Document:

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                                                                     Exhibit 4.8

                          CERTIFICATE OF DESIGNATION

                               ESTABLISHING THE

         POWERS, PREFERENCES, RIGHTS, QUALIFICATIONS, LIMITATIONS AND
                                RESTRICTIONS OF

                                      THE

        8.25% SERIES C CONVERTIBLE REDEEMABLE PREFERRED STOCK DUE 2012

                                      OF

                       XM SATELLITE RADIO HOLDINGS INC.

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

                        Pursuant to Section 151 of the
               General Corporation Law of the State of Delaware

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          XM SATELLITE RADIO HOLDINGS INC., a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Issuer"), does
hereby certify that (i) pursuant to authority conferred upon the Board of
Directors of the Issuer by its Restated Certificate of Incorporation, as amended
to date, and pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, the Board of Directors authorized the
creation and issuance of the Issuer's 8.25% Series C Convertible Redeemable
Preferred Stock due 2012 (referred to herein as the "Preferred Stock"), and (ii)
the following resolution, which was duly adopted by the Board of Directors on
July 7, 2000, remains in full force and effect. Certain capitalized terms used
herein are defined in Article 9.

     RESOLVED, that pursuant to the authority expressly granted to and vested in
     the Board of Directors of the Issuer by the provisions of the Restated
     Certificate of Incorporation, as amended from time to time (the
     "Certificate of Incorporation"), and pursuant to Section 151(g) of the
     General Corporation Law of the State of Delaware, there be created from the
     60,000,000 shares of preferred stock, $0.01 par value, of the Issuer
     authorized to be issued pursuant to the Certificate of Incorporation, a
     series of preferred stock, having the number of shares and, to the extent
     that the designations, powers, preferences and relative and other special
     rights and the qualifications, limitations and restrictions of such
     Preferred Stock are not stated and expressed in the Certificate of
     Incorporation, the powers, preferences and relative and other special
     rights and the qualifications, limitations and restrictions, as follows:

1.   Designation and Number of Shares

          The series will be designated as the "8.25% Series C Convertible
     Redeemable Preferred Stock due 2012" and the number of shares constituting
     such series will be 250,000 shares.

2.   Dividends

     2.1  Payment of Dividends

          (a) Holders of Preferred Stock will be entitled to receive, when, as
and if declared by the Board of Directors of the Issuer out of funds legally
available therefor, cumulative dividends on each share of such Holder's
Preferred Stock from the issue date of the Preferred Stock (the "Issuance Date")
at a rate per annum equal to 8.25% of the Liquidation Preference (not
compounded). Dividends will accrue daily, and be payable in arrears when, as and
if declared by the Board of Directors of the Issuer. All dividends will accrue
and cumulate (but not compound), whether or not earned or declared and whether
or not there shall be net profits or net assets of the Issuer legally available
for the payment of such dividends.

          (b) Each distribution in the form of a dividend shall be payable in
arrears to Holders of record as they appear on the stock books of the Issuer on
each record date as established by the Board of Directors of the Issuer.
Dividends payable on the Preferred Stock will be computed on the basis of a 360
day year consisting of twelve 30 day months.
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            (c) Dividends, to the extent declared by the Issuer's Board of
Directors or due in connection with a Liquidation Event or the redemption upon
final maturity of the Preferred Stock, shall be paid in cash.

            (d) In addition and not in lieu of the foregoing, when and if the
Board of Directors of the Issuer shall declare a dividend payable with respect
to the then outstanding shares of Common Stock, the holders of the Preferred
Stock shall be entitled to the amount of dividends per share as would be payable
on the largest number of whole shares of Common Stock into which each share of
Preferred Stock could then be converted pursuant to Section 4. Any such declared
and unpaid dividends will be payable first to the holders of Preferred Stock and
then to the holders of Common Stock.

      2.2   Declaration of Dividends

            (a) (i) Except as permitted under Section 7.3(a)(vii), no dividends
or other distributions may be declared, made or paid upon, or any funds set
apart for the payment of dividends upon, any of the Junior Securities or Parity
Securities, and (ii) except as permitted under Section 7.3(a)(x), no Junior
Securities or Parity Securities, including the Preferred Stock, may be
purchased, redeemed or otherwise acquired or retired for value for any
consideration (and no money may be paid into or set apart or made available for
a sinking or other like fund for the purchase, redemption or other acquisition
or retirement for value of any shares of any such stock) by the Issuer or any of
its Subsidiaries.

            (b) If at any time the Issuer pays less than the total amount of
dividends then accumulated with respect to the Preferred Stock, such payment
shall be distributed ratably among the Holders based upon the aggregate
accumulated but unpaid dividends on the Preferred Stock held by each Holder.

            (c) The Issuer will take all actions required or permitted under
Delaware corporate law to permit the payment of dividends on the Preferred
Stock, including, without limitation, through the revaluation of its assets in
accordance with Delaware General Corporation Laws.

3.    Ranking

      3.1   The Preferred Stock will, with respect to voting, dividend
distributions and distributions upon a Liquidation Event, rank:

            (a) senior to all classes of Common Stock, Series A Convertible
Preferred Stock of the Issuer and each other class of Capital Stock or series of
preferred stock issued by the Issuer, which is established after the date of
this Certificate of Designation by the Board of Directors of the Issuer, the
terms of which do not expressly provide that such class or series will rank
senior to or on a parity with the Preferred Stock as to voting, dividend
distributions and distributions upon a Liquidation Event (collectively, with the
Common Stock, referred to as the "Junior Securities");

            (b) on a parity with the Series B Preferred Stock and any class of
Capital Stock or series of preferred stock issued by the Issuer, which is
established after the date of this Certificate of Designation by the Board of
Directors of the Issuer, the terms of which expressly provide that such class or
series will rank on a parity with the Preferred Stock as to voting,

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dividend distributions and distributions upon a Liquidation Event (collectively
referred to as "Parity Securities"); and

             (c) junior to each class of Capital Stock or series of preferred
stock issued by the Issuer, which is established after the date of this
Certificate of Designation by the Board of Directors of the Issuer, the terms of
which expressly provide that such class or series will rank senior to the
Preferred Stock as to voting, dividend distributions and distributions upon a
Liquidation Event (collectively referred to as "Senior Securities").

     3.2     Except as otherwise provided herein, the Issuer is entitled to
amend its Certificate of Incorporation to authorize one or more additional
series of preferred stock, file certificates of designation, and issue without
restriction from time to time, any series of Junior Securities, Parity
Securities, or Senior Securities.

4.   Conversion

     4.1     Conversion Rights

             (a) Each Holder of Preferred Stock shall have the right, at its
option, at any time and from time to time to convert, subject to the terms and
provisions of this Article 4, any or all of such Holder's shares of Preferred
Stock into fully paid and nonassessable shares of Common Stock. In such case,
the shares of Preferred Stock shall be converted into such whole number of fully
paid and nonassessable shares of Common Stock as is equal, subject to Section
4.3, to:

     the product of the number of shares of Preferred Stock being so converted
     multiplied by the quotient of (i) the Liquidation Preference plus all
     accumulated and unpaid dividends divided by (ii) the Conversion Price then
     in effect,

except that with respect to any share which shall be called for redemption such
right shall terminate at the close of business on the Business Day prior to the
Redemption Date unless the Issuer shall default in making the payment due upon
redemption thereof.

             (b) The conversion right of a Holder of Preferred Stock shall be
exercised by the Holder by the surrender of the certificate representing shares
to be converted to the Issuer or to the Transfer Agent (or a binding agreement
to surrender or affidavit of loss in form and substance reasonably acceptable to
the Issuer) accompanied by the Conversion Notice.

                 (i) Immediately prior to the close of business on the
     Conversion Date, each converting Holder of Preferred Stock shall be deemed
     to be the Holder of record of Common Stock issuable upon conversion of such
     Holder's Preferred Stock notwithstanding that the share register of the
     Issuer shall then be closed or that certificates representing such Common
     Stock shall not then be actually delivered to such person.

                 (ii) On any Conversion Date, all rights with respect to the
     shares of Preferred Stock so converted, including the rights, if any, to
     receive notices, will terminate, except the rights of Holders thereof to:
     (1) receive certificates for the number of shares of Common Stock into
     which such shares of Preferred Stock have been converted; and (2) exercise
     the rights to which they are entitled as Holders of Common Stock.

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           (c) If the Conversion Date shall not be a Business Day, then such
conversion right shall be deemed exercised on the next Business Day.

           (d) If the conversion is in connection with an underwritten offering
of securities registered pursuant to the Act or other transaction involving sale
of Common Stock by the holder, the conversion may, at the option of any holder
tendering Preferred Stock for conversion, be conditioned upon the closing with
the underwriter of the sale of securities pursuant to such offering or other
transaction, in which event the person(s) entitled to receive the Common Stock
issuable upon such conversion of the Preferred Stock shall not be deemed to have
converted such Preferred Stock until immediately prior to the closing of the
sale of such securities or other transaction.

     4.2   The Conversion Price shall be subject to adjustment from time to time
as follows:

           (a) Stock Splits and Combinations. In case the Issuer shall at any
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time or from time to time after the Issuance Date (i) subdivide or split the
outstanding shares of Common Stock, (ii) combine or reclassify the outstanding
shares of Common Stock into a smaller number of shares or (iii) issue by
reclassification of the shares of Common Stock any shares of capital stock of
the Issuer, then, and in each such case, the Conversion Price in effect
immediately prior to such event or the record date therefor, whichever is
earlier, shall be adjusted so that the Holder of any shares of Preferred Stock
thereafter surrendered for conversion shall be entitled to receive the number of
shares of Common Stock or other securities of the Issuer which such Holder would
have owned or have been entitled to receive after the occurrence of any of the
events described above, had such shares of Preferred Stock been surrendered for
conversion immediately prior to the occurrence of such event or the record date
therefor, whichever is earlier. An adjustment made pursuant to this subparagraph
(a) shall become effective at the close of business on the day upon which such
corporate action becomes effective. Such adjustment shall be made successively
whenever any event listed above shall occur.

           (b) Dividends and Distributions in Common Stock. In case the Issuer
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shall at any time or from time to time after the Issuance Date pay a dividend or
make a distribution payable in shares of Common Stock on any class of capital
stock of the Issuer other than dividends or distributions of shares of Common
Stock or other securities with respect to which adjustments are provided in
paragraph (a) above and other than dividends payable in Common Stock to holders
of preferred stock required to be paid by the terms thereof, the Conversion
Price shall be adjusted so that the holder of each share of Preferred Stock
shall be entitled to receive upon conversion thereof the number of shares of
Common Stock determined by multiplying (1) the applicable Conversion Price by
(2) a fraction, the numerator of which shall be the number of shares of Common
Stock theretofore outstanding and the denominator of which shall be the sum of
such number of shares and the total number of shares issuable in such dividend
or distribution. The provisions of this clause shall not apply in connection
with any dividend where a dividend is also received by the Holders of the
Preferred Stock pursuant to Section 2.1(d). The provisions of this clause shall
similarly apply to successive dividends or distributions.

           (c) Distribution of Indebtedness, Securities or Assets. In case the
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Issuer shall distribute to all Holders of Common Stock (whether by dividend or
in a merger, amalgamation, consolidation or otherwise) evidences of
indebtedness, shares of capital stock of any class or series, other securities,
cash or assets (other than securities referred to in subparagraph (d) below or a
dividend payable exclusively in cash and other than as a result of a Fundamental
Change),

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the Conversion Price in effect immediately prior to the close of business on the
record date fixed for determination of shareholders entitled to receive such
distribution shall be reduced by multiplying such Conversion Price by a
fraction, the numerator of which is the Current Market Price on such record date
less the fair market value (as determined by the Board of Directors of the
Issuer, whose determination in good faith shall be conclusive) of the portion of
such evidences of indebtedness, shares of capital stock, other securities, cash
and assets so distributed applicable to one share of Common Stock and the
denominator of which is the Current Market Price. Such adjustment shall be made
successively whenever any such event shall occur.

             (d) Sales of Securities Below Conversion Price. If the Issuer shall
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issue any Additional Stock (as defined below) without consideration or for a
consideration per share less than the Conversion Price in effect immediately
prior to the issuance of such Additional Stock, then the Conversion Price in
effect immediately prior to each such issuance shall automatically be adjusted
as set forth in this Section 4.2(d), unless otherwise provided in this Section
4.2(d). Such adjustment shall be made successively whenever such event shall
occur.

                 (i) Whenever the Conversion Price is adjusted pursuant to this
     Section 4.2(d), the new Conversion Price shall be determined by multiplying
     the Conversion Price then in effect by a fraction, (x) the numerator of
     which shall be the number of shares of Common Stock outstanding immediately
     prior to such issuance (the "Outstanding Common") plus the number of shares
     of Common Stock that the aggregate consideration received by the Issuer for
     such issuance would purchase at such Conversion Price; and (y) the
     denominator of which shall be the number of shares of Outstanding Common
     plus the number of shares of such Additional Stock. For purposes of the
     foregoing calculation, the term "Outstanding Common" shall include shares
     of Common Stock issued or issuable upon the exercise, exchange or
     conversion of outstanding securities, other than Common Stock issuable upon
     the exercise, exchange or conversion of outstanding securities at a price
     greater than the per share consideration of the Additional Stock.

                 (ii) For purposes of this Section 4.2(d), "Additional Stock"
     shall mean any shares of Common Stock issued (or deemed to have been issued
     pursuant to Section 4.2(iv)) by the Issuer other than:

                         (1) Common Stock issued pursuant to a transaction
described in Section 4.2(a), and

                         (2) Shares of Common Stock, Class C Common Stock or
Preferred Stock issued or issuable upon conversion of the Preferred Stock.

                         (3) In addition to the shares of Common Stock described
in 4.2 (d) (ii) (4) below, up to 1,000,000 shares of Common Stock or options to
purchase shares of Common Stock (as adjusted for stock splits and the like) with
a purchase or conversion price less than the Conversion Price, which shares are
issuable or issued to employees, consultants or directors of the Issuer directly
or pursuant to a stock option plan, restricted stock plan or employee stock
purchase plan approved by the Board of Directors of the Issuer.

                         (4) Shares of Common Stock issued or issuable upon
conversion of all securities convertible, exchangeable or exercisable for, or
rights to purchase, shares of Common Stock outstanding as of the date of the
Stock Purchase Agreement.

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             (iii) In the case of the issuance of Common Stock for cash, the
      consideration shall be deemed to be the amount of cash paid therefor
      before deducting any reasonable discounts, commissions or other expenses
      allowed, paid or incurred by the Issuer for any underwriting or otherwise
      in connection with the issuance and sale thereof. In the case of the
      issuance of the Common Stock for a consideration in whole or in part other
      than cash, the consideration other than cash shall be deemed to be the
      fair value thereof as determined by the Board of Directors of the Issuer
      irrespective of any accounting treatment; provided, that, if the value of
      such consideration is determined to be in excess of $25 million by the
      Board of Directors of the Issuer, the Issuer shall procure an opinion as
      to such value from an accounting, appraisal or investment banking firm of
      national standing.

             (iv)  In the case of the issuance of options to purchase or rights
      to subscribe for Common Stock, securities by their terms or by agreement
      with the Issuer convertible into or exchangeable for Common Stock or
      options to purchase or rights to subscribe for such convertible or
      exchangeable securities, the following provisions shall apply for all
      purposes of this Section 4.2(d):

                  (1) The aggregate maximum number of shares of Common Stock
deliverable upon exercise (assuming the satisfaction of any conditions to
exercisability, including without limitation, the passage of time, but without
taking into account potential antidilution adjustments) of such options to
purchase or rights to subscribe for Common Stock shall be deemed to have been
issued at the time such options or rights were issued and for a consideration
equal to the consideration (determined in the manner provided in Section
4(d)(iii)), if any, received by the Issuer upon the issuance of such options or
rights plus the minimum exercise price provided in such options or rights
(without taking into account potential antidilution adjustments) for the Common
Stock covered thereby.

                  (2) The aggregate maximum number of shares of Common Stock
deliverable upon conversion of or in exchange (assuming the satisfaction of any
conditions to convertibility or exchangeability, including, without limitation,
the passage of time, but without taking into account potential antidilution
adjustments, accrual of dividends or payment of any premiums or preferences
conditioned upon the occurrence of specified transactions) for any such
convertible or exchangeable securities or upon the exercise of options to
purchase or rights to subscribe for such convertible or exchangeable securities
and subsequent conversion or exchange thereof shall be deemed to have been
issued at the time such securities were issued or such options or rights were
issued and for a consideration equal to the consideration, if any, received by
the Issuer for any such securities and related options or rights (excluding any
cash received on account of accrued interest or accrued dividends), plus the
minimum additional consideration, if any, to be received by the Issuer (without
taking into account potential antidilution adjustments) upon the conversion or
exchange of such securities or the exercise of any related options or rights
(the consideration in each case to be determined in the manner provided in
Section 4(d)(iii)).

           (v)    Notwithstanding any other provisions of this Section (4)(d),
     no adjustment of the Conversion Price pursuant to this Section 4(d) shall
     have the effect of increasing the Conversion Price above the Conversion
     Price in effect immediately prior to such adjustment.

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           (e) Fundamental Changes. In case of any Fundamental Change, the
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Holder of each share of Preferred Stock outstanding immediately prior to the
occurrence of such Fundamental Change shall have the right upon any subsequent
conversion to receive the kind and amount of stock, other securities, cash and
assets that such Holder would have received if such share had been converted
immediately prior thereto. In any such case, appropriate adjustment shall be
made in the application of the provisions of this Section 4 with respect to the
rights of the Holders of Preferred Stock after the Fundamental Change to the end
that the provisions of this Section 4 shall be applicable after that event in a
manner as nearly equivalent as practicable as before the Fundamental Change.

           (f) Anything in the above sections (a)-(e) to the contrary
notwithstanding, the Issuer shall not be required to give effect to any
adjustment in the Conversion Price unless and until the net effect of one or
more adjustments (each of which shall be carried forward until counted toward
adjustment), determined as above provided, shall have resulted in a change of
the Conversion Price by at least 1%, and when the cumulative net effect of more
than one adjustment so determined shall be to change the Conversion Price by at
least 1%, such change in the Conversion Price shall thereupon be given effect.
In the event that, at any time as a result of the provisions of this Section,
the holder of shares of Preferred Stock upon subsequent conversion shall become
entitled to receive any shares of capital stock of the Issuer other than Common
Stock, the number of Preferred Stock shall thereafter be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions contained herein.

           (g) There shall be no adjustment of the Conversion Price in case of
the issuance of any stock of the Issuer in a merger, reorganization,
acquisition, reclassification, recapitalization or other similar transaction
except as set forth in the above paragraphs (a)-(e).

           (h) In any case in which the above paragraphs (a)-(e) require that an
adjustment as a result of any event become effective from and after a record
date, the Issuer may elect to defer until after the occurrence of such event (i)
issuing to the Holder of any shares of Preferred Stock converted after such
record date and before the occurrence of such event the additional shares of
Common Stock issuable upon such conversion over and above the shares issuable on
the basis of the Conversion Price in effect immediately prior to adjustment and
(ii) paying to such Holder any amount in cash in lieu of a fractional share of
Common Stock.

           (i) If the Issuer shall take a record of the Holders of its Common
Stock for the purpose of entitling them to receive a dividend or other
distribution, and shall thereafter and before the distribution to shareholders
thereof legally abandon its plan to pay or deliver such dividend or
distribution, then thereafter no adjustment in the number of shares of Common
Stock issuable upon exercise of the right of conversion granted by the above
paragraphs (a)-(e) or in the Conversion Price then in effect shall be required
by reason of the taking of such record.

           (j) In each case of an adjustment or readjustment of the Conversion
Price for the number of shares of Common Stock or other securities issuable upon
conversion of the Preferred Stock, the Issuer, at its expense, shall compute
such adjustment or readjustment in accordance with the provisions hereof and
prepare a certificate showing such adjustment or readjustment, and shall mail
such certificate, by first class mail, postage prepaid, to each Holder of
Preferred Stock at the Holder's address as shown in the Issuer's books. The
certificate shall

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set forth such adjustment or readjustment, showing in detail the facts upon
which such adjustment or readjustment is based.

             (k) Upon (i) any taking by the Issuer of a record of the Holders of
any class of securities other than the Series B Preferred Stock in accordance
with the terms thereof for the purpose of determining the Holders thereof who
are entitled to receive any dividend or other distribution, or otherwise
participate in any event for which the Conversion Price is adjusted pursuant to
Section 4, (ii) any subdivision or combination of the outstanding Common Stock,
(iii) any recapitalization or reclassification of or other change in the Common
Stock, (iv) any Notice Event, or (v) any Liquidation Event, the Issuer shall
mail to each Holder of Preferred Stock at least twenty (20) days prior to the
record date specified therein a notice specifying (A) the date on which any such
record is to be taken for the purpose of such dividend, distribution or other
event and a description of such dividend, distribution or other event, (B) the
date on which any such subdivision, combination, reorganization,
reclassification, recapitalization, Fundamental Change or Liquidation Event is
expected to become effective, and (C) the date, if any, that is to be fixed as
to when the Holders of Common Stock (or other securities) shall be entitled to
exchange their shares of Common Stock (or other securities) for securities or
other property deliverable upon such subdivision, combination, reorganization,
reclassification, recapitalization, Fundamental Change or Liquidation Event.

     4.3     Upon a Change of Control, each Holder of Preferred Stock will
have the option, during the period commencing on the date that the applicable
notice of such Change of Control is mailed to Holders of Preferred Stock and
ending on the close of business on the 45/th/ day thereafter (the "Special
Conversion Date") to convert all, but not less than all, of such Holder's shares
of Preferred Stock into fully paid and nonassessable shares Common Stock at a
conversion rate equal to the Liquidation Preference plus accumulated and unpaid
dividends through the Special Conversion Date multiplied by the applicable
Redemption Price per share as set forth in Section 5.1(b) based on the Special
Conversion Date divided by the Conversion Price; provided, however, in the event
the Special Conversion Date occurs on or prior to February 8, 2005, the
conversion rate shall be equal to the Liquidation Preference plus accumulated
and unpaid dividends through February 8, 2005 multiplied by 105.7750% divided by
the Conversion Price.

             (a) Within fifteen days after a Change of Control, notice of
such Change of Control shall be given by the Issuer to each Holder of shares of
Preferred Stock, at such Holder's address as the same appears on the books of
the Issuer. Each such notice shall state: (i) that a Change of Control has
occurred; (ii) the last day on which the Change of Control option may be
exercised (the "Expiration Date"); (iii) the name and address of the paying
agent; and (iv) the procedures that Holders must follow to exercise the Change
of Control option.

             (b) On or before the Expiration Date, each Holder of shares of
Preferred Stock wishing to exercise the Change of Control option shall surrender
the certificate or certificates representing the shares of Preferred Stock to be
converted, in the manner and at the place designated in the notice described in
Section 4.3(a) and on such date the cash or shares of Common Stock due to such
Holder shall be delivered to the person whose name appears on such certificate
or certificates as the owner thereof and each surrendered certificate shall be
returned to authorized but unissued shares. Upon surrender (in accordance with
the notice described in Section 4.3(a)) of the certificate or certificates
representing any shares to be so converted

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(properly endorsed or assigned for transfer, if the Issuer shall so require and
the notice shall so state), such shares shall be converted by the Issuer at the
Conversion Price as adjusted.

           (c) Exercise by a holder of such Holder's special conversion option
following a Change of Control is irrevocable, except that a Holder may withdraw
its election to exercise such Holder's special conversion option at any time
prior to the close of business on the Special Conversion Date by delivering a
written or facsimile transmission notice to the Transfer Agent at the address or
facsimile number specified in the Change of Control notice. Such notice, to be
effective, must be received by the Transfer Agent prior to the close of business
on the Special Conversion Date. All shares of Preferred Stock tendered for
conversion pursuant to a Holder's special conversion option as described herein
and not withdrawn will be converted at the close of business on the Special
Conversion Date.

     4.4   On or after August 8, 2002, each share of Preferred Stock shall, at
the option of the Issuer, exercisable prior to the date that is five Business
Days after the end of any 50-Day Test Period (as defined below), be converted
into fully paid and nonassessable shares of Common Stock at a conversion rate
equal to the Liquidation Preference plus accumulated and unpaid dividends
through February 8, 2005 multiplied by 105.7750% divided by the Conversion Price
immediately upon the fiftieth consecutive day that the Closing Price of the
Common Stock equals or exceeds $50 per share, which per share price shall be
adjusted upon the occurrence of events described in Section 4.2(a). Each period
of 50 consecutive days meeting such test (including periods which overlap in
part with one or more prior such periods) is referred to as a "50-Day Test
Period."

     4.5   If, as a result of any Conversion Price Adjustment Event, a Holder of
the Preferred Stock becomes entitled to receive upon conversion shares of two or
more classes of Capital Stock, the Issuer shall determine the reasonable
allocation of the adjusted Conversion Price between the classes of Capital
Stock. After such allocation, the Conversion Price of each class of Capital
Stock shall thereafter be subject to adjustment on terms applicable to the
Preferred Stock in this Article 4.

     4.6   The Issuer shall at all times reserve and keep available for issuance
upon the conversion of the Preferred Stock such number of its authorized but
unissued shares of Common Stock as will from time to time be sufficient to
permit the conversion of all outstanding shares of Preferred Stock, and shall
take all action required to increase the authorized number of shares of Common
Stock if at any time there shall be insufficient authorized unissued shares of
Common Stock to permit such reservation or to permit the conversion of all
outstanding  shares of Preferred Stock.

     4.7   The issuance or delivery of certificates for Common Stock upon the
conversion of shares of Preferred Stock shall be made without charge to the
converting Holder of shares of Preferred Stock for such certificates or for any
tax in respect of the issuance or delivery of such certificates or the
securities represented thereby, and such certificates shall be issued or
delivered in the respective names of, or in such names as may be directed by,
the Holders of the shares of Preferred Stock converted; provided, however, that
the Issuer shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance and delivery of any such certificate in
a name other than that of the Holder of the shares of Preferred Stock converted,
and the Issuer shall not be required to issue or deliver such certificate unless
or until the Person or Persons requesting the issuance or delivery thereof shall
have paid to the Issuer the

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amount of such tax or shall have established to the reasonable satisfaction of
the Issuer that such tax has been paid.

     4.8   Without the consent of the Holders of then outstanding Preferred
Stock as required under Section 7.3(a), the Issuer shall not amend its
Certificate of Incorporation or participate in any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or take
any other similar voluntary action, for the purpose of avoiding or seeking to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Issuer, but shall at all times in good faith assist
in carrying out all such action as may be reasonably necessary or appropriate in
order to protect the conversion rights of the holders of the Preferred Stock
against impairment.

     4.9   Any notice required by the provisions of this Section 4 shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient; if not, then on the next Business
Day, (iii) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (iv) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All notices shall be addressed to each
Holder of record at the address of such Holder appearing on the books of the
Issuer.

5.   Redemption of Preferred Stock

     5.1     Optional Redemption of the Preferred Stock

             (a) Shares of the Preferred Stock may not be required to be
redeemed prior to February 8, 2005.

             (b) On or after February 8, 2005, the Preferred Stock may be
redeemed for cash, or, at the Holder's option, in fully paid and nonassessable
shares of Common Stock issued at the Conversion Price or in a combination
thereof, in whole or in part, at the option of the Issuer, subject to the
Holder's right to convert pursuant to Article 4, at the following Redemption
Prices per share (expressed as percentages of the Liquidation Preference plus
accumulated and unpaid dividends to the Redemption Date) upon not less than 30
nor more than 60 days' prior written notice in a Redemption Notice, if redeemed
during each period set forth below, commencing on each of the dates set forth
below:

          Date                                                Redemption
                                                           Price Per Share

          February 8, 2005..................................    105.7750%
          February 8, 2006..................................    104.9500%
          February 8, 2007..................................    104.1250%
          February 8, 2008..................................    103.3000%
          February 8, 2009..................................    102.4750%
          February 8, 2010..................................    101.6500%
          February 8, 2011..................................    100.8250%
          February 1, 2012..................................    100.0000%

                                       10
<PAGE>

         (c) In the event that fewer than all the outstanding shares of the
Preferred Stock are to be redeemed, the shares to be redeemed will be determined
pro rata or by lot, as determined by the Issuer.

         (d) From and after the applicable Redemption Date (unless the Issuer
shall be in default of payment of the Redemption Price), dividends on the shares
of the Preferred Stock to be redeemed on such Redemption Date shall cease to
accumulate, such shares shall no longer be deemed to be outstanding, and all
rights of the Holders thereof as stockholders of the Issuer (except the right to
receive the Redemption Price and accumulated dividend amounts and liquidation
penalties, if any through the Redemption Date) will cease.

    5.2  (a)    In the event the Issuer shall elect to redeem shares of the
Preferred Stock pursuant to Section 5.1 hereof:

                (i) The Issuer must make a public announcement of the redemption
    and provide the Holders with the Redemption Notice referred to in Section
    5.1(b) not fewer than 30 days nor more than 60 days' prior to the Redemption
    Date.

                (ii) On or before any Redemption Date, each Holder of shares of
    Preferred Stock to be redeemed shall surrender the certificate or
    certificates representing such shares of Preferred Stock (properly endorsed
    or assigned, or transferred, if the Issuer shall so require and the
    Redemption Notice shall so state) to the Issuer or the Redemption Agent (if
    appointed) in the manner and at the place designated in the Redemption
    Notice.

                (iii)On the Redemption Date, the Issuer or the Redemption Agent,
    as applicable, shall pay or deliver to the Holder whose name appears on such
    certificate or certificates as the owner thereof, the full Redemption Price
    due such Holder in cash or, at the Holder's option, in fully paid and
    nonassessable shares of Common Stock issued at the Conversion Price or in a
    combination thereof.

                (iv) The shares represented by each certificate to be
    surrendered shall be automatically (and without any further action of the
    Issuer or the Holder) canceled as of the Redemption Date whether or not
    certificates for such shares are returned to the Issuer and returned to
    authorized but unissued shares of preferred stock of no series.

                (v) If fewer than all the shares represented by any such
    certificate are to be redeemed, a new certificate shall be issued
    representing the unredeemed shares, without cost to the Holder, together
    with the amount of cash, if any, in lieu of fractional shares.

         (b) If a Redemption Notice shall have been given as provided in Section
5.1, all rights of the Holders thereof as stockholders of the Issuer with
respect to shares so called for redemption (except for the right to receive from
the Issuer the Redemption Price) shall cease either (i) from and after the
Redemption Date (unless the Issuer shall default in the payment of the
Redemption Price, in which case such rights shall not terminate at the
Redemption Date) or (ii) if the Issuer shall so elect and state in the
Redemption Notice, from and after the time and date (which date shall be the
Redemption Date or an earlier date not less than 20 days after the date of
mailing of the Redemption Notice) on which the Issuer shall irrevocably deposit
in trust for the Holders of the shares to be redeemed with a designated
Redemption Agent as paying agent sufficient to pay at the office of such paying
agent, on the Redemption Date, the Redemption Price. Any money or, at the
Holder's option, shares of Common Stock, so deposited

                                       11
<PAGE>

with such Redemption Agent which shall not be required for such redemption shall
be returned to the Issuer forthwith. Subject to applicable escheat laws, any
moneys or shares of Common Stock so set aside by the Issuer and unclaimed at the
end of one year from the Redemption Date shall revert to the general funds of
the Issuer, after which reversion the Holders of such shares so called for
redemption shall look only to the general funds of the Issuer for the payment of
the Redemption Price without interest. Any interest accrued on funds held by the
Redemption Agent shall be paid to the Issuer from time to time.

          (c)   In the event that fewer than all the outstanding shares of the
Preferred Stock are to be redeemed, the shares to be redeemed shall be
determined pro rata or by lot, as determined by the Issuer, except that the
Issuer may redeem such shares held by any Holder of fewer than 100 shares (or
shares held by Holders who would hold fewer than 100 shares as a result of such
redemption), as may be determined by the Issuer.

     5.3  Mandatory Redemption of Preferred Stock

          (a)   The Issuer will redeem all shares of Preferred Stock on February
1, 2012, at a Mandatory Redemption Price equaling 100% of the Liquidation
Preference, together with any accumulated and unpaid dividends to the date of
Mandatory Redemption, unless the Preferred Stock has already been redeemed or
converted. The Issuer shall send notice of such redemption to Holders upon not
less than 30 nor more than 60 days' prior written notice.

          (b)   The Issuer will make mandatory redemption payments on the
Preferred Stock by delivery of shares of Common Stock as follows:

                (i)  If on the date of such payment, such shares of Common Stock
     are freely tradable, such shares of Common Stock shall be valued at 95% of
     Average Market Value.

                (ii) If on the date of such payment, such shares of Common Stock
     are not freely tradable, such shares of Common Stock shall be valued at 90%
     of Average Market Value.

          (c)   If, as a matter of law, the Issuer is unable to issue Common
Stock in payment of the Mandatory Redemption Price, then the Issuer shall cause
the Preferred Stock to be converted on the date of such mandatory redemption
into the same number of shares of Common Stock as could otherwise have been
issued in satisfaction of the Mandatory Redemption Price, provided that the
Issuer shall have given the Holders of Preferred Stock notice of the exercise of
this option at least 30 days prior to the date of such mandatory redemption.

          (d)   In the event that the mandatory redemption payments are to be
made by the delivery of shares of Common Stock, subject to Section 11.3, the
Issuer shall pay a Cash Adjustment, determined based on the proceeds received by
the Transfer Agent from the sale of that number of shares of Common Stock, which
the Issuer will deliver to the Transfer Agent for such purpose, equal to the
aggregate of all such fractions rounded up to the nearest whole share, to each
Holder that would otherwise be entitled to a fraction of a share of Common
Stock.

                (i)  The Transfer Agent shall sell such shares of Common Stock
     at the best available prices and distribute the proceeds to the Holders in
     proportion to their respective interests therein.

                                       12
<PAGE>

                (ii) The Issuer will pay the expenses of the Transfer Agent with
     respect to such sale, including brokerage commissions. Any portion of any
     such payment that is declared and not paid through the delivery of shares
     of Common Stock will be paid in cash. The Issuer shall make a public
     announcement no later than the close of business on the tenth business day
     prior to the record date for each dividend as to whether the Issuer will
     pay such dividend and, if so, the form of consideration the Issuer will use
     to make such payment.

6.   Liquidation Preference

     6.1     Upon (i) the voluntary or involuntary liquidation, dissolution or
winding up of the Issuer, (ii) the sale, conveyance, exchange or transfer (for
cash, shares of stock, securities or other consideration) of all or
substantially all of the property or assets of the Issuer, (iii) the Sale of the
Issuer, (iv) any Fundamental Change, or (v) reduction or decrease in the
Issuer's capital stock resulting in a distribution of assets to the holders of
any class or series of the Issuer's capital stock (each a "Liquidation Event"),
Holders of the Preferred Stock will be entitled to be paid, out of assets of the
Issuer available for distribution, the greater of (i) if such Liquidation Event
occurs after February 8, 2005, the Liquidation Preference per share plus an
amount equal to all accumulated and unpaid dividends (whether or not declared
and whether or not funds are legally available therefor) thereon through the
date of such Liquidation Event multiplied by the applicable Redemption Price per
share set forth in Section 5.1(b) based on the date of such Liquidation Event or
if such Liquidation Event occurs on or prior to February 8, 2005, the
Liquidation Preference per share plus an amount equal to all accumulated and
unpaid dividends (whether or not declared and whether or not funds are legally
available therefor) thereon through February 8, 2005 multiplied by 105.7750% and
(ii) an amount equal to the amount the Holders of the Preferred Stock would have
received upon a Liquidation Event had such Holders converted their shares of
Preferred Stock in accordance with Section 4 into the shares of Common Stock
immediately prior to the Liquidation Event (such greater amount being the
"Liquidation Value") before any distribution is made on any Junior Securities,
including, without limitation, the Common Stock.  Payments required to be made
pursuant to this Section 6.1 shall be made in cash; provided that payments
required to be made pursuant to Section 6.1(iv) shall be made in the form of
consideration described in Section 4.2(e).

     6.2     If, upon any Liquidation Event, the amounts payable with respect to
the liquidation preference of the Preferred Stock and all other Parity
Securities are not paid in full, the Holders of the Preferred Stock and the
Parity Securities will share pro rata in proportion to the full distribution to
which each is entitled.

     6.3     After the payment of the full Liquidation Value and the full
liquidation preference of all other Parity Securities as set forth in Section
6.2 above, if there are remaining assets of the Issuer legally available for
distribution, such assets will be distributed to the holders of the then
outstanding Junior Securities (other than the holders of Common Stock) based on
the applicable liquidation preference.

     6.4     After the payment of the full Liquidation Value to Holders of the
Preferred Stock, the liquidation preference of the Parity Securities and the
liquidation preference of the Junior Securities (other than Common Stock), as
set forth in Sections 6.1, 6.2 and 6.3 above, if there are remaining assets of
the Issuer legally available for distribution, such assets will be distributed
pro

                                       13
<PAGE>

rata among the holders of the then outstanding Common Stock, and each other
class of common stock on a parity with the Common Stock.

7.   Voting Rights

     7.1     Except as otherwise provided herein or as required by applicable
law, the Holders of the Preferred Stock shall be entitled to vote on all matters
on which the Holders of Common Stock shall be entitled to vote, in the same
manner and with the same effect as the Holders of Common Stock, voting together
with the holders of Common Stock as a single class. For this purpose, the
Holders of the Preferred Stock shall be given notice of any meeting of
stockholders as to which the Holders of Common Stock are given notice in
accordance with the by-laws of the Issuer. As to any matter on which the Holders
of the Preferred Stock shall be entitled to vote, each Holder of the Preferred
Stock shall have a number of votes per share of the Preferred Stock held of
record by such Holder (on the record date for the meeting of stockholders, if
such matter is subject to a vote at a meeting of stockholders, or on the
effective date of any written consent, if such matter is subject to a written
consent of the stockholders without a meeting of stockholders), equal to the
number of shares of Common Stock into which such share of Preferred Stock is
convertible pursuant to Section 4 immediately after the close of business on
such record date or effective date, as the case may be.

     7.2     Events of Noncompliance

             (a)  Definition.  An Event of Noncompliance will be deemed to have
                  ----------
occurred if:

                  (i)   the Issuer fails to make any payment with respect to the
     Preferred Stock which it is obligated to make hereunder, whether or not
     such payment is legally permissible;

                  (ii)  the Issuer breaches or otherwise fails to perform or
     observe the provisions of Section 7.3 and such breach or failure to perform
     or observe continues for a period of 30 days after notice thereof (the
     "Noncompliance Notice") from the Holders of a majority of the Preferred
     Stock; or

                  (iii) the Issuer breaches or otherwise fails to perform or
     observe any other covenant or agreement set forth herein or any covenant or
     agreement set forth in the Stock Purchase Agreement and such breach or
     failure to perform or observe continues for a period of 30 days after
     receipt of the Noncompliance Notice from the Holders of a majority of the
     Preferred Stock.

The Issuer shall promptly (and in any event within five days) after learning of
(x) any failure by the Issuer to observe any covenant or agreement contained
herein or in the Stock Purchase Agreement or (y) any Event of Noncompliance,
give notice thereof to each Holder of Preferred Stock.

          (b)  Consequences of Certain Events of Noncompliance.
               -----------------------------------------------

               (i)  If an Event of Noncompliance has occurred, the dividend rate
     in respect of the Preferred Stock shall increase immediately to the lesser
     of (A) (x) during the twelve-month period commencing on the date the Event
     of Noncompliance occurs, 10.25% per annum and (y) thereafter, 12.25% per
     annum and (B) the maximum rate

                                       14

<PAGE>

     permitted by applicable law, and shall remain at such rate as long as any
     Preferred Stock is outstanding and the Event of Noncompliance continues.

               (ii) If any Event of Noncompliance has occurred, each Holder of
     Preferred Stock will also have (A) any other rights which such Holder may
     have in accordance with applicable law, including without limitation, to
     specific performance of the terms hereof and to enjoin any continuing
     Events of Noncompliance, and to sue for and obtain other remedies available
     in equity or at law.

     7.3  The Issuer shall not, and shall not permit any of its Subsidiaries to
take any of the actions described in this Section 7.3 unless such actions are
taken following receipt of the vote or consent of the Holders of the Preferred
Stock described in this Section 7.3.

          (a)  The affirmative vote or consent of the Holders of at least 60% of
the outstanding Preferred Stock, voting as a separate class, will be required
for:

               (i)    any amendment, alteration or repeal of any provision of
     (i) the Certificate of Incorporation or By-laws of the Issuer or any of its
     Subsidiaries material to the rights of the Holders of the Preferred Stock,
     whether by merger, consolidation or otherwise or (ii) any Certificate of
     Designation relating to Senior Securities or Parity Securities other than
     Parity Securities issued pursuant to the proviso in clause (ii) below;

               (ii)   the authorization, creation, reclassification or issuance
     of any series or class of Senior Securities (or security convertible into
     Senior Securities or evidencing a right to purchase any shares of any
     series or class of Senior Securities) or any series or class of Parity
     Securities (or security convertible into Parity Securities or evidencing a
     right to purchase any shares of any class or series of Parity Securities);
     provided that the Issuer may issue up to $250 million in aggregate
     liquidation preference of Preferred Stock, including the Preferred Stock
     issued pursuant to the Stock Purchase Agreement, and Parity Securities;

               (iii)  any increases in the outstanding number of shares of the
     Series A Convertible Preferred Stock of the Issuer or Series B Preferred
     Stock of the Issuer and the Preferred Stock, except for increases in
     connection with anti-dilution adjustments under the terms of such
     securities;

               (iv)   any increase or decrease in the authorized number of
     shares of the Preferred Stock;

               (v)    the issuance of common stock or securities convertible
     into common stock, (excluding common stock issued in respect of (1)
     securities convertible into or exercisable for common stock outstanding on
     the date hereof and (2) securities issued pursuant to the Stock Purchase
     Agreement), which would increase the number of shares of common stock
     outstanding calculated on a Fully Diluted basis on the date of the Stock
     Purchase Agreement, after giving effect to the transactions contemplated
     thereby by 20% or more in one, or more than one issuance. The securities
     issued pursuant to paragraph (ii) above, other than the securities issued
     pursuant to the Stock Purchase Agreement, shall be counted in calculating
     the 20% referenced in this clause (v). Securities issued in connection with
     a high yield issuance and Common Stock paid as a dividend to holders of
     Series B Preferred Stock in accordance with the terms of such securities
     shall not be counted in the 20% referenced in this clause (v);

                                       15
<PAGE>

               (vi)   the incurrence by the Issuer or any of its Subsidiaries of
     any indebtedness or the issuance of any securities, in each case,
     containing financial, operational or subscriber maintenance or milestone
     covenants which if not met would put the Issuer or any of its Subsidiaries
     into default under the terms of the indebtedness or the securities;

               (vii)  the declaration and payment of any dividends on any Junior
     Securities or Parity Securities other than dividends consisting solely of
     Common Stock to the holders of Series B Preferred Stock to the extent such
     dividends are required to be paid by the terms of such securities and other
     than, subject to clause (v) above, dividends consisting solely of Common
     Stock;

               (viii) any merger or liquidation of the Issuer or any of its
     Subsidiaries;

               (ix)   any action that results in the Issuer or any of its
     Subsidiaries entering into any agreement or understanding, that would
     impose material restrictions on the Issuer's ability to honor the exercise
     of any rights of the Holders of the Preferred Stock or violate, be in
     conflict with, the rights of the Holders of Preferred Stock;

               (x)    the purchase, redemption or other acquisition or
     retirement for value (including, in connection with any merger or
     reorganization of the Issuer or any of its Subsidiaries) of any securities
     of the Issuer or any of its Subsidiaries with the exception that the Issuer
     can (a) exercise its option to repurchase up to 35% in aggregate principal
     amount of its outstanding 14% Senior Secured Notes due 2010 pursuant to
     Section 3.07(b) of the indenture related thereto, and any similar options
     to repurchase contained in future high yield issuances, (b) redeem the
     Series B Preferred Stock and the Preferred Stock in accordance with their
     terms, and (c) redeem equity securities in an aggregate amount not to
     exceed $5 million;

               (xi)   the making of loans or advances to, transferring
     properties to, or guaranteeing any indebtedness of Subsidiaries of the
     Issuer other than Subsidiaries pursuing or related to the Issuer's
     satellite radio business;

               (xii)  any change in the principal nature of the business of the
     Issuer or any of its Subsidiaries to a business other than the satellite
     radio business or a business related thereto;

               (xiii) any payments to, or any sale, lease, transfer or otherwise
     disposition of any of the Issuer's or any of its Subsidiaries' properties
     or assets to, or purchase of any property or assets from, or entering into
     or making or amending any transaction, contract, agreement, understanding,
     loan, advance or guarantee with, or for the benefit of, any Affiliate
     (each, an "Affiliate Transaction"), unless the following are complied with:

                      (1) Such Affiliate Transaction is on terms that are no
less favorable to the Issuer or the relevant Subsidiary than those that would
have been obtained in a comparable transaction by the Issuer or such Subsidiary
with an unrelated Person; and

                      (2) the Issuer delivers to the Holders of the Preferred
Stock:

                          (a) with respect to any Affiliate Transaction or
     series of related Affiliate Transactions involving aggregate consideration
     in excess of $5.0 million, a resolution of the Board of Directors set forth
     in an officers' certificate certifying that

                                       16
<PAGE>

     such Affiliate Transaction complies with this clause (xiii) and that such
     Affiliate Transaction has been approved by a majority of the members of the
     Board of Directors who are disinterested with respect to such Affiliate
     Transaction; and

                         (b) with respect to any Affiliate Transaction or series
     of related Affiliate Transactions involving aggregate consideration in
     excess of $20.0 million, an opinion as to the fairness to the Issuer or
     such Subsidiary of such Affiliate Transaction from a financial point of
     view issued by an accounting, appraisal or investment banking firm of
     national standing.

     The following items shall not be deemed to be Affiliate Transactions and,
therefore, will not be subject to the provisions of clause (xiii):

(1)  any transaction by the Issuer or any of its Subsidiaries with an Affiliate
     directly related to the purchase, sale or distribution of products in the
     ordinary course of business consistent with industry practice which has
     been approved by a majority of the members of the Board of Directors of the
     Issuer who are Disinterested with respect to such transaction;

(2)  any employment agreement or arrangement or employee benefit plan entered
     into by the Issuer or any of its Subsidiaries in the ordinary course of
     business of the Issuer or Subsidiary which has been approved by a majority
     of the members of the Board of Directors of the Issuer who are
     Disinterested with respect to such transaction;

(3)  transactions between or among the Issuer and/or its wholly-owned
     Subsidiaries;

(4)  payment of reasonable directors fees and provisions of customary
     indemnification to directors, officers and employees of the Issuer and its
     Subsidiaries;

(5)  contractual arrangements existing on the date of the Stock Purchase
     Agreement, and any renewals, extensions, implementations or modifications
     thereof that are not materially adverse to the Holders of Preferred Stock
     which have been approved by a majority of the members of the Board of
     Directors of the Issuer who are Disinterested with respect to such
     transaction.

             (xiv) the sale, transfer, assignment, conveyance or other
     disposition to a third party of all or substantially all of the properties
     or assets of the Issuer and its Subsidiaries, taken collectively, in one or
     more related transactions;

             (xv)  entering into any transaction that would result in any
     Subsidiary of the Issuer not being wholly owned, directly or indirectly, by
     the Issuer other than pledges of the common stock of any Subsidiary of the
     Issuer in connection with financing transactions; and

             (xvi) agree or commit to do any of the foregoing.

          (b)  The affirmative vote or consent of (x) the Primary Investor (at
any time when the Primary Investor still holds Preferred Stock) unless the
Primary Investor notifies the Issuer in writing that the Issuer no longer needs
the affirmative vote of the Primary Investor and (y) the Holders of at least 60%
of the outstanding Preferred Stock, voting as a separate class will be required
for any declaration or payment of dividends on the Preferred Stock; provided,
however, that this requirement shall not apply in the event of a Liquidation
Event.

                                       17
<PAGE>

8.   Amendment, Supplement and Waiver

     8.1     Without the consent of any Holder of the Preferred Stock, subject
to the requirements of the General Corporation Law of the State of Delaware, the
Issuer may amend or supplement this Certificate of Designation to cure any
ambiguity, defect or inconsistency.

9.   Certain Definitions

     Set forth below are certain defined terms used in this Certificate of
Designation.

     9.1     "Act" means the Securities Act of 1933, as amended, and the rules
and regulations thereunder.

     9.2     "Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such person, whether through the
ownership of voting securities, by agreement of or otherwise; provided, that
beneficial ownership of 10% or more of the Voting Stock of a Person shall be
deemed to be control.

     9.3     "Average Market Value" of Common Stock means the arithmetic average
of the Current Market Value of the Common Stock for the ten trading days ending
on the fifth Business Day prior to (a) in the case of the payment of any
dividend, the record date for such dividend and (b) in the case of the mandatory
redemption payment, the date of such payment.

     9.4     "Bankruptcy Event" shall be deemed to have occurred with respect to
a Person if such Person shall:

             (a)  generally fail to pay, or admit in writing its inability to
pay, its debts as they become due;

             (b)  apply for, consent to or acquiesce in, the appointment of a
liquidator, trustee, receiver, sequestrator or other custodian for itself or any
of its Subsidiaries or any property of any thereof, or make a general assignment
for the benefit of creditors;

             (c)  in the absence of such application, consent or acquiescence,
permit or suffer to exist the appointment of a liquidator, trustee, receiver,
sequestrator or other custodian for itself or any of its Subsidiaries or for a
substantial part of the property of any thereof and such appointment shall not
be discharged within 30 days;

             (d)  commence, or permit or suffer to exist the commencement of,
any bankruptcy, reorganization, debt arrangement, or other case or proceeding
under any bankruptcy or insolvency law, or any dissolution, winding up or
liquidation proceeding, in respect of such Person or any of its Subsidiaries,
and, if such case or proceeding is not commenced by such Person or any such
Subsidiaries, such case or proceeding shall be consented to or acquiesced in by
such Person or any of its Subsidiaries or shall result in the entry of any order
for relief or shall remain for 30 days undismissed; or

             (e) take any action to authorize any of the foregoing.

                                       18
<PAGE>

       9.5   "Beneficial Owner" has the meaning assigned to such term in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular "person" (as that term is used in Section
13(d)(3) of the Exchange Act), such "person" shall be deemed to have beneficial
ownership of all securities that such "person" has the right to acquire by
conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition. The terms "Beneficially Owns" and "Beneficially Owned" shall have a
corresponding meaning.

       9.6   "Business Day" means any day other than a Legal Holiday.

       9.7   "Capital Stock" means any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock or partnership or membership interests, whether common or preferred.

       9.8   "Cash Adjustment" will be determined based on the proceeds received
by the Transfer Agent from the sale of that number of shares of Common Stock,
which the Issuer will deliver to the Transfer Agent for such purpose, equal to
the aggregate of all such fractions rounded up to the nearest whole share.

       9.9   "Closing Price" with respect to the Common Stock on any trading
day, means the last reported regular-way sale price of the Common Stock on the
NYSE, or if the Common Stock is not then listed on the NYSE, the last reported
regular-way sale price of the Common Stock on the principal stock exchange or
market of the Nasdaq Stock Market on which the Common Stock is then listed or
traded, or if the Common Stock is not then listed or traded on any such stock
exchange or market, the average of the closing bid and asked prices in the over-
the-counter market as furnished by any NYSE member firm selected from time to
time by the Issuer for that purpose.

       9.10  "Change of Control" means the occurrence of any of the following:

             (a) the direct or indirect sale, lease, transfer, conveyance or
other disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the properties or
assets of the Issuer and its Subsidiaries taken as a whole to any "person" or
"group" (as such terms are used in Section 13(d)(3) and 14(d)(2) of the Exchange
Act, and including all parent and Subsidiary companies of the person or members
of the group), including any group acting for the purpose of acquiring, holding
or disposing of securities within the meaning of Rule 13d-5(b)(1) under the
Exchange Act;

             (b) immediately prior to the adoption of a plan relating to the
liquidation or dissolution of the Issuer or XM or a successor thereto;

             (c) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" or "group" (as defined above), becomes the Beneficial Owner (other than
Motient, until Motient owns less than 50% of the Voting Stock of the Issuer),
directly or indirectly, of more than 50% of the Voting Stock of the Issuer
and/or securities to acquire such Voting Stock of the Issuer measured by voting
power rather than number of shares;

             (d) the first day on which a majority of the members of the Board
of Directors of the Issuer or XM or any successors are not Continuing Directors;
or

                                       19
<PAGE>

             (e)  immediately prior to the Issuer or XM consolidating with, or
merging with or into, any Person, or any Person consolidating with, or merging
with or into the Issuer or XM, in any such event pursuant to a transaction in
which any of the outstanding Voting Stock of the Issuer or XM, as the case may
be, or such other Person, will be converted into or exchanged for cash,
securities or other property, other than any such transaction where the Voting
Stock of the Issuer or XM, as the case may be, outstanding immediately prior to
such transaction will be converted into or exchanged for Voting Stock of the
surviving or transferee Person and will constitute a majority of the outstanding
shares of such Voting Stock of such surviving or transferee Person (immediately
after giving effect to such issuance);

             (f)  the first day on which XM ceases to be a wholly owned
subsidiary of the Issuer; or

             (g)  the Common Stock not being listed on any national securities
exchange or The Nasdaq Stock Market or system, other than for a period of not
more than 30 days during which no determination of Current Market Price or
Current Market Value is required to be made.

       9.11  "Common Stock" means the Issuer's authorized $.01 par value Class A
Common Stock.

       9.12  "Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the applicable Person who:

             (a)   was a member of such Board of Directors on the date of the
Stock Purchase Agreement or was designated for election to the Board of
Directors under the Stockholder Agreement; or

             (b)   was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors who were
members of such Board at the time of such nomination or election.

     9.13    "Conversion Date" means the date the Issuer or the Transfer Agent
receives the Conversion Notice.

     9.14    "Conversion Notice" means written notice from the Holder to the
Issuer stating that the Holder elects to convert all or a portion of the shares
of Preferred Stock represented by certificates delivered to the Issuer or the
Transfer Agent contemporaneously. The Conversion Notice will specify or include:

               (i)    The number of shares of Preferred Stock being converted by
     the Holder,

               (ii)   The name or names (with address and taxpayer
     identification number) in which a certificate or certificates for shares of
     Common Stock are to be issued,

               (iii)  A written instrument or instruments of transfer in form
     reasonably satisfactory to the Issuer or the Transfer Agent, duly executed
     by the Holder or its duly authorized legal representative, or in blank, and

               (iv)   Transfer tax stamps or funds therefor, if required
     pursuant to Section 4.6.

                                       20
<PAGE>

     9.15    "Conversion Price" shall initially be $26.50, and shall be adjusted
as provided herein.

     9.16    "Conversion Price Adjustment Events" are any of those events
specified in Section 4.2.

     9.17    "Current Market Price" means, as of any date, the average of the
daily Closing Price for the five consecutive Trading Days selected by the Board
of Directors beginning not more than 20 trading days before, and ending not
later than the date of the applicable event described in Section 4.2(d) hereof
and the date immediately preceding the record date fixed in connection with that
event.

     9.18    "Current Market Value" of Common Stock means the average of the
high and low sale prices of the Common Stock as reported on the Nasdaq National
Market or such other SEC-recognized national securities exchange or trading
system which the Issuer may from time to time designate upon which the greatest
number of shares of the Common Stock is then listed or traded, for the trading
day in question.

     9.19    "Disinterested" means when used in respect of a director, a
director who does not have an interest in the terms or nature of the transaction
to be entered into, it being understood that directors of an Affiliate of the
Person that designated a director that is not deemed to be Disinterested shall
not be deemed to be Disinterested.

     9.20    "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

     9.21    "Expiration Date" is as defined in Section 4.4(a)(ii), above.

     9.22    "Fully Diluted" means, at any given time, the number of shares of
Common Stock actually outstanding at such time, plus the number of shares of
Common Stock issuable upon the conversion, exchange, or exercise in full, of all
securities that are exercisable for, convertible into or exchangeable for shares
of Common Stock whether or not such securities are convertible into or
exercisable or exchangeable for Common Stock at such time.

     9.23    "Fundamental Change" means any transaction or event, including,
without limitation, any merger, consolidation, sale of assets, tender or
exchange offer, reclassification, compulsory share exchange or liquidation, in
which all or substantially all outstanding shares of the Issuer's Common Stock
are converted into or exchanged for stock, other securities or assets.

     9.24    "Holder" means a Person in whose name shares of Capital Stock are
registered.

     9.25    "Issuance Date" is as defined in Section 2.1

     9.26    "Issuer" means XM Satellite Radio Holdings Inc., a Delaware
corporation.

     9.27    "Junior Security" is as defined in Section 3.1, above.

     9.28    "Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place payment is to be
received are authorized by law, regulation or executive order to remain closed.
If a payment date is a Legal Holiday at a place of payment, payment may be made
at that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.

     9.29    "Liquidation Event" is as defined in Section 6.1 above.

     9.30    "Liquidation Preference" means $1,000 per share of Preferred Stock.

                                       21
<PAGE>

     9.31    "Liquidation Value" is as defined in Section 6.1 above.

     9.32    "Mandatory Redemption Price" is as defined in Section 5.3(a),
above.

     9.33    "Market Capitalization" means the product of the then-current
market price times the total number of shares of Common Stock then outstanding.

     9.34    "Market Value" means the average of the Closing Prices of the
Common Stock for the five trading days ending on the last trading day preceding
the date of occurrence of a Change of Control.

     9.35    "Notice Event" means any merger, consolidation, recapitalization,
sale of assets, tender or exchange offer, reclassification or compulsory share
exchange or liquidation.

     9.36     "Parity Security" is as defined in Section 3.1, above.

     9.37     "Person" means any individual, corporation, partnership, joint
venture, association, joint-stock issuer, interest, trust or unincorporated
organization (including any subdivision or ongoing business of any such entity
or substantially all of the assets of any such entity, subdivision or business).

     9.38    "Preferred Stock" means the Preferred Stock authorized in this
Certificate of Designation.

     9.39    "Primary Investor" means collectively, AEA XM Investors I LLC, a
Delaware limited liability company, and AEA XM Investors II LLC, a Delaware
limited liability company or any of their respective successors.

     9.40    "Redemption Agent" means that Person, if any, appointed by the
Issuer to hold funds deposited by the Issuer in trust to pay to the Holders of
shares to be redeemed having, or holding such funds in a depository institution
with, aggregate capital and surplus in excess of $10,000,000,000.

     9.41    "Redemption Date" means that certain date set forth in the
Redemption Notice on which date the redemption of the Preferred Stock is
completed.

     9.42    "Redemption Notice" means that notice to be given by the Issuer to
the Holders notifying the Holders as to the redemption, in whole or in part, of
the Preferred Stock pursuant to Article 5 hereof. The Redemption Notice shall
include the following information: (i) the Redemption Date and the time of day
on such date; (ii) the total number of shares of Preferred Stock to be redeemed
and, if fewer than all the shares held by such Holder are to be redeemed, the
number of such shares to be redeemed from such Holder; (iii) the Redemption
Price (whether to be paid in cash or shares of Common Stock); (iv) the place or
places where certificates for such shares are to be surrendered for payment of
the Redemption Price and delivery of certificates representing shares of Common
Stock (if the Issuer so chooses); (v) that dividends on the shares to be
redeemed will cease to accrue on such Redemption Date unless the Issuer defaults
in the payment of the Redemption Price; and (vi) the name of any bank or trust
company, if any, performing the duties of Redemption Agent. Redemption Notice
shall be given by first-class mail to each record Holder of the shares to be
redeemed, at such holder's address as the same appears on the books of the
Issuer.

     9.43    "Redemption Price" means that price for redemption of the Preferred
Stock established in Section 5.1(b) hereof.

                                       22
<PAGE>

     9.44    "Sale of the Issuer" means any transaction or event, including
without limitation, any merger, consolidation, sale of assets, tender or
exchange offer, reclassification, compulsory share exchange or liquidation in
which all or substantially all of outstanding shares of the Issuer's Common
Stock are sold for cash.

     9.45    "Senior Security" is as defined in Section 3.1, above.

     9.46    "Series B Preferred Stock" means the Issuer's Series B Convertible
Redeemable Preferred Stock.

     9.47    "Special Conversion Date" is as defined in Section 4.3, above.

     9.48    "Stock Purchase Agreement" means the Stock Purchase Agreement,
dated as of July 7, 2000 between the Issuer and the Investors listed therein.

     9.49    "Stockholder Agreement" means the Amended and Restated Shareholders
Agreement, dated on or about August 8, 2000 between the Issuer and various
stockholders of the Issuer, as it may be amended in accordance with its terms.

     9.50    "Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of such Person or a combination
thereof.

     9.51    The "Transfer Agent" shall be as established pursuant to Article 10
hereof.

     9.52    "Trading Day" means any business day on which the Nasdaq National
Stock Market (or any U.S. national securities exchange or quotation system on
which the Common Stock is then listed) is open for the transaction of business.

     9.53    "Voting Stock" means with respect to any Person, Capital Stock of
any class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
Person.

     9.54    "XM" means XM Satellite Radio Inc., a Delaware corporation.

10.  Transfer Agent and Registrar

             The duly appointed Transfer Agent and registrar for the Preferred
Stock shall be BankBoston, N.A. (or the Issuer for an interim period). The
Issuer may, in its sole discretion, remove the Transfer Agent in accordance with
the agreement between the Issuer and the Transfer Agent; provided that the
Issuer shall appoint a successor transfer agent who shall accept such
appointment prior to the effectiveness of such removal.

11.  Other Provisions

     11.1    With respect to any notice to a Holder of shares of the Preferred
Stock required to be provided hereunder, neither failure to mail such notice,
nor any defect therein or in the mailing thereof, to any particular Holder shall
affect the sufficiency of the notice or the validity of the proceedings referred
to in such notice with respect to the other Holders or affect the legality or
validity of any distribution, right, warrant, reclassification, consolidation,
merger, conveyance, transfer, dissolution, liquidation or winding up, or the
vote upon any such action.

                                       23
<PAGE>

Any notice which was mailed in the manner herein provided shall be conclusively
presumed to have been duly given whether or not the Holder receives the notice.

     11.2    Shares of Preferred Stock issued and reacquired will be retired and
canceled promptly after reacquisition thereof and, upon compliance with the
applicable requirements of Delaware law, have the status of authorized but
unissued shares of preferred stock of the Issuer undesignated as to series and
may with any and all other authorized but unissued shares of preferred stock of
the Issuer be designated or redesignated and issued or reissued, as the case may
be, as part of any series of preferred stock of the Issuer except that any
issuance or reissuance of shares of Preferred Stock must be in compliance with
this Certificate of Designation.

     11.3    In the Issuer's discretion, no fractional shares of Common Stock or
securities representing fractional shares of Common Stock will be issued upon
conversion, redemption, or as dividends payable in the Preferred Stock. Any
fractional interest in a share of Common Stock resulting from conversion,
redemption, or dividend payment will be paid in cash based on the last reported
sale price of the Common Stock on the Nasdaq National Stock Market (or any
national securities exchange or authorized quotation system on which the Common
Stock is then listed) at the close of business on the trading day next preceding
the date of conversion or such later time as the Issuer is legally and
contractually able to pay for such fractional shares.

     11.4    The shares of Preferred Stock shall be issuable in whole shares.

     11.5    All notice periods referred to herein shall commence on the date of
the mailing of the applicable notice.

     11.6    Notwithstanding anything to the contrary contained herein, the
Issuer and the Holders of the Preferred Stock shall not take any action pursuant
to this Certificate of Designation which would constitute or result in
assignment of any governmental approval, authorization, license, or permit
issued by the Federal Communications Commission ("FCC License") or any change of
control of the holder of any FCC License, if such assignment of the FCC License
or transfer of control would require under then existing law (including the
Communications Act of 1934, as amended, and the rules, regulations, policies and
decisions of the FCC), the prior approval of the FCC, without first obtaining
such approval of the FCC.

                                       24
<PAGE>

          IN WITNESS WHEREOF, XM Satellite Radio Holdings Inc. caused this
Certificate of Designation to be signed this 8th day of August, 2000.

                              XM SATELLITE RADIO HOLDINGS INC.

                              By:/s/ Joseph M. Titlebaum
                                 ------------------------------
                                 Name:  Joseph M. Titlebaum
                                 Title: Senior Vice President, General
                                        Counsel and Secretary

                                       25<PAGE>

                                                                    Exhibit 10.1
--------------------------------------------------------------------------------

                             AMENDED AND RESTATED

                            SHAREHOLDERS AGREEMENT

                                 by and among

                       XM SATELLITE RADIO HOLDINGS INC.

                       AND VARIOUS SHAREHOLDERS THEREOF

                             Dated August 8, 2000

--------------------------------------------------------------------------------
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               Page
                                                                                                               ----
<S>                                                                                                            <C>
ARTICLE I.  DEFINITIONS...................................................................................        2
   Section 1.1    Definitions.............................................................................        2

ARTICLE II.  CONDUCT OF BUSINESS; NON-COMPETITION; COOPERATION OF
SHAREHOLDERS..............................................................................................        7
   Section 2.1    Conduct of Business.....................................................................        8
   Section 2.2    Non-Competition.........................................................................        8
   Section 2.3    Cooperation of Shareholders.............................................................        8

ARTICLE III.  RESTRICTIONS ON TRANSFER....................................................................        8
   Section 3.1    Initial Transfer Restrictions for Investors.............................................        8
   Section 3.2    Transfers and Assignment by Motient.....................................................        9
   Section 3.3    Permitted Transfers.....................................................................       10
   Section 3.4    Endorsement of Stock Certificates.......................................................       10
   Section 3.5    Regulatory Approvals; Opinions..........................................................       11

ARTICLE IV.  CONVERSION OF CLASS B COMMON STOCK...........................................................       12
   Section 4.1    Conversion of Class B Common Stock into Class A Common Stock............................       12
   Section 4.2    Submission of Proposal for Conversion to Public Stockholders............................       12

ARTICLE V.  CORPORATE GOVERNANCE; VOTING AGREEMENT........................................................       12
   Section 5.1    Board of Directors......................................................................       12
   Section 5.2    Observation Rights......................................................................       14
   Section 5.3    Removal of Directors....................................................................       15
   Section 5.4    Operational Involvement of Clear Channel, DIRECTV and the TCM Group.....................       15
   Section 5.5    Shareholder Actions.....................................................................       15

ARTICLE VI.  CERTAIN REPRESENTATIONS......................................................................       15
   Section 6.1    Existence and Power.....................................................................       15
   Section 6.2    Due Authorization; No Contravention.....................................................       16
   Section 6.3    Binding Effect..........................................................................       16

ARTICLE VII.  TAG-ALONG RIGHTS FOR PRIVATE TAG-ALONG SALE; right of first
OFFER; ANTIDILUTION PROTECTION............................................................................       16
   Section 7.1    Tag Along Rights........................................................................       16
   Section 7.2    Right of First Refusal..................................................................       17
   Section 7.3    Ratchet Antidilution Protection.........................................................       18

ARTICLE VIII.  MISCELLANEOUS..............................................................................       19
   Section 8.1    Amendment and Restatement...............................................................       19
   Section 8.2    TCM Agreement...........................................................................       19
   Section 8.3    Notices.................................................................................       19
</TABLE>

                                      -i-
<PAGE>

<TABLE>
<S>                                                                                                            <C>
   Section 8.4    Waiver and Amendment....................................................................       19
   Section 8.5    Specific Performance....................................................................       20
   Section 8.6    GOVERNING LAW...........................................................................       20
   Section 8.7    Parties In Interest.....................................................................       20
   Section 8.8    Severability of Provisions..............................................................       20
   Section 8.9    Plural; Singular........................................................................       21
   Section 8.10   Counterparts............................................................................       21
   Section 8.11   Descriptive Headings....................................................................       21
   Section 8.12   Future Assurances.......................................................................       21
   Section 8.13   Termination.............................................................................       21
</TABLE>

                                     -ii-
<PAGE>

                             AMENDED AND RESTATED
                            SHAREHOLDERS AGREEMENT

     This Amended and Restated Shareholders Agreement, dated as of August 8,
2000 (this "Agreement"), is hereby entered into by and among XM Satellite Radio
            ---------
Holdings Inc., a corporation duly organized under the laws of the State of
Delaware (the "Company"); Motient Corporation, a corporation duly organized
               -------
under the laws of the State of Delaware ("Motient"); the Baron Asset Fund series
                                          -------
("Baron Asset") and the Baron iOpportunity Fund series ("Baron iOpportunity") of
  -----------                                            ------------------
Baron Asset Fund, a business trust organized under the laws of the Commonwealth
of Massachusetts, and the Baron Capital Asset Fund series of the Baron Capital
Funds Trust ("Baron Capital" and collectively with Baron Asset and Baron
              -------------
iOpportunity, "Baron"), a business trust organized under the laws of the State
               -----
of Delaware; Clear Channel Investments, Inc., a corporation duly organized under
the laws of the State of Nevada ("Clear Channel"); Columbia XM Radio Partners,
                                  --------------
LLC, a limited liability company duly organized under the laws of the
Commonwealth of Virginia ("Columbia Radio Partners"); DIRECTV Enterprises, Inc.
                           -----------------------
a corporation duly organized under the laws of the State of Delaware
("DIRECTV"); General Motors Corporation, a corporation duly organized under the
  -------
laws of the State of Delaware ("GM"); Madison Dearborn Capital Partners III,
                                --
L.P. ("Madison Capital"), Madison Dearborn Special Equity III, L.P. ("Madison
       ---------------                                                -------
Equity"), Special Advisors Fund I, LLC ("Madison Advisors" and, collectively
------                                   ----------------
with Madison Capital and Madison Equity, each an entity duly organized under the
laws of the State of Delaware, "Madison"); Telcom-XM Investors, L.L.C., a
                                -------
limited liability company duly organized under the laws of the State of Delaware
("Telcom"); AEA XM Investors I LLC and AEA XM Investors II LLC, each a limited
  ------
liability company organized under the laws of the State of Delaware
(individually or collectively "AEA XM"), Columbia XM Satellite Partners III,
                               ------
LLC, a limited liability company duly organized under the laws of the
Commonwealth of Virginia ("Columbia Satellite Partners"), Columbia Capital
                           ---------------------------
Equity Partners III (QP), L.P., a limited partnership company duly organized
under the laws of the State of Delaware ("Columbia Equity Partners", and
                                          ------------------------
collectively with Columbia Radio Partners and Columbia Satellite Partners,
"Columbia"), and American Honda Motor Co, Inc., a corporation duly organized
---------
under the laws of the State of California ("Honda"). Baron Asset, Clear Channel,
                                            -----
Columbia Radio Partners, DIRECTV, GM, Madison and Telecom, each in its capacity
as a holder of securities in the Company other than Series C Convertible
Preferred Stock (as defined below) or Common Stock (as defined below) issuable
upon conversion thereof, are collectively referred to herein as the "Original
                                                                     --------
Investors."  AEA XM, Baron, Columbia Satellite Partners, Columbia Equity
---------
Partners, Columbia Radio Partners, DIRECTV, Honda, Madison Capital and Madison
Equity, each in its capacity as a holder of the Series C Convertible Preferred
Stock or Common Stock issuable upon conversion thereof, are collectively
referred to herein as the "Series C Investors."  The Original Investors and the
                           ------------------
Series C Investors are collectively referred to herein as the "Investors." The
                                                               ---------
Company, Motient, and the Investors are collectively referred to herein as the
"Parties."
 --------
<PAGE>

                                  WITNESSETH
                                  ----------

     WHEREAS, Motient and the Original Investors are parties to a Shareholders
Agreement, dated July 7, 1999 (the "1999 Shareholders Agreement");
                                    ---------------------------

     WHEREAS, the Company owns one hundred percent (100%) of the issued and
outstanding shares of common stock of XM Satellite Radio Inc. ("XM");
                                                                --

     WHEREAS, XM Radio Inc., a wholly owned subsidiary of XM, holds a license
awarded by the U.S. Federal Communications Commission for the establishment of a
Satellite Digital Audio Radio Service ("SDARS") system in the United States;
                                        -----

     WHEREAS, the Series C Investors have entered into a purchase agreement with
the Company, dated as of July ___, 2000 (the "Series C Purchase Agreement"),
                                              ---------------------------
under which the Series C Investors are purchasing Series C Convertible
Redeemable Preferred Stock, par value $.01 per share (the "Series C Convertible
                                                           --------------------
Preferred Stock"), on the terms and conditions described in the Series C
---------------
Purchase Agreement; and

     WHEREAS, the Company, Motient, and each of the Investors believe it to be
in the best interests of the Company, Motient, and the mutual best interests of
each of the Investors to set forth herein their agreements with respect to
certain matters related to the ownership and corporate governance of the Company
by amending and restating the 1999 Shareholders Agreement.

     NOW, THEREFORE, in consideration for the mutual covenants contained herein,
the adequacy, receipt, and sufficiency of which are hereby acknowledged, the
undersigned hereby agree as follows:

                                  ARTICLE I.
                                  ----------

                                  DEFINITIONS
                                  -----------

     Section 1.1  Definitions.  Capitalized terms not defined herein have the
                  -----------
respective meanings ascribed to them in the Series C Purchase Agreement.

     (a)  Accredited Investor: has the meaning specified in Rule 501 of
          -------------------
Regulation D promulgated under the Securities Act.

     (b)  Affiliate: means, as applied to any Person, any other Person directly
          ---------
or indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise. For purposes of
Sections 3.3, 5.1, 7.1 and 7.2, a member of a limited liability company or a
partner of a partnership shall be deemed an Affiliate of said company or
partnership.

                                       2
<PAGE>

     (c)  Agreement:  has the meaning specified in the Preamble.
          ---------

     (d)  Antidilution Protection: means any right to have the relevant price or
          -----------------------
price ratio for the conversion of securities of the Company into any class of
common stock of the Company, or the number of securities issuable upon such
conversion, adjusted where the Company sells common stock (or securities
convertible into or exercisable or exchangeable for common stock) for a price
below a specified dollar amount that is less than the then applicable conversion
price of the securities subject to the adjustment or below the market price (as
defined in the terms of such right) of the common stock. As used herein,
Antidilution Protection is not intended to include stock splits,
reorganizations, distributions of stock or rights to all holders of common stock
or similar transactions.

     (e)  Baron: has the meaning specified in the Preamble.
          -----

     (f)  Baron Asset: has the meaning specified in the Preamble.
          -----------

     (g)  Baron Capital: has the meaning specified in the Preamble.
          -------------

     (h)  Baron iOpportunity: has the meaning specified in the Preamble.
          ------------------

     (h)  Board or Board of Directors: means the Board of Directors of the
          ---------------------------
Company or a committee consisting of one or more directors lawfully exercising
the powers of the Board.

     (i)  Business Day: means any day other than a Saturday, Sunday or any other
          ------------
day on which commercial banks are authorized or required by law to be closed in
New York City or the District of Columbia.

     (j)  Capital Stock: means any and all of the Company's shares, interests,
          -------------
warrants, options, rights to acquire equity or equity-linked securities of the
Company, participations or other equivalents (however designated, whether voting
or non-voting) in equity of the Company, whether now outstanding or issued
subsequently hereto, including, without limitation, all series and classes of
Common Stock and preferred stock of the Company, and all Convertible Securities,
including the Series A Convertible Preferred Stock, the Series B Convertible
Preferred Stock and the Series C Convertible Preferred Stock.

     (k)  Change of Control: means a transfer of control of XM Radio Inc. which
          -----------------
would require approval by the FCC under any terms of XM Radio Inc.'s SDARS
license.

     (l)  Charter Documents: has the meaning specified in Section 5.5(b).
          -----------------

     (m)  Class A Common Stock: means the Class A Common Stock, par value $0.01
          --------------------
per share, of the Company having one (1) vote per share.

     (n)  Class B Common Stock: means the Class B Common Stock, par value $0.01
          --------------------
per share, of the Company having three (3) votes per share.

     (o)  Class C Common Stock: means the Class C Common Stock, par value $0.01
          --------------------
per share, of the Company having zero (0) votes per share.

                                       3
<PAGE>

     (p)  Clear Channel: has the meaning specified in the Preamble.
          -------------

     (q)  Clear Channel Operational Assistance Agreement:  means the operational
          ----------------------------------------------
assistance agreement dated on or about June 7, 1999, between Clear Channel and
the Company.

     (r)  "Columbia" has the meaning specified in the Preamble.
           --------

     (s)  "Columbia Equity Partners" has the meaning specified in the Preamble.
           ------------------------

     (t)  "Columbia Radio Partners" has the meaning specified in the Preamble.
           -----------------------

     (u)  "Columbia Satellite" has the meaning specified in the Preamble.
           ------------------

     (v)  Commencement of Commercial Operations: means the commencement of
          -------------------------------------
commercial operations of XM as publicly announced by it and as indicated in a
filing by the Company with the FCC of which the Company shall notify the
Investors.

     (w)  Commission: means the Securities and Exchange Commission or any other
          ----------
Federal agency at the time administering the Securities Act.

     (x)  Common Stock: means all classes and series of the common stock of the
          ------------
Company, any stock into which such common stock shall have been changed or
converted or any stock resulting from any capital reorganization or
reclassification of such common stock, and all other stock of any class or
classes (however designated) of the Company, the holders of which have the
right, without limitation as to amount, either to all or to a share of the
balance of current dividends and liquidating dividends after the payment of
dividends and distributions of any shares entitled to preference.

     (y)  Common Stock Deemed Outstanding: means, at any given time, the number
          -------------------------------
of shares of Common Stock actually outstanding at such time, plus the number of
shares of Common Stock issuable upon the conversion, exchange, or exercise in
full, of all Convertible Securities whether or not the Convertible Securities
are convertible into or exercisable or exchangeable for Common Stock at such
time.

     (z)  Communications Act: has the meaning specified in Section 2.1.
          ------------------

     (aa) Company:  has the meaning specified in the Preamble.
          -------

     (bb) Convertible  Securities:  means securities or obligations that are
          -----------------------
exercisable for, convertible into or exchangeable for shares of Common Stock.
The term includes options, warrants or other rights to subscribe for or purchase
Common Stock or to subscribe for or purchase other securities or obligations
that are convertible into or exercisable or exchangeable for Common Stock,
including, without limitation, the Series A Convertible Preferred Stock, the
Series B Convertible Preferred Stock and the Series C Convertible Preferred
Stock.

     (cc) DBS:  means direct broadcast satellite service.
          ---

     (dd) DIRECTV: has the meaning specified in the Preamble.
          -------

                                       4
<PAGE>

     (ee) DIRECTV Operational Assistance Agreement: means the operational
          ----------------------------------------
assistance agreement dated on or about June 7, 1999 between DIRECTV, Inc. (an
Affiliate of DIRECTV) and XM.

     (ff) Excluded Securities: means any (a) Common Stock or Convertible
          --------------------
Securities outstanding as of the date hereof and any Common Stock issuable upon
exercise of such Convertible Securities, (b) Common Stock or Convertible
Securities issued under a Qualifying Stock Plan and (c) Common Stock or
Convertible Securities issued to Persons who are not Affiliates of the Company
as partial consideration for senior debt financing, equipment lease financing or
underwritten High Yield Debt financing pursuant to a registered public offering
under the Securities Act or pursuant to Rule 144A thereunder.

     (gg) FCC:  means the Federal Communications Commission, or successor agency
          ---
thereof.

     (hh) FCC Approval: means approval by the FCC of the transfer of control of
          ------------
the Company from Motient to a diffuse group of shareholders.

     (ii) GM:  has the meaning specified in the Preamble.
          --

     (jj) High Yield Debt: means secured or unsecured debt securities issued by
          ---------------
the Company or a Subsidiary of the Company in a registered public offering or an
offering to Qualified Institutional Buyers and/or institutional Accredited
Investors under Rule 144A of the Securities Act of at least $50 million after
the Series C Closing Date, with or without attached warrants or quasi-equity
rights issued by the Company or a Subsidiary of the Company.

     (kk) Holders: means the Investors and Motient and their respective
          -------
Permitted Transferees.

     (ll) Honda: has the meaning specified in the Preamble.
          -----

     (mm) Investors: has the meaning specified in the Preamble and their
          ---------
Permitted Transferees.

     (nn) Madison:  has the meaning specified in the Preamble.
          -------

     (oo) Motient:  has the meaning specified in the Preamble.
          -------

     (pp) Non-Public Capital Stock: means Capital Stock which the Company
          ------------------------
intends to issue without registration under the Securities Act.

     (qq) Notice of Proposed Issuance: has the meaning specified in Section 7.
          ---------------------------

     (rr) Offered Non-Public Capital Stock: has the meaning specified in
          --------------------------------
Section 7.

     (ss) Participation Notice: has the meaning specified in Section 3.2(c).
          --------------------

     (tt) Parties:  has the meaning specified in the Preamble.
          -------

                                       5
<PAGE>

     (uu)   Permitted Transferees: means each transferee of any Capital Stock,
            ---------------------
with the transfer being made in compliance with the provisions of Article III
hereof.

     (vv)   Person: means any individual, partnership, corporation, joint
            ------
venture, limited liability company, association, trust, unincorporated
organization, or a government or agency or political subdivision thereof.

     (ww)   Primary Series C Investor: means AEA XM Investors I LLC and AEA XM
            -------------------------
Investors II LLC, individually or collectively, or any of its/their successors.

     (xx)   Private Financing Transaction: means a private placement or similar
            -----------------------------
transaction which provides financing to the Company in the amount of $25,000,000
or more, excluding acquisitions and other strategic transactions in which the
Company receives consideration other than cash.

     (yy)   Private Tag-Along Sale: means a sale or other disposition to a
            ----------------------
purchaser or purchasers (including any "person" or "group" (as such terms are
used in Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934,
as amended, and including any group acting for the purpose of acquiring, holding
or disposing of securities within the meaning of Rule 13d-5(b)(1) under the
Securities Exchange Act of 1934, as amended)), other than Motient or its
subsidiaries (until Motient and its subsidiaries beneficially own less than 50%
of the voting securities of the Company), of Capital Stock where either before
or after the sale the purchaser or purchasers, together with their Affiliates,
has beneficial ownership (as defined in Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended, but assuming all rights to acquire
securities by conversion or exercise are currently exercisable and not subject
to conditions on exercise) of greater than 30% of the voting securities of the
Company.

     (zz)   Qualified Institutional Buyer: has the meaning specified in Rule
            -----------------------------
144A promulgated under the Securities Act.

     (aaa)  Qualifying Stock Plan: means, collectively, all approved stock
            ---------------------
incentive plans for employees, consultants and non-employee directors, provided
that (i) issuances under a Qualifying Stock Plan do not exceed 10% in the
aggregate of the shares of Common Stock Deemed Outstanding and (ii) such
Qualifying Stock Plan has been approved by a compensation committee of the Board
of Directors or the full Board of Directors, which, in either case, shall
include at least one director designated by the Original Investors and which
approval shall include the approval of such director so designated.

     (bbb)  Registration Statement: means a registration statement filed with
            ----------------------
the Commission pursuant to the Securities Act.

     (ccc)  Resale-Restriction Termination Date: has the meaning specified in
            -----------------------------------
Section 3.1

     (ddd)  Right of First Offer: means the rights granted to each Holder
            --------------------
pursuant to Section 7.2 hereof.

     (eee)  SDARS:  has the meaning specified in the Recitals.
            -----

                                       6
<PAGE>

     (fff)  Securities Act: means the Securities Act of 1933, as amended, or any
            --------------
similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.

     (ggg)  Series A Convertible Preferred Stock: means the Series A Convertible
            ------------------------------------
Preferred Stock, par value $1.00 per share, of the Company having zero (0) votes
per share.

     (hhh)  Series B Convertible Preferred Stock: means the Series B Convertible
            ------------------------------------
Redeemable Preferred Stock, par value $.01 per share, of the Company having zero
(0) votes per share.

     (iii)  Series C Closing Date: means the date of closing under the Series C
            ---------------------
Purchase Agreement.

     (jjj)  Series C Convertible Preferred Stock: has the meaning specified in
            ------------------------------------
the Recitals, consisting of Series C Convertible Redeemable Preferred Stock, par
value $.01 per share, such series having the same voting rights as the Common
Stock determined on an as converted basis.

     (kkk) Series C Purchase Agreement: has the meaning specified in the
           ---------------------------
Preamble.

     (lll)  Subsidiary: means, with respect to any Person, any corporation,
            ----------
association or other business entity of which more than fifty percent (50%) of
the voting power of the outstanding Capital Stock is owned, directly or
indirectly, by such Person or one or other Subsidiaries of such Person.

     (mmm)  TCM Group:  means Columbia, Madison and Telcom.
            ---------

     (nnn)  Telcom:  has the meaning specified in the Preamble.
            ------

     (ooo)  TCM:  means TCM, LLC, a Delaware limited liability company.
            ---

     (ppp)  TCM Operational Assistance Agreement: means the operational
            ------------------------------------
assistance agreement dated on or about the date hereof between TCM and the
Company.

     (qqq)  Transfer Notice: has the meaning specified in Section 3.2(c)
            ---------------

     (rrr)  Unallocated Portion: has the meaning specified in Section 3.2(c).
            -------------------

     (sss)  XM:  has the meaning specified in the Preamble.
            --

                                  ARTICLE II.
                                  -----------

             CONDUCT OF BUSINESS; NON-COMPETITION; COOPERATION OF
             ----------------------------------------------------
                                 SHAREHOLDERS
                                 ------------

     Section 2.1  Conduct of Business. The Company shall act as the holding
                  -------------------
company for XM and its Subsidiaries. XM and the Company shall, and Motient shall
cause XM, its

                                       7
<PAGE>

Subsidiaries and the Company to, conduct their business in such manner as to
comply with all applicable laws and regulations (including but not limited to
the Communications Act of 1934, as amended (the"Communications Act"), and the
                                                -------------------
rules and regulations of the FCC).

     Section 2.2  Non-Competition. Motient agrees not to compete with XM or the
                  ---------------
Company or its Subsidiaries in the SDARS business in the United States for so
long as Motient holds at least 5% of the Common Stock (assuming full conversion
of all of Motient's holdings of Capital Stock which are convertible into Common
Stock) and for a period of three years following the date on which Motient
ceases to hold at least 5% of the Common Stock (assuming full conversion of all
of Motient's holdings of Capital Stock which are convertible into Common Stock).
Notwithstanding the foregoing, nothing contained herein shall limit Motient's
rights to fulfill its obligations under law as a common carrier licensed by the
FCC with respect to the selling of its capacity to third party resellers for any
business purpose, including those which may compete with the business of XM and
the Company or any Subsidiary of the Company or XM.

     Section 2.3  Cooperation of Shareholders. Motient, the Company and the
Investors agree to work cooperatively in connection with the preservation,
maintenance and any extension or renewal by XM Radio Inc. of its SDARS license
and to provide (and to cause the Company to provide), with reasonable
promptness, such information, and assist in making all filings, as may be
required or appropriate in accordance with the Communications Act, FCC rules,
regulations, and processes to preserve, maintain and extend or renew XM Radio
Inc.'s SDARS license.

                                 ARTICLE III.
                                 ------------

                           RESTRICTIONS ON TRANSFER
                           ------------------------

     Section 3.1  Initial Transfer Restrictions for Investors.
                  -------------------------------------------

     Prior to July 7, 2000 (the "Resale-Restriction Termination Date"), each
Investor may transfer any shares of Capital Stock held by it only (i) to the
Company, (ii) pursuant to a Registration Statement that has been declared
effective under the Securities Act, (iii) for so long as such Capital Stock is
eligible for resale pursuant to Rule 144A under the Securities Act, to a person
it reasonably believes is a Qualified Institutional Buyer that purchases for its
own account or for the account of a Qualified Institutional Buyer to whom notice
is given that the transfer is being made in reliance on Rule 144A under the
Securities Act, (iv) pursuant to offers and sales that occur outside the United
States within the meaning of Regulation S under the Securities Act, (v)
commencing only with the period which is six months after the date of the
issuance of such Capital Stock, to an Accredited Investor purchasing for its own
account or for the account of such an Accredited Investor, (vi) pursuant to any
other available exemption from the registration requirements of the Securities
Act, or (vii) pursuant to Section 7.1 of this Agreement, subject in each of the
foregoing cases to any requirement of law that the disposition of its property
or the property of any investor account or accounts be at all times within its
or their control. The foregoing restrictions on resale will not apply subsequent
to the Resale-Restriction Termination Date. If any resale or other transfer of
any Capital Stock is proposed to be made pursuant to clause (v) above prior to
the Resale-Restriction Termination Date, the transferor shall deliver a

                                       8
<PAGE>

letter from the transferee to the Company in form and substance reasonably
satisfactory to the Company, which shall provide, among other things, that the
transferee is an Accredited Investor that is acquiring such Capital Stock for
investment and not for resale or distribution in violation of the Securities
Act. Each Investor acknowledges that the Company reserves the right prior to any
offer, sale or other transfer of the Capital Stock pursuant to clauses, (iii),
(iv), (v) or (vi) above to require the delivery to the Company of an opinion of
counsel to the Investor, certifications and/or other information reasonably
satisfactory to the Company.

     Section 3.2  Transfers and Assignment by Motient.
                  -----------------------------------

     (a)  Subject to the requirements of Article IV hereof, Motient shall not be
permitted to transfer any of its shares of Capital Stock or other securities of
the Company to any Person (excluding 1,314,914 shares of Capital Stock
transferred to Baron Asset in January 2000) until the earlier of (i) the
Commencement of Commercial Operations, or (ii) October 8, 2000; provided that no
                                                                -------- ----
shares of Class B Common Stock may be transferred at any time until such shares
are converted to shares of Class A Common Stock.

     (b)  Notwithstanding Section 3.2(a) and subject to Section 3.3(b) and (c)
and Section 7.1, Motient shall have the right to (i) assign or transfer its
interest in the Company to any Person (1) if such Person is an Affiliate of
Motient or (2) if such Person owns 10% or more of the outstanding Common Stock
of Motient; provided that such assignment or transfer complies with applicable
law and regulations, including the Communications Act and the FCC rules and
regulations, and, in the case of an assignment or transfer to a 10% or more
holder, Motient's right to effect such assignment or transfer shall be subject
to Motient's furnishing 30 days prior written notice to the Company of any such
assignment or transfer, compliance with the provisions of Section 3.3(c) and
Section 7.1 and any such assignment or transfer may be subject to disallowance
if the Board reasonably determines and provides notice to Motient during the 30-
day period referred to above that the proposed assignment or transfer would (x)
result in a sale, assignment or transfer to a competitor of the Company for
SDARS service in the United States, (y) be reasonably likely to materially
adversely affect the Company's prospects for obtaining from the FCC or other
regulatory bodies or maintaining any necessary licenses or consents for the
Company's SDARS system; or (z) be reasonably likely to materially adversely
affect the Company's ability or prospects for successfully implementing or
operating its SDARS system, and (ii) pledge or hypothecate, in connection with
its customary bona fide financing arrangements (including under its current
guaranteed bank facilities), Capital Stock and any other interest in the
Company.

     (c)  In the event that Motient proposes to transfer all or a portion of its
interest in the Company in accordance with Section 3.2(b)(i)(2) hereof to a
Person who is not an Affiliate, Motient will provide notice thereof (including
the proposed terms thereof) (the "Transfer Notice"), at least ten (10) Business
                                  ---------------
Days prior to the proposed transfer, to each Investor whereupon each Investor
shall have the right to purchase, at the same price and upon the same material
terms and conditions set forth in the Transfer Notice, a pro rata portion of
such interest based upon such Investor's portion of the Common Stock Deemed
Outstanding held by all Investors. Each Investor desiring to participate in such
purchase shall provide Motient and each other Investor notice of its agreement
to participate (the "Participation Notice") within ten (10) Business Days of
                     --------------------
receipt of the Transfer Notice with respect to its pro rata portion of the

                                       9
<PAGE>

proposed transfer. In the event that one or more of the other Investors does not
provide a timely Participation Notice, whether and to the extent to which such
Investor would acquire any remaining, unallocated portion of the proposed
transfer (the "Unallocated Portion"), the Unallocated Portion shall be allocated
               -------------------
in pro rata proportion based upon the Common Stock Deemed Outstanding held by
each of the Investors who submits a Participation Notice to the extent of such
Investor's indicated willingness to acquire any Unallocated Portion as provided
in such Investors' Participation Notice.

     Section 3.3  Permitted Transfers.
                  -------------------

     (a)  Notwithstanding the restrictions on transfer set forth elsewhere in
this Article III (other than Sections 3.4 and 3.5), each Investor shall have the
right to transfer or assign its holdings of Capital Stock to an Affiliate of
such Investor, and each Investor shall be able to pledge or hypothecate, in
connection with bona fide financing arrangements, its Capital Stock and any
other interest in the Company; provided, however that no transfer to an
                               --------  -------
Affiliate shall be effective if the purpose or intent of such transfer is to
circumvent the restrictions on transfers to non-Affiliates set forth herein.

     (b)  Transfers and encumbrances of Capital Stock may only be made in strict
compliance with all applicable terms of this Agreement. Any purported transfer
or encumbrance of Capital Stock that does not so comply with all applicable
provisions of this Agreement shall be void and ineffective and the Company shall
not recognize nor be bound by any such purported transfer or encumbrance and any
such purported transfer shall have no effect on the stock transfer books of the
Company.

     (c)  Any assignment or transfer of an interest in the Company pursuant to
the terms of this Agreement, other than in a public offering of the Company's
Common Stock or an offering pursuant to Rule 144 or 145 under the Securities
Act, shall be subject to the assumption by the transferee of the terms and
conditions set forth in this Agreement applicable to the transferor.

     Section 3.4  Endorsement of Stock Certificates. Conformed copies of this
                  ---------------------------------
Agreement shall be filed with the secretary of the Company and kept with the
records of the Company at its principal office. Until such time that the
Company, based on an opinion of counsel, shall have determined otherwise, an
officer of the Company shall endorse each certificate representing the Capital
Stock heretofore or hereafter issued by the Company to any Holder by causing to
be placed on the back thereof the following legend:

         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

                                      10
<PAGE>

         FROM, OR NOT SUBJECT TO, REGISTRATION UNDER THE
         SECURITIES ACT.

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE
         ARE THE SUBJECT OF A CERTAIN SHAREHOLDERS
         AGREEMENT WHICH, AMONG OTHER THINGS, CONTAINS
         RESTRICTIONS ON THE TRANSFER OF SUCH
         SECURITIES. A COPY OF THE SHAREHOLDERS
         AGREEMENT IS AVAILABLE FOR INSPECTION AT THE
         PRINCIPAL OFFICE OF THE COMPANY.

     Upon registration of any Capital Stock under the Securities Act, the
Company shall remove such legend from the certificate(s) representing such
Capital Stock promptly upon request of the Holder thereof and delivery of such
certificate(s) to the Company. The Company shall, upon presentation of a
certificate representing shares of the Company's Capital Stock with respect to
which one or both of the foregoing restrictions have expired or are not
applicable, together with such evidence (including, when such an opinion would
customarily be required by the Company of its stockholders, an opinion of
counsel obtained at the Holder's expense and reasonably satisfactory to the
Company) of such lapse or nonapplicability as the Company would reasonably
request of stockholders who are similarly situated, promptly cause to be issued
a replacement certificate for such shares of the Company's Capital Stock without
the applicable restrictive legend.

     Section 3.5  Regulatory Approvals; Opinions.
                  ------------------------------

     (a)  To the extent that any regulatory approval, notification or other
submission or procedure is required or customarily provided in connection with
the exercise of any right or obligations as set forth in this Agreement with
respect to the transfer or assignment of Capital Stock (including, but not
limited to, FCC approvals (if required) and applicable securities laws), such
transfer or assignment of Capital Stock pursuant to this Agreement will be
delayed and will only take place after such approval, notification or other
submission or procedure has been obtained, submitted or completed.

     (b)  Prior to the transfer of any Capital Stock, the Company at its option
may require an opinion of counsel reasonably satisfactory to the Company to the
effect that such transfer is in compliance with, or exempt from, the
registration requirements of the Securities Act.

                                  ARTICLE IV.
                                  -----------

                      CONVERSION OF CLASS B COMMON STOCK
                      ----------------------------------

     Section 4.1  Conversion of Class B Common Stock into Class A Common Stock.
                  ------------------------------------------------------------
Either (i) at the discretion of Motient or (ii) at the direction of the holders
of a majority of the shares of Common Stock Deemed Outstanding (excluding any
shares held by Motient and its Affiliates other than Baron Asset, GM, Hughes or
DIRECTV), which majority shall include at

                                      11
<PAGE>

least 20% of the public holders of Class A Common Stock, Motient shall convert
all of its shares of Class B Common Stock into shares of Class A Common Stock,
upon the receipt of FCC Approval; provided that Motient shall not be obligated
                                  -------------
to convert any shares of Class B Common Stock into shares of Class A Common
Stock unless such conversion, together with the conversion of all Convertible
Securities the Company reasonably believes would be converted at such time,
would result in a Change of Control. Each of Motient, the Company and the
Investors hereby agrees to prepare and file any and all applications, and
furnish any information, required by the Communications Act or applicable FCC
rules, regulations and policies in order to obtain the FCC Approval and shall
agree to use all reasonable commercial efforts in order to obtain the FCC
Approval.

     Section 4.2  Submission of Proposal for Conversion to Public Stockholders.
                  ------------------------------------------------------------
At the direction of two (2) of the four (4) members of the Board of Directors
designated by the Investors pursuant to Section 5.1, the Company will insert
into any proxy statement scheduled by the Company to be delivered to the holders
of Class A Common Stock, holders of Series C Convertible Preferred Stock and
holders of any other stock that votes with the Class A Common Stock as a single
class, other than the Class B Common Stock ("Non-Series B Voting Stock")
appropriate material to provide such holders of Non-Series B Voting Stock with
the opportunity to vote to direct the Company to cause Motient to convert its
shares of Class B Common Stock into shares of Class A Common Stock.

                                   ARTICLE V.
                                   ----------

                     CORPORATE GOVERNANCE; VOTING AGREEMENT
                     --------------------------------------

     Section 5.1  Board of Directors.
                  ------------------

     (a)   Prior to the receipt of FCC Approval, the Board of Directors and the
board of directors of XM and any other material subsidiary (collectively, the
"Boards of Directors") shall consist of eleven (11) members, of whom:
--------------------

     (i)   three (3) members shall be designated by the Original Investors, (x)
one (1) of whom shall be a designee of Clear Channel, (y) one (1) of whom shall
be a designee of GM or DIRECTV, as those two Parties may agree, and (z) one (1)
of whom shall be a designee of Telcom;

     (ii)  five (5) members shall be designated by Motient, who shall include
(x) the Chairman and (y) the President and the CEO of the Company (who shall be
selected by Motient);

     (iii) two (2) members shall be independent directors of recognized industry
expertise and stature, of whom (x) one (1) member shall be approved by Motient
and (y) the other of whom shall be approved by the Investors who hold a majority
of the Common Stock Deemed Outstanding that is held by Investors; and

     (iv)  one (1) member shall be designated by the Primary Series C Investor
who shall be appointed to any Audit Committee and Executive Committee (subject
to meeting the Nasdaq Audit Committee and Charter requirements).

                                      12
<PAGE>

     (b)    Upon receipt of the FCC Approval, the Boards of Directors shall
consist of ten (10) members, of whom:

     (i)    three (3) members shall be designated by the Original Investors, (x)
one (1) of whom shall be a designee of Clear Channel, (y) one (1) of whom shall
be a designee of GM or DIRECTV, as those two Parties may agree, and (z) one (1)
of whom shall be a designee of Telcom;

     (ii)   three (3) members shall be designated by Motient;

     (iii)  one (1) member shall be the President and CEO of the Company; and

     (iv)   two (2) members shall be independent directors of recognized
industry expertise and stature both of whom shall be approved by Motient and the
Investors who hold a majority of the Common Stock Deemed Outstanding that is
held by the Investors; and

     (v)    one (1) member shall be designated by the Primary Series C Investor
who shall be appointed to any Audit Committee and Executive Committee (subject
to meeting the Nasdaq Audit Committee and Charter requirements).

     (c)    Each Holder agrees to vote its Common Stock in favor of the persons
nominated in accordance with the provisions herein. The rights of each of (i)
Clear Channel and (ii) GM or DIRECTV to designate a director and approve the
appointment of independent directors pursuant to this Section 5.1 shall continue
for so long as such Party (or GM and DIRECTV together) holds (A) in excess of 5%
of the Common Stock Deemed Outstanding or (B) the full amount of such Party's
original investment in the Company (whether or not converted into shares of
Series A Convertible Preferred Stock, if applicable, or Class A Common Stock).
The right of Telcom to designate a director shall continue for so long as Telcom
holds (i) at least 50% of its investment in the Company as of the Series C
Closing Date, or (ii) in excess of 2% of the Common Stock Deemed Outstanding.
Similarly, the right of the Primary Series C Investor to designate a director
shall continue for so long as AEA XM (or its Affiliates) holds at least 50% of
the stock that it originally purchased under the Series C Purchase Agreement,
either in Series C Convertible Preferred Stock or as converted into Class A
Common Stock. Similarly, following the Company's receipt of FCC Approval, the
right of Motient to designate directors and approve the appointment of
independent directors pursuant to this Section 5.1 shall continue for so long as
Motient holds (A) in excess of 15% of the Common Stock Deemed Outstanding or (B)
the full amount of Motient's investment in the Company on July 7, 1999
(excluding 1,314,914 shares of Motient's Capital Stock transferred to Baron
Asset in January 2000) (whether or not converted into shares of Class A Common
Stock) (the "Initial Motient Investment"); provided that, if Motient holds less
             --------------------------
than 15% of the Common Stock Deemed Outstanding and less than the Initial
Motient Investment, (x) Motient shall be entitled to designate two (2) directors
(notwithstanding Section 5.1(b)(ii)) and approve the appointment of two (2)
independent directors (notwithstanding Section 5.1(b)(iv)) for so long as
Motient owns Capital Stock in excess of 10% of the Common Stock Deemed
Outstanding, and (y) Motient shall be entitled to designate one (1) director
(notwithstanding Section 5.1(b)(ii)) and approve the appointment of two (2)
independent directors (notwithstanding Section 5.1(b)(iv)) for so long as
Motient owns in excess of 5% of the Common Stock Deemed Outstanding.

                                      13
<PAGE>

     (d)    The right of each Original Investor to designate a director pursuant
to Sections 5.1(a)(i) and 5.1(b)(i) also shall terminate, and any director
designated by such Original Investor shall promptly resign from the Boards of
Directors:

     (i)    in the case of Clear Channel, if a majority of the ownership
interests of Clear Channel cease to be owned, directly or indirectly, by Clear
Channel Communications, Inc.;

     (ii)   in the case of DIRECTV, if a majority of the ownership interests of
DIRECTV cease to be owned, directly or indirectly, by Hughes Electronics
Corporation or its Affiliates (provided that the loss of DIRECTV's right to
designate directors shall not affect GM's rights under this Section 5.1); and

     (iii)  in the case of Telcom, if a majority of the ownership interests of
Telcom cease to be owned, directly or indirectly, by Telcom Ventures, L.L.C.

      Section 5.2    Observation Rights.
                     ------------------

     (a)    For such time as GM and DIRECTV (i) continue to hold, in the
aggregate, in excess of 5% of the Common Stock Deemed Outstanding, or (ii) each
retains the full amount of its original investment in the Company, (whether or
not converted into shares of Series A Convertible Preferred Stock or Class A
Common Stock), GM or DIRECTV shall be allowed one observer at Board of Directors
meetings to represent whichever company does not designate a member of the Board
of Directors at that time.

     (b)    For such time as any of Columbia and Madison (i) continues to hold
in excess of 2% of the Common Stock Deemed Outstanding, or (ii) such Investor
retains at least 50% of its investment in the Company as of the Series C Closing
Date, such Investor shall be allowed to have an observer at Board of Directors
meetings so long as such company(ies) does not have an Affiliate serving as a
member of the Board of Directors at that time.

     (c)    For such time as Clear Channel (i) continues to hold in excess of 5%
of the Common Stock Deemed Outstanding, or (ii) retains the full amount of its
original investment in the Company, Clear Channel shall be allowed an observer
at Board of Directors meetings.

     (d)    For such time as Honda retains at least 50% of its investment in the
Company as of the Series C Closing Date, Honda shall be allowed an observer at
Board of Directors meetings.

     Section 5.3     Removal of Directors.  Motient and the Investors agree to
                     --------------------
vote so that each member of the Board of Directors nominate designated in
accordance with Section 5.1 shall serve as a director of the Company until
removed, upon the instructions of the Party designating such director, and each
Party agrees to vote its shares of Common Stock in accordance with such
directions. To the extent permitted by law, Motient and each Investor agree not
to take any action to remove or replace (and to use all reasonable efforts to
cause the Board of Directors not to replace), with or without cause, any
director of the Company that has not been designated for removal or replacement
by the Party having originally nominated or designated such director.

     Section 5.4     Operational Involvement of Clear Channel, DIRECTV and the
                     ---------------------------------------------------------
TCM Group.
---------

                                      14
<PAGE>

     (a)   For such time as Clear Channel (i) continues to hold in excess of 5%
of the Common Stock Deemed Outstanding, or (ii) retains the full amount of its
original investment in the Company, the Company agrees that Clear Channel shall
have operational rights and involvement as set forth in the Clear Channel
Operational Assistance Agreement, provided that such rights and involvement
                                  -------------
shall terminate if Clear Channel ceases to be a wholly-owned subsidiary of Clear
Channel Communications, Inc.

     (b)   For such time as DIRECTV (i) continues to hold in excess of 5% of the
Common Stock Deemed Outstanding, or (ii) retains the full amount of its original
investment in the Company, (whether or not converted into shares of Series A
Convertible Preferred Stock or Class A Common Stock), the Company agrees that
DIRECTV, Inc. shall have operational rights and involvement as set forth in the
DIRECTV Operational Assistance Agreement.

     (c)   For such time as Telcom, Columbia and Madison (i) continue to hold,
in the aggregate, in excess of 5% of the Common Stock Deemed Outstanding, or
(ii) retain, in the aggregate, at least 50% of their investment in the Company
as of the Series C Closing Date, the Company agrees that the TCM Group shall
have operational rights and involvement as set forth in the TCM Operational
Assistance Agreement.

     Section 5.5     Shareholder Actions.  Each Party shall at all times take
                     -------------------
all actions necessary (i) to give effect to the terms and conditions of this
Agreement and (ii) to ensure that the certificate of incorporation and bylaws of
the Company (the "Charter Documents") do not, at any time, conflict with the
                  -----------------
provisions of this Agreement, and hereby agrees to make or authorize any
amendments to the Charter Documents that may hereafter be required to give
effect to this Agreement.

                                  ARTICLE VI.
                                  -----------

                            CERTAIN REPRESENTATIONS
                            -----------------------

     Each Party hereby represents and warrants on behalf of itself to each other
Party that:

     Section 6.1    Existence and Power.
                    -------------------

     (a)   It is an entity duly organized, validly existing and in good standing
under the laws of its jurisdiction of formation;

     (b)   It has the power and authority to own its assets, carry on its
business and execute, deliver, and perform its obligations under this Agreement;
and

     (c)   It is duly qualified to do business and is licensed and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
or license.

     Section 6.2    Due Authorization; No Contravention.  The execution,
                    -----------------------------------
delivery and performance by it of this Agreement have been duly authorized by
all necessary action, and do not and will not:

                                      15
<PAGE>

     (a)    Breach or violate the terms of its certificate of incorporation (or
similar constituent document) or bylaws (or similar constituent document);

     (b)    Breach or violate the terms of any material agreement to which it is
party; or

     (c)    Violate any law or regulation applicable to it, including but not
limited to the Communications Act and the rules and regulations promulgated from
time to time by the FCC.

     Section 6.3    Binding Effect.  This Agreement has been duly authorized,
                    --------------
executed and delivered by it and constitutes the legal, valid and binding
obligation of it enforceable against it in accordance with the terms hereof,
subject to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws affecting creditors' rights generally and
to general principles of equity (regardless of whether enforcement is sought in
a proceeding in equity or at law).

                                  ARTICLE VII.
                                  ------------

         TAG-ALONG RIGHTS FOR PRIVATE TAG-ALONG SALE; RIGHT OF FIRST
         -----------------------------------------------------------
                        OFFER; ANTIDILUTION PROTECTION
                        ------------------------------

     Section 7.1    Tag Along Rights Upon Private Tag-Along Sale.  Each Investor
                    --------------------------------------------
(and Motient, to the extent Motient holds shares of Class A Common Stock) shall
have the right to participate on the same terms (without paying any portion of
the transaction costs associated with such sale except for their own legal
expense and selling commission) in any Private Tag-Along Sale by any other Party
and its Affiliates, whether in one transaction or in a series of related
transactions. This right shall not apply to a Transfer by a Party to a
controlled Affiliate or parent company owning 50% or more of such Party, to any
open-market or reasonably similar "blind" transaction or to a sale pursuant to a
tender or exchange offer made to all securities holders. Such participation
shall be shared pro rata with each other Investor (and Motient, if applicable,
with respect to its Class A Common Stock) desiring to participate, based upon
such Investor's (or Motient's, with respect to its Class A Common Stock) Common
Stock Deemed Outstanding relative to the Common Stock Deemed Outstanding held by
all Investors (and Motient, as applicable, with respect to its Class A Common
Stock). In addition, if the Company grants additional tag along rights to any
Party, it shall grant such rights to all other Parties (provided, however, that
Motient's eligibility to utilize any such right shall arise only to the extent
Motient holds shares of Class A Common Stock).

     Section 7.2    Right of First Offer.  The Company shall only issue Non-
                    --------------------
Public Capital Stock in a Private Financing Transaction in accordance with the
following terms:

     (a)    The Company shall not issue any Non-Public Capital Stock unless it
first delivers to each Investor and Motient who is then an Eligible Purchaser
(as defined below) (each such Person being referred to in this Section 7 as a
"Buyer") a written notice (the "Notice of Proposed Issuance") specifying the
 -----                          ---------------------------
type and total number of such shares of Non-Public Capital Stock that the
Company then intends to issue (the "Offered Non-Public Capital Stock"), all of
                                    --------------------------------
the material terms, including the price upon which the Company proposes to issue
the Offered Non-Public Capital Stock and stating that the Buyers shall have the
right to purchase the Offered Non-Public

                                      16
<PAGE>

Capital Stock in the manner specified in this Section 7.2(a) for the same price
per share and in accordance with the same terms and conditions specified in such
Notice of Proposed Issuance.

     (b)   For a period of ten (10) calendar days from the date the Company
delivers to all of the Buyers the Notice of Proposed Issuance (the "Ten Day
                                                                    -------
Period"), the Buyers may elect to subscribe to purchase all of the Offered Non-
------
Public Capital Stock at the same price per share and upon the same terms and
conditions specified in the Notice of Proposed Issuance. Each Buyer electing to
purchase Offered Non-Public Capital Stock must give written notice of its
election to the Company prior to the expiration of the Ten Day Period. If the
Offered Non-Public Capital Stock is being offered as part of an investment unit
together with debt or other instruments, any election by a Buyer to purchase
Offered Non-Public Capital Stock shall also constitute an election to purchase a
like portion of such debt or other instruments.

     (c)   Each Buyer shall have the right to purchase that number of shares of
the Offered Non-Public Capital Stock as shall be equal to the number of shares
of the Offered Non-Public Capital Stock multiplied by a fraction, the numerator
of which shall be the number of shares of Common Stock then held by such Buyer
plus all shares of Common Stock issuable upon conversion of all Convertible
Securities then held by such Buyer and the denominator of which shall be the
aggregate number of shares of Common Stock Deemed Outstanding. The amount of
such Offered Non-Public Capital Stock that each Buyer is entitled to purchase
under this Section 8 shall be referred to as its "Proportionate Share."
                                                  -------------------

     (d)   Each Buyer shall have a right of oversubscription such that if any
other Buyer fails to elect to purchase his or its full Proportionate Share of
the Offered Non-Public Capital Stock, the other Buyer(s) shall, among them, have
the right to purchase up to the balance of such Offered Non-Public Capital Stock
not so purchased. The Buyers may exercise such right of oversubscription by
electing to purchase more than their Proportionate Share of the Offered Non-
Public Capital Stock by so indicating in their written notice given during the
Ten Day Period. If, as a result thereof, such oversubscription elections exceed
the total number of the Offered Non-Public Capital Stock available in respect to
such oversubscription privilege, the oversubscribing Buyers shall be cut back
with respect to oversubscriptions on a pro rata basis in accordance with their
respective Proportionate Share or as they may otherwise agree among themselves.

     (e)   If all of the Offered Non-Public Capital Stock has not been
subscribed for by the Buyers pursuant to the foregoing provisions, then the
Company shall have the right, until the expiration of one-hundred eighty (180)
consecutive days commencing on the first day immediately following the
expiration of the Ten Day Period, to issue the Offered Non-Public Capital Stock
not purchased by the Buyers at not less than, and on terms no more favorable in
any material respect to the purchaser(s) thereof than, the price and terms
specified in the Notice of Proposed Issuance. If such remaining Offered Non-
Public Capital Stock is not issued within such period and at such price and on
such terms, the right to issue in accordance with the Notice of Proposed
Issuance shall expire and the provisions of this Agreement shall continue to be
applicable to the Offered Non-Public Capital Stock.

     (f)   The Company may proceed with the issuance of Non-Public Capital Stock
without first following the foregoing procedures provided that (i) any purchaser
of such Non-

                                      17
<PAGE>

Public Capital Stock acquiring more than 5% of the Common Stock Deemed
Outstanding agrees in writing to be bound by Section 7.1, and (ii) within ten
(10) days following the issuance of such Non-Public Capital Stock, the Company
or the purchaser of the Non-Public Capital Stock undertakes steps substantially
similar to those described above to offer to all Buyers the right to purchase
from such purchaser or from the Company such amount of such Non-Public Capital
Stock at the same price and terms applicable to the purchaser's purchase thereof
as is necessary for the Buyers to maintain the same ownership percentage of the
Company on a fully diluted basis as existed prior to such issuance of Non-Public
Capital Stock.

     (g)   Notwithstanding the foregoing, the Right of First Offer described in
this Section 7 shall not apply with respect to the issuance of Excluded
Securities or to any Investor who is not an Eligible Purchaser. For purposes of
this Section 7, any Investor or Motient shall be an "Eligible Purchaser" with
respect to a proposed issuance of Non-Public Capital Stock if such Investor or
Motient meets the Company's reasonable requirements for investors generally
(such as being an Accredited Investor or Qualified Institutional Buyer) to
purchase Non-Public Capital Stock in the particular Private Financing
Transaction.

     (h)   The Right of First Offer described in this Section 7 shall terminate
(i) as to any Investor who transfers more than 50% of its original Capital Stock
to a Person other than an Affiliate, or (ii) upon the Company achieving positive
EBITDA for a period of six consecutive calendar months.

     Section 7.3  Antidilution Protection.  In the event that, at a time when
                  -----------------------
Series C Convertible Preferred Stock is then outstanding, the Company grants any
Antidilution Protection to any purchaser(s) of 1% or more (on a fully diluted
basis) of the Capital Stock which would (if granted to the holders of the Series
C Convertible Preferred Stock) be materially more favorable (taken as a whole)
to the holders of the Series C Convertible Preferred Stock than the Antidilution
Protection then applicable to the Series C Convertible Preferred Stock (a "New
                                                                           ---
Antidilution Protection"), then if the holders of a majority of the Series C
-----------------------
Convertible Preferred Stock so elect by written notice to the Company, the
Company and the Series C Investors shall use their best efforts to take all
steps determined in good faith by the Board of Directors to be reasonably
necessary to provide (and the Investors shall vote in favor of any amendment to
the Certificate of Designation of the Series C Convertible Preferred Stock which
may be necessary), as nearly as practicable under the circumstances and
consistent with the other terms of Certificate of Designation for the Series C
Convertible Preferred Stock, the New Antidilution Protection to the holders of
the Series C Convertible Preferred Stock as a replacement for the Antidilution
Protection then applicable to the Series C Convertible Preferred Stock.

                                 ARTICLE VIII.
                                 -------------

                                 MISCELLANEOUS
                                 -------------

     Section 8.1    Amendment and Restatement.  This Agreement hereby restates,
                    -------------------------
amends and supersedes the 1999 Shareholders Agreement.

     Section 8.2    TCM Agreement.  Concurrently with the execution and delivery
                    -------------
of the execution of this Agreement by all of the members of the TCM Group, the
TCM Group

                                      18
<PAGE>

Agreement dated as of July 7, 1999 between members of the TCM Group regarding
designation of a director under the 1999 Shareholder Agreement shall be
terminated.

     Section 8.3    Notices.  Except as otherwise provided in this Agreement,
                    -------
notices and other communications under this Agreement shall be in writing and
shall be deemed properly served if: (i) mailed by registered or certified mail,
return receipt requested, (ii) delivered by a recognized overnight courier
service, (iii) delivered personally, or (iv) sent by facsimile transmission
addressed to each Party at its address for notices specified on Schedule I
attached hereto, or at such other address, or to the attention of such officer,
as any Party shall have furnished to each other Party in writing pursuant to
this Section 8.2. Such notice shall be deemed to have been received: (i) three
(3) Business Days after the date of mailing if sent by certified or registered
mail, (ii) one (1) Business Day after the date of delivery if sent by overnight
courier, (iii) the date of delivery if personally delivered, or (iv) the next
succeeding Business Day after transmission by facsimile with confirmation of
receipt.

     Section 8.4    Amendment.  Any term of this Agreement may be amended only
                    ---------
with the written consent of (a) the Company, (b) Motient, (c) Investors holding,
(i) in the case of amendments to provisions of this Agreement generally,
seventy-five percent (75%) of the aggregate of the Common Stock Deemed
Outstanding held by Investors, and (ii) in the case of any non-material change
or technical correction of this Agreement, a majority of the aggregate of the
Common Stock Deemed Outstanding held by Investors, (d) in the case of amendments
to Section 7 of this Agreement, in addition to the consents listed in (a), (b)
and (c) of this Section, at least 66-2/3% of the aggregate of the Common Stock
Deemed Outstanding held by Series C Investors, and (e) in the case of amendments
to any provision of Section 5.1(a) or 5.1(b) which adversely affect the right of
any Investor to designate one or more directors, in addition to the consents
listed in (a), (b) and (c) of this Section, the Investor having the right that
would be adversely affected; provided, however, that in the event the rights,
preferences or obligations hereunder of one or more Investors are being amended
in a manner that is materially adverse to such Investors and in a manner that is
different from those of other Investors, such rights, preferences or obligations
may be so amended only with the consent of the Investors holding at least 75% in
the aggregate of the Common Stock Deemed Outstanding held by Investors whose
rights, preferences or obligations are being materially adversely amended in
such different manner.. Any amendment effected in accordance with this Section
8.4 shall be binding upon each future Holder and the Company.

     Section 8.5    Specific Performance.  Each Party acknowledges (i) that it
                    --------------------
will be impossible to measure in money the damage to each other Party if any of
them or any legal representative of any Party fails to comply with any of the
provisions of this Agreement, (ii) that every such provision is material, and
(iii) that in the event of any such failure, the Company and the Investors will
not have an adequate remedy at law or in damages. Accordingly, each Party hereto
consents to the issuance of an injunction or the enforcement of other equitable
remedies against it at the suit of an aggrieved Party without the posting of any
bond or other security, to compel specific performance of all of the terms
hereof and to prevent any disposition of shares of Capital Stock in
contravention of any terms of this Agreement, and waives any defense thereto,
including, without limitation, the defenses of (i) failure of consideration,
(ii) breach of any other provision of this Agreement and (iii) availability or
relief in damages.

                                      19
<PAGE>

     Section 8.6    GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
                    -------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING
EFFECT TO ANY CONFLICT OF LAW PROVISIONS THEREOF.

     EACH OF THE PARTIES ACKNOWLEDGES THAT (i) IT IS A KNOWLEDGEABLE, INFORMED,
SOPHISTICATED BUSINESS ENTITY CAPABLE OF UNDERSTANDING AND EVALUATING THE
PROVISIONS SET FORTH IN THIS AGREEMENT, INCLUDING THIS SECTION 8.5, AND (ii) IT
HAS BEEN REPRESENTED BY SUCH COUNSEL AND OTHER ADVISORS OF ITS CHOOSING AS IT
HAS DEEMED APPROPRIATE IN CONNECTION WITH ITS DECISION TO ENTER INTO THIS
AGREEMENT.

     Section 8.7    Parties In Interest.  This Agreement shall be binding upon
                    -------------------
and shall inure to the benefit of each Party and their respective successors and
assigns as provided for herein, and by their signatures hereto, and each Party
intends to and does hereby become bound. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any Person other than the
Parties hereto and their respective successors and assigns any legal or
equitable right, remedy or claim under or in or in respect of this Agreement or
any provision herein contained.

     Section 8.8    Severability of Provisions.  In case any one or more of the
                    --------------------------
provisions contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.

     Section 8.9    Plural; Singular.  When used herein, the singular of each
                    ----------------
term includes the plural and the plural of each term includes the singular.

     Section 8.10   Counterparts.  This Agreement may be executed in any number
                    ------------
of counterparts all of which taken together shall constitute one agreement and
any Party hereto may execute this Agreement by signing any such counterpart.

     Section 8.11   Descriptive Headings.  The descriptive headings of the
                    --------------------
several sections of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.

     Section 8.12   Future Assurances.  Each Party shall execute and deliver all
                    -----------------
such future instruments and take such other and further action as may be
reasonably necessary or appropriate to carry out the provisions of this
Agreement and the intention of the Parties as expressed herein.

     Section 8.13   Termination.  This Agreement shall be immediately terminated
                    -----------
upon any of the following: (i) the unanimous written consent to the termination
hereof by the Parties hereto, (ii) the dissolution, bankruptcy or receivership
of the Company, or (iii) at such time as only one (1) Holder remains a Party
hereto.

                                      20
<PAGE>

     IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
signed as of the date first above written.

<TABLE>
<S>                                                       <C>
XM SATELLITE RADIO HOLDINGS INC.                            MOTIENT CORPORATION

By:____________________________________                     By:__________________________________________
Name:                                                       Name:
Title:                                                      Title:

BARON ASSET FUND                                            CLEAR CHANNEL INVESTMENTS, INC.
on behalf of THE BARON ASSET FUND SERIES

By:____________________________________                     By:__________________________________________
Name:                                                       Name:
Title:                                                      Title:

COLUMBIA XM RADIO PARTNERS, LLC                             DIRECTV ENTERPRISES, INC.
By Columbia Capital LLC, its Managing Member

By:____________________________________                     By:__________________________________________
Name:                                                       Name:
Title:                                                      Title:

GENERAL MOTORS CORPORATION                                  MADISON DEARBORN CAPITAL PARTNERS III, L.P.
                                                            By Madison Dearborn Partners III, L.P., its
                                                            general partner
By:____________________________________                     By Madison Dearborn Partners LLC, its general
Name:                                                       partner
Title:
                                                            By:__________________________________________
                                                            Name:
                                                            Title:

MADISON DEARBORN SPECIAL EQUITY III, L.P.                   SPECIAL ADVISORS FUND I, LLC
By Madison Dearborn Partners III, L.P., its general         By Madison Dearborn Partners III, L.P., its
partner                                                     manager
By Madison Dearborn Partners LLC, its general               By Madison Dearborn Partners LLC, its general
partner                                                     partner

By:____________________________________                     By:__________________________________________
Name:                                                       Name:
Title:                                                      Title:

TELCOM--XM INVESTORS, L.L.C.                                AEA XM INVESTORS I LLC
</TABLE>

<PAGE>

<TABLE>
<S>                                                         <C>
By:____________________________________                     By: ________________________________________
Name:                                                       Name:
Title:                                                      Title:

COLUMBIA XM SATELLITE PARTNERS III, LLC                      AEA XM INVESTORS II LLC
By:

By:____________________________________                      By: ________________________________________
Name:                                                        Name:
Title:                                                       Title:

COLUMBIA CAPITAL EQUITY PARTNERS III                         AMERICAN HONDA MOTOR CO., INC.
(QP), L.P.,
By: Columbia Capital Equity Partners III, L.P., its
General Partner

By:____________________________________                     By: ________________________________________
Name:                                                       Name:
Title:                                                      Title:

BARON ASSET FUND                                            BARON CAPITAL FUND TRUST
on behalf of THE BARON iOPPORTUNITY FUND SERIES             on behalf of THE BARON CAPITAL ASSET FUND SERIES

By: ___________________________________                     By: _________________________________________
Name:                                                       Name:
Title:                                                      Title:
</TABLE>
<PAGE>

                                   SCHEDULE I
                                   ----------

               NAMES, ADDRESSES AND FACSIMILE NUMBERS OF PARTIES

<TABLE>
<S>                                     <C>                                               <C>
The Company:                            XM Satellite Radio Holdings Inc.                   202-380-4500
                                        1500 Eckington Place, N.E.
                                        Washington, DC 20002
                                        Attention:  Joseph M. Titlebaum, Esq.

Motient:                                Motient Corporation                                703-758-6134
                                        10802 Parkridge Blvd.
                                        Reston, VA 22091
                                        Attention:  Randy S. Segal, Esq.

Clear Channel:                          Clear Channel Investments, Inc.                    210-822-2299
                                        200 Concord Plaza, Suite 600
                                        San Antonio, TX 78216
                                        Attention:  Ken Wyker, Esq.

Columbia:                               Columbia XM Radio Partners, L.L.C.                 703-519-3904
                                        201 North Union Street, Suite 300
                                        Alexandria, Virginia 22314
                                        Attention:  Mr. James B. Fleming

DIRECTV:                                DIRECTV Enterprises, Inc.                          310-964-4114
                                        2230 East Imperial Highway
                                        El Segundo, CA 90245
                                        Attention:  Mr. Steven J. Cox

GM:                                     General Motors Corporation                         212-418-6258
                                        100 Renaissance Center
                                        Detroit, MI 48265 - 1000
                                        Attention:  Anne Larin, Esq.

Telcom:                                 Telcom-XM Investors, L.L.C.                        703-706-3801
                                        211 North Union Street, Suite 300
                                        Alexandria, VA 22314
                                        Attention: Hal B. Perkins, Esq.

Madison:                                Madison Dearborn Partners, Inc.                    312-895-1221
                                        Three First National Plaza
                                        Chicago, Illinois 60602
                                        Attention:  Mr. James N. Perry

AEA XM:                                 AEA Investors, Inc.                                212-888-1459
                                        65 E. 55/th/ Street
                                        New York, New York 10022
                                        Attention:  General Counsel
</TABLE>

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