Document:

EXHIBIT 10.39

 Exhibit 10.39 
  
 LOAN NO. 20048551001 
  
 INDEMNITY AND GUARANTY AGREEMENT 
  
 THIS INDEMNITY AND GUARANTY AGREEMENT (this “Agreement”), made as of August     , 2004, by XM Satellite Radio
Holdings Inc., a Delaware Corporation, having an address at 1500 Eckington Place, NE, Washington D.C. 20002 (“Indemnitor”) in favor of MERRILL LYNCH MORTGAGE LENDING, INC., a Delaware corporation, having an address at 4 World
Financial Center, 16th Floor, New York, New York 10080 Attention: Commercial Mortgage Financing
(“Lender”). All capitalized terms used but not defined herein shall have the meaning set forth in the Mortgage (as hereinafter defined). 
  
 W I T N E S S E T H: 
  
 WHEREAS, Lender is the current holder of a Secured Promissory Note (the “Original Note”) made by Borrower
on or about August 24, 2001 to Fremont Investment & Loan and evidencing a loan in the original principal amount of $29,000,000.00 (the “Original Loan”); 
  
 WHEREAS, Lender and Borrower are, as of the date hereof, amending and restating the Original Note to reflect a revised loan
in the amount of THIRTY THREE MILLION THREE HUNDRED THOUSAND AND NO/100 DOLLARS ($33,300,000.00) (the “Loan”) evidenced by an Amended and Restated Secured Promissory Note (the “Note”) dated the date hereof, and
secured by, among other things, the amended and restated deed of trust, security agreement, assignment of rents and fixture filing (the “Mortgage”) dated the date hereof, in the amount of the Loan, given by Borrower for the benefit
of Lender and encumbering certain property commonly known as 1500 Eckington Place, Washington, D.C. (the “Property”). All capitalized terms not defined herein shall have the same meanings set forth in the Mortgage; 
  
 WHEREAS, in connection with the revised Loan, Lender has required that
Indemnitor indemnify Lender from and against and guarantee payment to Lender of those items for which Borrower is personally liable and for which Lender has recourse against Borrower under the terms of the Note and the Mortgage; and 
  
 WHEREAS, Indemnitor is an Affiliate of Borrower and will derive substantial
economic benefit from Lender making the Loan to Borrower and therefore agrees to provide such indemnification; 
  

 NOW, THEREFORE, to induce Lender to extend the Loan to Borrower and in consideration of the foregoing
premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Indemnitor hereby covenants and agrees for the benefit of Lender, as follows: 
  
 1. Indemnity and Guaranty. Indemnitor hereby assumes liability for,
guarantees payment to Lender of, agrees to pay, protect, defend and save Lender harmless and indemnifies Lender from and against, any and all liabilities, obligations, losses, damages, costs and expenses (including, without limitation, reasonable
attorneys’ fees, costs and disbursements), causes of action, suits, claims, demands and judgments paid, imposed upon Lender or to which Lender may be subject (collectively, “Costs”) as a result of the: 
  

	 	(i)	misappropriating by Borrower or any Affiliate of Borrower of any proceeds of insurance policies or condemnation awards in connection with the Property; 

  

	 	(ii)	misappropriating by Borrower or any Affiliate of Borrower of any Rents, security deposits or other refundable deposits paid to or held by or on behalf of Lender;

  

	 	(iii)	Rents, issues, profits and revenues of all or any portion of the Property received after the occurrence and during the continuation of any Event of Default under the Loan Documents,
which are not applied to pay, first (a) real estate taxes and other charges then due and which, if unpaid, could result in liens superior to that of the Mortgage and (b) premiums on insurance policies then due, second, the other ordinary and
necessary expenses of owning and operating the Security Property which are then due and, third, sums due Lender under the Loan Documents; 

  

	 	(iv)	Borrower or any Affiliate of Borrower receiving of any Rent or other payments under Leases more than one month in advance; 

  

	 	(v)	committing of material physical waste, arson or material physical damage to the Property as a result of intentional misconduct or gross negligence of Borrower or any Affiliate;

  

	 	(vi)	removing of any Equipment or other Property in violation of the Mortgage or other Loan Documents by Borrower or any Affiliate; 

  

	 	(vii)	committing of fraud or making of any material misrepresentation in connection with the Loan or the ownership, use, operation or management of the Property by Borrower, any Affiliate
of Borrower, Indemnitor, any applicant for the Loan or any employee of Borrower authorized or apparently authorized to make representations on behalf of Borrower or bind Borrower; 

  

	 	(viii)	failure to pay any taxes, fees or charges (including, without limitation, fines, penalties and/or interest) in connection with the recording of the Deed of Trust, assignment of
leases and rents or and/or other recorded or filed Loan Documents; 

  

	 	(ix)	transferring or encumbering of the Property in violation of Article VIII of the Mortgage; or failing to maintain the existence of Borrower as a Special-Purpose Entity or otherwise
failing to comply with Article XII of the Mortgage (other than the first sentence of Section 12.1(f) thereof and other than Section 12.1(k) thereof); and/or 

  

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	 	(x)	the breach of any representation, warranty or covenant or indemnification provision in the Environmental Indemnity executed by Borrower or in the Mortgage concerning environmental
laws, hazardous substances and asbestos and any indemnification of Lender with respect thereto in either document. 

  
 This is a guaranty of payment and performance and not of collection. The liability of Indemnitor under this Agreement shall be direct and immediate and
not conditional or contingent upon the pursuit of any remedies against Borrower, any indemnitor, any other Person nor against the collateral for the Loan. In the event any proceeding, action, petition or filing under the Bankruptcy Code, or any
similar state or federal law now or hereafter in effect relating to bankruptcy, reorganization or insolvency, or the arrangement or adjustment of debts pertaining to Borrower or Indemnitor shall be filed by, consented to or acquiesced in by Borrower
or Indemnitor or any Affiliate of either of them, or if Borrower or Indemnitor or any Affiliate of either of them shall institute any proceeding for Borrower’s or Indemnitor’s dissolution or liquidation, or shall make an assignment for the
benefit of creditors of Borrower or Indemnitor, Indemnitor shall be fully liable for all sums due pursuant to the Loan Documents. If the obligations guaranteed hereby are partially paid or discharged by reason of the exercise of any of the remedies
available to Lender, Indemnitor shall remain liable for all remaining obligations guaranteed hereby, even though any rights which Indemnitor may have against Borrower may be destroyed or diminished by the exercise of any such remedy. 
  
 2. Indemnification Procedures. 
  
 (a) If any action, proceeding, litigation, claim, loss, liability or other
Cost shall be brought or asserted against Lender for any matter which Lender is indemnified hereunder (each, a “Claim”), Lender shall promptly notify Indemnitor in writing thereof and Indemnitor shall promptly assume the defense
thereof, including, without limitation, the employment of counsel reasonably acceptable to Lender and the negotiation of any settlement. Lender shall have the right, at the expense of Indemnitor (which expense shall be included in Costs), if
Indemnitors do not fully defend such Claim as required by the preceding sentence or if Lender reasonably believes that joint representation presents a conflict of interest, to employ separate counsel in connection with any Claim and to participate
in the defense thereof. In the event Indemnitor shall fail to discharge or undertake to defend Lender against any Claim, such failure shall constitute an Event of Default and Lender may, at its sole election, defend or settle such Claim and the
amount of Indemnitor’s liability hereunder shall include the settlement consideration and all other Costs, which shall be paid by Indemnitor as hereinafter provided. 
  
 (b) Indemnitor shall not, without the prior written consent of Lender, not to be unreasonably withheld, conditioned or
delayed, settle or compromise any Claim in any manner or consent to the entry of any judgment (i) in which the claimant or plaintiff does not unconditionally release Lender from all liability in respect of such Claim and obtain a dismissal of such
Claim with prejudice; or (ii) that may materially adversely affect Lender (as reasonably determined by Lender) or obligate Lender to pay any sum or perform any obligation. Any release of Lender shall be in writing and shall be in form, scope and
substance reasonably satisfactory to Lender. 
  

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 (c) Indemnitor shall pay to Lender any and all Costs within twenty (20) days after written notice from
Lender itemizing the amounts thereof incurred to the date of such notice. All Costs shall be immediately reimbursable to Lender, without any requirement of waiting for the ultimate outcome of any Claim. Any Costs not paid within the aforementioned
twenty (20) day period shall bear interest at the Default Rate from the date incurred until the date paid in full. 
  
 3. Reinstatement of Obligations. If at any time all or any part of any payment received by Lender pursuant to this Agreement shall be rescinded or
returned for any reason whatsoever including, without limitation, the insolvency, bankruptcy or reorganization of Indemnitor or Borrower, then the obligations of Indemnitor hereunder shall, to the extent of such rescinded or returned payment, be
reinstated and shall continue as though such previous payment received by Lender had never occurred. 
  
 4. Waivers by Indemnitor. To the extent permitted by law, Indemnitor hereby waives and agrees not to assert or take advantage of: 
  
 (a) Any right to require Lender (i) to proceed against Borrower or any other
Person, (ii) to proceed against or exhaust any security held by Lender at any time or (iii) to pursue any other remedy in Lender’s power or under any other agreement, in any case, before proceeding against Indemnitor hereunder; 
  
 (b) Any defense that may arise by reason of the incapacity, lack of
authority, death or disability of any other Person or the failure of Lender to file or enforce a claim against the estate (in administration, bankruptcy or any other proceeding) of any other Person; 
  
 (c) Demand, presentment for payment, protest and notice of protest, demand,
dishonor and nonpayment and all other notices except as expressly required in the Loan Documents including, without limitation, notice of new or additional indebtedness or obligations or of any action or non-action on the part of Borrower, Lender,
any endorser or creditor of Borrower or of Indemnitor or on the part of any other Person whomsoever under this Agreement or any other Loan Document; 
  
 (d) Any defense based upon an election of remedies, splitting a cause of action or merger of judgments by Lender; 
  
 (e) Any right or claim of right to cause a marshaling of the assets of
Indemnitor; 
  
 (f) [Intentionally Omitted] 
  
 (g) Any duty on the part of Lender to disclose to Indemnitor any facts Lender
may now or hereafter know about Borrower or the Property, regardless of whether Lender (i) has reason to believe that any such facts materially increase the risk beyond that which Indemnitor intends to assume, (ii) has reason to believe that such
facts are unknown to Indemnitor or (iii) has a reasonable opportunity to communicate such facts to Indemnitor, it being understood and agreed that Indemnitor is fully responsible for being and keeping informed of the financial condition of Borrower,
the financial and physical condition of the Property and all other circumstances bearing on the risk that liability may be incurred by Indemnitor hereunder; 
  

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 (h) Any invalidity, irregularity or unenforceability, in whole or in part, of any one or more of the Loan
Documents; 
  
 (i) Intentionally omitted; 
  
 (j) Any deficiencies in the collateral for the Loan or any deficiency in the
ability of Lender to collect or to obtain performance from any Persons now or hereafter liable for the payment and performance of any obligation hereby guaranteed; 
  
 (k) Any claim that the automatic stay provided by 11 U.S.C. § 362 (arising upon the voluntary or involuntary bankruptcy
proceeding of Borrower) or any other stay provided under any other debtor relief law (whether statutory, common law, case law or otherwise) of any jurisdiction whatsoever, now or hereafter in effect, which may be or become applicable, shall operate
or be interpreted to stay, interdict, condition, reduce or inhibit the ability of Lender to enforce any of its rights, whether now existing or hereafter acquired, which Lender may have against Indemnitor, the Borrower or the collateral for the Loan;

  
 (l) Any modifications of the Loan Documents or any obligation
of Borrower relating to the Loan by operation of law or by action of any court, whether pursuant to the Bankruptcy Reform Act of 1978, as amended, or any other debtor relief law (whether statutory, common law, case law or otherwise) of any
jurisdiction whatsoever, now or hereafter in effect, or otherwise; and 
  
 (m) Any action, occurrence, event or matter consented to by Indemnitor under Section 5(h) hereof, under any other provision hereof, or otherwise. 
  
 Indemnitor covenants and agrees that, upon the commencement of a voluntary or involuntary bankruptcy proceeding by or against Borrower, Indemnitor shall
not seek or cause Borrower or any other Person to seek a supplemental stay or other relief, whether injunctive or otherwise, pursuant to 11 U.S.C. § 105 or any other provision of the Bankruptcy Reform Act of 1978, as amended, or any other
debtor relief law, (whether statutory, common law, case law or otherwise) of any jurisdiction whatsoever, now or hereafter in effect, which may be or become applicable, to stay, interdict, condition, reduce or inhibit the ability of Lender to
enforce any rights of Lender against Indemnitor or the collateral for the Loan by virtue of this Agreement or otherwise. 
  
 5. General Provisions. 
  
 (a) Rules of Construction. This Agreement is governed by and incorporates by reference the Rules of Construction set forth in Article XV of the
Mortgage, which shall have the same force and effect as if fully set forth herein. 
  
 (b) Fully Recourse. Notwithstanding any provision of any other Loan Document to the contrary, all of the terms and provisions of this Agreement are recourse obligations of Indemnitor and not restricted by any
limitation on personal liability. 
  

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 (c) Reliance. Indemnitor acknowledges that Lender would not make the Loan to Borrower without
being able to rely upon the covenants and obligations of Indemnitor set forth herein. Accordingly, Indemnitor intentionally and unconditionally enters into this Agreement. 
  
 (d) Survival. To the fullest extent permitted by law, this Agreement shall be deemed to be continuing in nature and
remain in full force and effect and survive the exercise of any remedy by Lender under the Mortgage or any of the other Loan Documents, including, without limitation, any foreclosure or deed in lieu thereof. 
  
 (e) Subordination; No Recourse Against Lender. Until the Debt (as
defined in the Mortgage) is indefeasibly paid in full, Indemnitor hereby subordinates any and all indebtedness of Borrower now or hereafter owed to Indemnitor to all indebtedness of Borrower to Lender. Until the Debt (as defined in the Mortgage) is
indefeasibly paid in full, Indemnitor shall not demand or accept any payment of principal or interest from Borrower, shall not claim any offset or other reduction of Indemnitor’s obligations hereunder because of any such indebtedness and shall
not take any action to obtain any of the collateral for the Loan (other than receipt of limited liability company distributions in accordance with the terms of the Borrower’s organizational documents and after payment of debt service and
reserves due under the Loan Documents and the operating expenses of the Property) until the date that is one year plus one day after the repayment in full of the Loan. 
  
 (f) Financial Statements. Indemnitor hereby agrees to furnish Lender promptly upon demand by Lender following the
occurrence of an Event of Default current and dated financial statements detailing the assets and liabilities of Indemnitor, certified by Indemnitor, in form and substance acceptable to Lender. Indemnitor hereby warrants and represents to Lender
that any and all balance sheets, net worth statements and other financial data which have been or may be given to Lender with respect to Indemnitor did or will at the time of such delivery fairly and accurately present the financial condition of
Indemnitor. Notwithstanding the foregoing, for so long as Indemnitor is a publicly-traded company that files financial statements that are generally available to the public, Indemnitor shall not be bound by the provisions of this Section 5(f).

  
 (g) Nature of Obligations. The obligations of
Indemnitor hereunder are independent of the obligations of Borrower. In the event of any default hereunder, a separate action or actions may be brought and prosecuted against Indemnitor whether or not Indemnitor is the alter ego of Borrower and
whether or not Borrower is joined therein or a separate action or actions are brought against Borrower. Lender’s rights hereunder shall not be exhausted until all of the obligations of Indemnitor hereunder have been fully paid and performed.

  
 (h) No Limitation on Liability. Indemnitor hereby
consents and agrees that any of the following may occur from time to time, without notice or consideration to, or consent of, Indemnitor, and the liability of Indemnitor hereunder shall remain unconditional and absolute and shall in no way be
impaired or limited by reason thereof: 
  
 (i) any extension of
time for performance required by any of the Loan Documents or otherwise granted by Lender or any extension or renewal of the Note; 
  

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 (ii) any sale, assignment or foreclosure of the Note, the Mortgage or any of the other Loan Documents or
any sale or transfer of the Property; 
  
 (iii) any change in the
composition of Borrower, including, without limitation, the voluntary or involuntary withdrawal or removal of Indemnitor from any current or future position of ownership, management or control of Borrower; 
  
 (iv) any representations and warranties made by Indemnitor herein or by
Borrower in any of the Loan Documents; 
  
 (v) the release of
Borrower or of any other Person from performance or observance of any of the agreements, covenants, terms or conditions contained in any of the Loan Documents by operation of law, Lender’s voluntary act or otherwise; 
  
 (vi) the release or substitution in whole or in part of any security for the
Loan; 
  
 (vii) Lender’s failure to record the Mortgage or
to file any financing statement (or Lender’s improper recording or filing thereof) or to otherwise perfect, protect, secure or insure any lien or security interest given as security for the Loan; 
  
 (viii) the modification of the terms of any one or more of the Loan
Documents; or 
  
 (ix) the taking or failure to take any action
of any type whatsoever. Nothing contained in this Section shall be construed to require Lender to take or refrain from taking any action referred to herein. 
  
 (i) Representations. Indemnitor represents and warrants that there is no bankruptcy, reorganization or insolvency proceeding pending or, to its
knowledge, threatened against it. 
  
 (j) Enforcement. This
Agreement is subject to enforcement at law or in equity, including actions for damages or specific performance. 
  
 (k) Professionals’ Fees. In the event it is necessary for Lender to retain the services of an attorney or any other consultants in order to
enforce this Agreement, or any portion hereof, Indemnitor agrees to pay to Lender any and all costs and expenses, including, without limitation, reasonable attorneys’ and consultants’ fees and disbursements, incurred by Lender as a result
thereof and all such amounts shall be included in Costs; provided, however, that if a court of competent jurisdiction makes a final and conclusive determination wholly in favor of Indemnitor (i.e., that Indemnitor has no liability under this
Agreement) then Indemnitor shall not be obligated to pay such costs and expenses of Lender. 
  
 (l) Successive Actions. A separate right of action hereunder shall arise each time Lender acquires knowledge of any matter indemnified or guaranteed by Indemnitor hereunder. Separate and successive actions may
be brought hereunder to enforce any of the provisions hereof at any time and from time to time and no action hereunder shall preclude any subsequent action. 
  

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 IN WITNESS WHEREOF, Indemnitor has executed this Agreement as of the day and year first above written.

  

			
	 XM SATELLITE RADIO HOLDINGS, INC.,

	 a Delaware corporation

		
	 By:
	 	  

	 Name:
	 	 
	 Title:EXHIBIT 10.40

 Exhibit 10.40 
  

 EMPLOYMENT AGREEMENT 
  
 Between 
  
 XM SATELLITE RADIO HOLDINGS INC. and 
 XM SATELLITE RADIO INC. 
  
 and 
  
 GARY PARSONS 
  
 Dated as of August 6, 2004 
  

 THIS AGREEMENT is entered into as of August 6, 2004, (the “Effective Date”), by and between XM
Satellite Radio Holdings Inc., a Delaware corporation, and its subsidiary XM Satellite Radio Inc., a Delaware corporation, both having a place of business at 1500 Eckington Place, N.E., Washington, D.C. 20002 (hereinafter collectively referred to as
“XM”) and Gary Parsons (“EMPLOYEE”) a resident of the State of Maryland. 
  
 WHEREAS, XM is engaged in the development, implementation and operation of a digital audio satellite service to portable receivers; and 
  
 WHEREAS, XM is interested in employing EMPLOYEE as the Chairman of its Board of Directors, and EMPLOYEE is interested in
being employed in that position subject to the terms and conditions set forth herein; 
  
 NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements of the parties contained herein, the parties hereby agree as follows: 
  
 ARTICLE 1 
 DEFINITIONS 
  
 For purposes of this Agreement, the terms defined in this Article 1 shall have the respective meanings set forth below: 
  
 1.1. “Affiliate” shall mean any corporation, partnership or other entity controlling, controlled by, or under common control with XM; provided,
however, that no entity that holds capital stock of XM Satellite Radio Holdings Inc. and/or with board representation rights incidental to such holdings shall be deemed to be an Affiliate of XM for purposes of this Agreement For purposes of this
definition, “control” (including the terms “controlling” and “controlled”) means the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of securities, by
contract, or otherwise. 
  
 1.2. “Confidential
information” shall mean all information relating to the business of XM known to XM or learned by EMPLOYEE during the term of employment and not generally known, including any and all general and specific knowledge, experience, information and
data, technical or non-technical, and whether or not patentable, including, without limitation processes, skills, information, know-how, trade secrets, data, designs, formulae, algorithms, specifications, samples, methods, techniques, compilations,
computer programs, devices, concepts, inventions, developments, discoveries, improvements, and commercial or financial information, in any form, including without limitation, oral, written, graphic, demonstrative, machine recognizable, specimen or
sample form. 
  
 1.3. “Conflicting Product or Service”
shall mean any product or service of any person or organization other than XM, in existence or under development, which resembles or competes with a product or service of XM. 

 1.4. “Conflicting Organization” shall mean any person or organization engaged in research on or
development, production, marketing, or selling of a “Conflicting Product or Service.” 
  
 1.5. “Inventions” shall mean inventions, designs, discoveries, developments, creations, and improvements created, discovered, developed,
conceived or reduced to practice. 
  
 1.6. “Works of
Authorship” shall mean all computer software programs or other writings, including, without limitation, verbal works, designs, models, drawings, or audio, visual or audiovisual recordings. 
  
 ARTICLE 2 
 TERM OF AGREEMENT; EMPLOYMENT 
  
 2.1. Term. , This Agreement supercedes previously existing agreements, and subject to the provisions of Article 4 hereof, shall be in effect for a
term of three (3) years commencing as of the Effective Date. For the term of this Agreement, each twelve (12) month period beginning on the Effective Date or any anniversary thereof shall be considered a “Contract Year.” 
  
 2.2. Employment. XM agrees to employ EMPLOYEE as Chairman of the Board
of Directors and EMPLOYEE agrees to accept such employment by XM, on the terms and conditions set forth herein. EMPLOYEE represents and warrants that neither the execution and delivery nor performance by him of this Agreement will violate any
agreement, order, judgment or decree to which he is a party or by which he is bound. 
  
 2.3. Duties. 
  
 (a) As
Chairman of XM, EMPLOYEE shall have duties and responsibilities related to building the organization and business, including but not limited to, securing financing for the Company, merger/acquisition activity, ensuring positive shareholders and
partner relations, and in consort with the CEO, establishing strategic direction and senior management structure for the Company. EMPLOYEE shall report to the Board of Directors and shall also serve as a director of XM. 
  
 (b) During the term of employment, EMPLOYEE shall devote EMPLOYEE’s
business time, attention, skill, and ability to the faithful and diligent fulfillment of EMPLOYEE’s duties hereunder on a near-fulltime basis. EMPLOYEE acknowledges and agrees that EMPLOYEE may be required, without additional compensation, to
perform services for any Affiliates, and to accept such office or position with any Affiliate as the Board may require, including, but not limited to, service as an officer or director of XM or any Affiliate, provided however, that such services,
and such office or position, shall be consistent with EMPLOYEE’s position as Chairman of XM. EMPLOYEE shall comply with all applicable policies of XM and Affiliates ; provided that such Affiliates’ policies shall be consistent with those
of XM. 
  

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 2.4. Indemnification. During and after the term of this Agreement, XM shall provide EMPLOYEE with
directors and officers insurance, and shall indemnify EMPLOYEE and his legal representatives to the fullest extent permitted by the laws of the State of Delaware and the By-Laws of XM as in effect on the date hereof, against all damages, costs,
expenses and other liabilities incurred or sustained by EMPLOYEE or his legal representatives in connection with any suit, action or proceeding to which EMPLOYEE or his legal representatives may be made a party by reason of EMPLOYEE being or having
been a director or officer of XM or any Affiliate or having served in any other capacity or taken any other action purportedly on behalf of or at the request of XM or any Affiliate. During and after the term of this Agreement and without the need
for further approval by the Board of Directors of XM or any Affiliate, XM will promptly advance or pay any and all amounts for costs or expenses (including but not limited to legal fees and expenses incurred by counsel of EMPLOYEE’s choice
retained by EMPLOYEE) for which EMPLOYEE may claim XM is obligated to indemnify him. EMPLOYEE undertakes to repay such amounts if it is ultimately determined that he is not entitled to be indemnified by XM as provided in this Article 2.4.

  
 ARTICLE 3 
 COMPENSATION 
  
 3.1. Base Salary. For services rendered by EMPLOYEE pursuant to this Agreement, XM shall pay EMPLOYEE a base salary (“Base Salary”) of at
least $400,000 annually beginning with the effective date, with increases on each anniversary of the effective date to $450,000 and $475,000, respectively. 
  
 3.2. Bonuses. With respect to each calendar year during the term of this Agreement, EMPLOYEE will be eligible to receive such bonuses (the
“Discretionary Bonus”) as may be authorized and declared by the XM Board of Directors based upon EMPLOYEE’s performance in the sole discretion of the Board of Directors. Discretionary Bonus will be paid in cash or stock, at the
discretion of the Board, within 60 days of the end of each calendar year. The target amount for the Discretionary Bonus shall be based upon having met (100% of Base Salary) or having significantly exceeded (125% of Base Salary) the personal and
corporate objectives established by the Board of Directors each year. 
  
 3.3. Participation in Benefit Plans. Subject to applicable eligibility requirements, and to the terms of this Agreement, EMPLOYEE shall be eligible during the term of this Agreement to participate in any stock option, employee stock
ownership, pension, thrift, profit sharing, group life or disability insurance, medical or dental coverage, education, or other retirement or employee benefit plan or program that XM has adopted or may adopt for the benefit of its employees, on the
same basis as other executive employees. 
  
 3.4. Expenses.
XM shall reimburse EMPLOYEE for all reasonable, ordinary and necessary business expenses actually incurred by EMPLOYEE in connection with the performance of his duties hereunder, including ordinary and necessary expenses incurred by EMPLOYEE in
connection with travel on XM business. As Chairman of 
  

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 XM, EMPLOYEE shall be entitled to fly first class. All expenses shall be approved in advance by XM in accordance with and
subject to the terms and conditions of XM’s then-prevailing expense policy. As a condition precedent to obtaining reimbursement of expenses, EMPLOYEE shall provide to XM any and all statements, bills, or receipts evidencing the expenses for
which EMPLOYEE seeks reimbursement, and such related information or materials as XM may from time to time reasonably require. EMPLOYEE shall account to XM for any expenses that are eligible for reimbursement under this Section 3.4 in accordance with
XM policy. 
  
 3.5. Employment and Supplies. XM shall
provide EMPLOYEE with administrative support relating to the performance of EMPLOYEE’s duties of the same type and at least the same extent as is provided to other executive employees. XM shall acquire and/or provide to EMPLOYEE for his
business use: a multimedia portable computer and subscriptions to various trade publications and various trade books. Such items shall remain the exclusive property of XM, are to be used solely for XM’s benefit, and shall be returned promptly
to XM upon request at the termination of EMPLOYEE’s employment for whatever reason. 
  
 3.6. Withholding. Anything in this Agreement to the contrary notwithstanding, all payments required to be made by XM hereunder to EMPLOYEE or EMPLOYEE’s estate or beneficiaries in connection with
EMPLOYEE’s employment hereunder shall be subject to the withholding of such amounts relating to taxes as XM may reasonably determine it should withhold pursuant to any applicable law or regulation. 
  
 3.7. Stock Option Grants. EMPLOYEE shall receive options to purchase
Class A common stock of XM Satellite Radio Holdings Inc. (“XM Stock”) on the following terms. 
  
 (a) On the Effective Date of this Agreement, XM will grant EMPLOYEE an option to purchase Seven Hundred Fifty Thousand (750,000) shares of XM Stock.
Subsequent grants of options shall be at the sole discretion of the Board of Directors. 
  
 (b) The options granted pursuant to Article 3.7(a) hereof will be non-qualified. The exercise price for such options shall be, with respect to each grant, the closing price of XM Stock on the date of grant.

  
 (c) Subject to the provisions of Article 4 hereof, the options
granted pursuant to Article 3.7(a) hereof will vest and become exercisable on the following schedule: with respect to each grant, one third of the shares covered by the option shall become exercisable on the first anniversary of the grant, one third
of the shares covered by the option shall become exercisable on the second anniversary of the grant, and one third of the shares covered by the option shall become exercisable on the third anniversary of the grant. In the event that EMPLOYEE holds
non-vested options at the time his employment by XM terminates, such non-vested options shall vest or shall be forfeited, as the case may be, in accordance with the provisions of Article 4 hereof. 
  

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 (d) Vested options may be exercised within ten (10) years of the date on which they were granted For
seven years following the Effective Date, shares underlying vested options granted pursuant to article 3.7(a) may not be sold at any time that the current trading price of XMSR Class A Common Stock does not represent at least a 10% increase over the
exercise price. In the event that EMPLOYEE holds unexercised vested options at the time his employment by XM terminates, however, such vested options may be exercised (and the aforementioned restriction shall terminate) within the time periods set
forth in Article 4 hereof. 
  
 (e) XM agrees that the XM Stock to
be issued to EMPLOYEE upon his exercise of the options granted pursuant to Article 3.7(a) hereof will be registered for sale to the public on XM’s Form S-8 Registration Statement. 
  
 ARTICLE 4 
 TERMINATION 
  
 4.1. General.
EMPLOYEE’s employment hereunder shall terminate in accordance with the provisions of this Article 4 upon EMPLOYEE’s death or Disability, upon EMPLOYEE’s termination by XM with or without Cause, upon EMPLOYEE’s resignation with or
without Good Reason, or upon the expiration of the term of this Agreement without renewal. 
  
 4.2. Death. If the EMPLOYEE’s employment terminates because of his death, the date of termination shall be the date of death.  
  
 (a) If the EMPLOYEE’s employment terminates because of his death, XM shall continue to pay EMPLOYEE’s then current
Base Salary, if any, and Discretionary Bonus (based on the Discretionary Bonus awarded to EMPLOYEE in the prior year), and shall continue to make all applicable benefits available, to EMPLOYEE’s legal representatives, estate, beneficiaries or
heirs, in accordance with XM’s then-prevailing executive payroll practices, through the end of the third calendar month following EMPLOYEE’s death. In addition, XM shall continue any health, medical, dental, or similar benefits which
members of EMPLOYEE’s family were receiving for a period of one year, or pay such family members an amount equal to their cost for obtaining equivalent coverage. 
  
 (b) If the EMPLOYEE’s employment terminates because of his death, EMPLOYEE’s non-vested options shall be
forfeited. EMPLOYEE’s legal representatives, estate, beneficiaries or heirs shall be entitled to exercise any of EMPLOYEE’s vested options within one (1) year after EMPLOYEE’s death. 
  
 4.3. Disability. For purposes of this Agreement, EMPLOYEE shall be
deemed to be under a Disability if EMPLOYEE shall be unable, by virtue of illness or physical or mental incapacity or disability (from any cause or causes whatsoever), to perform EMPLOYEE’s essential job functions hereunder, whether with or
without reasonable accommodation, in substantially the manner and to the extent required hereunder prior to the commencement of such disability, for a period exceeding ninety (90) consecutive days. 
  

 5 

 (a) Upon EMPLOYEE’s Disability, the payment of benefits under XM’s short-term and long-term
disability insurance programs, if any, shall offset XM’s obligations under Article 3.1 hereof to the extent such benefits are received by EMPLOYEE. 
  
 (b) Subject to any applicable legal requirements, in the event EMPLOYEE shall remain under a Disability for a period exceeding one hundred twenty (120)
days in any twelve (12) month period, XM shall have the right to terminate EMPLOYEE’s employment hereunder. XM shall effect such termination by giving EMPLOYEE a notice specifying the effective date of such termination, which date shall not be
earlier than the last day of the calendar month following the giving of notice. 
  
 (c) If XM terminates the EMPLOYEE’s employment because of Disability, XM shall continue to pay EMPLOYEE’s then current Base Salary, if any, and Discretionary Bonus (based on the Discretionary Bonus awarded
to EMPLOYEE in the prior year), and shall continue to make all applicable benefits available, to EMPLOYEE, in accordance with XM’s then-prevailing executive payroll practices, through the end of the third calendar month following termination.
In addition, XM shall continue any health, medical, dental, or similar benefits which EMPLOYEE (and/or members of EMPLOYEE’s family) were receiving for a period of one year, or pay EMPLOYEE an amount equal to the cost of obtaining equivalent
coverage. 
  
 (d) If XM terminates EMPLOYEE’s
employment because of Disability, EMPLOYEE’s non-vested options shall be forfeited. EMPLOYEE shall be entitled to exercise any of his vested options within one (1) year after termination. 
  
 4.4. Termination for Cause or Voluntary Resignation.  
  
 (a) For purposes of this Agreement, Cause shall mean a good faith finding by
the Board of Directors of: (i) EMPLOYEE’s willful or gross misconduct, willful or gross negligence in the performance of his duties for XM, or intentional or habitual neglect of his duties for XM, provided that XM shall have given EMPLOYEE
notice specifying the conduct it believes to fall within this sentence and EMPLOYEE shall have failed to remedy such conduct within ten (10) days thereafter; or (ii) EMPLOYEE’s theft or misappropriation of funds of XM or conviction of a felony.
XM shall effect a termination for Cause by giving EMPLOYEE a notice specifying the effective date of such termination. 
  
 (b) For purposes of this Agreement, voluntary resignation means the EMPLOYEE’s resignation of his employment hereunder without Good Reason (as
defined in Article 4.5(b) hereof. EMPLOYEE shall effect a termination by voluntary resignation by giving XM a notice specifying the effective date of such termination, which date shall not be earlier than thirty (30) days after the giving of
notice. 
  

 6 

 (c) In the event EMPLOYEE’s employment is terminated by XM for Cause or by EMPLOYEE by voluntary
resignation: 
  
 (i) XM shall pay to EMPLOYEE, in
accordance with XM’s then-prevailing executive payroll practices, all Base Compensation, benefits and other payments to which EMPLOYEE was entitled hereunder through the effective date of termination. 
  
 (ii) In the case of voluntary resignation only, EMPLOYEE shall be entitled to
exercise any of his vested options within three (3) months after termination. Subject to the previous sentence of this Article 4.4(c)(ii), EMPLOYEE’s non-vested and vested but unexercised options shall be forfeited. 
  
 (iii) Except as set forth in this Article 4.4, XM shall have no further
obligation to EMPLOYEE (or EMPLOYEE’s legal representatives, estate, beneficiaries or heirs) for any compensation, benefits or other payments hereunder, provided that nothing herein shall be deemed to affect EMPLOYEE’s entitlement, if any,
to any vested pension or similar benefits to which he may be or may become entitled.  
  
 4.5. Termination Without Cause or Resignation for Good Reason. 
  
 (a) For the purposes of this Agreement, termination without Cause is any termination by XM of EMPLOYEE’s employment hereunder without Cause, as
defined in Article 4.4(a) hereof. XM shall effect a termination without Cause by giving EMPLOYEE a notice specifying the effective date of such termination, which date shall not be earlier than thirty (30) days after the giving of notice.

  
 (b) For the purposes of this Agreement, Good Reason shall
mean: (i) a substantial diminution of EMPLOYEE’s responsibilities or status; (ii) XM’s relocation of EMPLOYEE outside the Washington, D.C. area; (iii) a material breach of this Agreement by XM, provided that EMPLOYEE shall have given XM
notice of the conduct he believes to constitute the material breach and XM shall have failed to remedy such breach within ten (10) days thereafter; (iv) a Change of Control of XM as defined in Article 4.5(c) hereof. EMPLOYEE shall effect a
termination by resignation for Good Reason by giving XM a notice specifying the effective date of such termination. 
  
 (c) For the purposes of this Agreement, a Change of Control will occur where (i) any person or group becomes beneficial owner of securities of XM
representing more than 40% of the then voting power of XM; (ii) Board members (together with new members appointed by at least two thirds (2/3) of those members) at the beginning of a two-year period no longer constitute two thirds (2/3) of the
Board during such two-year period; (iii) a merger/consolidation of XM occurs wherein the XM voting securities immediately prior thereto do not constitute at least sixty percent (60%) of the combined voting securities after the merger/consolidation;
or (iv) the stockholders approve a plan of complete liquidation or winding-up or an agreement for the sale or disposition of all or substantially all of XM’s assets. 
  

 7 

 (d) In the event EMPLOYEE’s employment is terminated by XM without Cause or by EMPLOYEE by
resignation for Good Reason: 
  
 (i) XM shall continue to pay
EMPLOYEE’s then current Base Salary, if any, and Discretionary Bonus (based on the Discretionary Bonus awarded to EMPLOYEE in the prior year), and shall continue to make all applicable benefits available to EMPLOYEE, in accordance with
XM’s then-prevailing executive payroll practices, for two (2) years from such termination. With respect to the health, medical, dental, or similar benefits which EMPLOYEE (and/or members of EMPLOYEE’s family) were receiving, XM may pay
EMPLOYEE an amount equal to his cost for obtaining equivalent coverage, as an alternative to continuing such benefits. 
  
 (ii) Any payment under this Section 4.5(d) shall be made over time or in a present value lump sum payment, at the election of EMPLOYEE. 
  
 (e) In the event EMPLOYEE’s employment is terminated by XM without Cause
or by EMPLOYEE by resignation for Good Reason, all options that have been granted to EMPLOYEE shall immediately vest and become exercisable, and EMPLOYEE shall be entitled to exercise any of his vested options within eighteen (18) months after
termination. 
  
 (f) If, as a result of a Change of Control, it is
determined that EMPLOYEE would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, XM shall reimburse EMPLOYEE for the amount of such tax, and shall pay EMPLOYEE such additional amount as may be necessary to place
EMPLOYEE in the same financial position that he would have been in if he had not incurred such excise tax liability. All determinations under this Article 4.5(f), including whether EMPLOYEE is liable for the excise tax, and the amount to be paid to
EMPLOYEE by XM, shall be made by a nationally-recognized accounting firm to be selected by EMPLOYEE and paid by XM. 
  
 4.6. Expiration of Contract Term. 
  
 (a) For the purposes of this Agreement, Renewal Offer means a bona fide offer by XM to enter into a new employment agreement with EMPLOYEE, on terms at
least as favorable to EMPLOYEE as this Agreement, made to EMPLOYEE at least four (4) months before the expiration of this Agreement. 
  
 (b) In the event that XM makes a Renewal Offer to Employee, but the parties nevertheless do not enter into a new employment agreement and EMPLOYEE’s
employment by XM therefore terminates upon the expiration of this Agreement, any options scheduled to vest on the third anniversary of the Effective Date of this Agreement pursuant to Article 3.7(c) shall immediately vest and become exercisable, all
other non-vested options shall be forfeited, and EMPLOYEE shall be entitled to exercise any of his vested options within three (3) months after termination. 
  
 (c) In the event that XM does not make a Renewal Offer to Employee and EMPLOYEE’s employment by XM therefore terminates at the expiration of the term
of this Agreement, all options that have been granted to EMPLOYEE shall immediately vest and become exercisable, and EMPLOYEE shall be entitled to exercise any of his vested options within eighteen (18) months after termination. 
  

 8 

 ARTICLE 5 
 RESTRICTIVE COVENANTS 
  
 5.1. Confidentiality. Except as authorized or directed by XM, EMPLOYEE shall not, at any time during or subsequent to the term of this Agreement, directly or indirectly publish or disclose any Confidential Information of XM or of any
of its Affiliates, or Confidential Information of others that has come into the possession of XM or of any of its Affiliates, or into the EMPLOYEE’s possession in the course of his employment with XM or of his services and duties hereunder, to
any other person or entity, and EMPLOYEE shall not use any such Confidential Information for EMPLOYEE’s own personal use or advantage or make it available to others for use. All confidential information, whether oral or written, regarding the
business or affairs of XM or any of its Affiliates, including, without limitation, information as to their products, services, systems, designs, inventions, software, finances (including prices, costs and revenues), marketing plans, programs,
methods of operation, prospective and existing contracts, customers and other business arrangements or business plans, procedures, and strategies, shall all be deemed Confidential Information, except to the extent the same shall have been lawfully
and without breach of the EMPLOYEE’S confidentiality obligation made available to the general public without restriction, or that EMPLOYEE can prove, by documentary evidence, was previously known to EMPLOYEE prior to the term of EMPLOYEE’s
employment. The Company shall be under no obligation to identify specifically any information as to which the protection of this Section 5.1 extends by any notice or other action. Upon expiration or termination of this Agreement for any reason,
EMPLOYEE shall promptly return to XM all Confidential Information, including all copies thereof in EMPLOYEE’s possession, whether prepared by him or others. 
  
 5.2. Unfair Competition. During his employment pursuant to this Agreement and for a period of one (1) year after the
termination of his employment, EMPLOYEE shall not, within the United States, directly or indirectly, and whether or not for compensation, as a stockholder owning beneficially or of record more than five percent (5%) of the outstanding shares of any
class of stock of an issuer, or as an officer, director, employee, consultant, partner, joint venturer, proprietor, or otherwise, engage in or become interested in any Conflicting Organization in connection with research, development, consulting,
manufacturing, purchasing, accounting, engineering, marketing, merchandising or selling of any Conflicting Product or Service, directly or indirectly, in competition with XM or any of its Affiliates (or any of their successors) as conducted from
time to time during such period. During the period in which EMPLOYEE is receiving any payments under this Agreement and for a period of one (1) year thereafter, EMPLOYEE shall not, without the prior written consent of XM, solicit or hire or induce
the termination of employment of any employees or other personnel providing services to XM, or any of its Affiliates, for any business activity, other than a business activity owned or controlled, directly or indirectly, by XM or any of its
Affiliates. 
  

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 5.3. Injunctive Relief.  
  
 (a) EMPLOYEE acknowledges and warrants that he will be fully able to earn an adequate livelihood for himself and his
dependents if Section 5.2 should be specifically enforced against him, and that Section 5.2 merely prevents unfair competition against XM for a limited period of time. EMPLOYEE agrees and acknowledges that, by virtue of EMPLOYEE’s employment
with XM, EMPLOYEE shall have access to and maintain an intimate knowledge of XM’s activities and affairs, including trade secrets, Confidential Information, and other confidential matters. As a result of such access and knowledge, and because
of the special, unique, and extraordinary services that EMPLOYEE is capable of performing for XM or one of its competitors, EMPLOYEE acknowledges that the services to be rendered by EMPLOYEE pursuant to this Agreement are of a character giving them
a peculiar value, the loss of which cannot adequately or reasonably be compensated by money damages. Consequently, EMPLOYEE agrees that any breach or threatened breach by EMPLOYEE of EMPLOYEE’s obligations under this Article 5 would cause
irreparable injury to XM, and that XM shall be entitled to preliminary and permanent injunctions enjoining EMPLOYEE from violating such provisions. Nothing in this Agreement, however, shall be construed to prohibit XM from pursuing any other remedy,
XM and EMPLOYEE having agreed that all such remedies shall be cumulative. 
  
 (b) The restrictions set forth in this Article 5 and the following Article 6 shall be construed as independent covenants, and shall survive the termination or expiration of this Agreement, and the existence of any
claim or cause of action against XM, whether predicated upon this Agreement or otherwise, shall not constitute a defense to the enforcement by XM of the restrictions contained in this Article 5 or the following Article 6. EMPLOYEE hereby consents
and waives any objection to the jurisdiction over his person or the venue of any courts within the State of Virginia with respect to any proceedings in law or in equity arising out of this Article 5 or the following Article 6. If any court of
competent jurisdiction shall hold that any of the restrictions contained in Section 5.2 are unreasonable as to time, geographical area, or otherwise, said restrictions shall be deemed to be reduced to the extent necessary in the opinion of such
court to make their application reasonable. 
  
 ARTICLE 6

 INVENTIONS, WORKS OF AUTHORSHIP, 
 PATENTS AND COPYRIGHTS 
  
 6.1. Ownership of Inventions and Works of Authorship. EMPLOYEE agrees that all Inventions made, conceived, discovered, developed or reduced to practice by EMPLOYEE and all software and other works of authorship created by EMPLOYEE,
either alone or with others, at any time, within or without normal working hours, during the term of this Agreement, arising out of such employment or based upon Confidential Information, or pertinent to any field of business or research in which,
during such employment, XM is engaged or (if such is known or ascertainable by EMPLOYEE) is considering engaging, whether or not patented or patentable, shall be and remain the sole property of XM with respect to all rights of EMPLOYEE arising from
any discovery, conception, development, reduction to practice, or creation by EMPLOYEE. XM shall have the full right to assign, license, or transfer all rights thereto. 
  

 10 

 6.2. Disclosure of Inventions and Works of Authorship. EMPLOYEE shall promptly make full
disclosure to XM or to an authorized representative thereof of all information relating to the making, conception, discovery, development, creation or reduction to practice of Inventions, or of software and other works of authorship owned by XM
pursuant to Section 6.1 above. 
  
 6.3. Patent and Copyright
Applications. At the request of XM and at XM’s expense, EMPLOYEE shall execute such documents and perform such acts as XM deems necessary to obtain patents or the like on such Inventions or copyright registrations for such software and
other works of authorship in any jurisdiction or jurisdictions. Such obligation shall continue beyond the term of this Agreement. In the event that XM is unable because of EMPLOYEE’s mental or physical capacity or for any other reason to secure
EMPLOYEE’s signature to apply for or to pursue any applications for patent or copyright covering Inventions, software and other works of authorship owned by XM pursuant to Section 6.1, then EMPLOYEE hereby irrevocably designates and appoints XM
as EMPLOYEE’s agent and attorney in fact, upon prior notice, to act for and in his behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of patents and
copyright registrations thereon with the same legal force and effect as if executed by EMPLOYEE. EMPLOYEE further agrees not to file any patent applications relating to or describing or otherwise disclosing any Confidential Information or any such
Inventions, or to claim any copyright or file any applications to register any copyright in such software or other works of authorship, except with the prior written consent of XM. 
  
 6.4. Assignment of Inventions and Works of Authorship. EMPLOYEE agrees to assign to XM or it Affiliates all of
EMPLOYEE’s right, title and interest in and to any and all such Inventions and the patent applications and patents relating thereto and to the copyright in any and all such software and other works of authorship and any copyright applications
and registrations relating thereto conceived, reduced to practice, discovered, created or otherwise developed by EMPLOYEE and owned by XM pursuant to Section 6.1 above. 
  
 ARTICLE 7 
 MISCELLANEOUS 
  
 7.1. Assignment.
The rights and obligations of XM under this Agreement shall be binding upon its successors and assigns and, subject to EMPLOYEE’s rights under Article 4.5 hereof, may be assigned by XM to the successors in interest of XM. The rights and
obligations of EMPLOYEE under this Agreement shall be binding upon EMPLOYEE’s heirs, legatees, personal representatives, executors or administrators. This Agreement may not be assigned by EMPLOYEE, but any amount owed EMPLOYEE upon
EMPLOYEE’s death shall inure to the benefit of EMPLOYEE’s heirs legatees, personal representatives, executors, or administrators. 
  

 11 

 7.2. Notice. For purposes of this Agreement, notices and all other communications provided for in
this Agreement shall be in writing and shall be deemed to have been duly given when hand delivered, sent by overnight courier, or mailed by first-class, registered, or certified mail, return receipt requested, postage prepaid, or transmitted by
telegram, telecopy, or telex addressed as follows: 
  

	
	 If to EMPLOYEE: (Copy to XM Executive Office)

	
	 Gary Parsons

	 1500 Eckington Place, N.E.,

	 Washington, D.C. 20002

	
	 If to XM:

	
	 XM Satellite Radio Holdings Inc.

	 1500 Eckington Place, N.E.,

	 Washington, D.C. 20002

	 Telephone:     202-380-4066

	 Telecopy:       202-380-4534

	
	 Attn: General Counsel

  
 or to such other address as either
party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 
  
 7.3. Entire Agreement. From and after the Effective Date, this Agreement constitutes the entire agreement between the parties hereto, and expressly
supersedes all prior oral or written agreements, commitments or understandings with respect to the matters provided for herein. 
  
 7.4. Headings. Article and Section headings contained in this Agreement are inserted for convenience of reference only, shall not be deemed to be a
part of this Agreement for any purpose, and shall not in any way define or affect the meaning, construction or scope of any of the provisions hereof. 
  
 7.5. Severability. In the event any provision of this Agreement, or any portion thereof, is determined by any arbitrator or court of competent
jurisdiction to be unenforceable as written, such provision or portion thereof shall be interpreted so as to be enforceable. In the event any provision of this Agreement, or any portion thereof is determined by any arbitrator or court of competent
jurisdiction to be void, the remaining portions of this Agreement shall nevertheless be binding upon XM and EMPLOYEE with the same effect as though the void provision or portion thereof had been severed and deleted. 
  

 12 

 7.6. Arbitration. Without prejudice to XM’s right to seek an injunction pursuant to Article
5.3(a) hereof from a court of competent jurisdiction, any dispute between the parties hereto arising out of this Agreement, or otherwise arising out of or relating to EMPLOYEE’s employment by XM, or the termination thereof, shall be submitted
to non-binding mediation before a mediator to be agreed upon by the parties or, failing agreement, to be appointed by the American Arbitration Association (“AAA”). In the event that mediation is unsuccessful, such dispute shall be resolved
by binding arbitration, before a single arbitrator, under the rules of the AAA. The arbitrator shall have the authority to apportion the costs of arbitration, and to render an award including reasonable attorney’s fees, as and to the extent he
deems appropriate under the circumstances. 
  
 7.7. Governing
Law. This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the substantive laws of the State of Virginia (excluding the choice of law
rules thereof). 
  
 7.8. Amendment; Modification; Waiver.
No amendment, modification or waiver of the terms of this Agreement shall be valid unless made in writing and duly executed by EMPLOYEE and XM. No delay or failure at any time on the part of EMPLOYEE or XM in exercising any right, power or
privilege under this Agreement, or in enforcing any provision of this Agreement, shall impair any such right, power, or privilege, or be construed as a waiver of any default or as any acquiescence therein, or shall affect the right of EMPLOYEE or XM
thereafter to enforce each and every provision of this Agreement in accordance with its terms. 
  
 7.9. Additional Obligations. Both during and after the term of employment, EMPLOYEE shall, upon reasonable notice, furnish XM with such information as may be in EMPLOYEE’s possession or control, and
cooperate with XM, as may reasonably be requested by XM (and, after the term of employment, with due consideration for EMPLOYEE’s obligations with respect to any new employment or business activity) in connection with any litigation or other
adversarial proceedings in which XM or any Affiliate is or may become a party. XM shall reimburse EMPLOYEE for all reasonable expenses incurred by EMPLOYEE in fulfilling EMPLOYEE’s obligations under this Article 7.9. 
  
 IN WITNESS WHEREOF, the parties have executed this Agreement to be effective
as of the Effective Date. 
  

					
	 XM Satellite Radio Holdings, Inc.

	 XM Satellite Radio Inc.

			
	 By:
	 	  

	 	 Date:             

	 	 	 Gary M. Parsons
 Chairman of the Board

	 	 
			
	 By:
	 	  

	 	 Date:             

	 	 	 Tom Donohue

	 	 	 Chairman/Comp Comm

  

 13

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