EXHIBIT 10.2

EXECUTION VERSION

SECOND AMENDMENT TO

SECOND AMENDED AND RESTATED DISTRIBUTION AGREEMENT

This SECOND AMENDMENT TO SECOND AMENDED AND RESTATED DISTRIBUTION AGREEMENT is
dated as of April 19, 2006 (this “Amendment”) and entered into by and among
OnStar Corporation (“Distributor”), General Motors Corporation (“GM”), XM
Satellite Radio Holdings Inc. (“Holdings”), and XM Satellite Radio Inc. (“XM”)
(collectively the “Parties,” and each, a “Party”).

WITNESSETH:

WHEREAS, Distributor, Holdings and XM have entered into a Second Amended and
Restated Distribution Agreement dated as of January 28, 2003, as amended (the
“Original Agreement”);

WHEREAS, as part of XM’s refinancing efforts, XM plans to retire or replace its
outstanding senior secured indebtedness with new unsecured indebtedness and
convert its existing senior secured credit facility with General Motors into an
unsecured facility;

WHEREAS, the Parties desire to amend the Original Agreement pursuant to the
terms hereof to provide, among other things: (i) for a right of XM to defer
payments owing to Distributor under the Original Agreement until December 31,
2009 in an amount not to exceed $100 million; and (ii) upon the completion of
XM’s planned refinancing transactions, eliminate the ability of XM to pay up to
$35 million of subscriber bounty payments in stock and increase the amount that
may be deferred to $150 million; and

WHEREAS, certain capitalized terms used herein without definition shall have the
respective meanings set forth in the Original Agreement.

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

ARTICLE I

AMENDMENTS

1.1 Addition of New Definitions. Section 1 of the Original Agreement is amended
by inserting the following new definitions in alphabetical order:

“Applicable Margin” means a rate per annum equal to 8%.

“Bankruptcy Law” means Title 11, U.S. Code or any similar federal or state law
for the relief of debtors.

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

--------------------------------------------------------------------------------

“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.

“Contractual Obligations” has the meaning set forth in Section 13(a).

“Debt Replacement Transaction” means a transaction in which at least 80% of the
Indenture Debt outstanding as of December 31, 2005 is replaced with unsecured
debt or otherwise retired or redeemed in a manner that does not result in the
incurrence of new secured debt other than a new senior secured bank credit
facility.

“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.

“Deferral” has the meaning set forth in Section 13(a).

“Deferral Limit” means, subject to Section 13(i)(i)(a), the agreement of
Distributor to permit Deferrals by XM so long as the aggregate principal amount
of such Deferrals outstanding at any time does not exceed $100,000,000 less any
amounts then outstanding under the GM Credit Facility.

“Deferral Period” means the period commencing on April 19, 2006 and ending upon
the earliest of (i) the termination of this Agreement, (ii) the date that is six
months after XM achieves Investment Grade Status and (iii) December 31, 2009.

“Excess Cash” means, for any fiscal year, the excess, if any, of (a) the sum,
without duplication, of (i) consolidated net income of Holdings and its
subsidiaries for such fiscal year, as reported in Holdings’ reports filed with
the Securities and Exchange Commission, (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 Holdings and its subsidiaries for such fiscal year, (iv) an
amount equal to the aggregate net non-cash loss on the disposition of property
by Holdings and its subsidiaries during such fiscal year (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
fiscal year (if any) in deferred tax accounts of Holdings 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 Holdings and its subsidiaries in cash
during such fiscal year on account of capital expenditures, (iii) the aggregate
amount of all prepayments of all amounts during such fiscal year

 

2

--------------------------------------------------------------------------------

owing to: (A) Distributor under this Agreement; (B) GM under the GM Credit
Facility; (C) holders of XM’s 10% Senior Secured Discount Convertible Notes due
2009; and (D) holders of XM’s 14% Senior Secured Discount Notes due 2009,
(iv) the aggregate amount of all regularly scheduled principal payments of
obligations made during such fiscal year with respect to the GM Credit Facility
or Deferrals under this Agreement, (v) increases in consolidated working capital
of Holdings and its subsidiaries for such fiscal year, (vi) an amount equal to
the aggregate net non-cash gain on the disposition of property by Holdings and
its subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent included in arriving at such
consolidated net income, (vii) the net decrease during such fiscal year (if any)
in deferred tax accounts of Holdings and its subsidiaries, (viii) $10 million,
and (ix) an amount equal to the amount of all funds set aside during such fiscal
year solely for financing or paying the cost of (A) one or more replacement
satellites, (B) other expenditures relating to infrastructure, back-office, user
equipment and subscriber acquisition, and (C) research and development
activities.

“Event of Default” has the meaning set forth in Section 13(h) of this Agreement.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“GM Credit Facility” means the Credit Agreement, dated as of January 28, 2003,
among XM, as a borrower, Holdings, as a borrower, and GM, as lender, as amended.

“GM Revenues” means all revenues attributable to XM Receivers installed in
Enabled GM Vehicles.

“Indenture Debt” means XM’s 14% Senior Secured Discount Notes due 2009, 12%
Senior Secured Notes due 2010 and Senior Secured Floating Rate Notes due 2009.

“Interest Payment Date” means the 26th day of January and the 26th day of July
of each calendar year; provided that (i) if any Interest Payment Date is not a
Business Day, the Interest Payment Date will be deferred until the next
succeeding Business Day and (ii) if any Interest Payment Date would occur after
the Maturity Date, such Interest Payment Date shall be the Maturity Date.

“Interest Period” means each period commencing on and including an Interest
Payment Date through, but not including, the next following Interest Payment
Date.

“Interest Rate” means for any day during an Interest Period, a rate per annum
equal to the LIBOR Rate in effect for such Interest Period plus the Applicable
Margin.

“Investment Grade Status” means that XM receives an issuer rating of Baa3 or
better by Moody’s and BBB- or better by S&P (or, if either such entity ceases to
rate XM for reasons outside of the control of XM, the equivalent investment
grade credit rating from any other “nationally recognized statistical rating
organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the
Securities Exchange Act of 1934, as amended, selected by XM as a replacement
agency) or receives similar ratings from any other two nationally recognized
statistical rating organizations.

 

3

--------------------------------------------------------------------------------

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

“LIBOR Rate” means, for each Interest Period, the rate that is reported on the
Interest Payment Date on which such Interest Period commences as the 6-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.

“Maturity Date” means the earliest of (i) the termination of this Agreement,
(ii) the date that is six month after XM achieves Investment Grade Status and
(iii) December 31, 2009.

“New Credit Facility” means a senior secured bank credit facility of the Company
initially anticipated to be $250 million expected to be entered in or about
April or May 2006 but which may be increased by up to $100 million in accordance
with its terms.

“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.

“Parent Company Merger” means (a) a merger or consolidation of XM with or into
Holdings or a merger or consolidation of Holdings with or into XM, provided that
the holders of Voting Stock of Holdings immediately prior to such transaction
own substantially all of the Voting Stock of the surviving entity immediately
after such transaction or (b) any assignment, transfer, conveyance or other
disposition of all or substantially all of the properties or assets of XM to
Holdings or of Holdings to XM.

“Permitted Indebtedness” means senior secured debt (whether secured by a first
or second lien or otherwise) that is permitted to be incurred by XM consistent
with the terms of the New Credit Facility, whether as a draw under the New
Credit Facility or a permitted incurrence from a third party that is not
prohibited by the New Credit Facility, and whether by the terms of the New
Credit Facility or with a consent or waiver from the lenders under the New
Credit Facility which is obtained, provided, however, that in the event the New
Credit Facility terminates prior to the end of the Deferral Period or the New
Credit Facility is amended to eliminate the limitations on XM’s ability to incur
senior secured debt, Permitted Indebtedness means the senior secured debt
contemplated by the first clause of this paragraph prior to such termination or
amendment, and provided further, that the amount of Permitted Indebtedness will
not exceed $500 million, including advances under the New Credit Facility.

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

“Pre-Marketing Cash Flow” means earnings before interest income and expense,
other income, income or loss from equity investments, taxes, depreciation
(including amounts related to research and development) and amortization,
including deferred income on Holdings’

 

4

--------------------------------------------------------------------------------

consolidated balance sheet from XM Canada (“EBITDA”), calculated in the same
manner as in consolidated financial statements contained in the reports of
Holdings filed with the Securities and Exchange Commission, but excluding from
such calculation (i) all marketing, advertising, subscriber acquisition and
distribution expenses, (ii) compensation expenses associated with equity-based
compensation for employees pursuant to SFAS No. 123R, (iii) expenses relating to
the retirement of debt or other deleveraging transactions, and (iv) all GM
Revenues.

“Prepayment Date” has the meaning set forth in Section 13(f).

“Request for Deferral” has the meaning set forth in Section 13(a).

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

“Significant Subsidiary” means any Subsidiary that would be a “significant
subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date
hereof.

“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).

“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 or trustees of such Person.

“XM Leasing Subsidiary” means XM Equipment Leasing LLC, a Delaware limited
liability company, and any and all successors thereto.

1.2 Amendment to Section 9. Section 9(a) of the Original Agreement is hereby
amended and restated as follows:

(a) Representations and Warranties.

(i) Distributor represents and warrants to and agrees with XM and Holdings that
as of the date hereof:

(A) (1) It is duly organized, validly existing and in good standing under the
laws of the state under which it is organized; (2) it is under no contractual or
other legal obligation that shall in any way interfere with its full, prompt and
complete performance hereunder; (3) it has the power and authority to enter into
this Agreement and to perform fully its obligations hereunder; (4) the
individual executing this Agreement on its behalf has the authority to do so;
and (5) the obligations created by this Agreement, insofar as they purport to be
binding on it, constitute legal, valid and binding obligations enforceable in
accordance with their terms.

 

5

--------------------------------------------------------------------------------

(B) Risks of Investment. Its management recognizes that the purchase of the
Class A Common Stock which may be issued in payment of interest on the Deferrals
or as Subscriber Bounty Payments under Section 4(c) of this Agreement involves a
high degree of risk including, but not limited to, the following: (1) an
investment in Holdings is highly speculative, and only investors who can afford
the loss of their entire investment should consider investing in Holdings and
accepting the Class A Common Stock; (2) Distributor may not be able to liquidate
its investment; (3) transferability of the Class A Common Stock is restricted;
(4) in the event of a disposition of the Class A Common Stock, Distributor could
sustain the loss of its entire investment and (5) Holdings does not anticipate
the payment of dividends in the foreseeable future.

(C) Investment Experience. Its management has prior investment experience,
including investment in securities which are non-listed, unregistered and/or not
traded on the NASDAQ National or SmallCap Market, a national or other stock
exchange or on the automated quotation system of the National Association of
Securities Dealers, Inc., for actively traded stocks. To the extent necessary,
Distributor has retained, at its own expense, and relied upon appropriate
professional advice regarding the investment, tax and legal merits and
consequences of this Agreement and its purchase of the Class A Common Stock
hereunder.

(D) Ability to Bear Risk. By reason of its management’s business or financial
experience Distributor 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.

(E) Receipt and Review of Documentation. Its management has been furnished by XM
and Holdings during the course of this transaction with information regarding XM
and Holdings which Distributor’s management has requested, has been afforded the
opportunity to ask questions of and receive answers from duly authorized
officers or other representatives of XM and Holdings concerning the terms and
conditions of the Class A Common Stock, and has received any additional
information which its management has requested.

(F) Acquisition for Own Account. Distributor is accepting the Class A Common
Stock for its own account for investment only, and not with a view towards their
distribution in violation of applicable securities laws.

(G) No Public Market; Rule 144.

(1) Its management understands and hereby acknowledges that Holdings is under no
obligation to register the Class A Common Stock under the Securities Act or any
state securities or “blue sky” laws.

(2) Distributor’s management acknowledges and agrees that the shares of Class A
Common Stock Distributor may receive in payment of interest must be held

 

6

--------------------------------------------------------------------------------

indefinitely unless such shares are subsequently registered under the Securities
Act or an exemption from such registration is available. Distributor has been
advised or is aware of the provisions of Rule 144 promulgated under the
Securities Act, which permits limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions, including, among
other things: the availability of certain current public information about
Holdings, the resale occurring not less than one year after a party has
purchased and paid for the security to be sold, the sale being through an
unsolicited “broker’s transaction” or in transactions directly with a market
maker (as said term is defined under the Exchange Act) and the number of shares
being sold during any three-month period not exceeding specified limitations.

(H) Qualified Institutional Buyer or Accredited Investor. It is: (1) a Qualified
Institutional Buyer (as defined in Rule 144A under the Securities Act) and an
institutional Accredited Investor (as defined in Rule 501(a) under the
Securities Act); and (2) aware that the transfer of Class A Common Stock to it
is being made in reliance on the exemption from the registration requirements
provided by Section 4(2) of the Securities Act and the regulations promulgated
thereunder.

(I) Distributor acknowledges that each certificate representing Class A Common
Stock 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.

Certificates evidencing Class A Common Stock shall not be required to contain
such legend (i) following any sale of such Class A Common Stock pursuant to an
effective registration statement covering the resale of such Class A Common
Stock under the Securities Act, (ii) following any sale of such Securities
pursuant to Rule 144 under the Securities Act, (iii) if such Class A Common
Stock is 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).

(ii) Each of XM and Holdings hereby represents, warrants and agrees with
Distributor that as of the date hereof:

(A) (1) It is duly organized, validly existing and in good standing under the
laws of the state under which it is organized; (2) it has the power and
authority to enter into this

 

7

--------------------------------------------------------------------------------

Agreement and to perform fully its obligations hereunder; (3) the individual
executing this Agreement on its behalf has the authority to do so; and (4) the
obligations created by this Agreement, insofar as they purport to be binding on
it, constitute legal, valid and binding obligations enforceable in accordance
with their terms.

(B) The execution, delivery and performance of this Agreement by XM and Holdings
in connection with the transactions contemplated hereby, and the consummation of
the transactions contemplated herein and compliance by XM and Holdings with
their respective obligations hereunder, 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 or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
either of XM 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 XM or Holdings or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality, stock exchange or NASDAQ Stock Market or
court, domestic or foreign, having jurisdiction over either of XM or Holdings or
any of their assets or properties.

(C) Except as may be required to be obtained or made under the Securities Act
and applicable state securities laws, neither XM nor Holdings are 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.

1.3 Addition of new Section 13. The Original Agreement is amended by
re-numbering Section 13 of the Original Agreement as Section 14, with all
references in the Original Agreement to Section 13 now referring to Section 14,
and adding the following as the new Section 13:

13. DEFERRED PAYMENTS:

(a) Deferrals. Subject to the terms of this Agreement, Distributor agrees to
permit XM to defer (each, a “Deferral”, collectively, the “Deferrals”) payments
owing to Distributor under any provision of this Agreement (“Contractual
Obligations”) during the Deferral Period so long as the aggregate principal
amount of such Deferrals outstanding at any time does not exceed the Deferral
Limit.

(b) Request for Deferral. XM may effect a Deferral of a Contractual Obligation
by delivering to Distributor a completed Request for Deferral in the form
attached hereto as Exhibit A (a “Request for Deferral”) at any date and time not
later than 3:00 p.m., New York City time on the date such Contractual Obligation
is due and owing. Such Request for Deferral shall be signed by an authorized
officer of XM and shall indicate the amount of the requested Deferral, a
description of the Contractual Obligation for which such Deferral is being
requested, and the date for such Deferral, which shall be the date on which the
Contractual Obligation being deferred by such Deferral would otherwise have
become due and owing (the “Deferral Date”).

 

8

--------------------------------------------------------------------------------

Each Request for Deferral shall be irrevocable and effective only upon receipt
by Distributor. In no event shall a Request for Deferral be made in respect of
any amount for which a Request for Advance (as defined in the GM Credit
Facility) has been delivered and honored.

(c) Interest.

(i) Interest Accrual. Interest shall accrue at the Interest Rate on a daily
basis during each Interest Period on the unpaid principal amount of all
Deferrals and shall be payable in arrears on each Interest Payment Date.

(ii) Default Interest. In the event XM shall fail to make any payment of the
principal or interest of or on any Deferral when due, after giving effect to any
applicable grace period provided for in this Agreement, XM 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
sum of the Interest Rate in effect at such time plus one percent (1.0%).

(d) Payments. Each payment of principal or interest of or on any Deferral will
be made to Distributor by certified or bank cashier’s check or wire transfer of
immediately available funds, at such address or to such account as Distributor
specifies in writing to XM at least five (5) Business Days before such payment
is to be made.

(e) Payment at Maturity. The outstanding principal amount of all Deferrals,
together with any accrued interest thereon, shall be due and payable in full in
immediately available U.S. Dollars on the earlier of: (i) December 31, 2009, or
(ii) such earlier date as the Deferrals become due and payable pursuant to this
Agreement.

(f) Prepayment.

(i) Optional Prepayment. The Deferrals, including all accrued interest thereon,
may be prepaid in whole or in part at any time, without premium or penalty;
provided that XM shall give Distributor not less than one (1) Business Day’s
written notice prior to making such prepayment, specifying the amount to be
prepaid and the date of prepayment. Each such notice of prepayment shall be
irrevocable upon receipt by Distributor. Any Deferrals prepaid pursuant to this
Section 13(f) shall not reduce the Deferral Limit and, within the limits of such
Deferral Limit, amounts of Deferrals so prepaid may be deferred pursuant to
Section 13(a) hereof.

(ii) Mandatory Prepayments.

(A) XM is obligated, on or before March 31st of each calendar year (a
“Prepayment Date”), to use fifty percent (50%) of Excess Cash for the fiscal
year most recently then ended to prepay all or part of the amount outstanding
under the GM Credit Facility. In the event that such fifty percent (50%) of
Excess Cash for the fiscal year most recently then ended is greater than the
amount of such prepayment, the balance shall be used, on such Prepayment Date,
to prepay all or part of the amount of any outstanding Deferrals, including all
accrued interest thereon, without premium or penalty, in an amount equal to the
lesser of (x) such balance, and (y) the amount necessary to prepay the Deferrals
in full.

 

9

--------------------------------------------------------------------------------

(B) In the event that XM shall, without Distributor’s prior written consent,
directly or indirectly, consolidate or merge with or into another entity
(whether or not XM is the surviving corporation), 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 Parent Company Merger,
then the Deferrals shall be immediately prepaid in whole, including all interest
thereon, without premium or penalty.

(iii) Loan Commitment Termination. Any amounts prepaid pursuant to
Section 13(f)(ii) shall permanently reduce the Deferral Limit by an equal amount
and may not be reborrowed.

(g) Conditions Precedent. With respect to any Deferral, XM shall satisfy the
following conditions precedent on or prior to the Deferral Date:

(i) The representations and warranties made by XM in Section 9 hereof shall be
true and correct in all material respects when made, and shall be true and
correct in all material respects at the Deferral Date with the same force and
effect as if they had been made on and as of said date, and if requested by
Distributor shall be so certified by an Officer of XM.

(ii) All covenants, agreements and conditions contained in this Section 13 shall
have been performed or complied with in all material respects.

(iii) XM shall have delivered to Distributor a Request for Deferral satisfying
the requirements set forth in Section 13(b).

(iv) Distributor shall have received a certificate of the Chief Financial
Officer, the Treasurer or any Assistant Treasurer of XM, dated the Deferral
Date, certifying satisfaction of the following conditions:

(A) Pre-Marketing Cash Flow. For all Deferrals in 2007 and beyond, 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 Deferral Date for
which Holdings shall have filed its report on Form 10-K with the SEC:

 

Fiscal Year

   Pre-Marketing Cash Flow

2006

   $ 75,000,000

2007

   $ 375,000,000

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

(v) If at the Deferral Date the GM Credit Facility is then secured (with either
a first priority or subordinated security interest) and Deferrals under this
Agreement do not then have the benefit of a security interest with substantially
the same terms and priority as under the

 

10

--------------------------------------------------------------------------------

GM Credit Facility, XM shall have executed such agreements or amendments and
documentation as may be required to effect a security interest in favor of
Distributor that is the same as under the GM Credit Facility and that has
substantially the same terms and priority, and Distributor shall have received a
certificate of the Chief Financial Officer, the Treasurer or any Assistant
Treasurer of XM, dated the Deferral Date, certifying satisfaction of the same.

(h) Defaults and Remedies.

(i) Events of Default. An “Event of Default” occurs under this Article 13 if:

(A) XM defaults in the payment when due of interest on any Deferral and such
default continues for a period of 30 days;

(B) XM defaults in the payment when due of principal of any Deferral when the
same becomes due and payable at maturity or pursuant to Section 13(e) hereof or
defaults under the GM Credit Facility in the payment when due of principal of
any Advance (as defined therein) when the same becomes due and payable at
maturity pursuant to Section 8.1(b) of the GM Credit Facility;

(C) XM fails to observe or perform any other covenant or other agreement in this
Section 13 for 60 days after notice to XM by Distributor;

(D) a final nonappealable judgment or final nonappealable judgments for the
payment of money are entered by a court or courts of competent jurisdiction
against XM 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 $10,000,000 (net
of any amounts with respect to which a reputable and creditworthy insurance
company has acknowledged liability in writing);

(E) XM or any of its Significant Subsidiaries or any group of Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary pursuant to or
within the meaning of Bankruptcy Law:

(1) commences a voluntary case,

(2) consents to the entry of an order for relief against it in an involuntary
case,

(3) consents to the appointment of a custodian of it or for all or substantially
all of its property,

(4) makes a general assignment for the benefit of its creditors, or

(5) generally can not pay its debts as they become due;

 

11

--------------------------------------------------------------------------------

(F) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:

(1) is for relief against XM or any of its Significant Subsidiaries or any group
of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary in an involuntary case;

(2) appoints a custodian of XM or any of its Significant Subsidiaries or any
group of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary or for all or substantially all of the property of XM or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary; or

(3) orders the liquidation of XM or any of its Significant Subsidiaries or any
group of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary;

and the order or decree remains unstayed and in effect for 60 consecutive days;

(ii) Acceleration. If any Event of Default (other than an Event of Default
specified in clause (E) or (F) of Section 13(h)(i) hereof with respect to XM,
any Significant Subsidiary or any group of Significant Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary) occurs and is continuing,
Distributor may declare the Deferrals to be due and payable immediately. Upon
any such declaration, the principal amount of the Deferrals, together with all
interest accrued thereon, shall become due and payable immediately.
Notwithstanding the foregoing, if an Event of Default specified in clause (E) or
(F) of Section 13(h)(i) hereof occurs with respect to XM, any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary, the outstanding principal amount of the
Deferrals shall be due and payable immediately without further action or notice.
Distributor 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 waived.

(iii) Other Remedies. If an Event of Default occurs and is continuing,
Distributor may pursue any available remedy to collect the payment of the
principal and interest on the Deferrals or to enforce the performance of any
provision of this Agreement.

A delay or omission by Distributor 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.

(iv) Waiver of Past Defaults. Distributor 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.

 

12

--------------------------------------------------------------------------------

(i) Planned Refinancing. If at any time following a Debt Replacement
Transaction, the GM Credit Facility becomes secured (with either a first
priority or subordinated security interest), then all Deferrals under this
Agreement shall be entitled to the benefit of a security interest with
substantially the same terms and priority as under the GM Credit Facility,
including with respect to the documentation that is to be executed and
implemented to create and perfect such security interest and the timing of such
execution and implementation, and the parties shall amend this Agreement as
needed to reflect such security interest.

In addition, if at any time following a Debt Replacement Transaction, the GM
Credit Facility has the benefit of a guarantee by XM Leasing Subsidiary or other
guarantee by one or more subsidiaries of XM, then, if at such time the Deferrals
under this Agreement do not have the benefit of such guarantees, all Deferrals
under this Agreement shall be entitled to the benefit of any such guarantees in
the same manner as under the GM Credit Facility, and the parties shall amend
this Agreement as needed to reflect such guarantees.

Following the consummation of a Debt Replacement Transaction:

(i) The definition of “Deferral Limit” shall be automatically amended and
restated to read as follows without any further action of any of the Parties
hereto:

(a) “Deferral Limit” means the agreement of Distributor to permit Deferrals by
XM so long as the aggregate principal amount of such Deferrals outstanding at
any time does not exceed $150,000,000 less any amounts then outstanding under
the GM Credit Facility; provided however, that for so long as at least
$75,000,000 aggregate principal amount of XM’s 10% Senior Secured Discount
Convertible Notes due 2009 remains outstanding, the maximum aggregate principal
amount of Deferrals outstanding at any time shall be $37,500,000 less any
amounts then outstanding under the GM Credit Facility.

(b) Section 4 shall be automatically amended to delete the last three sentences
of Section 4(c) without any further action of any of the Parties hereto.

(ii) The following shall automatically be added as Section 13(g)(vi) without any
further action of any of the Parties hereto:

“(v) If XM has in place a New Credit Facility under which it is then eligible to
borrow funds, XM shall have borrowed at least 75% of the amount available for
borrowing under the New Credit Facility.”

(iii) The Parties acknowledge that the first paragraph of this Section 13(i)
governs whether Deferrals under this Agreement would be entitled to the benefit
of any security interest.

(iv) The following shall be automatically added as the last sentence of
Section 4(a) to read as follows without any further action of any of the Parties
hereto:

 

13

--------------------------------------------------------------------------------

“If XM completes a Debt Replacement Transaction that raises $800 million or more
in gross proceeds, not more than $560 million of which is used to retire, redeem
or purchase Indenture Debt and pay costs associated with the Debt Replacement
Transaction, XM shall satisfy in full the guaranteed payments it owes to
Distributor for each of the 2007, 2008 and 2009 calendar years by paying to
Distributor, no later than 3 business days after the closing of such Debt
Replacement Transaction, $237,000,000, which amount represents the present value
of such guaranteed payments, as agreed by XM and Distributor. This amount shall
be paid to Distributor, unless otherwise jointly directed by Distributor and GM
in a written notice to XM at least five business days before the due date of
such payment.”

(v) Following the execution of the New Credit Facility, the Parties shall amend
and restate the definition of “Permitted Indebtedness” hereunder to conform to
the corresponding definition in the New Credit Facility.

(j) Expenses. XM will pay all reasonable expenses relating to this Section 13,
including the reasonable fees and disbursements of outside counsel for
Distributor with respect to this Section 13.

1.4 Amendment to Section 14. The first sentence of Section 14(a), which was
previously numbered Section 13(a), is hereby amended and restated as follows:

“Either party or its authorized representative shall have the right, at its
expense, to inspect, audit, and copy any such books and records of the other
party, at the other party’s offices, during normal business hours upon not less
than thirty (30) days’ prior written notice, that relate to the performance of
the other party’s obligations hereunder. Notice of the desire to exercise audit
rights pursuant to this Section 14(a) must occur within one year of the date on
which the related reimbursement or payment was made.”

ARTICLE II

MISCELLANEOUS

2.1 Representations and Warranties. Each of XM and Holdings represents and
warrants to Distributor and Distributor represents and warrants to each of XM
and Holdings that (i) it has the power and authority to enter into this
Amendment and to perform fully its obligations hereunder; (ii) it is under no
contractual or other legal obligation that shall in any way interfere with its
full, prompt and complete performance hereunder; (iii) the individual executing
this Amendment on its behalf has the authority to do so; and (iv) the
obligations created by this Amendment, insofar as they purport to be binding on
it, constitute legal, valid and binding obligations enforceable in accordance
with their terms.

2.2 Original Agreement. Except as specifically amended hereby, the Original
Agreement shall continue to be in full force and effect and is hereby ratified
by the Parties. Exhibit A to this Amendment shall be attached to and made a part
of the Original Agreement.

 

14

--------------------------------------------------------------------------------

2.3 Additional Party. GM is hereby executing this Amendment for purposes of
becoming a party to the Original Agreement, as amended by this Amendment. From
and after the date of this Amendment, GM shall be deemed to be a party to the
Original Agreement, and from and after the date of this Amendment, GM and
Distributor shall be jointly and severally liable to XM and Holdings for all
obligations under the Original Agreement, as amended by this Amendment. XM and
Holdings shall be jointly and severally liable to GM and Distributor for all
obligations under the Original Agreement, as amended by this Amendment,
provided, however, that any payments under Section 4 of the Original Agreement
shall be paid by XM and Holdings only to Distributor, unless each of Distributor
and GM direct Holdings and XM, in a writing signed by each of Distributor and GM
and delivered to Holdings and XM at least five business days before the due
date, to make all or part of the payments owing under Section 4 of the Original
Agreement to GM in which case Holdings and XM shall be relieved and discharged
from any obligation to make such payments to Distributor to the extent Holdings
and XM make such payments to GM. Reasonably promptly following the execution of
the New Credit Facility (or if no such facility is entered into within the 30
day period following the effectiveness of this Amendment, reasonably promptly
following completion of such period), the parties hereto shall amend and restate
the Original Agreement and the GM Credit Facility to combine them into one
agreement, with GM and Distributor, on the one hand, and XM and Holdings, on the
other, having joint and several rights and obligations (subject to the single
payment obligation of Holdings and XM described above) thereunder, but such
combination into one agreement shall not effect any other substantive changes to
the agreement.

2.4 Governing Law. This Amendment and all manners or issues collateral thereto
shall be governed by the laws of the State of New York, without regard to any
conflicts of law principles other than New York General Obligations Law Sections
5-1401 and 5-1402.

2.5 Counterparts. This Amendment 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.

 

15

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be executed
by their respective duly authorized officers as of the date first written above.

 

XM SATELLITE RADIO INC.

/s/ Hugh Panero

Name:   Hugh Panero Title:   President and Chief Executive Officer XM SATELLITE
RADIO HOLDINGS INC.

/s/ Hugh Panero

Name:   Hugh Panero Title:   President and Chief Executive Officer ONSTAR
CORPORATION

/s/ Joseph J. McCusker

Name:   Joseph J. McCusker Title:   Vice President and Treasurer GENERAL MOTORS
CORPORATION

/s/ Kevan Pareku

Name:   Kevan Pareku Title:   Director, Business Development

 

16

--------------------------------------------------------------------------------

EXHIBIT A