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Employment Agreement - Sirius Satellite Radio Inc. and Patrick L. Donnelly

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                             EMPLOYMENT AGREEMENT

                  This EMPLOYMENT AGREEMENT, dated as of February 28, 2003
         (this "Agreement"), between SIRIUS SATELLITE RADIO INC., a Delaware
         corporation (the "Company"), and Patrick L. Donnelly (the "Executive").

         In consideration of the mutual covenants and conditions set forth
herein, the Company and the Executive agree as follows:

         1. Employment. Subject to the terms and conditions of this Agreement,
the Company hereby employs the Executive, and the Executive hereby accepts
employment with the Company.

         2. Duties and Reporting Relationship. (a) The Executive shall be
employed in the capacity of Executive Vice President, General Counsel and
Secretary of the Company. During the Term (as defined below), the Executive
shall, on a full-time basis, use his skills and render services to the best of
his ability in supervising the legal affairs of the Company and shall, in
addition, perform such other activities and duties consistent with his position
as the Chief Executive Officer of the Company shall, from time to time,
reasonably specify and direct. It is acknowledged that the Executive has made,
and may continue to make, passive investments which will require a portion of
his time and attention but Executive agrees that such investments will not
interfere with his full-time commitment to the Company. The Executive shall not
be required by this Agreement to perform duties for any entity other than the
Company and its subsidiaries.

         (b) The Executive shall generally perform his duties and conduct his
business at the principal offices of the Company in New York, New York.

         (c) The Executive shall report to the Chief Executive Officer of the
Company.

         3. Term. The term of this Agreement shall commence on February 28,
2003, and end on March 28, 2004, unless terminated earlier pursuant to the
provisions of Section 6 (the "Term").

         4. Annual Base Salary. (a) During the Term, the Executive shall be
paid an annual base salary of $345,000, subject to any increases that the Chief
Executive Officer of the Company shall approve. All amounts paid to the
Executive under this Agreement shall be in U.S. dollars. The Executive's base
salary shall be paid at least monthly and, at the option of the Company, may be
paid more frequently. In the event the Executive's employment is terminated
during the Term, the Executive's base salary shall be prorated through the date
of termination.

         (b) All compensation paid to the Executive hereunder shall be subject
to any payroll and withholding deductions required by any applicable law,
including, without limitation, federal, New York state and New York City income
tax withholding, federal unemployment tax and social security (FICA).

         5. Additional Compensation, Expenses and Benefits. (a) During the
Term, the Company shall promptly reimburse the Executive for all reasonable and
necessary business







<PAGE>

expenses incurred and advanced by him in carrying out his duties under this
Agreement. The Executive shall present to the Company from time to time an
itemized account of such expenses in such form as may be required by the
Company from time to time.

         (b) During the Term, the Executive shall be entitled to participate
fully in any bonus grants, benefit plans, programs, policies and fringe
benefits which may be made available to the officers of the Company generally,
including, without limitation, medical, dental and life insurance; provided that
the Executive shall participate in any stock option or stock purchase or
compensation plan currently in effect or subsequently established by the Company
to the extent, and only to the extent, authorized by the plan document or by the
Board of Directors of the Company (the "Board") or the compensation committee
thereof. The Company agrees that if all other Executive Vice Presidents [or all
Senior Officers at the same level] are eligible for an annual performance bonus,
the Executive shall be eligible for an annual performance bonus on the same
basis

         6. Termination. The date upon which this Agreement is deemed to be
terminated in accordance with any of the provisions of this Section 6 is
referred to herein as the "Termination Date."

          (a) Termination for Cause. The Company has the right and may elect to
terminate this Agreement for Cause at any time. For purposes of this Agreement,
"Cause" means the occurrence or existence of any of the following: (i) a
material breach by the Executive of the terms of his employment or of his duty
not to engage in any transaction that represents, directly or indirectly,
self-dealing with the Company or any of its affiliates (which, for purposes
here, shall mean any individual, corporation, partnership, association, limited
liability company, trust, estate, or other entity or organization directly or
indirectly controlling, controlled by, or under direct or indirect common
control with the Company) which has not been approved by a majority of the
disinterested directors of the Board, if in any such case such material breach
remains uncured after thirty days have elapsed following the date on which the
Company gives the Executive written notice of such breach; (ii) the repeated
material breach by the Executive of any duty referred to in clause (i) above
with respect to which at least one prior notice was given under clause (i);
(iii) any act of dishonesty, misappropriation, embezzlement, intentional fraud,
or similar conduct by the Executive involving the Company or its affiliates;
(iv) the conviction or the plea of nolo contendre or the equivalent in respect
of a felony; (v) any damage of a material nature to any property of the Company
or any of its affiliates caused by the Executive's willful or grossly negligent
conduct; (vi) the repeated nonprescription use of any controlled substance or
the repeated use of alcohol or any other non-controlled substance that the Board
reasonably determines renders the Executive unfit to serve as an officer or
employee of the Company or its affiliates; (vii) the Executive's failure to
comply with the Board's reasonable written instructions, after thirty days
written notice; or (viii) conduct by the Executive that in a good faith written
determination of the Board demonstrates unfitness to serve as an officer or
employee of the Company or its affiliates, including, without limitation, a
finding by the Board or any regulatory authority that the Executive committed
acts of unlawful harassment or violated any other state, federal or local law or
ordinance prohibiting discrimination in employment applicable to the business of
the Company or any of its operating subsidiaries. Termination of the Executive
for Cause pursuant to this Section 6(a) shall be communicated by a Notice of
Termination. For purposes of this Agreement a "Notice of Termination" shall mean
delivery to the Executive of a copy of a resolution or resolutions duly adopted
by the affirmative vote of not less than a majority of the directors present and
voting at a meeting of the Board called and held for that purpose after
reasonable notice to the Executive and reasonable opportunity for the Executive,
together with the Executive's counsel, to be heard before the Board prior to
such vote, finding







<PAGE>

that in the good faith opinion of the Board, the Executive was guilty of conduct
set forth in the first sentence of this Section 6(a) and specifying the
particulars thereof in detail. For purposes of Section 6(a), this Agreement
shall terminate on the date specified by the Board in the Notice of Termination.

         (b) Death or Disability. (i) This Agreement and the Executive's
employment hereunder shall terminate upon the death of the Executive. For
purposes of Section 6(b)(i), this Agreement shall terminate on the date of the
Executive's death.

         (ii) If the Executive is unable to perform the essential duties and
functions of his position because of a disability, even with a reasonable
accommodation, for one hundred eighty days within any three hundred sixty-five
day period, and the Company, in its reasonable judgment, determines that the
exigencies created by the Executive's disability are such that termination is
warranted, the Company shall have the right and may elect to terminate the
services of the Executive by a Notice of Disability Termination. For purposes of
this Agreement, a "Notice of Disability Termination" shall mean a written notice
which sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under this Section
6(b)(ii). For purposes of this Agreement, no such purported termination by the
Company shall be effective without such Notice of Disability Termination. This
Agreement shall terminate on the day after such Notice of Disability Termination
is received by the Executive.

         (c) Voluntary Resignation. Should the Executive wish to resign from his
position with the Company, for other than Good Reason (as defined below), during
the Term, the Executive shall give fourteen days prior written notice to the
Company. Failure to provide such notice shall entitle the Company to terminate
this Agreement effective on the last business day on which the Executive
reported for work at his principal place of employment with the Company. The
Agreement will terminate on the effective date of the resignation as defined
above, however, the Company may, at its sole discretion, request that the
Executive perform no job responsibilities and cease his or her active employment
immediately upon receipt of the Notice.

         (d) Without Cause. The Company shall have the absolute right to
terminate the Executive's employment without Cause at any time. If the Company
elects to terminate the Executive without Cause, the Company shall give seven
days written notice to the Executive. This Agreement shall terminate seven days
following receipt of such notice by the Executive, however, the Company, at its
sole discretion may request that the Executive cease active employment and
perform no more job duties immediately upon provision of such notice to the
Executive.

         (e) For Good Reason. Should the Executive wish to resign from his
position with the Company for Good Reason during the Term, the Executive shall
give seven days prior written notice to the Company. Failure to provide such
notice shall entitle the Company to fix the Termination Date as of the last
business day on which the Executive reported for work at his principal place of
employment with the Company. The Agreement shall terminate on the date specified
in such notice, however, at its sole discretion, the Company may request the
Executive cease active employment and perform no more job duties for the Company
immediately upon receipt of such notice.

         For purposes of this Agreement, "Good Reason" shall mean the
continuance of any of the following events (without the Executive's express
prior written consent) for a period of seven







<PAGE>

days (or thirty days in the case of items (i) and (v) below) after delivery to
the Company by the Executive of a notice of the occurrence of such event:

                  (i) the assignment to the Executive by the Company of duties
         not reasonably consistent with the Executive's positions, duties,
         responsibilities, titles or offices at the commencement of the Term or
         any unreasonable reduction in his duties or responsibilities or any
         removal of the Executive from or any failure to re-elect the Executive
         to any of such positions (except in connection with the termination of
         the Executive's employment for Cause, disability or as a result of the
         Executive's death or by the Executive other than for Good Reason); or

                  (ii) any reduction in the Executive's annual base salary from
the previous year; or

                  (iii) any failure of the Company to comply with the terms of
         Section 5(b) as it relates to the Executive's annual bonuses; or

                  (iv) a relocation of the Company's executive offices to a
         location outside of New York City; or

                  (v) any material breach by the Company of any provision of
this Agreement.

         (f) Compensation and Benefits Upon Termination. If the employment of
the Executive is terminated for any reason, except (i) by the Company for Cause
or (ii) by the Executive voluntarily, then the Executive shall be entitled to
receive, and the Company shall pay to the Executive without setoff, counterclaim
or other withholding, except as set forth in Section 4(b), an amount (in
addition to any salary, benefits or other sums due the Executive through the
Termination Date) equal to the sum of (1) the Executive's annualized base salary
then in effect, and (2) the annual cash bonus, if any, paid to the Executive
with respect to the immediately preceding calendar year (or, in the case of the
year ending December 31, 2002, the performance bonus paid to the Executive in
January 2003). Any amount becoming payable under this Section 6(f) shall be paid
in immediately available funds within ten business days following the
Termination Date. The resignation of the Executive for Good Reason shall not be
considered a voluntary resignation and the Executive shall be entitled to be
paid the amount set forth above in the event the Executive terminates for Good
Reason.

         7. Gross-Up Provisions. (a) If the Executive is, in the opinion of a
nationally recognized accounting firm selected by the Executive in his sole
discretion, expected to pay an excise tax on "excess parachute payments" (as
defined in Section 280G(b) of the Internal Revenue Code of 1986, as amended (the
"Code")) under Section 4999 of the Code as a result of an acceleration of the
vesting of options or for any other reason, the Company shall have an absolute
and unconditional obligation to pay the Executive in accordance with the terms
of this Section 7 the expected amount of such taxes. In addition, the Company
shall have an absolute and unconditional obligation to pay the Executive such
additional amounts as are necessary to place the Executive in the exact same
financial position that he would have been in if he had not incurred any
expected tax liability under Section 4999 of the Code; provided that the
Company shall in no event pay the Executive any amounts with respect to any
penalties or interest due under any provision of the Code. The determination of
the exact amount, if any, of any expected "excess parachute payments" and any
expected tax liability under Section 4999 of the Code shall be made by the
nationally-recognized independent accounting firm selected by the Executive.
The fees and expenses of such accounting firm shall be paid by the Company in







<PAGE>

advance. The determination of such accounting firm shall be final and binding
on the parties. The Company irrevocably agrees to pay to the Executive, in
immediately available funds to an account designated in writing by the
Executive, any amounts to be paid under this Section 7 within two days after
receipt by the Company of written notice from the accounting firm which sets
forth such accounting firm's determination. In addition, in the event that such
payments are not sufficient to pay all excise taxes on "excess parachute
payments" under Section 4999 of the Code as a result of an acceleration of the
vesting of options or for any other reason and to place the Executive in the
exact same financial position that he would have been in if he had not incurred
any expected tax liability under Section 4999 of the Code as a result of a
change in control, then the Company shall have an absolute and unconditional
obligation to pay the Executive such additional amounts as may be necessary to
pay such excise taxes and place the Executive in the exact same financial
position that he would have been had he not incurred any tax liability as a
result of a change in control under the Code. Notwithstanding the foregoing, in
the event that a written ruling (whether public or private) of the Internal
Revenue Service ("IRS") is obtained by or on behalf of the Company or the
Executive, which ruling expressly provides that the Executive is not required
to pay, or is entitled to a refund with respect to, all or any portion of such
excise taxes or additional amounts, the Executive shall promptly reimburse the
Company in an amount equal to all amounts paid to the Executive pursuant to
this Section 7 less any excise taxes or additional amounts which remain payable
by, or are not refunded to, the Executive after giving effect to such IRS
ruling. Each of the Company and the Executive agrees to promptly notify the
other party if it receives any such IRS ruling.

         (b) The provisions of this Section 7 shall survive any termination of
this Agreement.

         8. Nondisclosure of Confidential Information. (a) The Executive
acknowledges that in the course of his employment he will occupy a position of
trust and confidence. The Executive shall not, except as may be required to
perform his duties or as required by applicable law, disclose to others or use,
whether directly or indirectly, any Confidential Information.

         (b) "Confidential Information" shall mean information about the
Company's business and operations that is not disclosed by the Company for
financial reporting purposes and that was learned by the Executive in the
course of his employment by the Company, including, without limitation, any
proprietary knowledge, patents, trade secrets, data, formulae, information and
client and customer lists and all papers and records (including computer
records) of the documents containing such Confidential Information. The
Executive acknowledges that such Confidential Information is specialized, unique
in nature and of great value to the Company, and that such information gives
the Company a competitive advantage. The Executive agrees to deliver or return
to the Company, at the Company's request at any time or upon termination or
expiration of his employment or as soon as possible thereafter, all documents,
computer tapes and disks, records, lists, data, drawings, prints, notes and
written information (and all copies thereof) furnished by the Company or
prepared by the Executive in the course of his employment by the Company.

         (c) The provisions of this Section 8 shall survive any termination of
this Agreement.

         9. Covenant Not to Compete. For two years following the end of the
Term or, in the event the Executive has been terminated without Cause or has
resigned for Good Reason, for one year following such termination without Cause
or resignation for Good Reason (the "Restricted Period"), the Executive will
not, directly or indirectly, enter into the employment of, render services to,
or acquire any interest whatsoever in (whether for his own account as an
individual proprietor, or as a partner, associate, stockholder, officer,
director, consultant, trustee






<PAGE>

or otherwise), or otherwise assist, any person or entity engaged in any
operations in North America involving the transmission of radio entertainment
programming in competition with the Company or that competes, or is likely
to compete, with any other aspect of the business of the Company as conducted
at the end of the Term; provided, that nothing in this Agreement shall prevent
the purchase or ownership by the Executive by way of investment of up to five
percent of the shares or equity interest of any corporation or other entity.
Without limiting the generality of the foregoing, the Executive agrees that
during the Restricted Period, the Executive will not call on or otherwise
solicit business or assist others to solicit business from any of the customers
or potential customers of the Company as to any product or service that
competes with any product or service provided or marketed by or actually under
development by the Company at the end of the Term. The Executive agrees that
during the Restricted Period he will not solicit or assist others to solicit
the employment of or hire any employee of the Company without the prior written
consent of the Company.

         10. Remedies. The Executive and Company agree that damages for breach
of any of the covenants under Sections 8 and 9 above will be difficult to
determine and inadequate to remedy the harm which may be caused thereby, and
therefore consent that these covenants may be enforced by temporary or permanent
injunction without the necessity of bond. The Executive believes, as of the date
of this Agreement, that the provisions of this Agreement are reasonable and that
the Executive is capable of gainful employment without breaching this Agreement.
However, should any court or arbitrator decline to enforce any provision of
Section 8 or 9 of this Agreement, this Agreement shall, to the extent applicable
in the circumstances before such court or arbitrator, be deemed to be modified
to restrict the Executive's competition with the Company to the maximum extent
of time, scope and geography which the court or arbitrator shall find
enforceable, and such provisions shall be so enforced.

         11. Indemnification. The Company shall indemnify the Executive to
the full extent provided in the Company's Amended and Restated Articles of
Incorporation and Amended and Restated Bylaws and the law of the State of
Delaware in connection with his activities as an officer of the Company.

         12. Entire Agreement. The provisions contained herein constitute the
entire agreement between the parties with respect to the subject matter hereof
and supersede any and all prior agreements, understandings and communications
between the parties, oral or written, with respect to such subject matter.

         13. Modification. Any waiver, alteration, amendment or modification of
any provisions of this Agreement shall not be valid unless in writing and
signed by both the Executive and the Company.

         14. Severability. If any provision of this Agreement shall be declared
to be invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof, which shall
remain in full force and effect.

         15. Assignment. The Executive may not assign any of his rights or
delegate any of his duties hereunder without the prior written consent of the
Company. The Company may not assign any of its rights or delegate any of its
obligations hereunder.

         16. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the successors in interest of the Executive and the Company.






<PAGE>

         17. Notice. All notices and other communications required or permitted
hereunder shall be made in writing and shall be deemed effective when initially
transmitted by courier or facsimile transmission and five days after mailing by
registered or certified mail:

                           if to the Company:

                           Sirius Satellite Radio Inc.
                           1221 Avenue of the Americas
                           36th Floor
                           New York, New York  10020
                           Attention:  General Counsel
                           Telecopier:  (212) 584-5353

                           if to the Executive:

                           Patrick L. Donnelly
                           Address on file in the offices
                           of the Company

or to such other person or address as either of the parties shall furnish in
writing to the other party from time to time.

         18. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed entirely within the State of New York.

         19. Non-Mitigation. The Executive shall not be required to mitigate
damages or seek other employment in order to receive compensation or benefits
under Section 6 or Section 7 of this Agreement; nor shall the amount of any
benefit or payment provided for under Section 6 or Section 7 of this Agreement
be reduced by any compensation earned by the Executive as the result of
employment by another employer.

         20. Arbitration. (a) The Executive and the Company agree that if a
dispute arises concerning or relating to the Executive's employment with the
Company, or the termination of the Executive's employment, such dispute shall
be submitted to binding arbitration under the rules of the American Arbitration
Association in effect at the time such dispute arises. The arbitration shall
take place in New York, New York, and both the Executive and the Company agree
to submit to the jurisdiction of the arbitrator selected in accordance with the
American Arbitration Association rules and procedures. Except as provided for
below, the Executive and the Company agree that this arbitration procedure will
be the exclusive means of redress for any disputes relating to or arising from
the Executive's employment with the Company or his termination, including
disputes over rights provided by federal, state, or local statutes, regulations,
ordinances, and common law, including all laws that prohibit discrimination
based on any protected classification. The parties expressly waive the right to
a jury trial, and agree that the arbitrator's award shall be final and binding
on both parties, and shall not be appealable. The arbitrator shall have
discretion to award monetary and other damages, and any other relief that the
arbitrator deems appropriate and is allowed by law. The arbitrator shall have
the discretion to award the prevailing party reasonable costs and attorneys'
fees incurred in bringing or defending an action, and shall award such costs and
fees to the Executive in the event the Executive prevails on the merits of
any action brought hereunder.






<PAGE>

         (b) Exceptions. The Company and the Executive agree that the sole
dispute that is excepted from Section 20(a) is an action seeking injunctive
relief from a court of competent jurisdiction regarding enforcement and
application of Sections 8 and 9 of this Agreement, which action may be brought
in addition to, or in place of, an arbitration proceeding in accordance with
Section 20(a).

         21. Counterparts. This Agreement may be executed in counterparts, all
of which shall be considered one and the same agreement, and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties.

         22. Executive's Representations. Executive hereby represents and
warrants to Company that he (a) is not now under any contractual or other
obligation that is inconsistent with or in conflict with this Agreement or that
would prevent, limit, or impair the Executive's performance of his or her
obligations under this Agreement; (b) has been provided the opportunity to be,
or has been, represented by legal counsel in preparing, negotiating, executing
and delivering this Agreement; and (c) fully understands the terms and
provisions of this Agreement.






<PAGE>


         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

                                          SIRIUS SATELLITE RADIO INC.

                                          By:      /s/ John H. Schultz
                                                   ----------------------------
                                                   John H. Schultz
                                                   Senior Vice President, Human
                                                   Resources

                                                   /s/ Patrick L. Donnelly
                                                   ----------------------------
                                                   Patrick L. Donnelly