period commencing at
      the
      end of the previous fiscal quarter and ending with the end of such fiscal
      quarter and Consolidated and consolidating statements of income and a
      Consolidated statement of cash flows of Holdings and its Subsidiaries for the
      period commencing at the end of the previous fiscal year and ending with the
      end
      of such quarter, setting forth in each case in comparative form the
      corresponding figures for the corresponding date or period of the preceding
      fiscal year, all in reasonable detail and duly certified (subject to normal
      year-end audit adjustments) by the chief financial officer of Holdings as having
      been prepared in accordance with GAAP.

     

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    (d) Monthly
      Financials.
      As soon
      as available and in any event within 30 days after the end of each month, a
      Consolidated balance sheet of Holdings and its Subsidiaries as of the end of
      such month and Consolidated and consolidating statements of income and a
      Consolidated statement of cash flows of Holdings and its Subsidiaries for the
      period commencing at the end of the previous month and ending with the end
      of
      such month and Consolidated and consolidating statements of income and a
      Consolidated statement of cash flows of Holdings and its Subsidiaries for the
      period commencing at the end of the previous fiscal year and ending with the
      end
      of such month, setting forth in each case in comparative form the corresponding
      figures for the preceding month and the corresponding month of the preceding
      Fiscal Year, all in reasonable detail and duly certified by the chief financial
      officer of Holdings.

     

    (e) Litigation.
      Promptly after the commencement thereof, notice of all actions, suits,
      investigations, litigation and proceedings before any court or governmental
      department, commission, board, bureau, agency or instrumentality, domestic
      or
      foreign, affecting Holdings, the Borrower or any of their Subsidiaries, and
      promptly after the occurrence thereof, notice of any adverse change in the
      status or the financial effect on Holdings or the Borrower.

     

    (f) Agreement
      Notices.
      Promptly upon receipt thereof, copies of all notices, requests and other
      documents received by Holdings, the Borrower or any of their Subsidiaries under
      or pursuant to any material contract or instrument, indenture, loan or credit
      or
      similar agreement with respect to Indebtedness equal to or greater than
      Cdn$2,000,000, regarding or related to any breach or default by any party
      thereto or any other event that would be reasonably likely to materially impair
      the value of the interests or the rights of Holdings, the Borrower or any of
      their Subsidiaries and copies of any amendment, modification or waiver of any
      provision of any material contract or instrument, indenture, loan or credit
      or
      similar agreement and, from time to time upon request by the Lender, such
      information and reports regarding the material contracts and such instruments,
      indentures and loan and credit and similar agreements as the Lender may
      reasonably request.

     

    (g) Other
      Information.
      Such
      other information respecting the business, condition (financial or otherwise),
      operations, performance, properties or prospects of Holdings, the Borrower
      or
      any of their Subsidiaries as the Lender may from time to time reasonably
      request.

     

    (h) Investment
      Information.
      In
      connection with a proposed Conversion, such information relating to Holdings
      and
      its business as would reasonably be provided to a prospective
      investor.

     

     

    
      	 	
              6.7

            	
              Inspection
                Rights

            

    

     

    At
      any
      reasonable time and from time to time prior to a Default upon three (3) Business
      Day’s prior notice and at any reasonable time after the occurrence and during
      the continuance of a Default, Holdings and the Borrower shall permit
      representatives of the Lender to examine, copy, and make extracts from its
      books
      and records, to visit and inspect its properties, and to discuss its business,
      operations and financial condition with its officers and employees. At any
      reasonable time and from time to time, Holdings and Borrower will permit
      representatives of the Lender to discuss its business, operations, and financial
      condition with its independent certified public accountants in any meeting
      arranged and attended by representatives of the Borrower.

     

     

    
      	 	
              6.8

            	
              Lines
                of Business

            

    

     

    Neither
      Holdings, Borrower nor any Subsidiary shall engage in any business other than
      the development and provision of satellite digital audio radio service in
      Canada,
      which
      shall be understood to include without limitation any facets of the satellite
      radio business as conducted by the Lender.

     

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    
      	 	
              6.9

            	
              Legal
                Requirements

            

    

     

    Each
      of
      Borrower and Holdings shall timely comply, and shall cause each of their
      respective Subsidiaries to timely comply with all legal requirements of
      relevance to its and their respective business(es), property or assets or
      undertaking (including, without limitation, all environmental statutes,
      regulations, orders and directives) and, when requested from time to time by
      the
      Lender acting reasonably, shall deliver to the Lender evidence of such
      compliance.

     

     

    
      	 	
              6.10

            	
              Insurance 

            

    

     

    Each
      of
      Borrower and Holdings shall obtain and maintain and shall cause each of their
      respective Subsidiaries to obtain and maintain insurance policies
      providing
      customary insurance, with coverage consistent with prudent business practice,
      and subject to reasonable deductibility provisions, including insurance with
      respect to the Repeaters naming the Lender as an additional named insured from
      and after the date of the Initial Advance. Each of Borrower and Holdings shall,
      at the request of the Lender, deliver certified copies of such policies to
      the
      Lender.

     

     

    
      	 	
              6.11

            	
              Corporate
                Existence and Performance

            

    

     

    The
      Borrower and Holdings shall do, and shall cause each Subsidiary to do,all things
      necessary or desirable (i) to maintain the corporate existence of the Borrower,
      Holdings and each Subsidiary and (ii) to permit or enable it to comply with
      all
      obligations under the Transaction Documents.

     

     

    
      	 	
              6.12

            	
              Further
                Assurances

            

    

     

    Each
      of
      Borrower and Holdings, at their expense, shall promptly, at the request of
      the
      Lender, cure or cause to be cured all defects in the content, execution and
      delivery of this agreement, the other Transaction Documents. The Borrower and
      Holdings, at their expense, shall promptly execute and deliver to the Lender,
      upon request by the Lender, all such other and further documents, agreements
      and
      instruments necessary to satisfy the obligations of the Borrower and Holdings
      hereunder or under any of the documents arising herefrom.

     

     

    
      	
              7.

            	
              Representations,
                Warranties and Agreements of the
                Borrower and Holdings

            

    

     

    Each
      of
      Holdings and the Borrower hereby represents, warrants and agrees with the Lender
      that as of the date hereof and as of the date of each Advance: 

     

     

    
      	 	
              7.1.

            	
              Incorporation,
                Standing, Subsidiaries

            

    

     

    Each
      of
      Holdings and the Borrower is a corporation duly organized, validly existing
      and
      in good standing under the laws of the jurisdiction of its incorporation and
      has
      all requisite corporate power and authority to own and operate its properties,
      to carry on its business as now conducted and as presently proposed to be
      conducted, to enter into this Agreement and the other Transaction Documents
      to
      which each is a party and to perform its obligations hereunder and thereunder.
      Borrower has no Subsidiaries other than Subsidiaries formed with the prior
      written consent of the Lender in respect of which all applicable obligations
      under the Transactions Documents have been satisfied, including, without
      limitation, Articles 13 and 15 hereof. Holdings owns 100% of the Equity
      Interests of the Borrower and owns no Equity Interests in any other
      Person.

     

     

    
      	 	
              7.2.

            	
              Authorization
                of Agreement

            

    

     

    This
      Agreement and the other Transaction Documents to which Holdings and the Borrower
      are parties have been duly, executed and delivered by the Borrower or Holdings,
      as applicable, and each such agreement constitutes a valid, binding and
      enforceable obligation of the Borrower or Holdings, as applicable, subject
      to
      applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
      affecting creditors’ rights generally, and subject, as to enforceability, to
      general principles of equity (regardless of whether enforcement is sought in
      a
      proceeding in equity or at law).

     

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    
      	 	
              7.3.

            	
              Absence
                of Defaults and Conflicts

            

    

     

    The
      execution, delivery and performance of this Agreement and the Transaction
      Documents by the Borrower and Holdings in connection with the transactions
      contemplated hereby and thereby, and the consummation of the transactions
      contemplated herein or therein and compliance by the Borrower and Holdings
      with
      their respective obligations hereunder and thereunder, do not and will not,
      whether with or without the giving of notice or passage of time or both,
      conflict with or constitute a breach of, or default (or an event that with
      notice or lapse of time or both would become a default) under, require the
      Borrower or Holdings to conduct an offer to repurchase any outstanding
      Obligations in accordance with the documents establishing the terms under which
      such Obligations were incurred, give any others rights of termination,
      amendment, acceleration or cancellation (with or without notice, lapse of time,
      or both), or result in the creation or imposition of any lien, charge or
      encumbrance upon any property or assets of either the Borrower or Holdings
      pursuant to any material contract, indenture, mortgage, note lease or other
      instrument to which it is party, nor will such action result in any violation
      of
      the provisions of the certificate of incorporation, bylaws or other charter
      documents of either of the Borrower or Holdings or any applicable law, statute,
      rule, regulation, judgment, order, writ or decree of any government, government
      instrumentality, stock exchange or stock market or court, domestic or foreign,
      having jurisdiction over the Borrower or Holdings or any of their assets or
      properties.

     

     

    
      	 	
              7.4.

            	
              Governmental
                Consents

            

    

     

    Except
      as
      may be required to be obtained or made under the Securities Act or the
      Broadcasting Act (Canada), applicable state securities laws and equivalent
      applicable Canadian securities laws in connection with the exercise of any
      registration rights of the Lender provided for in the Registration Rights
      Agreement, neither Borrower nor Holdings is required to procure, make or file
      any consent, approval or authorization of, or any notice to, of filing,
      registration or qualification with, any court or administrative or governmental
      body in order to execute and deliver this Agreement and to perform its
      obligations hereunder and under any and.
      all
      Transaction Documents. 

     

     

    
      	 	
              7.5

            	
              Indebtedness

            

    

     

    Holdings,
      the Borrower and their Subsidiaries have no Indebtedness except (i) as of the
      Closing Date, as reflected on Schedule
      6.1(v)
      and (ii)
      at all times on and after the date of the Initial Advance, as permitted by
      Section 6.1. 

     

     

    
      	 	
              7.6

            	
              Ranking
                of Obligations

            

    

     

    Except
      for any Indebtedness incurred pursuant to Section 6.1(ii), no Indebtedness
      incurred by the Borrower ranks senior in right of payment to the
      Obligations.

     

    7.7 Litigation

     

    There
      is
      no litigation and there is no legal proceeding pending, or to the best knowledge
      of the Borrower, and Holdings or any of their respective Subsidiaries,
      threatened against the Borrower, Holdings or any of their respective
      Subsidiaries before any court or administrative agency of any country which
      has,
      or could reasonably be expected to have, a Material Adverse Effect.

     

     

    
      	 	
              7.8

            	
              Disclosure;
                Financial Statements 

            

    

     

    All
      information and reports furnished to the Lender by Holdings or the Borrower
      do
      not contain any material misstatement of fact; nor do they omit a material
      fact
      to make any statement therein contained misleading. The financial statements
      dated August 31, 2005 of Borrower and Holdings, respectively, are substantially
      correct and complete in all material respects and have been prepared in
      accordance with GAAP, consistently applied. Since the date thereof, there has
      occurred no change which has had, or could reasonably be expected to have,
      a
      Material Adverse Effect. 

     

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    
      	 	
              7.9

            	
              Taxes

            

    

     

    The
      Borrower, Holdings and each of their respective subsidiaries has paid or made
      adequate provision for payment of all material taxes, assessments, fees and
      other governmental charges (including all Taxes) levied upon it or upon its
      assets or income which are due and payable, including interest and penalties,
      or
      has provided adequate reserves for the payment thereof.

     

     

    
      	
              8.

            	
              Defaults
                and Remedies

            

    

     

     

    
      	 	
              8.1.

            	
              Events
                of Default

            

    

     

     

    An
      “Event
      of Default”
      occurs
      if:

     

     

    (a) the
      Borrower defaults in the payment when due of interest on any Advance and such
      default continues for a period of 3 days;

     

     

    (b) the
      Borrower defaults in the payment when due of principal of any Advance when
      the
      same becomes due and payable at maturity or pursuant to Section 2.6
      hereof;

     

     

    (c) 
      (i) the
      Borrower or Holdings fails to observe or perform any covenant set forth in
      Sections 6.1, 6.2, 6.3, 6.4 and 6.5, or (ii) the Borrower or Holdings fails
      to
      observe or perform any other covenant or other agreement in this Agreement
      or
      the other Transaction Documents and such failure pursuant to this clause (ii)
      shall continue for 30 days after the Borrower knows or should have known of
      the
      occurrence thereof, or the Borrower does not advise Lender of the occurrence
      of
      such a failure to observe or perform promptly after the Borrower first learns
      of
      the same; 

     

     

    (d) a
      default
      occurs and is continuing under any mortgage, indenture or instrument (other
      than
      this Agreement) under which there may be issued or by which there may be secured
      or evidenced any Indebtedness for money borrowed by the Borrower or Holdings
      or
      any of their respective Subsidiaries (or the payment of which is guaranteed
      by a
      Borrower or Holdings or any of their respective Subsidiaries), whether such
      Indebtedness or guarantee now exists, or is created after the date hereof,
      which
      default either results in the acceleration or permits the holder thereof to
      cause the acceleration of, such Indebtedness prior to its express maturity
      and,
      in each case, the principal amount of such Indebtedness, together with the
      principal amount of any other such Indebtedness under which there has been
      a
      default or the maturity of which has been so accelerated, aggregates USD
      $5,000,000 or more; 

     

     

    (e) a
      final
      nonappealable judgment or final nonappealable judgments for the payment of
      money
      are entered by a court or courts of competent jurisdiction against the Borrower,
      Holdings or any of their respective Subsidiaries and such judgment or judgments
      remain undischarged for a period (during which execution shall not be
      effectively stayed) of 60 days, provided
      that the
      aggregate of all such undischarged judgments exceeds USD $5,000,000 (net of
      any
      amounts with respect to which a reputable and creditworthy insurance company
      has
      acknowledged liability in writing);

     

     

    (f) the
      Borrower, Holdings or any of their respective Subsidiaries:

     

     

    
      	 	
              (i)

            	
              applies
                for or consents to the appointment of a receiver, a receiver and
                manager,
                a liquidator or other similar person of it or of all or a substantial
                part
                of its assets;

            

    

     

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    
      	 	
              (ii)

            	
              is
                unable, or admits in writing its inability to pay its debts as they
                become
                due;

            

    

     

     

    
      	 	
              (iii)

            	
              is
                insolvent;

            

    

     

     

    
      	 	
              (iv)

            	
              makes
                an assignment in bankruptcy or a proposal in bankruptcy, delivers
                a notice
                of intention to file a proposal in bankruptcy, or files a petition
                seeking
                reorganization or an arrangement with creditors, takes advantage
                of any
                insolvency law, or admits the material allegations of a petition
                filed
                against it in any bankruptcy, reorganization or insolvency
                proceeding;

            

    

     

     

    
      	 	
              (v)

            	
              takes
                corporate action to authorize any of the
                foregoing;

            

    

     

     

    
      	 	
              (vi)

            	
              is
                wound up; or

            

    

     

     

    
      	 	
              (vii)

            	
              commits
                any act of bankruptcy;

            

    

     

     

    (g) an
      order,
      judgment or decree shall be rendered by any court of competent jurisdiction
      granting a stay of proceedings against the Borrower, Holdings or any of their
      respective Subsidiaries or approving a petition seeking reorganization of the
      Borrower, Holdings or any such Subsidiary or appointing a receiver, receiver
      and
      manager, trustee in bankruptcy or liquidator or other similar person of it
      or of
      all or a substantial part of its assets;

     

     

    (h) any
      proceedings are commenced against or by the Borrower, Holdings or any of their
      respective Subsidiaries under the Companies'
      Creditors Arrangement Act
      (Canada)
      or Bankruptcy
      and Insolvency Act
      (Canada)
      or Winding
      Up and Restructuring Act
      (Canada)
      to wind up or liquidate the Borrower, Holdings or any such
      Subsidiary;

     

     

    (i) the
      Borrower, Holdings or any of their respective Subsidiaries shall cease or
      threaten to cease carrying on business in the normal course or dispose of all
      or
      a significant part of its business or assets, or a receiver or receiver and
      manager is appointed with respect to all or any significant part of its business
      or assets;

     

     

    (j) an
      encumbrancer, lien holder, or person acting on its behalf takes possession
      of
      all or a substantial part of the assets of the Borrower, Holdings or any of
      their respective Subsidiaries; 

     

     

    (k) the
      Borrower, Holdings or any of their Subsidiaries shall breach any agreement
      set
      forth in the Security Documents or shall repudiate any of its obligations under
      the Security Documents or the Security Documents shall be held in any judicial
      proceeding to be unenforceable or invalid or shall cease for any reason to
      be in
      full force and effect or cease to create a valid and perfected security interest
      in the Collateral purported to be covered thereby; 

     

     

    (l) any
      representation, warranty or certification made or deemed made in this Agreement,
      in any of the other Transaction Documents, or in any statement or certificate
      at
      any time given by any such Person pursuant to or in connection with any of
      the
      Transaction Documents shall be false or misleading in any material respect
      on
      the date as of which made or repeated; 

     

     

    (m) any
      Agreement Subsidiary Guarantee shall be held in a judicial proceeding to be
      unenforceable or invalid or shall cease for any reason to be in full force
      and
      effect (except pursuant to its terms), or any Guarantor shall deny or disaffirm
      its obligations under its Agreement Subsidiary Guarantee; 

     

     

    (n) the
      Holdings Guarantee shall be held in a judicial proceeding to be unenforceable
      or
      invalid or shall cease for any reason to be in full force and effect (except
      pursuant to its terms), or Holdings shall deny or disaffirm its obligations
      under the Holdings Guarantee; 

     

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    (o) a
      default
      occurs under the Canadian Licences which prevents Holdings, Borrower or any
      of
      their Subsidiaries from utilizing the Canadian Licences in the conduct of their
      business or the Canadian Licences are for any reason, revoked, suspended or
      terminated; 

     

     

    (p) Borrower
      or Holdings shall default in the performance or compliance with any material
      term, covenant or agreement contained in the Share Issuance Agreement or the
      XM
      System Licence Agreement, and such default shall continue for thirty (30) days
      after the occurrence thereof, or the XM System Licence Agreement shall have
      terminated or been terminated for any reason; or

     

     

    (q) a
      Change
      of Control occurs.

     

     

    
      	 	
              8.2.

            	
              Acceleration

            

    

     

     

    If
      any
      Event of Default (other than an Event of Default specified in clause (f), (g)
      or
      (h) of Section 8.1 hereof with respect to the Borrower, Holdings or any of
      their
      Subsidiaries, occurs and is continuing, the Lender may declare the Obligations
      to be due and payable immediately. Upon any such declaration, the principal
      amount of the Advances, together with all interest accrued thereon, shall become
      due and payable immediately and the Loan Commitment shall terminate.
      Notwithstanding the foregoing, if an Event of Default specified in clause (f),
      (g) or (h) of Section 8.1 hereof occurs with respect to the Borrower, Holdings,
      or any of their Subsidiaries, the outstanding principal amount of the Advances
      shall be due and payable immediately and the Loan Commitment shall terminate
      without further action or notice. The Lender may rescind an acceleration and
      its
      consequences if the rescission would not conflict with any judgment or decree
      and if all existing Events of Default (except nonpayment of principal amount,
      interest or premium that has become due solely because of the acceleration)
      have
      been cured or have been waived by the Lender, either separately or as part
      of a
      rescission notice issued by the Lender. 

     

     

    
      	 	
              8.3.

            	
              Other
                Remedies

            

    

     

     

    If
      an
      Event of Default occurs and is continuing, the Lender may pursue any available
      remedy to collect the payment of the principal and interest on the Advances
      or
      to enforce the performance of any provision of this Agreement, the Agreement
      Subsidiary Guarantees, and the Security Documents.

     

     

    A
      delay
      or omission by the Lender in exercising any right or remedy accruing upon an
      Event of Default shall not impair the right or remedy or constitute a waiver
      of
      or acquiescence in the Event of Default. All remedies are cumulative to the
      extent permitted by law.

     

     

    
      	 	
              8.4.

            	
              Waiver
                of Past Defaults

            

    

     

     

    Lender
      may waive an existing Default or Event of Default and its consequences
      hereunder. Upon any such waiver, such Default shall cease to exist, and any
      Event of Default arising therefrom shall be deemed to have been cured for every
      purpose of this Agreement; but no such waiver shall extend to any subsequent
      or
      other Default or impair any right consequent thereon. 

     

     

    
      	
              9.

            	
              Restrictions
                on Transfer

            

    

     

     

    
      	 	
              9.1.

            	
              Restrictions;
                Restrictive Legend 

            

    

     

    (a) The
      Lender acknowledges that each certificate representing CSR Common Stock issued
      on any Conversion (the “Securities”)
      will
      contain a legend substantially to the following effect:

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
      SECURITIES LAWS. NEITHER THESE SECURITIES NOR ANY INTEREST OR PARTICIPATION
      HEREIN MAY BE RE-OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED
      OR
      OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH
      TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION UNDER THE SECURITIES
      ACT.

     

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    Certificates
      evidencing Securities shall not be required to contain such legend
      (i) following any sale of such Securities pursuant to an effective
      registration statement covering the resale of such Securities under the
      Securities Act, (ii) following any sale of such Securities pursuant to Rule
      144
      under the Securities Act, (iii) if such Securities are eligible for sale under
      Rule 144(k), or (iv) if such legend is not, in the opinion of counsel to
      Holdings, required in the circumstances under applicable requirements of the
      Securities Act (including judicial interpretations and pronouncements issued
      by
      the Staff of the SEC).

     

    (b) In
      addition, the Lender acknowledges that each certificate representing Securities
      will contain a legend substantially to the following effect:

     

    THE
      SECURITIES REPRESENTED HEREBY MAY NOT BE DIRECTLY OR INDIRECTLY SOLD, OFFERED
      FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED TO, FOR THE ACCOUNT
      OR
      BENEFIT OF, OR FOR RESALE TO, ANY RESIDENT OF ONTARIO UNTIL: (A.) THE DATE
      ON
      WHICH CANADIAN SATELLITE RADIO INC. (THE “COMPANY”) BECOMES A “REPORTING ISSUER”
IN ANY OF ALBERTA, BRITISH COLUMBIA, MANITOBA, NOVA SCOTIA, ONTARIO, QUEBEC
      OR
      SASKATCHEWAN AND THE HOLDER OTHERWISE COMPLIES WITH ANY APPLICABLE REQUIREMENTS
      UNDER MULTILATERAL INSTRUMENT 45-102-RESALE OF SECURITIES, PROMULGATED UNDER
      APPLICABLE SECURITIES LAWS; OR (B.) THE COMPANY SHALL HAVE RECEIVED AN OPINION
      ADDRESSED TO THE COMPANY FROM COUNSEL TO THE REGISTERED HOLDER OR OTHER EVIDENCE
      IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, AS TO THE AVAILABILITY OF
      AN
      APPLICABLE EXEMPTION FROM PROSPECTUS AND REGISTRATION REQUIREMENTS UNDER THE
      SECURITIES LEGISLATION OF THE PROVINCE OF ONTARIO AND ANY OTHER JURISDICTION
      OF
      CANADA IN WHICH THE PROPOSED TRANSFEREE IS RESIDENT. ANY TRANSFEREE OF THESE
      SECURITIES MUST COMPLY WITH THE RESTRICTIONS SET OUT IN THIS
      LEGEND.

     

    Certificates
      evidencing Securities shall not be required to contain such legend (i) following
      the sale of such Securities under a prospectus for which a receipt has been
      obtained pursuant to the securities laws of any province or territory of Canada,
      (ii) once the Borrower becomes a “reporting issuer” in any of Alberta, British
      Columbia, Manitoba, Nova Scotia, Ontario, Quebec or Saskatchewan under
      applicable Canadian securities laws, or (iii) if such legend is not, in the
      opinion of counsel to Holdings, required in the circumstances under the
      applicable requirements of Canadian securities laws (including policies, rules
      and other instruments issued by Canadian securities regulatory authorities
      thereunder).

     

    (c) In
      addition, the Lender acknowledges that each certificate representing Securities
      will contain a legend substantially to the following effect:

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE ARE THE SUBJECT OF A CERTAIN
      SHAREHOLDERS AND NOTEHOLDERS AGREEMENT WHICH, AMONG OTHER THINGS, CONTAINS
      RESTRICTIONS ON THE TRANSFER OF SUCH SECURITIES. A COPY OF THE SHAREHOLDERS
      AND
      NOTEHOLDERS AGREEMENT IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF
      CSR.

     

    Subject
      to Section 9.1(a) and (b), the Borrower shall remove the applicable legend(s)
      from the certificate(s) representing such shares promptly upon request of the
      holder thereof and shall promptly deliver replacement certificate(s) to such
      holder.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    
      	
              10.

            	
              Expenses

            

    

     

    The
      Borrower will pay at Closing all reasonable expenses relating to this Agreement
      and the Transaction Documents, including the reasonable fees and disbursements
      of outside counsel for the Lender. 

     

     

    
      	
              11.

            	
              Survival

            

    

     

    All
      express representations and warranties contained in this Agreement or made
      in
      writing by or on behalf of the Borrower, Holdings or their Subsidiaries as
      of
      the date hereof and as of the date of each Advance in connection with the
      transactions contemplated by this Agreement shall survive any investigation
      at
      any time made by the Lender or on the Lender’s behalf, and shall not be deemed
      waived or voided by the Closing, any Advance hereunder or any disposition or
      payment of amounts outstanding hereunder. 

     

     

    
      	
              12.

            	
              Amendments
                and Waivers

            

    

     

     

    
      	 	
              12.1

            	
              Amendments
                and Waivers

            

    

     

    Any
      term
      of this Agreement may be amended, and the observance of any term of this
      Agreement may be waived (either generally or in a particular instance and either
      retroactively or prospectively) only with the written consent of the Parties
      hereto. Any amendment or waiver effected in accordance with this Section 12
      shall be binding upon the Lender and the Borrower.

     

     

    
      	
              13.

            	
              Guarantees

            

    

     

     

    
      	 	
              13.1.

            	
              Execution
                and Delivery of Agreement Subsidiary
                Guarantees

            

    

     

    The
      Borrower shall cause each Subsidiary to execute and deliver at the Closing
      to
      the Lender an Agreement Subsidiary Guarantee substantially in the form included
      in Exhibit
      B
      hereto,
      duly executed on behalf of such Subsidiary by an Officer thereof.

     

     

    
      	 	
              13.2.

            	
              Subsidiary
                Guarantors May Consolidate, Etc. on Certain
                Terms

            

    

     

    (a) Nothing
      contained in this Agreement or in any Agreement Subsidiary Guarantee shall
      prevent any consolidation or merger of a Subsidiary Guarantor with or into
      a
      Borrower or another Subsidiary Guarantor, or shall prevent the transfer of
      all
      or substantially all of the assets of a Subsidiary Guarantor to a Borrower
      or
      another Subsidiary Guarantor. Upon any such consolidation, merger, transfer
      or
      sale, the Agreement Subsidiary Guarantee of the Subsidiary Guarantor being
      consolidated or merged or into a Borrower or such other Subsidiary Guarantor
      (or
      the assets of which are being so transferred) shall no longer have any force
      or
      effect.

     

    (b) Nothing
      contained in this Agreement shall prevent any consolidation or merger of a
      Subsidiary Guarantor with or into a corporation or corporations other than
      a
      Borrower or another Subsidiary Guarantor (whether or not affiliated with the
      Subsidiary Guarantor), or successive consolidations or mergers in which a
      Subsidiary Guarantor or its successor or successors shall be a party or parties,
      or shall prevent the transfer of all or substantially all of the assets of
      a
      Subsidiary Guarantor, to a corporation other than a Borrower or another
      Subsidiary Guarantor (whether or not affiliated with the Subsidiary Guarantor)
      authorized to acquire and operate the same in the event that
      such
      consolidation, merger or transfer complies with the terms and conditions of
      this
      Agreement and all Agreement Subsidiary Guarantees. 

     

     

    
      	 	
              13.3.

            	
              Releases
                Following Sale of Assets

            

    

     

    Concurrently
      with any sale or other disposition of assets all or substantially all of the
      assets of any Subsidiary Guarantor or all of the Capital Stock of any Subsidiary
      Guarantor,
      in each
      case, in compliance with the terms hereof, then such Subsidiary Guarantor (in
      the event of a sale or other disposition of all of the Capital Stock of such
      Subsidiary Guarantor) or the corporation acquiring the property (in the event
      of
      a sale or other disposition of all or substantially all of the assets of a
      Subsidiary Guarantor) shall be released from and relieved of its obligations
      under its Agreement Subsidiary Guarantee and under this Section 13. Any
      Subsidiary Guarantor not released from its obligations under its Agreement
      Subsidiary Guarantee shall remain liable for the full amount of principal of
      and
      interest on the Advances and for the other obligations of any Subsidiary
      Guarantor under the Agreement Subsidiary Guarantee
      as
      provided in this Section 13.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    
      	 	
              13.4.

            	
              Application
                of Certain Terms and Provisions to the Subsidiary
                Guarantors

            

    

     

    Any
      notice or demand which by any provision of this Agreement is required or
      permitted to be given or served by the Lender to or on any Subsidiary Guarantor
      may be given or served as described in this Agreement as if references herein
      to
      the Borrower were references to such Subsidiary Guarantor.

     

     

    
      	 	
              13.5.

            	
              Addition
                of Subsidiary Guarantors

            

    

     

    If
      at any
      time after the Closing, the Borrower forms or acquires a Subsidiary, the
      Borrower shall upon such formation or acquisition, cause such Subsidiary to
      (i)
      issue an Agreement Subsidiary Guarantee by causing such Subsidiary to execute
      and deliver to the Lender an Agreement Subsidiary Guarantee substantially in
      the
      form of Exhibit
      B
      hereto
      and (ii) take all actions contemplated by Section 15.1 in respect of the
      Security Documents. The Agreement Subsidiary Guarantee and the Security
      Documents so issued shall in all respects have the same legal rank and benefit
      under this Agreement as the Agreement Subsidiary Guarantees and the Security
      Documents theretofore and thereafter issued in accordance with the terms of
      this
      Agreement as though such Agreement Subsidiary Guarantee and Security Documents
      had been issued at the date of the execution hereof. 

     

     

    
      	 	
              13.6.

            	
              Holdings
                Guarantee

            

    

     

    Holdings
      shall execute and deliver at the Closing to the Lender a parent guarantee
      substantially in the form of Exhibit
      C
      hereto.

     

     

    
      	
              14.

            	
              Notices

            

    

     

    Except
      as
      otherwise provided in this Agreement, notices and other communications under
      this Agreement shall be in writing and shall be deemed properly served if:
      (i)
      mailed by registered or certified mail, return receipt requested, (ii) delivered
      by a recognized overnight courier service, (iii) delivered personally, or (iv)
      sent by facsimile transmission, addressed to the General Counsel for each Party
      at the address set forth below for such party or at such other address or to
      the
      attention of such other officers as such Party shall have furnished in writing
      pursuant to this Section 14. Such notice shall be deemed to have been received:
      (i) three (3) days after the date of mailing if sent by certified or registered
      mail, (ii) one (1) day after the date of delivery if sent by overnight courier,
      (iii) the date of delivery if personally delivered, or (iv) the next succeeding
      business day after transmission by facsimile.

     

    If
      to the
      Borrower or Holdings:

    Suite
      2300, P.O. Box 222

    Canada
      Trust Tower, BCE Place

    161
      Bay
      Street

    Toronto,
      Ontario M5J 2S1

     

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    

    If
      to the
      Lender:

    

    XM
      SATELLITE RADIO HOLDINGS INC.

    1500
      Eckington Place, NE

    Washington,
      D.C. 20002-2164

    Fax
      No.:
      (202) 380-4500

    Attention:      Joseph
      Titlebaum

    Executive
      Vice President, General Counsel

    Joseph
      Verbrugge

    Vice
      President, International Operations

     

    
      	
              15.

            	
              Security

            

    

     

    
      	 	
              15.1.

            	
              Borrower
                Security
                Required

            

    

     

    As
      general and continuing security for the due payment or performance, as the
      case
      may be, of all Obligations, the Borrower shall deliver or cause to be delivered
      to the Lender (i) before the Initial Advance, except to the extent the
      conditions set forth in Section 15.6 are met as of the time of the initial
      Advance, or (ii) if the following security documents are not then in full
      force and effect, before any subsequent Advance to be made at a time when the
      conditions set forth in Section 15.6 are not met, the following security
      documents (collectively the "Security
      Documents")
      and in
      form and substance satisfactory to the Lender acting reasonably:

     

    (a) a
      debenture containing, inter alia, a first (subject to Permitted Liens including,
      without limitation, priority liens in favor of Senior Bank Indebtedness that
      constitute Permitted Liens) fixed and floating charge of all present and future
      assets, property and undertaking of Holdings, the Borrower and each Subsidiary
      Guarantor, in registrable form containing, among other things:

     

    
      	 	
              (i)

            	
              a
                fixed and specific charge of, and security interest in all present
                and
                future real property including all leasehold interests
                therein;

            

    

     

    
      	 	
              (ii)

            	
              a
                fixed charge of and security interest in all present and future personal
                property including without limitation equipment, inventory, receivables,
                and other intangibles, but excluding any Repeaters not financed by
                Advances under this Agreement and any Canadian Licences and the shares
                of
                any Subsidiary where the primary asset of such Subsidiary is any
                Canadian
                Licence; 

            

    

     

    
      	 	
              (iii)

            	
              an
                assignment of all rights in (but not obligations under) all present
                and
                future contracts and licences other than the Canadian Licences of
                the
                Borrower;

            

    

     

    
      	 	
              (iv)

            	
              an
                assignment of all insurance; and

            

    

     

    
      	 	
              (v)

            	
              a
                floating charge of, and security interest in the undertaking and
                all
                present and future real and personal property not subject to a fixed
                charge in favour of the Lender, but excluding any Repeaters not financed
                by Advances under this Agreement and any Canadian Licences and the
                shares
                of any Subsidiary where the primary asset of such Subsidiary is any
                Canadian Licence;

            

    

     

    (b) a
      delivery agreement by the Borrower, Holdings and each Subsidiary Guarantor
      to
      the Lender in respect of the debenture;

     

    (c) a
      hypothec granted by the Borrower, Holdings and each Subsidiary Guarantor in
      favour of the Lender creating a security interest in all of its present and
      after-acquired personal and moveable real property in or subject to the laws
      of
      Quebec;

     

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    (d) charges/mortgages
      of land with a copy of the debenture attached thereto for registration against
      the real property of the Borrower, Holdings, and each Subsidiary Guarantor,
      where applicable;

     

    (e) to
      the
      extent not included in the debenture and hypothec a first assignment by the
      Borrower, Holdings and each Subsidiary Guarantor to the Lender of all present
      and future property insurance in effect covering the Borrower’s assets, naming
      the Lender as loss payee and first mortgagee together with the consent of the
      insurers thereto and a standard mortgage endorsement clause; and

     

    (f) a
      first
      specific hypothecation and pledge by the Borrower, Holdings and each Subsidiary
      Guarantor to the Lender of all of the issued and outstanding securities now
      or
      hereafter issued by all direct or indirect existing and future Subsidiaries
      of
      the Borrower or Holdings, and delivery to the Lender of all share certificates
      evidencing such securities issued by each such Subsidiary and duly endorsed
      by
      owner thereof in blank for transfer (or if requested by the Lender, re-issued
      in
      the name of the Lender) or a power of attorney with respect
      thereto.

     

     

    
      	 	
              15.2

            	
              Registration

            

    

     

    The
      Lender may, at the expense of the Borrower, register, file or record the
      Security Documents or financing statements or notices in respect thereof in
      all
      offices where such registration, filing or recording is, in the opinion of
      the
      Lender or its counsel, acting reasonably, necessary to the creation, perfection
      or preservation of the charges, assignments and security interests arising
      pursuant thereto. The Lender may, at the Borrower’s expense, renew such
      registrations, filings and recordings from time to time as and when required
      to
      keep them in full force and effect. The Borrower acknowledges that the forms
      of
      Security Documents have been prepared based on the laws in effect at the date
      of
      execution thereof and that such laws may change, and that the laws of other
      jurisdictions may require the execution and delivery of different forms of
      security instruments in order to grant to the Lender the rights intended to
      be
      granted by the Security Documents. The Borrower, Holdings, and each Subsidiary
      Guarantor shall, on the reasonable request from the Lender from time to time,
      execute and deliver to the Lender such additional security instruments and
      related documents and will amend or supplement any security theretofore provided
      to the Lender:

     

    (a) to
      reflect any changes in such laws, whether arising as a result of statutory
      amendments, court decisions or otherwise;

     

    (b) to
      facilitate the registration of appropriate forms of security or other documents
      in all appropriate jurisdictions; or

     

    (c) if
      the
      Borrower amalgamates with any other person or enters into any corporate
      reorganization,

     

    in
      each
      case in order to confer upon Lender such security interests with such priority,
      as are intended to be created by the Security Documents.

     

     

    
      	 	
              15.3

            	
              Additional
                Security by the Borrower 

            

    

     

    To
      the
      extent that: 

     

    (a) any
      applicable law or its interpretation is varied such that the Lender considers
      it
      advisable to receive additional security; or 

     

    (b) additional
      assets come into existence or are acquired by the Borrower, Holdings, or any
      Subsidiary Guarantor or the Borrower, Holdings or any Subsidiary Guarantor
      enters into a material contract, 

     

    the
      Borrower, Holdings, or the applicable Subsidiary Guarantor, as applicable,
      shall, within 30 days after a request from the Lender, execute and deliver
      to
      the Lender first (subject to any applicable Permitted Liens which may have
      priority) specific assignments, pledges or charges thereof or security interests
      therein as required by the Lender, in form and substance satisfactory to the
      Lender, whereby such assets are assigned, pledged, mortgaged and charged to
      the
      Lender, together with legal opinions from the Borrower’s counsel, consents and
      other documents, all in form and substance satisfactory to the Lender related
      to
      such matters as the Lender may reasonably request.

     

     

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    
      	 	
              15.4.

            	
              Release
                of Collateral

            

    

     

    Collateral
      may be released only in accordance with the terms of the Security
      Documents.

     

     

    
      	 	
              15.5.

            	
              Termination
                of Security Interest.

            

    

     

    Upon
      the
      payment in full of all Obligations of the Borrower under this Agreement, the
      Lender shall, at the request of the Borrower, promptly deliver a certificate
      to
      the Borrower stating that such Obligations have been paid in full, and at
      Borrower’s request and expense, take all actions reasonably requested to release
      all rights and interests of the Lender with respect to the Liens under the
      Security Documents. 

     

     

    
      	 	
              15.6.

            	
              Termination
                of Security Interest to Permit High Yield Debt
                Offering.

            

    

     

    In
      the
      event the
      Borrower proposes to incur High Yield Debt of not less than USD $75 million
      under Section 6.1(iii) that is not subject to any security interest, encumbrance
      or charge, and the Borrower certifies to the Lender that Borrower is in
      compliance with all of the covenants herein regarding incurrence of Indebtedness
      and Liens (including without limitation Section 6.1 and 6.3), the Lender shall,
      at
      Borrower’s request and expense, take all actions reasonably requested to release
      all rights and interests of the Lender with respect to the Liens under the
      Security Documents effective immediately prior to the incurrence of such High
      Yield Debt by the Borrower, and the provisions of Section 15.1, 15.2 and 15.3
      and other sections of this Agreement relating to the Security Documents shall
      cease to apply immediately following such release.

     

     

    
      	 	
              15.7.

            	
              Intercreditor
                Agreement

            

    

     

    In
      the
      event the Borrower proposes to incur any Senior
      Bank Indebtedness, the Lender and the Borrower shall negotiate in good faith
      with the lender of such Senior Bank Indebtedness an intercreditor agreement
      on
      customary terms and conditions.

     

     

    
      	
              16.

            	
              Execution
                in Counterparts

            

    

     

    This
      Agreement may be executed in any number of counterparts and by different Parties
      hereto in separate counterparts, each of which when so executed shall be deemed
      to be an original and all of which taken together shall constitute one and
      the
      same agreement.

     

     

    
      	
              17.

            	
              Binding
                Effect

            

    

     

    This
      Agreement shall be binding upon and inure to the benefit of the Parties and
      their respective successors and assigns, except that the Borrower shall not
      have
      the right to assign their respective rights or obligations hereunder, other
      than
      to an Affiliate, or any interest herein without the prior written consent of
      the
      Lender which may be withheld for any reason.

     

     

    
      	
              18.

            	
              GOVERNING
                LAW; CHOICE OF FORUM; JURY TRIAL
                WAIVER

            

    

     

    THIS
      AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
      OF
      THE PROVINCE OF ONTARIO AND THE LAWS OF CANADA APPLICABLE THEREIN. Without
      prejudice to the right of the Lender to commence any proceedings with respect
      to
      this Agreement in any other proper jurisdiction, the parties hereby attorn
      and
      submit to the jurisdiction of the courts of the Province of Ontario. THE PARTIES
      HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
      PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS
      CONTEMPLATED HEREBY OR ANY OTHER DOCUMENT CONTEMPLATED HEREIN.

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    
      	
              19.

            	
              Miscellaneous

            

    

     

     

    
      	 	
              19.1.

            	
              Severability

            

    

     

    The
      holding of any provision of this Agreement to be invalid or unenforceable by
      a
      court of competent jurisdiction shall not affect any other provision of this
      Agreement, which shall remain in full force and effect. If any provision of
      this
      Agreement shall be declared by a court of competent jurisdiction to be invalid,
      illegal or incapable of being enforced in whole or in part, such provision
      shall
      be interpreted so as to remain enforceable to the maximum extent permissible
      consistent with applicable law and the remaining conditions and provisions
      or
      portions thereof shall nevertheless remain in full force and effect and
      enforceable to the extent they are valid, legal and enforceable, and no
      provisions shall be deemed dependent upon any other covenant or provision unless
      so expressed herein. 

     

     

    
      	 	
              19.2.

            	
              No
                Waiver

            

    

     

    It
      is
      agreed that a waiver by any Party of a breach of any provision of this
Agreement
      shall not operate, or be construed, as a waiver of any subsequent breach by
      the
      breaching Party.

     

     

    
      	 	
              19.3.

            	
              Further
                Assurances

            

    

     

    The
      Parties agree to execute and deliver all such further documents, agreements
      and
      instruments and take such other and further action as may be necessary or
      appropriate to carry out the purposes and intent of this Agreement, including
      without limitation, entering into the other Transaction Documents to which
      each
      is a party.

     

     

    
      	 	
              19.4.

            	
              Interest
                Act Disclosure

            

    

     

    For
      purposes of the Interest
      Act
      (Canada)
      it is hereby agreed that where interest is calculated pursuant to this agreement
      at a rate or percentage based on a year of 360 days, the yearly rate or
      percentage of interest to which such interest rate is equivalent, is the rate
      obtained by multiplying such rate by the actual number of days in the relevant
      year and dividing by 360. 

     

     

    
      	 	
              19.5

            	
              Canadian
                Currency

            

    

     

    All
      dollar amounts referred to herein are denominated in Canadian currency unless
      otherwise expressly provided.

     

     

    
      	 	
              19.6

            	
              Construction

            

    

     

    The
      headings herein are for convenience only, do not constitute a part of this
      Agreement and shall not be deemed to limit or affect any of the provisions
      hereof. The language used in this Agreement will be deemed to be the language
      chosen by the parties to express their mutual intent, and no rules of strict
      construction will be applied against any party. The word “including” as used
      herein shall not be construed so as to exclude any other thing not referred
      to
      or described.

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Parties have caused this Agreement to be duly signed as
      of
      the date first above written.

     

      
      

    
      	 	 	 
	 	
              XM
                SATELLITE RADIO HOLDINGS INC.

            
	 
 	 
 	 
 
	
            	By:  	/s/ Gary
              M.
              Parsons
	 	
              

              Name:
                Gary M. Parsons

            
	 	Title:
              Chairman

    

     

    
 

    
      	 	 	 
	 	
              CANADIAN
                SATELLITE RADIO INC.

            
	 
 	 
 	 
 
	 	By:  	/s/ John
              I.
              Bitove
	 	
              

              Name:
                John I. Bitove

            
	 	
              Title:
                Chairman and CEO

            

    

     

     

    
      	 	 	 
	 	CANADIAN
              SATELLITE RADIO HOLDINGS INC.
	 
 	 
 	 
 
	
            	By:  	/s/ John
              I.
              Bitove
	 	
              

              Name:
                John I. Bitove

            
	 	
              Title:
                Chairman and CEO

            

    

    

     

     

    
      Signature
        Page to Credit Agreement

    

    

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    Exhibit
      A

    Form
      of Request for Advance

    

    

    [Date]

     

    XM
      Satellite Radio Holdings Inc.

    1500
      Eckington Place, NE

    Washington,
      D.C. 20002-2194

    Fax
      No.:
      (202) 380-4500

    

    Attention:
      General Counsel

     

    Ladies
      and Gentlemen:

     

    The
      undersigned, Canadian Satellite Radio Inc. (the “Borrower”),
      refers
      to the Credit Agreement, dated as of _______ __, 2005 (as amended from time
      to
      time, the “Credit Agreement”, the terms defined therein being used herein as
      therein defined), among XM Satellite Radio Holdings Inc., as Lender, the
      Borrower, and Canadian Satellite Radio Holdings Inc., and hereby gives you,
      Lender, irrevocable notice, pursuant to Section 2.2(a) of the Credit Agreement,
      that the undersigned hereby requests an Advance under the Credit Agreement,
      and
      in that connection sets forth below the information relating to such Advance
      as
      required by Section 2.2(a) of the Credit Agreement:

     

    (i)  The
      Business Day of the proposed Advance is _________ __, ___ (the “Funding
      Date”) 1

     

    (ii)  The
      aggregate amount of the proposed Advance is Cdn$__________.

     

    (iii)  The
      aggregate amount of the proposed Advance to be used for Repeater Obligations
      and
      Subscription Fee Obligations, respectively, is Cdn$______________ and
      Cdn$_________________.

     

    (iv)  The
      proposed Advance is being requested for [______________].

     

    (v)  The
      proceeds of the proposed Advance shall be made available to XM Satellite Radio
      Inc. to pay the Repeater Obligations and Subscription Fee Obligations then
      due
      and owing.

     

    The
      undersigned hereby certifies that (A) each of the conditions set forth in
      Section 4.2(b) of the Credit Agreement have been satisfied as of the Funding
      Date and (B) no Default or Event of Default has occurred and is
      continuing.

     

    
      	 	 	 
	 	
              Very
                truly yours,

               

              CANADIAN
                SATELLITE RADIO INC.

            
	 
 	 
 	 
 
	Date: 	By:  	/s/ 
	 	
              

            
	 	Title 

    

     

     

    [Must
      be signed by an authorized officer.]

     

    1
      This
      date shall be the date on which the Repeater Obligations and/or Subscription
      Fee
      Obligations being funded by such Advance become due and owing in respect of
      any
      such Obligations.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
      B

    Form
      of Agreement Subsidiary Guarantee

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      C

     

    Form
      of Holdings Guarantee

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      1.1.PL(14)-Permitted Liens

    

    NIL,
      subject to completion of a lien search to identify lien filings that the
      Borrower and Holdings are not presently aware of. 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      6.1(v)—Indebtedness

    

    Holdings
      and/or the Borrower are indebted to affiliates of Canadian Satellite Radio
      Investments Inc. for amounts advanced in connection with the funding of the
      Borrower’s business. These amounts are to be repaid upon, and out of, the
      contribution by Canadian Satellite Radio Investments Inc. of an additional
      $15
      million in capital.

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