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Pursuant to the agreement, the holders have agreed to waive XM's change of control repurchase obligation of the 9.75 percent Notes with respect to the consummation of the previously announced merger of XM Satellite Radio and Sirius Satellite Radio Inc. Pursuant to the terms of the indenture governing the 9.75 percent Notes, the waiver is effective for all holders of the 9.75 percent Notes.
The waiver provides that, promptly following the closing of the merger, XM will commence an offer to exchange the 9.75 percent Notes for a combination of at least $400 million of cash and up to $200 million aggregate principal amount of a new series of senior notes to be issued by XM. The waiver is subject to the consummation of the merger and the satisfaction of certain conditions in connection with various other merger-related refinancing transactions to be undertaken by XM prior to August 31. If the merger and the satisfaction of such other conditions have not occurred by August 31, the waiver, unless extended, will cease to be effective.
The exchange notes will mature in 2014, or 2013 in certain circumstances. The yield to maturity on the exchange notes (calculated solely on the basis of interest rate on the exchange notes and the price at which they are offered in exchange for 9.75 percent Notes) will be calculated on the basis of the selling price of and interest rate on certain other senior notes expected to be issued by XM in connection with its merger-related refinancing transactions. The effective yield on the exchange notes will not be less than 13.92 percent per annum. In the event that XM issues less than $150 million aggregate principal amount of other senior notes in connection with its merger related refinancing transactions, the effective yield on the exchange notes will not be less than 15 percent per annum.
The senior notes expected to be issued by XM will not be registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
Nothing in this press release should be construed as a solicitation of an exchange or offer to purchase, or an offer to sell, any of XM's or XM Satellite Radio Holdings Inc.'s securities. Any offer to exchange, purchase or sell any of XM's or XM Satellite Radio Holdings Inc.'s securities will be made only upon the terms and conditions set forth in an offering document related thereto.
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