NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[***]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST, AND HAVE BEEN OMITTED FROM THIS EXHIBIT.
COMPLETE, UNREDACTED COPIES OF THIS EXHIBIT HAVE BEEN FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT
REQUEST.
          SECOND AMENDMENT (this “Second Amendment”), dated as of November 8,
2007, to the Manufacturing and Distribution Agreement, dated as of April 7,
2005, as amended July 17, 2007 (the “Agreement”), between SIRIUS SATELLITE RADIO
INC., a Delaware corporation (“Sirius”), and DIRECTED ELECTRONICS, INC., a
Florida corporation (“Directed”).
WITNESSETH:
     WHEREAS, Sirius and Directed desire to amend certain provisions of the
Agreement in the manner provided for in this Second Amendment;
     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Directed and Sirius hereby agree
as follows:
     1. Effective Date. This Second Amendment shall become effective as of
January 1, 2008.
     2. Definitions. (a) Capitalized terms used in this Second Amendment and not
defined herein shall have the meanings assigned to such terms in the Agreement;
     (b) Section 1.01 of the Agreement is hereby amended by adding the following
definitions in the appropriate alphabetical order:
     “Material Part” has the meaning set forth in Section 3.09(d).
     “NFF Product Returns” means Core Products [* * *] which Sirius or a
third-party service provider has determined that no fault was found after visual
inspection and functional testing of such products.
     “NFF Product Return Rate” means the total number of NFF Product Returns
during a calendar quarter taken as a percentage of the total Core Products sold
by Directed during the immediately preceding calendar quarter.
     “Products Ineligible for Return” shall have the meaning set forth in
Section 3.09(b)(ii).
     [* * *] .

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[* * *] — CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
     “Warranty” has the meaning set forth in Section 3.09(b).
     3. Amendment to Section 3.03 of the Agreement. Section 3.03 of the
Agreement is hereby amended by deleting such Section in its entirety and
substituting in lieu thereof the following Section:
     “SECTION 3.03. Product Sourcing and Pricing. (a) Directed shall purchase
Products (other than Directed/Sirius Accessory Products) from third party
manufacturers authorized by Sirius (“Authorized Manufacturers”). Directed and
Sirius shall work together to establish mutually acceptable dealer costs and
suggested retail prices for such Products that are competitive with the costs
and retail prices of similar products marketed and sold by third parties, which
costs and prices may change from time to time due to market conditions. 
Directed shall publish documents for its dealers that contain such dealer costs
and suggested retail prices in accordance with the costs and prices set forth in
Exhibit B. 
     (b) Subject to Section 3.03(c), [* * *] Authorized Manufacturers to sell
Core Products to Directed at costs that will [* * *].
     (c) In the event that the NFF Product Return Rate reaches [* * *] Core
Products to Directed for the following [* * *] that will allow Directed to
realize [* * *] as follows:
     (i) [* * *] NFF Product Return Rate = [* * *] ;
     (ii) [* * *] NFF Product Return Rate = [* * *];
     (iii) [* * *] NFF Product Return Rate = [* * *]; and
     (iv) [* * *] NFF Product Return Rate or below = [* * *].
Directed’s [* * *] every [* * *] based on the NFF Product Return Rate for the
preceding [* * *] , but in no event less than the [* * *] specified in
Section 3.03(b). Directed’s [* * *] will be adjusted as soon as practicable
following (1) [* * *] for the preceding [* * *] pursuant to Section 3.12 and
(2) the [* * *] to determine whether they are NFF Product Returns. Such [* * *]
shall be applied retroactively for the time period from the beginning of the [*
* *] until such time the [* * *].”

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[* * *] — CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
     4. Amendment to Section 3.07(b) of the Agreement. Section 3.07(b) is hereby
amended by inserting the following sentence after the first sentence in
Section 3.07(b):
     “[* * *] to place Backstop Purchase Orders upon receipt of, and [* * *].”
     5. Amendment to Section 3.09 of the Agreement. Section 3.09 is hereby
amended by deleting such Section in its entirety and substituting in lieu
thereof the following Section:
     “SECTION 3.09. Returns. (a) Directed and Sirius shall process all Core
Products returned to Directed by Approved Dealers in the manner set forth in
this Section 3.09.
     (b) Directed shall use all commercially reasonable efforts to ensure that
the Core Products returned to Directed by an Approved Dealer adhere [* * *] (the
“Warranty”), and at a minimum will [* * *]:
     (i) the Core Product returned is accompanied by [* * *], the Core Product
was returned within the applicable Warranty period [* * *]; and
     (ii) at the time the Approved Dealer returned the Core Products to
Directed, the Core Products were not [* * *] manufactured and the applicable
Authorized Manufacturer warranty period for the last manufactured unit has
expired. Core Products to be included in the “Products Ineligible for Return”
list shall be determined jointly by Directed and Sirius.
     (c) Directed shall visually inspect each Approved Dealer-returned Core
Product to determine if such Core Product has observable consumer induced
damage. Directed shall use Sirius’ Cosmetic Acceptance Standards for “B-Stock”
Products, attached hereto as Exhibit C (as it may be amended by Sirius from time
to time), as a guideline for determining whether such Core Product has
observable consumer induced damage. Directed shall return consumer damaged Core
Products to the appropriate Approved Dealer, or otherwise handle such consumer
damaged Core Products in a commercially reasonable manner approved by Sirius in
writing, provided that such approval shall not be unreasonably withheld. Sirius

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[* * *] — CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
shall work with Directed in good faith to minimize the return of Core Products
with consumer induced damage.
     (d) [* * *].
     (e) Directed shall [* * *]. The sum of the [* * *]for the applicable [* *
*]and the cumulative sum of the [* * *]for all [* * *]to date shall be listed as
a separate line on each [* * *]. After the cumulative sum of [* * *] provided in
Core Product [* * *], all subsequent [* * *] for Core Products shall be in an [*
* *] of the then current [* * *] of the applicable new Core Product. Directed
shall ship such Core Products [* * *] to a location [* * *]. Directed shall also
issue [* * *] pursuant to Section 3.09(d) if applicable. Directed shall pay such
[* * *].
     (f) In the event any dispute exists with respect to any payments or credits
due pursuant to this Section 3.09, (A) the payor shall pay all undisputed
amounts within the time specified in the applicable section herein, (B) the
parties shall work together in good faith to resolve any disputes in an
expeditious manner and (C) the payor shall pay any amount that is no longer in
dispute within [* * *] after such dispute is resolved.
     (g) [* * *]work in good faith to establish with each [* * *] all defective
Core Product to the applicable [* * *] shall have no further obligations in
connection with such Core Product [* * *]. In the event that [* * *], after
diligent good faith efforts, is unable to establish with any [* * *] in
accordance with Section 3.09(h).
     (h) If no agreement exists with the applicable [* * *] pursuant to
Section 3.09(g), all [* * *] that remains covered by the applicable [* * *]
shall be returned to [* * *] shall pay such [* * *] within [* * *] days of
receipt of [* * *]. In the event any [* * *] missing from [* * *] returned to [*
* *] shall provide written notice to [* * *] within [* * *] days of receipt and
[* * *] shall charge to [* * *] a missing part charge equal to the [* * *] as
set forth in Exhibit E, as it may be updated and amended from time to time by
mutual agreement of the parties. [* * *]. If for any reason an [* * *]
determines that Core Product returned to it by [* * *] does not qualify as [* *
*] such returned Core Product, and such determination or refusal complies with
[* * *] agreement with such, [* * *] issued to [* * *] for the same Core
Product.
     (j) In no event shall this Section 3.09 apply to Core Products returned to
[* * *]. Such Core Products shall be subject to the applicable letter agreement
in effect with respect to such Core Products at the time the Core Products were
returned.”
     6. Addition of Section 3.12 of the Agreement. The following Section 3.12 is
hereby added to the Agreement:

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[* * *] — CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
     “SECTION 3.12. Reporting. Without limiting the reports required by Section
4.01, Directed shall, within a commercially reasonable period not to exceed [* *
*] following [* * *] in which the applicable return of Core Products occurred,
provide a report to Sirius in a mutually agreeable electronic format that
consists of:
     (a) the total number of [* * *] for the preceding [* * *], broken down by
[* * *];
     (b) the cumulative number of [* * *] returns to date returned by each [* *
*], broken down by [* * *] ;
     (c) the total [* * *] supplied to each [* * *] for the preceding [* * *],
broken down by [* * *];
     (d) the cumulative number of [* * *] supplied to date to each [* * *],
broken down by [* * *];
     (e) the cumulative [* * *] to date by each [* * *] based upon the total [*
* *] supplied to such [* * *]; and
     (f) the per-model cumulative percentage of [* * *] to date by each [* * *]
based upon the total [* * *] of such [* * *] supplied to such [* * *].
     (g) the total number of [* * *] to [* * *] during the preceding [* * *] by
each [* * *] that were not [* * *] to the applicable [* * *] by the consumer
within the applicable Warranty period as determined in accordance with
Section 3.09(b) or were listed as “Products Ineligible for Return.””
     7. Amendment to Section 8.01. Section 8.01 of the Agreement is hereby
amended by deleting such Section in its entirety and substituting in lieu
thereof the following Section:
     “SECTION 8.01. Term. The term of this Agreement as amended (the “Term”)
shall commence on the date hereof and shall extend until August 31, 2008.”
     8. Amendment to Exhibit B. Exhibit B of the Agreement is hereby amended by
deleting such Exhibit in its entirety and substituting in lieu thereof the
Exhibit B attached hereto.

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     9. No Other Amendments. Except as expressly amended, modified and
supplemented by this Second Amendment, the provisions of the Agreement as
amended are and shall remain in full force and effect.
     10. Counterparts. This Second Amendment may be executed in counterparts,
all of which shall be considered one and the same instrument, and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other party. Delivery of this Second Amendment by facsimile
shall be as effective as delivery of an originally executed copy hereof.
     11. Entire Agreement. This Second Amendment, together with the terms of the
Agreement as amended, constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, between Sirius and
Directed with respect to the subject matter hereof; provided that Core Products
returned to Directed by Authorized Dealers on or before December 31, 2007 shall
be subject to the applicable

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letter agreement in effect with respect to such Core Products at the time the
Core Products were returned.
     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date set forth above.

            SIRIUS SATELLITE RADIO INC.
      By:     /s/ Robert F. Law         Robert F. Law        Senior Vice
President and General Manager, Consumer Electronics Division        DIRECTED
ELECTRONICS, INC.
      By:   /s/ Jim Minarik 11/26/2007         Jim Minarik        President and
Chief Executive Officer     

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EXHIBIT B
Dealer Costs/Suggested Retail Prices
[* * *]

 

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EXHIBIT C
Cosmetic Acceptance Standards for “B-Stock” Products
[* * *]

 

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EXHIBIT D
Consumable Parts and Accessories
[* * *]

 

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EXHIBIT E
Material Parts Costs
[* * *]