XM Satellite Radio Holdings Inc., the nation’s
leading satellite radio company, today announced that it had entered
into a written agreement with holders of a majority of XM Satellite
Radio Inc.’s outstanding 9.75% Senior Notes due 2014. Pursuant to the
agreement, these holders have agreed to waive XM’s change of control
repurchase obligation of the 9.75% Notes with respect to the
consummation of the previously announced merger of XM Satellite Radio
and Sirius Satellite Radio Inc. Pursuant to the terms of the indenture
governing the 9.75% Notes, the waiver is effective for all holders of
the 9.75% Notes.

The waiver provides that, promptly following the closing of the
merger, XM will commence an offer to exchange the 9.75% Notes for a
combination of at least $400 million of cash and up to $200 million
aggregate principal amount of a new series of senior notes to be issued
by XM. The waiver is subject to the consummation of the merger and the
satisfaction of certain conditions in connection with various other
merger-related refinancing transactions to be undertaken by XM prior to
August 31, 2008. If the merger and the satisfaction of such other
conditions have not occurred by August 31, 2008, the waiver, unless
extended, will cease to be effective.

The exchange notes will mature in 2014, or 2013 in certain
circumstances. The yield to maturity on the exchange notes (calculated
solely on the basis of interest rate on the exchange notes and the
price at which they are offered in exchange for 9.75% Notes) will be
calculated on the basis of the selling price of and interest rate on
certain other senior notes expected to be issued by XM in connection
with its merger-related refinancing transactions. The effective yield
on the exchange notes will not be less than 13.92% per annum. In the
event that XM issues less than $150 million aggregate principal amount
of other senior notes in connection with its merger related refinancing
transactions, the effective yield on the exchange notes will not be
less than 15% per annum.

The senior notes expected to be issued by XM will not be registered
under the United States Securities Act of 1933 and may not be offered
or sold in the United States absent registration or an applicable
exemption from registration requirements.

Nothing in this press release should be construed as a solicitation
of an exchange or offer to purchase, or an offer to sell, any of XM’s
or XM Satellite Radio Holdings Inc.’s securities. Any offer to
exchange, purchase or sell any of XM’s or XM Satellite Radio Holdings
Inc.’s securities will be made only upon the terms and conditions set
forth in an offering document related thereto.

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