Sirius XM Radio (SIRI)

(19) Subsequent Events

(15) Subsequent Events

Since September 30, 2008, we have issued or entered into agreements to issue an aggregate of 262,911,513 shares of our common stock, par value $0.001 per share, in exchange for $90,772 principal amount of the 2 ¹/2% Notes beneficially owned by institutional holders.

We did not receive any cash proceeds as a result of the exchange of our common stock for the 2 ¹/2% Notes, which notes were retired and cancelled. We executed these transactions to reduce our debt and interest cost, increase our equity, and improve our balance sheet. We may engage in additional exchanges in respect of our outstanding indebtedness if and as favorable opportunities arise.

The issuance of the shares of our common stock was made pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, contained in Section 3(a)(9) of such Act.

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Table of Contents

12. Subsequent Events

          We exercised an option under our existing satellite purchase agreement with Space Systems/Loral, Inc. to purchase our sixth satellite. Space Systems/Loral will design and construct the satellite, which is expected to be one of the most advanced and powerful satellites ever built.

          Construction of this satellite is expected to be completed in 2010. The satellite is expected to be launched into an inclined elliptical orbit to complement our existing satellites, which were also manufactured by Space Systems/Loral. Our unique hybrid constellation, consisting of satellites operating in a highly inclined geosynchronous orbits in combination with one satellite operating in a geostationary orbit will provide unparalleled redundancy, enhanced coverage and exceptional performance.

          The aggregate cost of designing and building this satellite will be approximately $169,000. A substantial portion of this purchase price will not be paid until 2009 and following the launch and successful completion of on-orbit testing of this satellite.

          In June 2006, in connection with the contract to purchase our fifth satellite, which is currently under construction, Space Systems/Loral agreed to provide us a $100,000 vendor financing facility. No amounts in connection with this existing facility have been drawn. As part of the exercise of the option to purchase an additional satellite, Space Systems/Loral has amended and extended this $100,000 vendor financing to permit us to access the facility to pay a portion of the purchase price of the new satellite.

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16. Subsequent Events

          In January 2007, Howard Stern and his agent were granted an aggregate of approximately 22,058,000 shares of our common stock as a result of certain performance targets that were satisfied on December 31, 2006. The value of these shares recorded to stock-based compensation expense during 2006 was $82,941.

          We and XM Radio announced on February 19, 2007 a definitive agreement, under which we will be combined in a tax-free, all-stock merger of equals. Under the terms of the agreement, XM Radio shareholders will receive 4.6 shares of our common stock for each share of XM Radio they own. XM Radio and our shareholders will each own approximately 50% of the combined company. The transaction is subject to approval by XM Radio and our shareholders, the satisfaction of customary closing conditions and regulatory review and approvals, including antitrust agencies and the FCC. We and XM Radio expect the transaction to be completed by the end of 2007.

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15. Subsequent Events (Unaudited)

      In January 2005, certain third parties exercised approximately 18,167,000 warrants, with an exercise price of $0.92 per share, approximately 27,250,000 warrants, with an exercise price of $1.04

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SIRIUS SATELLITE RADIO INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollar amounts in thousands, unless otherwise stated)

per share, and 2,400,000 warrants, with an exercise price of $2.392 per share. In connection with these exercises, we issued approximately 41,194,000 shares of our common stock in a series of cashless exercise transactions.

      In February 2005, we entered into an agreement with NASCAR to broadcast live all NASCAR Nextel Cup Series, NASCAR Busch Series and NASCAR Craftsman Truck Series races for five years starting in 2007. We will create a new around-the-clock channel of NASCAR-related programming and will become the Official Satellite Radio Partner of NASCAR with exclusive trademark and marketing rights and the right to sell advertising time on the NASCAR channel and during races. We will pay rights fees totaling $107.5 million over the term of this agreement, including an initial $3 million payment and a $15 million payment into escrow.

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SIRIUS SATELLITE RADIO INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollar amounts in thousands, unless otherwise stated)