Sirius XM Radio (SIRI)

(17) Subsequent Event

On April 28, 2009, our board of directors adopted a rights plan to protect against limitations on our ability to use our net operating loss carryforwards and certain other tax benefits (the “NOLs”) to reduce potential future federal income tax obligations. We have experienced and continue to experience substantial operating losses, and under the Internal Revenue Code and rules promulgated thereunder we may “carry forward” these losses in certain circumstances to offset current and future earnings and reduce our federal income tax liability. We believe that we currently may be able to carry forward our NOLs, and these NOLs may be a substantial asset to us although we presently have a related valuation allowance recorded. An “ownership change,” as defined in Section 382 of the Internal Revenue Code may substantially limit, our ability to use the NOLs significantly impairing the value of that asset. The terms of the rights and the rights plan are set forth in a Rights Agreement, by and between us and The Bank of New York Mellon, as rights agent, dated as of April 29, 2009 (the “Rights Plan”).

The Rights Plan is intended to act as a deterrent to any person or group (an “Acquiring Person”) acquiring 4.9% or more of our outstanding common stock (assuming for purposes of this calculation that all of our outstanding convertible preferred stock is converted into common stock) without the approval of our board of directors. The Rights Plan exempts future acquisitions of common stock by Liberty Radio, LLC and its affiliates, but does not in any respect alter the respective rights and obligations of the Company and Liberty Radio, LLC and its affiliates under the terms of the Investment Agreement dated as of February 17, 2009, between us and Liberty Radio, LLC. Any rights held by an Acquiring Person are void and may not be exercised. Our board of directors may, in its sole discretion, exempt any person or group from being deemed an Acquiring Person for purposes of the Rights Plan.

The Rights Plan will continue in effect until August 1, 2011, unless it is terminated or redeemed earlier by our board of directors. We plan to submit the Rights Plan to stockholder vote prior to June 30, 2010, and the failure to obtain this approval will result in a termination of the Rights Plan.

For further information regarding the Rights Plan, please refer to the Rights Agreement, which is incorporated by reference as an exhibit to this Report.

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15. Subsequent Event

      In January 2006, Howard Stern and his agent were granted an aggregate of 34,375,000 shares of our common stock as a result of certain performance targets that were satisfied in January 2006. The value of these shares was approximately $225,000 and will be recorded to equity granted to third parties and employees expense in the first quarter of 2006.

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11. Subsequent Event

      In August 2005, we agreed to sell $500,000 in aggregate principal amount of our 9⁵⁄8% Senior Notes due 2013 in a private transaction exempt from registration under the Securities Act of 1933 pursuant to Rule 144A.

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