<PAGE>
As filed with the Securities and Exchange Commission on September 22, 1999.
Registration No. 333-83619
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
AMENDMENT NO. 4
TO FORM S-1
REGISTRATION STATEMENT
Under the Securities Act of 1933
---------------
XM SATELLITE RADIO HOLDINGS INC.
(Exact name of registrant as specified in its charter)
Delaware 4899 54-1878819
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification Number)
incorporation or
organization)
1250 23rd Street, N.W., Suite 57
Washington, D.C. 20037-1100
(202) 969-7100
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Joseph M. Titlebaum
Senior Vice President, General
Counsel and Secretary
XM Satellite Radio Holdings Inc.
1250 23rd Street, N.W., Suite 57
Washington, D.C. 20037-1100
(202) 969-7100
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------
With Copies To:
David B.H. Martin, Esq. Gregory A. Ezring, Esq.
Steven M. Kaufman, Esq. LATHAM & WATKINS
HOGAN & HARTSON L.L.P. 885 Third Avenue
555 13th Street, N.W. Suite 1000
Washington, D.C. 20004 New York, New York 10022
(202) 637-5600 (212) 906-1200
---------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (as defined below), check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
---------------
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act or until this registration statement shall become effective
on such date as the Securities and Exchange Commission, acting pursuant to said
Section 8(a), may determine.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
EXPLANATORY NOTE TO AMENDMENT NO. 4
This Amendment No. 4 to the XM Satellite Radio Holdings Inc. Registration
Statement on Form S-1 has been filed solely for the purpose of filing certain
exhibits to the Registration Statement.
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
IIA-1
<PAGE>
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits.
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
1.1 Form of Underwriting Agreement.
3.1 Form of Restated Certificate of Incorporation of XM Satellite Radio
Holdings Inc.
3.2 Form of Amended and Restated Bylaws of XM Satellite Radio Holdings
Inc.
4.1+ Form of Certificate for our Class A common stock.
5.1+ Opinion of Hogan & Hartson L.L.P. with respect to the common stock
being registered.
10.1++ Shareholders' Agreement, dated as of July 7, 1999, by and among XM
Satellite Radio Holdings Inc., American Mobile Satellite
Corporation, Baron Asset Fund, Clear Channel Investments, Inc.,
Columbia XM Radio Partners, LLC, DIRECTV Enterprises, Inc., General
Motors Corporation, Madison Dearborn Capital Partners III, L.P.,
Special Advisors Fund I, LLC, Madison Dearborn Special Equity III,
L.P., and Telcom-XM Investors, L.L.C.
10.2++ Registration Rights Agreement, dated July 7, 1999, by and among XM
Satellite Radio Holdings Inc., American Mobile Satellite
Corporation, the Baron Asset Fund series of Baron Asset Fund, and
the holders of Series A subordinated convertible notes of XM
Satellite Radio Holdings Inc.
10.3++ Note Purchase Agreement, dated June 7, 1999, by and between XM
Satellite Radio Holdings Inc., XM Satellite Radio Inc., Clear
Channel Communications, Inc., DIRECTV Enterprises, Inc., General
Motors Corporation, Telcom-XM Investors, L.L.C., Columbia XM Radio
Partners, LLC, Madison Dearborn Capital Partners III, L.P., Madison
Dearborn Special Equity III, L.P., and Special Advisors Fund I, LLC
(including form of Series A subordinated convertible note of XM
Satellite Radio Holdings Inc. attached as Exhibit A thereto).
10.4++* Technology Licensing Agreement by and among XM Satellite Radio Inc.,
XM Satellite Radio Holdings Inc., WorldSpace Management Corporation
and American Mobile Satellite Corporation, dated as of January 1,
1998, amended by Amendment No. 1 to Technology Licensing Agreement,
dated June 7, 1999.
10.5++* Technical Services Agreement between XM Satellite Radio Holdings Inc.
and American Mobile Satellite Corporation, dated as of January 1,
1998, as amended by Amendment No. 1 to Technical Services Agreement,
dated June 7, 1998.
10.6++* Satellite Purchase Contract for In-Orbit Delivery, by and between XM
Satellite Radio Inc. and Hughes Space and Communications
International, Inc., dated July 21, 1999.
10.7+ Agreement by and between XM Satellite Radio, Inc. and
STMicroelectronics Srl, dated November 2, 1998.
10.8++* Distribution Agreement, dated June 7, 1999, between OnStar, a
division of General Motors Corporation, and XM Satellite Radio Inc.
10.9++* Operational Assistance Agreement, dated as of June 7, 1999, between
XM Satellite Radio Inc. and DIRECTV, INC.
10.10++* Operational Assistance Agreement, dated as of June 7, 1999, between
XM Satellite Radio Inc. and Clear Channel Communications, Inc.
10.11++* Operational Assistance Agreement, dated as of June 7, 1999, between
XM Satellite Radio Inc. and TCM, LLC.
</TABLE>
IIA-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
10.12+ Agreement, dated as of July 16, 1999 between XM Satellite Radio
Holdings Inc. and Gary Parsons.
10.13+ Employment Agreement, dated as of June 1, 1998, between XM Satellite
Radio Holdings Inc. and Hugh Panero.
10.14+ Letter Agreement with Lee Abrams date May 22, 1998.
10.15+ Letter Agreement with Stelios Patsiokas dated September 14, 1998.
10.16+ Letter Agreement with Heinz Stubblefield dated May 22, 1998.
10.17++ Form of Indemnification Agreement between XM Satellite Radio Holdings
Inc. and each of its directors and executive officers.
10.18++ 1998 Shares Award Plan.
10.19++ Form of Non-Qualified Stock Option Agreement.
10.20* Firm Fixed Price Contract #001 between XM Satellite Radio Inc. and
Fraunhofer Gesellschaft zur Foderung Der angewandten Forschung e.V.,
dated July 16, 1999.
10.21* Contract for Engineering and Construction of Terrestrial Repeater
Network System by and between XM Satellite Radio Inc. and LCC
International, Inc., dated August 18, 1999.
21.1+ Subsidiaries of XM Satellite Radio Holdings Inc.
23.1+ Consent of Hogan & Hartson L.L.P. (contained in their opinion filed as
Exhibit 5.1).
23.2++ Consent of KPMG LLP.
23.3++ Consent of Nathaniel A. Davis as future director.
23.4++ Consent of Thomas J. Donohue as future director.
24.1++ Powers of Attorney.
27.1++ Financial Data Schedule.
</TABLE>
- --------
++ Previously filed.
+ To be filed by amendment.
* Certain confidential portions of this Exhibit were omitted by means of
redacting a portion of the text. This Exhibit has been filed separately with
the Secretary of the Commission without such text pursuant to our
Application Requesting Confidential Treatment under Rule 406 under the
Securities Act.
(b) Financial Statement Schedules included separately in the Registration
Statement.
IIA-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-1 and has duly caused this Amended
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the District of Columbia, on the 22nd day of September,
1999.
XM Satellite Radio Holdings Inc.
By: *
Name: Hugh Panero
Title: President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amended
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President, Chief Executive September 22, 1999
______________________________________ Officer, and Director
Hugh Panero (Principal Executive
Officer)
* Senior Vice President and September 22, 1999
______________________________________ Chief Financial Officer
Heinz Stubblefield (Principal Financial and
Accounting Officer)
* Chairman of the Board of September 22, 1999
______________________________________ Directors
Gary M. Parsons
* Director September 22, 1999
______________________________________
Randall T. Mays
* Director September 22, 1999
______________________________________
Randy S. Segal
</TABLE>
IIA-4
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* Director September 22, 1999
______________________________________
Jack Shaw
* Director September 22, 1999
______________________________________
Dr. Rajendra Singh
* Director September 22, 1999
______________________________________
Ronald L. Zarrella
*By: Joseph M. Titlebaum
______________________________________
Joseph M. Titlebaum
Attorney-in-Fact
</TABLE>
IIA-5
<PAGE>
Exhibit 1.1
DRAFT
XM SATELLITE RADIO HOLDINGS INC.
10,000,000 Shares of Class A Common Stock
UNDERWRITING AGREEMENT
September 10, 1999
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
DEUTSCHE BANK SECURITIES INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
<PAGE>
10,000,000 Shares of Class A Common Stock
XM SATELLITE RADIO HOLDINGS, INC.
UNDERWRITING AGREEMENT
September 10, 1999
Bear, Stearns & Co. Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Deutsche Bank Securities Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Ladies and Gentlemen:
XM Satellite Radio Holdings, Inc., a corporation organized and
existing under the laws of Delaware (the "Company"), proposes, subject to the
terms and conditions stated herein, to issue and sell to the several
underwriters named in Schedule I hereto (collectively, the "Underwriters") an
aggregate of 10,000,000 shares (the "Firm Shares") of its Class A common stock,
par value $0.01 per share (the "Common Stock") and, for the sole purpose of
covering over-allotments in connection with the sale of the Firm Shares, at the
option of the Underwriters, up to an additional 1,500,000 shares (the
"Additional Shares") of Common Stock. The Firm Shares and any Additional Shares
purchased by the Underwriters are referred to herein as the "Shares". The Shares
are more fully described in the Registration Statement referred to below.
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 (No.
333-83619), and any amendments thereto, and related preliminary
prospectuses for the registration under the Securities Act of 1933, as
amended (the "Securities Act"), of shares of common stock, which
registration statement, as so amended, has been declared effective by the
Commission and copies of which have heretofore been delivered to the
Underwriters. The registration statement, as amended at the time it became
effective, including the exhibits and information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant
to Rule 430A under the Act, is hereinafter referred to as the
"Registration Statement". If the Company has filed or is required pursuant
to the terms hereof to file a registration statement pursuant to Rule
462(b) under the Securities Act registering additional shares of Common
Stock (a "Rule 462(b) Registration Statement"), then, unless otherwise
specified, any reference herein to the term "Registration Statement" shall
be deemed to include such Rule 462(b) Registration Statement. Other than a
<PAGE>
Rule 462(b) Registration Statement, which became effective upon filing, no
other document with respect to the Registration Statement has heretofore
been filed with the Commission (other than prospectuses filed pursuant to
Rule 424(b) of the rules and regulations of the Commission under the
Securities Act (the "Securities Act Regulations"), each in the form
heretofore delivered to the Underwriters). No stop order suspending the
effectiveness of either the Registration Statement or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for that
purpose has been initiated or, to the Company's knowledge, threatened by
the Commission. The Company, if required by the Securities Act
Regulations, proposes to file the Prospectus with the Commission pursuant
to Rule 424(b) of the Securities Act Regulations. The Prospectus, in the
form in which it is to be filed with the Commission pursuant to Rule
424(b) of the Securities Act Regulations, is hereinafter referred to as
the "Prospectus", except that if any revised prospectus or prospectus
supplement shall be provided to the Underwriters by the Company for use in
connection with the offering and sale of the Shares (the "Offering") which
differs from the Prospectus (whether or not such revised prospectus or
prospectus supplement is required to be filed by the Company pursuant to
Rule 424(b) of the Securities Act Regulations), the term "Prospectus"
shall refer to such revised prospectus or prospectus supplement, as the
case may be, from and after the time it is first provided to the
Underwriters for such use; and, provided, further, that the term
"Prospectus" shall be deemed to include any wrapper or supplement thereto
prepared in connection with the distribution of any Reserved Shares (as
defined in Section 2(f), below). Any preliminary prospectus or prospectus
subject to completion included in the Registration Statement or filed with
the Commission pursuant to Rule 424 under the Securities Act is hereafter
called a "Preliminary Prospectus". All references in this Agreement to the
Registration Statement, the Rule 462(b) Registration Statement, a
Preliminary Prospectus and the Prospectus, or any amendments or
supplements to any of the foregoing, shall be deemed to include any copy
thereof filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval System ("EDGAR").
(b) The Registration Statement and the Prospectus, at the time the
Registration Statement became effective and as of the Closing Date
referred to in Section 2 hereof, and the Preliminary Prospectus as of the
date thereof, complied and comply in all material respects with the
requirements of the Securities Act and the Securities Act Regulations, and
did not and as of the Closing Date do not contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Prospectus, as of the date hereof (unless the term "Prospectus" refers to
a prospectus which has been provided to the Underwriters by the Company
for use in connection with the offering of the Shares which differs from
the Prospectus filed with the Commission pursuant to Rule 424(b) of the
Securities Act Regulations, in which case at the time it is first provided
to the Underwriters for such use) and on the Closing Date, does not and
will not include any untrue statement of a material fact or omit to state
a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this Section (1)(b)
shall not apply to statements in or omissions from the Registration
Statement or Prospectus made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in
writing by any Underwriter expressly for use in the Registration Statement
or the Prospectus. Each Preliminary Prospectus and Prospectus filed as
part of the Registration Statement, as part of any amendment thereto or
pursuant to Rule 424 under the Securities Act Regulations, if filed by
electronic transmission pursuant to Regulation S-T under the Securities
Act, was identical to the copy thereof delivered to the Underwriters for
use in connection with the offer and sales of the Shares (except as may be
permitted by Regulation S-T under the Securities Act). There are no
contracts or other documents required to be described in the Prospectus or
to be filed as exhibits
2
<PAGE>
to the Registration Statement under the Securities Act that have not been
described or filed therein as required, and there are no business
relationships or related-party transactions involving the Company or any
of its subsidiaries or any other person required to be described in the
Prospectus that have not been described therein as required.
(c) Each of the Company and its subsidiaries (i) has been duly
organized and is validly existing as a corporation in good standing under
the laws of its respective jurisdiction of incorporation, (ii) has all
requisite corporate power and authority to carry on its business as it is
currently being conducted and as described in the Prospectus and to own,
lease and operate its properties, and (iii) is duly qualified and in good
standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification except, with respect to
clauses (i) (as it relates to good standing) and (iii), where the failure
to be so qualified or in good standing does not and could not reasonably
be expected to (x) individually or in the aggregate, result in a material
adverse effect on the properties, business, results of operations,
condition (financial or otherwise), affairs or prospects of the Company
and its subsidiaries, taken as a whole, (y) interfere with or adversely
affect the issuance or marketability of the Shares pursuant hereto or (z)
in any manner draw into question the validity of this Agreement or the
transactions described in the Prospectus under the caption "Use of
Proceeds" (any of the events set forth in clauses (x), (y) or (z), a
"Material Adverse Effect").
(d) All of the outstanding shares of capital stock of the Company
have been duly authorized, validly issued, and are fully paid and
nonassessable and were not issued in violation of any preemptive or
similar rights. The Shares, when issued, delivered and sold in accordance
with this Agreement, will be duly authorized and validly issued, fully
paid and nonassessable, and will not have been issued in violation of or
subject to any preemptive or similar rights. At June 30, 1999, after
giving effect to the issuance and sale of the Shares pursuant hereto, the
application of the net proceeds from the sale thereof and the conversion
of the Company's Series A subordinated convertible notes and American
Mobile Satellite Corporation ("AMSC") convertible notes, the Company had
the pro forma as adjusted capitalization as set forth in the Prospectus
under the caption "Capitalization."
(e) Except as disclosed in the Prospectus, all of the outstanding
capital stock of, or other ownership interests in, the Company's
subsidiaries is owned by the Company, free and clear of any security
interest, claim, lien, limitation on voting rights or encumbrance; and all
such securities have been duly authorized, validly issued, and are fully
paid and nonassessable and were not issued in violation of any preemptive
or similar rights.
(f) Except as disclosed in the Prospectus there are not currently,
and will not be as a result of the Offering, any outstanding
subscriptions, rights, warrants, calls, commitments of sale or options to
acquire or instruments convertible into or exchangeable for, any capital
stock or other equity interest of the Company or any of its subsidiaries
(other than options issued pursuant to the Company's 1998 Shares Award
Plan (as such term is defined in the Prospectus)).
(g) The Common Stock (including the Shares) is registered pursuant
to Section 12(g) of the Securities Exchange Act of 1934 (the "Exchange
Act") and is listed for quotation on the Nasdaq National Market System
("Nasdaq"), and the Company has taken no action designed to, or likely to
have the effect of, terminating the registration of the Common Stock under
the Exchange Act or delisting the Common Stock from Nasdaq, nor has the
3
<PAGE>
Company received any notification that the Commission or Nasdaq is
contemplating terminating such registration or listing.
(h) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby, including, without
limitation, the corporate power and authority to issue, sell and deliver
the Shares as provided herein and the corporate power to effect the Use of
Proceeds as described in the Prospectus.
(i) The statistical and market-related data included in the
Prospectus are based on or are derived from sources which the Company
believes to be reliable and accurate in all material respects.
(j) This Agreement has been duly and validly authorized, executed
and delivered by the Company and is the legal, valid and binding agreement
of the Company, enforceable against the Company in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity, and
except insofar as indemnification and contribution provisions may be
limited by applicable law or equitable principles
(k) Neither the Company nor any of its subsidiaries is, nor after
giving effect to the Offering will be, (i) in violation of its charter or
bylaws, (ii) in default in the performance of any bond, debenture, note,
indenture, mortgage, deed of trust or other agreement or instrument to
which it is a party or by which it is bound or to which any of its
properties is subject, or (iii) in violation of any local, state or
federal law, statute, ordinance, rule, regulation, requirement, judgment
or court decree (including, without limitation, the Communications Act of
1934 (the "Communications Act") and the rules and regulations of the
Federal Communications Commission (the "FCC"), and environmental laws,
statutes, ordinances, rules regulations, judgments or court decrees)
applicable to the Company or any of its subsidiaries or any of their
assets or properties (whether owned or leased) other than, in the case of
clauses (ii) and (iii), any default or violation that (A) could not
reasonably be expected to have a Material Adverse Effect or (B) which is
disclosed in the Prospectus. There exists no condition that, with notice,
the passage of time or otherwise, would constitute a default under any
such document or instrument, except as disclosed in the Prospectus.
(l) None of (i) the execution, delivery or performance by the
Company of this Agreement, (ii) the issuance and sale of the Shares and
(iii) consummation by the Company of the transactions contemplated hereby
and in the Prospectus violate, conflict with or constitute a breach of any
of the terms or provisions of, or a default under (or an event that with
notice or the lapse of time, or both, would constitute a default), or
require consent under, or result in the imposition of a lien on any
properties of the Company or any of its subsidiaries, or an acceleration
of any indebtedness of the Company or any of its subsidiaries pursuant to,
(A) the charter or bylaws of the Company or any of its subsidiaries, (B)
any bond, debenture, note, indenture, mortgage, deed of trust, contract or
other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or its subsidiaries or
their properties is or may be bound, (C) any statute, rule or regulation
applicable to the Company or any of its subsidiaries or any of their
assets or properties or (D) any judgment, order or decree of any court or
governmental agency or authority having jurisdiction over the Company or
any of its subsidiaries or any of their assets or properties. No consent,
approval, authorization or order of, or filing, registration,
qualification, license or permit of or with, (i) any court or governmental
4
<PAGE>
agency, body or administrative agency or (ii) any other person is required
for (A) the execution, delivery and performance by the Company of this
Agreement, (B) the issuance and sale of the Shares and the transactions
contemplated hereby and thereby, except such as have been obtained and
made under the Securities Act and state securities or Blue Sky laws and
regulations or such as may be required by the National Association of
Securities Dealers, Inc. (the "NASD").
(m) There is (i) no action, suit or proceeding before or by any
court, arbitrator or governmental agency, body or official, domestic or
foreign, now pending or, to the best knowledge of the Company or any of
its subsidiaries, threatened or contemplated to which the Company or any
of its subsidiaries is a party or to which the business or property of the
Company or any of its subsidiaries is subject, (ii) no statute, rule,
regulation or order that has been enacted, adopted or issued by any
governmental agency or that has been proposed by any governmental body or
(iii) no injunction, restraining order or order of any nature by a federal
or state court or foreign court of competent jurisdiction to which the
Company or any of its subsidiaries is or may be subject or to which the
business, assets, or property of the Company or any of its subsidiaries
are or may be subject, that, in the case of clauses (i), (ii) and (iii)
above, (w) is required to be disclosed in the Prospectus and that is not
so disclosed, or (x) could reasonably be expected to, individually or in
the aggregate, result in a Material Adverse Effect.
(n) No action has been taken and no statute, rule, regulation or
order has been enacted, adopted or issued by any governmental agency that
prevents the issuance of the Shares or prevents or suspends the use of the
Prospectus; no injunction, restraining order or order of any kind by a
federal or state court of competent jurisdiction has been issued that
prevents the issuance of the Shares, prevents or suspends the sale of the
Shares in any jurisdiction referred to in Section 1(c) hereof or that
could adversely affect the consummation of the transactions contemplated
by this Agreement or the Prospectus; and every request of any securities
authority or agency of any jurisdiction for additional information has
been complied with in all material respects.
(o) There is (i) no significant unfair labor practice complaint
pending against the Company or any of its subsidiaries nor, to the best
knowledge of the Company, threatened against any of them, before the
National Labor Relations Board, any state or local labor relations board
or any foreign labor relations board, and no significant grievance or
significant arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Company or any of its
subsidiaries nor, to the best knowledge of the Company, threatened against
any of them, (ii) no significant strike, labor dispute, slowdown or
stoppage pending against the Company or any of its subsidiaries nor, to
the best knowledge of the Company, threatened against the Company or any
of its subsidiaries and (iii) to the best knowledge of the Company, no
union representation question existing with respect to the employees of
the Company or any of its subsidiaries that, in the case of clauses (i),
(ii) or (iii) above, could reasonably be expected to result in a Material
Adverse Effect. To the best knowledge of the Company, no collective
bargaining organizing activities are taking place with respect to the
Company or any of its subsidiaries. None of the Company or any of its
subsidiaries has violated (A) any federal, state or local law or foreign
law relating to discrimination in hiring, promotion or pay of employees,
(B) any applicable wage or hour laws or (C) any provision of the Employee
Retirement Income Security Act of 1974, as amended, and the regulations
and published interpretations thereunder (collectively, "ERISA"), which in
the case of clause (A), (B) or (C) above could reasonably be expected to
result in a Material Adverse Effect.
5
<PAGE>
(p) None of the Company or any of its subsidiaries has violated any
environmental, safety or similar law or regulation applicable to it or its
business or property relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), lacks any permit,
license or other approval required of it under applicable Environmental
Laws or is violating any term or condition of such permit, license or
approval, which could reasonably be expected to, either individually or in
the aggregate, have a Material Adverse Effect.
(q) Each of the Company and its subsidiaries has (i) good and
marketable title to all of the properties and assets described in the
Prospectus as owned by it, free and clear of all liens, charges,
encumbrances and restrictions, except such as are described in the
Prospectus or as would not have a Material Adverse Effect, (ii) peaceful
and undisturbed possession of its properties under all material leases to
which it is a party as lessee, (iii) all licenses, certificates, permits,
authorizations, approvals, franchises and other rights from, and has made
all declarations and filings with, all federal, state and local
authorities, all self-regulatory authorities and all courts and other
tribunals (each an "Authorization") necessary to engage in the business
conducted by it in the manner described in the Prospectus, except as
described in the Prospectus or where failure to hold such Authorizations
would not, individually or in the aggregate, have a Material Adverse
Effect and (iv) no reason to believe that any governmental body or agency
is considering limiting, suspending or revoking any such Authorization.
Except where the failure to be in full force and effect would not have a
Material Adverse Effect, all such Authorizations are valid and in full
force and effect, and each of the Company and its subsidiaries is in
compliance in all material respects with the terms and conditions of all
such Authorizations and with the rules and regulations of the regulatory
authorities having jurisdiction with respect thereto. All material leases
to which the Company or any of its subsidiaries is a party are valid and
binding, and no default by the Company or any subsidiary has occurred and
is continuing thereunder and, to the best knowledge of the Company and its
subsidiaries, no material defaults by the landlord are existing under any
such lease that could reasonably be expected to result in a Material
Adverse Effect.
(r) Each of the Company and its subsidiaries owns, possesses or has
the right to employ all patents, patent rights, licenses (including all
FCC, state, local or other regulatory licenses), inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, software, systems or procedures),
trademarks, service marks and trade names, inventions, computer programs,
technical data and information (collectively, the "Intellectual Property")
presently employed by it in connection with the businesses now operated by
it or that are proposed to be operated by it or its subsidiaries free and
clear of and without violating any right, claimed right, charge,
encumbrance, pledge, security interest, restriction or lien of any kind of
any other person and none of the Company or any of its subsidiaries has
received any notice of infringement of or conflict with asserted rights of
others with respect to any of the foregoing, except as (1) disclosed in
the Prospectus or (2) as could not reasonably be expected to have a
Material Adverse Effect. The use of the Intellectual Property in
connection with the business and operations of the Company and its
subsidiaries does not infringe on the rights of any person, except as
could not reasonably be expected to have a Material Adverse Effect.
(s) None of the Company or any of its subsidiaries or, to the best
knowledge of the Company, any of their respective officers, directors,
partners, employees, agents or affiliates or any other person acting on
behalf of the Company or any of its subsidiaries has, directly or
indirectly, given or agreed to give any money, gift or similar benefit
(other than legal price
6
<PAGE>
concessions to customers in the ordinary course of business) to any
customer, supplier, employee or agent of a customer or supplier, official
or employee of any governmental agency (domestic or foreign),
instrumentality of any government (domestic or foreign) or any political
party or candidate for office (domestic or foreign) or other person who
was, is or may be in a position to help or hinder the business of the
Company or any of its subsidiaries (or assist the Company or any of its
subsidiaries in connection with any actual or proposed transaction), which
(i) might subject the Company or any of its subsidiaries, or any other
individual or entity, to any damage or penalty in any civil, criminal or
governmental litigation or proceeding (domestic or foreign), (ii) if not
given in the past, might have had a material adverse effect on the assets,
business or operations of the Company or any of its subsidiaries or (iii)
if not continued in the future, might have a Material Adverse Effect.
(t) All material tax returns required to be filed by the Company and
each of its subsidiaries in all jurisdictions have been so filed. All
taxes, including withholding taxes, penalties and interest, assessments,
fees and other charges due or claimed to be due from such entities or that
are due and payable have been paid, other than those being contested in
good faith and for which adequate reserves have been provided or those
currently payable without penalty or interest. To the knowledge of the
Company, there are no material proposed additional tax assessments against
the Company, the assets or property of the Company or any of its
subsidiaries. The Company has made adequate charges, accruals and reserves
in the applicable financial statements included in the Prospectus in
respect of all federal, state and foreign income and franchise taxes for
all periods as to which the tax liability of the Company or any of its
consolidated subsidiaries has not been finally determined.
(u) None of the Company or any of its subsidiaries is (i) an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), or (ii) a "holding company" or a "subsidiary
company" or an "affiliate" of a holding company within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(v) Except as disclosed in the Prospectus, there are no holders of
securities of the Company or any of its subsidiaries who, by reason of the
execution by the Company of this Agreement to which it is a party or the
consummation by the Company or any of its subsidiaries of the transactions
contemplated hereby, have the right to request or demand that the Company
or any of its subsidiaries register under the Securities Act or analogous
foreign laws and regulations securities held by them, other than such that
have been duly waived.
(w) Each of the Company and its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets,
(iii) access to assets is permitted only in accordance with management's
general or specific authorization and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences thereto.
(x) Each of the Company and its subsidiaries maintains insurance
covering its properties, operations, personnel and businesses. Such
insurance insures against such losses and risks as are adequate in
accordance with customary industry practice to protect the Company and its
subsidiaries and their respective businesses. None of the Company or any
of its subsidiaries
7
<PAGE>
has received notice from any insurer or agent of such insurer that
substantial capital improvements or other expenditures will have to be
made in order to continue such insurance. All such insurance is
outstanding and duly in force on the date hereof, subject only to changes
made in the ordinary course of business, consistent with past practice,
which do not, singly or in the aggregate, materially alter the coverage
thereunder or the risks covered thereby. The Company has no reason to
believe that it or any subsidiary will not be able (a) to renew its
existing insurance coverage as and when such policies expire or (b) to
obtain comparable coverage from similar institutions as may be necessary
or appropriate to conduct its business as now conducted or as presently
contemplated and at a cost that would not result in a Material Adverse
Effect.
(y) The Company has not (i) taken, directly or indirectly, any
action designed to, or that might reasonably be expected to, cause or
result in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares or (ii) since
the date of the Preliminary Prospectus (A) sold, bid for, purchased or
paid any person any compensation for soliciting purchases of, the Shares
or (B) paid or agreed to pay to any person any compensation for soliciting
another to purchase any other securities of the Company.
(z) The Company and its subsidiaries and any "employee benefit plan"
(as defined under ERISA) established or maintained by the Company, its
subsidiaries or their "ERISA Affiliates" (as defined below) are in
compliance in all material respects with ERISA. "ERISA Affiliate" means,
with respect to the Company or a subsidiary, any member of any group of
organizations described in Sections 414(b), (c), (m) or (o) of the
Internal Revenue Code of 1986, as amended, and the regulations and
published interpretations thereunder (the "Code") of which the Company or
such subsidiary is a member. No "reportable event" (as defined under
ERISA) has occurred or is reasonably expected to occur with respect to any
"employee benefit plan" established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates. No "employee benefit plan"
established or maintained by the Company, its subsidiaries or any of their
ERISA Affiliates, if such "employee benefit plan" were terminated, would
have any "amount of unfunded benefit liabilities" (as defined under
ERISA). Neither the Company, its subsidiaries nor any of their ERISA
Affiliates has incurred or reasonably expects to incur any liability under
(i) Title IV of ERISA with respect to termination of, or withdrawal from,
any "employee benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B of
the Code. Each "employee benefit plan" established or maintained by the
Company, its subsidiaries or any of their ERISA Affiliates that is
intended to be qualified under Section 401(a) of the Code is so qualified
and nothing has occurred, whether by action or failure to act, which would
cause the loss of such qualification.
(aa) Subsequent to the respective dates as of which information is
given in the Prospectus and up to the Closing Date, except as set forth in
the Prospectus, (i) none of the Company or any of its subsidiaries has
incurred any liabilities or obligations, direct or contingent, that are
material, individually or in the aggregate, to the Company and its
subsidiaries taken as a whole, nor entered into any transaction not in the
ordinary course of business, (ii) none of the Company or any of its
subsidiaries has incurred any liabilities or obligations, direct or
contingent, that will be material to the Company and its subsidiaries
taken as a whole, (iii) there has not been, singly or in the aggregate,
any change or development that could reasonably be expected to result in a
Material Adverse Effect, (iv) there has been no dividend or distribution
of any kind declared, paid or made by the Company or any of its
subsidiaries on any class of its capital stock, (v) there has been no
change in accounting methods or practices (including any change in
depreciation or amortization policies or rates) by the Company or any of
its
8
<PAGE>
subsidiaries, (vi) there has been no revaluation by the Company or
any of its subsidiaries of any of their assets, (vii) there has been
no increase in the salary or other compensation payable or to become
payable by the Company or any of its subsidiaries to any of their
officers, directors, employees or advisors, nor any declaration,
payment or commitment or obligation of any kind for the payment by
the Company or any of its subsidiaries of a bonus or other
additional salary or compensation to any such person, (viii) there
has been no amendment or termination of any material contract,
agreement or license to which the Company or any subsidiary is a
party or by which it is bound, (ix) there has been no waiver or
release of any material right or claim of the Company or any
subsidiary, including any write-off or other compromise of any
material account receivable of the Company or any subsidiary, and
(x) there has been no material change in pricing or royalties set or
charged by the Company or any subsidiary to their respective
customers or licensees or in pricing or royalties set or charged by
persons who have licensed Intellectual Property Rights to the
Company or any of its subsidiaries.
(bb) KPMG LLP, who have expressed their opinion with respect to the
financial statements (which term as used in this Agreement includes the
related notes thereto) and supporting schedules included in the
Prospectus, are independent public or certified public accountants within
the meaning of Regulation S-X under the Securities Act and the Exchange
Act.
(cc) The financial statements, together with the related notes,
included in the Prospectus present fairly in all material respects the
consolidated financial position of the Company and its subsidiaries as of
and at the dates indicated and the results of their operations and cash
flows for the periods specified. Such financial statements have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved, except as
may be expressly stated in the related notes thereto. The financial data
set forth in the Prospectus under the captions "Prospectus
Summary--Summary Consolidated Financial Data", "Selected Consolidated
Financial Data" and "Capitalization" fairly present the information set
forth therein on a basis consistent with that of the audited financial
statements contained in the Prospectus.
(dd) Except pursuant to this Agreement, there are no contracts,
agreements or understandings between the Company and any other person that
would give rise to a valid claim against the Company or any of the
Underwriters for a brokerage commission, finder's fee or like payment in
connection with the issuance, purchase and sale of the Shares.
(ee) The statements (including the assumptions described therein)
included in the Prospectus (i) are within the coverage of Rule 175(b)
under the Securities Act to the extent such data constitute forward
looking statements as defined in Rule 175(c) and (ii) were made by the
Company with a reasonable basis and reflect the Company's good faith
estimate of the matters described therein.
(ff) Each of the Company and its subsidiaries has implemented Year
2000 compliance programs designed to ensure that its computer systems and
applications will function properly beyond 1999. The Company believes that
adequate resources have been allocated for this purpose and expects the
Company's and its subsidiaries' Year 2000 date conversion programs to be
completed on a timely basis.
9
<PAGE>
(gg) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to the
Underwriters as to the matters covered thereby.
The Company acknowledges that each of the Underwriters and, for
purposes of the opinions to be delivered to the Underwriters pursuant to Section
6 hereof, counsel to the Company and counsel to the Underwriters, will rely upon
the accuracy and truth of the foregoing representations and hereby consents to
such reliance.
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties, covenants
and agreements herein contained, but subject to the terms and conditions herein
set forth, the Company agrees to sell to the Underwriters and the Underwriters,
severally and not jointly, agree to purchase from the Company, at a purchase
price per share of $____, the number of Firm Shares set forth opposite the
respective names of the Underwriters in Schedule I hereto plus any additional
number of Shares which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 9 hereof.
(b) Payment of the purchase price for, and delivery of
certificates for, the Firm Shares shall be made at the office of Latham &
Watkins, 885 Third Avenue, Suite 1000, New York, New York, 10022, or at such
other place as shall be agreed upon by the Underwriters and the Company, at
10:00 A.M. on September ___, 1999 (unless postponed in accordance with the
provisions of Section 9 hereof) after the determination of the public offering
price of the Firm Shares, or such other time not later than ten business days
after such date as shall be agreed upon by the Underwriters and the Company
(such time and date of payment and delivery being herein called the "Closing
Date"). Payment shall be made to the Company by wire transfer in same day funds,
against delivery to the Underwriters of certificates for the Shares to be
purchased by them. Certificates for the Firm Shares shall be registered in such
name or names and in such authorized denominations as the Underwriters may
request in writing at least two full business days hours prior to the Closing
Date. The Company will permit the Underwriters to examine and package such
certificates for delivery at least one full business day prior to the Closing
Date.
(c) In addition, the Company hereby grants to the Underwriters
the option to purchase up to 1,500,000 Additional Shares at the same purchase
price per share to be paid by the Underwriters to the Company for the Firm
Shares as set forth in this Section 2, for the sole purpose of covering
over-allotments in the sale of Firm Shares by the Underwriters. This option may
be exercised at any time, in whole or in part, on or before the thirtieth day
following the date of the Prospectus, by written notice by the Underwriters to
the Company. Such notice shall set forth the aggregate number of Additional
Shares as to which the option is being exercised and the date and time, as
reasonably determined by the Underwriters, when the Additional Shares are to be
delivered (such date and time being herein sometimes referred to as the
"Additional Closing Date"); provided, however, that the Additional Closing Date
shall not be earlier than the Closing Date or earlier than the second full
business day after the date on which the option shall have been exercised nor
later than the eighth full business day after the date on which the option shall
have been exercised (unless such time and date are postponed in accordance with
the provisions of Section 9 hereof). Certificates for the Additional Shares
shall be registered in such name or names and in such authorized denominations
as the Underwriters may request in writing at least two full business days prior
to the Additional Closing Date. The Company will permit the Underwriters to
examine and package such certificates for delivery at least one full business
day prior to the Additional Closing Date.
10
<PAGE>
(d) The number of Additional Shares to be sold to each
Underwriter shall be the number which bears the same ratio to the aggregate
number of Additional Shares being purchased as the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I hereto (or such number
increased as set forth in Section 9 hereof) bears to the total number of Firm
Shares being purchased from the Company, subject, however, to such adjustments
to eliminate any fractional shares as the Underwriters in their sole discretion
shall make.
(e) Payment for the Additional Shares shall be made by wire
transfer in same day funds each payable to the order of the Company at the
office of Latham & Watkins, 885 Third Avenue, Suite 1000, New York, New York,
10022, or such other location as may be mutually acceptable, upon delivery of
the certificates for the Additional Shares to the Underwriters.
(f) The Company and the Underwriters agree that up to 500,000
of the Firm Shares to be purchased by the Underwriters (the "Reserved Shares")
shall be reserved for sale by the Underwriters to certain individuals and
entities having business relationships with the Company, as part of the
distribution of the Shares by the Underwriters, subject to the terms of this
Agreement, the NASD and all other applicable laws, rules and regulations. To the
extent that such Reserved Shares are not orally confirmed for purchase by such
individuals and entities having business relationships with the Company by the
end of the first business day after the date of this Agreement, such Reserved
Shares may be offered to the public as part of the public offering contemplated
hereby.
3. Offering. Upon the Underwriters' authorization of the release of
the Firm Shares, the Underwriters propose to offer the Shares for sale to the
public upon the terms set forth in the Prospectus.
4. Covenants of the Company. The Company covenants and agrees with
each of the Underwriters that:
(a) The Company will notify the Underwriters immediately (and,
if requested by the Underwriters, will confirm such notice in writing) (i) when
any post-effective amendment to the Registration Statement becomes effective,
(ii) of any request by the Commission for any amendment of or supplement to the
Registration Statement or the Prospectus or for any additional information,
(iii) of the mailing or the delivery to the Commission for filing of the
Prospectus or any amendment of or supplement to the Registration Statement or
the Prospectus or any document to be filed pursuant to the Exchange Act during
any period when the Prospectus is required to be delivered under the Securities
Act, (iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereto or of the initiation, or the threatening, of any proceedings therefor,
(v) of the receipt of any comments or inquiries from the Commission, and (vi) of
the receipt by the Company of any notification with respect to the suspension of
the qualification of the Shares for sale in any jurisdiction or the initiation
or threatening of any proceeding for that purpose. If the Commission shall
propose or enter a stop order at any time, the Company will make every
reasonable effort to prevent the issuance of any such stop order and, if issued,
to obtain the lifting of such order as soon as possible. The Company will not
file any post-effective amendment to the Registration Statement or any amendment
of or supplement to the Prospectus (including any revised prospectus which the
Company proposes for use by the Underwriters in connection with the offering of
the Shares which differs from the prospectus filed with the Commission pursuant
to Rule 424(b) of the Securities Act Regulations, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) of the Securities Act
Regulations) to which the Underwriters or Underwriters' Counsel (as hereinafter
defined) shall reasonably object, will furnish the Underwriters
11
<PAGE>
with copies of any such amendment or supplement a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file any
such amendment or supplement or use any such prospectus to which the
Underwriters or counsel for the Underwriters shall reasonably object.
(b) If any event shall occur as a result of which the
Prospectus would, in the judgment of the Underwriters or the Company, include an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or if it shall
be necessary at any time to amend or supplement the Prospectus or the
Registration Statement to comply with the Securities Act or the Securities Act
Regulations, the Company will notify the Underwriters promptly and prepare and
file with the Commission an appropriate amendment or supplement (in form and
substance satisfactory to the Underwriters) which will correct such statement or
omission or which will effect such compliance.
(c) The Company has delivered to the Underwriters five signed
copies of the Registration Statement as originally filed, including exhibits,
and all amendments thereto, and the Company will promptly deliver to each of the
Underwriters, from time to time during the period that the Prospectus is
required to be delivered under the Securities Act, such number of copies of the
Prospectus and the Registration Statement, and all amendments of and supplements
to such documents, if any, as the Underwriters may reasonably request.
(d) The Company will endeavor in good faith, in cooperation
with the Underwriters, to qualify the Shares for offering and sale under the
securities laws relating to the offering or sale of the Shares of such
jurisdictions as the Underwriters may designate and to maintain such
qualification in effect for so long as required for the distribution thereof;
except that in no event shall the Company be obligated in connection therewith
to qualify as a foreign corporation or to execute a general consent to service
of process.
(e) The Company will make generally available (within the
meaning of Section 11(a) of the Securities Act) to its security holders and to
the Underwriters as soon as practicable, but not later than 45 days after the
end of its fiscal quarter in which the first anniversary date of the effective
date of the Registration Statement occurs (or if such fiscal quarter is the
Company's fourth fiscal quarter, not later than 90 days after the end of such
quarter), an earnings statement (in form complying with the provisions of Rule
158 of the Regulations) covering a period of at least twelve consecutive months
beginning after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Securities Act).
(f) During the period of 180 days from the date of the
Prospectus, the Company will not, directly or indirectly, without the prior
written consent of Bear, Stearns & Co. Inc. and Donaldson, Lufkin & Jenrette
Securities Corporation, offer, sell, contract to sell, grant any option to
purchase, pledge or otherwise dispose (or announce any offer, sale, contract to
sell, grant of an option to purchase, pledge or other disposition) of any shares
of Common Stock of the Company or any securities convertible into or exercisable
or exchangeable for such Common Stock, except that the Company may issue (i)
shares of Common Stock and options to purchase Common Stock under its 1998
Shares Award Plan, (ii) shares of Common Stock upon exercise of warrants to
purchase Common Stock or conversion of notes that were issued and outstanding on
the date of the Prospectus or (iii) shares of Common Stock in connection with
strategic relationships and acquisitions of businesses, technologies and
products complementary to those of the Company, so long as the recipients of
such shares agree to be bound by a lock-up agreement substantially in the form
of Exhibit C hereto (which shall provide that any transferees
12
<PAGE>
and assigns of such recipients shall be bound by the lock-up agreement) for the
remainder of the 180-day lock-up period.
(g) During a period of three years from the date of the
Prospectus, the Company will furnish to the Underwriters copies of (i) all
reports to its stockholders; and (ii) all reports, financial statements and
proxy or information statements filed by the Company with the Commission or any
national securities exchange.
(h) The Company will apply the proceeds from the sale of the
Shares as set forth under "Use of Proceeds" in the Prospectus.
(i) If the Company elects to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by 10:00 P.M., New
York City time, on the date of this Agreement, no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission, and all requests for additional information on the
part of the Commission shall have been complied with to the Underwriters'
reasonable satisfaction.
(j) The Company, during the period when the Prospectus is
required to be delivered under the Securities Act or the Exchange Act, will file
all documents required to be filed with the Commission pursuant to Sections 13,
14 or 15 of the Exchange Act within the time periods required by the Exchange
Act and the rules and regulations thereunder.
5. Payment of Expenses. Whether or not the transactions contemplated
in this Agreement are consummated or this Agreement is terminated, the Company
hereby agrees to pay all costs and expenses incident to the performance of the
obligations of the Company hereunder, including those in connection with (a)
preparing, printing, duplicating, filing and distributing the Registration
Statement, as originally filed and all amendments thereto (including all
exhibits thereto), any Preliminary Prospectus, the Prospectus and any amendments
or supplements thereto (including, without limitation, fees and expenses of the
Company's accountants and counsel), the underwriting documents (including this
Agreement, the Agreement Among Underwriters and the Selling Agreement) and all
other documents related to the public offering of the Shares (including those
supplied to the Underwriters in quantities as hereinabove stated), (b) the
issuance, transfer and delivery of the Shares to the Underwriters, including any
transfer or other taxes payable thereon, (c) the qualification of the Shares
under state or foreign securities or Blue Sky laws, including the costs of
printing and mailing a preliminary and final "Blue Sky Memorandum" and the fees
of counsel in connection therewith and such counsel's disbursements in relation
thereto, (d) listing of the Shares for quotation on the Nasdaq, (e) filing fees
of the Commission and the NASD, (f) the cost of printing certificates
representing the Shares, (vii) the cost and charges of any transfer agent or
registrar and (g) all costs and expenses of the Underwriters, including the fees
and disbursements of counsel for the Underwriters, in connection with matters
related to the Reserved Shares.
6. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Firm Shares and the Additional Shares,
as provided herein, shall be subject to the accuracy of the representations and
warranties of the Company herein contained, as of the date hereof and as of the
Closing Date (for purposes of this Section 6, "Closing Date" shall refer to the
Closing Date for the Firm Shares and any Additional Closing Date, if different,
for the Additional Shares), to the absence from any certificates, opinions,
written statements or letters furnished to the Underwriters or to Latham &
Watkins ("Underwriters' Counsel") pursuant to this Section 6 of any material
misstatement or
13
<PAGE>
omission, to the performance by the Company of its obligations hereunder, and to
the following additional conditions:
(a) Prior to the Closing Date the Registration Statement shall
have become effective, and on the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
Securities Act or proceedings therefor initiated or, to the Company's knowledge,
threatened by the Commission. The Prospectus shall have been filed or
transmitted for filing with the Commission pursuant to Rule 424(b) of the
Securities Act Regulations within the prescribed time period, and prior to
Closing Date the Company shall have provided evidence satisfactory to the
Underwriters of such timely filing or transmittal.
(b) All of the representations and warranties of the Company
contained in this Agreement shall be true and correct on the date hereof and on
the Closing Date with the same force and effect as if made on and as of the date
hereof and the Closing Date, respectively. The Company shall have performed or
complied with all of the agreements herein contained and required to be
performed or complied with by it at or prior to the Closing Date.
(c) The Prospectus shall have been printed and copies
distributed to the Underwriters not later than 10:00 a.m., New York City time,
on the second business day following the date of this Agreement or at such later
date and time as to which the Underwriters may agree, and no stop order
suspending the qualification or exemption from qualification of the Shares in
any jurisdiction referred to in Section 4(d) shall have been issued and no
proceeding for that purpose shall have been commenced or shall be pending or
threatened.
(d) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date, prevent the issuance of
the Shares; no action, suit or proceeding shall have been commenced and be
pending against or affecting or, to the best knowledge of the Company,
threatened against, the Company or any of its subsidiaries before any court or
arbitrator or any governmental body, agency or official that (i) could
reasonably be expected to result in a Material Adverse Effect or (ii) has not
been disclosed in the Prospectus.
(e) Since the dates as of which information is given in the
Prospectus, (i) there shall not have been any material adverse change, or any
development that is reasonably likely to result in a material adverse change, in
the capital stock or the long-term debt, or material increase in the short-term
debt, of the Company or any of its subsidiaries from that set forth in the
Prospectus, (ii) no dividend or distribution of any kind shall have been
declared, paid or made by the Company or any of its subsidiaries on any class of
its capital stock, (iii) neither the Company nor any of its subsidiaries shall
have incurred any liabilities or obligations, direct or contingent, that are
material, individually or in the aggregate, to the Company and its subsidiaries,
taken as a whole, and that are required to be disclosed on a balance sheet or
notes thereto in accordance with generally accepted accounting principles and
are not disclosed on the latest balance sheet or notes thereto included in the
Prospectus. Since the date hereof and since the dates as of which information is
given in the Prospectus, there shall not have occurred any Material Adverse
Effect.
(f) The Underwriters shall have received (1) a certificate,
dated the Closing Date, signed on behalf of the Company by each of the Company's
Chief Executive Officer and Chief Financial Officer in form and substance
reasonably satisfactory to the Underwriters, confirming, as of the Closing Date,
the matters set forth in paragraphs (a) through (e) of this Section 6 and that,
as of the Closing Date, the obligations of the Company to be performed hereunder
on or prior thereto have been
14
<PAGE>
duly performed in all material respect and (2) a certificate, dated the Closing
Date, signed by the Company's Secretary, in form and substance reasonably
satisfactory to the Underwriters.
(g) The Underwriters shall have received on the Closing Date
an opinion, dated the Closing Date, in form and substance satisfactory to the
Underwriters and counsel to the Underwriters, of Hogan & Hartson L.L.P., counsel
for the Company, to the effect set forth in Exhibit A hereto.
(h) The Underwriters shall have received on the Closing Date
an opinion, dated the Closing Date, in form and substance satisfactory to the
Underwriters and counsel to the Underwriters, of Fisher Wayland Cooper Leader &
Zaragoza L.L.P., counsel for the Company, to the effect set forth in Exhibit B
hereto.
(i) The Underwriters shall have received an opinion, dated the
Closing Date, in form and substance reasonably satisfactory to the Underwriters,
of Latham & Watkins, counsel to the Underwriters, covering such matters as are
customarily covered in such opinions.
(j) Latham & Watkins shall have been furnished with such
documents, in addition to those set forth above, as they may reasonably require
for the purpose of enabling them to review or pass upon the matters referred to
in this Section 6 and in order to evidence the accuracy, completeness or
satisfaction in all material respects of any of the representations, warranties
or conditions herein contained.
(k) At the time this Agreement is executed and at the Closing
Date the Underwriters shall have received from KPMG LLP, independent public
accountants for the Company and its subsidiaries, dated as of the date of this
Agreement and as of the Closing Date, customary comfort letters addressed to the
Underwriters in form and substance satisfactory to the Underwriters and counsel
to the Underwriters with respect to the financial statements and certain
financial information of the Company and its subsidiaries contained in the
Prospectus.
(l) At the time this Agreement is executed, the Underwriters
shall have received a "lock-up" agreement, substantially in the form attached as
Exhibit C hereto, from each of the officers and directors of the Company
identified on Exhibit D hereto.
(m) At the time this Agreement is executed, the Underwriters
shall have received a "lock-up" agreement, substantially in the form attached as
Exhibit E hereto, from each of the stockholders of the Company identified on
Exhibit F hereto.
(n) At the Closing Date, the Shares shall have been approved
for quotation on the Nasdaq.
(o) At the time this Agreement is executed and at the Closing
Time, the NASD shall not have withdrawn, or given notice of an intention to
withdraw, its approval of the fairness of the underwriting terms and
arrangements of the Offering of the Shares by the Underwriters.
(p) Each of the (1) Shareholders' Agreement, dated July 7,
1999, by and among the Company and the other parties thereto, (2) Technology
Licensing Agreement, dated June 7, 1999, by and among the Company and the other
parties thereto, (3) Technical Services Agreement, dated January 1, 1998, as
amended, between the Company and AMSC, (4) Satellite Purchase Contract for
In-Orbit Delivery, dated March 20, 1998, between the Company and Hughes Space
and Communications
15
<PAGE>
International, Inc., (5) Agreement, dated November 2, 1998, by and between the
Company and STMicroelectronics Srl, (6) Distribution Agreement, dated June 7,
1999, between the OnStar Division of General Motors Corporation and the Company,
(8) Operational Assistance Agreement, dated June 7, 1999, between the Company
and DIRECTV, INC., (9) Operational Assistance Agreement, dated June 7, 1999,
between the Company and Clear Channel Communications, Inc., (10) Operational
Assistance Agreement, dated June 7, 1999, between the Company and TCM, LLC. and
(11) Agreement, dated _______, between LCC International and the Company, shall
be in full force and effect, and no party to any such agreement shall have given
any notice of termination or amendment of any material provision thereof, or of
any intention to terminate or amend any material provision thereof, to any other
party, and no event shall have occurred which would prevent any party from
substantially performing its obligations under such agreements.
(q) All opinions, certificates, letters and other documents
required by this Section 6 to be delivered by the Company will be in compliance
with the provisions hereof only if they are reasonably satisfactory in form and
substance to the Underwriters. The Company will furnish the Underwriters with
such conformed copies of such opinions, certificates, letters and other
documents as Bear, Stearns & Co. Inc. and Donaldson, Lufkin & Jenrette
Securities Corporation shall reasonably request. Prior to the Closing Date, the
Company shall have furnished to the Underwriters such further information,
certificates and documents as the Underwriters may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to the
Underwriters or to Underwriters' Counsel pursuant to this Section 6 shall not be
in all material respects reasonably satisfactory in form and substance to the
Underwriters and to Underwriters' Counsel, all obligations of the Underwriters
hereunder may be canceled by the Underwriters at, or at any time prior to, the
Closing Date and the obligations of the Underwriters to purchase the Additional
Shares may be canceled by the Underwriters at, or at any time prior to, the
Additional Closing Date. Notice of such cancellation shall be given to the
Company in writing, or by telephone, telecopy, telex or telegraph, confirmed in
writing.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act
against any and all losses, liabilities, claims, damages and expenses whatsoever
as incurred (including but not limited to attorneys' fees and any and all
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, as originally filed or any amendment thereof, or any
related Preliminary Prospectus or the Prospectus, or in any supplement thereto
or amendment thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
the Company will not be liable in any such case (i) to the extent but only to
the extent that any such loss, liability, claim, damage or expense arises out of
or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf of any
Underwriter expressly for use therein and (ii) with respect to any preliminary
prospectus or preliminary prospectus
16
<PAGE>
supplement to the extent that any such loss, claim, damage or liability results
from the fact that an Underwriter sold Shares to a person as to whom it shall be
established that there was not sent or given, at or prior to written
confirmation of such sale, a copy of the prospectus or prospectus supplement as
then amended or supplemented in any case where such delivery is required by the
Securities Act if the Company has previously furnished copies thereof in
sufficient quantity to such Underwriter and with sufficient time to effect a
recirculation pursuant to Rule 461 under the Securities Act and the loss, claim,
damage or liability of the Underwriters results from an untrue statement or
omission of a material fact contained in the preliminary prospectus or
preliminary prospectus supplement which was identified in writing prior to the
effective date of the registration statement to such underwriter and corrected
in the prospectus or prospectus supplement as then amended, and such correction
would have cured the defect giving rise to such loss, claim, damage or
liability. This indemnity agreement will be in addition to any liability which
the Company may otherwise have including under this Agreement.
(b) Each Underwriter severally, and not jointly, agrees to
indemnify and hold harmless the Company and each other person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act, against any and all losses, liabilities,
claims, damages and expenses whatsoever as incurred (including but not limited
to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, as
originally filed or any amendment thereof, or any related preliminary
prospectus, preliminary prospectus supplement or prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter expressly for use therein; provided, however, that in
no case shall any Underwriter be liable or responsible for any amount in excess
of the underwriting discount applicable to the Shares purchased by such
Underwriter hereunder. This indemnity will be in addition to any liability which
any Underwriter may otherwise have, including under this Agreement.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 7 except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability which it may otherwise have). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by the indemnifying parties
in connection with the defense of such action, (ii) the indemnifying parties
shall not have
17
<PAGE>
employed counsel to take charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying party or parties shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties), in any of which
events such fees and expenses shall be borne by the indemnifying parties.
Anything in this subsection to the contrary notwithstanding, an indemnifying
party shall not be liable for any settlement of any claim or action effected
without its written consent; provided, however, that such consent was not
unreasonably withheld.
8. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 7 hereof is
for any reason held to be unavailable from any indemnifying party or is
insufficient to hold harmless a party indemnified thereunder, the Company and
the Underwriters shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Company any
contribution received by the Company from persons, other than the Underwriters,
who may also be liable for contribution, including persons who control the
Company within the meaning of Section 15 of the Securities Act or Section 20(a)
of the Exchange Act, officers of the Company who signed the Registration
Statement and directors of the Company) as incurred to which the Company and one
or more of the Underwriters may be subject, in such proportions as is
appropriate to reflect the relative benefits received by the Company and the
Underwriters from the offering of the Shares or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in Section 7
hereof, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company and the
Underwriters in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other hand shall be deemed to be in
the same proportion as (x) the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company and (y) the underwriting discounts and commissions received by
the Underwriters, respectively, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault of the Company and the
Underwriters shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this Section 8, (i) in no case shall any Underwriter be liable or responsible
for any amount in excess of the underwriting discount applicable to the Shares
purchased by such Underwriter hereunder, and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person, if
any, who controls an Underwriter within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act shall have the same rights
to contribution as such Underwriter, and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20(a)
of the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company
18
<PAGE>
shall have the same rights to contribution as the Company, subject in each case
to clauses (i) and (ii) of this Section 8. Any party entitled to contribution
will, promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties, notify each party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 8 or otherwise. No party
shall be liable for contribution with respect to any action or claim settled
without its consent; provided, however, that such consent was not unreasonably
withheld.
9. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in its or
their obligation to purchase Firm Shares or Additional Shares hereunder, and if
the Firm Shares or Additional Shares with respect to which such default relates
do not (after giving effect to arrangements, if any, made by the Underwriters
pursuant to Subsection (b) below) exceed in the aggregate 10% of the number of
Firm Shares or Additional Shares, the Firm Shares or Additional Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase shall be purchased by the non-defaulting Underwriters in proportion to
the respective proportions which the numbers of Firm Shares set forth opposite
their respective names in Schedule I hereto bear to the aggregate number of Firm
Shares set forth opposite the names of the non-defaulting Underwriters.
(b) In the event that such default relates to more than 10% of
the Firm Shares or Additional Shares, as the case may be, the Underwriters may
in their discretion arrange for themselves or for another party or parties
(including any non-defaulting Underwriter or Underwriters who so agree) to
purchase such Firm Shares or Additional Shares, as the case may be, to which
such default relates on the terms contained herein. In the event that within
five calendar days after such a default the Underwriters do not arrange for the
purchase of the Firm Shares or Additional Shares, as the case may be, to which
such default relates as provided in this Section 9, this Agreement, or in the
case of a default with respect to the Additional Shares, the obligations of the
Underwriters to purchase and of the Company to sell the Additional Shares, shall
thereupon terminate, without liability on the part of the Company with respect
thereto (except in each case as provided in Section 5, 7(a) and 8 hereof) or the
Underwriters, but nothing in this Agreement shall relieve a defaulting
Underwriter or Underwriters of its or their liability, if any, to the other
Underwriters and the Company for damages occasioned by its or their default
hereunder.
(c) In the event that the Firm Shares or Additional Shares to
which the default relates are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as aforesaid,
the Underwriters or the Company shall have the right to postpone the Closing
Date or Additional Closing Date, as the case may be, for a period not exceeding
five business days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus or in any other
documents and arrangements, and the Company agrees to file promptly any
amendment or supplement to the Registration Statement or the Prospectus which,
in the opinion of Underwriters' Counsel, may thereby be made necessary or
advisable. The term "Underwriter" as used in this Agreement shall include any
party substituted under this Section 9 with like effect as if it had originally
been a party to this Agreement with respect to such Firm Shares or Additional
Shares.
10. Survival of Representations and Agreements. All representations
and warranties, covenants and agreements of the Underwriters and the Company
contained in this Agreement, including the agreements contained in Section 5,
the indemnity agreements contained in Section 7 and the contribution agreements
contained in Section 8, shall remain operative and in full force and effect
19
<PAGE>
regardless of any investigation made by or on behalf of any Underwriter or any
controlling person thereof or by or on behalf of the Company, any of its
officers and directors, or any controlling person of the Company, and shall
survive delivery of and payment for the Shares to and by the Underwriters. The
representations contained in Section 1 and the agreements contained in Sections
5, 7, 8, 11(d) and 12 hereof shall survive the termination of this Agreement,
including termination pursuant to Section 9 or 11 hereof.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon the execution
and delivery of a counterpart hereof by each of the parties hereto.
(b) The Underwriters shall have the right to terminate this
Agreement at any time prior to the Closing Date or the obligations of the
Underwriters to purchase the Additional Shares at any time prior to the
Additional Closing Date, as the case may be, if on or prior to such date, (i)
the Company shall have failed, refused or been unable to perform in any material
respect any agreement on its part to be performed hereunder, (ii) any other
condition to the obligations of the Underwriters hereunder as provided in
Section 6 is not fulfilled when and as required in any material respect, (iii)
in the judgment of the Underwriters any changes of circumstance shall have
occurred since the respective dates as of which information is given in the
Prospectus which could have a Material Adverse Effect, other than as set forth
in the Prospectus, or (iv) (A) any domestic or international event or act or
occurrence has materially adversely affected, or in the opinion of the
Underwriters will in the immediate future materially adversely affect, the
market for the Company's securities or for securities in general; or (B) trading
in securities generally on the New York Stock Exchange ("NYSE") or quotations on
the Nasdaq shall have been suspended or materially limited, or minimum or
maximum prices for trading shall have been established, or maximum ranges for
prices for securities shall have been required, on such exchange, or by such
exchange or other regulatory body or governmental authority having jurisdiction;
or (C) a banking moratorium shall have been declared by federal or state
authorities, or a moratorium in foreign exchange trading by major international
banks or persons shall have been declared; or (D) there is an outbreak or
escalation of armed hostilities involving the United States on or after the date
hereof, or if there has been a declaration by the United States of a national
emergency or war, the effect of which shall be, in the Underwriters' judgment,
to make it inadvisable or impracticable to proceed with the offering, sale and
delivery of the Firm Shares or the Additional Shares, as the case may be, on the
terms and in the manner contemplated by the Prospectus; or (E) there shall have
been such a material adverse change in general economic, political or financial
conditions or if the effect of international conditions on the financial markets
in the United States shall be such as, in the Underwriters' judgment, makes it
inadvisable or impracticable to proceed with the offering, sale and delivery of
the Firm Shares or the Additional Shares, as the case may be, on the terms and
in the manner contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 11
shall be by telephone, telecopy, telex, or telegraph, confirmed in writing by
letter.
(d) If this Agreement shall be terminated pursuant to any of
the provisions hereof (other than pursuant to Section 9(b) or 11(b) hereof), or
if the sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof, the
Company will, subject to demand by the Underwriters, reimburse the Underwriters
for all out-of-pocket expenses (including the reasonable fees and expenses of
their counsel), incurred by the Underwriters in connection herewith.
20
<PAGE>
12. Underwriters' Information. The Company and the Underwriters
severally acknowledge that the statements set forth in (i) the last paragraph of
the outside front cover of the Prospectus concerning the delivery of the shares
of Common Stock to the Underwriters and the offering of such shares by the
Underwriters; (ii) the fourth paragraph under the caption "Underwriting" in the
Prospectus concerning the proposed public offering price, discount and
concession; and (iii) the seventh paragraph under the caption "Underwriting" in
the Prospectus concerning transactions that stabilize, maintain, or otherwise
affect the price of the Common Stock, constitute the only information furnished
in writing by or on behalf of any Underwriter expressly for use in the
Registration Statement, as originally filed or in any amendment thereof, any
related Preliminary Prospectus or preliminary prospectus supplement or the
Prospectus or in any amendment thereof or supplement thereto, as the case may
be.
13. Notices. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and, if sent to the
Underwriters shall be mailed, delivered, telegraphed or telecopied and confirmed
in writing to the Underwriters, c/o Bear, Stearns & Co. Inc., 245 Park Avenue,
New York, New York 10167, Attention: Corporate Finance Department, telecopy
number: (212) 272-3092 and Donaldson, Lufkin & Jenrette Securities Corporation,
277 Park Avenue, New York, New York, 10172, Attention: Syndicate Department,
with a copy to Latham & Watkins, 885 Third Avenue, Suite 1000, New York, New
York 10022, Attention: Gregory A. Ezring, telecopy number (212) 751-4864, and if
sent to the Company, shall be mailed, delivered or telexed, telegraphed or
telecopied and confirmed in writing to XM Satellite Radio Holdings Inc., 1250
23rd Street, NW, Suite 57, Washington, D.C. 20037-1100, Attention: Chief
Financial Officer, telecopy number: (202) _______, with a copy to Hogan &
Hartson L.L.P., 555 Thirteenth Street NW, Washington, D.C. 20004-1109,
Attention: Steve Kaufman, telecopy number (202) 637-5910; provided, however,
that any notice pursuant to Sections 7 or 8 shall be mailed, delivered,
telegraphed or telecopied and confirmed in writing
14. Parties. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Underwriters, the Company and the controlling
persons, directors, officers, employees and agents referred to in Section 7 and
8, and their respective successors and assigns, and no other person shall have
or be construed to have any legal or equitable right, remedy or claim under or
in respect of or by virtue of this Agreement or any provision herein contained.
The term "successors and assigns" shall not include a purchaser, in its capacity
as such, of Shares from any of the Underwriters.
15. Construction. This Agreement shall be construed in accordance
with the internal laws of the State of New York applicable to agreements made
and to be performed within New York, without giving any effect to any provisions
thereof relating to conflicts of law. TIME IS OF THE ESSENCE IN THIS AGREEMENT.
16. Captions. The captions included in this Agreement are included
solely for convenience of reference and are not to be considered a part of this
Agreement.
17. Counterparts. This Agreement may be executed in various
counterparts which together shall constitute one and the same instrument.
21
<PAGE>
If the foregoing correctly sets forth the understanding among the
Underwriters and the Company, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement among
us.
Very truly yours,
XM SATELLITE RADIO HOLDINGS INC.
By: ____________________________________
Name: __________________________________
Title: _________________________________
Accepted as of the date first above written
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
Acting severally on behalf of themselves and
the several Underwriters named in Schedule I
hereto
BEAR, STEARNS & CO. INC.
By:________________________________
Name:
Title:
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
By:________________________________
Name:
Title:
<PAGE>
SCHEDULE I
Number of Firm
Name of Underwriter Shares to be Purchased
- --------------------------------------------------------------------------------
Bear, Stearns & Co. Inc. ...............................................
Donaldson, Lufkin & Jenrette Securities Corporation ....................
Deutsche Bank Securities Inc............................................
Merrill Lynch, Pierce, Fenner & Smith Incorporated......................
........................................................................
[others]................................................................
........................................................................
........................................................................
Total..............................................................
<PAGE>
Exhibit A
Form of Opinion of Hogan & Hartson LLP
1. Each of XM Satellite Radio Holdings, Inc. (the "Company")and its
subsidiaries is duly organized and validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, and has all
requisite corporate power and authority to carry on its business as it is being
conducted and as described in the Prospectus and to own, lease and operate its
properties, and is duly qualified and in good standing as a foreign corporation
authorized to do business in each jurisdiction in which the nature of its
business or its ownership or leasing of property requires such qualification,
except where the failure to be so qualified or in good standing would not,
singly or in the aggregate, have a Material Adverse Effect.
2. All of the outstanding shares of capital stock of the Company
have been duly authorized, validly issued, and are fully paid and nonassessable
and were not issued in violation of any preemptive or similar rights under the
Delaware General Corporation Law. The authorized, issued and outstanding capital
stock of the Company conforms in all respects to the description thereof set
forth in the Prospectus.
3. All of the issued and outstanding capital stock of, or other
ownership interests in, the Company's subsidiaries have been duly authorized and
validly issued, are fully paid and non-assessable and were not issued in
violation of or subject to any preemptive or similar rights under the Delaware
General Corporation Law or known to us, after reasonable inquiry, and, are owned
by the Company of record and, to our knowledge, after reasonable inquiry, free
and clear of any security interest, claim, lien, limitation on voting rights or
encumbrance. There are not, to our knowledge, currently, and will not be
following the Offering, any outstanding subscriptions, rights, warrants, calls,
commitments of sale or options to acquire or instruments convertible into or
exchangeable for, any capital stock or other equity interest of the Company or
any of its subsidiaries (other than options issued pursuant to the Company's
stock option plan).
4. The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Underwriting Agreement
and to consummate the transactions contemplated thereby and in the Prospectus,
including, without limitation, the corporate power and authority to issue, sell
and deliver the Shares as provided herein and therein.
5. The Underwriting Agreement has been duly and validly authorized,
executed and delivered by the Company and, assuming due execution by the other
parties hereto, is the legally valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.
6. The Registration Statement has become effective under the Act
and, to the best of our knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued under the Act and no proceedings
therefor have been initiated or threatened by the Commission; and any required
filing of the Prospectus pursuant to Rule 424(b) under the Act has been made in
accordance with Rule 424(b) and 430A under the Act.
7. The Registration Statement, Preliminary Prospectus and Prospectus
comply as to form in all material respects with the requirements for
registration statements on Form S-1 under the
- ----------
29. Acceptable alternative language to "initiated" includes "instituted" or
"pending."
<PAGE>
Securities Act and the Securities Act Regulations; it being understood, however,
that such counsel need not express an opinion with respect to the financial
statements, schedules and other financial data included in the Registration
Statement, Preliminary Prospectus or Prospectus. To such counsel's knowledge,
there are no contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein, and, to such counsel's knowledge, the descriptions thereof
or references thereto are correct in all material respects.
8. None of (A) the execution, delivery or performance by the Company
of the Underwriting Agreement, (B) the issuance and sale of the Shares or (C)
the consummation by the Company of the transactions described in the Prospectus
under the caption "Use of Proceeds" violates, conflicts with or constitutes a
breach of any of the terms or provisions of, or a default under (or an event
that with notice or the lapse of time, or both, would constitute a default), or
requires consent under, or will result in the imposition of a lien or
encumbrance on any properties of the Company or any of its subsidiaries, or an
acceleration of any indebtedness of the Company or any of its subsidiaries
pursuant to, (i) the charter or bylaws of the Company or any of its
subsidiaries, (ii) any bond, debenture, note, indenture, mortgage, deed of
trust, contract or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which any of them or their property is or may
be bound identified to such counsel as material, (iii) any statute, rule of
regulation applicable to the Company or any of its subsidiaries, or (iv) any
judgment, order or decree of any court or governmental agency or authority
having jurisdiction over the Company or any of its subsidiaries or any of their
assets or properties known to such counsel, and except in the case of clauses
(ii), (iiii) and (iv) for such violations, conflicts, breaches, defaults,
consents, impositions of liens or accelerations that (x) would not, singly or in
the aggregate, have a Material Adverse Effect or (y) are disclosed in the
Prospectus. No consent, approval, authorization or order of, or filing,
registration, qualification, license or permit of or with, (a) any court or
governmental agency, body or administrative agency (b) or any other person is
required for (1) the execution, delivery and performance by the Company of the
Underwriting Agreement, (2) the issuance and sale of the Shares or (3)
consummation by the Company of the transactions described in the Prospectus
except (i) such as have been obtained and made or have been disclosed in the
Prospectus or (ii) where the failure to obtain such consents or waivers would
not, singly or in the aggregate, have a Material Adverse Effect. To the best of
such counsel's knowledge, after reasonable inquiry, no consents or waivers from
any other person are required for the execution, delivery and performance by the
Company of the Underwriting Agreement, the issuance and sale of the Shares ,
other than such consents and waivers as have been obtained or are being applied
for.
9. None of the Company or any of its subsidiaries is (i) an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, or (ii) a
"holding company" or a "subsidiary company" or an "affiliate" of a holding
company within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
10. Except as set forth in the Underwriting Agreement or in the
Prospectus, to such counsel's knowledge, after reasonable inquiry there are no
holders of any securities of the Company who, by reason of the execution by the
Company of the Underwriting Agreement or the consummation by the Company of the
transactions contemplated thereby, have the right to request or demand that the
Company register under the Act securities held by them.
11. To the knowledge of such counsel, after reasonable inquiry, no
search of courts having been made, there is (i) no action, suit, investigation
or proceeding before or by any court, arbitrator or governmental agency, body or
official, domestic or foreign, now pending, or threatened or contemplated to
which any of the Company or any of its subsidiaries is or may be a party or to
which the
ii
<PAGE>
business or property of any of the Company or any of its subsidiaries is or may
be subject, (ii) no statute, rule, regulation or order that has been enacted,
adopted or issued by any governmental agency or that has been proposed by any
governmental body, or (iii) no injunction, restraining order or order of any
nature by a federal or state court of competent jurisdiction to which any of the
Company or any of its subsidiaries is or may be subject has been issued that, in
the case of clauses (i), (ii) and (iii) above, (w) is required to be disclosed
in the Prospectus and that is not so disclosed or, (x) could reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect, except as disclosed in the Prospectus; or (y) might interfere with,
adversely affect or in any manner question the validity of the issuance and sale
of the Shares or any of the other transactions contemplated by the Underwriting
Agreement.
12. The statements contained in the Prospectus under the captions
"Risk Factors--Our distribution agreement with General Motors involves
significant financial and other risks", "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Funds Required for XM Radio
Through Commencement of Commercial Operations--Sources of Funds", "Management's
Discussion and Analysis of Financial Condition and Results of Operations--Funds
Required for XM Radio Following Commencement of Commercial Operations"
"Management", "Certain Relationships and Related Party Transactions", "Principal
Stockholders", "Description of Capital Stock" and "Shares Eligible for Future
Sale", in each case, insofar as such statements constitute summaries of the
legal matters, documents or proceedings referred to therein, fairly present the
information required with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein in all material
respects.
We have participated in conferences with officers and other
representatives of the Company, representatives of the independent certified
public accountants of the Company and the Underwriters and their representatives
at which the contents of the Registration Statement, Preliminary Prospectus and
Prospectus and related matters were discussed and, although we have not
undertaken to investigate or verify independently, and do not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement, Preliminary Prospectus or Prospectus
(except as indicated above), on the basis of the foregoing, no facts have come
to our attention which led us to believe that the Registration Statement,
Preliminary Prospectus and Prospectus, as of its date or the Closing Date,
contained an untrue statement of a material fact or omitted to state any fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading
(except as to financial statements and related notes, the financial statement
schedules and other financial and statistical data included therein).
iii
<PAGE>
Exhibit B
Form of Opinion of Fisher Wayland Cooper Leader & Zaragoza L.L.P.
1. Except as set forth in the Prospectus, the (i) the FCC has
granted XM Satellite Radio Holdings, Inc. (the "Company") all material
authorizations needed to construct, launch, and operate a satellite radio
service and offer a subscription service on a non-common carrier basis, and (ii)
the FCC has assigned XM two orbital locations at 85 degrees W.L. and 105 degrees
W.L. for XM Radio's two satellites and the frequency band 2332.5-2345 MHz to
provide such satellite radio service.
2. Except for such FCC consents, approvals, authorizations or orders
that have already been obtained, no material consent, approval, authorization or
order of the FCC is required to be obtained by the Company or its subsidiaries
under the Communications Laws for the consummation of the transactions
contemplated under the Underwriting Agreement, except that, from time to time,
the Company and its subsidiaries may be required to obtain certain
authorizations that would be required in the ordinary course of business.
3. The execution and delivery of the Underwriting Agreement, and the
consummation of the transactions contemplated thereunder, by the Company do not
and will not violate any material provision of the Communications Laws.
4. The statements set forth in the Prospectus under the captions
"Risk Factors--Oversight by the FCC and other regulatory bodies involves costs
and risks" and "Business--Regulatory Matters," insofar as such statements
constitute a summary of material (a) legal matters, (b) documents, or (c)
proceedings under the Communications laws, fairly present the information
contained under such captions in light of the circumstances in which they were
made.
5. Except as set forth in the Prospectus, to our knowledge, there is
no investigation or complaint before the FCC pending or threatened in writing
that is specifically directed against or in respect of the Company or its
subsidiaries, or any of the FCC licenses held by the Company or its subsidiaries
that would reasonably be expected to result in the revocation of any material
FCC authorizations or otherwise to materially impair the operations of the
Company or its subsidiaries.
<PAGE>
Exhibit C
XM Satellite Radio Holdings Inc.
1250 23rd Street, NW, Suite 57
Washington, D.C. 20037-1100
Lock-Up Agreement
Bear, Stearns & Co. Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Dear Sirs:
The undersigned understands that Bear, Stearns & Co. Inc. and Donaldson,
Lufkin & Jenrette Securities Corporation, as representatives of the several
underwriters (the "Underwriters"), propose to enter into an Underwriting
Agreement with XM Satellite Radio Holdings Inc., a Delaware corporation (the
"Company"), providing for the initial public offering of the Company's Class A
common stock, par value $.01 per share (the "Common Stock"), pursuant to a
Registration Statement on Form S-1 (File No. 333-83619). The undersigned wishes
to facilitate the Offering and recognizes that the Offering will be of benefit
to the undersigned.
In consideration of the foregoing and in order to induce you to act as
Underwriters in connection with the Offering, the undersigned hereby agrees, for
the benefit of the Company and the Underwriters, that during the period
beginning from the date hereof and continuing to and including the date 180 days
after the date of the final prospectus relating to the Offering, the undersigned
will not, directly or indirectly, without the prior written consent of Bear,
Stearns & Co. Inc. and Donaldson, Lufkin & Jenrette Securities Corporation,
offer, sell, contract to sell, swap, make any short sale, pledge, establish an
open "put equivalent position" within the meaning of Rule 16a-1(h) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), grant any
option to purchase or otherwise dispose (or publicly announce the undersigned's
intention to do any of the foregoing) of, directly or indirectly, any shares of
Common Stock or other capital stock of the Company, or any securities
convertible into, or exercisable or exchangeable for, any shares of Common Stock
or other capital stock of the Company that the undersigned currently
beneficially owns (within the meaning of Rule 13d-3 under the Exchange Act),
directly or indirectly, or may beneficially own, directly or indirectly, in the
future.
The undersigned confirms that the undersigned understands that the
Underwriters and the Company will rely upon the representations set forth in
this Agreement in proceeding with the Offering. The undersigned further confirms
that the agreements of the undersigned are irrevocable and shall be binding upon
the undersigned's heirs, legal representatives, successors and assigns. The
undersigned agrees and consents to the entry of stop transfer instructions with
the Company's transfer agent against the transfer of securities of the Company
held by the undersigned except in compliance with this Agreement.
Very truly yours,
By:____________________________________
<PAGE>
Name:
Title:
Dated: September ___, 1999
ii
<PAGE>
Exhibit D
Individuals Delivering a Lock-Up Agreement Pursuant to Section 6(l)
Lee Abrams
Stephen Cook
Nathaniel Davis
Thomas R. Donohue
Randall T. Mays
Gary M. Parsons
Hugh Panero
Dr. Stelios Patsiokas
Randy S. Segal
Jack Shaw
Dr. Rajendra Singh
Heinz Stubblefield
Joseph M. Titlebaum
John R. Wormington
Ronald L. Zarella
<PAGE>
Exhibit E
Lock-Up Agreement
Bear, Stearns & Co. Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Dear Sirs:
The undersigned understands that Bear, Stearns & Co. Inc. and Donaldson,
Lufkin & Jenrette Securities Corporation, as representatives of the several
underwriters (the "Underwriters"), propose to enter into an Underwriting
Agreement with XM Satellite Radio Holdings Inc., a Delaware corporation (the
"Company"), providing for the initial public offering of the Company's Class A
common stock, par value $.01 per share (the "Common Stock"), pursuant to a
Registration Statement on Form S-1 (File No. 333-83619). The undersigned is a
holder of securities of the Company and wishes to facilitate the Offering and
recognizes that the Offering will be of benefit to the undersigned.
In consideration of the foregoing and in order to induce you to act as
Underwriters in connection with the Offering, the undersigned hereby agrees, for
the benefit of the Company and the Underwriter, that during the period beginning
from the date hereof and continuing to and including the date 180 days after the
date of the final prospectus relating to the Offering, the undersigned will not,
directly or indirectly, without the prior written consent of Bear, Stearns & Co.
Inc. and Donaldson, Lufkin & Jenrette Securities Corporation, offer, sell,
contract to sell, swap, make any short sale, pledge, establish an open "put
equivalent position" within the meaning of Rule 16a-1(h) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), grant any option to
purchase or otherwise dispose (or publicly announce the undersigned's intention
to do any of the foregoing) of, directly or indirectly, any shares of Common
Stock or other capital stock of the Company, or any securities convertible into,
or exercisable or exchangeable for, any shares of Common Stock or other capital
stock of the Company that the undersigned currently beneficially owns (within
the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, or
may beneficially own, directly or indirectly, in the future.
The undersigned confirms that the undersigned understands that the
Underwriter and the Company will rely upon the representations set forth in this
Agreement in proceeding with the Offering. The undersigned further confirms that
the agreements of the undersigned are irrevocable and shall be binding upon the
undersigned's heirs, legal representatives, successors and assigns. The
undersigned agrees and consents to the entry of stop transfer instructions with
the Company's transfer agent against the transfer of securities of the Company
held by the undersigned except in compliance with this Agreement.
Very truly yours,
By:_____________________________________
Name:
<PAGE>
Title:
Dated: September ___, 1999
1
<PAGE>
Exhibit F
Stockholders Delivering a Lock-Up Agreement Pursuant to Section 6(m)
American Mobile Satellite Corporation
Clear Channel Investments, Inc.
Columbia XM Radio Partners L.L.C.
DIRECTV Enterprises, Inc.
General Motors Corporation
Madison Dearborn Capital Partners III, L.P.
Madison Dearborn Special Equity III, L.P.
Special Advisors Fund I, LLC
Telecom-XM Investors, L.L.C.
<PAGE>
Exhibit 3.1
FORM OF RESTATED
CERTIFICATE OF INCORPORATION
OF
XM SATELLITE RADIO HOLDINGS INC.
XM Satellite Radio Holdings Inc., a corporation organized and existing
under the laws of the State of Delaware (the "Corporation") hereby certifies as
follows:
1. The name of the Corporation is XM SATELLITE RADIO HOLDINGS INC. The
name under which the Corporation was originally incorporated was AMRC Holdings,
Inc., and the Corporation's original Certificate of Incorporation was filed with
the Secretary of State of the State of Delaware on May 16, 1997.
2. This Restated Certificate of Incorporation was duly adopted by the
Corporation's Board of Directors and stockholders in accordance with Sections
242 and 245 of the General Corporation Law of the State of Delaware (the
"DGCL"). The Restated Certificate of Incorporation restates, integrates and
further amends the provisions of the Certificate of Incorporation of the
Corporation.
3. Upon the filing and effectiveness (the "Effective Time") of this
Restated Certificate of Incorporation pursuant to the DGCL to reflect the
addition of this paragraph to Article IV of the Corporation's Certificate of
Incorporation, each share of the Corporation's Class A Common Stock, par value
$.01 per share, or Class B
<PAGE>
Common Stock, par value $.01 per share issued and outstanding immediately prior
to the Effective Time (the "Old Common Stock") shall be reclassified as and
changed and converted into 53,514 validly issued, fully paid, and non-assessable
shares of Class A Common Stock or 53,514 validly issued, fully paid, and
non-assessable shares of Class B Common Stock, respectively, without any action
by the holder thereof. Each certificate that prior to the Effective Time
represented a share or shares of Old Common Stock shall thereafter represent
that number of shares of Class A Common Stock and the number of shares of Class
B Common Stock into which the share or shares of Old Common Stock represented by
such certificate shall have been reclassified; provided, however, that each
record holder of a stock certificate or certificates that prior to the Effective
Time represented a share or shares of Old Common Stock shall receive, upon
surrender of such certificate or certificates, a new certificate or certificates
evidencing and representing the number of shares of Class A Common Stock or the
number of shares of Class B Common Stock to which such record holder is entitled
pursuant to the foregoing reclassification.
4. The text of the Certificate of Incorporation as heretofore amended is
hereby further amended and restated in its entirety, to read in its entirety as
follows:
-2-
<PAGE>
FIRST: The name of the corporation is XM Satellite Radio Holdings Inc.
(the "Corporation").
SECOND: The address of the registered office of the Corporation in the
State of Delaware is 1013 Centre Road, in the City of Wilmington, County of New
Castle. The name of the Corporation's registered agent at such address is the
Corporation Service Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of the State of Delaware ("DGCL").
FOURTH: A. The total number of shares of all classes of capital stock
which the Corporation shall have authority to issue is Three Hundred Million
(300,000,000), consisting of (i) Sixty Million (60,000,000) shares of Preferred
Stock with a par value of $0.01 per share, and (ii) Two Hundred and Forty
Million (240,000,000) shares of Common Stock with a par value of $0.01 per
share, of which One Hundred and Eighty Million (180,000,000) shares shall be
designated "Class A Common Stock", Thirty Million (30,000,000) shares shall be
designated "Class B Common Stock" and Thirty Million (30,000,000) shares shall
be designated "Class C Common Stock."
B. The Class A Common Stock, the Class B Common Stock and the Class
C Common Stock shall be identical in all respects and shall have equal rights
and privileges, except as otherwise provided in this Article FOURTH. The
relative rights, preferences, privileges and restrictions of the shares of the
classes are as follows:
-3-
<PAGE>
1. The holders of shares of Class A Common Stock, Class B
Common Stock and Class C Common Stock shall ratably receive dividends and
distributions of the Corporation whether paid in cash, in property or shares of
Common Stock.
2. The holders of shares of Class A Common Stock, Class B
Common Stock and Class C Common Stock shall have the following voting rights:
(i) At every annual or special meeting of the
stockholders of the Corporation or at any other time that any matter is
submitted to a vote or for the consent of the stockholders, every holder of
Class A Common Stock shall be entitled to one (1) vote for each share of Class A
Common Stock standing in such holder's name on the books of the Corporation.
(ii) At every annual or special meeting of the
stockholders of the Corporation or at any other time that any matter is
submitted to a vote or for the consent of the stockholders, every holder of
Class B Common Stock shall be entitled to three (3) votes for each share of
Class B Common Stock standing in such holder's name on the books of the
Corporation.
(iii) The holders of shares of Class C Common Stock
shall not be entitled to vote at any annual or special meeting of the
stockholders of the Corporation or at any other time that any matter is
submitted to a vote or for the consent of the stockholders, except to the extent
required by law.
3. Upon liquidation, dissolution, winding up or insolvency of
the Corporation, whether voluntary or involuntary, after payment or provision
for payment of the debts and other liabilities of the Corporation and of the
preferential
-4-
<PAGE>
amounts to which the holders of Preferred Stock shall be entitled, the holders
of all outstanding shares of Class A Common Stock, Class B Common Stock and
Class C Common Stock shall be entitled to share ratably in the remaining net
assets of the Corporation.
4. Each holder of record of a share of Class B Common Stock
may at any time or from time to time, in such holder's sole discretion and at
such holder's option, convert any whole number or all of such holder's shares of
Class B Common Stock into fully paid and nonassessable shares of Class A Common
Stock at the rate of one share of Class A Common Stock for each share of Class B
Common Stock surrendered for conversion.
(a) In the event that the Corporation shall at any time
prior to the conversion of all or a portion of Class B Common Stock either (i)
subdivide the outstanding shares of Class A Common Stock into a greater number
of shares, (ii) combine the outstanding shares of Class A Common Stock into a
smaller number of shares, (iii) change the outstanding shares of Class A Common
Stock into the same or a given number of shares of any other class or classes of
shares, (iv) declare on or in respect of the shares of Class A Common Stock a
dividend payable in shares or other securities of the Corporation, or (v) offer
to the holders of Class A Common Stock any rights to subscribe for shares of
other securities of the Corporation (each such event being referred to as a
"Recapitalization"), then the holders of the shares of Class B Common Stock
shall be entitled, as the case may be, to receive the same number of shares of
Class B
-5-
<PAGE>
Common Stock, in the case of any Recapitalization involving Class A Common
Stock, or shares of any other class or classes of shares or other securities of
the Corporation, or shall be entitled to subscribe for and purchase at the same
price that the Recapitalization shares or securities are offered to the holders
of Class A Common Stock, the number of such shares or the amount of such other
class or classes of shares or other securities as will result in the holders of
the shares of Class B Common Stock holding such number of shares of Class B
Common Stock as necessary to maintain the same proportion of the outstanding
shares of Class B Common Stock in relation to the outstanding shares of Class A
Common Stock following the Recapitalization as the proportion of the outstanding
shares of Class B Common Stock in relation to the outstanding shares of Class A
Common Stock prior to such Recapitalization.
(b) Any conversion of one or more shares of Class B
Common Stock into one or more shares of Class A Common Stock may be effected by
the holder of Class B Common Stock by surrendering such holder's certificate or
certificates for the shares of Class B Common Stock to be converted, duly
endorsed, at the office of the Corporation or the office of any transfer agent
for the Class A Common Stock, together with a written notice to the Corporation
at such office that such holder elects to convert all or a specified number of
such shares of Class B Common Stock. Promptly thereafter, the Corporation shall
issue and deliver to such holder a certificate or certificates for the number of
shares of Class A Common Stock to which such holder shall be entitled as
aforesaid. Such conversion shall be made at the close of business on the date of
such surrender and the person entitled
-6-
<PAGE>
to receive the shares of Class A Common Stock issuable on such conversion shall
be treated for all purposes as the record holder of such shares of Class A
Common Stock on such date.
(c) These provisions for conversion of Class B Common
Stock shall be subject to all applicable statutory limitations and restrictions.
5. Thirty Million (30,000,000) shares of Class A Common Stock
shall be reserved and set aside and such shares shall be issued upon conversion
of, and in exchange for, shares of Class B Common Stock as herein provided,
subject to increase in such number of shares of Class A Common Stock so reserved
and set aside in order to adjust for a Recapitalization.
6. Shares which have been converted hereunder shall revert to
the status of unissued shares and shall not be reissued. Such shares may be
eliminated as provided by law.
C. I. The Preferred Stock may be issued from time to time by the
Board of Directors as shares of one or more series of Preferred Stock and,
except to the extent that subdivision II below designates an initial series of
Preferred Stock and fixes the powers, preferences and relative, participating,
optional or other special rights of shares of, and the qualifications,
limitations or restrictions of, such initial series, and subject to the
provisions hereof and the limitations prescribed by law, the Board of Directors
is expressly authorized, prior to issuance, in the resolution or resolutions
providing for the issue of, or providing for a change in the number of, shares
of any particular series and by filing a certificate pursuant to the DGCL, to
establish or change the number of shares to be included in each such
-7-
<PAGE>
series and to fix the designation, powers, preferences and relative,
participating, optional or other special rights of shares of, and the
qualifications, limitations or restrictions of, each such series.
The authority of the Board of Directors with respect to each series shall
include, but not be limited to, determination of the following:
1. The number of shares constituting that series and the
distinctive designation of that series;
2. The dividend rate on the shares of that series, whether
dividends shall be cumulative, and, if so, from which date or dates, and whether
they shall be payable in preference to, or in another relation to, the dividends
payable on any other class or classes or series of stock;
3. Whether that series shall have voting rights, in addition
to the voting rights provided by law, and, if so, the terms of such voting
rights;
4. Whether that series shall have conversion or exchange
privileges, and, if so, the terms and conditions of such conversion or exchange,
including provision for adjustment of the conversion or exchange rate in such
events as the Board of Directors shall determine;
5. Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of such redemption, including
the manner of selecting shares for redemption if less than all shares are to be
redeemed, the date or dates upon or after which they shall be redeemable, and
the amount per share payable in case of redemption, which amount may vary under
different conditions and at different redemption dates;
-8-
<PAGE>
6 Whether that series shall be entitled to the benefit of a
sinking fund to be applied to the purchase or redemption of shares of that
series, and, if so, the terms and amounts of such sinking fund;
7. The right of the shares of that series to the benefit of
conditions and restrictions upon the creation of indebtedness of the Corporation
or any subsidiary, upon the issue of any additional stock (including additional
shares of such series or any other series) and upon payment of dividends or the
making of other distributions on, and the purchase, redemption or other
acquisition by the Corporation or any subsidiary of any outstanding stock of the
Corporation,
8. The right of the shares of that series in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation and whether such rights shall be in preference to, or in another
relation to, the comparable rights of any other class or classes or series of
stock; and
9. Any other relative, participating, optional or other
special rights, qualifications, limitations or restrictions of that series.
C. II. The designation, powers, preferences and relative,
participating, optional or other special rights of, and the qualifications,
limitations or restrictions of, the initial series of Preferred Stock, to
consist of Fifteen Million (15,000,000) shares of Preferred Stock, shall be as
follows:
1. Designation. The designation of the initial series of
Preferred Stock shall be "Series A Convertible Preferred Stock, par value $.01
per share" ("Series A Convertible Preferred Stock").
-9-
<PAGE>
2. Conversion. Each holder of record of a share of Series A
Convertible Preferred Stock may at any time or from time to time, in such
holder's sole discretion and at such holder's option, convert any whole number
or all of such holder's shares of Series A Convertible Preferred Stock into
fully paid and nonassessable shares of Class A Common Stock at the rate of one
share of Class A Common Stock for each share of Series A Convertible Preferred
Stock surrendered for conversion. Following the occurrence of a
Recapitalization, each share of Series A Convertible Preferred Stock shall be
convertible into the kind and number of shares of stock or other securities or
property of the Corporation or otherwise to which the holder of such share of
Series A Convertible Preferred Stock would have been entitled to receive if such
holder had converted such share into Class A Common Stock immediately prior to
such Recapitalization. Adjustments to the conversion rate shall similarly apply
to each successive Recapitalization.
Any such conversion may be effected by the holder of Series A Convertible
Preferred Stock by surrendering such holder's certificate or certificates for
the shares of Series A Convertible Preferred Stock to be converted, duly
endorsed, at the office of the Corporation or the office of any transfer agent
for the Class A Common Stock, together with a written notice to the Corporation
at such office that such holder elects to convert all or a specified number of
such shares of Series A Convertible Preferred Stock. Promptly thereafter, the
Corporation shall issue and deliver to such holder a certificate or certificates
for the number of shares of Class A Common Stock to which such holder shall be
entitled as aforesaid. Such conversion shall be made at the close of business on
the date of such surrender and the person
-10-
<PAGE>
entitled to receive the shares of Class A Common Stock issuable on such
conversion shall be treated for all purposes as the record holder of such shares
of Class A Common Stock on such date.
3. Voting Rights. The holders of shares of Series A
Convertible Preferred Stock shall not be entitled to vote at any annual or
special meeting of the stockholders of the Corporation or at any other time that
any matter is submitted to a vote or for the consent of the stockholders. So
long as any shares of the Series A Convertible Preferred Stock are outstanding,
the Corporation shall not, without first obtaining the approval by vote or
written consent, in the manner provided by law, of a majority of the total
number of shares of the Series A Convertible Preferred Stock at the time
outstanding, voting separately as a class, alter or change any or all of the
rights, preferences, privileges and restrictions granted to or imposed upon the
Series A Convertible Preferred Stock or increase or decrease the authorized
number of shares of Series A Convertible Preferred Stock.
4. Dividends. The holders of shares of Series A Convertible
Preferred Stock shall receive dividends and distributions of the Corporation
ratably with the holders of shares of Class A Common Stock, Class B Common Stock
and Class C Common Stock.
5. Liquidation, Dissolution, Winding Up or Insolvency. In the
event of any liquidation, dissolution, winding up or insolvency of the
Corporation, whether voluntary or involuntary, before any distribution or
payment is made to any holders of shares of Class A Common Stock, Class B Common
Stock and Class C Common Stock or any other class or series of capital stock of
the Corporation
-11-
<PAGE>
designated to be junior to the Series A Convertible Preferred Stock, and subject
to the liquidation rights and preferences of any class or series of preferred
stock designated in the future to be senior to, or on a parity with, the Series
A Convertible Preferred Stock with respect to liquidation preferences, the
holders of Series A Convertible Preferred Stock shall be entitled to be paid
first out of the assets of the Corporation available for distribution to holders
of capital stock of all classes whether such assets are capital, surplus or
earnings ("Available Assets"), an amount equal to $9.5248159 per share of Series
A Convertible Preferred Stock, together with the amount of any accrued or
capitalized dividends in respect thereof (the "Liquidation Preference"). After
payment in full to the holders of Series A Convertible Preferred Stock of the
Liquidation Preference, holders of the Series A Convertible Preferred Stock
shall, as such, have no right or claim to any of the remaining Available Assets.
FIFTH: Elections of directors need not be by written ballot. The books of
the Corporation may be kept (subject to any provision contained in the DGCL or
other applicable statutes) outside the State of Delaware at such place or places
as may be designated from time to time by the Board of Directors or in the
bylaws of the Corporation. The number of directors shall be such number as from
time to time shall be fixed by, or in the manner provided in, the bylaws of the
Corporation.
SIXTH: In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, alter, amend,
change, add to or repeal the bylaws of the Corporation. In addition to the
powers and authority hereinbefore or by statute expressly conferred upon them,
the
-12-
<PAGE>
directors are hereby empowered to exercise all such powers and do all such acts
and things as may be exercised or done by the Corporation, subject,
nevertheless, to the provisions of the statutes of Delaware, this Restated
Certificate of Incorporation, and any bylaws adopted by the stockholders;
provided, however, that no bylaws hereafter adopted by the stockholders shall
invalidate any prior act of the directors which would have been valid if such
bylaws had not been adopted.
SEVENTH: Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware, may on the application in a summary
way of the Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for the Corporation in
accordance with the laws of Delaware or on the application of trustees in
dissolution or of any receiver or receivers appointed for the Corporation in
accordance with the laws of Delaware, order a meeting of the creditors or class
of creditors, and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three-fourths in value of the
creditors or class of creditors, and/or the stockholders or class of
stockholders of the Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of the Corporation as a consequence of
such compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of
-13-
<PAGE>
creditors, and/or on all the stockholders or class of stockholders, of the
Corporation, as the case may be, and also on the Corporation.
EIGHTH: No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for any breach of fiduciary
duty by such a director as a director. Notwithstanding the foregoing sentence, a
director shall be liable to the extent provided by applicable law (i) for any
breach of the director's duty of loyalty to the Corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the
DGCL, or (iv) for any transaction from which such director derived an improper
personal benefit. No amendment to or repeal of this Article EIGHTH shall
adversely affect any right or protection of any director of the Corporation
existing at the time of such amendment or repeal for or with respect to any acts
or omissions of such director occurring prior to such amendment or repeal.
NINTH: The Corporation shall indemnify to the full extent authorized or
permitted by the laws of the State of Delaware any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director or officer of
the Corporation, or by reason of the fact that such director or officer is or
was serving at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, domestic or foreign, against expenses (including attorneys' fees)
judgments, fines and amounts paid in
-14-
<PAGE>
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding, and shall advance expenses incurred by any such
officer or director in defending any such action, suit or proceeding to the full
extent authorized or permitted by the laws of the State of Delaware upon receipt
of an undertaking that he is not entitled to be indemnified by the Corporation
as authorized by Section 145 of the DGCL. Nothing contained herein shall affect
any rights to indemnification to which employees other than directors and
officers may be entitled by law. No amendment to or repeal of this Article NINTH
shall apply to or have any effect on any right to indemnification provided
hereunder with respect to any acts or omissions occurring prior to such
amendment or repeal.
TENTH: The Corporation expressly elects not to be governed by Section 203
of the DGCL.
ELEVENTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in its Certificate of Incorporation, or any
amendment thereof, in the manner now or hereafter prescribed by the laws of the
State of Delaware or the Certificate of Incorporation, and all rights conferred
upon stockholders of the Corporation are granted subject to this reservation.
TWELFTH: Notwithstanding any other provision of this Restated Certificate
of Incorporation to the contrary, outstanding shares of stock of the Corporation
shall always be subject to redemption by the Corporation, by action of the Board
of Directors, if in the judgment of the Board of Directors such action should be
taken, pursuant to Section 151(b) of the DGCL or any other applicable provision
of law, to the extent necessary to prevent the loss or secure the
-15-
<PAGE>
reinstatement of any license or franchise from any governmental agency held by
the Corporation or any of its subsidiaries to conduct any portion of the
business of the Corporation or any of its subsidiaries, which license or
franchise is conditioned upon some or all of the holders of the Corporation's
stock possessing prescribed qualifications. The terms and conditions of such
redemption shall be as follows:
(a) The redemption price of the shares to be redeemed pursuant to
this Article TWELFTH shall be determined by the Board of Directors and shall be
equal to the Fair Market Value (as defined herein) of such shares or, if such
shares were purchased by one or more Disqualified Holders (as defined herein)
within one year of the Redemption Date (as defined herein), the lesser of (i)
the Fair Market Value of such shares and (ii) the purchase price paid by such
Disqualified Holder for such shares.
(b) At the election of the Corporation, the redemption price of such
shares may be paid in cash, Redemption Securities (as defined herein) or any
combination thereof.
(c) If fewer than all shares held by Disqualified Holders are to be
redeemed, the shares to be redeemed shall be selected in such manner as shall be
determined by the Board of Directors, which may include selection first of the
most recently purchased shares thereof, selection by lot or selection in any
other manner determined by the Board of Directors.
(d) At least 30 days' prior written notice of the Redemption Date
shall be given to any Disqualified Holder of shares selected to be redeemed
(unless waived in writing by any such holder), provided that the Redemption Date
may be
-16-
<PAGE>
the date on which written notice shall be given to such holder if the cash or
Redemption Securities necessary to effect the redemption shall have been
deposited in trust for the benefit of such holder and subject to immediate
withdrawal by it upon surrender of the stock certificates formerly representing
the shares redeemed.
(e) From and after the Redemption Date, any and all rights of
whatever nature that any Disqualified Holder may have with respect to any shares
selected for redemption (including, without limitation, any rights to vote or
participate in dividends declared on stock of the same class or series as such
shares) shall cease and terminate, and such Disqualified Holder shall
thenceforth be entitled only to receive, with respect to such shares, the cash
or Redemption Securities payable upon redemption.
(f) The Board of Directors may also impose additional terms and
conditions.
(g) For purposes of this Article TWELFTH:
(i) "Disqualified Holder" shall mean any holder of shares of
stock of the Corporation whose holding of such stock, either individually or
when taken together with the holding of shares of stock of the Corporation by
any other holders, may result, in the judgment of the Board of Directors, in the
loss of, or the failure to secure the reinstatement of, any license or franchise
from any governmental agency held by the Corporation or any of its subsidiaries
to conduct any portion of the business of the Corporation or any of its
subsidiaries.
(ii) "Fair Market Value" of a share of the Corporation's stock
of any class or series shall mean the average Closing Price (as defined herein)
for
-17-
<PAGE>
such a share for each of the 45 most recent days on which shares of stock of
such class or series shall have been traded preceding the day on which notice of
redemption shall be given pursuant to paragraph (d) of this Article TWELFTH;
provided, however, that if shares of stock of such class or series are not
traded on any securities exchange or in the over-the-counter market, "Fair
Market Value" shall be determined by the Board of Directors in good faith.
"Closing Price" on any day means the reported closing sales price or, in case no
such sale takes place, the average of the reported closing bid and asked prices
on the principal United States securities exchange registered under the
Securities Exchange Act of 1934 on which such stock is listed, or, if such stock
is not listed on any such exchange, the highest closing sales price or bid
quotation for such stock on the Nasdaq National Market of The Nasdaq Stock
Market, Inc. or any system then in use, or if no such prices or quotations are
available, the fair market value on the day in question as determined by the
Board of Directors in good faith.
(iii) "Redemption Date" shall mean the date fixed by the Board
of Directors for the redemption of any shares of stock of the Corporation
pursuant to this Article TWELFTH.
(iv) "Redemption Securities" shall mean any debt or equity
securities of the Corporation, any of its subsidiaries or any other
corporations, or any combination thereof, having such terms and conditions as
shall be approved by the Board of Directors and which, together with any cash to
be paid as part of the redemption price, in the opinion of any investment
banking firm selected by the Board of Directors (which may be a firm which
provides other investment banking,
-18-
<PAGE>
brokerage or other services to the Corporation), has a value, at the time notice
of redemption is given pursuant to paragraph (d) of this Article TWELFTH, at
least equal to the price required to be paid pursuant to paragraph (a) of this
Article TWELFTH (assuming for purposes of such valuation, in the case of
Redemption Securities to be publicly traded, such Redemption Securities were
fully distributed and trading under normal conditions).
-19-
<PAGE>
IN WITNESS WHEREOF, XM Satellite Radio Holdings Inc. has caused this
Restated Certificate of Incorporation to be signed by its Senior Vice President,
General Counsel and Secretary, Joseph M. Titlebaum, this _____ day of September,
1999.
----------------------------
Name: Joseph M. Titlebaum
Title: Senior Vice President,
General Counsel and Secretary
-20-
<PAGE>
Exhibit 3.2
FORM OF
RESTATED BYLAWS OF
XM SATELLITE RADIO HOLDINGS INC.
(As of September __, 1999)
A Delaware Corporation
ARTICLE I.
Offices
SECTION 1. Registered Office. The registered office of XM Satellite Radio
Holdings Inc. (hereinafter called the "Corporation") shall be within the State
of Delaware.
SECTION 2. Other Offices. The Corporation may also have offices at such
place or places as the Board of Directors shall from time to time determine or
the business of the Corporation may require.
ARTICLE II.
The Stockholders;
Meetings of the Stockholders
SECTION 1. Place of Meetings. All meetings of the stockholders shall be
held at any such place, either within or without the State of Delaware, but
within the United States of America, as shall be designated from time to time by
the Board of Directors and stated in the notice of meeting or in a duly executed
waiver thereof.
SECTION 2. Annual Meeting. The annual meeting of the stockholders for the
election of directors and for the transaction of such other business as may come
before the meeting shall be held at such time and place as shall be determined
by the Board of Directors and stated in the notice of the meeting.
<PAGE>
SECTION 3. Special Meetings. Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed by statute, may be called by
the Board of Directors, by stockholders holding at least fifteen percent of the
outstanding common stock of the Corporation or by the Chairman, the Chief
Executive Officer or the President.
SECTION 4. Notice of Meetings. Notice of meetings of the stockholders
shall be given as required by applicable law.
SECTION 5. Organization. At every meeting of the stockholders, the
Chairman shall preside, or in his or her absence or inability to act, the person
whom the Chairman, the Chief Executive Officer or the President shall appoint
shall act as chairman of the meeting. The Secretary, or, in his or her absence
or inability to act, the person whom the chairman of the meeting shall appoint,
shall act as secretary of the meeting and keep the minutes thereof.
SECTION 6. Order of Business. The order of business at all meetings of the
stockholders shall be as determined by the chairman of the meeting.
SECTION 7. Quorum at Meetings. Stockholders may take action on a matter at
a meeting only if a quorum exists with respect to that matter. Except as
otherwise provided by statute or by the Certificate of Incorporation, the
holders of a majority of the shares entitled to vote at the meeting, and who are
present in person or represented by proxy, shall constitute a quorum at all
meetings of the stockholders for the transaction of business. Where a separate
vote by a class or series or classes or series is required, a
2
<PAGE>
majority of the outstanding shares of such class or series or classes or series,
present in person or represented by proxy, shall constitute a quorum entitled to
take action with respect to that vote on that matter. Once a share is
represented for any purpose at a meeting (other than solely to object (1) to
holding the meeting or transacting business at the meeting, or (2) (if it is a
special meeting) to consideration of a particular matter at the meeting that is
not within the purpose or purposes described in the meeting notice), it is
deemed present for quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set for the
adjourned meeting. The holders of a majority of the voting shares represented at
a meeting, whether or not a quorum is present, may adjourn such meeting from
time to time.
SECTION 8. Stockholder Proposals. For business to be properly brought
before an annual meeting by a stockholder, the stockholder must have given
timely notice thereof in writing to the Secretary of the Corporation. To be
timely, a stockholder's notice must be delivered to or mailed and received at
the principal executive offices of the Corporation not less than 60 days or more
than 90 days prior to the meeting; provided, however, that in the event that
less than 70 days' notice of the date of the meeting is given to stockholders or
prior public disclosure of the date of the meeting is made, notice by the
stockholder to be timely must be so received not later than the close of
business on the 10th day following the day on which such notice of the annual
meeting was mailed or such public disclosure was made. A stockholder's notice to
the Secretary shall set forth as to each matter the stockholder proposes to
bring before the annual meeting (a) a brief description of the business desired
to be brought before the annual meeting and the
3
<PAGE>
reasons for conducting such business at the annual meeting, (b) the name and
address, as they appear on the Corporation's books, of the stockholder proposing
such business, (c) the class and number of shares of the Corporation which are
beneficially owned by the stockholder, (d) any material interest of the
stockholder in such business and (e) the same information required by clauses
(b), (c) and (d) above with respect to any other stockholder that, to the
knowledge of the stockholder proposing such business, supports such proposal.
Notwithstanding anything in these Bylaws to the contrary, no business shall be
conducted at an annual meeting except in accordance with the procedures set
forth in this Section 3. The chairman of an annual meeting shall, if the facts
warrant, determine and declare to the annual meeting that a matter of business
was not properly brought before the meeting in accordance with the provisions of
this Section 3, and if he or she should so determine, he or she shall so declare
to the meeting and any such business not properly brought before the meeting
shall not be transacted.
SECTION 9. Action by Consent. Any action required or permitted to be taken
at any annual or special meeting of the stockholders of the Corporation may be
taken without a meeting, without prior notice and without a vote, if a consent
in writing, setting forth the action so taken, shall be signed by stockholders
holding outstanding stock having not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting at which all
shares entitled to vote thereon were present and voted and shall be delivered to
the Corporation and the other stockholders.
4
<PAGE>
ARTICLE III.
Board of Directors
SECTION 1. General Powers. The business and affairs of the Corporation
shall be managed by or under the direction of the Board of Directors.
SECTION 2. Number, Qualifications, Election and Term of Office. The Board
of Directors shall initially consist of that number of directors as provided for
in that certain Shareholders Agreement dated as of July 7, 1999, by and among
the Corporation, American Mobile Satellite Corporation and the Investors named
therein (the "Shareholders Agreement"). Thereafter, subject to the provisions of
the Shareholders Agreement, the number of directors shall be between three and
15, unless otherwise determined from time to time by the affirmative vote of at
least a majority of the Board of Directors. Members of the Board need not be
residents of the State of Delaware and need not be stockholders of the
Corporation. Subject to the provisions of the Shareholders Agreement, and except
as set forth in the bylaws, directors shall be elected at the annual meeting of
the stockholders.
SECTION 3. Place of Meetings. Meetings of the Board of Directors shall be
held at such place or places, within or without the State of Delaware, as the
Board of Directors may from time to time determine or as shall be specified in
the notice of any such meeting.
SECTION 4. Annual Meeting. The Board of Directors shall meet for the
purpose of organization, the election of officers and the transaction of other
business, as soon as practicable after each annual meeting of the stockholders,
on the same day and at
5
<PAGE>
the same place where such annual meeting shall be held. Notice of such meeting
need not be given. In the event such annual meeting is not so held, the annual
meeting of the Board of Directors may be held at such other time or place
(within or without the State of Delaware) as shall be specified in a notice
thereof given as hereinafter provided in Section 7 of this Article III.
SECTION 5. Regular Meetings. Regular meetings of the Board of Directors
shall be held at such time and place as the Board of Directors may fix. Notice
of regular meetings of the Board of Directors need not be given except as
otherwise required by statute or these Bylaws.
SECTION 6. Special Meetings. Special meetings of the Board of Directors
may be called by the Chairman, the Chief Executive Officer or the President or
at the request of one-third of the directors.
SECTION 7. Notice of Meetings. Notice of each special meeting of the Board
of Directors (and of each regular meeting for which notice shall be required)
shall be given by the Secretary as hereinafter provided in this Section 7, in
which notice shall be stated the time and place of the meeting. Except as
otherwise required by these Bylaws, such notice need not state the purposes of
such meeting. Notice of each such meeting shall be mailed, postage prepaid, to
each director and to each party with observation rights as provided for in the
Shareholders Agreement, addressed to his or her residence or usual place of
business, by first class mail or by overnight courier, at least five (5) days
before the day on which such meeting is to be held, or shall be sent addressed
to such party at such place by telegraph, cable, telex, telecopier, or other
similar means, or be
6
<PAGE>
delivered to such director personally or be given to him or her by telephone or
other similar means, at least seventy-two (72) hours before the time at which
such meeting is to be held and if given by telephone or other similar means,
shall be followed by a confirmation in writing by telegraph, cable, telex,
telecopier or similar means within twenty-four (24) hours after such telephone
or other similar means, but such confirmation shall not be necessary for the
validity of such notice. Notice of any such meeting need not be given to any
director who shall, either before or after the meeting, submit a signed waiver
of notice or who shall attend such meeting, except when he or she shall attend
for the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.
SECTION 8. Nomination of Directors. Nominations of persons for election to
the Board of Directors may be made by the Board of Directors or by any
stockholder of the Corporation entitled to vote for the election of directors at
the annual meeting who complies with the notice procedures set forth in this
Section 8. To be timely, a stockholder's notice must be delivered to or mailed
and received at the principal executive offices of the Corporation not less than
60 days or more than 90 days prior to the meeting; provided, however, that in
the event that less than 70 days' notice of the date of the meeting is given to
stockholders or prior public disclosure of the date of the meeting is made,
notice by the stockholder to be timely must be so received not later than the
close of business on the 10th day following the day on which such notice of the
annual meeting was mailed or such public disclosure was made. Such stockholder's
notice shall set forth (a) as to each person whom the stockholder proposes to
nominate for
7
<PAGE>
election or re-election as a director, (i) the name, age, business address and
residence address of such person, (ii) the principal occupation or employment of
such person, (iii) the class and number of shares of the Corporation which are
beneficially owned by such person, and (iv) any other information relating to
such person that is required to be disclosed in solicitations of proxies for
election of directors, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended (including
without limitation such person's written consent to being named in the proxy
statement as a nominee and to serving as a director if elected); and (b) as to
the stockholder giving notice (i) the name and address, as they appear on the
Corporation's books, of the stockholder proposing such nomination, and (ii) the
class and number of shares of the Corporation which are beneficially owned by
the stockholder. No person shall be eligible for election as a director of the
Corporation unless nominated in accordance with the procedures set forth in this
Section 8. The Chairman shall, if the facts warrant, determine and declare to
the annual meeting that a nomination was not made in accordance with the
provisions of this Section 8, and if the Chairman should so determine, the
Chairman shall so declare to the meeting and the defective nomination shall be
disregarded.
SECTION 9. Quorum and Manner of Acting. A majority of the entire Board of
Directors shall constitute a quorum for the transaction of business at any
meeting of the Board of Directors, and, except as otherwise expressly required
by statute or the Certificate of Incorporation or these Bylaws, the act of a
majority of the directors present at any meeting at which a quorum is present
shall be the act of the Board of Directors. In
8
<PAGE>
the absence of a quorum at any meeting of the Board of Directors, a majority of
the directors present thereat may adjourn such meeting to another time and
place. Notice of the time and place of any such adjourned meeting shall be given
to all of the directors unless such time and place were announced at the meeting
at which the adjournment was taken, in which case such notice shall only be
given to the directors who were not present thereat. At any adjourned meeting at
which a quorum is present, any business may be transacted which might have been
transacted at the meeting as originally called. The directors shall act only as
a Board and the individual directors shall have no power as such.
SECTION 10. Organization. At each meeting of the Board of Directors, the
Chairman shall preside, or in his or her absence or inability to act, a director
chosen by a majority of the directors present shall act as chairman of the
meeting and preside thereat. The person appointed by the chairman shall act as
secretary of the meeting and keep the minutes thereof.
SECTION 11. Resignations. Any director of the Corporation may resign at
any time by giving written notice of his or her resignation to the Corporation,
attention: Secretary. Any such resignation shall take effect at the time
specified therein or, if the time when it shall become effective shall not be
specified therein, immediately upon its receipt. Unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.
SECTION 12. Vacancies. Unless otherwise provided for by the Shareholders
Agreement, vacancies and newly created directorships resulting from any increase
in the
9
<PAGE>
authorized number of directors elected by all of the stockholders having the
right to vote as a single class may be filled by the affirmative vote of a
majority of the directors then in office, although fewer than a quorum, or by a
sole remaining director. Whenever the holders of any class or classes of stock
or series thereof are entitled to elect one or more directors by the provisions
of the Certificate of Incorporation, vacancies and newly created directorships
of such class or classes or series may be filled by the affirmative vote of a
majority of the directors elected by such class or classes or series thereof
then in office, or by a sole remaining director so elected. Each director so
chosen shall hold office until the next election of directors of the class to
which such director was appointed, and until such director's successor is
elected and qualified, or until the director's earlier death, resignation or
removal. In the event that one or more directors resign from the Board,
effective at a future date, a majority of the directors then in office,
including those who have so resigned, shall have power to fill such vacancy or
vacancies, the vote thereon to take effect when such resignation or resignations
shall become effective, and each director so chosen shall hold office until the
next election of directors, and until such director's successor is elected and
qualified, or until the director's earlier death, resignation or removal.
SECTION 13. Compensation. The Board of Directors shall compensate the
directors for serving as directors, and shall reimburse the directors for any
expenses incurred in attending the meetings of the Board of Directors or any
committee thereof, solely to the extent approved by the Board of Directors..
10
<PAGE>
SECTION 14. Committees. The Board of Directors may, by resolution passed
by a majority of the whole Board, designate one or more committees, each
committee to consist of three or more of the directors of the Corporation. The
Board may designate one or more directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of the
committee. In the absence or disqualification of a member of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not the member or members constitute a quorum, may
unanimously appoint another member of the Board to act at the meeting in the
place of any such absent or disqualified member. Any such committee, to the
extent provided in the resolution of the Board, shall have and may exercise all
the powers and authority of the Board in the management of the business and
affairs of the Corporation, and may authorize the seal of the Corporation to be
affixed to all papers which may require it; but no such committee shall have the
power or authority in reference to amending the Certificate of Incorporation,
adopting an agreement of merger or consolidation, recommending to the
stockholders the sale, lease or exchange of all or substantially all of the
Corporation's property and assets, recommending to the stockholders a
dissolution of the Corporation or a revocation of a dissolution, or amending
these Bylaws of the Corporation; and, unless the resolution designating it
expressly so provides, no such committee shall have the power or authority to
declare a dividend or to authorize the issuance of stock.
SECTION 15. Action by Consent. Unless restricted by the Certificate of
Incorporation, any action required or permitted to be taken by the Board of
Directors or
11
<PAGE>
any committee thereof may be taken without a meeting if all members of the Board
of Directors of such committee, as the case may be, consent thereto in writing,
and the writing or writings are filed with the minutes of the proceedings of the
Board of Directors or such committee as the case may be.
SECTION 16. Telephonic Meeting. Unless restricted by the Certificate of
Incorporation, any one or more members of the Board of Directors or any
committee thereof may participate in a meeting of the Board of Directors or such
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other.
Participation by such means shall constitute presence in person at a meeting.
ARTICLE IV.
Officers
SECTION 1. Number and Qualifications. The officers of the Corporation
shall be elected by the Board of Directors and shall include the Chairman, the
Chief Executive Officer, the President, one or more Vice Presidents, the
Treasurer and the Secretary and such other officers and assistant officers as
the Board of the Corporation may from time to time appoint, or authorize the
Chairman, the Chief Executive Officer or the President to appoint.
SECTION 2. Tenure. Officers and assistant officers of the Corporation may,
but need not, also be members of the Board. Each officer shall hold his or her
office until a successor is elected and qualified or until his or her earlier
death, resignation or removal in the manner specified in this Section 2 of
Article IV of these Bylaws. Any officer
12
<PAGE>
elected or appointed by the Board may be removed by the Board with or without
cause. In addition, however, any officer or assistant officer appointed by the
Chairman, the Chief Executive Officer or the President and, if the Chairman, the
Chief Executive Officer or the President is so authorized by the Board, any
officer or assistant officer appointed by the Board of the Corporation, may be
removed from office by the Chairman, the Chief Executive Officer or the
President upon such terms as the Chairman, the Chief Executive Officer or the
President may specify in writing to such officer. The removal of an officer
without cause shall be without prejudice to his or her contract rights, if any.
The election or appointment of an officer shall not of itself create contract
rights. Should any vacancy occur among the officers by reason of any of the
specified acts or events, the position shall be filled by appointment made by a
majority vote of the Board or by the Chairman, the Chief Executive Officer or
the President, if he or she is so authorized by a resolution approved by a
unanimous vote of the Board.
SECTION 3. Duties. The powers and duties of the several officers shall be
as provided from time to time by resolution or other directive of the Board. In
the absence of such provisions, the respective officers shall have the powers
and shall discharge the duties customarily and usually held and performed by
like officers of corporations similar in organization and business purposes to
the Corporation.
SECTION 4. Compensation. Officers may be paid such reasonable compensation
as the Board may from time to time authorize and direct.
13
<PAGE>
ARTICLE V.
Stock Certificates and Their Transfer
SECTION 1. Regulations. Subject to and upon the terms and conditions set
forth in the Shareholders Agreement, the Board of Directors may make such rules
and regulations, not inconsistent with these Bylaws, as it may deem expedient
concerning the issue, transfer and registration of certificates for shares of
stock of the Corporation.
ARTICLE VI.
Indemnification
SECTION 1. Indemnification. Each person who is or was a director or
officer of the Corporation shall be indemnified by the Corporation to the
fullest extent permitted or authorized by the General Corporation Law of the
State of Delaware or any other applicable laws as presently or hereafter in
effect. The Corporation may, but shall not be obligated to, maintain insurance,
at its expense, for the benefit of the Corporation and of any person to be
indemnified.
ARTICLE VII.
General Provisions
SECTION 1. Dividends. Subject to the provisions of statute and the
Certificate of Incorporation, dividends upon the shares of capital stock of the
Corporation may be declared by the Board of Directors at any regular or special
meeting. Dividends may be paid in cash, in property or in shares of stock of the
Corporation, unless otherwise provided by statute or the Certificate of
Incorporation.
14
<PAGE>
SECTION 2. Reserves. Before payment of any dividend, there may be set
aside out of any funds of the Corporation available for dividends such sum or
sums as the Board of Directors may, from time to time, in its absolute
discretion, think proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
Corporation or for such other purpose as the Board of Directors may think
conducive to the interests of the Corporation. The Board of Directors may modify
or abolish any such reserves in the manner in which it was created.
SECTION 3. Seal. The seal of the Corporation shall be in such form as
shall be approved by the Board of Directors.
SECTION 4. Fiscal Year. The fiscal year of the Corporation shall end on
December 31 of each year. The fiscal year of the Corporation may hereafter be
changed, by resolution of the Board of Directors.
SECTION 5. Checks, Notes, Drafts, Etc. All checks, notes, drafts or other
orders for the payment of money of the Corporation shall be signed, endorsed or
accepted in the name of the Corporation by such officer, officers, person or
persons as from time to time may be designated by the Board of Directors or by
an officer or officers authorized by the Board of Directors to make such
designation.
SECTION 6. Execution of Contracts, Deeds, Etc. The Board may authorize any
officer, employee or agent to enter into any contract or execute and deliver any
instrument in the name and on behalf of the Corporation. Such authority may be
general or confined
15
<PAGE>
to specific instances, or otherwise limited, and if the Board so provides may be
delegated by the person so authorized.
SECTION 7. Loans. No loans shall be contracted on behalf of the
Corporation and no evidence of indebtedness shall be issued in its name unless
authorized by a resolution of the Board. Such authority may be general or
confined to specific instances and if the Board so provides may be delegated by
the person so authorized.
ARTICLE VIII.
Amendments
SECTION 1. Amendments. Subject to the provisions of the Shareholders
Agreement, these Bylaws may be amended or repealed or new bylaws adopted by the
stockholders or the Board of Directors of the Corporation.
16
<PAGE>
Exhibit 10.20
***Confidential treatment has been requested for portions of this agreement. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as [*****]. A complete version of this
agreement has been filed separately with the Securities and Exchange Commission.
[Execution Copy]
Firm Fixed Price Contract
Contract #001
Technical Consulting on XM Radio
BETWEEN
XM Satellite Radio Inc.
1250 23rd Street, N.W.
Suite 57
Washington, D.C. 20037
AND
Fraunhofer Gesellschaft zur Forderung
Der angewandten Forschung e.V.,
ADDRESS
Leonrodstr. 54
D-80636 Munchen, Germany
July 16, 1999
<PAGE>
Firm Fixed Price Contract
NO. 001
This Contract is made and entered into this 16th day of July, 1999 by and
between XM SATELLITE RADIO INC., a satellite digital audio radio services (DARS)
company, with offices at 1250 23rd Street, N.W., Washington, DC 20037, U.S.A.
(hereinafter referred to as the "Customer" which expression shall include its
successors and permitted assigns) and the FRAUNHOFER-GESELLSCHAFT ZUR FORDERUNG
DER ANGEWANDTEN FORSCHUNG E.V., a corporation organized and existing under the
laws of Germany, (hereinafter referred to as "FhG" which expression shall
include its successors and permitted assigns).
WITNESSETH THAT: The Customer and FhG (collectively referred to hereunder
as "Parties" and individually as "Party") hereto mutually agree as follows:
1. CONTRACT TYPE AND SCOPE OF WORK
FhG shall furnish the necessary personnel, equipment, material, services
and facilities to provide the deliverables specified in Exhibit A
("Statement of Work") and in accordance with the Payment Plan in Exhibit
B.
2. PERIOD OF PERFORMANCE
The period of performance for this Contract is July 16, 1999 through
December 30, 2000.
3. PRICE
3.1 For the performance of the requirements of this Firm-Fixed Price
Contract, FhG shall receive payment by Customer in DM, which shall
be paid in accordance with Article 4 of this Contract entitled
"Payment".
3.2 All travel costs incurred by FhG in any month in connection with its
performance under this Contract shall be communicated to Customer in
the following month in a report using the form attached hereto as
Exhibit E, including any other information that Customer may
reasonably request from time to time. Customer shall reimburse FhG
the amounts set forth in such reports, on a fixed sum per trip
basis, as set out in Exhibit B, subject to Customer's reasonable
approval, in accordance with the terms of Article 4 hereof.
4. PAYMENT
4.1 Payment shall be made by customer in accordance with completion of
milestones by FhG set forth in Exhibit B. All payments shall be in
DM until such time as the Euro is the only legal currency in the
Federal Republic of Germany, at which time the payment obligations
hereunder, particularly the monetary value stipulated in this
Contract, shall be regarded as being stipulated in Euro. In any case
the conversion of D-Mark in Euro will be effected on the basis of
the then-current published fixed conversion rate, which is currently
1.95583 DM per Euro.
4.2 Any amounts due to FhG shall be paid within thirty (30) days after
FhG provides to Customer (i) a facsimile invoice stating the
milestone (with reference to the Payment Plan) for which payment is
being requested and (ii) an e-mail to Stell Patsiokas and Paul Marko
notifying them that such invoice has been faxed. Fixed
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
monthly payments according to the Payment Plan (Exhibit B) shall be
paid by Customer within thirty (30) days after FhG provides an
invoice for such amount to Customer. Customer shall have ten (10)
business days following receipt of such invoice to notify FhG that
such milestone has not been met in accordance with the requirements
of this Contract. The Parties acknowledge that the "substantial"
standard for performance set forth in Article 18.1 hereof does not
apply to the acceptance of performance milestones. If FhG does not
receive such notice within such ten (10) business day period, then
such milestone shall be deemed to have been met. Payment shall be
made by wire transfer to FhG, Reference No. [*****] or said payments
shall be express couriered to FhG at the address shown in Article
26.1 of the Contract.
4.3 Any amounts for payments under Exhibit B that have been met or
deemed to have been met that are not received by FhG within the
above stated time periods shall bear interest from the date of
invoice, at the rate of [*****] per month or the maximum rate
allowed by law, whichever is lower. If any invoiced amount is in
dispute, the Party disputing such amount shall notify the other
Party thereof in writing within ten (10) business days after such
amount was due. No interest shall be payable unless, until, and to
the extent the dispute is settled in favor of FhG. The Parties agree
that work under this Contract shall continue during the resolution
of such dispute.
4.4 Subject to Article 4.3, and provided FhG is not in default
hereunder, the Customer's failure to make payments in accordance
with the terms of this Contract shall be deemed to be a default. FhG
will provide the Customer with a written notice of the default and
if the default is not cured by the Customer within 15 days of
receipt of FhG's written notice, FhG may suspend all work hereunder
until such default is cured. If such default is not cured within 30
days of receipt of FhG's written notice, FhG may terminate work
under this Contract without further obligation to the Customer. In
the event of such termination, the Customer's liability shall be
determined by the provisions relating to the Customer's liability in
Article 19 of the Contract hereof entitled Termination for
Convenience.
4.5 In the event FhG suspends work due to late payment by the Customer,
as described in Article 4.4 above, and if following receipt of
payment by the Customer FhG subsequently proceeds with the work, the
period of performance set forth in this Contract shall be extended
by an amount of time equal to the period of time necessary for FhG
to reconstitute its efforts plus an amount of time equal to the
number of days that the work was suspended. Furthermore, any
additional cost impact resulting from such suspension shall be
determined and agreed by the Parties as an allowable cost under this
Contract. Any extension of time or additional cost agreed upon by
the Parties shall be included in an agreement to amend the Contract.
The Parties agree that work under this Contract shall continue
during the negotiation of such additional costs (or any disputes
related thereto).
5. TECHNICAL AND CONTRACTUAL REPRESENTATIVES
The following authorized representatives are hereby designated for this
Contract:
XM Satellite Radio Inc. FhG
----------------------- ---
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
<TABLE>
<S> <C>
Technical and Program: Stell Patsiokas Technical and Program: Stefan Meltzer
Contractual: Joseph Titlebaum Contractual: Dr. Birgit Homma
</TABLE>
6. TAXES AND DUTIES
All national, regional or local taxes, duties, and similar liabilities,
shall be paid by FhG.
7. CONSULTATIONS
At the request of Customer, FhG shall make available all relevant key
personnel pertaining to this Contract and the Statement of Work for
meetings either in the United States or Europe in connection with design
reviews, troubleshooting, other requests for assistance, or progress
reports.
8. FORCE MAJEURE
8.1 FhG shall not be liable for any loss damage, detention, or delay
resulting from causes beyond its reasonable control, including, but
not limited to: acts of God, acts of governments in their sovereign
capacity (except to the extent that such acts of governments arise
out of an act or failure to act by FhG), fires, floods, epidemics,
quarantine restrictions, strikes labor disputes, freight embargoes,
unusually severe weather, insurrection or riot, damage in
transportation, and inability due to causes beyond its reasonable
control to obtain necessary labor, materials, or facilities. In the
event of a temporary delay specified in this Contract is required,
an equitable adjustment shall be made in the Contract price and the
performance dates hereof shall be extended at least by an amount of
time equal to the number of days that work was suspended, not to
exceed a reasonable length of time. In the event the parties agree
that it is reasonably likely that such an excusable delay will
exceed forty-five (45) days (an "Extended Force Majeur") resulting
from any such causes, the Customer shall be entitled to terminate
this Contract in accordance with Article 17 hereof entitled
Termination for Extended Force Majeure. The Parties acknowledge that
the occurrence of any force majeur event described herein shall not
excuse any default by FhG existing prior to the occurrence of such
event.
8.2 FhG shall take all reasonable steps to mitigate the impact of any
force majeure event.
9. INDEMNITY AND LIMITATION OF LIABILITY
9.1 The liability of FhG with respect to any service, sale, or anything
done in connection therewith, such as the performance or breach
thereof, or from the manufacture, sale, delivery, resale,
installation or use of any goods or services covered by or furnished
under this Contract whether arising out of statute, contract,
negligence, strict liability in tort, or under any warranty, or
otherwise, and whether or not occasioned by FhG's negligence, shall
not exceed 25% of the price of each work package (i.e., system
engineering, [*****] development and test equipment) affected by the
action or inaction resulting in such liability and resulting from
the willful misconduct or gross negligence of FhG.
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
9.2 Notwithstanding any other provision of this Contract, neither Party
shall under any circumstances be liable for special, incidental,
indirect or consequential damages, such as, but not limited to, loss
or damage of other property or equipment, loss of profits or revenue
cost of capital, cost of purchased or replaced goods, or claims of
customers or contractors of the other Party for, but not limited to
delays, penalties or service interruptions.
9.3 FhG shall indemnify, defend and hold harmless Customer against any
costs or expenses, with the exception of those costs identified in
Article 9.2 above, including reasonable attorneys' fees, incurred by
Customer as a result of legal actions brought against Customer by
third parties caused by default of FhG in the performance of the
work under the Contract, subject to the limitation of liability set
forth as Clause 9.1 above.
9.4 Notwithstanding the foregoing, the Customer and FhG agree to a
no-fault, no-subrogation inter-party waiver of liability under which
each Party shall be responsible for any damage it sustains as a
result of damage to its own property and employees, including death,
while involved in the conduct of the activities which are the
subject of this Contract, which damage is not caused by the other
Party. It is the intent of the Parties that this inter-party waiver
of liability be construed broadly to achieve the intended
objectives.
10. PROPRIETARY INFORMATION AND INTELLECTUAL PROPERTY
10.1 Each Party shall identify to the other, and the receiving Party
shall hold in confidence, any proprietary or confidential
information marked as proprietary or confidential or obtained in
connection with FhG's work under this Contract, any deliverables
hereunder, or any proprietary or confidential information so marked
furnished by one Party to the other. Subject to Customer's rights
described in Article 10.2 hereof, each Party shall use the same
efforts to avoid disclosure, publication or dissemination of such
proprietary or confidential information as they use with respect to
their own proprietary or confidential information, but in no event
less than best efforts. Said information shall remain the
proprietary information of the Party disclosing it and shall not be
disclosed to others without the disclosing Party's prior written
consent either during or after the term of the Contract. All
technical data based upon proprietary or confidential information
furnished by Customer that is essential to the design, function or
operation of any deliverable under this Contract (including, without
limitation, any patents or patent applications anywhere in the world
owned by or licensed to Customer) shall be considered as the
Customer's proprietary or confidential data and shall not be
disclosed to others without the Customer's prior written consent
either during or after the term of the Contract. Proprietary or
confidential information or data shall not include information or
data which becomes generally known in the industry, or is known to
either Party prior to its disclosure by the other Party as
demonstrated by written records, or is authorized in writing by the
disclosing Party for release, or which is subject to judicial or
governmental compelled disclosure.
10.2 FhG hereby grants to Customer:
(a) An exclusive, paid-up, royalty-free, transferable, perpetual,
and irrevocable world-wide license in and to the [*****] code
or other source
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
or executable code for [*****] developed by FhG under this
Contract and all patent applications, patents, trade secrets,
mask works, copyrights and other intellectual property for
work or inventions performed or developed in connection with
such Code for Customer (the "Code"). Such license shall
include the right of Customer to use, copy, maintain, modify,
create derivative works of, transfer, sublicense or otherwise
convey the Code as necessary in connection with Customer's
business in Customer's sole discretion and without the consent
of FhG.
(b) A non-exclusive, non-transferable, paid-up, royalty-free
perpetual and irrevocable worldwide license to use the test
equipment developed hereunder in connection with Customer's
business.
(c) The Parties acknowledge that nothing in this Article 10.2 is
intended to grant to Customer the rights to modify, transfer
or otherwise convey any rights in the FhG Background IP
(defined in Article 10.5).
10.3 FhG agrees that its ownership rights in the Code shall be limited by
the following:
(a) FhG shall not sell, transfer, distribute, loan, disclose,
reproduce or otherwise convey the Code (in its entirety as
delivered to Customer hereunder) to or for any other person or
entity. FhG acknowledges that the Code comprises a material
element in Customer's digital radio system and that Customer
would suffer material financial and market share losses in the
event the Code were to be disclosed. Accordingly, FhG agrees
to maintain strict confidentiality of the Code.
(b) Subject to the limitation described in Article 10.3(c) below,
FhG may modify the Code for use in future projects for which
FhG is commissioned by future FhG clients; provided, however,
that such modifications shall be substantial enough to make
the Code unrecognizable to such clients and such that such
modifications will not be able to be reverse-engineered to
obtain the Code.
(c) Under no circumstances shall FhG modify the Code for any
Customer Competitor. For purposes of this Contract, "Customer
Competitor" shall mean (i) any entity involved in the business
of satellite or terrestrial digital broadcasting in [*****],
(ii) any individual employed by, serving as an officer or
director for, or owning any equity interest in, such an
entity, (iii) any entity controlling, controlled by, or under
common control with such an entity, or also (iv) any entity
owning any equity interest in such an entity. "Customer
Competitor" shall also include the following companies, as
well as any other company that Customer notifies FhG in
writing shall be considered a Customer Competitor: CD Radio
and any company involved with IBOC technology or having an
equity interest in a license for the wireless communication
system (WCS) frequency spectrum. "Customer Competitor" shall
not include WorldSpace Satellite Company or any principal
affiliate thereof as it operates in [*****].
For FhG and FhG customer purposes other than XM Radio Program related projects,
FhG will retain all rights to reuse the following blocks and subblocks included
in the [*****] design:
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
[*****]
10.4 Customer hereby grants to FhG a royalty-free, non-exclusive,
non-transferable license for the development, manufacturing and sale
of the test equipment specified in Exhibit A; provided, however,
that FhG shall be entitled to sublicense such rights to Fraunhofer
IZT. FhG shall inform its customers that such license is for
engineering development uses and not for consumer receiver
production tests.
10.5 The Parties acknowledge that the intellectual property listed in
Exhibit D hereto, as may be modified from time to time during the
term of this Contract, belonging to FhG, with associated patent
applications, patents, trade secrets, and copyright references
identified (the "FhG Background IP") are all of the technologies
owned by FhG required to complete the deliverables under this
Contract. FhG hereby grants a royalty-free, non-exclusive,
non-transferable perpetual and irrevocable worldwide right and
license to Customer to such FhG Background IP. Customer shall
provide FhG on a non-exclusive, non-transferable, royalty-free basis
with all licenses to intellectual property owned by Customer
necessary for the performance of the Contract.
10.6 FhG shall notify Customer promptly upon its filing of any patents
resulting from or in connection with the deliverables under this
Contract.
11. PATENT INDEMNITY
11.1 FhG shall reasonably ensure that the FhG Background IP and any
intellectual property arising out of this Agreement embodied in each
deliverable does not infringe on third Party patents or other
proprietary right, and FhG represents that, to the best of its
knowledge, no such infringement claims are pending or threatened
against FhG. FhG shall promptly notify the Customer in writing of
potential patent infringement claims related to the FhG Background
IP and any intellectual property arising out of this Agreement and
FhG shall diligently defend or settle such claims at its own
expense.
11.2 In the event that use of the services and deliverables to be
provided by FhG hereunder is enjoined or that the parties mutually
determine that an infringement claim is likely, FhG shall either
obtain the necessary license for the Customer or modify the subject
deliverable to avoid infringement. The Customer would have no
further remedy beyond these two actions. The costs of modifications
or additional licenses shall be borne by Customer up to $500,000.
FhG shall in no respect bear the costs of additional licenses.
11.3 FhG agrees to indemnify and hold harmless the Customer and its
officers and defend at its own expense any claims, actions, or
proceeding based on an allegation that FhG uses materials or items
for the performance of services or provision of goods under this
Contract which directly infringes any trademark, copyright, or trade
secret, provided that FhG is given prompt written notice of such
claims by the Customer. Notwithstanding the foregoing, FhG shall
have no liability or responsibility for any infringement resulting
from FhG following the directions of or specifications provided by
the Customer.
<PAGE>
11.4 This Article 11 is subject to the limitations of Article 9.1.
12. COPYRIGHT
Copyright in all reports and other documents which are produced by FhG and
delivered under this Contract shall vest in and be the sole property of
the Customer. The foregoing shall not be deemed to preclude FhG from
making and retaining copies of such materials for record keeping purposes.
All such reports and other documents shall clearly state that they were
authored by FhG.
13. WARRANTY
FhG warrants that the services provided under this Contract and the
Statement of Work shall be carried out with all reasonable skill, care and
diligence. Any claim for breach of the foregoing warranty shall be deemed
to have been waived unless asserted in writing within one (1) year after
completion of performance of the services to be provided under this
Contract. FhG agrees to correct defects discovered by Customer within 30
days of notification of such defect(s).
FhG warrants that the products and other deliverables provided under this
Contract shall be free from defects in materials and workmanship under
normal use and service, and such products and other deliverables will be
new, of good quality, and of recent manufacture (unless otherwise
permitted by Customer) for one (1) year from the date of acceptance of
such product or deliverable by Customer.
14. DISPUTES
FhG and the Customer shall make every effort to reach an amicable
settlement of any dispute or disagreement arising under this Contract
including if deemed appropriate and requested by either Party submission
to the principal officers of FhG and the Customer. If no agreement can be
reached within 7 days, the matter shall be settle definitively by three
(3) arbitrators, using the Rules of the International Chamber of Commerce
(ICC), who shall sit in London, England applying the laws of Switzerland.
Each Party shall designate one (1) arbitrator and both Parties shall
designate the third arbitrator. All arbitration shall be in the English
language. The arbitration award shall be final and binding upon the
Parties and judgment may be entered thereon, upon the application of
either Party, by any court having jurisdiction. Each Party shall bear the
cost of preparing and presenting its case, and the cost of the arbitration
(including fees and expenses of the arbitrators) shall be shared equally
by the Parties unless the award otherwise provides.
Pending a decision by the arbitrators, each Party shall, unless directed
by the other Party in writing, fulfill all of its obligations under this
Contract, including the obligation to take all steps necessary during the
pendency of the arbitration to ensure the services and deliverables will
be delivered within the time stipulated, or within such extended time as
may be allowed under this Contract, provided Customer shall continue to
make payments therefore in accordance with this Contract.
15. GOVERNMENT APPROVALS
15.1 FhG shall be responsible for obtaining any governmental
authorizations, consents, and approvals in Germany necessary for the
performance of FhG's obligations herein. In the event that lawful
performance of this Contract or any part of this Contract by either
Party is delayed or rendered impossible by, or as a consequence of
any law, regulation, or any Government having jurisdiction over
<PAGE>
it, such Party shall not be considered to be in default by reason of
such delay or failure to perform, and the Parties shall consult in
good faith to develop an equitable resolution of the issue with due
regard for the respective interests of the Parties.
15.2 All provisions in this Article shall remain binding on the Parties
after the termination of the Contract.
16. LANGUAGE AND COMMUNICATIONS
16.1 All data, documents, descriptions, reports, certificates, studies,
technical data provided by FhG shall be written in English.
16.2 This Contract and all documentation and communications required
hereunder, shall be in the English language.
17. TERMINATION FOR EXTENDED FORCE MAJEURE
In the event of an Extended Force Majeur resulting from a force majeure
event as stated in Article 8, the Customer by written notice, may
terminate this Contract in whole or in part at any time upon giving thirty
(30) days notice to FhG. The Customer shall pay FhG for the services
rendered and ODC's incurred up to the date of termination in accordance
with the provisions of Article 4 of this Contract. FHG shall take all
reasonable steps to mitigate costs incurred after receiving notice of any
such force majeure event.
18. TERMINATION FOR DEFAULT
18.1 The Customer may, by written Notice of Default to FhG, terminate the
whole or any part of this Contract in any one of the following
circumstances; (1) if FhG fails substantially to make delivery of
any deliverable as defined in Exhibit A or to perform the services
within the time specified herein; or (2) if FhG fails to make
progress as to materially endanger performance of this Contract in
accordance with its terms; or (3) the amounts described in Article
11.2 hereof exceed the limit stated therein; or (4) if proceedings
are commenced or threatened, the result of which will be to place
FhG into liquidation, receivership or administration or FhG
otherwise becomes insolvent or admits its inability to meet its
debts as they fall due or if it enters into any form of composition
or arrangement with its creditors and in either of (1) (2) or (3)
above FhG does not effect a satisfactory plan to cure such failure
within a period of thirty (30) days (or such longer period as the
Customer may authorize in writing) after receipt of notice from the
Customer specifying such failure.
18.2 In the event of a default under Article 18.1 above, the Customer
may: (i) rescind the whole or portion of the Contract so terminated
whereupon FhG shall promptly reimburse the Customer all amounts
previously paid to FhG by the Customer for the work so terminated
(less the amounts for supplies or services delivered and accepted or
performed and accepted prior to the date of termination or desired
by the Customer notwithstanding such termination). .FhG shall have
no further liability.
<PAGE>
19. TERMINATION FOR CONVENIENCE
The Customer may, by thirty (30) calendar days written notice, terminate
the whole or any part of this Contract for any reason. All work performed
and expenses incurred by FhG up to and including said thirty (30) day
period shall be paid by Customer according to the provisions of this
agreement. In the event of termination for convenience, FhG shall receive
termination fees in an amount equal to FhG's reasonable wind-down costs
plus ten percent (10%) of such wind-down costs.
20. KEY PERSONNEL
20.1 FhG agrees that the individuals identified in the schedule attached
hereto as Exhibit C, entitled Key Personnel, is necessary for the
successful completion of its services under the Contract. Upon the
completion of any work package, the key personnel associated with
such work package shall no longer be considered key personnel
(except for purposes of Article 7 hereof), even if their names
remain on Exhibit C, provided they are not to be assigned to
subsequent work packages hereunder.
20.2 Such key personnel shall not be removed from the performance of the
Contract unless replaced with personnel of substantially equal
qualifications and ability. The Customer shall have the right to
review the qualifications of any proposed replacements and, if for
good and sufficient reasons, the Customer deems such personnel to be
unsuitable, the Customer may require FhG to offer alternative
candidates where such are available.
20.3 Notwithstanding the Customer's role in approving key personnel and
their replacements, nothing in this Article shall relieve FhG of any
of its obligations under this Contract or of its responsibility for
any acts or omissions of its personnel.
21. REPORTS
21.1 FhG shall submit reports to the Customer consistent with the
requirements contained in Exhibit A, Statement of Work. These
reports will reflect the status of the activities by FhG and other
information related to the project.
21.2 FhG will promptly inform the Customer about extraordinary
circumstances arising during the performance of the services and
about all matters under this Contract requiring the consent of the
Customer.
21.3 FhG shall furnish to the Customer such information related to the
services as the Customer may reasonably request from time to time.
This information will be furnished on a non-interfering basis with
the progress of the project.
22. AMENDMENTS TO THE CONTRACT
Any amendment or modification of this Contract, except in writing and
signed by the authorized representatives of the Parties (in the case of
the Customer, the Chief Executive Officer), shall be void and of no
effect.
23. DOCUMENTS FORMING PART OF CONTRACT
<PAGE>
The following documents shall be deemed to form and be read and construed
as parts of this Contract, and shall hereinafter be called the Contract
documents:
1) These Contractual Terms and Conditions
2) Statement of work (Exhibit A)
3) Exhibit B (Payment Plan)
4) Exhibit C (Key Personnel)
5) Exhibit D (FhG Background IP)
6) Exhibit E (Monthly Air Travel Report Form)
In the event of conflict or inconsistencies between this Contract and the
Exhibits attached hereto, this Contract shall take precedence over such
Exhibits and Appendices.
24. INFORMATION AND ACCESS
24.1 FhG shall grant Customer reasonable access to all information
performed under the contract and all work in progress.
24.2 The Customer shall ensure that FhG shall have the access that the
Customer is given at all reasonable times to the facilities of all
relevant spacecraft program contractors, launch vehicle program
contractor and subcontractors, and that FhG shall have full access
at all reasonable times to relevant data available from such
contractors and subcontractors.
25. PERMITS AND AUTHORIZATIONS
FhG shall be responsible for all permits and authorizations required in
Germany to perform the efforts defined in this contract. The Customer
shall obtain all necessary US licenses.
26. NOTICE
26.1 Any notice, request, demand, approval, consent, or other
communication ("Communication") permitted or required to be given by
this Contract shall be effective only if in writing and delivered
(I) personally, or (ii) by registered or certified mail, postage
prepaid, return receipt requested, or (iii) by prepaid domestic
courier, receipt acknowledged, or (iv) by facsimile or other
electronic communications or similar conveyance, transmission
confirmed, and addressed as follows:
If to FhG: FhG Fraunhofer Institut fur Integrierte Schaltungen
Am Weichselgarten 3,
D-91058 Erlangen, Germany
Attn: Stefan Meltzer
Contracts Manager
Telephone: +9131-776-6340
Facsimile: +9131-776-6399
If to Customer: XM Satellite Radio Inc.
XM Innovation Center
600 West Hillsboro Blvd., Suite 210
Deerfield Beach, FL 33441
Attn: Dr. Stell Patsiokas
Senior Vice President, Technology
<PAGE>
Telephone: (954) 419-9693
Facsimile: (954) 419-1694
26.2 If delivered personally, or by facsimile or their electronic
conveyance, the deemed date of delivery shall be the date on which
the Communication is dispatched. If delivered by mail or by courier,
the deemed date of delivery shall be the date on which the
Communication is received. All Communications shall bear the date on
which the are dispatched or deposited in the mail. Either Party may
change the address at which it will receive Communications upon the
giving of notice to the other Party as provided above.
27. GENERAL
27.1 Except for assignment of delegation to a wholly-owned subsidiary of
FhG or the Customer, neither Party shall assign or delegate this
Contract or any of its rights, duties or obligations thereunder to
any other person without the prior written consent of the other
Party, which consent shall not be unreasonably withheld, provided
that the assignor shall execute a guarantee in a form acceptable to
the other Party which guarantees the due performance of the
assignees and the observation of its duties and obligations under
the Contract. Any attempt by either Party to assign or delegate any
of its rights, duties or obligations under this Contract without
such consent shall be void and of no effect.
27.2 FhG may subcontract portions of the work. Customer's written
approval is required for any such subcontracts accounting for more
than 300,000 -DM; or in the case of software, only for those
subcontracts accounting for 150,000 -- DM or more. FhG shall provide
sufficient detail on subcontractors experience, expertise and
compliance with this Contract so that the Customer can adequately
assess such subcontractor.
27.3 If either Party, at its option, agrees to a waiver of any of the
terms and conditions recited herein, such waiver shall not for any
purpose be construed as a waiver of any succeeding breach of the
same or any other terms and conditions; not shall such a waiver be
deemed as a course of conduct.
27.4 If any provision or clause, or portion thereof, of this Contract, or
application thereof to any person or circumstances is held invalid
or unconscionable, such invalidity or unconscionability shall not
affect other provisions, or portions thereof, or applications of
this Contract which can be given effect without the invalid or
unconscionable provision, or portion thereof, or application, and to
this end the provisions of these terms and conditions are declared
to be severable.
27.5 Except as required to obtain necessary licenses or Governmental
approvals, each Party shall give the other thirty (30) days advanced
written notice to comment upon the content and timing of news
releases, articles, brochures, advertisements, prepared speeches and
other information releases, concerning this Contract or the work
performed or to be performed hereunder.
27.6 Unless otherwise provided herein, any time limits to which this
Contract binds FhG or the Customer shall be counted in calendar days
from the day following that of the event marking the start of the
time limit, and shall end of the last day of the period laid down.
When the last day of a time limit is a Saturday or Sunday, or a
recognized public holiday in the country in which the particular
<PAGE>
contractual performance is required, such time limit shall be
extended to the first working day following.
27.7 This Contract shall be governed by the laws of Switzerland.
28. ON CALL SERVICES
The Customer may request FhG to provide other or additional related
services beyond those described in Exhibit A, Statement of work or
additional work upon the expiration of the Period of Performance as
defined in Article 2. FhG will provide a quotation of labor, expenses and
associated schedule in response to any such request on a time and
materials basis. Upon written notification by the Customer of approval of
the quotation, and formal incorporation into this Contract, and subject to
Article 15 hereof, FhG shall provide the requested services.
29. ENTIRE AGREEMENT
This Contract constitutes the entire agreement between the Parties in
connection with the subject matter hereof, and there are no other
agreements or understandings, written or oral, except as provided herein.
IN WITNESS WHEREOF, the representatives of the parties hereto have
executed this Contract, the present text of which shall be the only authentic
version.
FhG XM Satellite Radio Inc.
By:_______________________________ By:_______________________________
Name:_____________________________ Name:_____________________________
Title:____________________________ Title:____________________________
Date:_____________________________ Date:_____________________________
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
Exhibit A
SOW between XM Radio and FhG for the XM Radio System
development
Version 1.1
August 20, 1999
1 Introduction
The Statement of Work between XM Radio and Fraunhofer IIS-A for the DARS
development program describes the work packages for each area and the respective
deliverables for the Fraunhofer contribution.
2 Scope of Work
Fraunhofer will mainly contribute to the development of the XM Radio DARS system
in the following areas:
o System Engineering
o Receiver development
o Test equipment development and production
o [*****]
This list can be extended on the basis of a common written agreement between XM
Radio and Fraunhofer IIS-A on the content, deliverables and cost for each work
package. The details for the already agreed work packages are described below.
3 General
3.1 Applicable Documents
[1] DARS-FHG-FDSC-603-110000 [*****]
"Waveform Requirements - Service Layer"
[2] DARS-FHG-FDSC-602-110000 [*****]
"Waveform Requirements - Transport Layer"
[3] DARS-FHG-FDSC-601-110000 [*****]"Waveform Requirements -
Terrestrial Physical Layer"
[4] DARS-STEL-608-110000 "Waveform Requirements -Satellite Physical
Layer"
[5] DARS-FHG-FDSB-600-600000 [*****]
"Test Equipment Specification"
[6] DARS-FHG-FDSC-601-520 000 [*****]
"[*****] Specification"
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
4 Work Package Overview
This section will give an overview to the work package. A more detailed
description will be given in the
o chapter 8.1 for system engineering
o chapter 8.2 for [*****] development
For the test equipment the detailed definition is part of the work package
"Definition of the required test equipment".
4.1 System Engineering
The contributions in system engineering cover all work packages related to the
system definition, system validation and system optimization until the release
of the final system and waveform specifications. It also includes support of the
[*****] and test equipment development for the XM Radio system.
- --------------------------------------------------------------------------------
Work package Description Deliverables Completion
Date
- --------------------------------------------------------------------------------
[*****]
2
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
The work package [*****] will be finalized with the release of the [*****] by
the end of [*****]. With the official release XM Radio will [*****] of these
documents.
The [*****] on the availability and content of the [*****]. XM Radio and FhG
will agree mutually on a [*****], after both consider the [*****]. Any changes
to [*****] after the release of this final version will require a change request
for the implementation.
4.2 [*****]
4.2.1 General Remarks
The area of XM-Radio Receiver Development covers all development activities
related to the commercial receiver and its key components. The main focus of
FhG-activities is the [*****].
For the development of the [*****] Fraunhofer will work in close cooperation
with XM and with ST Microelectronics ( ST is acting as an agent of XM for the
[*****] development ), and Aptix. The design for the [*****] includes the
verification of [*****] will be supplied by XM.
3
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
The [*****] will be developed in a way that it is to the highest extent reusable
for [*****]. Nevertheless its integration and the development of the required
[*****] is part of the SOW.
[*****] requirements for the evaluation on the [*****] will be defined by FhG.
The software will be developed by ST. The [*****] is required for the operation
of the [*****].
The work packages related to the [*****] assume the delivery of required
specifications, design documents, design modules and hardware to be provided by
XM-Radio .
4.2.2 [*****]
For the purpose of validation of the [*****] has been selected by XM. The
hardware consists of an [*****]. One complete [*****] will be available for FhG
in Erlangen.
The [*****] will be functionally tested and provided by XM . The definition of
the [*****] has already been performed by FhG on basis of the [*****] and
reviewed by XM. All other [*****] are not subject to specification or review by
FhG.
A [*****]. This function is performed via a [*****] provided by ST.
The [*****] is purchased and delivered to FhG without any cost. At the
discretion of XM radio, based on performance associated with schedule
milestones, the [*****] may remain at FhG after finalizing the integration work
and program termination. In any case the [*****] shall remain at FhG until the
end of the warranty period defined in the contract. Notwithstanding anything to
the contrary in this paragraph, FhG and the customer acknowledge and agree that
the [*****] is the property solely of the Customer, and that FhG retains no
ownership right, title or interest in the [*****].
4.2.3 [*****]
For the integration of the [*****] are required. For the integration a setup
similar to the [*****] is sufficient. For the verification of the [*****] are
necessary. XM Radio will provide to FhG one [*****] as soon as they are
available.
4
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
4.2.4 Hardware Validation of the [*****]
The integration and validation of the [*****] is performed in 2 phases:
Phase A
[*****]
Phase B
[*****]
Deliverables from XM for [*****]:
- --------------------------------------------------------------------------------
Part: Due Date
- --------------------------------------------------------------------------------
[*****]
4.2.5 [*****] relevant documentation
The [*****] design is based on the [*****] and documentation listed in section
3.1 Applicable Documents [*****]. The relevant [*****] consists of [*****] which
has been provided by FhG to XM at [*****]. After [*****], any change to these
specifications or to [*****] will require a change request from XM.
Note: [*****]
5
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
4.2.6 [*****]
In addition to the [*****] and documentation the [*****] are listed in the table
below.
[*****]
6
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
4.2.7 Work Package definition
The following table identifies the work-packages and deliverable dates.
- --------------------------------------------------------------------------------
Completion
ID Work package Description Deliverables Date
- --------------------------------------------------------------------------------
[*****]
7
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
Note: All completion dates are very aggressive target dates which depend highly
on the availability of specifications, hardware implementations and
control software from XM, STMicroelectonics and Aptix. If non-FhG
deliverables do not meet the dates specified in this SOW, according
adjustments of the schedule and the price have to be discussed.
4.2.8 Required Reviews:
- --------------------------------------------------------------------------------
ID Review Comment Proposed Date
- --------------------------------------------------------------------------------
[*****]
8
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
4.2.9 [*****]
The [*****] from FhG only. The [*****] will be delivered to XM.
o [*****]
o [*****]
o [*****]
Note: The design documentation of the [*****] is under the responsibility of ST.
FhG will support XM and ST with the content of the final documentation
set.
4.3 Test Equipment
For the development verification and maintenance of the different equipment of
the XM Radio system test equipment is required. Test equipment is especially
required for the following activities:
The following test equipment requirements are identified:
o [*****]
o [*****]
The different requirements of the above described applications can be reduced to
a basic set of functions which are:
o [*****]
These basic functions will be supplemented with specific functions required for
the specific applications. [*****].
- --------------------------------------------------------------------------------
Work package Description Deliverables Date
- --------------------------------------------------------------------------------
4.3.1 [*****]
- --------------------------------------------------------------------------------
4.3.2
- --------------------------------------------------------------------------------
4.3.3
- --------------------------------------------------------------------------------
4.3.4
- --------------------------------------------------------------------------------
4.3.5
- --------------------------------------------------------------------------------
4.3.6
- --------------------------------------------------------------------------------
9
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
Note: Schedule dependent on XM delivery of [*****]. The business model for the
Test Equipment is described in the Cost Estimate
The [*****]. Therefore it may have limited functionality, performance and
reliability. Therefore it is the common understanding of XM Radio and FhG that
no guarantee for the functionality of this pre-production unit can be given. FhG
will provide the necessary update the pre-production unit to the level of a
production unit, when the production units will be available. In case of an
hardware update XM Radio will bear the cost for shipping the unit.
The details of the [*****].
The specifications for the [*****] test equipment will be added. At the present
moment no work package for the development of the [*****] test equipment is
defined.
10
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
4.4 [*****]
- --------------------------------------------------------------------------------
Work package Description Deliverables Date
- --------------------------------------------------------------------------------
4.4.1 [*****] [*****] [*****] [*****]
- --------------------------------------------------------------------------------
4.4.2 [*****] [*****] [*****] [*****]
- --------------------------------------------------------------------------------
The feasibility analysis should cover the following topics
1. [*****]
The schedule will be as follows:
1. Kick-Off meeting
Define in detail the content of the analysis, the target market and the
overall schedule within the system development
Date: [*****]
2. Final presentation
Presentation of the results and selection of one option for the
implementation
Date: [*****]
3. Discussion about implementation work plan
Presentation of implementation work plan based on selected option
Date: [*****]
[*****] XM Radio has to decide [*****]. In this case the [*****] accordingly.
11
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
5 Project Management
FhG shall be responsible for the program management of all of the tasks detailed
in this SOW.
5.1 Program Management
FhG shall designate a single point contact for all activities which are the
subject of this SOW. The program manager shall be responsible for managing
internal FhG resources, timely delivery of all deliverables, organization of all
key meetings, configuration control of all deliverables, progress reporting to
XM.
5.1.1 Meetings
FhG shall conduct the following meetings:
[*****]
FhG shall participate to the following meetings:
1) Weekly project review teleconference and written program status
update
[*****]
5.1.2 Weekly Progress Reports
A weekly progress report shall be submitted to the XM Program manager by the
last working day of each week. The report shall contain a description of
progress and major issues.
5.1.3 Quarterly Management Meetings
FhG shall conduct a Quarterly Management Meeting scheduled by XM to review
overall program status.
5.1.4 [*****]
FhG shall [*****] for all deliverable documents and equipment which are subject
of this SOW. [*****]. FhG shall electronically submit all required deliverable
documents to the XM documentation manager upon revision. In monthly reports, a
list of all program documentation shall be maintained with indication of current
revision.
5.1.5 Schedule
FhG shall provide a [*****] for approval by XM at EDC
5.2 Documentation
5.2.1 Document Organization
Documents shall be organized into 1) Performance / Functional Requirements, 2)
Test/Validation Requirements, 3) ICD Documents, 4) Design Specification 5) Test
and Analysis Reports 6) Software / Hardware User Manuals.
12
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
5.2.2 Document Configuration Management
A configuration management system as defined by FhG will be used.
5.2.3 Document Tools
FhG shall use Microsoft Office 97 and Microsoft Project 98 v4.1 for all program
documentation. [*****].
5.2.4 Review/Release of Documents
The specification documents will be distributed among the partners (according to
the responsibilities) for comments. At least the reviewer shall provide
comments. The following steps are assumed:
o Outline: Outline of the contents of the document or a very first
draft. Depending on the document different outlines may be
distributed.
o Draft: The term "draft" shall be used for documents close to the
planned release. At least 90% of the contents shall be
included.
o Final Draft:Document is reviewed, but not officially released
o Release: The document is released.
After sending a draft typically a period of two weeks for review is assumed. The
reviewer shall provide comments within this time period. After this period the
final draft will be distributed. If no further comments are received the
document will be released one week after sending the final draft.
5.2.5 Distribution List
XM shall provide a documentation distribution list to FhG no later than [*****]
and shall update the list quarterly. XM shall identify a program documentation
manager and review list by [*****] for submittal of all configuration controlled
documentation. All documents and memorandum submitted to XM shall be reviewed by
XM and comments within two weeks after submittal. The document shall be deemed
acceptable after that period if no comments are received.
5.3 Product assurance
FhG will use its internal product and quality assurance procedures in the course
of the project.
6 Acceptance
6.1 Documents
Deliverable documents are accepted with their official release.
6.2 CDEC VHDL Code
The [*****]. The package will be considered as accepted by XM Radio if there is
no written notice from XM Radio stating any problem within 30 days after
delivery.
13
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
6.3 Equipment
For the test equipment common acceptance test between XM Radio and FhG will be
conducted.
7 Approval of documentation
7.1 Document to be approved
The following documents will be submitted to XM by FhG for approval.
[*****]
14
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
8 Detailed Work Package Description
8.1 System Engineering - Description of the Work packages
8.1.1 System Specification
[*****]
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
WP-ID Work package Description Deliverables Required Input
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SYS-1-2 [*****]
- -------------------------------------------------------------------------------------
SYS-1-3
- -------------------------------------------------------------------------------------
SYS-1-4
- -------------------------------------------------------------------------------------
SYS-1-5
- -------------------------------------------------------------------------------------
SYS-1-6
- -------------------------------------------------------------------------------------
SYS-1-7
- -------------------------------------------------------------------------------------
</TABLE>
PAGE 215
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
8.1.2 Development of System Reference Model
[*****]
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
WP-ID Work package Description Deliverables Required Input
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SYS-2-1 [*****]
- -------------------------------------------------------------------------------------
SYS-2-2
- -------------------------------------------------------------------------------------
SYS-2-3
- -------------------------------------------------------------------------------------
</TABLE>
Note: [*****]
PAGE 216
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
8.1.3 [*****]
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
WP-ID Work package Description Deliverables Required Input
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SYS-4-1 [*****]
- -------------------------------------------------------------------------------------
SYS-4-2
- -------------------------------------------------------------------------------------
SYS-4-3
- -------------------------------------------------------------------------------------
SYS-4-4
- -------------------------------------------------------------------------------------
SYS-4-5
- -------------------------------------------------------------------------------------
</TABLE>
PAGE 217
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
8.1.4 [*****]
[*****].
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
WP-ID Work package Description Deliverables Required Input
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SYS-5-1 [*****]
- -------------------------------------------------------------------------------------
SYS-5-2
- -------------------------------------------------------------------------------------
</TABLE>
PAGE 218
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
8.2 [*****]
8.2.1 [*****]
- --------------------------------------------------------------------------------
Work Package Content Input Requirements Deliverables from FhG
- --------------------------------------------------------------------------------
[*****] [*****] [*****]
- --------------------------------------------------------------------------------
PAGE 219
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
8.2.2 [*****]
- --------------------------------------------------------------------------------
Work Package Content Input Requirements Deliverables from FhG
- --------------------------------------------------------------------------------
[*****] [*****] [*****]
- --------------------------------------------------------------------------------
PAGE 220
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
[*****] (entire table)
PAGE 221
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
8.2.3 [*****]
- --------------------------------------------------------------------------------
Work Package Content Input Requirements Deliverables from FhG
- --------------------------------------------------------------------------------
[*****] [*****] [*****]
- --------------------------------------------------------------------------------
Note: [*****]
PAGE 222
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
8.2.4 [*****]
- --------------------------------------------------------------------------------
Work Package Content Input Requirements Deliverables from FhG
- --------------------------------------------------------------------------------
[*****] [*****] [*****]
- --------------------------------------------------------------------------------
[*****]
PAGE 223
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
8.2.5 [*****]
- --------------------------------------------------------------------------------
Work Package Content Input Requirements Deliverables from FhG
- --------------------------------------------------------------------------------
[*****] [*****] [*****]
- --------------------------------------------------------------------------------
PAGE 224
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
8.2.6 [*****]
- --------------------------------------------------------------------------------
Work Package Content Input Requirements Deliverables from FhG
- --------------------------------------------------------------------------------
[*****] [*****] [*****]
- --------------------------------------------------------------------------------
PAGE 225
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
9 Annex A: [*****]
[*****]
9.1 [*****]
- --------------------------------------------------------------------------------
Review Purpose Input Requirements Expected review result
- --------------------------------------------------------------------------------
o [*****] o [*****] o [*****]
- --------------------------------------------------------------------------------
9.2 [*****]
- --------------------------------------------------------------------------------
Review Purpose Input Requirements Expected review result
- --------------------------------------------------------------------------------
o [*****] o [*****] o [*****]
- --------------------------------------------------------------------------------
PAGE 226
<PAGE>
9.3 [*****]
- --------------------------------------------------------------------------------
Review Purpose Input Requirements Expected review result
- --------------------------------------------------------------------------------
o [*****] o [*****] o [*****]
- --------------------------------------------------------------------------------
*** End of document ***
[*****]
PAGE 227
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
Exhibit B
Payment Plan for Contract #001 between XM Radio and FhG for
Technical Consulting on XM Radio
Version 1.2
August 23, 1999
1 Payments Summary
The payments associated with the Work Packages described Exhibit A will be split
between Milestone payments and Monthly payments as summarized in the Table
below.
Milestone PMT Monthly PMT Total
- --------------------------------------------------------------------------------
System Engineering [*****]
- --------------------------------------------------------------------------------
Receiver Development
- --------------------------------------------------------------------------------
Receiver Development Bonus
- --------------------------------------------------------------------------------
Test Equipment
- --------------------------------------------------------------------------------
Program Management
- --------------------------------------------------------------------------------
[*****]
- --------------------------------------------------------------------------------
Travel (Maximum)
- --------------------------------------------------------------------------------
Total [*****] [*****] DM 8,150,000 to
DM 10,850,000
- --------------------------------------------------------------------------------
Travel costs will be invoiced on a monthly basis after the travel has been
completed. Travel within Europe will be charged at [*****] per person per trip
and travel to the US will be charged at [*****] per person per trip.
The test equipment developed and delivered to XM are not included in the payment
summary and will be invoiced separately after delivery.
The test equipment hardware cost is summarized in the table below.
- --------------------------------------------------------------------------------
[*****] DM 111,000
- --------------------------------------------------------------------------------
[*****] DM 35,000
- --------------------------------------------------------------------------------
[*****] DM 180,000
- --------------------------------------------------------------------------------
[*****] DM 100,000
- --------------------------------------------------------------------------------
[*****] DM 100,000
- --------------------------------------------------------------------------------
PAGE 21
<PAGE>
Note. The [*****] hardware cost is preliminary and will be finalized when the
specification is complete [*****]
2 Monthly Payments
The monthly down payments will be organized as follows:
[*****]
PAGE 22
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
3 Milestone Payments
3.1 Systems Engineering
- --------------------------------------------------------------------------------
Work package Milestone Completion Date Payment
- --------------------------------------------------------------------------------
[*****]
PAGE 23
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
3.2 Receiver Development
The following table identifies the work-packages and deliverable dates.
- --------------------------------------------------------------------------------
ID Work package Milestone Completion Date Payment
- --------------------------------------------------------------------------------
[*****]
PAGE 34
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
3.3 Test Equipment
- --------------------------------------------------------------------------------
Work package Milestone Completion Date Payment
- --------------------------------------------------------------------------------
[*****]
Note 1. The Test Equipment hardware costs underlined in Table 4.3 above will be
separately invoiced after delivery to XM on or about the corresponding Milestone
Completion Date.
Note 2. The [*****] hardware cost in 4.3.6 is preliminary and will be finalized
when the specification is complete [*****].
PAGE 15
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
3.4 [*****]
- --------------------------------------------------------------------------------
Work package Milestone Completion Date Payment
- --------------------------------------------------------------------------------
[*****]
4 Bonus
- --------------------------------------------------------------------------------
1.4.1 Work Package Milestone Deadline Bonus Amount Early/Late
Adjustment
- --------------------------------------------------------------------------------
[*****]
A bonus amount of up to an additional [*****] shall be payable to FhG upon the
full and satisfactory completion of key milestones on or prior to the
corresponding deadlines as outlined in Table 1.4. At the discretion of XM, bonus
amounts may be payable if a milestone is not met on its corresponding deadline
due to the fault of XM or any supplier to XM other than FhG (such a delay, a
"No-Fault Delay").
The acceptance criteria for the bonus milestones shall be the same acceptance
criteria as set forth in exhibit A, which shall be subject to mutual agreement
by the parties; provided, however, that in the event the parties cannot agree to
such criteria by [*****], such criteria shall be determined by XM and shall be
reasonable in light of the parties' mutual desire to achieve the bonus
milestones.
For the purpose of computing the bonus amount in Table 1.4, a week shall be
defined as 7 calendar days and each corresponding deadline shall be defined as
the end of the day in Germany.
PAGE 16
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
Exhibit C
Key Personnel for Contract #001 between XM Radio and FhG for
Technical Consulting on XM Radio
Version 1.2
August 24, 1999
1 Key Personnel
[*****] Program Manager
[*****] System Engineer
[*****] IC Design Manager
[*****] Test Equipment
PAGE 11
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
Exhibit D
FhG Background IP
Version 1.1
August 19, 1999
1 Patents
1. [*****]
All of the above listed patents [*****] are exclusively licensed to WorldSpace.
XM Radio will be in charge to obtain a license for these patents from
WorldSpace.
2 Other Intellectual Property Rights
Includes all other intellectual proprietary to FhG and necessary for FhG to
fulfill its obligations under the Agreement.
PAGE 11
<PAGE>
Exhibit E
MONTHLY AIR TRAVEL SUMMARY
For the Month and Year:_________________________________________
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Destination Return
Name and Title of Person Traveling (Place & Date) (Place & Date) Purpose Amount*
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Total for Month
-----------------------------------------------
-----------------------------------------------
Maximum Available Allowance 360,000 DM
-----------------------------------------------
Total Spent (including this month) -( )
-----------------------------------------------
*Trips to US = 10,000 DM per person per trip -----------------------------------------------
Trips within Europe = 4,000 DM per person per trip Remaining Allowance
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PAGE 11
<PAGE>
CONFIDENTIAL
***Confidential treatment has been requested for portions of this agreement. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as [*****]. A complete version of this
agreement has been filed separately with the Securities and Exchange Commission.
Exhibit 10.21
CONTRACT
FOR
ENGINEERING AND CONSTRUCTION
OF
TERRESTRIAL REPEATER NETWORK SYSTEM
By and Between
XM Satellite Radio Inc.
and
LCC International, Inc.
CONFIDENTIALITY NOTICE
This attached Contract and the information contained herein is confidential to
XM Satellite Radio Inc. and LCC International, Inc., and shall not be published
or disclosed to any third party without the express written consent of a duly
authorized representative of XM Satellite Radio Inc. and LCC International, Inc.
<PAGE>
CONFIDENTIAL
TABLE OF CONTENTS
CONTRACT
FOR
ENGINEERING AND CONSTRUCTION
OF
TERRESTRIAL REPEATER NETWORK SYSTEM
TERMS AND CONDITIONS
EXHIBIT A - NETWORK DESIGN CRITERIA AND PROCESS
EXHIBIT B - STATEMENT OF WORK (SOW)
EXHIBIT C - CONTRACT PRICING, PAYMENTS AND MILESTONE ACHIEVEMENT
CRITERIA
EXHIBIT D - DATA AND DOCUMENTATION
EXHIBIT E - NETWORK TESTING AND ACCEPTANCE CRITERIA
Terms and Conditions
Page -i-
<PAGE>
CONFIDENTIAL
CONTRACT
FOR
ENGINEERING AND CONSTRUCTION
OF
TERRESTRIAL REPEATER NETWORK SYSTEM
By and Between
XM SATELLITE RADIO INC.
and
LCC International, Inc.
TERMS AND CONDITIONS
<PAGE>
CONFIDENTIAL
TABLE OF CONTENTS
TERMS AND CONDITIONS
1. DEFINITIONS AND CONSTRUCTION.............................................2
1.1 CERTAIN DEFINITIONS....................................................2
1.2 OTHER TERMS............................................................9
1.3 INTEGRATION AND CONSTRUCTION...........................................9
1.4 HEADINGS; NUMBER AND GENDER...........................................10
2. SCOPE OF WORK...........................................................11
2.1 GENERAL...............................................................11
2.2 ASSURANCES OF CONTRACTOR AND SUBCONTRACTOR PERFORMANCE................12
3. EFFECTIVE DATE OF CONTRACT ("EDC"); CONDITIONS PRECEDENT................13
3.1 EFFECTIVE DATE OF CONTRACT............................................13
3.2 CONDITIONS PRECEDENT..................................................13
4. CONTRACT SUM............................................................14
4.1 CONTRACT SUM..........................................................14
4.2 CHANGES IN CONTRACT SUM...............................................14
4.3 TAXES AND DUTIES......................................................14
5. PAYMENT.................................................................15
5.1 INVOICING.............................................................15
5.2 PAYMENT...............................................................15
5.3 RESERVED..............................................................16
5.4 FINAL PAYMENT FOR A CITY NETWORK......................................16
5.5 SET OFF...............................................................16
5.6 LATE PAYMENT..........................................................17
5.7 RESERVED..............................................................17
5.8 WITHHOLDING OF PAYMENT................................................17
5.9 CONTRACTOR'S RIGHT TO SUSPEND THE WORK................................18
5.10 ACCESS TO RECORDS...................................................18
6. ACCESS TO WORK..........................................................20
6.1 ACCESS TO WORK........................................................20
6.2 DATA AND DOCUMENTATION................................................20
6.3 ELECTRONIC ACCESS.....................................................20
6.4 MEETINGS..............................................................20
6.5 FINANCING ENTITIES....................................................21
7. TIME FOR PERFORMANCE....................................................22
7.1 INITIAL CITY SCHEDULE AND ACCEPTANCE DATE.............................22
7.2 DELIVERY INCENTIVES AND LIQUIDATED DAMAGES............................22
7.3 SUSPENSION OF WORK BY OWNER...........................................23
7.4 EXCUSABLE DELAY DEFINED...............................................24
7.5 CONTRACT ADJUSTMENTS..................................................24
7.6 NO CLAIMS FOR WEATHER CONDITIONS OTHER THAN EXTRAORDINARY WEATHER
CONDITIONS............................................................25
7.7 NO CLAIMS FOR PREVENTION OF EARLY COMPLETION..........................25
8. ACCEPTANCE..............................................................26
Terms and Conditions
Page -i-
<PAGE>
8.1 REPEATER ACCEPTANCE TESTING (CITY NETWORK TESTING OF REPEATERS ONLY)..26
8.2 CITY NETWORK TESTING OF REPEATERS AND ONE SATELLITE...................28
9. TITLE AND RISK OF LOSS..................................................29
9.1 TRANSFER OF TITLE.....................................................29
9.2 TRANSFER OF RISK OF LOSS..............................................29
10. PERFORMANCE WARRANTIES..................................................30
10.1 WARRANTIES..........................................................30
10.2 DUTY TO CORRECT.....................................................33
10.3 DISCLAIMERS OF WARRANTY.............................................33
11. CHANGES IN SCOPE OF WORK................................................35
11.1 CHANGES REQUESTED BY OWNER..........................................35
11.2 CHANGES REQUESTED BY CONTRACTOR.....................................36
11.3 PRICING OF CHANGES..................................................36
12. PERMITS AND LICENSES; COMPLIANCE WITH LAWS..............................38
12.1 PERMITS, LICENSES, AND APPROVALS....................................38
12.2 COMPLIANCE WITH LAWS................................................38
13. SUBCONTRACTS............................................................40
13.1 SUBCONTRACTS........................................................40
13.2 REPLACEMENT OF MATERIAL SUBCONTRACTORS..............................40
13.3 NO PRIVITY OF CONTRACT..............................................40
13.4 SUBCONTRACTOR RELATIONS.............................................40
13.5 ASSIGNMENT OF SUBCONTRACTS UPON TERMINATION.........................41
14. PERSONNEL AND KEY PERSONNEL.............................................42
14.1 PERSONNEL QUALIFICATIONS............................................42
14.2 KEY PERSONNEL POSITIONS.............................................42
14.3 ASSIGNMENT OF KEY PERSONNEL.........................................42
15. CONTRACTOR'S REPRESENTATIONS, WARRANTIES AND COVENANTS..................43
16. OWNER'S REPRESENTATIONS AND WARRANTIES..................................45
17. INTELLECTUAL PROPERTY RIGHTS............................................47
18. INTELLECTUAL PROPERTY INFRINGEMENT INDEMNIFICATION......................51
18.1 CONTRACTOR INTELLECTUAL PROPERTY INDEMNIFICATION....................51
18.2 OWNER INTELLECTUAL PROPERTY INDEMNIFICATION.........................51
19. CONFIDENTIAL INFORMATION................................................52
19.1 CONFIDENTIALITY OBLIGATIONS.........................................52
19.2 EXCEPTIONS..........................................................53
19.3 NO LICENSE..........................................................53
19.4 RETURN OF CONFIDENTIAL INFORMATION..................................53
19.5 INCONSISTENT LEGENDS................................................54
20. INDEMNIFICATION.........................................................55
20.1 CONTRACTOR'S INDEMNIFICATION........................................55
20.2 OWNER'S INDEMNIFICATION.............................................55
20.3 INDEMNIFICATION PROCEDURES..........................................55
20.4 WAIVER OF SUBROGATION...............................................56
Terms and Conditions
Page -ii-
<PAGE>
21. INSURANCE...............................................................57
21.1 GENERAL.............................................................57
21.2 SPECIFIC INSURANCE REQUIREMENTS.....................................57
21.3 CERTIFICATES OF INSURANCE...........................................61
22. DISPUTE RESOLUTION......................................................62
22.1 INFORMAL DISPUTE RESOLUTION.........................................62
22.2 ARBITRATION.........................................................62
22.3 LITIGATION..........................................................64
22.4 CONTINUED PERFORMANCE...............................................65
23. OWNER'S RESPONSIBILITIES................................................66
24. LIMITATION OF LIABILITY.................................................67
25. DEFAULT AND CORRECTION PLAN.............................................68
25.1 MATERIAL BREACH.....................................................68
25.2 FAILURE TO ACHIEVE KEY TASK.........................................68
26. TERMINATION.............................................................70
26.1 TERMINATION FOR OWNER'S CONVENIENCE.................................70
26.2 TERMINATION FOR CONTRACTOR'S DEFAULT................................72
26.3 TERMINATION FOR OWNER'S DEFAULT.....................................75
26.4 TERMINATION/EXPIRATION ASSISTANCE...................................77
27. MECHANICS' LIENS AND CLAIMS.............................................78
27.1 WAIVER OF LIENS.....................................................78
27.2 DISCHARGE OF LIENS..................................................78
27.3 SUBORDINATION OF LIENS..............................................78
28. GENERAL.................................................................79
28.1 ASSIGNMENT..........................................................79
28.2 ENTIRE AGREEMENT....................................................80
28.3 AMENDMENTS..........................................................80
28.4 WAIVER OF BREACH OF CONTRACT........................................80
28.5 REMEDIES CUMULATIVE.................................................80
28.6 SEVERABILITY........................................................80
28.7 APPLICABLE LAW......................................................81
28.8 NOTICES.............................................................81
28.9 RELATIONSHIP OF THE PARTIES.........................................82
28.10 MEDIA RELEASES......................................................82
28.11 CALCULATION OF INTEREST.............................................82
28.12 SURVIVAL............................................................82
28.13 NO THIRD-PARTY BENEFICIARIES........................................82
28.14 CONSENTS AND APPROVALS..............................................82
28.15 LENDER REQUIREMENTS.................................................83
28.16 NO SOLICITATION.....................................................83
28.17 TIME OF THE ESSENCE.................................................83
28.18 COVENANT OF GOOD FAITH..............................................83
28.19 COUNTERPARTS........................................................84
Terms and Conditions
Page -iii-
<PAGE>
CONFIDENTIAL
Terms and Conditions
Page -iv-
<PAGE>
ATTACHMENTS
Attachment A Key Personnel
Attachment B Form of Certification Accompanying
Invoices
Attachment C Contractor's Software License Terms and
Conditions
Terms and Conditions
Page i
<PAGE>
CONTRACT FOR ENGINEERING AND CONSTRUCTION
OF
TERRESTRIAL REPEATER NETWORK SYSTEM
THIS CONTRACT FOR ENGINEERING AND CONSTRUCTION OF TERRESTRIAL REPEATER
NETWORK SYSTEM (this "Contract") is made and entered into as of this 18th day of
August, 1999, by and between XM Satellite Radio Inc., a Delaware corporation
with its principal offices located at 1250 23rd Street, NW, Suite 57,
Washington, DC 20037 (hereinafter "Owner"), and LCC International, Inc., a
Delaware corporation with its principal offices located at 7925 Jones Branch
Drive, McLean Virginia 22102 (hereinafter "Contractor"). As used in this
Contract, "Party" means either Owner or Contractor, as appropriate, and
"Parties" means Owner and Contractor.
WHEREAS, Owner is implementing a satellite system designed to provide
digital audio radio services to the continental United States; and
WHEREAS, Owner anticipates providing the business referred to above
through two (2) geostationary satellites, a system of terrestrial repeater
networks located in various cities within the continental United States
("Terrestrial Repeater Network System" or "System") and end-user receivers; and
WHEREAS, Contractor is a company qualified to design, engineer, and
construct the Terrestrial Repeater Network System, has the necessary skill and
experience to perform the services described in this Contract in a
cost-effective, professional and timely manner, and has performed similar
services with respect to other wireless systems; and
WHEREAS, the Parties have reached agreement on the terms and conditions of
procurement by Owner from Contractor of the engineering, design and construction
of the Terrestrial Repeater Network System, and related items, services and
activities as set forth and further defined in this Contract.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and intending to be legally bound hereby, the Parties agree as
follows:
Terms and Conditions
Page 1
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
1. DEFINITIONS AND CONSTRUCTION
1.1 Certain Definitions.
In this Contract, the following terms shall have the meaning stated
hereunder:
(a) "Acceptance" of the Work with respect to a City Network has the
meaning set forth in Article 8.1(c) (Acceptance).
(b) "Acceptance Date" means [*****], as such date may be extended in
accordance with the Contract.
(c) "Affiliate" means, with respect to an entity, any other entity
Controlling or Controlled by or under common Control with such entity.
(d) "Agreed Performance Threshold" means that either Contractor (i) has
achieved Acceptance of all Cities or (ii) would have achieved Acceptance of all
Cities but for underperformance in one or more Cities due to the absence of the
lesser of two Sites per City or five percent (5%) of all Sites in any such City.
(e) "Amendment to this Contract" or "Amendment" means a written agreement
modifying the terms of this Contract executed in accordance with Article 28.3
(Amendments).
(f) "Approval" means written approval. This term is as defined, whether or
not capitalized in this Contract.
(g) "Architecture and Engineering" or "A&E" means the architecture and
engineering services Contractor shall furnish Owner in accordance with Exhibit B
(SOW).
(h) "Associates" means, with respect to an entity, its directors,
officers, employees agents, consultants, and assigns.
(i) "Business Day" means any day other than the following: a Saturday,
Sunday, and any other day on which national banks are authorized to be closed in
New York City, New York.
(j) "Calendar Day" means any day.
Terms and Conditions
Page 2
<PAGE>
CONFIDENTIAL
(k) "Change Directive" means a written directive executed by Owner
directing Contractor to proceed with a change in the Work pending final
determination of the appropriate change, if any, in the Contract Sum and/or
Initial City Schedules and/or Acceptance Date.
(l) "Change Order" means a written document, executed by both Owner and
Contractor, setting forth a change in the Work and agreement between Owner and
Contractor as to the change in the Contract Sum and/or Initial City Schedules
and/or Acceptance Date associated with such change in the Work.
(m) "City" means any city identified in Attachment 1 of Exhibit B (SOW),
as the geographical boundaries (Defined Coverage Areas) of such city shall be
determined by Owner and provided to Contractor in accordance with Exhibit B
(SOW).
(n) "City Network" means, for any City designated in Attachment 1 of
Exhibit B (SOW), the terrestrial repeater network to be designed, constructed
and implemented at various Sites in such City in accordance with this Contract.
(o) "City Progress Schedule" has the meaning set forth in Exhibit B (SOW).
(p) "Confidential Information" means all information, of any nature and in
any form, whether written, oral or recorded or transmitted electronically or by
tape or other similar manner, regarding the business, finances, operations,
prospects, plans, or affairs of the Furnishing Party (including its Affiliates,
Subcontractors, or Consultants), and all data, processes, materials, and
software in source code and object code form, related documentation, and other
technical data that is confidential and embodies trade secrets and other
proprietary information of the Furnishing Party, which information is designated
in writing by the Furnishing Party as confidential; provided, however, that if
disclosed orally, such information must be confirmed and designated in writing
in summary form as confidential within five (5) Business Days of the time at
which oral disclosure took place. This Contract is deemed Confidential
Information of each Party. Contractor Tools and Contract Software (including
WINDS) are deemed confidential information of Contractor.
(q) "Consultant" means a person or organization retained by Owner to
provide Owner with technical advice and related services and identified by Owner
to Contractor as such in accordance with Article 6 (Access to Work).
(r) "Contract" means the written instrument herein dated the day and year
first written above, including any Amendments made pursuant to Article 28.3
(Amendments), and Change Orders made pursuant to Article 11 (Changes in Scope of
Work), embodying the agreement between Contractor and Owner and including the
Terms and Conditions, Attachments and Exhibits (and Attachments thereto),
annexed hereto and made a part of this Contract.
(s) "Contract Sum" has the meaning set forth in Article 4.1 (Contract
Sum).
Terms and Conditions
Page 3
<PAGE>
CONFIDENTIAL
(t) "Contractor Tools" means all proprietary software, methods, tools,
techniques, processes, or procedures of Contractor that Contractor may use,
modify or develop in the provision of services hereunder, including all
Intellectual Property Rights related thereto.
(u) "Contract Software" has the meaning set forth in Article 17
(Intellectual Property Rights).
(v) "Control" and its derivatives mean, with respect to an entity, the
legal, beneficial, or equitable ownership, directly or indirectly, of fifty
percent (50%) or more of the capital stock (or other ownership interest if not a
corporation) of such entity ordinarily having voting rights or the power to
direct the management policies of such entity, whether through the ownership of
voting stock, by contract, or otherwise.
(w) "Correction Plan" means a plan submitted by Contractor pursuant to
Article 25 (Default and Correction Plan) that details the means by which
Contractor shall correct a failure to perform any material duty or obligation
under this Contract.
(x) "Data and Documentation" means that data and documentation to be
supplied by Contractor pursuant to the requirements of Exhibit D (Data and
Documentation).
(y) "Default Pricing" has the meaning set forth in Exhibit C (Contract
Pricing, Payments and Milestone Achievement Criteria).
(z) "Developed Materials" means all tangible deliverables developed by
Contractor or on Contractor's behalf specifically for Owner and provided by
Contractor to Owner under this Contract that are paid for by Owner, including
network designs, system schematics, system drawings, site specifications, zoning
site reports, market databases described in Section 3 of Exhibit (B) (SOW), and
other documentation materials relating specifically to the Work, provided by
Contractor in the performance of the Work, but specifically excluding any
Contractor Tools and Contract Software.
(aa) "Dispute" has the meaning set forth in Article 22 (Dispute
Resolution).
(bb) "Effective Date of Contract" or "EDC" has the meaning set forth in
Article 3 (Effective Date of Contract).
(cc) "Excusable Delay" has the meaning set forth in Article 7.3 (Excusable
Delay).
(dd) "Exhibit" or "Exhibits" means any and all exhibits, and any schedules
or attachments thereto, to this Contract, which are attached hereto and
incorporated herein.
(ee) "Extraordinary Weather Conditions" means any rain, snow, cold, or
other weather conditions (not including those referred to in Article 7.4(a)
(ii)) that occur during any
Terms and Conditions
Page 4
<PAGE>
CONFIDENTIAL
calendar month that are extraordinary by comparison to the average of the
weather conditions that occurred during the same calendar month of the past five
(5) years as set forth in the U.S. National Oceanic and Atmospheric
Administration records for the City where the affected Work is being performed.
(ff) "Final Payment" has the meaning set forth in Article 5.4 (Final
Payment for a City Network).
(gg) "Financing Agreements" means any and all documents and agreements
executed in connection with the debt or equity financing to be obtained by Owner
from Financing Entities to provide all or a substantial portion of the funds to
finance the Project and related repeater hardware, and all security instruments,
mortgages, assignments and related documentation executed or delivered to secure
repayment of such financing.
(hh) "Financing Entity" means any financial institution, bank,
corporation, partnership or other entity (other than Contractor, its Affiliates
or competitors of Contractor or Affiliates of such competitors), providing all
or a substantial portion of the debt or equity financing to Owner to provide
funds to finance the Project and related repeater hardware, including any
trustee acting on behalf of any such entity.
(ii) "Furnishing Party" means the Party who furnishes Confidential
Information to the other Party.
(jj) "General Conditions Costs" means all time-related and indirect costs
other than direct labor and material costs, including salaries and benefits for
superintendents, insurance costs, bond costs, increased or adjusted bond costs,
any and all non-productive labor, clean-up, project management, supervision,
safety, field supervision, incidental costs, fixed costs, variable costs,
insurance, testing, start-up, warranty, small tools, big tools, miscellaneous
materials, trash, trash removal, lay-out, re-layout, engineering, waste,
coordination, estimating, remobilization and demobilization.
(kk) "Including" and its derivatives (such as "include" and "includes")
means including without limitation. This term is as defined, whether or not
capitalized in this Contract.
(ll) "Initial City Schedule" shall have the meaning set forth in Section
2.3 of Exhibit B (SOW).
(mm) "Intellectual Property" means all designs, methods, concepts,
layouts, software, inventions (whether or not patented or patentable),
processes, technical data and documentation, technical information and drawings,
and similar matter in which an Intellectual Property Right may subsist.
Terms and Conditions
Page 5
<PAGE>
CONFIDENTIAL
(nn) "Intellectual Property Rights" means any and all common law and
statutory proprietary rights, including Patent Rights, Trademark Rights, Trade
Secret Rights and Copyrights Rights (each term as defined below), existing from
time to time under the intellectual property Laws of the United States, any
state or foreign jurisdiction or international treaty regime. The term "Patent
Rights" means any and all common law and statutory rights existing from time to
time under the Laws of the United States, any state or foreign jurisdiction or
international treaty regime with respect to patents, patent applications, and
patent registrations. The term "Trademark Rights" means any and all common law
and statutory rights existing from time to time under the Laws of the United
States, any state or foreign jurisdiction or international treaty regime with
respect to trademarks, service marks, trade names and trade dress. The term
"Trade Secret Rights" means any and all common law and statutory rights existing
from time to time under the Laws of the United States, any state or foreign
jurisdiction or international treaty regime with respect to trade secrets and
data rights. The term "Copyright Rights" means any and all common law and
statutory rights existing from time to time under the Laws of the United States,
any state or foreign jurisdiction or international treaty regime with respect to
copyrights, mask work rights, moral rights and rights in visual works.
(oo) "Interim Maintenance" means the interim maintenance services
Contractor shall furnish Owner in accordance with Exhibit B (SOW).
(pp) "Interim Services Agreement" means the Interim Services Agreement
between the Parties dated February 19, 1999, and amendments thereto.
(qq) "Key Task" has the meaning set forth in Section 2.3 and Attachment 4
of Exhibit B (SOW).
(rr) "Landlord" means, with respect to a particular Site, the person or
entity that owns the real property or improvement upon which the Site is
situated and/or the person or entity that is otherwise in lawful possession of
such real property or improvement and has the authority to enter into a Site
Lease Agreement.
(ss) "Law" or "Laws" means any and all laws, including rules, regulations,
codes, injunctions, judgments, orders, ordinances, decrees, rulings, licenses,
authorizations, approvals or consents and charges thereunder, of any federal,
state, local or municipal government of any country (and all agencies thereof)
having jurisdiction over any portion of the Work or the performance of any
portion of the Work.
(tt) "Losses" means all losses, liabilities, damages, royalty payments and
claims, and all related costs and expenses (including reasonable legal fees and
disbursements and costs of investigation, expert fees, litigation, settlement,
judgment, interest, and penalties).
(uu) "Material Adverse Effect" means any material adverse change in (i)
the legality, validity, or enforceability of this Contract or (ii) the ability
of Owner or Contractor to perform this Contract.
Terms and Conditions
Page 6
<PAGE>
CONFIDENTIAL
(vv) "Milestone" means a portion of the definitive, measurable Work, which
shall be completed in accordance with this Contract including Exhibit C
(Contract Pricing, Payments and Milestone Achievement Criteria) and upon
completion of which a payment is to be made in accordance with Exhibit C.
(ww) "Milestone Achievement Criteria" has the meaning set forth in Exhibit
C (Contract Pricing, Payments and Milestone Achievement Criteria).
(xx) "Milestone Payment" means any of those payments listed as specific
milestone payments in Exhibit C (Contract Pricing, Payments and Milestone
Achievement Criteria).
(yy) "Network Management Testing" has the meaning set forth in Section 12
of Exhibit B (SOW).
(zz) "Notice of Defects" means a written notice executed by Owner and
delivered to Contractor identifying any defects in the Work setting forth in
reasonable detail a description of the defect.
(aaa) "Owner-Furnished Materials" means those documents, equipment and
other materials furnished by Owner to Contractor in connection with Contractor's
performance of the Work.
(bbb) "Owner Personnel" means Owner employees, Consultants or
representatives, or Owner's Consultants' employees.
(ccc) "Owner's Designated Representative" means Jack Wormington, Senior
Vice President of Engineering and Operations, or his successor or designee in
writing.
(ddd) "Pass-Through Expenses" has the meaning set forth in Exhibit C
(Contract Pricing, Payments and Milestone Achievement Criteria).
(eee) "Permitted Lien" means any lien, security interest, mortgage,
assignment, pledge, encumbrance or change of any kind in favor of the Financing
Entities under the Financing Agreements or any interest (except to the extent
waived or otherwise contravened in an applicable Site Lease Agreement) of a
Landlord (in its capacity as a Landlord under such Site Lease Agreement)
pursuant to applicable Law at a Site where the Work is located or pursuant to
the terms of such Site Lease Agreement itself.
(fff) "Permitted Reimburseables Expenses" has the meaning set forth in
Exhibit C (Contract Pricing, Payments and Milestone Achievement Criteria).
(ggg) "Program Management" means the program management services
Contractor shall furnish Owner in accordance with Exhibit B (SOW).
Terms and Conditions
Page 7
<PAGE>
CONFIDENTIAL
(hhh) "Project" means the design, development, implementation, and
completion of the entire Terrestrial Repeater Network System and related
equipment, facilities and services (excluding Owner-Furnished Materials) to be
provided to Owner in connection therewith, all in accordance with this Contract.
(iii) "Receiving Party" means the Party who receives Confidential
Information from the Furnishing Party.
(jjj) "Regulatory Services" has the meaning set forth in Exhibit B (SOW).
(kkk) "Repeater Acceptance Test Criteria" has the meaning set forth in
Section 2 of Exhibit E (Network Testing and Acceptance Criteria).
(lll) "Repeater Acceptance Testing" has the meaning set forth in Exhibit E
(Network Testing and Acceptance Criteria).
(mmm) "RF Engineering" means the radio frequency engineering services
Contractor shall furnish Owner in accordance with Exhibit B (SOW).
(nnn) "Site" means a terrestrial repeater site identified, acquired,
designed, constructed and tested in accordance with this Contract, which site
shall be part of the City Network of the City in which it is located.
(ooo) "Site Acquisition Services" means the site acquisition services
Contractor shall furnish Owner in accordance with Exhibit B (SOW).
(ppp) "Site Construction" means the site construction services Contractor
shall furnish Owner in accordance with Exhibit B (SOW).
(qqq) "Site Lease Agreement" means the agreement between Owner and
Landlord, whether license, lease or otherwise, whereby Owner acquires the right
to occupy, build and operate a Site on Landlord's property.
(rrr) "Standard Sites" has the meaning set forth in Exhibit C (Contract
Pricing, Payments and Milestone Achievement Criteria).
(sss) "Statement of Work" or "SOW" means the Work described in Exhibit B
to this Contract and to be provided by Contractor.
(ttt) "Subcontract" means a contract awarded by Contractor to a
Subcontractor or a contract awarded by a Subcontractor.
Terms and Conditions
Page 8
<PAGE>
CONFIDENTIAL
(uuu) "Subcontractor" means a person, firm, corporation, or business
entity that has been awarded a Subcontract.
(vvv) "Testing" means the site testing and network testing services
Contractor shall furnish Owner in accordance with Exhibit B (SOW) and Exhibit E
(Network Testing and Acceptance Criteria), respectively.
(www) "Tier 1 City" "Tier 2 City" or "Tier 3 City" has the meaning set
forth in Attachment 1 of Exhibit B (SOW).
(xxx) "Work" means all services (including design, radio frequency,
engineering, site acquisition, zoning, architecture and engineering, program
management, construction management, construction and testing services), labor,
equipment, materials, articles, matters, acts (including tests to be performed)
and things to be furnished by Contractor and rights to be transferred by
Contractor in performance of this Contract, all as described in Exhibit A
(Network Design Criteria and Process), Exhibit B (SOW) and Exhibit E (Network
Testing and Acceptance Criteria). "Work" does not include any labor, materials,
articles, matters, acts (including tests to be performed) and things to be
furnished by Owner pursuant to this Contract, including pursuant to Attachment 2
of Exhibit B (SOW), or Contractor Tools or Contract Software.
(yyy) "Zoning" means the services Contractor shall furnish Owner with
respect to obtaining certain local zoning permits, licenses and approvals
necessary to perform the Work, all in accordance with Exhibit B (SOW).
1.2 Other Terms.
Other terms in this Contract are defined in the context in which they are
used and shall have the meanings there indicated.
1.3 Integration and Construction.
(a) The documents listed below in this Article 1.3 (Integration and
Construction), including any Exhibits, Attachments, and Schedules, as amended
from time to time in accordance with Article 28.3 (Amendments), constitute this
Contract and shall be deemed to constitute one fully integrated agreement
between the Parties. In the event of any conflict or inconsistency among the
provisions of the various documents of this Contract, such conflict or
inconsistency shall be resolved by giving a descending level of precedence to
the documents in the order set forth below:
(1) Terms and Conditions
(2) Exhibit A - Network Design Criteria and Process
(3) Exhibit B - Statement of Work (SOW)
Terms and Conditions
Page 9
<PAGE>
CONFIDENTIAL
(4) Exhibit C - Contract Pricing, Payments and Milestone
Achievement Criteria
(5) Exhibit D - Data and Documentation
(6) Exhibit E - Network Testing and Acceptance Criteria
(b) Exhibits A, B, C, D, and E are attached to and incorporated into these
Terms and Conditions.
1.4 Headings; Number and Gender.
The Article headings are for convenience of reference only and shall not
be considered in interpreting the text of this Contract. Words in the singular
include the plural and vice versa, and words imputing the masculine gender
include the feminine and neuter genders where the context so requires.
Terms and Conditions
Page 10
<PAGE>
CONFIDENTIAL
2. SCOPE OF WORK
2.1 General.
(a) In accordance with the requirements of this Contract, Contractor shall
furnish and perform and Owner shall purchase the Work.
(b) Without limiting the generality of the foregoing, Contractor shall
furnish the following:
(1) Program Management -- Contractor shall provide Program
Management in accordance with Exhibit B (SOW).
(2) RF Engineering -- Contractor shall provide RF Engineering in
accordance with Exhibit B (SOW).
(3) Site Acquisition Services -- Contractor shall provide Site
Acquisition Services in accordance with Exhibit B (SOW).
(4) Architecture and Engineering -- Contractor shall provide
Architecture and Engineering in accordance with Exhibit B
(SOW).
(5) Zoning Services -- Contractor shall provide Zoning Services in
accordance with Exhibit B (SOW).
(6) Site Construction -- Contractor shall provide Site
Construction in accordance with Exhibit B (SOW).
(7) Interim Maintenance -- Contractor shall provide Interim
Maintenance in accordance with Exhibit B (SOW).
(8) Regulatory Services -- Contractor shall provide Regulatory
Services in accordance with these Terms and Conditions and
Exhibit B (SOW).
(9) Network Management Testing -- Contractor shall provide Network
Management Testing in accordance with Exhibit B (SOW).
(10) Antenna Procurement -- Contractor shall procure antennas in
accordance with Exhibit B (SOW).
(11) Antenna Pointing - Contractor shall perform antenna pointing
services in accordance with Exhibit B (SOW).
(12) Testing -- Contractor shall perform site testing in accordance
with Exhibit B (SOW) and network testing in accordance with
Exhibit E (Network Testing and Acceptance Criteria).
Terms and Conditions
Page 11
<PAGE>
CONFIDENTIAL
2.2 Assurances of Contractor and Subcontractor Performance.
(a) By separate letter agreement, the Parties shall agree on a process for
providing Owner continuing assurances of Contractor's ability to perform its
obligations under this Contract.
(b) Contractor shall obtain from its Subcontractors, and shall require its
Subcontractors to obtain from their subcontractors, such performance and/or
payment bonds as are commercially prudent taking into account the risk of
failure and financial resources of such Subcontractors.
Terms and Conditions
Page 12
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
3. EFFECTIVE DATE OF CONTRACT ("EDC"); CONDITIONS PRECEDENT
3.1 Effective Date of Contract.
This Contract shall be effective as of, and the effective date of this
Contract (the "Effective Date of Contract" or "EDC") shall be, the date first
set forth in this Contract.
3.2 Conditions Precedent.
Contractor shall have no obligation to commence performance of the Work
until, and Contractor agrees to commence Work upon, the date upon which Owner
deposits by wire transfer into the account specified in Article 5.2 (Payment)
the sum of [*****], wire transfer of which for the purposes of this Contract and
the Interim Services Agreement, as amended, shall be deemed to be Owner's
issuance and delivery of a notice to proceed with the Work. Owner shall make
such wire transfer on or before one (1) Business Day following EDC.
Terms and Conditions
Page 13
<PAGE>
CONFIDENTIAL
4. CONTRACT SUM
4.1 Contract Sum.
In consideration of Contractor's performance of the Work in accordance
with this Contract, Owner shall pay Contractor the amounts determined in
accordance with Exhibit C (Contract Pricing, Payments and Milestone Achievement
Criteria) (collectively the "Contract Sum") in accordance with the payment
conditions and Milestones set forth therein, as may be adjusted pursuant to this
Contract. For the Work provided or to be provided under this Contract, Owner
shall not be obligated to pay Contractor any amounts in addition to the Contract
Sum, except as otherwise specifically provided in this Contract.
4.2 Changes in Contract Sum.
Except pursuant to Article 11 (Changes in Scope of Work) or Exhibit C
(Contract Pricing, Payments and Milestone Achievement Criteria), and as
otherwise expressly set forth in this Contract, the Contract Sum is not subject
to any escalation or to any adjustment or revision.
4.3 Taxes and Duties.
(a) Contractor shall be responsible for any sales, use, excise,
value-added, services, consumption and other taxes payable by Contractor on any
goods or services used or consumed by Contractor in providing the Work,
excluding taxes on Permitted Reimbursable Expenses and Pass-Through Expenses,
where such tax is imposed on Contractor's acquisition or use of such goods or
services and the amount of such tax is measured by Contractor's costs in
acquiring such goods or services.
(b) Owner shall be responsible for any sales, use, excise, value-added,
services, consumption and other tax on the provision to Owner of the Work as a
whole or any part of the Work, including on Permitted Reimbursable Expenses and
Pass-Through Expenses.
(c) Each Party shall consult and cooperate with the other to minimize the
other's tax liability to the extent legally permissible.
(d) Each Party shall cooperate with the other in the settlement of any
claim for taxes asserted by applicable taxing authorities.
Terms and Conditions
Page 14
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
5. PAYMENT.
5.1 Invoicing.
(a) Contractor shall invoice Owner monthly for all Milestones completed in
accordance with the applicable Milestone Achievement Criteria and all other
applicable requirements of this Contract during the period covered by the
invoice (including Permitted Reimbursable Expenses and Pass-Through Expenses
incurred during the month) and any other charge permitted by this Contract. Each
invoice shall be accompanied by conditional releases of claims and waivers of
liens, in form and substance reasonably satisfactory to Owner, executed by
Contractor and all Subcontractors with respect to the Work for which payment is
sought. The invoice shall show details and supporting documentation as to
amounts invoiced as specified by Owner. Each invoice shall be accompanied by a
certification in the form of Attachment B.
(b) In the event a Party determines a credit is due Owner pursuant to this
Contract, such Party shall notify the other Party in writing. To the extent the
Parties agree on the amount of the credit, if any, due to Owner, Contractor
shall provide Owner with such credit against amounts then due and owing; if no
further payments are due to Contractor, Contractor shall pay the amount of such
credit to Owner within thirty (30) Calendar Days after such credit becomes due.
(c) Contractor shall deliver a copy of each invoice and all details and
supporting documentation to:
XM Satellite Radio Inc.
1250 23rd Street, NW
Suite 57
Washington, DC 20037
Tel: 202-969-7100
Fax: 202-969-7050
Attention: Chief Financial Officer
Copy to: Royce Kincaid
Vice President, Terrestrial Repeater Program
5.2 Payment.
(a) Subject to Article 5.8 (Withholding of Payment), Owner shall pay
Contractor within thirty (30) Calendar Days after receipt from Contractor of an
invoice in accordance with the requirements of Article 5.1. Notwithstanding the
foregoing, invoices shall be credited in full against the initial [*****] down
payment described in Article 3.2 (Conditions Precedent) until such amount has
been exhausted.
Terms and Conditions
Page 15
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
(b) Payments on account of invoices shall be made by wire transfer to the
following bank account (or to such other account as Contractor shall request by
written instruction to Owner signed by Contractor's Chief Executive Officer or
President):
Bank: Nations Bank, NA
Address: Washington, DC
Account No.: [*****]
ABA No.: [*****]
(c) No payment by Owner shall constitute an Acceptance of any Work not in
accordance with this Contract.
(d) Owner shall have no obligation to pay or be responsible in any way for
payment to a Subcontractor. Contractor shall pay each Subcontractor all
undisputed amounts in accordance with the applicable Subcontract. Promptly upon
execution of this Contract, the Parties shall develop procedures to be employed
by Contractor to assure Owner that Subcontractors will be paid on a timely
basis.
5.3 Reserved.
5.4 Final Payment for a City Network.
(a) With respect to each City Network constructed hereunder, Final Payment
(as defined below) shall be due and payable by wire transfer to the account
specified above in Article 5.2 (Payment) on or before thirty (30) Calendar Days
following the last to occur of the following: (i) the Work in respect of such
City Network has been completed; (ii) Acceptance of such City Network has
occurred; and (iii) Owner has received Contractor's invoice for Final Payment
for such City Network, including all details and supporting documentation as to
amounts invoiced as specified by Owner. "Final Payment" with respect to a City
Network means the entire unpaid balance for all amounts due for Work in respect
of such City Network.
(b) Acceptance by Contractor of Final Payment for a City Network shall
constitute a waiver of all claims for payment by Contractor in respect of such
City Network, except those claims previously made in writing and identified as
unsettled at the time of submission of the invoice for such Final Payment.
5.5 Set Off.
In the event Contractor has not paid Owner any amount due and payable to
Owner under this Contract, or if Owner is entitled to a credit under this
Contract (for example, for overcharges that have been paid by Owner), Owner
shall have the right to set off such amount against payments due to Contractor.
Terms and Conditions
Page 16
<PAGE>
CONFIDENTIAL
5.6 Late Payment.
For any payment under this Contract that is overdue, the Party entitled to
such payment shall also be entitled to interest on such payment for each day the
payment is overdue until the day payment is made, such interest to be calculated
in accordance with Article 28.11 (Calculation of Interest), unless expressly
provided otherwise in this Contract.
5.7 Reserved.
5.8 Withholding of Payment.
(a) If Owner, in good faith, does not agree that a Milestone associated
with an invoice has been completed in accordance with the Contract or that such
invoice is otherwise inaccurate, (i) Owner shall pay the undisputed part of such
invoice in the time period required by this Contract and (ii) Owner shall have
the right to withhold the disputed portion of such invoice provided Owner gives
to Contractor written notice stating in reasonable detail the reason for
withholding such amount within twenty (20) Calendar Days after receipt by Owner
of the applicable invoice. Upon receipt of such notice, the Parties shall
initiate Dispute Resolution in accordance with Article 22 (Dispute Resolution).
(b) If the Parties' fail to resolve such disagreement within thirty (30)
Calendar Days after receipt by Owner of the disputed invoice and if the
aggregate of withheld disputed amounts exceeds Two Hundred and Fifty Thousand
Dollars ($250,000), Owner shall deposit all withheld amounts into an
interest-bearing escrow account (the escrow agent and the escrow agreement to be
agreed by the Parties no later than thirty (30) Calendar Days following EDC)
within thirty-five (35) Calendar Days after receipt by Owner of the applicable
invoice.
(c) In the event it is determined, either by arbitration or written
agreement of the Parties, that the withheld payment or any part thereof is due
and payable to Contractor, such amount shall be paid to Contractor within five
(5) Calendar Days after resolution of the dispute, together with all interest
accrued on the withheld amounts deposited in the escrow account (provided Owner
shall pay to Contractor any difference between such interest and the interest
set forth in Article 28.11 (Calculation of Interest) hereof) or, for withheld
amounts not deposited in the escrow account, the late payment charge that may
have accrued under this Contract pursuant to Article 5.6 (Late Payment), running
from the date such amount shall be determined to have been due and payable to
the date of payment. In the event it is determined, either by arbitration or
written agreement of the Parties, that the withheld payment or any part thereof
is not due and payable to Contractor, then, if Owner had deposited withheld
amounts into the escrow account, Owner shall be entitled to withdraw from such
account such withheld payment together with all interest accrued thereon
(provided Contractor shall pay to Owner any difference between such interest and
the interest set forth in Article 28.11 (Calculation of Interest) hereof),
running from the date such amount was deposited into the escrow account to the
date of payment.
Terms and Conditions
Page 17
<PAGE>
CONFIDENTIAL
5.9 Contractor's Right to Suspend the Work.
In the event Owner fails to pay Contractor any undisputed amounts due in
accordance with this Contract with respect to a City, or fails to place into
escrow disputed amounts to the extent required by Article 5.8(b) above with
respect to a City, Contractor, after providing Owner with five (5) Business
Days' prior written notice and opportunity to cure, may suspend performance of
the Work in that City until Owner pays Contractor such undisputed amounts due or
places into escrow disputed amounts to the extent required by Article 5.8
(Withholding of Payment); provided further, where (i) Contractor is permitted
pursuant to this Article 5.9 (Contractor's Right to Suspend Work) to suspend the
Work in at least one Tier 1 City or at least five (5) of the remaining Cities
(Tier 2 or Tier 3 Cities) or (ii) the amount of disputed payments withheld by
Owner exceeds Three Million Dollars ($3,000,000), Contractor may suspend all the
Work hereunder. In the event of a suspension under this Article 5.9
(Contractor's Right to Suspend the Work), the Parties shall work together to
minimize the impact of such suspension on the Contract Sum, Initial City
Schedules, Acceptance Date and Contractor's performance hereunder and Contractor
shall be entitled to an equitable adjustment in the Key Tasks set forth in the
Initial City Schedules, the Acceptance Date and the Contract Sum, such pricing
adjustments to be determined in accordance with Article 11.3 (Pricing of
Changes).
5.10 Access to Records.
(a) Contractor shall maintain accurate records, including, bills, books,
papers, time reporting documents, written policies and procedures, daily reports
and diaries and daily logs, insofar as they relate to this Contract, and all
other Project documentation in accordance with generally accepted accounting
principles uniformly and consistently applied in a format that will permit
audit. All such records with respect to a City Network shall be retained by
Contractor for a period of three (3) years from the date of Final Payment for
such City Network.
(b) Owner and its authorized representatives shall have access to such
records for inspection, audit, examination and copying (at Owner's expense) upon
reasonable prior written notice to Contractor and at reasonable times during
normal business hours for the following purposes: (i) to audit charges hereunder
that are not fixed charges under Exhibit C (Contract Pricing, Payments and
Milestone Achievement Criteria) (for example, unit charges, Permitted
Reimbursable Expenses, Pass-Through Expenses and time and material charges) and
(ii) with respect to any dispute or claim filed under the Contract. If requested
by Owner, Contractor shall provide adequate work space on Contractor's premises
for Owner's authorized representatives to review and copy such records and shall
provide such records in a timely manner. Contractor shall use commercially
reasonable efforts to require any Subcontractor to maintain records as stated
above for Contractor and to permit Contractor to have access to such records for
inspection and audit at reasonable times during normal business hours and
Contractor shall inspect and audit such records of Subcontractor upon request of
Owner and as Contractor determines appropriate. Owner's right to inspect, audit
and copy shall expire upon the first anniversary of (i) the date of Acceptance
of the last City Network to be accepted or (ii) termination of this Contract,
whichever is earlier.
Terms and Conditions
Page 18
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
(c) In the event an audit, inspection or examination in accordance with
this Contract discloses net overcharges (of any nature) (the amount by which
overcharges exceed undercharges) by Contractor to Owner, Contractor shall be
liable to Owner for such overcharges, plus interest calculated in accordance
with Article 28.11 (Calculation of Interest). The costs of such audit,
inspection or examination shall be shared by the Parties as follows: in the
event such net overcharges are less than or equal to [*****] of the aggregate of
the audited, inspected or examined invoices, Owner shall pay such costs; in the
event such net overcharges are greater than [*****] and less than or equal to
[*****] of the aggregate of such invoices, Contractor and Owner shall equally
share such costs; in the event such net overcharges are in excess of [*****] of
the aggregate of such invoices or the net overcharges are equal to or in excess
[*****], Contractor shall pay such costs. Any payments required hereunder as a
result of any such audit, inspection or examination of Contractor's invoices
and/or records shall be made within a reasonable amount of time (not to exceed
thirty (30) Calendar Days from presentation of the findings of the auditor,
inspector or examiner).
(d) Any information obtained by audit, inspection or examination hereunder
is subject to Article 19 (Confidential Information).
Terms and Conditions
Page 19
<PAGE>
CONFIDENTIAL
6. ACCESS TO WORK
6.1 Access to Work.
Contractor shall provide Owner Personnel access to all Work (including
work-in-progress, documentation, and testing) at the Site on a non-interference
basis during business hours.
6.2 Data and Documentation.
(a) Subject to Article 6.1 (Access to Work), Owner Personnel will at all
times have access to (i) Data and Documentation; (ii)Work-in-progress, technical
and schedule data and documentation relevant to the Work; and (iii) drawings,
specifications and other design documents relevant to the Work. To facilitate
Owner's rights hereunder, Contractor will allow Owner Personnel access to all
indices related to the materials set forth in this paragraph (a).
(b) Where the materials described in paragraph (a) are necessary for
evaluation of designs, performance considerations, assessment of test plans and
test results, or for any other purpose connected with the design, qualification,
testing, Acceptance, or operation of the Work, or any part thereof, Contractor
will, subject to Article 19 (Confidential Information), make available to Owner
Personnel copies of such documentation on the reasonable request of Owner
Personnel at Owner's expense.
(c) Any data provided by a Party to the other Party in electronic form
shall be embodied in, or be in a form compatible with, commercially available
software.
6.3 Electronic Access.
Subject to the license granted in Article 17(c), during the term of this
Contract, Owner shall be provided electronic access to Contractor's workflow
management system as deployed on the Project (such system known as "WINDS") in
accordance with Exhibit B (SOW) and Exhibit C (Contract Pricing, Payments and
Milestone Achievement Criteria).
6.4 Meetings.
(a) Contractor shall hold work status meetings at locations to be mutually
agreed to by the Parties in accordance with Exhibit B (SOW).
(b) Owner Personnel shall be entitled, at Owner's expense, to participate
in the meetings (including in person, or through teleconference, video
conference or internet) of Contractor and of Contractor with any
Subcontractor(s) where such meetings (or portions of such meetings) are related
to the Work and shall have the right to participate in and make recommendations,
but not to control, give directions or assign actions, in all such meetings.
Contractor shall advise Owner of the date and time of scheduled meetings in
accordance with Section 2.6 of Exhibit B (SOW).
Terms and Conditions
Page 20
<PAGE>
CONFIDENTIAL
(c) In the event a meeting is convened at the facilities of Contractor or
a Subcontractor relating to the Work, Contractor shall make appropriate
arrangements to ensure the entry of Owner Personnel to the meeting place.
(d) Notwithstanding the foregoing, Owner and Contractor acknowledge and
agree that a large number of impromptu, unscheduled, informal and otherwise
casual meetings will be held during the normal course of performance of this
Contract and that, in all instances of meetings relating to this Contract,
notice to Owner of all such meetings may not be practicable. Accordingly,
Contractor is not required to provide notice to Owner of such impromptu,
unscheduled, informal and otherwise casual meetings.
6.5 Financing Entities.
Each Financing Entity shall have access to the Work in the same manner and
to the same extent as Owner Personnel under this Article 6 (Access to Work).
Terms and Conditions
Page 21
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
7. TIME FOR PERFORMANCE
7.1 Initial City Schedule and Acceptance Date.
(a) For each City, Contractor shall deliver to Owner on or before
forty-five (45) Calendar Days following EDC an Initial City Schedule in
accordance with Exhibit B (SOW). Each Initial City Schedule shall set forth
Contractor's schedule for achieving Key Tasks so as to achieve Acceptance of the
applicable City Network on or before the Acceptance Date.
(b) Contractor shall achieve Acceptance of each City Network on or before
the Acceptance Date and Contractor shall perform the Work so as to achieve each
Key Task set forth in each Initial City Schedule in accordance with the schedule
set forth therein.
(c) For each City, Contractor shall deliver to Owner on a monthly basis a
City Progress Schedule showing the progress of the Work against the Initial City
Schedule as part of the monthly status report required under Exhibit B (SOW).
(d) In the event Contractor fails to complete any Key Task in accordance
with the Initial City Schedule, the rights of the Parties shall be as set forth
in Article 25 (Default and Correction Plan).
7.2 Delivery Incentives and Liquidated Damages.
(a) In the event Contractor achieves the Agreed Performance Threshold for
all Tier 1 Cities on or before [*****] Calendar Days prior to the Acceptance
Date, Owner shall pay Contractor within thirty (30) Calendar Days of such event
[*****]. In the event Contractor achieves the Agreed Performance Threshold for
all Cities on or before [*****] Calendar Days prior to the Acceptance Date,
Owner shall pay Contractor within thirty (30) Calendar Days of such event
[*****].
(b) The Parties acknowledge and agree that failure to achieve the Agreed
Performance Threshold of all City Networks on or before the Acceptance Date,
will cause substantial financial loss or damage being sustained by Owner. The
Parties further acknowledge and agree that the following liquidated damages are
believed to represent a genuine estimate of the loss that would be suffered by
Owner by reason of any such delay (which losses are difficult or impossible to
calculate with reasonable certainty).
(c) In the event Contractor fails to achieve the Agreed Performance
Threshold on or before the later of (i) the Acceptance Date as such date may be
adjusted in accordance with the Contract, or (ii) [*****] if Owner's first
satellite is not successfully launched on or before
Terms and Conditions
Page 22
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
[*****], ((i) and (ii) together, the "Liquidated Damages Date"), Contractor
shall pay Owner, as liquidated damages and not as a penalty, the following
amount for each Calendar Day after the Liquidated Damages Date Contractor fails
to achieve the Agreed Performance Threshold:
(1) [*****] for each Calendar Day, starting on the first Calendar
Day following the Liquidated Damages Date and continuing
through the thirtieth (30th) Calendar Day following the
Liquidated Damages Date;
(2) [*****] per Calendar Day, starting on the thirty-first (31st)
Calendar Day following the Liquidated Damages Date and
continuing through the sixtieth (60th) Calendar Day following
the Liquidated Damages Date; and
(3) [*****] per Calendar Day, starting on the sixty-first (61st)
Calendar Day following the Liquidated Damages Date and
continuing through the ninetieth (90th) Calendar Day following
the Liquidated Damages Date.
(d) The total amount of liquidated damages for failure to achieve the
Agreed Performance Threshold on or before the Liquidated Damages Date shall not
exceed [*****].
(e) Owner may deduct any liquidated damages from any amounts due
Contractor, or Owner may require Contractor to pay any liquidated damages that
exceed amounts due Contractor, within thirty (30) Calendar Days after such
request. Until any liquidated damages are paid to Owner, Owner shall also be
entitled to interest on such payment for each day the payment is overdue until
the day payment is made, such interest to be calculated in accordance with
Article 28.11 (Calculation of Interest).
7.3 Suspension of Work by Owner.
Owner, in its sole discretion, may suspend performance of the Work, in
whole or in part, upon written notice to Contractor, and Contractor shall
suspend performance of the Work to the extent specified in such notice within
twenty-four (24) hours thereof. If, within two (2) months of Owner's notice to
suspend the Work, Owner fails to notify the Contractor to resume performance of
the Work suspended, Contractor may, at any time thereafter, terminate the
Contract, but only to the extent the Work was suspended, upon ten (10) Calendar
Days written notice to Owner. In the event of a suspension under this Article
7.3 (Suspension of Work by Owner ), the Parties shall work together to minimize
the impact of such suspension on the Contract Sum, Initial City Schedules,
Acceptance Date and Contractor's performance hereunder and Contractor shall be
entitled to an equitable adjustment in the Key Tasks set forth in the Initial
City Schedules, the Acceptance Date and the Contract Sum, such pricing
adjustments to be determined in accordance with Article 11.3 (Pricing of
Changes).
Terms and Conditions
Page 23
<PAGE>
CONFIDENTIAL
7.4 Excusable Delay Defined.
(a) With respect to Contractor's performance of its obligations under this
Contract, an "Excusable Delay" shall be any delay in the performance of the
Work, in whole or in part, caused by an event that is beyond the reasonable
control of Contractor, its Subcontractors or their respective Affiliates,
including (i) war (whether declared or undeclared), outbreak of national
hostilities, invasion or sabotage; (ii) fire, earthquake, flood, hurricane,
tornado, cyclone, monsoon, epidemic, explosion, or quarantine restriction; (iii)
strike or work slow-down (other than by the employees of Contractor or any
Subcontractor at any Site) not reasonably within Contractor's control; (iv)
freight embargoes; (v) acts of God; (vi) Extraordinary Weather Conditions; (vii)
governmental action, including changes in Law, zoning moratorium (de jure and de
facto), and changes in zoning requirements (but excluding difficulties in
obtaining zoning not due to zoning moratorium (de jure or de facto ) or changes
in zoning requirements) that have a negative impact on performance of the Work;
or (viii) failure by Owner to timely meet its responsibilities under this
Contract, including those referred to in Article 24 (Owner's Responsibilities),
where such Owner failure inhibits, delays, or otherwise adversely affects
Contractor's ability to perform the Work in accordance with the Initial City
Schedule and/or Acceptance Date; provided, however, that no delay shall be an
Excusable Delay unless such delay could not have been either (x) avoided by
Contractor, its Subcontractors or their respective Affiliates through the
exercise of reasonable foresight or reasonable precautions or (y) circumvented
by Contractor, its Subcontractors or their respective Affiliates through the use
of reasonable efforts to establish work-around plans alternate sources, or other
means. Contractor shall use best efforts to include in its weekly report
immediately following the delay a detailed description of the cause of the event
constituting an Excusable Delay and the portion(s) of the Work known to be
affected by such event constituting an Excusable Delay. Upon Owner's written
request, Contractor shall provide Owner a Correction Plan. Contractor shall also
provide Owner prompt written notice when the event constituting an Excusable
Delay has ended.
(b) In the event Owner disputes any Excusable Delay asserted by
Contractor, Owner shall notify Contractor in writing within ten (10) Business
Days from the date of receipt of the Weekly Status Report identifying such
Excusable Delay and, if the Parties have not resolved the dispute within ten
(10) Business Days of Contractor's receipt of written notice from Owner, the
dispute shall be resolved pursuant to Article 22 (Dispute Resolution).
7.5 Contract Adjustments.
(a) In the event of an Excusable Delay under Article 7.3 (Excusable Delay
Defined), there shall be an equitable adjustment to the affected Initial City
Schedules and the Acceptance Date; Contractor acknowledges and agrees the
occurrence of an Excusable Delay shall not entitle Contractor to an increase in
the Contract Sum unless (i) the Excusable Delay is caused directly by Owner's
failure to meet its responsibilities under this Contract, including those
detailed in Article 23 (Owner's Responsibilities), in which event there shall be
an equitable adjustment to the Contract Sum, the pricing for such adjustment to
be determined in accordance with Article 11.3 (Pricing of Changes) or (ii) the
Excusable Delay is due to a zoning moratorium
Terms and Conditions
Page 24
<PAGE>
CONFIDENTIAL
(de jure or de facto) or a change in the regulatory regime at the U.S. Federal
Communications Commission, or state or local jurisdictions that results in
treating the Terrestrial Repeater Network System materially different from PCS,
cellular or other local wireless distribution systems, the effect of which is to
create a materially more cumbersome, time-consuming and expensive process per
Site, in which event there shall be an equitable adjustment to the Contract Sum
to address the changed circumstances the Parties did not foresee, the pricing
for such adjustment to be determined in accordance with Article 11.3 (Pricing of
Changes).
(b) In the event the U.S. Federal Communications Commission preempts state
and local jurisdiction over permits, approvals and licenses and the result of
such preemption is to create a materially less cumbersome, time-consuming and
expensive process per Site, there shall be an equitable decrease in the Contract
Sum to take into account the effect of such improved efficiencies.
(c) On or before the tenth (10th) Business Day after the end of each
calendar month in which Contractor asserts an event constituting an Excusable
Delay, Contractor shall use commercially reasonable efforts to provide to Owner
a claim for contract adjustments for Excusable Delay, detailing the delays over
the prior calendar month for which Contractor claims a contract adjustment
pursuant to this Article 7.5 (Contract Adjustments). Notwithstanding anything to
the contrary herein, failure to make such a claim in writing to Owner within
sixty (60) Calendar Days after the occurrence of an Excusable Delay shall
constitute a waiver of such claim. Any adjustment made pursuant to this Article
7.5 (Contract Adjustments) shall be set forth in an Amendment to this Contract
in accordance with Article 28.3 (Amendments).
7.6 No Claims for Weather Conditions Other than Extraordinary Weather
Conditions.
Contractor (i) represents and warrants to Owner that the Acceptance Date
contains allowances for delays caused by adverse weather conditions under normal
seasonal conditions and (ii) covenants and agrees that Contractor shall make no
claim for an increase in the Acceptance Date as a result of rain, snow, cold, or
other weather conditions (not including those referred to in Article 7.4(a)
(ii)), unless such conditions are Extraordinary Weather Conditions.
7.7 No Claims for Prevention of Early Completion.
Contractor waives the right to assert any claim against Owner in the event
Contractor is unable to complete a Key Task before the date set forth in the
applicable Initial City Schedule, regardless of the reason for Contractor's
failure, including the acts or omissions of Owner; provided, however, in the
event of an Excusable Delay caused directly by Owner's failure to meet its
responsibilities under this Contract, including those detailed in Article 24
(Owner's Responsibilities), Contractor shall be entitled to an equitable
adjustment pursuant to Article 7.5 (Contract Adjustments) and further provided
that in the event of a suspension of Work in accordance with Article 5.9
(Contractor's Right to Suspend the Work) or Article 7.3 (Suspension of Work by
Owner), Owner shall reimburse Contractor for costs incurred as a result of such
suspension as set forth in such Articles.
Terms and Conditions
Page 25
<PAGE>
CONFIDENTIAL
8. ACCEPTANCE
8.1 Repeater Acceptance Testing (City Network Testing of Repeaters Only)
(a) After Contractor has completed a City Network, Contractor shall
conduct Repeater Acceptance Testing against the Repeater Acceptance Test
Criteria set forth in Exhibit E (Network Testing and Acceptance Criteria) and in
accordance with the Repeater Test Plan and Procedures attached thereto.
(b) On a City Network-by-City Network basis, Owner shall review the
Repeater Acceptance Test Report prepared and delivered by Contractor in
accordance with Section 4 of Exhibit E, and the certification prepared and
delivered by Contractor in accordance with Section 5 of Exhibit E. Upon Owner's
request, Contractor will reasonably support Owner in such review (e.g., answer
questions, provide supporting information).
(c) Owner shall provide Contractor written notification of its acceptance
or rejection of the City Network within fourteen (14) Calendar Days after
receipt of Contractor's certification required by Section 5 of Exhibit E
(Network Testing and Acceptance Criteria). Owner shall accept a City Network in
the event that the Repeater Acceptance Test Report establishes that the City
Network meets the Repeater Acceptance Test Criteria as set forth in Exhibit E
(Network Testing and Acceptance Criteria). In the event Owner provides
Contractor notice of acceptance, the accepted Work shall be deemed accepted as
of the date of Contractor's certification ("Acceptance"). In the event Owner
rejects the Work or any part thereof, Owner shall provide Contractor with a
Notice of Defects. Where Owner fails to provide Contractor written acceptance or
Notice of Defects within the said fourteen (14) Calendar-Day Period, the
certified Work shall be deemed accepted as of the date of Contractor's
certification. If Contractor disputes the contents of a Notice of Defects,
Contractor shall notify Owner in writing of the basis for its dispute within
fourteen (14) Calendar Days of receipt of Owner's Notice of Defects. In the
event Contractor does not dispute such Notice of Defects, the Parties shall
proceed in accordance with paragraphs 1, 2 and 3 below:
(1) In the event the Repeater Acceptance Testing indicates Contractor
did not implement the Build-To City Network Design, in any material
way, as set forth in such Design (irrespective of the reason for
such failure), then Contractor, at its cost, shall perform all
additional RF Engineering and other services (except Site
Construction at additional Sites if any are required) required to
implement such Design and, at Owner's cost in accordance with the
pricing set forth in Exhibit C (Contract Pricing, Payments and
Milestone Achievement Criteria), Contractor shall perform all Site
Construction and provide all equipment (except repeaters, which
shall be provided by Owner at Owner's expense) at any additional
Sites as required to implement the Build-To City Network Design.
(2) In the event Contractor has implemented the Build-To City Network
Design in accordance with such Design, but the Repeater Acceptance
Testing nevertheless indicates the City Network does not meet the
Terms and Conditions
Page 26
<PAGE>
CONFIDENTIAL
Repeater Acceptance Test Criteria set forth in Exhibit E (Network
Testing and Acceptance Criteria), the Parties shall analyze the
cause of the discrepancies between the Build-To City Network Design
and the Repeater Acceptance Testing results. If the discrepancy is
due to Contractor's failure to design the City Network in accordance
with the performance standards set forth in Article 10.1(a) and/or
to implement the Build-To City Network Design in accordance with the
performance standards set forth in Article 10.1(a), then Contractor,
at its cost, shall perform all additional RF Engineering and other
services required (except Site Construction at additional Sites) for
the City Network to meet the Repeater Acceptance Test Criteria, and,
at Owner's cost in accordance with the pricing set forth in Exhibit
C (Contract Pricing, Payments and Milestone Achievement Criteria),
Contractor shall perform Site Construction and provide all equipment
(except repeaters which shall be provided by Owner at Owner's
expense) required for the City Network to meet the Repeater
Acceptance Test Criteria.
(3) If the discrepancy is due to any other cause, then Contractor, at
Owner's cost in accordance with the pricing set forth in Exhibit C
(Contract Pricing, Payments and Milestone Achievement Criteria),
shall perform the RF Engineering and other services and provide the
equipment necessary for the City Network to meet the Repeater
Acceptance Test Criteria.
(4) Upon completion of the work set forth in paragraphs (1), (2) and (3)
above, Contractor shall repeat Repeater Acceptance Testing in
accordance with this Article 8.1 and Exhibit E, to the extent
necessary to demonstrate compliance with the Repeater Acceptance
Test Criteria.
(d) Owner shall determine, in its reasonable discretion, the time at which
the work required by paragraphs (b)(1) - (b)(4) above shall be performed
promptly or otherwise. The schedule and cost impact of postponing correction of
such deficiencies for a material period of time after completion of Repeater
Acceptance Testing shall be mutually agreed by the Parties; it is the Parties'
expectation that correction of such deficiencies promptly after completion of
Repeater Acceptance Testing shall impact neither the pricing set forth in
Exhibit C (Contract Pricing, Payments and Milestone Achievement Criteria) nor
Contractor's performance to schedule.
(e) Owner shall provide Contractor with written notice within thirty (30)
Calendar Days after receipt of the Repeater Acceptance Test Report required by
Exhibit E (Network Testing and Acceptance Criteria), identifying that portion of
the work required by paragraphs (b)(1) - (b)(4) above that Owner desires
Contractor to commence promptly, as well as, that portion of the Work Owner does
not desire Contractor to commence promptly. For portions of the Work that Owner
does not request Contractor to commence promptly, such portions of the work
shall be deemed completed and fully functioning for purposes of Contractor's
reperformance of Repeater Acceptance Testing and meeting the Repeater Acceptance
Test Criteria under paragraph (b)(4) above.
Terms and Conditions
Page 27
<PAGE>
CONFIDENTIAL
8.2 City Network Testing of Repeaters and One Satellite
Upon Owner's request, Contractor shall test each City Network with the
first of Owner's satellites against live test criteria (the "Live Testing").
Such Live Testing shall not be within the scope of this Contract and shall be
the subject of later agreement by the Parties. Such later agreement shall
include the following:
(a) The Live Test Criteria shall be developed for the integrated repeater
and one -satellite, for at least the same level of performance established in
the Repeater Acceptance Test Criteria (appropriately adjusted to reflect
improved City Network performance reasonably expected as a result of adding
additional sites pursuant to Article 8.1 (Repeater Acceptance Testing) and
satellite coverage). The Live Testing shall be conducted in accordance with a
Live Test Plan proposed by Contractor for Owner's review and approval prior to
the first scheduled Live Testing. Contractor shall incorporate Owner's
reasonable comments into the Live Test Plan prior to commencing Live Testing.
(b) Contractor shall deliver to Owner a report setting forth in detail the
results of Live Testing, including all test data. If the results of the Live
Testing indicate the City Network fails to meet the Live Test Criteria, and if
such deficiency is the result of Contractor's failure to design in accordance
with the applicable standards set forth in Article 10.1(a), then Contractor, at
its cost, shall perform all additional RF Engineering and, at the Parties'
shared costs, Contractor shall perform all other services (except Site
Construction ) required to meet the Live Test Criteria, and, at Owner's cost in
accordance with the pricing set forth in the Exhibit C (Contract Pricing,
Payments and Milestone Achievement Criteria), Contractor shall perform all Site
Construction and provide all equipment and antennas required to meet the Live
Test Criteria (repeaters to be provided by Owner at Owner's expense).
(c) It is understood by the Parties that Contractor will apply best
engineering practices within the limitations of Contractor's satellite line of
sight tool and data input (imperfect USGS maps and absence of building,
vegetation and other morphological data).
Terms and Conditions
Page 28
<PAGE>
CONFIDENTIAL
9. TITLE AND RISK OF LOSS
9.1 Transfer of Title.
Subject to Article 17 (Intellectual Property Rights), transfer of title,
free and clear of all liens and encumbrances of any kind (except for Permitted
Liens), of each item of Work shall pass to Owner upon Contractor's receipt of
Owner's payment for such item, it being understood by the Parties that Owner
shall retain title to all Owner-Furnished Materials.
9.2 Transfer of Risk of Loss
(a) Subject to paragraph (b) below, risk of loss or damage to each item of
the Work shall pass to Owner (i) for items to be incorporated in a Site, upon
Acceptance of the City Network in which such Site is located and (ii) for all
other items, upon delivery of such item to Owner in accordance with this
Contract.
(b) Risk of loss or damage to each item of Owner-Furnished Materials shall
pass to Contractor upon delivery to Contractor and shall pass from Contractor to
Owner upon Acceptance of the City Network in which such item of Owner-Furnished
Materials is installed.
Terms and Conditions
Page 29
<PAGE>
CONFIDENTIAL
10. PERFORMANCE WARRANTIES
10.1 Warranties.
(a) Workmanship.
Contractor represents and warrants it will perform the engineering, design
and construction portions of the Work in accordance with the wireless industry's
best practices for engineering, design and construction appropriate for projects
of similar scope and complexity and other portions of the Work, and all other
portions of the Work in a skillful and workmanlike manner in accordance with
generally accepted standards and practices for the wireless industry, all
portions of the Work to be performed with sufficient number of properly trained
and educated personnel. With respect to any portion of the Work in any City
Network, such warranty shall commence upon payment of the Milestone related to
such Work and shall run until the first anniversary of the date of Acceptance of
such City Network. Owner shall provide Contractor with written notice of any
alleged or claimed breach of the foregoing warranty within thirty (30) Calendar
Days after discovery thereof. Contractor's sole obligation with respect to the
foregoing warranty shall be: (i) with respect to Site Construction, to correct
such non-conforming services; and (ii) with respect to all other services to be
provided under this Contract (e.g., Program Management, RF Engineering, Site
Acquisition Services, Architecture and Engineering, Zoning Services, Interim
Maintenance, Regulatory Services, and Testing), to correct such non-conforming
services, it being understood that Contractor's obligation in this regard runs
to correcting such services only, and not to the provision of materials or
equipment that may be determined to be required in respect of such City Network
as a result of the correction of such services.
(b) Materials.
Contractor represents and warrants the materials and equipment provided as
part of the Work and each part thereof will be free from material defects in
material and workmanship under normal use and service and provided such defect
is not caused by Owner's failure to use the applicable portion of Work in
accordance with manufacturer's instructions made known to Owner in writing. With
respect to antennas such warranty shall run for three (3) years from the date of
shipment, and with respect to each other item of material and equipment, such
warranty shall be no less than industry standard for such material or equipment.
Contractor further represents and warrants the materials and equipment furnished
by or on behalf of Contractor hereunder will be of good quality, of recent
manufacture and new unless otherwise required or permitted by this Contract.
Owner shall provide Contractor with written notice of any alleged or claimed
breach of the foregoing warranties within thirty (30) Calendar Days after
discovery thereof. Contractor's sole obligation with respect to the foregoing
warranties shall be to repair or replace the non-conforming materials and
equipment.
(c) Title.
Subject to Article 17 (Intellectual Property Rights), by delivery of each
portion of the Work, Contractor represents and warrants (i) upon title to such
portion of the Work passing to
Terms and Conditions
Page 30
<PAGE>
CONFIDENTIAL
Owner in accordance with Article 9 (Title and Risk of Loss), Owner shall have
title to such portion of the Work free and clear of any and all liens and
encumbrances of any kind (except Permitted Liens) and (ii) Contractor has all
requisite authority and has obtained all authorizations required by Law or under
any agreement from any and all third parties necessary for Contractor to grant
Owner the rights conveyed in this Contract. Contractor's sole obligation under
the foregoing warranty shall be as set forth in Article 27.2 (Discharge of
Liens).
(d) Subcontractors' and Manufacturers' Warranties.
(1) Contractor represents and warrants that the Subcontractors',
manufacturers' or other warranties with respect to the
antennas procured by Contractor for delivery to Owner shall be
assignable to Owner. Furthermore, with respect to
Subcontractors', manufacturers or other warranties on all
materials and equipment (other than with respect to the
antennas) and services procured by Contractor for delivery to
Owner, Contractor represents and warrants it shall use
commercially reasonable efforts to make such warranties
assignable to Owner or to make Owner the intended third-party
beneficiary thereof.
(2) With respect to warranties that are assignable, Contractor
shall assign all such warranties to Owner on demand and in no
event later than Acceptance of the City Network in which the
relevant materials, equipment and services are incorporated or
to which they are related, whichever occurs earlier. With
respect to warranties that are not assignable or for which
Owner is the intended third-party beneficiary, Contractor
shall enforce such warranty on behalf of Owner prior to the
first anniversary of the Acceptance of the City Network to
which the warranted material, equipment or services attaches;
thereafter, upon Owner's request, Contractor shall provide
such enforcement on a Task-Order Pricing basis set forth in
Exhibit C (Contract Pricing, Payments and Milestone
Achievement Criteria).
(3) If Owner seeks to enforce a claim based upon a manufacturer's
warranty and such manufacturer fails to honor its warranty
based, in whole or in part, on a claim of defective
installation, and such claim fails due to defective
installation, Owner shall be entitled to enforce the terms of
such warranty against Contractor.
(e) Intellectual Property.
Contractor represents and warrants that, with respect to Intellectual
Property developed by Contractor and used in performance of the Work: (i) it is
either the owner of, or authorized to use, license, and incorporate, such
Intellectual Property utilized or incorporated in the Work; (ii) Contractor will
not embed or otherwise incorporate into the Work any Intellectual Property or
work product for which Contractor would require a license or sublicense; (iii)
Owner will not be required to pay any license fees or royalties apart from those
included in the Contract Sum for
Terms and Conditions
Page 31
<PAGE>
CONFIDENTIAL
the use of such Intellectual Property; and (iv) such Intellectual Property will
not infringe any Intellectual Property Right of a third party. Contractor
represents and warrants that to its knowledge the foregoing (i) - (iv) are true
and correct with respect to Intellectual Property developed by Subcontractors
and used in performance of the Work. Contractor will assign and pass through to
Owner all warranties and maintenance obligations of third parties with respect
to the Intellectual Property utilized or incorporated in the Work.
(f) Code.
Contractor represents and warrants: (i) it shall use commercially
reasonable efforts to ensure no viruses or similar items are coded or introduced
into the Work; (ii) it shall not introduce into the Work any code that would
have the effect of disabling or otherwise shutting down all or any portion of
the Work; and (iii) it shall not develop, or seek to gain access to the Work
through any special programming devices or methods, including trapdoors or
backdoors, to bypass any Owner security measures protecting the Work.
(g) Year 2000 Compliance.
Contractor represents and warrants that it has (i) undertaken an
assessment of all significant computer hardware, software, networks, systems and
equipment used by Contractor directly to perform the Work ("Business Systems")
that could be adversely affected by failure to accurately adapt, accommodate,
process or respond to the date 9/9/99, periods spanning the twentieth and
twenty-first centuries, and dates within the Year 2000 and thereafter ("Year
2000 Ready"), (ii) developed a plan and a timeline for rendering all Business
Systems material to the Work to be Year 2000 Ready (the "Year 2000 Plan") before
any failure would have a material adverse effect on the Work, and (iii) to date,
implemented such plan in accordance with such timetable in all material
respects. Contractor represents and warrants that (i) it has and will continue
to request all Material Subcontractors to provide to Contractor assessments of
the Year 2000 Readiness of all material computer hardware, software, networks,
systems and equipment of such suppliers used in providing products or services
to Contractor businesses ("Supplier Systems"), (ii) it has received such
assessments from all Material Subcontractors and (iii) based on such assessments
to date and after reasonable inquiry, nothing has come to its attention to cause
it to believe that all material Supplier Systems will not be Year 2000 Ready in
all material respects. The Year 2000 Plan and each such Material Subcontractor's
response, have been previously provided to Owner. Contractor's sole obligation
under the foregoing warranty shall be to use its commercially reasonable efforts
to correct any non-conformity therewith.
(h) Compliance with Applicable Law.
Contractor represents and warrants the Work will conform to all applicable
Federal, State, and municipal Laws, including safety, health and environmental
Laws.
Terms and Conditions
Page 32
<PAGE>
CONFIDENTIAL
(i) Replacement Parts.
Contractor represents and warrants each replacement part supplied by
Contractor in the performance of its warranty obligations hereunder shall be
free from material defects under normal use and service and conform to the
requirements of this Contract as if it were an original part. With respect to
replacement parts for antennas, all warranties hereunder applicable to such
replacement part supplied under warranty shall begin anew from the date said
replacement part is installed and is ready to begin service; with respect to all
other replacement parts, Contractor shall provide such parts on
industry-standard terms.
10.2 Duty to Correct.
(a) Contractor shall cure any breach of warranty after receipt of Notice
of Defect thereof from Owner, provided that payment has been made in respect
thereof, and regardless of prior reviews, inspections, approvals or acceptances
and regardless of whether Contractor disputes Owner's assertion of a breach of
warranty.
(b) Contractor shall fulfill the foregoing obligations at its own expense,
including, with respect to Site Construction, all costs arising from charges for
de-installation, removal, installation, repair, packaging, shipping, insurance,
taxes and other matters associated with the corrective measure.
(c) If Contractor fails to cure any breach of warranty after two (2)
attempts at correction, such attempts not to exceed thirty (30) Calendar Days,
after receipt of a Notice of Defect from Owner, Owner may, by separate contract
or otherwise, make the necessary cure and Contractor shall pay to Owner the
reasonable costs of such cure.
(d) If, after corrective measures have been taken, Contractor continues to
dispute Owner's assertion of a breach of warranty, Owner and Contractor shall
enter into dispute resolution pursuant to Article 22 (Dispute Resolution). If it
is determined by written agreement of the Parties or pursuant to Article 22
(Dispute Resolution) that a breach of warranty did not exist, Owner shall be
liable to Contractor for the incremental costs incurred by Contractor as a
result of any cure measures performed by Contractor, such costs to be reimbursed
in accordance with the Default Pricing for Contractor services set forth in
Exhibit C (Contract Pricing, Payments and Milestone Achievement Criteria).
(e) For the avoidance of doubt, if correction of any breach of warranty
causes a delay in the Acceptance of any City Network, the provisions of Article
7.2 (Liquidated Damages) shall apply.
10.3 Disclaimers of Warranty.
(a) EXCEPT AS OTHERWISE SET FORTH IN ARTICLE 10.1(e), CONTRACTOR TOOLS AND
CONTRACT SOFTWARE (INCLUDING WINDS), TO
Terms and Conditions
Page 33
<PAGE>
CONFIDENTIAL
THE EXTENT PROVIDED TO OWNER HEREUNDER, ARE LICENSED "AS IS" WITH NO WARRANTY
WHATSOEVER.
(b) NOTWITHSTANDING ANYTHING TO THE CONTRARY, CONTRACTOR DOES NOT
GUARANTEE OR WARRANT, EITHER EXPRESSLY OR IMPLIEDLY, THE MATERIALS IN OR
WORKMANSHIP OF MATERIALS, SUPPLIES AND EQUIPMENT MANUFACTURED BY THIRD PARTIES
AND FURNISHED AND INSTALLED BY CONTRACTOR IN THE PERFORMANCE OF THE WORK WHERE
THE SUPPLIER OR MANUFACTURER OF SUCH MATERIALS, SUPPLIES AND EQUIPMENT ARE
CHOSEN, SPECIFIED OR REQUIRED BY OWNER.
(c) THE FOREGOING WARRANTIES ARE IN LIEU OF, AND CONTRACTOR EXPRESSLY
DISCLAIMS, ALL OTHER WARRANTIES AND/OR CONDITIONS, EXPRESS OR IMPLIED, STATUTORY
OR OTHERWISE, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, IMPLIED
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE AND IMPLIED WARRANTY ARISING OUT OF
THE COURSE OF DEALING, CUSTOM OR USAGE OF TRADE. THE ABOVE WARRANTIES ARE THE
ONLY WARRANTIES MADE BY CONTRACTOR AND WILL NOT BE ENLARGED OR DIMINISHED
WITHOUT THE PARTIES' WRITTEN CONSENT.
(d) TO THE EXTENT REMEDIES ARE SET FORTH IN SECTION 10.1 FOR BREACH OF
WARRANTY SET FORTH THEREIN, SUCH REMEDIES ARE OWNER'S SOLE AND EXCLUSIVE
REMEDIES FOR A BREACH OF SUCH WARRANTIES.
Terms and Conditions
Page 34
<PAGE>
CONFIDENTIAL
11. CHANGES IN SCOPE OF WORK
11.1 Changes Requested by Owner.
(a) Subject to paragraphs (b), (c), and (d) below, Owner shall be entitled
to direct, during the performance of this Contract, any change within the
general scope of this Contract, including any change that will add, delete, or
change the Work, affect the design or construction of any Site or the time for
performance of the Work set forth in the Initial City Schedules and/or
Acceptance Date; provided, however, (i) this Article 11 (Changes in Scope of
Work) shall not be used by Owner to terminate this Contract in part for
convenience; (ii) Owner shall be entitled only to direct additions or changes to
the Work for which Contractor has, or will have within a reasonable period of
time using commercially reasonable efforts, the resources to perform such
addition or change; (iii) the additions or changes to the Work involve services
Contractor provides as part of its ordinary business; and (iv) the additions or
changes to the Work will not materially adversely affect Contractor's
performance under the Initial City Schedules.
(b) Any change directed by Owner as described in paragraph (a) above shall
be submitted in writing to Contractor. Contractor shall respond to such directed
change in writing to Owner within fourteen (14) Calendar Days after receipt of
such directed change and shall include in such response the details of the
impact of such change in the Work on the Contract Sum and/or Initial City
Schedules and/or Acceptance Date. In the event Contractor, using commercially
reasonable efforts, cannot prepare such details within such period, Contractor
shall so advise Owner and shall submit, for Owner's approval, a request for an
extension of such period that in no event shall exceed sixteen (16) Calendar
Days, such request to set forth the reasons that the details of the impact of
such change could not be documented within such fourteen (14) Calendar Days
using commercially reasonable efforts. Upon Owner's approval, Contractor shall
be granted such extension.
(c) If Owner and Contractor agree upon the change in the Contract Sum
and/or the Initial City Schedule and/or Acceptance Date caused by the change in
the Work, Contractor shall proceed with the performance of this Contract as
changed immediately upon the execution by both Parties of a Change Order
reflecting such agreement.
(d) If the Parties cannot agree on a change to the Contract Sum and/or
Initial City Schedule and/or Acceptance Date, as occasioned by the additions or
changes in the Work directed by Owner pursuant to paragraph (a) above, Owner may
issue a Change Directive for such additions or changes. Contractor shall proceed
with the Work in accordance with the Change Directive and Owner may dispute the
reasonableness of Contractor's determination with respect to the appropriate
change to the Contract Sum and/or Initial City Schedule and/or Acceptance Date
under Article 22 (Dispute Resolution). Pending resolution of such dispute, Owner
shall pay Contractor in accordance with Article 11.3(b). If it is determined by
written agreement of the Parties or pursuant to Article 22 (Dispute Resolution)
that Contractor is entitled to an amount other than the amount paid by Owner,
Owner shall pay to Contractor the amounts of the shortfall or Contractor shall
refund to Owner the amount of the excess, as the case may be, with interest on
such amount running from the date of initial payment by Owner to the date of
Terms and Conditions
Page 35
<PAGE>
CONFIDENTIAL
additional payment or refund, as the case may be, at the interest rate set forth
in Article 28.11 (Calculation of Interest).
(e) Any determination of a change to the Contract Sum pursuant to this
Article 11.1 (Changes Requested by Owner) shall be made in accordance with
Article 11.3 (Pricing of Changes).
11.2 Changes Requested by Contractor.
(a) Subject to paragraphs (b) and (c) below, Contractor may request,
during the performance of this Contract, any change within the general scope of
this Contract, including any change that will add or delete Work, cause a
revision to the Initial City Schedules or Acceptance Date or affect any other
requirement of this Contract.
(b) Any changes as described in paragraph (a) above requested by
Contractor shall be submitted in writing to Owner at least thirty (30) Calendar
Days prior to the proposed date of the change, or such notice as is reasonable
under the circumstances, that is, the notice for a complex and costly change
shall be significantly greater than that for a simple change that does not
impact the Contract Sum. If such Contractor-requested change causes an increase
or decrease or other impact on the Work, Contract Sum, Initial City Schedules or
Acceptance Date or other terms of this Contract, Contractor shall submit, with
such request, a written proposal identifying such change and the impact thereof
on the Contract Sum, Initial City Schedules or Acceptance Date or other terms of
this Contract.
(c) Owner may accept or reject such request in Owner's sole discretion.
Owner shall notify Contractor in writing, within fourteen (14) Calendar Days
after receipt of the requested change proposal, or within such period as is
reasonable under the circumstances; that is, the response to a notice that would
require significant analysis due to adverse changes in Contract Sum, Initial
City Schedules or Acceptance Date may be longer than that for a minor change
that does not adversely impact Contract Sum, Initial City Schedules or
Acceptance Date, whether or not Owner agrees with and accepts such change and
the impact thereof. If Owner agrees with and accepts Contractor's requested
change and such impact thereof, Contractor shall proceed with the performance of
this Contract upon the execution by both Parties of a written Change Order
reflecting such changes. If Owner does not agree to the requested change,
Contractor shall continue performance in accordance with this Contract without
regard to such requested change.
(d) Any determination of a change to the Contract Sum pursuant to this
Article 11.2 (Changes Requested by Contractor) shall be made in accordance with
Article 11.3 (Pricing of Changes).
11.3 Pricing of Changes.
(a) When calculating the change in the Contract Sum caused by changes in
the Work pursuant to this Article 11 (Changes in Scope of Work), the pricing set
forth in Exhibit C (Contract Pricing, Payments and Milestone Achievement
Criteria) shall apply to increases,
Terms and Conditions
Page 36
<PAGE>
CONFIDENTIAL
decreases and other changes in the Work, as applicable. Where the pricing in
Exhibit C does not apply to a specific change, (i) if the change in the Work
alters the Work in a manner that results in the provision of additional services
or materials, the increase in the Contract Sum shall be equal to either (a) a
lump sum agreed to by the Parties, or (b) in the absence of agreement by the
Parties, the Default Pricing set forth in Exhibit C (Contract Pricing, Payments
and Milestone Achievement Criteria) for Contractor services, and (ii) if the
change in the Work alters the Work in a manner that results in the provision of
fewer services or materials, the decrease in the Contract Sum shall be equal to
either (a) a lump sum agreed to by the Parties or (b) in the event the Parties
cannot agree on such lump sum, a percentage reduction, as reasonably agreed by
the Parties, in the Milestone Payments to which the Work relates in an amount
reflecting the reduction of services or materials necessary to complete the
Milestones. In determining any increase or decrease in the Contract Sum under
this Article 11.3 (Pricing of Changes), the increase or decrease to the Contract
Sum shall be further adjusted to take into account the effect, if any, of the
increase, decrease or other change in the Work on the efficiencies in
performance by Contractor (and its Subcontractors), including the effect on
changes in the Initial City Schedules, the incurrence of wind-down expenses
(including those described in Article 26.1(d)) and the incurrence of
mobilization expenses.
(b) In the event the Parties cannot agree on a change to the Contract Sum
as contemplated by Article 11.1(d), then pending resolution of such dispute,
Owner shall pay Contractor in accordance with the specific prices set forth in
Exhibit C (Contract Pricing, Payments and Milestone Achievement Criteria) or, if
such specific pricing is not applicable, in accordance with the Default Pricing
for Contractor services set forth in Exhibit C.
(c) Any adjustment made pursuant to this Article 11 (Changes in Scope of
Work) shall be set forth in an Amendment to this Contract in accordance with
Article 28.3 (Amendments).
Terms and Conditions
Page 37
<PAGE>
CONFIDENTIAL
12. PERMITS AND LICENSES; COMPLIANCE WITH LAWS
12.1 Permits, Licenses, and Approvals.
(a) Except as otherwise provided in Article 12.2(d), Contractor shall
obtain all approvals, permits, and licenses as may be required for the
performance of the Work by any Law, including all required zoning approvals,
permits and licenses and as described in Exhibit B (SOW). Owner shall cooperate
with Contractor in Contractor's efforts to obtain any such approvals, permits,
or licenses.
(b) Contractor shall cooperate with Owner in Owner's efforts to obtain the
FCC permits, licenses and approvals required for the Terrestrial Repeater
Network System to receive or transmit radio frequencies in the United States.
12.2 Compliance with Laws.
(a) Each Party shall perform its obligations under this Contract in
accordance with all applicable Laws.
(b) Without limiting the generality of Article 12.2(a), Contractor shall,
at its expense, perform the Work in accordance with all Laws and the conditions
of Laws applicable to its performance of the Work, including the Federal
Communications Commission's regulations implementing the National Environmental
Policy Act, 47 C.F.R. 1.1301-1.319. The Parties acknowledge that Contractor will
not be responsible for compliance with Canadian/Mexican border frequency
coordination and related matters.
(c) Without limiting the generality of Article 12.2(a), in its performance
of this Contract, Contractor will not, directly or indirectly, make, offer, or
agree to make or offer any loan, gift, donation, or other payment, whether in
cash or in kind, for the benefit, or at the direction, of any candidate,
committee, political party, government or its subdivision, or any individual
elected, appointed, or otherwise designated as an employee or officer thereof,
for the purpose of influencing any act or decision of such entity or individual
or inducing such entity or individual to do or omit to do anything, in order to
obtain or retain business or other benefits.
(d) Without limiting the generality of Article 12.2(a), Owner shall be
responsible for obtaining all permits, licenses and approvals required by the
Federal Communications Commission for the Terrestrial Repeater Network System to
receive or transmit radio frequency signals in the United States. In the event
Owner is unable to obtain any or all of the necessary FCC permits, licenses or
approvals, or is unable to obtain such permits, licenses or approvals in the
time period desired by Owner, Owner shall have the right, as it in its sole
discretion determines, to require Contractor to (i) suspend all or part of the
Work in accordance with Article 7.3 (Suspension of Work By Owner), and/or (ii)
slow the pace or otherwise modify the schedule for performance of the Work in
accordance with Article 11.1 (Changes Requested by Owner). Owner shall comply
with all applicable U.S. export Laws.
Terms and Conditions
Page 38
<PAGE>
CONFIDENTIAL
(e) Contractor, if requested by Owner, shall review with Owner any
application Contractor makes to any governmental or quasi-governmental
department, agency, or entity for any approval, permit, license, or agreement,
as may be required for the performance of the Work, prior to submission of such
application. Contractor shall provide Owner a minimum of three (3) Business Days
to review such application prior to submission to such governmental or
quasi-governmental entity, and Contractor shall in good faith consider any
comments and proposed revisions made by Owner for incorporation into such
application. Owner shall reasonably cooperate with Contractor in Contractor's
efforts to procure all such approvals, permits, licenses, and agreements.
(f) Neither Party shall be responsible in any way for the consequences,
direct or indirect, of any violation of any law by the other Party, the other
Party's Subcontractors or the respective Affiliates or Associates of such other
Party.
Terms and Conditions
Page 39
<PAGE>
CONFIDENTIAL
13. SUBCONTRACTS
13.1 Subcontracts.
(a) All portions of the Work to be performed by Subcontractors shall be
performed under Subcontracts or by other written agreements (e.g., purchase
order) with Contractor. Unless otherwise stated in this Contract, Contractor, as
soon as practicable after such information is determined, shall furnish Owner
with notice of the names of persons or entities from whom Contractor intends to
award Subcontracts for those portions of the work pertaining to the supply of
antennas and/or prime contracting of Site Construction (the "Material
Subcontracts") and Site Acquisition Services for one hundred (100) or more
Sites, and Contractor will consult with Owner concerning such selection.
(b) Owner's consultation with Contractor concerning any Subcontractor
shall not relieve Contractor from any obligations or responsibilities under this
Contract.
(c) Contractor shall not retain a Subcontractor to perform RF Engineering,
provided, however, Contractor may contract with any independent RF engineer to
perform RF engineering services under this Contract, and Contractor may contract
with one or more entities for the purpose of conducting drive tests.
13.2 Replacement of Material Subcontractors.
In the event Contractor desires to replace a Material Subcontractor or a
subcontractor providing Site Acquisition Services for one hundred (100) or more
Sites, Contractor shall provide Owner with reasonable prior written notice
thereof and will consult with Owner concerning the selected replacement.
13.3 No Privity of Contract.
Nothing in this Contract shall be construed as creating any contractual
relationship between Owner and any Subcontractor. Contractor is fully
responsible to Owner for the acts or omissions of Subcontractors and all persons
used by Contractor or a Subcontractor in connection with performance of the
Work. Any failure by a Subcontractor to meet its obligations to Contractor shall
not constitute a basis for Excusable Delay, except as expressly permitted in
Article 7.3 (Excusable Delay), and shall not relieve Contractor from meeting any
of its obligations under this Contract.
13.4 Subcontractor Relations.
(a) Contractor shall include in each of the Material Subcontracts and
shall use commercially reasonable efforts to include in all other Subcontracts,
that any such Subcontract include provisions substantially similar to Article
5.10 (Access to Records), Article 6.1 (Access to Work), Article 6.2 (Data and
Documentation), Article 6.4 (Meetings), Article 10.1(e)
Terms and Conditions
Page 40
<PAGE>
CONFIDENTIAL
(Intellectual Property), Article 19 (Confidential Information), Article 22
(Dispute Resolution), and Article 27 (Mechanics' Liens and Claims).
(b) Each Subcontract shall provide that, for changes to the Work performed
by a Subcontractor, the increase to the subcontract sum shall not exceed a
commercially reasonable price for substantially similar work.
(c) Contractor shall not disclose any Confidential Information of Owner to
any Subcontractor or potential Subcontractor unless and until Subcontractor has
agreed in writing to assume the obligations described in Article 19
(Confidential Information).
13.5 Assignment of Subcontracts Upon Termination.
Contractor shall include in each of the Material Subcontracts, and shall
use commercially reasonable efforts to include in all other Subcontracts, a
provision (i) permitting the assignment of such Subcontract to Owner or its
designee without additional payment and (ii) requiring Subcontractor to perform
the Work for Owner or its designee upon such assignment.
Terms and Conditions
Page 41
<PAGE>
CONFIDENTIAL
14. PERSONNEL AND KEY PERSONNEL
14.1 Personnel Qualifications.
Contractor shall assign properly qualified and experienced personnel to
the Project.
14.2 Key Personnel Positions.
Key personnel ("Key Personnel") shall be the personnel filling the
positions identified in Attachment A (Key Personnel). Contractor shall use
commercially reasonable efforts to retain Key Personnel on the Project for the
duration of the Project.
14.3 Assignment of Key Personnel.
(a) Contractor will assign individuals from within Contractor's
organization to the Key Personnel positions to carry out the Work.
(b) Key Personnel will be familiar with programs similar to Owner's
program; Contractor shall make individuals who shall replace Key Personnel fully
cognizant of the Project prior to such replacement.
(c) Before assigning an individual to any Key Personnel positions, whether
as an initial assignment or a subsequent assignment, Contractor shall notify
Owner of the proposed assignment, shall introduce the individual to appropriate
Owner representatives and, upon request, provide such representatives with the
opportunity to interview (either in person or by phone) the individual and shall
provide Owner with the individual's resume. If Owner in good faith objects to
the qualifications of the proposed individual within ten (10) Business Days
after being afforded the opportunity to interview the proposed individual,
Contractor shall discuss such objections with Owner and resolve such concerns on
a mutually agreeable basis or, if unable to do so, select another candidate in
accordance with the procedures set forth in this Article 14.3 (Assignment if Key
Personnel). Failure on the part of Owner to express its objections within ten
(10) Business Days of such notice shall be deemed acceptance of the assignment
of such individual. The Key Personnel that have been approved as of EDC are
listed in Attachment A (Key Personnel) hereto. Should the individuals filling
the positions of Key Personnel leave such positions for whatever reason,
Contractor shall follow the procedures set forth in this Article 14.3
(Assignment of Key Personnel) to select replacement personnel.
Terms and Conditions
Page 42
<PAGE>
CONFIDENTIAL
15. CONTRACTOR'S REPRESENTATIONS, WARRANTIES AND COVENANTS
(a) Contractor represents and warrants:
(i) it is a corporation duly organized, validly existing and in
good standing under the Laws of the State of Delaware;
(ii) it has all requisite power and authority to own and operate
its material properties and assets and to carry on its
respective business as now conducted in all material respects;
(iii) it is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure to so
qualify would have a Material Adverse Effect;
(iv) it is, or at the time of performance of the Work will be,
fully licensed and authorized to perform the Work in each
jurisdiction in which the Work is to be performed;
(v) it has all requisite corporate power and authority to enter
into this Contract and to carry out the transactions
contemplated by this Contract;
(vi) the execution, delivery, and performance of this Contract and
the consummation of the transactions contemplated by this
Contract have been duly authorized by all requisite corporate
action of Contractor and do not conflict with any other
agreement or obligation to which it is a party or which binds
its assets;
(vii) this Contract is a valid and binding obligation of Contractor,
enforceable in accordance with its terms, except Contractor
makes no representation or warranty as to the enforceability
of remedies due to applicable bankruptcy, insolvency,
moratorium, reorganization, or similar laws relating to or
affecting the enforcement of creditor's rights or by reason of
general principles of equity; and
(viii) in the event Contractor becomes a party to any legal,
administrative, arbitral, investigatory or other proceeding or
controversy pending or, to the best of its knowledge,
threatened, which reasonably would be expected to have a
Material Adverse Effect, Contractor will notify Owner as soon
as practicable.
Terms and Conditions
Page 43
<PAGE>
CONFIDENTIAL
(b) Contractor represents:
(i) Contractor is not a party to any legal, administrative,
arbitral, investigatory or other proceeding or controversy
pending or, to the best of its knowledge, threatened, which
reasonably would be expected to have a Material Adverse
Effect; and
(ii) as of the Effective Date, except as otherwise disclosed to
Owner in writing by Contractor prior to EDC, Contractor is not
a party to or bound by any letter of intent, memorandum of
understanding, contract, agreement, instrument, arrangement or
understanding, written or oral, which involves the acquisition
of the business of Contractor, or a substantial portion of the
assets or shares of capital stock of Contractor.
Terms and Conditions
Page 44
<PAGE>
CONFIDENTIAL
16. OWNER'S REPRESENTATIONS AND WARRANTIES
(a) Owner represents and warrants:
(i) it is duly organized, validly existing and in good standing
under the Laws of the State of Delaware;
(ii) it has all requisite power and authority to own and operate
its material properties and assets and to carry on its
respective business as now conducted in all material respects;
and
(iii) it is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure to so
qualify would have a Material Adverse Effect;
(iv) it has all requisite corporate power and authority to enter
into this Contract and to carry out the transactions
contemplated by this Contract;
(v) the execution, delivery, and performance of this Contract and
the consummation of the transactions contemplated by this
Contract have been duly authorized by the requisite corporate
action of Owner and do not conflict with any other agreement
or obligation to which it is a party or which binds its
assets;
(vi) this Contract is a valid and binding obligation of Owner,
enforceable in accordance with its terms, except Owner makes
no representation or warranty as to the enforceability of
remedies due to applicable bankruptcy, insolvency, moratorium,
reorganization, or similar laws relating to or affecting the
enforcement of creditor's rights or by reason of general
principles of equity; and
(vii) in the event Owner becomes a party to any legal,
administrative, arbitral, investigatory or other proceeding or
controversy pending, or to the best of its knowledge
threatened, which reasonably would be expected to have a
Material Adverse Effect, Owner will notify Contractor as soon
as practicable.
(b) Owner represents:
(i) as of the Effective Date, except as otherwise set forth in the
filing of the Registration Statement on Form S-1 by XM
Satellite Radio Inc. with the U.S. Securities and Exchange
Commission on July 23, 1999, Registration No. 333-38619, Owner
is not a party to any legal, administrative, arbitral,
investigatory or other
Terms and Conditions
Page 45
<PAGE>
CONFIDENTIAL
proceeding or controversy pending or, to the best of its
knowledge, threatened, which reasonably would be expected to
have a Material Adverse Effect.
Terms and Conditions
Page 46
<PAGE>
CONFIDENTIAL
17. INTELLECTUAL PROPERTY RIGHTS
(a) Except as otherwise provided in this Article 17, all Developed
Materials provided by Contractor under this Contract, together with all
Intellectual Property Rights in and to such Developed Materials, shall be deemed
to be works made for hire as defined in 17 U.S.C. Section 101 of the United
States Copyright Act of 1976, as amended. Owner shall be deemed the author of
such Developed Materials and shall own all right, title and interest in and too
all Intellectual Property Rights in the Developed Materials, with the right to
use, adapt and change said Developed Materials and to prepare derivative works
therefrom. To the extent any Developed Materials are deemed to not be works made
for hire, except as otherwise provided in paragraphs (b) and (c) below, this
Contract shall constitute an irrevocable, fully paid-up, perpetual, worldwide
assignment by Contractor to Owner of Contractor's rights in the ownership of,
and all Intellectual Property Rights in, such Developed Materials, and Owner
shall have the right to obtain and hold in its own name all Copyright Rights and
similar protections that may be available in such works. Contractor agrees to
give Owner or its designee, at Owner's expense, all assistance reasonably
required to perfect such rights. Except as otherwise provided in paragraph (b)
below, in the event Contractor utilizes Subcontractors in performing Work for
Owner, Contractor shall use commercially reasonable efforts to obtain for Owner,
ownership of, and all Intellectual Property Rights in, the Developed Materials
developed or produced by any Subcontractor.
(b) The Parties acknowledge that various Subcontractors preparing site
specific drawings may not normally convey full ownership of their work (e.g.,
architectural & engineering drawings, environmental reports, title reports and
title surveys, land surveys, etc.) (collectively "Site Specific Drawings") in
the normal course of business. With respect to these items, Contractor shall
convey to Owner all rights that are provided by the Subcontractor in connection
with its products or services, including Site Specific Drawings. At a minimum,
however, Contractor shall convey to Owner a fully paid-up, perpetual,
non-terminable royalty-free license to use all Site Specific Drawings prepared
by Subcontractors for the Project. Contractor will not retain or obtain in the
future any Intellectual Property Rights with respect to the Site Specific
Drawings developed under this Contract. Subject to Article 20.3 (Indemnification
Procedures), Owner agrees to indemnify Contractor and the A&E Subcontractors
from any Losses arising out of use of any Site-Specific Drawings beyond the
scope of their intended purpose.
(c) Contractor will own all Intellectual Property Rights in and to any
software developed, refined or modified by Contractor in the course of, or to
aid in any way its performance under, this Contract ("Contract Software"), and
in all Contractor Tools, regardless of whether Owner has paid for such
development, refinement or modification, and except with respect to the license
set forth in this paragraph (c) regarding WINDS, Owner shall have no rights to
use such Contract Software or Contractor Tools. In the event Owner wishes to use
such Contract Software (other than WINDS) or Contractor Tools, Owner and
Contractor shall in good faith negotiate a license therefor. Owner understands
and agrees that any such Contract Software or Contractor Tools will be provided
"as is" with no warranty of any kind, and Contractor shall have no obligation to
support or maintain such software or tools. With respect to WINDS, and subject
to the terms and conditions of this Contract and Attachment C (Terms and
Conditions of License), Contractor
Terms and Conditions
Page 47
<PAGE>
CONFIDENTIAL
hereby grants to Owner a fully paid up, non-exclusive, non-transferable,
irrevocable restricted right and license to use the WINDS software at Owner's
facility solely for Owner's internal business purposes (i) until the first City
Network to achieve Acceptance, to access Project data accessible through the
WINDS software using an internet browser and (ii) upon occurrence of the first
City Network to achieve Acceptance, to use a single copy of the WINDS software
for all purposes for which it was intended, including to access, add, delete and
edit Project data and other data associated with the Terrestrial Repeater
Network System on such single copy, as such system may evolve over time.
(d) Owner shall own all Patent Rights arising out of or relating to any
invention developed under this Contract that relate to technology incorporated
into infrastructure equipment that is not the core business of Contractor but is
essential to the business of Owner ("Owner Patent Rights"). Contractor will own
all other Patent Rights arising out of or relating to this Contract. Owner
hereby grants to Contractor a perpetual, worldwide, non-exclusive, assignable
license to make, have made, use, sell, offer to sell, or import technology,
apparatus, methods or services that are covered by such Owner Patent Rights with
the right to sublicense any of the foregoing rights. Notwithstanding anything to
the contrary herein, (i) it shall be a violation of the foregoing license to
exercise any of the foregoing rights (including assignment and sublicensing) for
the benefit of any direct competitor of Owner, and (ii) in the event of any such
violation, Owner may revoke the license granted to Contractor herein. Owner
agrees it will not license, transfer or assign Owner Patent Rights to a direct
competitor of Contractor.
(1) Contractor shall promptly notify owner, in writing, of any and
all inventions subject to Owner Patent Rights.
(2) Owner has the primary option for taking all action with
respect to filing and obtaining patents and other suitable
forms of protection in the United States and in any foreign
country in which Owner desires to perfect such right, at
Owner's sole expense from and after EDC. If Owner does not
exercise the above option within six (6) months of the first
public use of the subject matter to be patented, then
Contractor has the right to file and obtain patents and other
suitable forms of protection in the United States or any
foreign country at its sole expense. Further, if either Party
has exercised its right with respect to Owner Patent Rights,
then the other Party shall cooperate fully with the Party that
exercised such rights, such cooperation to include the
preparation, filing and prosecution of all patent applications
filed pursuant to this paragraph, and which shall include
execution by the other Party and its employees of any and all
such papers and instruments as are necessary or helpful to the
preparation, filing and prosecution of all such patent
applications. Regardless of which Party files for a patent
application or other suitable form of protection pursuant to
this paragraph, Owner shall own the patent application and
patent or other protection.
(3) If any Owner Patent Right is infringed by a third party, the
Party first having knowledge of such infringement shall
promptly notify the other in
Terms and Conditions
Page 48
<PAGE>
CONFIDENTIAL
writing, which notice shall set forth the facts of such
infringement in reasonable detail. Owner shall have the
primary right, but not the obligation, to institute,
prosecute, and control any action or proceeding with respect
to such infringement, through counsel of its own choice, and
Contractor shall have the right, at its own expense, to be
represented in such action by counsel of its own choice. If
Owner fails to bring such action or proceeding within a period
of one hundred twenty (120) Calendar Days after receiving
written notice from Contractor or otherwise having knowledge
of such infringement, Contractor shall have the right to bring
and control any such action by counsel of its own choice, and
Owner shall have the right, at its own expense, to be
represented in any such action or proceeding. In any event,
the second Party agrees to be joined as a party plaintiff and
to give the first Party reasonable assistance and authority to
file and prosecute such suit. The Party bringing such suit
shall be responsible for all expenses of prosecuting such suit
(except to the extent the other Party elects to be represented
by counsel of its own choosing). In the event of any damages
or other monetary awards covered therein in favor of Owner
and/or Contractor, the Party bringing suit will be entitled to
recover its expenses first and any remaining portion of such
award shall then be paid fifty percent (50%) to Owner and
fifty percent (50%) to Contractor. No settlement or consent
judgment or other voluntary final disposition of a suit under
this Article may be entered into without the joint consent of
Owner and Contractor (which consent shall not be withheld
unreasonably).
(4) Each Party agrees to pay to the other Party, commencing in the
first full fiscal quarter after EDC, and continuing quarterly
thereafter, a royalty of fifty percent (50%) of all net
revenues, if any, derived from the manufacture, use or sale of
products covered by the subject of the patent or, from the
licensing or sublicensing of the Owner Patent or patent
license as the case may be. Such royalties shall be paid on or
before the last day of the first month following the
applicable fiscal quarter. Notwithstanding anything to the
contrary herein, Contractor shall not be obligated to pay
royalties with respect to any services it provides in the
ordinary course of its business, even if such services are
provided using products covered by the subject of the Owner
Patent.
(5) Each Party agrees to keep full, true, and accurate books of
account containing all particulars that may be necessary for
the purpose of showing the amount of royalties payable to the
other pursuant to paragraph (d)(4) of Article 17 (Intellectual
Property Rights). Each Party shall keep these books of account
at the usual place where its books are kept. Each Party shall
retain such books and the supporting data for at least three
(3) years following the end of the fiscal year to which they
pertain, and shall make available the supporting data for
inspection by the other Party or an independent certified
public accountant retained by such
Terms and Conditions
Page 49
<PAGE>
CONFIDENTIAL
other Party for the purpose of substantiating the amount of
the first Party's royalty payments, or, in the case of
Contractor, compliance with the patent license granted herein.
The inspecting Party shall pay for the services of the
independent certified public accountant unless the independent
certified public accountant determines that the other Party
has understated the royalties due the inspecting Party, in
which case the other Party shall pay the entire amount charged
by the accountant for the accountant's services. The
non-inspecting Party agrees to pay the balance of such
royalties plus interest within ten (10) Calendar Days after
written notice of the understatement, such interest computed
in accordance with Article 28.11 (Calculation of Interest)
from the day on which said royalties were due and owing until
the date paid.
(e) Except as provided in this Article 17, Owner may use all Developed
Materials provided by Contractor hereunder to complete the Project, for
additions to the Project, or for any other purpose. Notwithstanding anything
herein to the contrary, Contractor will have no responsibility or liability to
Owner with respect to any modification to the Developed Materials made by Owner
or any other contractor retained by Owner.
Terms and Conditions
Page 50
<PAGE>
CONFIDENTIAL
18. INTELLECTUAL PROPERTY INFRINGEMENT INDEMNIFICATION
18.1 Contractor Intellectual Property Indemnification.
(a) Subject to paragraph (a) of Article 18.2 (Owner's Intellectual
Property Indemnification), Contractor shall indemnify, defend, and hold harmless
Owner from any and all Losses arising from, in connection with, or based on any
allegations made by third parties (including Subcontractors of Contractor) that
Owner's possession or use of the Work, or any part thereof, infringes any
third-party U.S., Canadian or Mexican Intellectual Property Right.
(b) If the use of the Work or any part thereof is enjoined, Contractor
shall, or, if in Contractor's reasonable opinion the Work or any part thereof is
likely to be enjoined, Contractor may, in either case at its expense, either
procure for Owner the right to use the Work or infringing part thereof, as the
case may be, or substitute an equivalent product reasonably acceptable to Owner,
or modify the Work or infringing part thereof to render them non-infringing
without materially affecting their utility or functionality. If Contractor
determines that none of these alternatives is reasonably available or feasible,
Contractor shall meet with Owner to address the matter and reach an equitable
solution reasonably acceptable to Owner.
(c) Contractor's obligations under this Article 18.1 (Contractor
Intellectual Property Indemnification) shall be subject to Article 20.3
(Indemnification Procedures).
(d) The foregoing sets forth Owner's sole remedy and Contractor's sole and
entire obligations with respect to any claims of infringement or
misappropriation of Intellectual Property Rights arising out of or related to
the Work.
18.2 Owner Intellectual Property Indemnification.
(a) Owner shall indemnify, defend, and hold harmless Contractor from any
and all Losses arising from, in connection with, or based on any allegations
made by third parties that the Work or any part thereof infringes any
third-party U.S., Canadian or Mexican Intellectual Property Right to the extent
such infringement is based on (i) any Intellectual Property provided by Owner
(or by others, other than Contractor or its Subcontractors, acting on behalf of
Owner); or (ii) any modification by Owner (or any entity, other than Contractor
or its Subcontractors, acting on behalf of Owner), of the Work or any part
thereof not intended or reasonably foreseeable by Contractor; or (iii) any
written requests, specifications or instructions provided by Owner to the extent
the infringement arises from compliance with such written requests, instructions
or specifications.
(b) Owner's obligations under this Article 18.2 (Owner Intellectual
Property Indemnification) shall be subject to Article 20.3 (Indemnification
Procedures).
Terms and Conditions
Page 51
<PAGE>
CONFIDENTIAL
(c) The foregoing sets forth Contractor's sole remedy and Owner's sole and
entire obligation with respect to any claims of infringement or misappropriation
of Intellectual Property Rights arising out of or related to the Work.
19. CONFIDENTIAL INFORMATION
19.1 Confidentiality Obligations.
(a) Any Confidential Information shall be maintained in strict confidence
by the Receiving Party. Except as provided in this Article 19 (Confidential
Information), the Receiving Party shall not use, or disclose in any manner to
any third party, Confidential Information of the Furnishing Party without the
prior express written consent of the Furnishing Party. The obligation of
confidentiality shall not be limited in time except to the extent the Receiving
Party can establish one of the exceptions set forth in Article 19.2 (Exceptions)
below by clear and convincing evidence.
(b) Access to and use of the Furnishing Party's Confidential Information
shall be restricted to those employees and persons within the Receiving Party's
organization (including its Consultants, attorneys, Subcontractors,
shareholders, and representatives) with a need to use such Confidential
Information for the purpose of performing this Contract, the Project or any
transaction contemplated hereby or, in the case of Owner, obtaining debt or
equity financing. The Receiving Party's Consultants or Subcontractors and the
Financing Entities may be included within the meaning of "persons within the
Receiving Party's organization," provided that such persons have executed a
non-disclosure or confidentiality agreement no less stringent than this Article
19 (Confidential Information). In addition, all information provided is subject
to the provisions of paragraph (c) below.
(c) Each Party shall use the other's Confidential Information solely for
the purpose of performing this Contract, the Project or any transaction
contemplated hereby or, in the case of Owner, obtaining debt or equity
financing.
(d) Except for Contract Software (including WINDS and Contractor Tools),
Data and Documentation and Developed Materials shall be deemed Confidential
Information furnished by Owner to Contractor and Contractor shall be subject to
the obligations of this Article 19 (Confidential Information) with respect
thereto.
(e) Notwithstanding the foregoing, nothing in this Contract shall permit a
Party or any of their respective Associates or Affiliates to disclose any
Confidential Information of the other Party to any entity that competes with the
other Party in the provision of products or services, whether or not, in the
case of Owner, the same is acting as a contractor or subcontractor for Owner,
or, in the case of Contractor, the same is a customer or client of Contractor.
Terms and Conditions
Page 52
<PAGE>
CONFIDENTIAL
19.2 Exceptions.
The obligations set forth in this Article 19.1 (Confidentiality
Obligations) shall not apply to information that is:
(a) Already known to or otherwise in the possession of the Receiving Party
at the time of receipt from the Furnishing Party and that was not so known or
received in violation of any confidentiality obligations;
(b) Publicly available or otherwise in the public domain prior to
disclosure by the Receiving Party or becomes publicly available or otherwise in
the public domain after receipt by the Receiving Party without breach of this
Contract;
(c) Rightfully obtained by the Receiving Party from any third party
without restriction and without breach of any confidentiality obligation by such
third party;
(d) Developed by the Receiving Party independent of any disclosure
hereunder, as evidenced by written records; or
(e) Disclosed pursuant to the order of a court or administrative body of
competent jurisdiction or a government agency or required to be released
pursuant to Law, or as the Receiving Party may reasonably determine advisable or
necessary under the Securities Act of 1933, as amended, the Securities Act of
1934, as amended, NASDAQ, NYSE or any other national securities exchange,
provided the Receiving Party shall notify the Furnishing Party prior to such
disclosure and shall cooperate with the Furnishing Party in the event the
Furnishing Party elects to contest legally, request confidential treatment, or
otherwise avoid such disclosure.
19.3 No License.
Except as expressly provided in this Contract, nothing in this Contract
shall be construed as granting the Receiving Party, whether by implication,
estoppel, or otherwise, any license or any right to use any Confidential
Information received from the Furnishing Party, or use any Intellectual Property
Right now or hereafter owned or controlled by the Furnishing Party.
19.4 Return of Confidential Information.
All Confidential Information disclosed pursuant to this Contract is
considered loaned for use solely in connection with this Contract. All
Confidential Information in tangible form of expression that has been disclosed
to or thereafter created, whether by copy or reproduction, by the Receiving
Party shall be and remain the property of the Furnishing Party. All such
Confidential Information and any and all copies and reproductions thereof shall,
within thirty (30) Calendar Days of written request by the Furnishing Party, be
either promptly returned to the Furnishing Party or destroyed at the Furnishing
Party's direction. In the event of such requested destruction, the Receiving
Party shall provide to the Furnishing Party written certification of compliance
therewith within thirty (30) Calendar Days of such written request.
Notwithstanding
Terms and Conditions
Page 53
<PAGE>
CONFIDENTIAL
the foregoing, in the event this Contract is terminated pursuant to Article 26
(Termination), Owner shall return to Contractor, or destroy at Contractor's
direction, all Confidential Information not paid for by Owner.
19.5 Inconsistent Legends.
This Article 19 (Confidential Information) shall control in lieu of and
notwithstanding any proprietary or restrictive legend or statements inconsistent
with this Article that may be printed on or associated with any particular
information disclosed pursuant to this Contract.
Terms and Conditions
Page 54
<PAGE>
CONFIDENTIAL
20. INDEMNIFICATION
20.1 Contractor's Indemnification.
(a) Subject to the indemnification procedures set forth in Article 20.3
(Indemnification Procedures), Contractor shall indemnify, defend, and hold
harmless Owner and its Affiliates and their respective Associates from any and
all Losses caused by claims made by third parties (including Consultants and
agents of Owner, Contractor, or any Subcontractor but not any employee, officer,
or director of Owner) for injury to person (including death) or loss or damage
to tangible property arising out of any error, omission or negligent act of
Contractor or its Subcontractors.
(b) Subject to the indemnification procedures set forth in Article 20.3
(Indemnification Procedures), Contractor shall indemnify, defend, and hold
harmless Owner as set forth in Article 18.1 (Contractor Intellectual Property
Indemnification) and Article 27.2 (Discharge of Liens).
20.2 Owner's Indemnification.
(a) Subject to the indemnification procedures set forth in Article 20.3
(Indemnification Procedures), Owner shall indemnify, defend, and hold harmless
Contractor and its Affiliates and their respective Associates from any and all
Losses caused by claims made by third parties (including consultants and agents
of Owner, any subcontractor of Owner, but not any employee, officer, or director
of Contractor) for injury to person (including death) or loss or damage to
tangible property arising out of any error, omission or negligent act of Owner.
(b) Subject to the indemnification procedures set forth in Article 20.3
(Indemnification Procedures), Owner shall indemnify Contractor as set forth in
Article 18.2 (Owner Intellectual Property Indemnification).
20.3 Indemnification Procedures.
(a) Promptly after receipt by the indemnified Party of notice of the
commencement or threatened commencement of any civil, criminal, administrative,
or investigative action or proceeding involving a claim in respect of which the
indemnified Party will seek indemnification pursuant to this Article 20
(Indemnification), the indemnified Party shall notify the indemnifying Party of
such claim in writing. Failure to so notify the indemnifying Party shall not
relieve the indemnifying Party of its obligations under this Contract except to
the extent it can demonstrate it was prejudiced by such failure. Within fifteen
(15) Calendar Days following receipt of written notice from the indemnified
Party relating to any claim, but no later than ten (10) Calendar Days before the
date on which any response to a complaint or summons is due, the indemnifying
Party shall notify the indemnified Party in writing if the indemnifying Party
elects to assume control of the defense or settlement of that claim (a "Notice
of Election").
(b) If the indemnifying Party delivers a Notice of Election relating to
any claim within the required notice period, so long as it is actively defending
such claim, the indemnifying Party
Terms and Conditions
Page 55
<PAGE>
CONFIDENTIAL
shall be entitled to have sole control over the defense and settlement of such
claim; provided that (i) the indemnified Party shall be entitled to participate
in the defense of such claim and to employ counsel at its own expense to assist
in the handling of such claim; (ii) where the indemnified Party is so
represented, the indemnifying Party shall keep the indemnified Party 's counsel
informed of each step in the handling of any such claim; (iii) the indemnified
Party shall provide, at the indemnifying Party's request and expense, such
assistance and information as is available to the indemnified Party for the
defense and settlement of such claim; and (iv) the indemnifying Party shall
obtain the prior written approval of the indemnified Party before entering into
any settlement of such claim or ceasing to defend against such claim where such
settlement or cessation of defense would prejudice any rights of the indemnified
Party or result in the indemnified Party making any payment. After the
indemnifying Party has delivered a Notice of Election relating to any claim in
accordance with the preceding paragraph, the indemnifying Party shall not be
liable to the indemnified Party for any legal expenses incurred by the
indemnified Party in connection with the defense of that claim. In addition, the
indemnifying Party shall not be required to indemnify the indemnified Party for
any amount paid or payable by the indemnified Party in the settlement of any
claim for which the indemnifying Party has delivered a timely Notice of Election
if such amount was agreed to without the prior written consent of the
indemnifying Party.
(c) If the indemnifying Party does not deliver a Notice of Election
relating to any claim within the required notice period or fails actively to
defend such claim, the indemnified Party shall have the right to defend and/or
settle the claim in such manner as it may deem appropriate, at the reasonable
cost and expense of the indemnifying Party. Provided that the indemnified Party
acts in good faith, it may settle such claim on any terms it reasonably
considers appropriate under the circumstances without in any way affecting its
right to be indemnified hereunder. The indemnifying Party shall promptly
reimburse the indemnified Party for all such costs and expenses.
20.4 Waiver of Subrogation.
If a Party insures against any loss or damage it may suffer in respect of
which it is required to indemnify the other Party, its Affiliates and their
respective Associates pursuant to this Article 20 (Indemnification), it shall be
a condition that the insuring Party arrange for the insurer to waive its right
of subrogation against such other Party and such other Party's Affiliates and
their respective Associates. Each Party shall be entitled to require proof from
time to time that the other Party has complied with its obligations under this
Article 20.4 (Waiver of Subrogation). In the event a Party does not comply with
such obligations, the indemnities referred to in Articles 20.1 (Contractor's
Indemnification) and 20.2 (Owner's Indemnification) shall extend to any claim
that may be made by an insurer pursuant to an alleged right of subrogation.
Terms and Conditions
Page 56
<PAGE>
CONFIDENTIAL
21. INSURANCE
21.1 General.
(a) Contractor shall purchase and maintain, as primary insurance, from a
company or companies qualified to do business in each state in which the Work
shall be performed and carrying at least an A-/VIII rating by Best's Insurance
Guide published by the Alfred M. Best Co., Inc., Oldwick New Jersey 08858, such
insurance as shall protect it from claims set forth below that may arise out of
or result from Contractor's operations under the Contract, whether such
operations be by itself or by any Subcontractor or by anyone directly or
indirectly employed by any of them, or by anyone for whose acts any of them may
be liable:
(1) claims under workers' or workmen's compensation, disability
benefit and other similar employee benefit acts;
(2) claims for damages because of bodily injury, occupational
sickness or disease, or death of its employees;
(3) claims for damages because of bodily injury, sickness or
disease, or death of any persons other than its employees;
(4) claims for damages insured by usual personal injury liability
coverage;
(5) claims for damages, other than to the Work itself, because of
injury to or destruction of tangible property, including loss
of use resulting therefrom;
(6) claims for damages because of bodily injury or death of any
person or property damage arising out of the ownership,
maintenance or use of any motor vehicle;
(7) claims for bodily injury or property damage arising out of
completed operations; and
(8) claims for damages due to professional errors or omissions.
(b) Compliance by Contractor with the foregoing insurance requirements
shall not limit Contractor's liability or relieve it of liability under this
Contract or any Law.
21.2 Specific Insurance Requirements.
The insurance required by this Article 21 (Insurance) shall be written for
not less than any limits of liability specified in this Contract, or required by
Law, whichever is greater. Before commencement of the Work and until the last
Final Payment made hereunder (except that product liability coverage shall
continue in force until two years after the date of the last Final Payment made
hereunder), Contractor shall procure, deposit, and maintain for Owner's benefit,
insurance satisfactory to Owner, as set forth in this Article 21.2 (Specific
Insurance Requirements).
Terms and Conditions
Page 57
<PAGE>
CONFIDENTIAL
(a) Worker's Compensation as required by the Worker's Compensation Laws of
the states in which the Work is performed and Employer's Liability Insurance in
an amount not less than $100,000/$500,000/$500,000.
(b) Commercial General Liability Insurance covering Bodily Injury,
Personal Injury and Property Damage,
(1) Minimum Limits: Such insurance shall be written for a combined
single limit not less than the following:
General aggregate per project $ 2,000,000
Products-Completed Operations Aggregate $ 2,000,000
Personal & Advertising Injury $ 2,000,000
Each occurrence $ 1,000,000
(2) This insurance shall be written on an occurrence basis and on
a coverage form at least equal to that provided under
ISO CG 00 01, latest available edition, without restricting
endorsements that reduce coverage.
(c) Automobile Liability Insurance covering Bodily Injury and Property
Damage as follows:
(1) Minimum Limits: The Combined Single Limit for Bodily Injury
and Property Damage shall be not less than $1,000,000 per
occurrence.
(2) This insurance shall be written on a coverage form at least
equal to that provided under ISO CA 00 01, latest available
edition, without restricting endorsements that reduce coverage
and shall cover all owned and hired vehicles of Contractor and
non-ownership protection for all employees of Contractor
engaged in the performance of this Contract.
(d) Professional Liability Insurance, caused by any of Contractor's
Subcontractors, as follows:
(1) Minimum Limits: Such insurance shall be written for a single
limit not less than $10,000,000 per claim and $10,000,000 in
the annual aggregate.
(2) This insurance shall be written on a claims made basis.
(3) This insurance shall contain prior acts coverage sufficient to
cover all services rendered by Contractor. Contractor will,
during the term of this Contract and for four (4) years from
the date Acceptance of all Cities has been achieved, provide
Owner with notice of any claim against Contractor that may
affect such Professional Liability Insurance coverage.
Terms and Conditions
Page 58
<PAGE>
CONFIDENTIAL
(4) This insurance shall have a maximum deductible in an amount
per claim reasonably acceptable to Owner. A $25,000 per claim
deductible is acceptable to Owner. The deductible shall be
paid by Contractor.
(5) This insurance shall remain in effect for four (4) years
following the date Acceptance of all Cities has been achieved.
(e) Excess Liability Insurance, written on an occurrence basis, in the
amount of not less than a combined single limit for Bodily Injury, Personal
Injury and Property Damage of $25,000,000 per occurrence/$25,000,000 in the
aggregate following the form and amounts of the primary insurance described in
paragraphs (b) and (c) of this Article 21.2 (Specific Insurance Requirements).
(f) With respect to the Project, Contractor shall purchase and maintain,
in a company or companies lawfully authorized to do business in the
jurisdictions in which the Project is located, a builder's risk or installation
floater property coverage tailored to the Work as follows:
(1) Minimum Limits: Such insurance shall be written for not less
than $6,000,000 per occurrence in general coverage and
$300,000 per site/ $500,000 per conveyance (for transit)
property coverage, on a replacement cost basis.
(2) This insurance shall be on an All Risk/Special Form basis and
shall include insurance against the perils of fire (with
extended coverage), vandalism, malicious mischief, theft,
collapse (however caused), earthquake, water damage, flood,
electrical injury, mechanical injury/breakdown, false work,
testing, startup and transmission, and damages resulting from
workmanship or defective materials and shall be deemed the
primary insurance as to covered risks. Earthquake, flood,
windstorm, lightning and workmanship or defective materials
may have sublimits reasonably acceptable to Owner.
(3) This insurance shall also cover Work in transit and Work
stored off-site.
(4) This insurance shall have a maximum deductible amount of
$5,000 per occurrence. Coverages with sublimits may have a
higher deductible, reasonably acceptable to Owner. Contractor
shall be responsible for any insured or uninsured loss or
damage to the Work falling under such deductible, whether or
not due to the fault of Contractor or its Subcontractors.
(5) All losses shall be adjusted with and made payable to
Contractor, Subcontractors and Owner as trustee.
(6) This insurance shall be maintained until the Date Acceptance
of all Cities has been achieved.
Terms and Conditions
Page 59
<PAGE>
CONFIDENTIAL
(g) Contractor and its Subcontractors shall each be responsible for
insuring (i) their own tools, equipment and appliances and (ii) property or
equipment to be incorporated into the Work stored at any location on the same
all-risk basis Contractor is required to insure property on any Site.
(h) All insurance maintained by Contractor shall provide:
(1) A Certificate signed by the insurance broker stating the
limits of liability and expiration date shall be filed in
triplicate with Owner before operations are begun. Such
certificates not only shall name the types of policies
provided, but also shall refer specifically to this Contract
and Article. Contractor will provide copies of the policies
upon request by Owner. If the initial insurance expires prior
to completion of the Work, renewal certificates shall be
furnished by the date of expiration.
(2) Owner, its Affiliates and Associates shall be included in the
Commercial General Liability and Excess Liability policies as
"additional insureds" with the understanding that the
liability to pay premiums shall be the sole obligation of
Contractor and not that of any other insured.
(3) Each Landlord, its Affiliates and Associates shall be included
in these policies as "additional insureds" to the extent
required by Owner's Site Acquisition Agreement with such
Landlord. Contractor shall carry the minimum insurance
required by each Landlord pursuant to the applicable Site
Acquisition Agreement.
(4) Except in the case of Worker's Compensation Insurance,
proceeds for first party losses, if any, shall be adjusted by
and payable to the party purchasing the insurance, except
property insurance purchased by Contractor for the benefit of
Contractor, Subcontractors and Owner, which shall be adjusted
with and payable to Contractor, Subcontractors and Owner, as
their interest may appear.
(5) The interests of Owner, Landlords, their Affiliates and
Associates, shall not be invalidated by any action or inaction
of Owner, Landlords, their Affiliates or Associates,
Contractor or any other person and such insurance shall insure
Owner, Landlords, their Affiliates and Associates regardless
of any breach or violation by Owner, Landlords, their
Affiliates or Associates, Contractor or any other person of
any warranties, declarations or conditions contained in such
policies.
(6) The insurer thereunder waives all rights of subrogation
against Owner, Landlords, their Affiliates and Associates, as
well as any rights of setoff and counterclaim and any other
right to deduction whether by attachment or otherwise.
Terms and Conditions
Page 60
<PAGE>
CONFIDENTIAL
(7) Such insurance shall be primary without any right of
contribution of any other insurance carried by or on behalf of
Owner, Landlords, their Affiliates and Associates.
(i) Contractor shall require each of its Subcontractors to procure and
maintain, until the completion of that Subcontractor's work, adequate insurance.
21.3 Certificates of Insurance.
Certificates in the "ACCORD" form of Certificate of Insurance shall be
provided to Owner on or before EDC plus ten (10) Business Days; provided,
however, the words "endeavor to" must be deleted from the cancellation section
of the form. These Certificates, as well as insurance policies required by this
Article 21 (Insurance), shall contain a provision that coverage shall not be
canceled or allowed to expire until at least ninety (90) Calendar Days' prior
written notice has been given to Owner; provided, however, ten (10) Calendar
Days notice is permitted if the insurance is cancelled for non-payment reasons.
Such Certificates shall also indicate that the Commercial General Liability and
Excess Liability insurance policies have been endorsed to name Owner, its
Affiliates and Associates (and Landlords, their Affiliates and Associates, as
required by this Article 21 (Insurance)) as additional insureds. If any of the
foregoing insurance coverages are required to remain in force after the date
Acceptance of all Cities has been achieved, an additional certificate evidencing
continuing of such coverage shall be submitted to Owner prior to the date
Acceptance of all Cities has been achieved.
Terms and Conditions
Page 61
<PAGE>
CONFIDENTIAL
22. DISPUTE RESOLUTION
Any dispute, claim, or controversy between the Parties arising out of or
relating to this Contract ("Dispute"), including any Dispute with respect to the
interpretation, performance, termination, or breach of this Contract or any
provision thereof shall be resolved as provided in this Article 22 (Dispute
Resolution).
22.1 Informal Dispute Resolution.
Prior to the initiation of formal dispute resolution procedures, the
Parties shall first attempt to resolve their Dispute informally, in a timely and
cost-effective manner, as follows:
(a) If, during the course of the Work, a Party believes it has a Dispute
with the other Party, the disputing Party shall give written notice thereof,
which notice will describe the Dispute and may recommend corrective action to be
taken by the other Party. Contractor's Project Manager shall promptly consult
with Owner's Project Manager in an effort to reach an agreement to resolve the
Dispute.
(b) In the event agreement cannot be reached within five (5) Calendar Days
of receipt of written notice, either Party may request the Dispute be escalated,
and the respective positions of the Parties shall be forwarded to an executive
level higher than that under paragraph (a) above for resolution of the Dispute.
(c) In the event agreement cannot be reached under paragraphs (a) or (b)
above within a total of ten (10) Calendar Days after receipt of the written
notice described in paragraph (a) above, either Party may request the Dispute be
escalated, and the respective positions of the Parties shall be forwarded to the
Chief Executive Officer (CEO) of each Party, and such executives shall meet
during such time to resolve the Dispute.
(d) In the event agreement cannot be reached under paragraphs (a), (b) or
(c) above within a total of twenty (20) Calendar Days after receipt of the
written notice described in paragraph (a) above, either Party may proceed with
arbitration in accordance with Article 22.2 (Arbitration).
22.2 Arbitration.
(a) Subject to the provisions of Article 22.1(Informal Dispute Resolution)
and Article 22.3 (Litigation), any Dispute shall be resolved by mandatory and
binding arbitration in accordance with the then-effective Center for Public
Resources Rules for Nonadministered Arbitration of Business Disputes, as may be
amended from time to time (the "CPR Rules"), which are incorporated herein by
reference. Notwithstanding the foregoing, to the extent any provision of this
Article 22.2 (Arbitration) modifies, adds to, or is inconsistent with any
provision of the CPR Rules, the provisions of this Article shall control.
Terms and Conditions
Page 62
<PAGE>
CONFIDENTIAL
(b) The arbitration shall be conducted by a three-arbitrator tribunal (the
"Tribunal"). Within thirty (30) Calendar Days after the commencement of the
arbitration, each Party shall appoint one arbitrator, and those two arbitrators
shall together appoint the third arbitrator as provided in CPR Rule 5.2. Each
arbitrator appointed by the Parties shall be knowledgeable and experienced in
contracting for technical systems and shall have senior management and/or
legal/judicial experience.
(c) Unless otherwise limited by the Tribunal or the agreement of the
Parties, the Parties shall be permitted to take discovery, if and as needed, by
deposition upon oral examination, requests for production of documents and
things, and requests for entry upon land for inspection and other purposes, as
those discovery methods are described and defined in the Federal Rules of Civil
Procedure; provided, however, that any limitations in the Federal Rules on the
number, timing, or sequence of such discovery requests shall not apply. The
scope of permissible discovery shall generally be as described in Federal Rule
of Civil Procedure Rule 26(b)(1), but the Parties shall use their best efforts
to focus and limit their discovery in accordance with the nature of the dispute
and the need for expedited resolution. The Tribunal may expand or limit the
scope of permissible discovery, establish the time period within which discovery
responses must be served, and expand or limit the type and number of discovery
methods and requests as it shall determine is appropriate in the circumstances,
taking into account the needs of the Parties and the desirability of making
discovery expeditious and cost-effective. The Tribunal may issue orders to
protect the confidentiality of proprietary information, trade secrets, and other
similar information disclosed in discovery and may order that discovery not be
had or that discovery may be had only on specific terms and conditions.
(d) Time is of the essence in the initiation and completion of the
arbitration. The arbitral hearing shall be commenced and conducted
expeditiously. Unless the Tribunal orders otherwise, the Dispute should be
submitted to the Tribunal for decision within two (2) months after the
commencement of the arbitration, and the final award shall be rendered within
one (1) month thereafter. The Parties and the Tribunal shall use their best
efforts to comply with this schedule, and the Tribunal may impose any remedy it
deems just for any Party's effort to unnecessarily delay, complicate or hinder
the proceedings.
(e) The arbitration shall be held in Washington, D.C., USA.
(f) Any arbitration proceeding held pursuant to this Article shall be
governed by the United States Arbitration Act, 9 U.S.C. ss.ss. 1 et seq., and
judgment upon the award rendered by the Tribunal may be entered in any court
having jurisdiction thereof.
(g) The Tribunal's award may grant any remedy or relief that the Tribunal
deems just and equitable and within the scope of this Contract, including
specific performance or other equitable relief. Notwithstanding the foregoing,
the Tribunal shall have no power or authority to amend or disregard any
provision of this Article 22.2 (Arbitration) or any other provision of the
Contract; in particular, but without limiting the generality of the foregoing,
the Tribunal shall not have the power or authority to exclude the right of a
Party to terminate this Contract when a
Terms and Conditions
Page 63
<PAGE>
CONFIDENTIAL
Party would otherwise have such right. The Tribunal also shall have no power or
authority to award punitive or exemplary damages to any Party.
(h) The non-prevailing Party, as determined by the Tribunal, shall pay the
costs of the arbitration and the prevailing Party's fees and expenses incurred
with respect to the arbitration, including reasonable attorneys' fees as
determined by the Tribunal. In the event of an arbitration involving multiple
claims with different Parties prevailing on each claim, the Tribunal shall
apportion the expenses and fees between or among the Parties in such manner as
it deems reasonable, taking into account the circumstances of the case, the
nature of the claims, and the result of the arbitration.
(i) At any time more than ten (10) Calendar Days before the commencement
of the hearing, any Party defending against any claim may serve upon the adverse
Party an offer to allow an award to be entered against the defending Party on
any claim for the money or property or to the effect specified in the offer. If
within ten (10) Calendar Days after the service of the offer, the adverse Party
serves written notice that it accepts the offer, either Party may file the offer
and acceptance with the Tribunal, which will thereupon promptly enter an award
on the claim as provided in the offer. An offer not accepted shall be deemed
withdrawn and shall not be admissible into evidence except with respect to a
determination of fees and expenses. If the award finally made on the claim is
not equal to or more favorable than the offer, then for the purpose of
apportioning expenses and fees pursuant to this Article 22.2 (Arbitration), the
Party making the offer shall be deemed the Prevailing Party with respect to such
claim.
(j) If at the time any Dispute arises, the Center for Public Resources no
longer provides rules or services with respect to the arbitration of business
disputes, then the Parties hereto agree that the arbitration shall be conducted
before the American Arbitration Association ("AAA"). Such arbitration shall be
conducted pursuant to the AAA's Commercial Arbitration Rules then effective,
provided, however, that in the event of any inconsistency with the AAA rules and
this Article, the provisions of this Article shall control.
22.3 Litigation.
(a) Notwithstanding the provisions of Article 22.1 (Informal Dispute
Resolution) and Article 22.2 (Arbitration) above, if the Dispute requires that
immediate equitable relief or relief in aid of arbitration be obtained, either
Party shall have the right to bring suit at any time to obtain preliminary or
temporary injunctive relief, including specific performance, but requests for
permanent injunctive relief shall be arbitrated pursuant to Article 22.2
(Arbitration).
(1) Any such suit shall be brought in a court of competent
jurisdiction in the State of Virginia, provided, however, that
the exclusive venue for any action brought in a Virginia state
court shall be the Circuit Court for Fairfax County, and the
Parties hereby waive any objection to that venue. The Parties
hereby irrevocably consent to personal jurisdiction in the
state and federal courts in the State of Virginia concerning
any Dispute between the Parties. If, for any reason, the state
and federal courts of Virginia do
Terms and Conditions
Page 64
<PAGE>
CONFIDENTIAL
not have or refuse to exercise jurisdiction over the Dispute,
then litigation as permitted herein may be brought in any
court of competent jurisdiction in the United States of
America, or if there is no such court, in any other nation.
(2) In the event a Party files a lawsuit pursuant to this Article
22.3 (Litigation), the Prevailing Party is entitled to an
award of its costs and fees, including reasonable attorney's
fees, incurred with respect to the lawsuit. The defendant in
such litigation shall be regarded as the Prevailing Party if
either the court denies the equitable relief sought on the
merits or the court otherwise decides that equitable relief is
not warranted or the matter should be resolved by arbitration.
(b) In the event an entity or person not subject to the provisions of this
Article 22 (Dispute Resolution) commences any litigation or proceeding against
any Party hereto in which the other Party hereto is an indispensable party, the
Party against which the litigation or proceeding is brought may join or attempt
to join the other Party in such litigation or proceeding notwithstanding the
provisions of Article 22.2 (Arbitration). For the purposes of this provision,
the other Party is an indispensable party in the lawsuit or proceeding if (i) in
its absence complete relief could not be accorded among those already a party to
the lawsuit or proceeding; (ii) its absence may as a practical matter impair or
impede its ability to protect its interests relating to the subject of the
lawsuit or proceeding; or (iii) its absence may leave the Party against which
the litigation or proceeding is brought subject to a substantial risk of
incurring double, multiple, or otherwise inconsistent obligations by reason of
the interest of the other Party relating to the subject of the lawsuit or
proceeding.
(c) Nothing in this Contract precludes a Party prevailing on any claim,
whether in arbitration or litigation, from initiating litigation in any
appropriate forum to enter or enforce a judgment based on the Tribunal's or
court's award on that claim.
22.4 Continued Performance.
Pending final resolution of any Dispute, each Party shall, unless directed
otherwise by the other Party in writing, fulfill all its obligations under this
Contract, including the obligation to take all steps necessary during the
pendency of the Dispute to ensure the Work will be performed within the time
stipulated or within such extended time as may be allowed under this Contract,
provided Owner shall continue to make payments of undisputed sums therefore in
accordance with this Contract (including the dispute resolution provisions
hereof), and further provided that, if Owner fails to make such undisputed
payments or the amount of disputed payments withheld by Owner exceeds Three
Million Dollars ($3,000,000), Contractor may stop Work as permitted by Article
5.9 (Contractor's Right to Suspend the Work).
Terms and Conditions
Page 65
<PAGE>
CONFIDENTIAL
23. OWNER'S RESPONSIBILITIES
Owner shall discharge, at no cost to Contractor or its Subcontractors,
those responsibilities set forth in Attachment 2 (Owner's Responsibilities) of
Exhibit B (SOW).
Terms and Conditions
Page 66
<PAGE>
CONFIDENTIAL
24. LIMITATION OF LIABILITY
(a) SUBJECT TO (c) BELOW, IN NO EVENT SHALL A PARTY BE LIABLE IN CONTRACT,
WARRANTY, STRICT LIABILITY, TORT OR OTHERWISE FOR LOST PROFITS, LOST REVENUES OR
ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR EXEMPLARY DAMAGES OF ANY
NATURE, WHETHER OR NOT FORESEEABLE, ARISING OUT OF, RESULTING FROM, OR IN ANY
WAY CONNECTED TO THE PERFORMANCE OR BREACH OF THIS CONTRACT AT ANY TIME OR FROM
ANY CAUSE WHATSOEVER.
(b) SUBJECT TO (c) BELOW, THE TOTAL CUMULATIVE LIABILITY OF EITHER PARTY
AND ITS RESPECTIVE AFFILIATES AND THEIR ASSOCIATES FOR ALL CLAIMS, LOSSES,
DAMAGES AND EXPENSES RESULTING IN ANY WAY FROM THE PERFORMANCE OF THE WORK OR
THIS CONTRACT SHALL NOT BE GREATER THAN THE CONTRACT SUM.
(c) THE LIMITATIONS SET FORTH IN (a) and (b) ABOVE SHALL NOT APPLY WITH
RESPECT TO (i) DAMAGES OR LOSSES OCCASIONED BY WILLFUL MISCONDUCT OR GROSS
NEGLIGENCE OF A PARTY OR (ii) CLAIMS THAT ARE THE SUBJECT OF INDEMNIFICATION
PURSUANT TO ARTICLE 20 (INDEMNIFICATION) OR (iii) DAMAGES OR LOSSES OCCASIONED
BY BREACH OF CONFIDENTIALITY OBLIGATIONS HEREUNDER, OR (iv) DAMAGES OR LOSSES
OCCASIONED BY WRONGFUL TERMINATION.
(d) Except with respect to liquidated damages for delay, each Party shall
have a duty to mitigate damages for which the other Party is responsible.
Terms and Conditions
Page 67
<PAGE>
CONFIDENTIAL
25. DEFAULT AND CORRECTION PLAN
25.1 Material Breach.
(a) Subject to Article 25.2_(Failure to Achieve Key Task), in the event
Contractor commits a material breach of this Contract, Owner shall be entitled
to deliver to Contractor a written demand that it correct such breach.
Contractor shall acknowledge receipt of Owner's notice within one Business Day.
In the event Owner does not receive such acknowledgement within three (3)
Business Days of the date of the original notice, Owner shall send a second
notice within five (5) Business Days of the transmittal of the first notice.
Within ten (10) Business Days of the date of Owner's first notice, or such
longer time as Owner in its sole discretion may establish (such establishment
may be after Contractor's reasonable request for an extension of such date),
Contractor shall submit to Owner, for Owner's review, comment and approval, a
Correction Plan; provided, however, no Correction Plan shall ever result in a
change to a Key Task in an Initial City Schedule or the Acceptance Date (as may
be extended pursuant to this Contract) unless the Parties so agree in accordance
with Article 28.3 (Amendments). In the event Owner does not approve the
Correction Plan, Contractor shall, within five (5) Business Days after receipt
of Owner's written comments, incorporate all of Owner's reasonable comments into
the Correction Plan and resubmit the Correction Plan to Owner for review and
approval. Owner shall promptly approve such Correction Plan provided Contractor
has incorporated therein Owner's reasonable comments. Upon Owner's approval of
the Correction Plan, the default shall be deemed cured upon Contractor's
compliance with all the terms of such Correction Plan. With respect to the
breach for which Owner approved a Correction Plan, Owner shall not deliver to
Contractor a Notice of Default so long as Contractor performs in accordance with
the terms of such Plan.
(b) Unless Contractor has otherwise cured the breach in question, Owner
may terminate this Contract to the extent permitted by paragraph (f) of Article
26.2 (Termination for Contractor Default) if Contractor (i) fails to submit a
Correction Plan to Owner within the period provided in paragraph (a) above; or
(ii) fails to complete the Owner-approved Correction Plan within thirty (30)
Calendar Days of Owner's approval of the Correction Plan or the period otherwise
set forth in such Correction Plan.
25.2 Failure to Achieve Key Task.
(a) In the event Contractor fails to complete any Key Task in accordance
with the schedule set forth in any Initial City Schedule, and Contractor
reasonably determines it can recover from such failure within thirty (30)
Calendar Days thereof so that every Key Task set forth in the Initial City
Schedule to be completed after such thirty (30) Calendar-Day Period can be
completed in accordance with the Initial City Schedule, Contractor need not
submit a Correction Plan to Owner. In the event Contractor fails to complete any
Key Task in accordance with the schedule set forth in any Initial City Schedule,
and Contractor reasonably determines it cannot recover from such failure within
thirty (30) Calendar Days thereof so that every Key Task set forth in the
Initial City Schedule to be completed after such thirty (30) Calendar-Day Period
can be completed in accordance with the Initial City Schedule, Contractor shall
submit to Owner a Correction Plan, including a revised schedule reasonably
demonstrating that it can achieve
Terms and Conditions
Page 68
<PAGE>
CONFIDENTIAL
Acceptance of the affected City Network by the Acceptance Date. If Contractor
submits a Correction Plan reasonably demonstrating that it can achieve
Acceptance of the affected City Network by the Acceptance Date, Owner shall
approve such Correction Plan in writing. Upon Owner's approval of the Correction
Plan, the default shall be deemed cured upon Contractor's compliance with all
the terms of the Correction Plan. With respect to the breach for which Owner
approved a Correction Plan, Owner shall not deliver to Contractor a Notice of
Default so long as Contractor performs in accordance with the terms of such
Plan.
(b) If, within thirty (30) Calendar Days of failing to achieve a Key Task
in accordance with an Initial City Schedule, Contractor fails to either recover
from its failure to achieve a Key Task so that every Key Task that is set forth
in the Initial City Schedule to be completed after such thirty (30) Calendar-Day
period can be completed in accordance with the Initial City Schedule, or
Contractor fails to submit a Correction Plan reasonably demonstrating it can
achieve Acceptance of the affected City Network in accordance with the
Acceptance Date (as may be extended pursuant to this Contract), and Contractor
fails to recover from either such failure within thirty (30) Calendar Days
notice thereof, Owner may terminate the Contract to the extent permitted by
paragraph (f) of Article 26.2 (Termination for Contractor Default).
(c) If Contractor fails to perform the work set forth in the
Owner-approved Correction Plan, in accordance with the revised schedule set
forth therein, and Contractor fails to cure such failure within thirty (30)
Calendar Days of notice thereof, Owner may terminate the Contract to the extent
permitted by paragraph (f) of Article 26.2 (Termination for Contractor Default).
Terms and Conditions
Page 69
<PAGE>
CONFIDENTIAL
26. TERMINATION
26.1 Termination for Owner's Convenience.
(a) Owner may, upon written notice to Contractor, at any time, terminate
the Work, in whole or in part, in accordance with the terms set forth below, and
Contractor shall immediately cease the Work in the manner and to the extent
specified below, provided Owner is not in default under this Contract, and
further provided Owner does not award to another Contractor all or a portion of
the Work terminated under this Article 26.1 (Termination for Owner's
Convenience) within one (1) year after such termination.
(b) In the event of partial termination of the Work in accordance with
this Article 26.1 (Termination for Owner's Convenience), Owner's notice of
termination will specify the portion of the Work terminated and the remaining
provisions of this Article 26.1 (Termination for Owner's Convenience) shall
apply to such terminated portion. All other portions of the Work shall continue
unaffected.
(c) Upon receipt of a notice of termination, as provided in paragraph (a)
above, Contractor shall take the following actions:
(1) stop Work under this Contract on the date and to the extent
specified in the notice of termination, except those services
that are reasonably necessary to be provided in connection
with a termination of this Contract;
(2) place no further orders or Subcontracts for materials,
services, or facilities to the extent they relate to the
performance of the Work terminated;
(3) terminate Subcontracts to the extent they relate to the
performance of the Work terminated;
(4) settle all outstanding liabilities and all claims arising out
of any termination of Subcontracts for materials, services, or
facilities provided Owner pays amounts due under paragraph (d)
below;
(5) take such action as may be reasonably necessary, or as Owner
may direct, for the protection and preservation of the
property related to this Contract that is in the possession of
Contractor or any Subcontractor and in which Owner has or may
acquire an interest:
(6) complete wind-down activities in all Cities within thirty (30)
Calendar Days of the effective date of termination; and
(7) complete all wind-down activities at Contractor's headquarters
within sixty (60) Calendar Days after the effective date of
termination.
Terms and Conditions
Page 70
<PAGE>
CONFIDENTIAL
(d) In the event of termination under this Article 26.1 (Termination for
Owner's Convenience), Contractor shall be entitled to payment of the following
amounts: (i) (A) all unpaid amounts hereunder for Milestones completed in
accordance with this Contract through the effective date of termination, (B) all
unpaid for Work-in-progress on any Milestone that has not been completed as of
the effective date of termination, with the payment equal to a percentage of the
applicable Milestone Payment that is equal to the percentage of Work, as
determined by the Parties, actually completed on the applicable Milestone, and
(C) ten percent (10%) of those Milestones completed for the following
Disciplines: Program Management, Construction Management, RF Engineering,
Zoning, and Architecture and Engineering; and (D) any and all reasonable
wind-down expenses incurred by Contractor as a result of early termination,
including costs associated with removing Contractor's employees from markets,
including early lease (e.g., office space, housing, equipment, etc.) termination
fees, other costs associated with terminating Subcontractor and other supplier
agreements, the costs of transportation back to the employee's home location,
employment related costs related to the termination of any employee specifically
hired by Contractor to support the Project who is terminated by Contractor
solely due to the termination of this Contract and Contractor's efforts in
performing the foregoing wind-down activities, such efforts to be charged in
accordance with the Default Pricing for Contractor services set forth in Exhibit
C (Contract Pricing, Payments and Milestone Achievement Criteria) and (iii)
interest on any payment not made when required to be made hereunder. In no event
shall the amounts payable pursuant to this Article 26.1 (Termination for Owner's
Convenience) exceed the Contract Sum less amounts paid prior to termination.
(e) Contractor shall submit an invoice to Owner for amounts due under this
Article 26.1 (Termination for Owner's Convenience) on a monthly basis, provided
Contractor shall use best efforts to invoice for all amounts due under this
Article 26.1 within sixty (60) Calendar Days after the effective date of
termination. No invoices shall be submitted later than one hundred eighty (180)
Calendar Days after the effective date of termination. The amounts payable by
Owner under this Article 26.1 (Termination for Owner's Convenience) shall be
verified at Owner's request and expense by a nationally recognized firm of
certified public accountants appointed by Owner and reasonably acceptable to
Contractor. In the event Owner does not notify Contractor in writing that it
disputes the amount specified in Contractor's invoice within thirty (30)
Calendar Days after receipt thereof, Owner shall be deemed to have accepted such
invoice. Contractor shall be entitled to payment by Owner of undisputed amounts
in such invoice within fifteen (15) Business Days after Owner's receipt of the
invoice. Disputed amounts shall be subject to Article 5.8 (Withholding of
Payments). Payment of such amount by any Financing Entity on behalf of Owner
shall relieve Owner from its obligation to make such payment.
(f) Payment of the amount payable by Owner to Contractor pursuant to
paragraph (d) above shall constitute a total discharge of Owner's liabilities to
Contractor for termination pursuant to this Article 26.1 (Termination for
Owner's Convenience).
(g) Upon payment in full of all amounts outstanding under this Contract,
Owner may require Contractor immediately to transfer to Owner in the manner and
to the extent directed by
Terms and Conditions
Page 71
<PAGE>
CONFIDENTIAL
Owner, title to and possession of any items comprising all or any part of the
Work terminated (including all Work-in-progress, parts and materials, and all
inventories, Subcontracts and associated warranties). Contractor shall, upon
direction of Owner and at Owner's expense, use commercially reasonable efforts
to protect and preserve property in the possession of Contractor or its
Subcontractors in which Owner has an interest and shall facilitate access to and
possession by Owner of items comprising all or part of the Work terminated, such
expenses to be reimbursed at the Default Pricing set forth in Exhibit C
(Contract Pricing, Payments and Milestone Achievement Criteria). In the event
Owner neither takes possession nor directs Contractor to protect and preserve
the Work, Owner shall be responsible for costs reasonably incurred by Contractor
in storing the Work. Upon Owner's request, Contractor shall make a reasonable,
good-faith effort to sell such items and to remit any sales proceeds to Owner,
less a deduction for costs of disposition reasonably incurred by Contractor for
such efforts provided the selling price shall be subject to Owner's prior
written approval.
26.2 Termination For Contractor's Default.
(a) Owner may terminate this Contract, subject to paragraph (f) below,
upon service of written notice of default to Contractor at any time after the
occurrence of any of the following:
(1) failure to achieve Acceptance for all Cities on or before the
Acceptance Date, as such date may be adjusted in accordance
with the Contract; or
(2) as provided in Article 25 (Default and Correction Plan); or
(3) except as otherwise provided in Article 25.2 (Failure to
Achieve Key Task), Contractor commits a material breach of any
of its duties or obligations hereunder and
(A) except as provided in (B) below, Contractor fails to
cure such breach within thirty (30) Calendar Days of
notice thereof; or
(B) with respect to a breach that cannot with due diligence
be cured within thirty (30) Calendar Days notice
thereof, Contractor fails to proceed promptly and
diligently to correct the breach (in which case
Contractor shall notify Owner, in writing, within ten
(10) Calendar Days of receipt of notice of breach
describing in reasonable detail the reason such breach
cannot be cured in such thirty (30) Calendar-Day period
and setting forth a Correction Plan to cure such breach)
or fails to cure the breach within sixty (60) Calendar
Days of notice of breach or as otherwise agreed in such
plan; or
(C) the breach is not subject to cure with due diligence
within sixty (60) Calendar Days notice of the breach; or
(4) Contractor commences a voluntary proceeding concerning itself
under any applicable bankruptcy, insolvency, reorganization,
adjustment of debt,
Terms and Conditions
Page 72
<PAGE>
CONFIDENTIAL
relief of debtors, or similar law ("Insolvency Law"); or any
involuntary proceeding commences against Contractor under an
Insolvency Law and the petition has not been dismissed within
ninety (90) Calendar Days after commencement of the
proceeding; or a receiver or custodian is appointed for or
takes charge of all or a substantial portion of the property
of Contractor and such custodian or receiver has not been
dismissed or discharged within sixty (60) Calendar Days; or
Contractor has taken action toward the winding-up,
dissolution, or liquidation of Contractor or its business; or
Contractor has been adjudicated insolvent or bankrupt or an
order for relief or any other order approving a case or
proceeding under any Insolvency Law has been entered; or
Contractor has made a general assignment for the benefit of
creditors or becomes unable to pay its debts generally as they
become due. Should Contractor become a debtor in any
bankruptcy proceeding, Contractor shall move to assume or
reject this Contract within forty-five (45) Calendar Days
after the entry of any order for relief; or
(5) Contractor has purported to assign or transfer this Contract
in violation of the provisions of Article 28.1 (Assignment)
and Contractor fails to cure such unauthorized purported
assignment or transfer within thirty (30) Calendar Days after
receiving written notice from Owner of the unauthorized
purported assignment or transfer.
(b) In the event Owner terminates this Contract pursuant to paragraph (a),
(i) Owner shall be entitled to have the Work completed by another party or
parties and Contractor shall be liable to Owner for damages resulting from such
termination, including any reasonable re-procurement costs and costs of "cover"
incurred in connection therewith in excess of the Contract Sum, such damages to
be actually incurred and invoiced to Contractor in reasonable detail, and for
all liquidated damages then due pursuant to Article 7.2 (Liquidated Damages),
the aggregate of all the foregoing damages not to exceed Twenty-Five Million
Dollars($25,000,000) and (ii) Owner shall be liable to Contractor for (A) unpaid
amounts invoiced hereunder for Milestones completed in accordance with this
Contract through the effective date of termination, (B) all unpaid for
Work-in-progress on any Milestone that has not been completed as of the
effective date of termination, with the payment equal to a percentage of the
applicable Milestone Payment that is equal to that percentage of Work, as
determined by the Parties, actually completed on the applicable Milestone, and
(C) interest on any payment not made when required to be made hereunder. Nothing
contained in this Contract shall be construed so as to obligate Owner to
exercise such right to terminate for Contractor's benefit.
(c) Each Party shall submit an invoice to the other Party for amounts due
under this Article 26.2 (Termination for Contractor's Default) within sixty (60)
Calendar Days after the termination date, which invoice shall state the amounts
due from such other Party. Each such invoice shall be deemed accepted by the
Party receiving such invoice, unless written notice disputing such invoice is
provided to the Party furnishing the invoice within fifteen (15) Business Days
after receipt of such invoice. The amounts payable by a Party under this Article
26.2 (Termination for Contractor's Default) shall be verified at such Party's
request and expense by a
Terms and Conditions
Page 73
<PAGE>
CONFIDENTIAL
nationally recognized firm of certified public accountants appointed by such
Party and reasonably acceptable to the other Party. Each Party's right to
verification shall be without prejudice to the rights of either Party under
Article 22 (Dispute Resolution). In the event a Party does not notify the other
Party in writing that it disputes the amount specified in an invoice within
fifteen (15) Business Days after receipt thereof, such Party shall be deemed to
have accepted such invoice. Each Party shall be entitled to payment of all
undisputed amounts within thirty (30) Business Days after the other Party's
receipt of such invoice. Disputed amounts, including those disputed by
Contractor, shall be deposited into an escrow account and paid therefrom in
accordance with the provisions of Article 5.8 (Withholding of Payments). Each
Party shall also be entitled to interest on such amounts for each day the
payment is overdue until the day payment is made, such interest to be calculated
in accordance with Article 28.11 (Calculation of Interest).
(d) Owner may require Contractor to transfer to Owner in the manner and to
the extent directed by Owner, title to and possession of any items comprising
all or any part of the Work terminated (including all Work-in-progress, parts
and materials, and all inventories, Subcontracts and warranties). Contractor
shall, upon direction of Owner and at Owner's expense, protect and preserve
property in the possession of Contractor or its Subcontractors in which Owner
has an interest and shall facilitate access to and possession by Owner of items
comprising all or part of the Work terminated, such expenses to be reimbursed at
the Default Pricing set forth in Exhibit C (Contract Pricing, Payments and
Milestone Achievement Criteria). In the event Owner neither takes possession nor
directs Contractor to protect the Work, Owner shall be responsible for costs
reasonably incurred by Contractor in restoring the Work. Upon Owner's request,
Contractor shall make a reasonable good-faith effort to sell such items and to
remit any sales proceeds to Owner, less a deduction for costs of disposition
reasonably incurred by Contractor for such efforts, provided the selling price
shall be subject to Owner's prior written approval.
(e) If, after termination of this Contract under the provisions of
paragraph (a) above, it is determined by dispute resolution, pursuant to Article
22 (Dispute Resolution), or admitted in writing by Owner, that Contractor was
not in default under the provisions of paragraph (a), or that any delay giving
rise to the default was excusable under the provisions of Article 7.3 (Excusable
Delay), such termination shall be considered a Termination for Convenience by
Owner and the provisions of Article 26.1 (Termination for Owner's Convenience)
shall apply.
(f) Owner may terminate the Contract pursuant to paragraphs (a)(1),
(a)(2), and (a)(3) of this Article 26.2 (Termination for Contractor's Default)
only with respect to those Cities in which the default under such paragraphs
pertain; provided, however, Owner may terminate the Contract in whole under any
such paragraphs if it is entitled to terminate the Contract pursuant to such
paragraphs in at least one Tier 1 City or five of the remaining Cities (Tier 2
and Tier 3 Cities).
Terms and Conditions
Page 74
<PAGE>
CONFIDENTIAL
26.3 Termination for Owner's Default.
(a) Contractor may terminate this Contract, subject to paragraph (h)
below, upon service of written notice of default to Owner at any time after the
occurrence of any of the following events of default:
(1) Owner fails to pay undisputed amounts due hereunder and fails
to cure such nonpayment within thirty (30) Calendar Days of
written notice thereof; or
(2) Owner commences a voluntary proceeding concerning itself under
any applicable bankruptcy, insolvency, reorganization,
adjustment of debt, relief of debtors, or similar law
("Insolvency Law"); or any involuntary proceeding commences
against Owner under an Insolvency Law and the petition has not
been dismissed within ninety (90) Calendar Days after
commencement of the proceeding; or a receiver or custodian is
appointed for or takes charge of all or a substantial portion
of the property of Owner and such custodian or receiver has
not been dismissed or discharged within sixty (60) Calendar
Days; or Owner has taken action toward the winding-up,
dissolution, or liquidation of Owner or its business; or Owner
has been adjudicated insolvent or bankrupt or an order for
relief or any other order approving a case or proceeding under
any Insolvency Law has been entered; or Owner has made a
general assignment for the benefit of creditors or becomes
unable to pay its debts generally as they become due. Should
Owner become a debtor in any bankruptcy proceeding, Owner
shall move to assume or reject this Contract within forty-five
(45) Calendar Days after the entry of any order for relief; or
(3) Owner has purported to assign or transfer this Contract in
violation of the provisions of Article 28.1 (Assignment) and
Owner fails to cure such purported unauthorized assignment or
transfer within thirty (30) Calendar Days after receiving
written notice.
(b) Upon the occurrence of an event of default under paragraph (a) above,
Contractor shall take the following actions:
(1) stop Work immediately under this Contract and all obligations
of Contractor shall terminate hereunder, except those services
that are reasonably necessary to be provided in connection
with a termination of this Contract;
(2) place no further orders or Subcontracts for materials,
services, or facilities to the extent they relate to the
performance of the Work;
(3) terminate orders and Subcontracts to the extent they relate to
the performance of the Work;
Terms and Conditions
Page 75
<PAGE>
CONFIDENTIAL
(4) settle all outstanding liabilities and all claims arising out
of such termination of orders and Subcontracts for materials,
services, or facilities provided Owner pays amounts due under
paragraph (c) below; and
(5) take such action as may be reasonably necessary, for the
protection and preservation of the property related to this
Contract that is in the possession of Contractor or any
Subcontractor and in which Owner has or may acquire an
interest.
(c) In the event Contractor terminates this Contract as provided in
paragraph (a) above, Contractor shall be entitled to payment of the amounts
specified in paragraph (d) of Article 26.1 (Termination for Owner's Convenience)
plus five percent (5%) of the difference between One Hundred Million Dollars
($100,000,000) and the sum of all Milestone Payments for Milestones paid or
required to be paid hereunder plus amounts required to be paid hereunder in
respect of Work-in-progress.
(d) In the event Contractor terminates this Contract as provided in
paragraph (a) above, the invoicing and payment provisions (including escrow for
disputed amounts) of Article 26.1(e) shall apply.
(e) Payment of the amount payable by Owner to Contractor pursuant to
paragraph (c) above shall constitute a total discharge of Owner's liabilities to
Contractor for termination pursuant to this Article 26.3 (Termination for
Owner's Default).
(f) Upon payment in full of all amounts outstanding under this Contract,
Owner may require Contractor immediately to transfer to Owner in the manner and
to the extent directed by Owner, title to and possession of any items comprising
all or any part of the Work terminated (including all Work-in-progress, parts
and materials, and all inventories, Subcontracts and warranties), and Contractor
shall, upon direction of Owner, protect and preserve property at Owner's expense
in the possession of Contractor or its Subcontractors in which Owner has an
interest and shall facilitate access to and possession by Owner of items
comprising all or part of the Work terminated. In the event Owner neither takes
possession nor directs Contractor to protect the Work, Owner shall be
responsible for costs reasonably incurred by Contractor in storing the Work.
Upon Owner's request and at Owner's expense, Contractor shall make a reasonable,
good-faith effort to sell such items and to remit any sales proceeds to Owner
less a deduction for costs of disposition reasonably incurred by Contractor for
such efforts.
(g) Except as expressly stated in this Article 26.3 (Termination for
Owner's Default), Contractor shall not have the right to terminate or suspend
this Contract.
(h) Contractor may terminate the Contract pursuant to paragraph (a)(1)
only with respect to those Cities in which the default under such paragraph
pertains; provided, however, Contractor may terminate the Contract in whole
under paragraph (a)(1) if it is entitled to
Terms and Conditions
Page 76
<PAGE>
CONFIDENTIAL
terminate the Contract pursuant thereto in at least one Tier 1 City or five of
the remaining Cities (Tier 2 or Tier 3 Cities).
26.4 Termination/Expiration Assistance.
(a) Commencing upon notice of termination and continuing through the
effective date of termination of this Contract, Contractor shall provide to
Owner, or at Owner's request to Owner's designee, the reasonable
termination/expiration assistance requested by Owner to allow the Work to
continue without interruption or adverse effect and to facilitate the orderly
transfer of the Work to Owner or its designee; provided, however, that Owner has
paid all outstanding invoices. Such assistance shall include the following:
(1) to the extent Contractor has not already done so pursuant to
paragraph (d) of Article 10.1 (Warranties), Contractor shall
assign, to the extent assignable, to Owner all
Subcontractors', manufacturers' or other warranties on all
materials or equipment furnished by Contractor; and
(2) upon Owner's request, Contractor shall assign to Owner or its
designee the Material Subcontracts, as well as any and all
Subcontracts requested by Owner provided that such
Subcontracts are assignable except in the case of termination
pursuant to Article 26.1 (Termination for Owner's
Convenience).
(b) Owner shall pay Contractor for termination/expiration assistance in
accordance with the pricing set forth in Exhibit C (Contract Pricing, Payments
and Milestone Achievement Criteria), provided, however, that in the event
Contractor terminates the Contract due to Owner's failure to pay undisputed
amounts or failure to pay amounts into escrow to the extent required under this
Contract, Contractor shall be entitled to payment in advance for
termination/expiration assistance.
Terms and Conditions
Page 77
<PAGE>
CONFIDENTIAL
27. MECHANICS' LIENS AND CLAIMS
27.1 Waiver of Liens.
To the extent permitted by Law and conditioned upon Owner's payment in
full for the Work being released, Contractor hereby expressly waives and
releases and hereby agrees to cause all Subcontractors, suppliers, laborers or
anyone else acting or claiming through it to waive and release their right to
file or claim any lien against all or any part of the Work, or any fee,
leasehold or other property interest upon which any portion of the Work is
located. Contractor agrees to use commercially reasonable efforts to include
this requirement in all Subcontracts and supply contracts and to execute any
additional documents to evidence this waiver and release as may be required by
Owner.
27.2 Discharge of Liens.
If, at any time, any notices of lien are filed for services or labor
performed by, or materials or equipment furnished or delivered to, Contractor
for the Work, Contractor, within ten (10) Calendar Days after the date of the
filing of such notice of lien shall discharge and remove such lien or claim of
lien or post a bond reasonably satisfactory to Owner for such lien or claim of
lien and shall indemnify, defend and hold harmless Owner for all Losses arising
from such lien or claim of lien, together with interest on the same from the
date any such cost was paid by Owner until reimbursed by Contractor at the rate
of interest on such payment for each day the payment is overdue until the day
payment is made, such interest to be calculated in accordance with Article 28.11
(Calculation of Interest), except if the lien is the result of Owner's
nonpayment of an amount when due hereunder over which no good-faith Dispute
exists between Owner and Contractor. The obligations of Contractor under this
Article 27.2 (Discharge of Liens) shall survive the expiration or termination of
this Contract.
27.3 Subordination of Liens.
To the fullest extent permitted by Law and, with respect to
Subcontractors, to the fullest extent permitted by the relevant Subcontracts,
all Contractor's, laborer's, mechanic's, and materialmen's judgments and other
similar liens that Contractor or its Subcontractors or any vendor or supplier
may have or acquire hereunder as to the Work, or any fee, license, leasehold or
other legal interest upon which any portion of the Work is located, shall be
subordinate to any liens securing payment of sums now or hereafter borrowed by
Owner for the Work and or the fee, license, leasehold or other legal interest
therein. At the request of Owner, Contractor shall execute such additional
documents as may be requested from time to time by Owner to give effect to the
provisions hereof.
Terms and Conditions
Page 78
<PAGE>
CONFIDENTIAL
28. GENERAL
28.1 Assignment.
(a) Contractor shall not, without the prior written approval of Owner and
except on such terms and conditions as shall be reasonably acceptable to Owner,
assign, mortgage, charge, or encumber this Contract or any part thereof, any of
its rights, duties, or obligations hereunder, or the Work to any person or
entity, provided that: (i) nothing in this Article shall be construed as
limiting Contractor's right to enter into Subcontracts in respect of the Work
and (ii) Contractor shall have the right to assign or transfer this Contract or
all of its rights, duties, or obligations hereunder to: (x) any Affiliate of
Contractor, or (y) any corporation in connection with the sale, transfer or
assignment of all or substantially all of Contractor's assets or capital stock,
whether by way of merger, consolidation or otherwise, subject to the following
conditions: (A) in the case of a transfer to an Affiliate, the net worth of such
Affiliate is not less than the net worth of Contractor immediately prior to such
transfer and, in the reasonable discretion of Owner, such Affiliate has the
experience, resources, and personnel required to perform the Work in accordance
with the Contract; (B) in the case of a transfer or assignment contemplated in
clause (y), immediately after giving effect to such transaction or series of
related transactions, the net worth of Contractor (or in the event Contractor is
not the continuing person, the net worth of the person or entity formed by such
consolidation or into which Contractor is merged or to which its properties are
transferred substantially as an entirety) shall be no less than the net worth of
Contractor immediately before such transaction or series of related
transactions, and in the case of the sale of all or substantially all of the
assets of Contractor, the assignee or transferee, in the reasonable discretion
of Owner, has the experience, resources and personnel required to perform the
Work in accordance with the Contract; and (C) the assignee, transferee or
successor to Contractor has expressly assumed all the obligations of Contractor
and all terms and conditions applicable to Contractor under this Contract
pursuant to an assumption agreement (between Contractor and assignee or
transferee) in form and substance reasonably satisfactory to Owner.
(b) Owner shall not, without the prior written approval of Contractor,
assign, transfer, mortgage, charge, or encumber this Contract, any part thereof,
or any of Owner's rights, duties or obligations hereunder, provided that
Contractor hereby agrees that Owner may make any assignment or transfer of this
Contract to (i) any or all Financing Entities in connection with obtaining
financing for the payment of Contractor's invoices and any and all other fees,
charges or expenses payable under this Contract under any Financing Agreement,
(ii) as part of any collateral pool in favor of other senior lenders providing
financing to Owner in connection with completion of the Terrestrial Repeater
Network System facility and related equipment and (iii) any Affiliate of Owner
provided that in the case of a transfer to an Affiliate, the Affiliate has
sufficient financial resources to fulfill its obligations under this Contract.
Owner hereby agrees that, prior to entering into any contract or agreement to
sell or transfer this Contract, the acquirer shall agree to assume this Contract
and all of Owner's rights, duties and obligations hereunder pursuant to an
assumption agreement (between Owner and assignee or transferee) in form and
substance reasonably satisfactory to Contractor.
Terms and Conditions
Page 79
<PAGE>
CONFIDENTIAL
(c) The assigning Party shall reimburse the other Party for all reasonable
expenses incurred by the other Party (and invoiced in reasonable detail) in
obtaining advice from its external financial and legal advisors relating to the
assigning Party's proposed assignment or transfer.
(d) This Contract shall be binding on the Parties and their successors and
permitted assigns. Except as otherwise expressly agreed in writing, assignment
of this Contract shall not relieve the assigning Party of any of its obligations
nor confer upon the assigning Party any rights except as provided in this
Contract.
28.2 Entire Agreement.
This Contract contains the entire agreement between the Parties regarding
the Work hereunder and supersedes all communications, negotiations, and other
agreements either written or oral, relating to the Work and made prior to EDC,
unless the same are expressly incorporated by reference into this Contract.
Without limiting the generality of the foregoing, this Contract supersedes the
Interim Services Agreement, and the rights, liabilities and obligations of the
Parties with respect to the work performed under such Interim Services Agreement
shall be governed by this Contract and the invoices for charges under the
Interim Services Agreement are null and void and work performed thereunder shall
be invoiced in accordance with this Contract.
28.3 Amendments.
This Contract, including any and all its Attachments, Exhibits and
Schedules, may not be modified except by written instrument of subsequent date
signed by a duly authorized representative of Contractor and a Senior Vice
President or higher of Owner.
28.4 Waiver of Breach of Contract.
A waiver of any provision or any breach of a provision of this Contract
shall not be binding upon either Party unless the waiver is in writing, signed
by a duly authorized representative of the Party, as applicable, and such waiver
shall not affect the rights of the Party not in breach with respect to any other
or future breach. No course of conduct by a Party shall constitute a waiver of
any provision or any breach of a provision of this Contract unless a written
waiver is executed in accordance with the provisions of this Article 28.4
(Waiver of Breach of Contract).
28.5 Remedies Cumulative.
Subject to Article 24 (Limitations of Liability), all remedies provided
for in this Contract shall be cumulative and in addition to and not in lieu of
any other remedies available to either Party at law, in equity and/or otherwise.
28.6 Severability.
In the event any one or more of the provisions of this Contract shall for
any reason be held to be invalid or unenforceable, the remaining provisions of
this Contract shall be
Terms and Conditions
Page 80
<PAGE>
CONFIDENTIAL
unimpaired and the invalid or unenforceable provision shall be replaced by a
mutually acceptable provision, which, being valid and enforceable, comes closest
to the intention of the Parties underlying the invalid or unenforceable
provision.
28.7 Applicable Law.
Except as provided in Article 22 (Dispute Resolution), this Contract and
performance under it shall be governed by, construed and enforced in accordance
with the Laws in force in the State of New York, without regard to conflict of
laws provisions thereof
28.8 Notices.
(a) All notices, requests, demands, and determinations under this
Contract, including any required under Article 28.1 (Assignment) (other than
routine operational communications) shall be in writing and shall be deemed duly
given (i) if delivered by hand, when delivered, (ii) if delivered by express
courier, two (2) Business Days after being given to an express courier with a
reliable system for tracking delivery, or (iii) if delivered by facsimile, when
sent by facsimile (confirmed by the specific individual to whom the facsimile is
transmitted) with a copy sent by another means specified in this Article 28.8
(Notices), and addressed as follows:
If to Owner: XM Satellite Radio Inc.
1250 23rd Street, NW
Suite 57
Washington, DC 20037
Tel. No.: 202-969-7100
Fax No.: 202-969-7050
Attention: General Counsel
Copy to: John R. Wormington
Senior Vice President, Engineering and Operations
Royce Kincaid
Vice President, Terrestrial Repeater Program
If to Contractor: LCC International, Inc.
7925 Jones Branch Drive
McLean, Virginia 22102
Tel. No.: 703-873-2910
Fax No.: 703-873-2900
Attention: Chief Executive Officer
Copy to: General Counsel
Chief Operating Officer
Terms and Conditions
Page 81
<PAGE>
CONFIDENTIAL
(b) A Party may from time to time change its address or designee for
notification purposes by giving the other Party prior written notice of the new
address or designee and the date upon which it will be effective.
28.9 Relationship of the Parties.
(a) Contractor, in performing the Work hereunder, is acting as an
independent Contractor, and Contractor has the sole right and obligation to
supervise, manage, contract, direct, procure, perform, or cause to be performed,
all Work to be performed by Contractor under this Contract.
(b) None of the provisions of this Contract or of any of its Attachments,
Exhibits or Schedules shall be construed to mean that either Party is appointed
or is in any way authorized to act as an agent of the other Party or that there
exists a joint venture, partnership, agency or formal business organization of
any kind between the Parties.
28.10 Media Releases.
All media releases, public announcements, and public disclosures by either
Party relating to this Contract or the subject matter of this Contract,
including promotional or marketing material (both internal and external), but
not including announcements intended solely for internal distribution or to meet
legal or regulatory requirements beyond the reasonable control of the disclosing
Party, shall be coordinated with and approved by the other Party prior to
release.
28.11 Calculation of Interest.
Except as otherwise specified in this Contract, any interest due to either
Party under this Contract shall be calculated at an annual rate equal to ten
percent (10%).
28.12 Survival.
Any provision of this Contract that contemplates performance or observance
subsequent to any termination or expiration of this Contract shall survive any
termination or expiration of this Contract and continue in full force and
effect.
28.13 No Third-Party Beneficiaries.
This Contract is entered into solely between, and may be enforced only by,
Owner and Contractor and their permitted assigns, and this Contract shall not be
deemed to create any rights in third parties, including suppliers and owners of
a Party, or to create any obligations of a Party to any such third parties.
28.14 Consents and Approvals.
Except where expressly provided as being in the sole discretion of a
Party, where agreement, approval, acceptance, consent, or similar action by
either Party is required under this Contract, such action shall not be
unreasonably delayed or withheld. An approval or consent
Terms and Conditions
Page 82
<PAGE>
CONFIDENTIAL
given by a Party under this Contract shall not relieve the other Party from
responsibility for complying with the requirements of this Contract, nor shall
it be construed as a waiver of any rights under this Contract, except as set
forth in a writing (including e-mail).
28.15 Lender Requirements.
(a) The Parties recognize Owner may obtain financing for the amounts due
in respect of this Contract, the Project and related repeater hardware through
external sources. Contractor shall provide to any Financing Entity any project
information or certification that such Financing Entity reasonably requires
(subject to confidentiality agreements governing such project information).
(b) Contractor agrees to work cooperatively with Owner in connection with
Owner's efforts to obtain financing for the Project and related repeater
hardware.
(c) Contractor agrees to execute such documents as may be reasonably
required by any Financing Entity, including such invoice certifications,
documents, instruments, contracts, agreements and amendments to this Contract
that may be required in connection with Owner's assignment of this Contract to
such Financing Entity under terms that are customary in the secured financing of
projects of this nature, provided Contractor's rights and obligations with
respect to the Contract Sum, time of performance, economic terms and/or other
terms under this Contract are not adversely affected by any such amendment to
this Contract or, in the event of such adverse effect, the Parties execute a
Change Order resolving such adverse effect, provided, however, Contractor shall
provide a performance and payment bond reasonably required by a Financing Entity
at no cost to Owner.
28.16 No Solicitation.
During the period of performance of the Work and for one (1) year
following the date on which all City Networks shall have achieved Acceptance,
neither Party shall, directly or indirectly, solicit for employment, employ or
engage for consulting services any employee or consultant of the other Party,
including any person who was employed or engaged by the other Party during the
six-month period immediately preceding such hiring or solicitation.
28.17 Time of the Essence.
Time is of the essence in this Contract, including with respect to the
resolution of any Disputes between the Parties under Article 26 (Termination).
28.18 Covenant of Good Faith.
Each Party agrees that, in respective dealings with the other Party under
or in connection with this Contract, it shall act in good faith.
Terms and Conditions
Page 83
<PAGE>
CONFIDENTIAL
28.19 Counterparts.
This Contract may be executed in two (2) or more counterparts, which taken
together constitute one single contract between the Parties.
IN WITNESS WHEREOF, this Contract has been executed on behalf of Owner by
persons authorized to act on Owner's behalf, and has also been executed on
behalf of Contractor by persons authorized to act on Contractor's behalf.
LCC INTERNATIONAL, INC. XM SATELLITE RADIO INC.
By: __________________________________ By: __________________________________
(Signature) (Signature)
Name: ________________________________ Name: ________________________________
(Print) (Print)
Title: _______________________________ Title: _______________________________
Date: ________________________________ Date: ________________________________
Terms and Conditions
Page 84
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
ATTACHMENT A
APPROVED AS OF EDC
KEY PERSONNEL
Position Individual
General Manager [*****]
Director of RF Engineering Manager [*****]
Regional Managers
1. Eastern Region [*****]
2. Western Region [*****]
Terms and Conditions - Attachment A
Page A-1
<PAGE>
CONFIDENTIAL
ATTACHMENT B
FORM OF CERTIFICATION ACCOMPANYING INVOICES
XM Satellite Radio Inc.
1250 23rd Street, N.W., Suite 57
Washington, D.C. 20037
Attention: Chief Financial Officer
RE: Terms and Conditions of the Contract for Engineering and
Construction of Terrestrial Repeater Network System dated as of
August 18, 1999 between XM Satellite Radio Inc. ("Owner") and LCC
International, Inc. ("Contractor") (as amended, supplemented or
modified from time to time, the "XM Network Purchase Contract")
Ladies and Gentlemen:
This Certificate is delivered to you pursuant to Article 5 (Payment) of the
Terms and Conditions of the XM Network Purchase Contract. Each capitalized term
used herein and not otherwise defined shall have the meaning assigned thereto in
the Terms and Conditions of the XM Network Purchase Contract.
We hereby certify, after due inquiry, that, as of the date hereof:
1. To the extent payment to us has been or will be made as specified in
this and the immediately preceding Contractor Certificates, there are and will
be no mechanics' or materialmen's liens except Permitted Liens on the Work.
2. a. The amount contained in the invoice delivered to you concurrently
herewith in accordance with the terms of Article 5 (Payment) of the Terms and
Conditions of the XM Network Purchase Contract represents monies owed to us in
respect of the Milestones set forth in such invoice.
b. The amount referred to in paragraph (a) above was computed in
accordance with the terms of the XM Network Purchase Contract.
c. The Milestones for which payment is requested in such invoice have been
completed in accordance with the XM Network Purchase Contract.
Very truly yours,
LCC INTERNATIONAL, INC.
By: __________________________
Title: __________________________
Terms and Conditions - Attachment B
Page B-1
<PAGE>
CONFIDENTIAL
ATTACHMENT C
TERMS AND CONDITIONS FOR LICENSE GRANT IN ARTICLE 17(c)
The license granted in Article 17(c) of the Contract is subject to the following
terms and conditions:
1. DEFINITIONS.
As used herein, the term "WINDS Software" shall mean the following:
Contractor's proprietary WINDS Software in machine-readable, object code form
only and the user manuals related thereto.
2. LICENSE TERMS AND RESTRICTIONS.
Owner agrees to the following terms and restriction on its use of the
WINDS Software:
2.1 The WINDS Software shall be used: (i) solely at the Owner's facility
in connection with the Project, and (ii) on no more than one computer by
one user at a time. Owner agrees to operate the software only as
prescribed in the user manuals.
2.2 In no event shall Owner delete, remove, erase, obliterate or otherwise
deface any form of marking appearing on or contained in the WINDS Software
or any part thereof which is a notice relating to either ownership of the
WINDS Software or to the intellectual property rights of Contractor
subsisting in or relating to the WINDS Software.
2.3 Owner agrees that it shall not: (i) reverse engineer, disassemble,
decompile, interrogate or decode the WINDS Software or any data files
created by or associated with the WINDS Software; (ii) derive source code,
methodologies or proprietary algorithms from the WINDS Software; (iii)
copy or modify the WINDS Software or otherwise create any derivative work
from the WINDS Software; (iv) assert the invalidity or contest the
ownership by Contractor of the WINDS Software, either as a complete or
partial defense to any claim made by Contractor or any third party, or (v)
take any action which may prejudice the validity of Contractor's rights,
title and interest in and to the WINDS Software.
2.4 Owner agrees and acknowledges that: (i) the WINDS Software is an
unpublished, licensed work and contains trade secrets of Contractor; (ii)
Contractor derives independent economic benefits from its ownership and
use of the WINDS Software; (iii) Contractor maintains the WINDS Software
in confidence and uses reasonable precautions to protect the WINDS
Software from unauthorized disclosure and/or use, and (iv) all property in
the WINDS Software and the media upon which it is embodied and all
intellectual property rights (including copyrights) subsisting in or
relating to the WINDS Software are the exclusive property of Contractor
and Owner's right to use the WINDS Software is limited to and arises only
out of the licenses granted pursuant to this license and is subject to the
superior rights of Contractor.
Terms and Conditions - Attachment C
Page C-1
<PAGE>
CONFIDENTIAL
2.5 Owner agrees that it shall not, at any time during or after the term
of this license, sell, assign, lease, sublease, license, sublicense or
otherwise transfer the WINDS Software.
2.6 Owner agrees that it shall not reexport, directly or indirectly, all
or any portion of the WINDS Software or any other technical data that it
may receive hereunder.
3. PROPRIETARY RIGHTS/WORKS.
3.1 Proprietary Rights. The license granted pursuant to Section 18(g) of
the Contract does not constitute a transfer or sale of Contractor's
ownership rights in or to the WINDS Software. All right, title and
interest in and to the WINDS Software (including any copies or subsequent
versions thereof) shall remain the exclusive property of Contractor,
subject to the rights expressly granted to Owner hereunder. Except as
specifically set forth herein, Contractor shall be the sole owner of any
and all inventions, discoveries, improvements, updates and enhancements
relating to the WINDS Software (whether in written or unwritten form)
which are made, developed, conceived of or reduced to practice by
Contractor. Contractor shall retain the exclusive right to reproduce,
publish, patent, copyright, sell, license and otherwise make use of: (i)
the WINDS Software; and (ii) any and all inventions, discoveries,
improvements, updates and enhancements relating to the WINDS Software
which are made, developed, conceived of or first reduced to practice by
Contractor. Nothing herein shall be construed as conveying to Owner any
right or interest in or to any of Contractor's trademarks.
3.2 Assistance. Owner agrees to notify Contractor immediately of any
infringement, unauthorized possession or misuse of the WINDS Software.
Contractor, in the exercise of its sole discretion and at its expense, may
institute lawsuits or other actions to prevent or terminate any such
infringement, unauthorized possession or misuse. Upon Contractor's request
and at Contractor's expense, Owner shall render all reasonable assistance
in the prosecution and/or settlement of any such lawsuit or action. Any
recovery in any such lawsuit or other action shall belong solely to
Contractor.
4. WARRANTY DISCLAIMER.
THE WINDS SOFTWARE ARE PROVIDED "AS IS" WITH NO WARRANTY OF ANY KIND.
CONTRACTOR EXPRESSLY DISCLAIMS, ALL WARRANTIES AND/OR CONDITIONS, EXPRESS OR
IMPLIED, STATUTORY OR OTHERWISE, INCLUDING BUT NOT LIMITED TO ANY IMPLIED
WARRANTY OF MERCHANTABILITY, ANY IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE, ANY IMPLIED WARRANTY OF NON-INFRINGEMENT AND ANY IMPLIED WARRANTY
ARISING OUT OF THE COURSE OF DEALING, CUSTOM OR USAGE OF TRADE.
5. LIMITATION OF LIABILITY.
IN NO EVENT WILL CONTRACTOR BE LIABLE TO OWNER OR ANY OTHER PERSON FOR
LOSS OF PROFITS, BUSINESS, USE OR DATA OR SPECIAL, EXEMPLARY, INDIRECT,
INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES
Terms and Conditions - Attachment C
Page C-2
<PAGE>
CONFIDENTIAL
OF ANY KIND OR FOR ANY REASON, INCLUDING, WITHOUT LIMITATION, THE BREACH OF
THESE TERMS AND CONDITIONS OR ANY TERMINATION OF THIS LICENSE, WHETHER SUCH
LIABILITY IS ASSERTED ON THE BASIS OF CONTRACT, TORT (INCLUDING NEGLIGENCE AND
STRICT LIABILITY) OR OTHERWISE, EVEN IF CONTRACTOR HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. THE ESSENTIAL PURPOSE OF THIS PROVISION IS TO LIMIT
THE POTENTIAL LIABILITY OF CONTRACTOR ARISING OUT OF THIS LICENSE. IN NO EVENT
SHALL CONTRACTOR'S LIABILITY TO OWNER HEREUNDER EXCEED, IN THE AGGREGATE, ONE
HUNDRED DOLLARS ($100.00).
6. INDEMNIFICATION.
Owner hereby agrees to indemnify Contractor and to hold Contractor
harmless from and against any and all liabilities, damages, costs and expenses
(including reasonable attorneys' fees) incurred by Contractor as a result of any
modification to the WINDS Software made by Owner or any unauthorized use of the
WINDS Software by Owner.
7. NON-DISCLOSURE.
The Winds Software is Contractor's "Confidential Information" and shall be
treated as such in accordance with the Contract.
8. TERM AND TERMINATION.
8.1 Term. This license shall commence on the EDC and shall continue in
full force and effect unless sooner terminated as provided herein.
8.2 Right to Termination. This license may be terminated:
8.2.1 By Owner or Contractor, immediately upon written notice of
termination, in the event of a material breach of this license by the other
party, if such breach continues uncured for a period of thirty (30) days after
written notice of such breach; or
8.2.2 By an executed written agreement between Owner and Contractor.
8.3 Return of WINDS Software. Immediately following any termination or
expiration of this license, Owner shall: (i) return the WINDS Software and all
materials relating thereto (including all copies thereof) and (ii) certify in
writing to Contractor that all such data, materials and copies have been
returned to Contractor.
8.4 Survival. The following sections of this license shall survive
expiration or termination of this license: 2.5, 2.6, 3.1, 4, 5, 6, 7 and 8.
Terms and Conditions - Attachment C
Page C-3
<PAGE>
CONFIDENTIAL
Terms and Conditions - Attachment C
Page C-4
<PAGE>
CONFIDENTIAL
CONTRACT
--------
FOR
---
ENGINEERING AND CONSTRUCTION
----------------------------
OF
--
TERRESTRIAL REPEATER NETWORK SYSTEM
-----------------------------------
By and Between
--------------
XM Satellite Radio Inc.
-----------------------
and
---
LCC International, Inc.
-----------------------
EXHIBIT A - NETWORK DESIGN CRITERIA AND PROCESS
CONFIDENTIALITY NOTICE
----------------------
This attached Exhibit A - City Network Design Process - and the information
contained herein is confidential to the Parties and shall not be published or
disclosed to any third party without the express written consent of a duly
authorized representative of each Party.
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
CONTRACT
--------
FOR
---
ENGINEERING AND CONSTRUCTION
----------------------------
OF
--
TERRESTRIAL REPEATER NETWORK SYSTEM
-----------------------------------
EXHIBIT A - NETWORK DESIGN CRITERIA AND PROCESS
-----------------------------------------------
A. OVERVIEW AND DEFINITIONS
It is understood by the Parties that the objective of the network design process
is to design the Terrestrial Repeater Network System to supplement the coverage
of Owner's satellites such that the combination of satellite and terrestrial
signal sources provides, for each City, acceptable signal levels over the
Defined Coverage Area (as defined in Section 3.2 of Exhibit B) of such City at
the lowest practical coverage-to-cost ratio within the schedule provided for the
Work. During the network design process, the Preliminary City Network Design,
Revised City Network Design and the Build-To City Network Design (as such terms
are defined in Exhibit B (SOW)) shall be subject to Owner's review and approval.
Defined Coverage Area.
----------------------
The Defined Coverage Area for each City is as set forth in Section 3.2 of
Exhibit B (SOW).
Design Criteria.
----------------
Contractor will design the Terrestrial Repeater Network System with the
objective of achieving the Repeater Test Criteria set forth in Exhibit E
(Network Testing and Repeater Acceptance Criteria), provided that the [*****]
Signal Reliability set forth therein shall be [*****] for purposes of the design
process (the "Design Criteria").
Exception Reports.
------------------
In the event Contractor encounters a situation in which a significant site cost
or other problem becomes apparent, Contractor shall prepare an exception report
detailing the problem and shall set forth such exception report in the Weekly
Status Report required by Exhibit B (SOW).
B. CITY NETWORK DESIGN PROCESS
Contractor shall design the City Network for each City in accordance with the
"Measurement Based RF Design Procedures" to be developed by Contractor
substantially in conformance to Attachment 1 hereto. Contractor shall submit a
revision of Attachment 1 hereto to Owner for Owner's review and approval by EDC
plus thirty (30) Calendar Days. Contractor shall incorporate Owner's reasonable
comments. The Owner-approved version of Attachment 1 shall be incorporated into
an Amendment to the Contract in accordance with Article 28.3 of the Terms and
Conditions of the Contract.
<PAGE>
CONFIDENTIAL
ATTACHMENT 1
------------
MEASUREMENT BASED RF DESIGN PROCEDURES
--------------------------------------
<PAGE>
CONFIDENTIAL
ATTACHMENT 1
MEASUREMENT BASED RF DESIGN PROCESS AND PROCEDURES
<PAGE>
CONFIDENTIAL
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
<S> <C>
1.0 INTRODUCTION......................................................... 3
1.1. Coverage Reliability Specification.................................. 3
1.1.a Primary Traffic Routes in the Central Business District (CBD).. 3
1.1.b Primary Traffic Routes outside the Central Business District... 3
1.1.c Secondary Traffic Routes anywhere in the market................ 3
1.2. Design Philosophy................................................... 4
2.0 DESIGN PROCESS....................................................... 4
2.1. Preliminary Coverage Design Process................................. 4
2.2. Revised Coverage Design (In Market)................................. 5
2.3. Transmit to Receive Isolation....................................... 5
2.4. Simulcast Analysis and Test......................................... 6
2.5. RF Exposure Compliance Plan......................................... 7
3. APPENDIX A - ANET COVERAGE ANALYSIS TOOL.............................. 9
4. APPENDIX B - MEASUREMENT BASED PROCESS................................ 11
5. APPENDIX C - TRANSMIT-TO-RECEIVE ISOLATION ANALYSIS AND TEST.......... 25
6. APPENDIX D - SIMULCAST DESIGN AND TEST................................ 30
7. APPENDIX E - RF EXPOSURE ANALYSIS AND TEST............................ 34
</TABLE>
1.0 Introduction
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
Under a license granted by the Federal Communications Commission, XM Satellite
Radio (XMSR) will launch two geo-synchronous satellites for the purpose of
delivering Digital Audio Broadcast Service (DARS) to all areas within the
Continental USA. To overcome signal blockage from terrain, foliage and man-made
structures, a network of terrestrial repeaters will be designed and built in a
total of 70 markets throughout the USA. The turnkey contractor for the 70
repeater networks will be LCC International (LCCI).
Because the DARS service will be a subscription service competing with
commercial AM and FM broadcasters in each market, the coverage reliability
provided by the combined satellite coverage and repeater coverage must be
extraordinarily high. To this end, XMSR has defined a coverage reliability
design goal of [*****] on primary and secondary traffic routes within each of
the 70 markets. Due to the fact that repeater networks will be designed and
constructed prior to launch and activation of the satellites, a somewhat lower
initial coverage reliability guarantee is specified in the turnkey services
contract between XMSR and LCCI. This document describes the design and test
processes by which LCCI will meet the contractual coverage reliability
guarantee--and approach the [*****] coverage reliability goal to the maximum
practical extent.
1.1 Coverage Reliability Specification
The coverage reliability for certain areas and highways within the markets is
specified in Exhibit E of the Contract. These requirements are summarized
below.
a) Primary Traffic Routes in the Central Business District (CBD):
Coverage reliability of [*****] over any single primary route, and no signal
outage greater than [*****] on any single primary route.
b) Primary Traffic Routes outside the Central Business District:
Coverage reliability of [*****] over any single primary route, and no signal
outage greater than [*****] on any primary route.
c) Secondary Traffic Routes anywhere in the market:
Coverage reliability of [*****] over the aggregate of all secondary routes, and
no signal outage greater than [*****] on any secondary route.
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
1.2 Design Philosophy
Due to the high coverage reliability goal, RF design based on modeling tools
alone will not provide the degree of confidence required to meet the coverage
goals. Therefore, a [*****] is required to fully characterize the design and
assure that the coverage requirements are met.
The measurement process requires the installation of [*****] on each potential
repeater site and the use of a [*****] to collect and store signal strength data
on traffic routes around that site. The signal strength data will be processed
and analyzed to determine the coverage that will be provided by that site. The
site-by-site coverage so determined will indicate the degree of coverage
required from adjacent sites (should the site be a part of a cluster of sites).
This is the measurements based design process that is described herein.
2.0 Design Process
The design process is defined in two stages, Preliminary Coverage Design and
Revised Coverage Design. Included in the design process are non-coverage items
such as [*****].
2.1 Preliminary Coverage Design Process
The preliminary design process involves certain definitions, analyses and
approvals. The final result of the preliminary design process is the basis of
the field design activity that becomes the revised design.
The preliminary design analysis is done utilizing the [*****]. The [*****],
when optimized through a measurement integration process, provides a means to
estimate coverage from candidate sites, to obtain a site count estimate and to
select anchor sites for the commencement of the revised design activity. The
[*****] coverage analysis process is described in Appendix A.
The following steps define the preliminary design process (responsible party
shown in parentheses):
. [*****]
. [*****]
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
. [*****]
. [*****]
. [*****]
. [*****]
2.2 Revised Coverage Design (In Market)
The Revised Design begins with the [*****] that are issued at the end of the
preliminary design process. Although [*****] will be used extensively to
predict coverage from candidate sites, the actual basis of the revised design
will be a measurements process. This basis of the measurement process is
described in Appendix B.
The following steps define the Revised Design process:
. [*****]
. [*****]
. [*****]
. [*****]
. [*****]
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
2.3 Transmit to Receive Isolation
One of the technical considerations of site design is the potential for transmit
to receive interference due to the proximity of the transmit frequency to the
receive frequency. Although the transmitter will [*****] analysis and testing
performed by LCC indicates that certain site configurations could result in
insufficient isolation margin. Details of the isolation parameters and the
Isolation Calculator Tool are provided in Appendix C.
The following steps define the Isolation Analysis and Test Process:
. [*****]
. [*****]
. [*****]
. [*****]
. [*****]
. [*****]
2.4 Simulcast Analysis and Test
Under certain conditions, self-interference can result from a so-called
"simulcast condition". A harmful simulcast condition exists when the signal
level from two repeaters are within [*****] of each other and when the time
delay between the two repeaters exceeds [*****]. Prevention of harmful
simulcast conditions is a goal of the design process, and the detection of
potential harmful simulcast conditions is a goal of the test process. The
simulcast design and testing process are described in Appendix D.
The following steps define the Simulcast Design Validation process:
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
. [*****]
. [*****]
. [*****]
. [*****]
. [*****]
2.5 RF Exposure Compliance Plan
In August 1996, the Federal Communications Commission (FCC) revised the
telecommunications act for human exposures to Radio Frequency Radiation (RFR)
from the transmitters on wireless communication sites. The FCC adopted as their
standard a combination of the ANSI/IEEE C95.1-1992 and NCRP 1986 standards which
is both preventative and precautionary in nature and applies to both
"Controlled/Occupational" and "Uncontrolled/General Population" exposures of
individuals - as defined in the FCC's OET Bulletin No. 65.
An RF Safety Plan has been submitted under Item RC-2 of the Contract--an
abstract of which is attached hereto as Appendix E. This safety plan fully
explains the regulatory background and the type and extent of RF exposure
analysis and testing.
The basic steps required to assure compliance with the RF exposure requirements
are summarized below. A more detailed description of the RF exposure compliance
plan is provided in Appendix E.
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
. [*****]
. [*****]
. [*****]
. [*****]
. [*****]
Appendix A - ANET Coverage Analysis Tool
Appendix B - Measurement Based Process
Appendix C - Transmit-to-Receive Isolation Analysis and Test
Appendix D - Simulcast Design and Test
Appendix E - RF Exposure Analysis and Test
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
[***** Pages A-9 to A-41]
(The remainder of this exhibit has been omitted)
<PAGE>
CONFIDENTIAL
CONTRACT
FOR
ENGINEERING AND CONSTRUCTION
OF
TERRESTRIAL REPEATER NETWORK SYSTEM
By and Between
XM Satellite Radio Inc.
and
LCC International, Inc.
EXHIBIT B - STATEMENT OF WORK (SOW)
CONFIDENTIALITY NOTICE
This attached Exhibit B - Statement of Work (SOW) - and the information
contained herein is confidential to the Parties and shall not be published or
disclosed to any third party without the express written consent of a duly
authorized representative of each party.
<PAGE>
CONFIDENTIAL
CONTRACT
FOR
ENGINEERING AND CONSTRUCTION
OF
TERRESTRIAL REPEATER NETWORK SYSTEM
EXHIBIT B - STATEMENT OF WORK (SOW)
TABLE OF CONTENTS
1. GENERAL..................................................................1
1.1 The Work...........................................................1
1.2 Owner Responsibilities.............................................1
2. PROGRAM MANAGEMENT.......................................................1
2.1 General............................................................1
2.2 Project Plan.......................................................1
2.3 Project Scheduling.................................................2
2.4 City Budget........................................................2
2.5 Quality Control and Safety Plan....................................3
2.6 Project Reports....................................................3
2.7 Electronic Maintenance of and Access to Project
Management Information.............................................4
2.8 Site Packages......................................................4
3. RF ENGINEERING...........................................................4
3.1 General............................................................4
3.2 Defined Coverage Area..............................................5
3.3 Preliminary City Network Design....................................5
3.4 Revised City Network Design........................................6
3.5 Build-To City Network Design.......................................7
3.6 City Network Testing...............................................7
Exhibit B - (SOW)
Page i
<PAGE>
CONFIDENTIAL
3.7 Final System Configuration.........................................7
4. SITE ACQUISITION SERVICES................................................8
4.1 Identification and Ranking of Candidate Sites......................8
4.2 Site Lease Agreements..............................................9
5. ARCHITECTURE AND ENGINEERING (A&E)......................................10
6. ZONING..................................................................12
6.1 Zoning Permits and Approvals......................................12
6.2 Zoning Analysis...................................................13
7. SITE CONSTRUCTION.......................................................13
7.1 General...........................................................13
7.2 Construction Management...........................................13
7.3 Building Permit...................................................14
7.4 Procurement of Materials and Inventory Management.................14
7.5 Preliminary Site Test.............................................14
7.6 Installation of Terrestrial Repeater Units and
Completion of Construction........................................14
8. INTERIM MAINTENANCE.....................................................15
9. ANTENNA POINTING........................................................15
10. SATELLITE RECEIVE ANTENNAS AND REPEATER TRANSMIT ANTENNAS...............15
11. REGULATORY APPROVALS....................................................16
11.1 Federal...........................................................16
11.2 State.............................................................17
12. NETWORK MANAGEMENT TESTING..............................................18
12.1 Guidelines and Assumptions........................................18
12.2 Test Report.......................................................19
Exhibit B - (SOW)
Page ii
<PAGE>
CONFIDENTIAL
13. SYSTEM ENGINEERING SERVICES.............................................19
13.1 Isolation Testing.................................................19
13.2 RF Engineering Test Plan and Test Procedures......................19
13.3 Refine Contractor's Design Tool...................................20
13.4 CD Radio vs. XM Radio Satellite Performance - Boston..............20
13.5 Design Preparation and System Specifications Definition...........20
14. DEFINITIONS.............................................................21
List of Attachments to Exhibit B
- --------------------------------------------------------
Attachment Description
---------- -----------
- --------------------------------------------------------
1 List of Cities
- --------------------------------------------------------
2 Owner Responsibilities Schedule
- --------------------------------------------------------
3 Master Schedule
- --------------------------------------------------------
4 Key Tasks
- --------------------------------------------------------
5 Standard Sites
- --------------------------------------------------------
6 Form of Weekly Status Report
- --------------------------------------------------------
7 Form of Monthly Status Report
- --------------------------------------------------------
8 Form of Quarterly Status Report
(Manpower Chart)
- --------------------------------------------------------
9 Form of Primary Candidate Site Package
- --------------------------------------------------------
10 Form of Lease Abstract
- --------------------------------------------------------
11 Contents of Zoning Analysis
- --------------------------------------------------------
12 Preliminary Site Test
- --------------------------------------------------------
13 Terrestrial Repeater Unit Acceptance
Test
- --------------------------------------------------------
14 Isolation Specifications
- --------------------------------------------------------
Exhibit B - (SOW)
Page iii
<PAGE>
CONFIDENTIAL
1. GENERAL
1.1 The Work.
The Work includes all services, material and equipment required to perform
the Program Management, RF Engineering, Site Acquisition Services, A&E, Zoning,
Site Construction, Interim Maintenance, Antenna services, Regulatory Compliance,
Network Management Testing and System Engineering described in Articles 1
through 13 below (each hereinafter sometimes referred to as a "Discipline") as
well as all other services and equipment required to produce for each City
identified on Attachment 1 attached hereto a complete and functioning City
Network in accordance with the Design Criteria to meet the Repeater Acceptance
Test Criteria. The Work further includes: (i) Contractor's performance of the
activities set forth in Exhibit E (Network Testing and Acceptance Criteria) of
the Contract; and (ii) Contractor's delivery to Owner of all Data and
Documentation described in Exhibit D (Data and Documentation) of the Contract.
1.2 Owner Responsibilities.
Owner understands that Contractor's timely performance of the Work is
dependent on the timely and effective completion of Owner's obligations and
timely decisions and approvals by Owner. A list of Owner's obligations and
required decisions and approvals is set forth in the Owner's Responsibilities
list attached hereto as Attachment 2.
2. PROGRAM MANAGEMENT
2.1 General.
Contractor shall provide for each City all program management services,
including scheduling, budgeting, management and oversight services described
herein, necessary for the complete development, RF engineering, design,
construction and testing of each City Network in accordance with the Design
Criteria to meet the Repeater Acceptance Test Criteria. The deliverables for
Program Management shall be as set forth in the remainder of this Section 2.
2.2 Project Plan.
(a) By letter dated April 30, 1999, Contractor provided to Owner the
Project Plan setting forth: (i) all key activities and tasks, by Discipline and
by City, to be performed by Contractor for the orderly and proper performance of
the Work and (ii) significant assumptions regarding third-party and governmental
response times.
(b) The Parties understand and agree that the Project Plan has been
developed for planning purposes only, based on all information available to the
date hereof, and subject to the assumptions described therein and normal project
assumptions.
Exhibit B - (SOW) Page 1
<PAGE>
CONFIDENTIAL
2.3 Project Scheduling.
(a) Contractor shall develop a detailed "Initial City Schedule" for each
City in the form provided by Contractor to Owner by letter dated April 30, 1999,
which shall, at a minimum: (i) specify all major tasks required to complete the
Work for such City, organized by Discipline, including the projected start and
stop dates of such tasks; (ii) identify all Milestones related to such City set
forth in Attachment 1.1 of Exhibit C (Contract Pricing, Payments and Milestone
Achievement Criteria) of the Contract and the projected date of achieving such
Milestones, (iii) identify all Key Tasks as set forth in Attachment 4 to this
Exhibit B; and (iv) identify assumptions regarding completion in accordance with
the schedule, including the performance of Owner's Responsibilities as set forth
in Attachment 2 hereof and the receipt of third party / governmental approvals,
Site Lease Agreements and similar items. For each City, the applicable Initial
City Schedule shall require that Acceptance of such City be completed on or
before the Acceptance Date and shall otherwise conform substantially to the
Master Schedule attached hereto as Attachment 3. Contractor shall provide Owner
with the Initial City Schedule for each City on or before forty-five (45)
Calendar Days after EDC. The Initial City Schedule shall be subject to Owner's
review and approval.
(b) For each City, Contractor shall prepare a monthly City Progress
Schedule showing the actual progress of the Work for such City against the
applicable Initial City Schedule and shall submit such City Progress Schedule as
part of the Monthly Status Report described in Section 2.6 below.
2.4 City Budget.
(a) For each City, Contractor shall provide Owner a preliminary City
Budget developed from the preliminary Site count derived from the approved
Preliminary City Network Design multiplied by the standard fixed price of each
applicable Standard Site, based on the mix of Standard Sites predicted by the
Parties upon completion of the applicable Preliminary City Network Design.
Standard Sites are described on Attachment 5 hereto.
(b) For each City, Contractor shall provide Owner a revised City
budget when 90% of the Primary Candidate Sites for the City are selected (i.e.,
upon completion of Milestone RF2). This revised City Budget shall be calculated
by multiplying the number of projected Sites for the City by the standard fixed
price of the applicable Standard Site with estimates for the remaining 10% of
undetermined Sites.
(c) Contractor shall provide Owner a second revised City Budget when
a Site Lease Agreement has been executed (including Master Lease Agreements) for
80% of the Sites within the Revised City Network Design (as defined in Section
3.4 below). This revised City Budget shall be calculated (i) by multiplying the
number of projected Sites for the City by the standard fixed price of each
applicable Standard Site, or (ii) based upon actual Site configuration and/or
the bill of materials for such Site, if available. The City Budget shall also
set forth Contractor's estimates of Permitted
Exhibit B - (SOW) Page 2
<PAGE>
CONFIDENTIAL
Reimbursable Expenses, Pass-Through Expenses and Unit Prices and provide
estimates for the remaining 20% of undetermined Sites.
(d) The City Budget shall be prepared for Owner's planning purposes and
not Contractor's management purposes.
2.5 Quality Control and Safety Plan.
(a) By letter dated May 15, 1999, Contractor provided Owner with a
copy of Contractor's comprehensive Quality Control Plan for the entire Project
setting forth the procedures and methodologies that Contractor shall employ
throughout the Project.
(b) By letter dated April 15, 1999, Contractor provided Owner with a
copy of Contractor's comprehensive Safety Plan for the entire Project setting
forth the procedures and methodologies that Contractor shall employ throughout
the Project.
2.6 Project Reports.
(a) Weekly Status Report. On Friday of each week, Contractor shall provide
Owner with a weekly report providing a brief summary of work status for each
Discipline (e.g., RF Engineering, Site Acquisition, Zoning, etc.) and outlining,
by Discipline and by City, major problems or other material information known to
Contractor that may require immediate attention and Contractor's proposed plan
to overcome such problems, including the information required by Section 3.4(e)
(regarding a Site's need for isolation testing) and Section 8 (b) (regarding a
Site's need for maintenance services) below. The Weekly Status Report shall
comply with the Form of Weekly Status Report attached hereto as Attachment 6.
(b) Monthly Status Report. Five business days after the end of each month,
Contractor shall provide Owner with a Monthly Status Report, including the City
Progress Schedules described in Section 2.3 above. The Monthly Status Report
shall include at a minimum: (i) a Project Budget which (a) sets forth the City
Budget as of the last update pursuant to Section 2.4(b) for each City, (b)
totals all such City Budgets and (c) sets forth the amounts invoiced to date by
Contractor, by City and for the entire Project; (ii) a summary of work
accomplished in each City during the month for each Discipline; (iii) the latest
version of the Repeater Delivery Requirements Schedule (see Section 7.6(a)
below); (iv) a schedule of all weekly status meetings, design review meetings
(provided Owner shall be given at least ten (10) Business Days notice of design
review meetings), regularly scheduled meetings and other meetings as requested
by Owner, which will be conducted during the current month; and (v) a schedule
of transmitter testing and testing conducted under Exhibit E (Network Testing
and Acceptance Criteria) which will commence during the current and coming
month. The Monthly Status Report shall be submitted in Contractor's standard
project tracking format. Each quarter the Monthly Status Report also shall
include a summary of activities for the past three months (using Contractor's
WINDS Master Tracking Report showing a summary of pertinent City-level
information). Contractor shall provide Owner
Exhibit B - (SOW) Page 3
<PAGE>
CONFIDENTIAL
with the first Monthly Status Report after completion of the first full calendar
month of Work under this Contract. The Monthly Status Report shall comply with
the Form of Monthly Status Report attached hereto as Attachment 7.
(c) Quarterly Status Report. Ten business days after the end of each
quarter, Contractor shall provide Owner with a Quarterly Status Report (Manpower
Chart). The Quarterly Status Report shall comply with the Form of Quarterly
Status Report attached hereto as Attachment 8. The first Quarterly Status Report
shall be due no sooner than January 17, 2000.
2.7 Electronic Maintenance of and Access to Project Management
Information.
Contractor shall maintain all Project Management information, including
the City Progress Schedule, Weekly Status Reports, Monthly Status Reports and
Quarterly Status Reports in an electronic format that is compatible with
Microsoft Office product, or other interface mutually agreed upon by Owner and
Contractor. In accordance with paragraph (c) of Article 17 (Intellectual
Property) of the Terms and Conditions of the Contract, Owner shall be afforded
electronic access (dial-up and/or e-mail) to all such information that may be
available using Contractor's WINDS project management software tool. Measured RF
performance data shall be maintained and made available to Owner as reasonably
requested by Owner in summary plots or other media mutually agreed upon by Owner
and Contractor.
2.8 Site Packages.
Promptly upon identification of each Primary Candidate Site and any
alternate candidate Sites in a Search Ring that complies with the requirements
of Section 4.1 below, Contractor shall provide a Site Package in the form
attached hereto as Attachment 9 for each Primary Candidate Site in such Search
Ring containing all required information available at such time. Such Site
Packages shall be updated by Contractor as the Work progresses. Upon Acceptance
of a City, the Site Package for each Site in such City shall contain complete
information on all items required by Attachment 5 hereto. In the event that an
alternate candidate Site becomes a Primary Candidate Site, Contractor shall
promptly provide a Site Package for such candidate Site and update and finalize
the Site Package in accordance with this Section 2.8.
3. RF ENGINEERING
3.1 General.
(a) Design Critieria and Optimization. For the Defined Coverage Area
of each City, Contractor shall perform all radio frequency (RF) engineering in
accordance with the Design Criteria and as required to design and build a
complete, integrated and functioning City Network that meets the Repeater
Acceptance Test Criteria set forth in Exhibit E (Network Testing and Acceptance
Criteria) of the Contract. Contractor shall undertake to optimize the
Preliminary City Network Design and Revised City Network Design (as defined
below) implementing the Design Criteria so as to meet the Repeater
Exhibit B - (SOW) Page 4
<PAGE>
CONFIDENTIAL
Acceptance Test Criteria for the lowest overall cost within schedule. For
purposes of this Section 3, Contractor shall perform RF engineering with respect
to both roof-top Sites and tower Sites, as necessary.
(b) Redesign and Reissuance of Search Ring. Pursuant to this Section
3, for each City, Contractor will identify Search Rings and pursuant to Section
4 below, Contractor will identify candidate Site(s) within each Search Ring. For
each Search Ring identified, Contractor will perform the RF Engineering work
reasonably required to either (i) select a viable Primary Site and complete the
Work required for such Site or (ii) disqualify such Search Ring as a viable area
for selection of a viable Primary Site. In the event a viable Primary Site
cannot be found and/or all required Work cannot be completed on a Site within
such Search Ring, Contractor will notify Owner of the need to redesign such
Search Ring and, upon Owner's written approval, Contractor shall redesign and
reissue the Search Ring.
3.2 Defined Coverage Area.
(a) By letter dated July 14, 1999, the Parties agreed to the Defined
Coverage Area for thirty (30) Cities. The Defined Coverage Area for each such
City defines the geographical areas in and around such City that are to receive
RF coverage from the combination of the satellites and terrestrial repeater
equipment so as to meet the Repeater Acceptance Test Criteria. The Defined
Coverage Area also defines exclusion zones ("Exclusion Zones") to which the
Parties agree Contractor will have no obligation to provide RF coverage.
(b) Owner shall provide Contractor with the Defined Coverage Area
for the remaining Cities within thirty (30) Calendar Days after EDC.
3.3 Preliminary City Network Design.
(a) Contractor shall perform the RF engineering necessary to produce
a preliminary city network design ("Preliminary City Network Design") for the
Defined Coverage Areas for the Cities in accordance with Exhibit A (Design
Criteria). For each City, the deliverables shall be the following:
(1) City assessment, including terrain plots, land use
plots, friendly sites databases, potential Exclusion
Zones and other information that affect the
implementation of the Preliminary City Network Design;
and
(2) Preliminary City Network Design, including (i) satellite
blockage plot (ii) terrestrial repeater coverage plot
(iii) Search Rings, (iv) projected usage of friendly
sites, (v) estimate of omni/other antenna usage, (vi)
potential Exclusion Zones, (vii) potential zoning
problems and other information then known to Contractor
(after diligent professional efforts under the
circumstances) that affect the implementation of the
Preliminary City
Exhibit B - (SOW) Page 5
<PAGE>
CONFIDENTIAL
Network Design. In developing the Preliminary City
Network Design, Contractor shall use Contractor-provided
coverage prediction tools, such as the satellite
blockage tool and a microcell model for use in the
Manhattan design.
(b) Owner and its consultants will review the Preliminary City
Network Design as submitted by Contractor. Owner will approve the Preliminary
City Network Design as submitted by Contractor or direct Contractor to revise
the Defined Coverage Area or declare one or more Exclusion Zones. Contractor
shall revise the Preliminary City Network Design as directed by Owner and
resubmit the same to Owner for review and approval or direction by Owner in
accordance with this Section. The approved Preliminary City Network Design shall
be used in subsequent design processes.
(c) As of EDC, Contractor has provided to Owner the Preliminary City
Network Designs for Tier 1 and Tier 2 Cities. Subject to paragraph (b) above,
Contractor will provide to Owner the Preliminary City Network Designs for Tier 3
Cities on or before August 24, 1999.
3.4 Revised City Network Design
(a) For each City, during Contractor's performance of RF
Engineering, Site Acquisition Services and Zoning for such City, Contractor
shall collect additional data and perform additional analysis (including
propagation testing from candidate Sites) to revise the Preliminary City Network
Design in accordance with the Design Criteria. Based upon information obtained
during the performance of RF Engineering, Site Acquisition Services and Zoning,
the results of additional analysis and comments received from Owner, Contractor
shall revise the Preliminary City Network Design as required to meet the Design
Criteria. The revised Preliminary City Network Design shall be called the
Revised City Network Design.
(b) The Revised City Network Design will also identify those Sites
to be constructed using a tower pursuant to the Master Tower Construction and
Lease Agreement.
(c) In developing the Revised City Network Design for each City,
Contractor shall set up test transmitters at each Primary Candidate Site
identified in the Preliminary City Network Design and measure the actual RF
coverage from the Site along traffic routes agreed to by the Parties. For each
Site, the deliverable shall be a Site/Cluster Test Report, including a signal
strength plot showing the coverage provided by that Site. The coverage so
measured shall be the basis for the design of further Sites within the relevant
cluster.
(d) For each City, Contractor shall provide Owner with a copy of a
Revised City Network Design for Owner's review and acceptance. Owner will review
the Revised City Network Design as submitted by Contractor. Owner will approve
the Revised City Network Design as submitted by Contractor or direct Contractor
to add
Exhibit B - (SOW) Page 6
<PAGE>
CONFIDENTIAL
Sites so as to satisfy the Design Criteria, revise the Defined Coverage Area
(subject to the change order process set forth in Article 11 of the Terms and
Conditions), revise any Exclusion Zones and/or delete Sites and declare further
Exclusion Zones. Contractor shall revise the Revised City Network Design as
directed by Owner and resubmit the same to Owner for review and written approval
or direction by Owner in accordance with this Section.
(e) In the event a Site requires isolation testing pursuant to
Isolation Specifications attached hereto as Attachment 14, Contractor shall
notify Owner through the Weekly Status Report and Contractor shall perform such
isolation testing.
(f) The foregoing may be accomplished on a Cluster-by-Cluster basis.
In the event a Cluster design does not meet the Design Criteria or exceeds cost
or schedule guidelines, Contractor shall report such matters as exceptions in
the Weekly Status Report.
3.5 Build-To City Network Design.
(a) Contractor shall proceed to complete Site Acquisition Services,
Zoning and Regulatory Compliance for the Primary Candidate Sites identified in
the Revised City Network Design. When all required Site Acquisition Services,
Zoning and Regulatory Compliance have been completed, Contractor shall revise
the Revised City Network Design to reflect the result of such services. The
revised Revised City Network Design shall be called the Build-To City Network
Design.
(b) For each City, Contractor shall provide Owner with a copy of the
Build-To City Network Design for Owner's review and acceptance. Owner will
review the Build-To City Network Design as submitted by Contractor. Owner will
approve the Build-To City Network Design as submitted by Contractor or direct
Contractor to revise the Build-To City Network Design so as to meet the Design
Criteria. Contractor shall revise the Build-To City Network Design as directed
by Owner and resubmit the same to Owner for review and written approval or
direction by Owner in accordance with this Section.
(c) The foregoing may be accomplished on a Cluster-by-Cluster basis.
3.6 City Network Testing
(a) For each City, Contractor shall perform testing on the City
Network in accordance with Exhibit E (Network Testing and Acceptance Criteria)
of the Contract.
3.7 Final System Configuration
(a) At the time Contractor provides Owner with the Repeater
Acceptance Test Report described in Exhibit E (Network Testing and Acceptance
Criteria), Contractor shall (i) provide Owner a copy of market databases,
including site characteristics and technical parameters used in ANET for
propagation modeling and
Exhibit B - (SOW) Page 7
<PAGE>
CONFIDENTIAL
(ii) identify the morphology and topology databases used in performing
propagation analyses under this Contract.
(b) After Acceptance of all City Networks has been achieved and for
so long as Contractor is licensed to use the ANET modeling tool and such tool is
maintained by a third party, at Owner's request pursuant to a duly executed task
order, Contractor shall perform propagation analysis using the ANET modeling
tool at the then prevailing market rates for such services.
4. SITE ACQUISITION SERVICES
For each Search Ring, Contractor will perform the Site Acquisition
Services reasonably required to either (i) select a viable Primary Site and
complete the Work required for such Site or (ii) disqualify such Search Ring as
a viable area for selection of a viable Primary Site.
4.1 Identification and Ranking of Candidate Sites.
For the Search Rings in each City, Contractor shall perform the following:
(a) Candidate Identification. In the course of performing Site
Acquisition Services, Contractor shall, as an initial matter, identify three
candidates for Normal-Area Sites, up to two candidates for Medium-Area Sites and
one candidate for Wide-Area Sites (as those sites are defined in Exhibit C)
(provided that Contractor may use only one candidate Site when it meets Owner's
requirements from the outset) within each Search Ring identified in the
Preliminary City Network Design. For each Search Ring, Contractor shall identify
and evaluate candidate Sites as Primary Sites and secondary candidate Sites
based on the following criteria: (i) compliance with the Site Lease Agreement
Term Sheet provided by Owner to Contractor by letter dated June 11, 1999; (ii)
availability of zoning; (iii) site constructability (including preliminary
structural, environmental suitability and accessibility to power and grounding);
and (iv) ability to minimize the need to perform RF interference analysis. For
each Primary Site evaluated and identified, the deliverable shall be a completed
copy of Contractor's standard Candidate Site Ranking Form and Site Survey Form.
For alternate candidate Sites evaluated and identified, Contractor shall provide
Owner a completed copy of Contractor's standard Candidate Site Ranking Form and
Site Survey Form, but only to the extent completed by Contractor In the event
Contractor is unable to identify a Primary Site from the candidate Sites
initially identified pursuant to this paragraph and/or the Work required to
complete a Primary Site identified from such candidate Sites cannot be
completed, Contractor will notify Owner and the Parties will review the
situation and, upon Contractor's recommendation and Owner's written concurrence,
Contractor shall either continue efforts to identify a Primary Site within the
Search Ring or disqualify the Search Ring and redesign and reissue the Search
Ring.
(b) Site Qualification. Contractor shall "Caravan" candidate Sites,
that is, obtain RF Engineering acceptance and rank candidate Sites for initial
suitability with respect to RF Engineering, Site Acquisition, Architecture and
Engineering, Zoning,
Exhibit B - (SOW) Page 8
<PAGE>
CONFIDENTIAL
Regulatory Compliance and Construction and, based on such suitability ranking,
select a Primary Candidate Site. The Site so selected shall be called a "Primary
Candidate Site" or a "Primary Site." For each Search Ring, the deliverable shall
be a completed copy of Contractor's standard Candidate Site Ranking Form and the
selection of such Primary Candidate Site, which shall be reported on
Contractor's Project Milestone Tracking Report (WINDS). The completed Site
Ranking Form shall identify those candidate Sites that likely cannot be
constructed as Standard Sites. In the event Contractor has performed the
services described in this paragraph within a Search Ring on three (3) Primary
Sites if Normal-Area Sites, two (2) Primary Sites if Medium-Area Sites and one
(1) Primary Site if Wide-Area Sites and all of such Primary Sites have been
abandoned or disqualified through no fault of Contractor, then Contractor shall
notify Owner and provide Owner with its recommendation as to how to proceed.
Contractor shall not, without Owner's prior written approval, perform the
services under this paragraph within a Search Ring for more than three (3)
Primary Sites if Normal-Area Sites, two (2) Primary Sites if Medium-Area Sites
and one (1) Primary Site if Wide-Area Site.
4.2 Site Lease Agreements.
(a) Contractor shall identify the Landlord for each Primary Site.
Contractor shall use reasonable efforts to obtain the Landlord's agreement to
negotiate from a Form of Site Lease Agreement provided by Owner to Contractor by
letter dated June 11, 1999. Any option lease agreement presented to Owner
hereunder shall, at a minimum, be in accordance with the terms set forth in the
Site Lease Agreement Term Sheet provided by Owner to Contractor by letter dated
June 11,1999 and shall permit Contractor to commence Site design, entitlements
(zoning and permits) and pre-construction tasks (utility coordination,
inter-modulation, telco, etc.) during the option period. Contractor shall use
reasonable commercial efforts to provide that the commencement date of Owner's
rent obligations to the Landlord under each option lease agreement shall
coincide with the commencement of Contractor's construction activities at such
Site. Execution of any such option lease agreement shall be in Owner's sole
discretion. For each Site, the deliverable shall be an executable Site
Acquisition Agreement in accordance with the Site Lease Agreement Term Sheet.
(b) During negotiation of a Site Lease Agreement, any material
deviations from the Site Lease Agreement Term Sheet must be reviewed and
approved by Owner. Upon completion of negotiation of each Site Lease Agreement,
such Site Lease Agreement shall be presented to Owner, together with a lease
abstract in the form set forth as Attachment 10 hereto, which shall set forth
deviations from the Site Lease Agreement Term Sheet. If the Site Lease Agreement
is acceptable to Owner, Owner shall execute the Site Lease Agreement. Owner's
execution and delivery of the Site Lease Agreement for any Site shall constitute
approval of said Site Lease Agreement and of any deviation from the Site Lease
Agreement Term Sheet.
(c) Contractor shall seek to locate Landlords with multiple
candidate Sites so as to enter into master Site Lease Agreements that cover
multiple candidate sites ("Master Site Lease Agreement"). This effort shall be
integrated with the development of the Revised City Network Design so as to
create a Revised City Network Design meeting
Exhibit B - (SOW) Page 9
<PAGE>
CONFIDENTIAL
all Design Criteria while requiring the negotiation and execution of the minimum
number of Site Lease Agreements.
(d) Contractor shall provide a preliminary title report. Pursuant to
a duly executed task order, Contractor shall provide the type and level of
additional title assurance (e.g., title insurance commitment and title
insurance) as may be agreed to by the Parties.
(e) In the event Contractor has performed the services described in
this Section 4.2 within a Search Ring on three (3) Primary Sites if Normal-Area
Sites, two (2) Primary Sites if Medium-Area Sites and one (1) Primary Site if
Wide-Area Sites and all of such Primary Sites have been abandoned or
disqualified through no fault of Contractor, then Contractor shall notify Owner
and provide Owner with its recommendation as to how to proceed. Contractor shall
not, without Owner's prior written approval, perform the services under this
Section 4.2 within a Search Ring for more than three (3) Primary Sites if
Normal-Area Sites, two (2) Primary Sites if Medium-Area Sites and one (1)
Primary Site if Wide-Area Site.
5. ARCHITECTURE AND ENGINEERING (A&E)
(a) Contractor shall provide all architectural and engineering design
services necessary to design each Site.
(b) As required by Landlord or governmental entities or as indicated by
Contractor's initial assessment of a Site (including the initial structural and
environmental assessment) and upon Owner's prior authorization by a duly
executed task order, Contractor will provide or cause to be provided a complete
structural analysis of such Site adequate to confirm that the existing
infrastructure has the structural capacity to accommodate the design loads of
the terrestrial repeater unit and antennas to be installed on such Site.
(c) Contractor shall analyze the restrictions imposed by the Landlord for
each Site to ensure that the completed design complies with such restrictions,
including but not limited to those set forth in the applicable Site Lease
Agreement.
(d) Contractor shall use reasonable commercial efforts to produce a design
for each Site that is in accordance with one of the Standard Sites described on
Attachment 5 attached hereto.
(e) In designing each Site, Contractor shall use reasonable commercial
efforts to maximize: (i) efficient use of the existing infrastructure; (ii)
operational functionality; and (iii) the likelihood that construction of the
Site in accordance with the Construction Documents for such Site will not
require a quantity of materials in excess of the quantity required for the
applicable Standard Site.
(f) Contractor will prepare "Construction Documents" consisting of final
construction Drawings and Specifications necessary for construction of each
Site. These Construction Documents will be complete and detailed and shall
include:
Exhibit B - (SOW) Page 10
<PAGE>
CONFIDENTIAL
(1) bill of materials;
(2) Site layout (showing placement of coax cables, equipment
and antennas);
(3) power panel and telecommunications box details,
penetrations and routing;
(4) electrical one line diagram;
(5) grounding plan and supplemental notes;
(6) installation notes for repeater, antennas, dishes and
coax;
(7) antenna, dish, repeater enclosure mounting details and
associated notes;
(8) Site specific installation notes;
(9) HVAC requirements for internal installation;
(10) Construction Drawings as described in paragraph (h)
below; and
(11) As-Built Drawings as described in paragraph (j) below.
(g) For each Primary Site, Contractor shall, as needed to support Site
Acquisition Services and Zoning Services, produce exhibit drawings ("Exhibit
Drawings"). In the case of Standard Sites, the Exhibit Drawings shall contain
only the level of detail required to support such services, it being understood
that it is the intention of the Parties that, subject to Contractor's ability to
meet the Delivery Schedule, Owner will not incur the expense of complete,
detailed drawings (as described in paragraph (h) below) required for
construction of a Primary Site unless the Permits for such Site have been issued
or are likely to be issued. In the case of candidate Sites that are not Standard
Sites, following the site caravan exercise, Contractor shall submit to Owner,
with the Candidate Site Ranking Form, a request for approval to prepare
Construction Drawings (as defined below). Owner shall approve or reject such
request in accordance with Attachment 2 (Owner Responsibilities) hereto.
(h) For each Primary Site for which Contractor has reasonably determined
that the necessary Permits are likely to be obtained, Contractor shall produce
at least one set of professional architectural/engineer stamped construction
drawings ("Construction Drawings" or "CD") sufficient to obtain a building
permit and allow for construction of the Site.
(i) All design services shall be performed by individuals licensed to
perform such services in the jurisdiction in which such services are performed.
Exhibit B - (SOW) Page 11
<PAGE>
CONFIDENTIAL
(j) During Site Construction, Contractor shall maintain and update
periodically a designated set of drawings with completed-to-date "as-built"
notations and information (red lined) (the "As-Built Drawings"). These As-Built
Drawings will be delivered to Owner as part of the final Site Package.
(k) Contractor will provide all additional architectural and engineering
services as it relates to site design for Sites that differ from the Standard
Sites.
(l) In the event Contractor has performed the services described in this
Section 5 within a Search Ring on three (3) Primary Sites if Normal-Area Sites,
two (2) Primary Sites if Medium-Area Sites and one (1) Primary Site if Wide-Area
Sites and all of such Primary Sites have been abandoned or disqualified through
no fault of Contractor, then Contractor shall notify Owner and provide Owner
with its recommendation as to how to proceed. Contractor shall not, without
Owner's prior written approval, perform the services described in this Section 5
within a Search Ring for more than three (3) Primary Sites if Normal-Area Sites,
two (2) Primary Sites if Medium-Area Sites and one (1) Primary Site if Wide-Area
Site.
6. ZONING
For each Search Ring, Contractor will perform the Zoning Services
reasonably required to either (i) select a viable Primary Site and complete the
Work required for such Site or (ii) disqualify such Search Ring as a viable area
for selection of a viable Primary Site.
6.1 Zoning Permits and Approvals.
(a) For each Primary Candidate Site, Contractor shall use
commercially reasonable efforts to obtain all local and county zoning, licenses,
and/or approvals required to construct each such Site ("Permits"). Contractor
shall not commence construction of any Site before Contractor has obtained all
Permits required for such Site.
(b) Contractor shall prepare and submit any plans, applications,
proposals, statements or other documents for submission to the proper
governmental officials in order to obtain all required Permits. Contractor shall
prepare appropriate responses to any staff report generated as a result of the
applications.
(c) As part of the Zoning process for each Site, Contractor shall
meet, as needed, with the staff members of each governmental office and agency
that has review and oversight responsibility for the proposed Site. To the
extent necessary, Contractor shall conduct and attend preliminary meetings with
applicable government officials and citizens groups (as required) so as to
advise such local and county officials and citizens groups of the plans for the
construction of the Site.
(d) In addition, Contractor shall attend any hearing, proceeding or
meeting required to procure any required Permits.
Exhibit B - (SOW) Page 12
<PAGE>
CONFIDENTIAL
(e) Contractor shall be responsible for re-permitting and/or
obtaining permit extensions as required to maintain permit validity during
project delays or option periods.
6.2 Zoning Analysis.
For each jurisdiction in which a Site(s) will be located, Contractor shall
prepare a detailed analysis, as described in Attachment 11 hereto, of the
Permits required to construct a Site(s) within such jurisdiction ("Zoning
Analysis"). Contractor shall provide Owner with the Zoning Analysis in
accordance with the Initial City Schedule.
7. SITE CONSTRUCTION
7.1 General.
(a) To the extent required to construct each Site in accordance with
the Construction Documents for such Site, Contractor shall provide all (except
for equipment to be procured by Owner as set forth in Attachment 2 hereto): (i)
materials, supplies, apparatuses, appliances, equipment, tools and implements;
(ii) labor, management and supervision; (iii) transportation, storage and all
other services; (iv) facilities, including sanitary facilities; (v) temporary
protection; (vi) protection and temporary closures; (vii) cleanup and trash
removal; (viii) communications; and (ix) material and personnel hoisting
equipment.
(b) In performing Site construction Work, Contractor shall comply
with all Laws and all Landlord requirements, such as building access
restrictions and all obligations imposed by the Site Lease Agreement related to
the performance of construction activities.
(c) In the case of Sites that are not Standard Sites ("Non-Standard
Sites"), such Sites shall be constructed in accordance with the process set
forth in Section 7 of Exhibit C (Contract Pricing, Payments and Milestone
Achievement Criteria)
7.2 Construction Management.
For Primary Candidate Sites in the Revised City Network Design, Contractor
shall, as needed to support the RF Engineering, Site Acquisition, preliminary
A&E, logistics, material management and Zoning services, perform the following:
(a) participate in Site visits, constructability reviews, site
investigations and ranking /business selection decisions;
(b) be responsible for coordinating with local utility providers to
order the telecommunications circuits, power routing and related utility meters
required to operate each Site based on Owner-furnished criteria; and
(c) oversee construction civil design processes, construction
contractor selection, management and quality control of the construction
processes.
Exhibit B - (SOW) Page 13
<PAGE>
CONFIDENTIAL
7.3 Building Permit.
Contractor shall use commercially reasonable efforts to obtain all
building permits required to construct each Site. Contractor shall not commence
construction of any Site before Contractor has obtained all required building
permits for such Site. Contractor shall be responsible for re-permitting and/or
obtaining building permit extensions as required to maintain permit validity
during project delays or option periods.
7.4 Procurement of Materials and Inventory Management.
Contractor shall be responsible for the procurement, receiving, inspection
and warehousing (as necessary) of all materials and equipment required for
construction of the Sites, including the satellite receive antennas and
satellite transmit antennas referred to in Section 10 below (except the
equipment to be procured by Owner as set forth in Attachment 2).
7.5 Preliminary Site Test.
Upon Contractor's completion of the construction of the Site (except for
the installation of the terrestrial repeater unit) in accordance with the
Construction Documents, Contractor shall conduct a successful Preliminary Site
Test of the Site in accordance with the procedures set forth on Attachment 12
hereto. Within thirty (30) Calendar Days after completion of such test,
Contractor shall deliver to Owner a Preliminary Site Test Report, setting forth
the results.
7.6 Installation of Terrestrial Repeater Units and Completion of
Construction.
(a) Contractor shall deliver to Owner, for Owner's review and
approval, a Repeater Delivery Requirements Schedule for the timely delivery of
terrestrial repeater units to the individual Sites. Owner shall review the
Repeater Delivery Requirements Schedule and either approve it or reject it
stating the reason for such rejection. In the event Owner rejects the proposed
Repeater Delivery Requirements Schedule, the Parties shall work together to
develop such schedule. Owner shall deliver terrestrial repeater units in
accordance with the Repeater Delivery Requirements Schedule agreed to by Owner.
(b) Contractor will receive each terrestrial repeater unit from the
repeater manufacturer at the street level/loading dock or similar receiving area
of the Site where the terrestrial repeater unit is to be installed and
Contractor shall transport the terrestrial repeater unit from such receiving
area to the location where it is to be installed at the Site. Contractor shall
provide Owner with written confirmation of the delivery of each terrestrial
repeater unit to Contractor. Contractor shall connect the terrestrial repeater
unit to all antennas and all required utilities and perform the Terrestrial
Repeater Unit Test in accordance with the procedures set forth on Attachment 13
hereto. Contractor shall either accept or reject the terrestrial repeater unit
based upon the results of the Terrestrial Repeater Unit Acceptance Test.
Contractor shall notify Owner orally
Exhibit B - (SOW) Page 14
<PAGE>
CONFIDENTIAL
and in writing promptly in the event that Contractor rejects any Terrestrial
Repeater Unit, providing Owner with the results of the Terrestrial Repeater Unit
Acceptance Test.
(c) Upon Owner's request pursuant to a duly executed task order,
Contractor will support Owner in its efforts with the repeater manufacturers to
resolve any repeater failure.
(d) As part of the Repeater Delivery Requirements Schedule required
above, Contractor shall, for each terrestrial repeater unit delivered to
Contractor, track the identification and location of each such unit (and any
change to such location), the delivery of each unit to the appropriate Site, the
disposition (acceptance or rejection) of such unit and any maintenance required
on such unit during performance of the Work.
(e) "Completion of Construction" for each Site shall be deemed to
have occurred when all requirements of this Section 7 have been completed with
respect to such Site.
8. INTERIM MAINTENANCE
(a) Commencing on the first full month following Completion of
Construction of a Site in accordance with Section 7.6(e) above and thereafter
until Acceptance of such City in accordance with Article 8 of the Terms and
Conditions of the Contract, Contractor shall conduct a monthly physical
inspection of each such Site. Such inspection shall include a visual examination
of all equipment, cables, antenna, materials and other items of Work situated at
the Site (including without limitation, the repeaters) for the purpose of
identifying any damage, vandalism or disrepair incurred by any such item of
Work.
(b) In the Weekly Status Report required by Article 2.6(a) above,
Contractor shall identify any problems (such as damage, vandalism or disrepair)
identified as a result of such inspection that require corrective action and
advise Owner as to the manner in which Contractor recommends remedying the same.
Pursuant to a duly executed task order, Contractor shall remedy the same.
9. ANTENNA POINTING
As requested by Owner, on a Site-by-Site basis, Contractor shall also
activate the terrestrial repeater unit and perform final antenna alignment
approximately six (6) weeks prior to the commencement of Single Satellite
Testing and/or Live Testing on such Site or commencement of commercial revenue
service, whichever occurs first.
10. SATELLITE RECEIVE ANTENNAS AND REPEATER TRANSMIT ANTENNAS
(a) Contractor shall procure, install and provide all labor,
materials, transportation and handling services for the satellite receive
antennas and repeater
Exhibit B - (SOW) Page 15
<PAGE>
CONFIDENTIAL
transmit antennas described in Attachment 9.1 of Exhibit C (Contract Pricing,
Payments and Milestone Achievement Criteria).
(b) Contractor shall select the antennas to be installed at each
Site based on the assumptions set forth in Attachment 9.1 of Exhibit C (Contract
Pricing, Payments and Milestone Achievement Criteria). Attachment 9.1 of Exhibit
C identifies standard antennas and special antennas. Contractor shall not
procure a special antenna for any Site without Owner's prior written approval.
11. REGULATORY APPROVALS
For each Search Ring, Contractor will perform the Regulatory Compliance
Services reasonably required to either (i) select a viable Primary Site and
complete the Work required for such Site or (ii) disqualify such Search Ring as
a viable area for selection of a viable Primary Site. Contractor shall perform
the following Regulatory Compliance tasks for each Site.
11.1 Federal.
(a) Environmental, Airspace, FCC and RF Exposure. Contractor shall
perform the Regulatory Compliance services including environmental, airspace,
FCC, and RF exposure compliance requirements, as follows:
(1) Contractor shall analyze the regulatory policy and
enforcement environment for environmental, airspace,
tower registration, and RF exposure issues. This process
is initiated by gathering updated Federal regulation
changes supported with geographically oriented
investigations at the state and local levels. The
deliverable will be a summary report of the regulatory
policy and enforcement environment (the "Analysis of
Policy and Enforcement Report").
(2) Contractor shall present policy and process
recommendations along with a risk analysis to Owner for
approval. Contractor will then work with Owner to
develop deliverables, including a System Level
Compliance Plan defining (a) the criteria for regulatory
compliance, (b) the predesign guidelines, (c) the
process flow for regulatory management, and (d) the
process for information dissemination and training.
(3) Contractor will perform aNEPA Initial Screening.
Contractor will engage and manage an environmental
contractor who will perform an Environmental Transaction
Screening for each Primary Candidate Site. These
screenings will serve two purposes; first, to determine
if the proposed use will have an environmental
Exhibit B - (SOW) Page 16
<PAGE>
CONFIDENTIAL
impact according to CFR 1.1307(a); and, secondly, if the
Site has such an environmental impact, Contractor will
recommend either abandoning the Site or proceeding with
a site feasibility analysis. Contractor will review site
investigation reports and ensure completion of all work
in a timely manner.
(4) Pursuant to a duly executed task order, Contractor will
engage and manage an environmental contractor who will
complete a Site Feasibility Analysis on raw land sites
including completion of Phase I and geo-technical
investigations for each Primary Candidate Site as
required. The evaluation will also provide information
pursuant to CERCLA for appropriate innocent purchaser
defenses provided within the CERCLA Regulations.
Contractor will review site investigation reports and
ensure completion of all Work in a timely manner.
(5) Contractor will complete FAA airspace study for each
Primary Candidate Site. If the airspace study indicates
that a FAA Impact Study is required, then Contractor
will engage a FAA consultant to complete the impact
study. Contractor will review FAA studies and ensure
completion of all Work in a timely manner.
(6) To evaluate RF Exposure compliance, Contractor will
complete (a) a baseline compliance evaluation and
characterization of each Primary Candidate Site ("RF
Exposure Site Characterization"), (b) a mitigation plan
for any Primary Candidate Sites potentially not in
compliance, (c) for each constructed Site, Contractor
will prepare a Site RF Safety Plan and (d) all
documentation required for regulatory compliance.
(b) Other. Contractor will identify, and send written notification
to Owner of, any other federal regulatory approvals required in connection with
the Project under federal environmental protection laws or by any federal
regulatory authority implementing such laws. Upon the written request of Owner
and pursuant to a duly executed task order, Contractor will proceed with all
activities required to comply with such laws and obtain such regulatory
approvals.
11.2 State.
Contractor will identify, and send written notification to Owner, of any
state regulatory approvals required in connection with the Project under state
environmental protection laws or by any state regulatory authority implementing
such laws. Upon written request of Owner and pursuant to a duly executed task
order, Contractor will
Exhibit B - (SOW) Page 17
<PAGE>
CONFIDENTIAL
proceed with all activities required to comply with such laws and obtain such
regulatory approvals.
12. NETWORK MANAGEMENT TESTING
Upon Owner's written request, and as more fully set forth in the
applicable duly executed task order, Contractor shall perform Network Management
System (NMS) testing at those Sites within a City set forth in such task order,
to assure that the overall NMS is operating properly, including its fault
alarms; such testing shall be performed in accordance with a test procedure that
will be jointly developed by Owner, Contractor and the NMS supplier(s) ("NMS
Test Procedures").
12.1 Guidelines and Assumptions.
The NMS Test Procedures shall include technologically-appropriate tests on
all material systems and subsystems of the NMS, and shall be based on the
guidelines and assumptions listed below: Most faults internal to the repeater
will be simulated either from the Network Operating Center (the "NOC") or
locally by a simple process.
(a) Faults external to the repeater will be manually initiated at
the Sites, including:
(1) Satellite LNA fault (if applicable)
(2) Receive cable fault
(3) Transmission cable fault
(4) Power/emergency power fault
(5) Telco line fault/backup circuit (if applicable)
(6) Ground fault
(7) Security system fault (if applicable)
(8) Repeater unauthorized entry fault
(b) NOC operation will have been verified by the NOC vendor prior to
the City-wide NOC testing process.
(c) Contractor personnel will operate the NOC and will run the test
sequence at the NOC during the NMS testing.
(d) If specified in the task order, City-wide NMS testing will be
coincident with Repeater Acceptance Testing.
(e) Actual equipment faults and system-level checks will be in
accordance with the final NMS configuration and capabilities.
Exhibit B - (SOW) Page 18
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
12.2 Test Report.
Within ten (10) Business Days of the completion of the NMS Test
Procedures, Contractor shall deliver to Owner a test report for the City-Network
that documents the fault and system level test results for each Site within the
City. Upon Owner's request, Contractor shall deliver to Owner the data that
underlies such report, which shall include one or more summary reports generated
at the NOC.
13. SYSTEM ENGINEERING SERVICES
In addition to the services set forth in this Exhibit B, Contractor shall
perform the following:
13.1 Isolation Testing.
Contractor shall perform isolation testing on three Sites to be
identified by Contractor and approved by Owner. Two Sites shall be standard
Sites, one of Standard Site 1 and the other of Standard Site 2; the third Site
shall be a High-Power Site. Standard Site Types 1 and 2 use a [*****] channel
transmitter and have the configurations set forth in Attachment 5 hereto.
High-Power Sites use [*****] channel transmitter. The purpose of the isolation
testing is to define "minimum separation distances" between the terrestrial
transmit antenna and terrestrial satellite receive dishes of each such type of
Site. "Minimum separation distance" means the minimum distance between the
terrestrial transmit antenna and terrestrial satellite receive dish at which the
measured isolation margin is as defined in Doc. No. DARS-ENG-XMSR-026-41500,
Ver.1, to be provided by Owner to Contractor. Contractor shall submit to Owner,
for Owner's review and approval, a test plan and test procedures for isolation
testing. Contractor shall revise the isolation test plan and procedures in
accordance with Owner's comments. The deliverables shall be the isolation test
plan and procedures and a package for each tested Site, such package to include
a description of the test procedures used, the measured test results and summary
of findings.
13.2 RF Engineering Test Plan and Test Procedures.
(a) Contractor shall develop a test plan and test procedures for
validating a level of coverage reliability as agreed by the Parties in the
Defined Coverage Area in each City Network.
(b) The deliverable shall be a document setting forth the test plan
and test procedures, including equipment requirements, pass/fail test criteria
and identification of the data to be collected and provided to Owner.
(c) Contractor shall present a draft of such test plan and test
procedures to Owner for Owner's review and comment. Contractor shall revise such
plan
Exhibit B - (SOW) Page 19
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
and procedures in accordance with Owner's comments. Contractor shall apply the
revised test plan and test procedures to the City Network in Pittsburgh, PA and
Washington, DC and Contractor shall present to Owner the data collected
therefrom, along with any suggested modifications to the revised test plan and
test procedures. Contractor shall revise the revised test plan and test
procedures in accordance with Owner's comments. The final test plan and test
procedures shall be subject to Owner's written approval.
13.3 Refine Contractor's Design Tool.
(a) Contractor shall refine the simulcast prediction capabilities of
Contractor's design tool so as to provide the capability to predict areas in
each Defined Coverage Area that may exceed the required simulcast delay
tolerance of [*****]. Contractor shall validate the refined simulcast delay
prediction capabilities of Contractor's design tool in the Defined Coverage Area
for Pittsburgh, PA and Los Angeles, CA.
(b) The deliverable shall be a document detailing the simulcast
delay analysis process used for RF network design, along with the analysis
results for such two Cities. In the event the analysis results for such two
Cities show that the refined Contractor design tool does not accurately predict
those areas that may exceed the simulcast delay tolerance set forth above, the
Parties will discuss and agree upon appropriate steps to further improve such
Contractor design tool's capabilities to a mutually acceptable level.
13.4 [*****] vs. XM Radio Satellite Performance - [*****].
Contractor will perform an in-depth technical analysis to determine
the satellite receive performance of [*****] Owner's satellites in [*****].
Contractor will utilize a building data base of the [*****] to enhance the
accuracy of the test simulation results and perform software adaptations in
processing the data. The study shall be conducted for two areas as agreed to by
the Parties. Contractor will provide Owner with a description of the process it
intends to use in performing this analysis. Contractor will revise such analysis
process in accordance with Owner's comments. Such Test Procedures will be
subject to Owner's prior written approval. Deliverables include a Technical
Report, setting forth Contractor's analysis, a detailed description of its
findings and its conclusions regarding the strengths and weaknesses of satellite
coverage for the satellites of Owner and [*****].
13.5 Design Preparation and System Specifications Definition.
(a) Contractor shall work with Owner to define critical system
engineering specifications and technical parameters in preparation for the
full-scale design and deployment of the Terrestrial Repeater Network. Critical
system engineering
Exhibit B - (SOW) Page 20
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
specifications and technical parameters shall include the following: final link
budgets for the repeaters and the satellites, final receiver sensitivity
threshold figures, identification of antennas to be used in the design and
identification of transmit/receive isolation requirements. The deliverables
shall be (1) an interim report setting forth the critical system engineering
specifications and technical parameters as agreed to by the Parties; and (2) a
final report validating (through the cluster testing described in (b) below)
such agreed-upon specifications and parameters and including any Owner-requested
modifications to such specifications and parameters. Included in this definition
phase are such items as the measurements-based coverage design criteria, the
antennas to be used in the design, and the transmit-to-receive isolation
requirements.
(b) In addition, Contractor shall design a cluster of sites in the
City in which the three SV Test sites are located plus selected other test sites
as needed to obtain the test data. "Cluster" testing shall be performed on 5-8
Sites (including the three existing SV Test sites), utilizing test transmitters
(which have at least [*****] of output power) to simulate the transmit power of
the repeaters and extensive drive testing to gather additional test data that
will be used to finalize the Design Criteria. Owner will contact Stanford
Telecom and request permission to use the prototype repeaters in connection with
such testing. The deliverable shall be a report validating the fade margins and
other environmentally determined parameters in the repeater link budget. The
cluster testing process shall be used to further define the critical system
engineering specifications and technical parameters to be developed under (a)
above.
14. DEFINITIONS
Capitalized terms used herein shall have the meaning set forth below or in
the Terms and Conditions of the Contract.
(a) "Acceptance" has the meaning set forth in Article 8 of the Terms
and Conditions of the Contract.
(b) "Analysis of Policy and Enforcement Report" has the meaning set
forth in Section 11.1 above.
(c) "As-Built Drawings" has the meaning set forth in Section 5
above.
(d) "Build-To City Network Design" has the meaning set forth in
Section 3.5 above.
(e) "Caravan" has the meaning set forth in Section 4.1 above.
(f) "City Budget" has the meaning set forth in Section 2.4 above.
Exhibit B - (SOW) Page 21
<PAGE>
CONFIDENTIAL
(g) "Cluster" means approximately 6-8 Sites adjacent to each other
in a City.
(h) "Construction Documents" has the meaning set forth in Section
5(f) above.
(i) "Defined Coverage Area" has the meaning set forth in Section 3.2
above.
(j) "Design Criteria" has the meaning set forth in Section 2 of
Exhibit A (Network Design Criteria and Process).
(k) "Discipline" has the meaning set forth in Section 1.1 above.
(l) "Exclusion Zones" has the meaning set forth in Section 3.2
above.
(m) "Exhibit Drawings" has the meaning set forth in Section 5 above.
(n) "Master Tower Construction and Lease Agreement" means the
agreement to be executed between Owner and Contractor for the construction and
lease of towers.
(o) "Pass-Through Expenses" has the meaning set forth in Exhibit C
(Contract Pricing, Payments and Milestone Achievement Criteria).
(p) "Permits" has the meaning set forth in Section 6 above.
(q) "Permitted Reimbursable Expenses" has the meaning set forth in
Exhibit C (Contract Pricing, Payments and Milestone Achievement Criteria).
(r) "Preliminary City Network Design" has the meaning set forth in
Section 3.3 above.
(s) "Primary Candidate Site" or "Primary Site" shall have the
meaning set forth in Section 4.1(b) above.
(t) "Repeater Acceptance Test Criteria" has the meaning set forth in
Exhibit E (Network Testing and Acceptance Criteria).
(u) "Revised City Network Design" has the meaning set forth in
Section 3.4 above.
(v) "Search Ring" means a map showing a geographic area within which
candidate Sites are to be located.
(w) "Unit Prices" has the meaning set forth in Exhibit C (Contract
Pricing, Payments and Milestone Achievement Criteria)
Exhibit B - (SOW) Page 22
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
ATTACHMENT 1
LIST OF CITIES
[*****]
Exhibit B (SOW) - Attachment 1
Page 1
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
ATTACHMENT 2
OWNER RESPONSIBILITIES
Owner shall be responsible for providing the information or performing the
tasks described below by the corresponding dates or within corresponding time
periods set forth below:
RESPONSE TIME
DISCIPLINE/RESPONSIBILITY OR DEADLINE
- ------------------------- -----------
Program Management
- --------------------------------------------------------------------------------
[*****]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Exhibit B (SOW) - Attachment 2
Page 1
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
RESPONSE TIME
DISCIPLINE/RESPONSIBILITY OR DEADLINE
- ------------------------- -----------
- --------------------------------------------------------------------------------
[*****]
- --------------------------------------------------------------------------------
* In the event Owner rejects any Contractor submission referenced in this
Attachment 2, Owner shall state the reasons therefor.
RF Engineering
- --------------------------------------------------------------------------------
[*****]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Exhibit B (SOW) - Attachment 2
Page 2
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
RESPONSE TIME
DISCIPLINE/RESPONSIBILITY OR DEADLINE
- ------------------------- -----------
- --------------------------------------------------------------------------------
[*****]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Site Acquisition
- --------------------------------------------------------------------------------
[*****]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Exhibit B (SOW) - Attachment 2
Page 3
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
RESPONSE TIME
DISCIPLINE/RESPONSIBILITY OR DEADLINE
- ------------------------- -----------
- --------------------------------------------------------------------------------
[*****]
- --------------------------------------------------------------------------------
Architecture and Engineering
- --------------------------------------------------------------------------------
[*****]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Zoning
- --------------------------------------------------------------------------------
[*****]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Regulatory Compliance **
- --------------------------------------------------------------------------------
[*****]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Exhibit B (SOW) - Attachment 2
Page 4
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
RESPONSE TIME
DISCIPLINE/RESPONSIBILITY OR DEADLINE
- ------------------------- -----------
- --------------------------------------------------------------------------------
[*****]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
** Other Regulatory Compliance dependencies are
covered under the RF Engineering section
Site Construction
- --------------------------------------------------------------------------------
[*****]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Exhibit B (SOW) - Attachment 2
Page 5
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
RESPONSE TIME
DISCIPLINE/RESPONSIBILITY OR DEADLINE
- ------------------------- -----------
- --------------------------------------------------------------------------------
[*****]
- --------------------------------------------------------------------------------
Miscellaneous
- --------------------------------------------------------------------------------
[*****]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Exhibit B (SOW) - Attachment 2
Page 6
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
ATTACHMENT 3
MASTER SCHEDULE
[*****]
(This entire schedule has been omitted)
Exhibit B (SOW) - Attachment 3
Page 1
<PAGE>
CONFIDENTIAL
ATTACHMENT 4
KEY TASKS
1. Mobilization to City/Deployment Complete
2. All Search Area Requests (SAR's) Released
3. 50% of Site Leases Executed
4. Site Leases Executed*
5. Zoning Completed*
6. Site Construction Commences
7. Site Construction Completed*
8. Repeater Network Acceptance Testing Completed
* For the purposes of these Key Tasks, each such Key Task will be deemed
completed when the Key Task is completed for all but the greater of two Sites
or 5% of the Sites in a City, provided that in the case of a City with ten or
fewer Sites, the Key Task will be deemed completed when the Key Task has been
completed for all but one Site in such City.
Exhibit B (SOW) - Attachment 4
Page 1
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
ATTACHMENT 5
STANDARD SITES
- --------------------------------------------------------------------------------
[*****]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
o o
- --------------------------------------------------------------------------------
Exhibit B (SOW) - Attachment 5
Page 1
<PAGE>
CONFIDENTIAL
ATTACHMENT 6
FORM OF WEEKLY STATUS REPORT
Week Ending ___________ ___, 1999/2000
RF ENGINEERING -
Alternative 1: To be used if no problems identified: RF Engineering
continues to proceed on schedule in the ____________ [identify city] market.
Alternative 2: To be used if problems encountered: RF Engineering
activities in the _____________ [identify city] market have identified the
following problems and the following is recommended to overcome such problems:
(See ZONING below for example.)
SITE ACQUISITION - Use Alternative 1 or 2 above, as applicable.
ZONING - Zoning activities have identified several problems in obtaining zoning
for key sites in the _____________ [identify city] market. An XM representative
will be needed at a scheduled zoning hearing in _________ on , 1999/200_ and for
a scheduled zoning hearing in _________ on , 1999/200_.
A&E - Use Alternative 1 or 2 above, as applicable.
CONSTRUCTION - Use Alternative 1 or 2 above, as applicable.
OTHER COMMENTS (Include identification of Sites inspected and inspection results
of Interim Maintenance pursuant to Article 8 of Exhibit B.)
Exhibit B (SOW) - Attachment 6
Page 1
<PAGE>
CONFIDENTIAL
ATTACHMENT 7
FORM OF MONTHLY STATUS REPORT
Month Ending ___________ ___, 1999/2000
RF ENGINEERING -
Alternative 1: To be used if no problems identified: RF Engineering
continues to proceed on schedule in the ____________ [identify city] market.
Alternative 2: To be used if problems encountered: RF Engineering
activities in the _____________ [identify city] market have identified the
following problems and the following is recommended to overcome such problems:
(See ZONING below for example.)
SITE ACQUISITION - Use Alternative 1 or 2 above, as applicable.
ZONING - Zoning activities have identified several problems in obtaining zoning
for key sites in the ____________ [identify city] market. An XM representative
will be needed at a scheduled zoning hearing in _________ on , 1999/200_ and for
a scheduled zoning hearing in _________ on , 1999/200_.
A&E - Use Alternative 1 or 2 above, as applicable.
CONSTRUCTION - Use Alternative 1 or 2 above, as applicable.
OTHER COMMENTS (Include identification of Sites inspected and inspection results
of Interim Maintenance pursuant to Article 8 of Exhibit B.)
PRELIMINARY CITY BUDGET
Estimated Total # of Sites:
Preliminary Site Count: (___ Standard Sites #1) x ($ Standard Site #1) = $_____
(___ Standard Sites #2) x ($ Standard Site #2) = $_____
Total Estimated Cost: $_____
Exhibit B (SOW) - Attachment 7
Page 1
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
ATTACHMENT 8
FORM OF QUARTERLY STATUS REPORT
(MANPOWER CHART)
[*****]
Exhibit B (SOW) - Attachment 8
Page 1
<PAGE>
CONFIDENTIAL
ATTACHMENT 9
FORM OF PRIMARY CANDIDATE SITE PACKAGE
Each Primary Candidate Site Package shall be broken down into the
following sections containing the following information:
-----------------------------------------------------
Section Description
------- -----------
-----------------------------------------------------
1 Table of Contents
-----------------------------------------------------
2 Correspondence
-----------------------------------------------------
3 Site Survey in Contractor's standard form
-----------------------------------------------------
4 Candidate Site Ranking in Contractor's
standard form
-----------------------------------------------------
5 Site Sketch/Plat of Site
-----------------------------------------------------
6 Maps/Photos of Site
-----------------------------------------------------
7 Zoning - Any and all Permits (including
the building permit) procured for the
Site
-----------------------------------------------------
8 Leasing - A copy of the executed Site
Lease Agreement for such Site and an
abstract of such Site Lease Agreement
-----------------------------------------------------
9 Construction Documents - The final
Construction Documents for the Site
-----------------------------------------------------
10 Lien Releases - All releases of final
claims and waivers of lien required by
the Contract with respect to such Site
-----------------------------------------------------
11 Testing - A written report and/or data set
that provides the results of all tests
performed on the Site, including the
Preliminary Site Test and Terrestrial
Repeater Unit Acceptance
-----------------------------------------------------
12 Miscellaneous information as agreed to
by Owner and Contractor
-----------------------------------------------------
13 Site Specific RF Safety Plan
-----------------------------------------------------
14 Site Specific Regulatory Compliance
Documentation
-----------------------------------------------------
Exhibit B (SOW) - Attachment 9
Page 1
<PAGE>
CONFIDENTIAL
ATTACHMENT 10
FORM OF LEASE ABSTRACT
Site Number _________________ Site Name _______________________________
Type of property -
o Rooftop
o Rawland
o Colo
Property Owner ______________________________________________________________
Lessor (if different from Owner) _____________________________________________
Lease or License ______________________________________________________________
Initial Term ______________________________________________________________
Renewal ______________________________________________________________
Rent ______________________________________________________________
Escalation? ______________________________________________________________
Current Equipment ______________________________________________________________
LLC approval of plans ________________________________________________________
Construction considerations _________________________________________________
___________________________________________________________________________
LLC approval required for additional _________________________________________
Insurance Requirements _______________________________________________________
Access restrictions _______________________________________________________
Assignable ______________________________________________________________
Exhibit B (SOW) - Attachment 10
Page 1
<PAGE>
CONFIDENTIAL
Other terms ______________________________________________________________
______________________________________________________________
Title defects ______________________________________________________________
______________________________________________________________
______________________________________________________________
Exhibit B (SOW) - Attachment 10
Page 2
<PAGE>
CONFIDENTIAL
ATTACHMENT 11
CONTENTS OF ZONING ANALYSIS
The Zoning Analysis shall consist of a Zoning Analysis and Building Permit
Report, per zoning jurisdiction, consisting of the following:
1. Pertinent sections of zoning documentation specific to the
terrestrial repeater equipment installation highlighted, in
actual documents such as ordinances, codes, rules &
regulations.
2. Explanation/summary of jurisdiction permitting/not permitting
repeater installations, including Contractor's determination
for each Site in the applicable City as to whether such Site
may be constructed under a building permit or zoning variance.
3. Addresses, titles and contact names, phone numbers, hours and
days of operation for each department.
4. Timelines from application to permitting.
5. A fee schedule when applicable.
6. Description of the nature or purpose of hearings and meetings
that may require Contractor representation and normal hearing
date schedules.
7. A & E requirements and documents required to be submitted with
zoning applications or building permits.
8. A description of the zoning and building permit application &
process per zoning jurisdiction.
9. Local generic specifications of structural/mechanical design
and wind loading requirements.
10. Any special zoning studies (noise, EMF, etc.) and the identity
of any other entity that may have to be approached for the
approval and installation of an antenna facility.
11. Any known upcoming plans to change ordinances, any moratoriums
or pending moratorium, when and possible impact.
12. Jurisdiction zoning maps.
13. Recommended strategies for obtaining all permits.
14. Executive Synopsis.
Exhibit B (SOW) - Attachment 11
Page 1
<PAGE>
CONFIDENTIAL
ATTACHMENT 12
PRELIMINARY SITE TEST
1. Antenna Visual Check: Contractor shall verify by observation that transmit
and receive antennas are oriented correctly in the azimuth and elevation
planes. Antenna check applies to GPS antenna should one be installed on
the Site.
2. RF Cable Sweep Test: Contractor shall perform a VSWR sweep for each
coaxial cable to verify cable integrity.
3. AC Power: Contractor shall perform continuity checks and voltage
measurements to verify that the power circuits are installed properly.
4. Grounding: Contractor shall perform ground resistance checks to verify
that the ground system is installed properly.
Exhibit B (SOW) - Attachment 12
Page 1
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
ATTACHMENT 13
TERRESTRIAL REPEATER UNIT ACCEPTANCE TEST
The following functional test procedure shall be performed to verify
functional operation of the terrestrial repeater equipment subsequent to site
delivery. These procedures shall be considered as preliminary and will be
further detailed in the site installation manuals that will accompany the
equipment. In any case, steps 3-5 below, should not require in excess of two (2)
man-hours for installation technician(s).
1. All required signal and power cabling for repeater installation shall be
in place prior to the functional tests. This includes:
[*****]
2. Equipment shall be uncrated and inspected for physical damage. If no
indication of damage is observed, equipment shall be moved to previously
prepared equipment pad.
3. All physical connections listed in (1) shall be made.
4. Equipment shall be powered up using factory-described procedures.
Condition of relevant monitor lamps shall be recorded.
5. Through notebook PC connection with repeater local NMS port, each repeater
sub-unit shall be powered on and operational screens used to verify
correct operation.
Exhibit B (SOW) - Attachment 13
Page 1
<PAGE>
CONFIDENTIAL
ATTACHMENT 14
ISOLATION SPECIFICATIONS
Exhibit B (SOW) - Attachment 14
Page 1
<PAGE>
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
ATTACHMENT 14
ISOLATION SPECIFICATIONS
1.0 Introduction
Contractor shall design repeater sites in such a way as to prevent degradation
of the satellite signal by the repeater transmitted signal. Contractor shall
position antennas so that there is sufficient isolation to maintain transmitter
interference below the calculated maximum allowed interference, including a
margin. Calculations of maximum interference shall be site specific, using
satellite power levels for the geographic area and repeater transmit power
associated with each specific site.
2.0 Specification Parameters
Contractor shall pre-calculate the interference level using the design site
parameters (fixed and variable) developed under the Interim Services Agreement
and approved by Owner. The critical parameter will be the "Required C/(N+I)
parameter," which shall be used as the baseline signal at the receive antenna
port for acceptable operation.
Contractor will develop for Owner's approval two sample isolation calculations
using the fixed and variable parameters. The calculation result shown on the
"Isolation Margin" line shall determine if the site configuration is a)
acceptable without isolation measurements, b) requires measurement or c) must be
reconfigured for better isolation performance.
The process for performing actual calculations and measurements is provided in
Exhibit A, Attachment 1.
3.0 Specification Limits
[*****]
4.0 Reports
Results of isolation margin calculations shall be included in the Candidate Site
Package. Results of each isolation test shall be set forth in a report delivered
to Owner and included in the Candidate Site Package.
<PAGE>
CONFIDENTIAL
CONTRACT
FOR
ENGINEERING AND CONSTRUCTION
OF
TERRESTRIAL REPEATER NETWORK SYSTEM
By and Between
XM Satellite Radio Inc.
and
LCC International, Inc.
EXHIBIT C
CONTRACT PRICING, PAYMENTS AND MILESTONE ACHIEVEMENT CRITERIA
CONFIDENTIALITY NOTICE
This attached Contract and the information contained herein is confidential to
XM Satellite Radio Inc. and LCC International, Inc., and shall not be published
or disclosed to any third party without the express written consent of a duly
authorized representative of XM Satellite Radio Inc. and LCC International, Inc.
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 1
<PAGE>
CONFIDENTIAL
1. GENERAL
1.1 Introduction
The pricing for the Work is set forth below for each of the
Disciplines (as defined in Exhibit B (SOW)) and other items. The pricing
components that comprise the Contract Sum are generally described in Section 1.2
below. Except as set forth herein, the pricing set forth in this Exhibit C
includes all costs of transportation, shipping, handling, warranties (as such
warranties are described in Article 10 of the Terms and Conditions) for the
items of the Work to which such pricing relates, as well as services,
responsibilities, equipment and other products and materials not specifically
described in Exhibit B (SOW) that are incidental to and reasonably required for
the proper provision of the Work. All invoicing and payment terms shall be in
accordance with the requirements of Article 5 of the Terms and Conditions.
The "Milestone Payments" and the "Milestone Achievement Criteria",
including description of all Work Units (as defined below) comprising such
Milestone Achievement Criteria, are defined in Attachment 1.1 hereto.
1.2 Pricing Components
The components of the pricing are described below:
(a) Firm Fixed Pricing: The fixed prices set forth in this Exhibit C
cover the services, labor, materials and testing required to complete each
Discipline on a Site basis in accordance with the requirements of Exhibit B
(SOW), except for those items of Work specifically identified as being payable
on the basis of Unit Pricing, Cost-Plus Pricing, Task Order Pricing, or as
Permitted Reimbursable Expenses or Pass-Through Expenses, or "Default Pricing".
For clarification purposes, a Discipline's "Fixed Price Amount" (e.g., "RF Fixed
Price Amount", "ZN Fixed Price Amount") refers to the fixed price per Site for
such Discipline.
(b) Unit Pricing: The Work described in Attachment 1.2(b) (e.g.,
certain Construction, Labor and Materials, Additional A&E Services) hereto will
be priced on a per unit basis (e.g., per linear foot of cabling) as set forth in
such Attachment and will be paid on a monthly basis pursuant to an invoice upon
completion of such Work in accordance with the requirements of the Contract.
(c) Task Order Pricing: For the Work that is identified in this
Exhibit C as being priced on the basis of Task Order Pricing, or for other work
outside the scope of the Work under the Contract as requested by Owner or
Contractor, Contractor will provide Owner with a Task Order describing the scope
of work, schedule, associated pricing and payment terms for such task. Prior to
commencement of any work under any Task Order, Contractor and Owner will
mutually agree as to the scope, schedule, pricing and payment terms of such Task
Order.
(i) Any such Task Orders agreed to on a "Time and Materials"
basis will be invoiced based on (x) the hourly rates of
the applicable Contractor
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 2
<PAGE>
CONFIDENTIAL
personnel, as set forth in Attachment 1.2 (c) hereto,
plus (y) Contractor's actual, direct, out-of-pocket and
reasonable business expenses (invoiced at 103% of
costs); any single business expense in excess of
$2,000.00 requires Owner's written consent prior to
expenditure. There will be no additional costs under
such Time and Materials Pricing related to Contractor
General Conditions Costs (as defined in the Terms and
Conditions), general and administrative costs, home
office overhead or profit, except as otherwise agreed to
by the Parties in writing pursuant to a Task-Order.
(ii) Any such Task Order agreed to on a "Cost-Plus" basis
will be invoiced in accordance with Section 1.2 (d)
below.
(iii) Unit Pricing, where applicable, will apply to any such
Task Order Pricing.
(iv) The terms of Permitted Reimbursable Expenses and
Pass-Through Expenses set forth below, where applicable,
will apply to any such Task Order Pricing.
(d) Cost-Plus Pricing: For Work that is identified in this Exhibit C
as being priced on the basis of Cost-Plus Pricing, Owner will be invoiced for
the costs incurred by Contractor in performing the task in an amount equal to
(x) actual, direct labor and material costs incurred in performing such Work
plus (y) a mark-up of ten percent (10%) of the amount in clause (x) to
compensate Contractor for its General Conditions Costs (as defined in the Terms
and Conditions), general and administrative costs, home office overhead and
profit.
(e) Permitted Reimbursable Expenses: Contractor will invoice Owner
an amount equal to the actual, direct, out-of-pocket and reasonable expenses
incurred by Contractor as Permitted Reimbursable Expenses, as specified in
Attachment 1.2(e) attached hereto. Contractor represents that the Permitted
Reimbursable Expenses listed on Attachment 1.2(e) constitute a reasonable
estimation of the expenses that are likely to be incurred by Contractor in
performing the Work. Notwithstanding the foregoing, Contractor shall notify
Owner and obtain Owner's written consent before incurring any single Permitted
Reimbursable Expense in excess of $2,000. In addition, Contractor shall not
incur any Permitted Reimbursable Expense appearing in Part II of Attachment
1.2(e) hereto or any other expense not listed on Attachment 1.2(e), without
obtaining Owner's prior written consent. Owner shall pay Contractor a handling
fee equal to three percent (3%) of the Permitted Reimbursable Expenses, which
handling fee, in the aggregate, shall not exceed $60,000 per year.
(a) Pass-Through Expenses: Owner will be invoiced for one hundred
percent (100%) of the expenses identified as Pass-Through Expenses in Attachment
1.2(e) attached hereto to the extent incurred by Contractor in performing the
Work.
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 3
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
(g) Default Pricing: In the event the Terms and Conditions specify
that "Default Pricing" shall apply, such work will be invoiced to Owner on a (i)
"Time and Materials" Pricing basis, based on the hourly rates of the applicable
Contractor personnel, set forth in Attachment 1.2 (c) hereto plus Contractor's
actual, direct, out-of-pocket and reasonable business expenses (invoiced at 103%
of cost; any single expense in excess of $2,000.00 requires Owner's written
consent prior to expenditure). There will be no additional costs under such Time
and Materials Pricing related to Contractor General Conditions Costs (as defined
in the Terms and Conditions, excluding those costs related to Contractor
demobilization, non-productive labor (i.e., idle time relating to a suspension
of Work due to Customer's fault) and remobilization, where applicable), general
and administrative costs, home office overhead or profit; or (ii) "Cost-Plus"
Pricing basis in accordance with Section 1.2 (d) above for Work subcontracted to
third party(ies) by Contractor.
(h) Owner Cancelled Sites: In the event Work on a Site is cancelled
in writing by Owner through no fault of Contractor, Contractor is entitled to
payment for the percentage of such Work actually completed at the time of notice
of cancellation.
1.3 Definitions
(a) "Normal-Area", "Medium-Area", and "Wide-Area" Sites are defined as
follows:
(i) "Normal-Area Site": A Normal-Area Site is a Site with a
[*****] repeater mounted on a low-level structure that covers
a nominal area within an urban center or suburban area,
typically 1-5 miles in diameter depending on obstructions.
(ii) "Medium-Area Site": A Medium-Area Site is a Site with a
[*****] repeater that is elevated such that the Site covers
approximately the same area as 2-5 Normal-Area Sites, or a
[*****] repeater site at a nominal elevation such that it
covers approximately the same area as 2-5 Normal-Area Sites.
(iii) "Wide-Area Site": A Wide-Area Site is a Site with a
[*****] or a [*****] repeater that is elevated such that the
Site covers a major part of an entire City, and such that
special analysis and measurements are required to prevent
simulcast interference with other Sites in the City Network.
(b) As used in this Exhibit C, the terms "Standard Site 1", "Standard
Site 2", "Standard Sites" and "Non-Standard Sites" have the meanings
attributed to them in Section 7 (Site Construction) herein and such
terms apply only in the Architecture and Engineering (A & E) and
Site Construction context.
(c) The term "Work Unit" means those tasks comprising a Discipline as
further described in Attachment 1.1 (Milestone Payments and
Milestone Achievement Criteria). Work Units are
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 4
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
identified throughout this Exhibit C with reference to the applicable
Discipline and Work Unit number (for example, "RF1", "SA2", "RC3").
(d) All other terms used in this Exhibit C have the meanings attributed
to them in the Contract.
2. PROJECT MANAGEMENT SERVICES
2.1 Firm Fixed Pricing
The Work described in Section 2 (Program Management) and Section 7.2
(Construction Management) of Exhibit B (SOW) (hereinafter collectively referred
to as "Project Management Services") will be priced on a firm fixed price basis
and is included in the per Site price determined in accordance with the table
set forth in Section 2.1.1 below (the "Project Management Fixed Price Amount").
2.1.1 Fixed Price Amount and Payment Terms
The Project Management Fixed Price Amount set forth in the table below
will be paid for each Site in accordance with this Section 2.1.
- --------------------------------------------------------------------------------
Work Unit Percentage Fixed Price per Site Amount
ID of Project
Management
Fixed Price
Amount
- --------------------------------------------------------------------------------
Normal-Area Site Medium-Area Site Wide-Area Site
- --------------------------------------------------------------------------------
M1 90% [*****] [*****] [*****]
- --------------------------------------------------------------------------------
M2 10% [*****] [*****] [*****]
- --------------------------------------------------------------------------------
Project 100% [*****] [*****] [*****]
Management
Fixed Price
Amount
- --------------------------------------------------------------------------------
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 5
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
(a) M1: Ninety percent (90%) of the Project Management Fixed Price
Amount shall be payable in equal monthly installments ("Work Unit
M1") based on the estimated site count of 1,578 Sites (for all
Cities) amortized over the term of the Contract and is subject to a
one-time final adjustment upon the "Project Completion Date"
(defined as the date upon which all Cities have achieved Acceptance
and all Work has been satisfactorily completed ***** Certain
information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
in accordance with the requirements of the Contract) pursuant to
Section 2.1.2 below. The total monthly installment for all Sites
across all Cities is equal to:
(1,578 Sites x[*****])/N months (where N equals the number of full
months from Notice to Proceed to[*****]).
Payment for such monthly installment shall commence on the first
full month following the date a Notice to Proceed is deemed to be
issued pursuant to Article 3.2 of the Terms and Conditions.
(b) M2: The remaining ten percent (10%) of the Program Management Fixed
Price Amount ("Work Unit M2") for the actual number of Sites
completed across all Cities shall be paid at Project Completion Date
and is calculated as follows:
M2 = (Actual Number of Sites at Project Completion Date x [*****]).
2.1.2 Final Adjustment to Aggregate Monthly Installment Amount
The aggregate amount paid in monthly installments by Owner to Contractor
will be adjusted to account for any change in the number of Sites from 1,578 to
the actual number of completed Sites across all Cities at the Project Completion
Date, it being understood that in no event shall the total amount paid under
this Section 2 for Project Management exceed the Project Management Fixed Price
Amount multiplied by the actual Site count at Project Completion Date.
Notwithstanding the foregoing, Contractor will be entitled to a percentage of
the Project Management Fixed Price Amount equal to the Project Management
Services Work completed for any Site that is cancelled by Owner through no fault
of Contractor.
The final adjustment will be determined as follows:
(a) If the number of Sites at Project Completion Date is
greater than 1,578, Owner shall pay Contractor, within
thirty (30) days of the Project Completion Date,
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 6
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
(b) the amount equal to (([*****]) x (A - S)) where A is the
number of actual completed Sites at Project Completion
Date and S equals 1,578.
(c) If the number of completed Sites at Project Completion
Date is less than 1,578, Owner shall be entitled to an
amount equal to (([*****]) x (S - A)) where S equals
1,578 and A is the number of actual completed Sites at
Project Completion Date. Owner shall be entitled to
deduct such amount from outstanding invoices; Contractor
shall promptly pay the remaining difference to Owner.
2.2 Unit Pricing
Not applicable.
2.3 Task Order Pricing
Not applicable.
2.4 Cost-Plus Pricing
Not applicable.
3. RF ENGINEERING
3.1 Firm Fixed Pricing
The Work described in Section 3, Section 9 and Section 7.6 of
Exhibit B (SOW), excluding any Work described in Section 3.2 and Section 3.3
below, will be priced on a firm fixed price basis and is included in the per
Site price determined in accordance with the table set forth below (the "RF
Fixed Price Amount").
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 7
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
The RF Fixed Price Amount will be paid on a Site-by Site basis in
accordance with Attachment 1.1 (Milestone Payments) hereto. For clarification
purposes, the table below sets forth the pricing associated with each Work Unit
comprising the RF Fixed Price Amount.
- --------------------------------------------------------------------------------
Work Unit Fixed Price Per Site Amount*
ID
- --------------------------------------------------------------------------------
Normal-Area Site Medium-Area Site Wide-Area Site
- --------------------------------------------------------------------------------
[*****]
RF1
- --------------------------------------------------------------------------------
RF2
- --------------------------------------------------------------------------------
RF3
- --------------------------------------------------------------------------------
RF4
- --------------------------------------------------------------------------------
RF5
- --------------------------------------------------------------------------------
RF6
- --------------------------------------------------------------------------------
RF Fixed
Price
Amount
- --------------------------------------------------------------------------------
*The RF Fixed Price Amount includes, for each Search Ring identified,
performance of RF Engineering Work referenced above that is reasonably required
in such Search Ring to either (i) select a viable Primary Site and complete the
Work required for such Site or (ii) disqualify such Search Ring as a viable area
for selection of a viable Primary Site. In the event a viable Primary Site
cannot be found and/or all required Work cannot be completed on a Site within
such Search Ring, Contractor will notify Customer of the need to
reissue/redesign such Search Ring. Upon Owner's prior written approval of any
reissuance/redesign of a Search Ring, Contractor is entitled to payment for RF
Engineering Work performed within the reissued/redesigned Search Ring in
accordance with this Section 3.
3.2 Unit Pricing
Contractor will invoice Owner for Isolation Testing services in
accordance with the unit price set forth in Attachment 1.2(b) in the event such
testing is required pursuant to Section 3.4(e) of Exhibit B (SOW).
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 8
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
3.3 Task Order Pricing
RF Engineering Work requested in writing by Owner that is outside
the scope of the Work described in Section 3 of Exhibit B (SOW) will be priced
on the basis of Task Order Pricing in accordance with Section 1.2 (c) above.
3.4 Cost-Plus Pricing
Not applicable.
4. SITE ACQUISITION
4.1 Firm Fixed Pricing
The Work described in Section 4 of Exhibit B (SOW), excluding any
Work described in Section 4.3 below, will be performed on a firm fixed price
basis and is included in the per Site price determined in accordance with the
table set forth below (the "SA Fixed Price Amount").
The SA Fixed Price Amount will be paid on a Site-by-Site basis in
accordance with Attachment 1.1 (Milestone Payments). For clarification purposes,
the table below sets forth the pricing associated with each Work Unit comprising
the SA Fixed Price Amount.
- --------------------------------------------------------------------------------
Percentage
Work Unit of SA Fixed Fixed Price Per Site Amount*
ID Price Amount
- --------------------------------------------------------------------------------
Standard Medium Wide
- --------------------------------------------------------------------------------
[*****]
SA1 25%
- --------------------------------------------------------------------------------
SA2 45%
- --------------------------------------------------------------------------------
SA3 30%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SA Fixed 100%
Price
Amount
- --------------------------------------------------------------------------------
*The Work Unit Fixed Price Amount for "SA1" includes, for each Search Ring
identified, performance of such Site Acquisition Work referenced above that is
reasonably required in such Search Ring to either (i) select a viable Primary
Site and complete the Work required for such Site or (ii)
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 9
<PAGE>
CONFIDENTIAL
disqualify such Search Ring as a viable area for selection of a viable Primary
Site. In the event a viable Primary Site cannot be found and/or all required
Work cannot be completed on a Site within such Search Ring, Contractor will
notify Customer of the need to reissue/redesign such Search Ring. Upon Owner's
written approval of any reissuance/redesign of a Search Ring, Contractor is
entitled to payment for SA1 performed within the reissued/redesigned Search Ring
in accordance with this Section 4.
*The Work Unit Fixed Price Amount for each of "SA2" and "SA3" includes
such Site Acquisition Work for one Primary Site within a Search Ring. In the
event and to the extent Contractor performs such Work on a viable Primary Site
and such Primary Site is disqualified and abandoned through no fault of
Contractor and Work Units SA2 and SA3 are then performed on a newly selected
viable Primary Site within the same Search Ring, Contractor is entitled to fifty
percent (50%) of the Work Unit Fixed Price Amount for such Work completed for
the additional Primary Sites in such Search Ring in accordance with this Section
5; provided, however, Contractor will not, without Owner's prior written
approval, perform Work Units SA2 or SA3 for more than three (3) Primary Sites if
Normal-Area Sites, two (2) Primary Sites if Medium-Area Sites and one (1)
Primary Site if a Wide-Area Site or reissue/redesign any Search Ring. Upon
Owner's prior written approval of any reissuance/redesign of a Search Ring,
Contractor is entitled to payment for Site Acquisition Work performed within the
reissued/redesigned Search Ring in accordance with this Section 4.
4.2 Unit Pricing
Not applicable.
4.3 Task Order Pricing
Contractor services relating to securing additional title assurance
beyond preliminary title report, as requested by Owner, will be priced on the
basis of Task Order Pricing in accordance with Section 1.2 (c) above.
4.4 Cost-Plus Pricing
Not applicable.
5. ARCHITECTURE AND ENGINEERING ("A&E", "AE")
5.1 Firm Fixed Pricing
The Work described in Section 5 of Exhibit B (SOW), excluding any Work
described in Section 5.2 and Section 5.4 below, will be performed on a firm
fixed price basis and is included in the per Site price determined in accordance
with the table set forth below (the "AE Fixed Price Amount").
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 10
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
The AE Fixed Price Amount will be paid on a Site-by-Site basis in
accordance with Attachment 1.1 (Milestone Payments). For clarification purposes,
the table below sets forth the pricing associated with each Work Unit comprising
the AE Fixed Price Amount.
- --------------------------------------------------------------------------------
Percentage Fixed Price Per Site Amount*
of AE Fixed
Work Unit Price
ID Amount
- --------------------------------------------------------------------------------
Standard Site
(1 or 2) (Pricing Non-Standard Site
for Normal, Medium
and Wide-Area
Sites, as
applicable)
- --------------------------------------------------------------------------------
AE1(a) 25% [*****] Pricing pursuant to
- ---------------------------------------------------
AE1(b) 25% [*****] Section 5.3 below*.
- ---------------------------------------------------
AE2 30% [*****]
- ---------------------------------------------------
AE3 10% [*****]
- ---------------------------------------------------
AE4 10% [*****]
- ---------------------------------------------------
AE Fixed 100% [*****]
Price
Amount
- --------------------------------------------------------------------------------
*The Work Unit Fixed Price Amount for each of the Work Units above
includes such A & E Work referenced above for one viable Primary Site within a
Search Ring. In the event and to the extent Contractor performs such Work on a
viable Primary Site and such Primary Site is disqualified and abandoned through
no fault of Contractor, and the Work Units are then performed on a newly
selected Primary Site within the same Search Ring, Contractor is entitled to
fifty percent (50%) of the Work Unit Fixed Price Amount for such Work completed
for the additional Primary Site in such Search Ring in accordance with this
Section 5; provided, however, Contractor will not, without Owner's prior written
approval, perform any of the Work Units for more than three (3) Primary Sites if
Normal-Area Sites, two (2) Primary Sites if Medium-Area Sites and one (1)
Primary Site if Wide-Area Sites or reissue/redesign any Search Ring. Upon
Owner's prior written approval of any reissuance/redesign of a Search Ring,
Contractor is entitled to payment for A & E Work performed within the
reissued/redesigned Search Ring in accordance with this Section 5.
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 11
<PAGE>
CONFIDENTIAL
5.2 Unit Pricing
To the extent the services, materials and labor listed in Attachment
1.2(b) under the heading "Roof-Top Additional A&E Services" are provided by
Contractor, Contractor will invoice Owner for such services, materials and labor
in accordance with the unit prices set forth in Attachment 1.2(b).
5.3 Cost-Plus Pricing
In the event and to the extent A & E Work for a Non-Standard Site exceeds
the Work required for a Standard Site, the price for such additional A & E Work
will be invoiced on a Cost-Plus Pricing basis in accordance with Section 1.2 (d)
above, with the "Cost" portion of such additional A & E work to be determined as
follows:
(i) Contractor will solicit and provide Owner three (3)
competitive firm fixed price bids detailing the scope,
pricing and schedule for such additional A & E work and
Contractor and Owner will mutually agree as to the bid
to accept; or
(ii) In the event the competitive bidding process described
in paragraph (i) above is not practical, then upon
Owner's request, an independent assessment of
Contractor's price proposal for such additional A & E
work will be conducted by a qualified third party that
has been mutually selected by Contractor and Owner
(hereinafter referred to as "A & E Consultant"). In the
event and to the extent such A & E Consultant rejects
Contractor's proposal (in whole or in part), Contractor
will revise such proposal in accordance with the A & E
Consultant's reasonable determination and resubmit its
proposal. In such event, the scope of work, schedule and
price for such additional A & E services shall be as
reasonably determined by such A&E Consultant. The cost
of such A & E Consultant shall be paid by Owner as a
Permitted Reimbursable Expense pursuant to Section 1.2
(e) above.
(iii) In addition, the provisions of Sections 1.2 (e) and 1.2
(f) above shall apply to any Permitted Reimbursable
Expense or Pass-Through Expense, as applicable.
5.4 Task Order Pricing
Upon Owner's prior written approval, A&E Work pursuant to Section 5(b)(i)
of Exhibit B (SOW) (i.e., Complete Structural Analysis of a Site (but not
architectural and engineering review fees charged by building/property owners
which is included in the per Site price determined in accordance with Section
5.1 above)) and A&E work that is outside the scope of the Work described in
Section 5 of Exhibit B
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 12
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
(SOW) will be priced on the basis of Cost-Plus Pricing in accordance with
Section 1.2 (d) above; such A&E work outside the scope of Exhibit B (SOW)
includes the following:
o Services relating to landscape architecture
o Geotechnical and Geodetic Surveys
o Engineering Topographic Surveys and Plats
o Designs for building upgrades, modifications and repairs
o Designs for specialty antenna support structures
o Ground resistivity tests
6. ZONING ("ZN")
6.1 Firm Fixed Pricing
The Work described in Section 6 of Exhibit B (SOW) will be performed on a
firm fixed price basis and is included in the per Site price determined in
accordance with the table set forth below (the "ZN Fixed Price Amount").
The ZN Fixed Price Amount will be paid on a Site-by-Site basis in
accordance with Attachment 1.1 (Milestone Payments). For clarification purposes,
the table below sets forth the pricing associated with each Work Unit comprising
the ZN Fixed Price Amount.
- --------------------------------------------------------------------------------
Percentage
of ZN Fixed Fixed Price Per Site Amount*
Work Unit Price
ID Amount
- --------------------------------------------------------------------------------
Normal-Area Site Medium -Area Site Wide-Area Site
- --------------------------------------------------------------------------------
ZN1 50% [*****] [*****] [*****]
- --------------------------------------------------------------------------------
ZN2 40% [*****] [*****] [*****]
- --------------------------------------------------------------------------------
ZN3 10% [*****] [*****] [*****]
- --------------------------------------------------------------------------------
ZN Fixed 100% [*****] [*****] [*****]
Price
Amount
- --------------------------------------------------------------------------------
*The ZN Fixed Price Amount includes, for each Search Ring identified,
performance of ZN Work referenced above that is reasonably required in such
Search Ring to either (i) select a viable Primary Site and complete the Work
required for such Site or (ii) disqualify such Search Ring as a viable area for
selection of a viable Primary Site. In the event a viable Primary Site cannot be
found and/or all required Work cannot be completed on a Site within such Search
Ring, Contractor will notify Customer of the
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 13
<PAGE>
CONFIDENTIAL
need to reissue/redesign such Search Ring. Upon Owner's prior written approval
of any reissuance/redesign of a Search Ring, Contractor is entitled to payment
for ZN Work performed within the reissued/redesigned Search Ring in accordance
with this Section 6.
6.2 Unit Pricing
Not applicable.
6.3 Task Order Pricing
As applicable pursuant to Section 1.2 (c) above.
6.4 Cost-Plus Pricing
Not applicable.
7. SITE CONSTRUCTION
7.1 Site Construction ("SC")
The Work described in Sections 7.1, 7.3, 7.4, 7.5 and 7.6 of Exhibit
B (SOW), excluding the Work described in Section 7.2, 7.3 and 7.4 below, is
included in the per Site pricing determined in accordance with this Section 7.1.
(a) Standard Site Design: Construction of a Standard Site 1 or
Standard Site 2 (as described in Attachment 7.2 hereto)
(collectively referred to as "Standard Sites") will be
performed on a firm fixed price basis determined in accordance
with the table set forth below ("SC Fixed Price Amount").
(b) Non-Standard Site Design: In the event a Site cannot be
constructed as a Standard Site and such Site cannot be
constructed using additional materials as provided in
accordance with Section 7.2 below (a "Non-Standard Site"), the
price for construction of such Non-Standard Site will be
invoiced on a Cost-Plus Pricing basis in accordance with
Section 1.2 (d) above, with the "Cost" portion of such
Non-Standard Site Construction to be determined as follows:
(i) Contractor will solicit and provide Owner three (3)
competitive firm fixed price bids detailing the scope,
pricing and schedule for construction of such
Non-Standard Site and Contractor and Owner will mutually
agree as to the bid to accept; or
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 14
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
(ii) In the event the competitive bidding process described
in paragraph (i) above is not practical, then upon
Owner's request, an independent assessment of
Contractor's price proposal for construction of such
Non-Standard Site will be conducted by a qualified third
party that has been mutually selected by Contractor and
Owner (hereinafter referred to as "Construction
Consultant"). In the event and to the extent such
Construction Consultant rejects Contractor's proposal
(in whole or in part), Contractor will revise such
proposal in accordance with the Construction
Consultant's reasonable determination and resubmit its
proposal. In such event, the scope of work, schedule and
price for construction of such Non-Standard Site shall
be as reasonably determined by such Construction
Consultant. The cost of such Construction Consultant
shall be paid by Owner as a Permitted Reimbursable
Expense pursuant to Section 1.2 (e) above.
The Work Units for Site Construction of a Non-Standard
Site will be as set forth in the table below.
In addition, the provisions of Section 1.2 (e) and 1.2
(f) above shall apply to any Permitted Reimbursable
Expense or Pass-Through Expense, as applicable.
(c) The SC Fixed Price Amount will be paid on a Site-by-Site basis in
accordance with Attachment 1.1 (Milestone Payments). For
clarification purposes, the table below sets forth the pricing
associated with each Work Unit comprising the SC Fixed Price Amount.
--------------------------------------------------------------------------
Work Percentage Fixed Per Site Amount
Unit of SC
ID Fixed
Price
Amount
--------------------------------------------------------------------------
Standard Site 1 Standard Site 2 Non-Standard Site
--------------------------------------------------------------------------
SC1 90% [*****] [*****] [*****]
--------------------------------------------------------------------------
SC2 10% [*****] [*****] [*****]
--------------------------------------------------------------------------
SC Fixed 100% [*****] [*****] [*****]
Price
Amount
--------------------------------------------------------------------------
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 15
<PAGE>
CONFIDENTIAL
7.2 Unit Pricing
In the event and to the extent the construction of a Site requires
materials, services and labor not included in construction of the Standard Sites
or quantities of materials, services and labor greater than the quantity
required for construction of the Standard Sites, and such materials, services or
labor are listed in Attachment 1.2(b) hereto, the price for construction of such
Site shall be increased in accordance with the unit prices set forth under the
heading "Construction Labor and Materials" in Attachment 1.2(b) hereto.
7.3 Task Order Pricing.
As applicable pursuant to Section 1.2 (c) above.
7.4 Cost-Plus Pricing
In the event and to the extent Contractor becomes aware during
actual Site Construction that a Site requires additional work that was both
unforseen and materially exceeds the Work contemplated in the price for Site
Construction for such Site (as determined pursuant to Section 7.1 above), such
additional work will be invoiced on the basis of Cost-Plus Pricing in accordance
with Section 1.2 (d) above. Notwithstanding the foregoing, Contractor will not,
without Owner's prior written approval, incur costs related to any additional
work which would result in an aggregate increase exceeding $1,500.00 of the Site
Construction price (as determined pursuant to Section 7.1 above) for any Site.
8. SOFTWARE
(a) Contractor will provide Owner with a license to use the following
software in accordance with Article 17(c) of the Terms and Conditions:
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 16
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
- --------------------------------------------------------------------------------
Software Unit Prices
- --------------------------------------------------------------------------------
Item No. Units Unit Price
Units
- --------------------------------------------------------------------------------
Program Management Tool (WINDS) 1 Each Included in
License for one (1) copy of WINDS as set forth in Contract
Article 17 of the Terms and Conditions Sum
- --------------------------------------------------------------------------------
(b) Upon Owner's written request, Contractor will provide Owner with
software licenses for additional copies of Program Management Tool (WINDS) and
related support services in accordance with the requirements of Article 17 of
the Terms and Conditions. The terms, conditions and pricing of such software and
services will be mutually agreed between the Parties.
9. OTHER PRICING
9.1 Satellite Receive Antenna and Transmit Antenna
Owner shall pay Contractor the firm fixed prices set forth in
Attachment 9.1 hereto for each satellite receive antenna and transmit antenna
provided by Contractor in accordance with the requirements of Section 10 of
Exhibit B (SOW).
9.2 Interim Maintenance Services
Contractor will provide the following interim maintenance services
and equipment as follows:
(a) Interim Maintenance Site Visit (in accordance with the requirements
of Article 8(a) of Exhibit B (SOW)) : [*****] per site
(b) Interim Maintenance Program Equipment : To be invoiced as a
Reimbursable Expense in accordance with Section 1.2(e) above, upon
Owner's approval prior to expenditure.
(c) Interim Fault Correction Maintenance Services: Will be provided by
Contractor as requested by Owner in writing in accordance with the
requirements of Section 8(b) of Exhibit B (SOW); such services will
be priced on the basis of Task Order Pricing in accordance with
Section 1.2(c) above.
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 17
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
Owner shall pay for such services and equipment, on a Site-by-Site basis,
pursuant to monthly invoices provided by Contractor (in accordance with the
requirements of Article 5.1 of the Terms and Conditions).
9.3 Network Management Testing Services
Upon Owner's written request, Contractor will provide network management
testing services in accordance with the requirements of Section 12 of Exhibit B
(SOW); such services will be priced on the basis of Task Order Pricing in
accordance with Section 1.2(c) above.
10. REGULATORY COMPLIANCE ("RC")
10.1 Firm Fixed Pricing
The Work described in Section 11 of Exhibit B (SOW), excluding any
Work described in Section 10.3 below, will be priced on a firm fixed price basis
and is included in the pricing determined in accordance with the table set forth
below ("Fixed Milestone Amounts"). This Regulatory Compliance Work set forth
below, except for RC1 and RC2, will be performed and paid on a Site-by-Site
basis in accordance with Attachment 1.1 (Milestone Payments). For clarification
purposes, the pricing associated with each Work Unit comprising the RC Work is
set forth below.
RC1 and RC2 will be performed for all Sites across all Cities and be paid
in the fixed amounts set forth below upon satisfactory completion of the
corresponding Work Unit Achievement Criteria set forth in Attachment 1.1 hereto.
Work Unit RC1: The fixed amount of [*****].
Work Unit RC2: The fixed amount of [*****].
Work Units RC3-RC7: as set forth in the table below:
- -------------------------------------------------------------------------------
Work Unit Fixed Amount Per Site*
ID
- -------------------------------------------------------------------------------
Normal -Area Site Medium-Area Site Wide-Area Site
- -------------------------------------------------------------------------------
RC3 [*****] [*****] [*****]
- -------------------------------------------------------------------------------
RC4 [*****] [*****] [*****]
- -------------------------------------------------------------------------------
RC5 [*****] [*****] [*****]
- -------------------------------------------------------------------------------
RC6 [*****] [*****] [*****]
- -------------------------------------------------------------------------------
RC7 [*****] [*****] [*****]
- -------------------------------------------------------------------------------
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 18
<PAGE>
CONFIDENTIAL
* The Work Unit Fixed Price Amounts includes, for each Search Ring identified,
performance of the Regulatory Compliance Work referenced above that is
reasonably required in such Search Ring to either (i) select a viable Primary
Site and complete the Work required for such Site or (ii) disqualify such Search
Ring as a viable area for selection of a viable Primary Site. In the event a
viable Primary Site cannot be found and/or all required Work cannot be completed
on a Site within such Search Ring, Contractor will notify Customer of the need
to reissue/redesign such Search Ring. Upon Owner's prior written approval of any
reissuance/redesign of a Search Ring, Contractor is entitled to payment for
Regulatory Compliance Work performed within the reissued/redesigned Search Ring
in accordance with this Section 10.
** Price includes all costs related to any Work performed by an environmental
contractor/consultant pursuant to Section 11.1(a)(3) of Exhibit B (SOW).
*** Price does not include costs related to Work performed by a FAA consultant
pursuant to Section 11.1(a)(5) of Exhibit B (SOW).
10.2 Unit Pricing
Not applicable.
10.3 Task Order Pricing
Work directed by Owner and identified as Task Order work pursuant to
Section 11.1(a)(4), Section 11.1 (b) and Section 11.2 of Exhibit B (SOW), and
other Work that is outside the scope of that described in Section 11 of Exhibit
B (SOW), will be performed on a Task Order basis and priced on the basis of Task
Order Pricing in accordance with Section 1.2(c) above.
10.4 Cost-Plus Pricing
Not applicable.
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 19
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
11. SYSTEMS ENGINEERING WORK
For the Work described in Section 13 of Exhibit B (SOW), the fixed price
amounts set forth below will be paid upon satisfactory completion of the
corresponding Milestone Achievement Criteria (set forth below) in accordance
with the requirements of the Contract :
- --------------------------------------------------------------------------------
Milestone Achievement Criteria Milestone Payment Amount
(In Accordance with the
Requirements of Section 13 of
Exhibit B (SOW))
- --------------------------------------------------------------------------------
[*****]
Section 13.1 (Exhibit B)
Delivery of Isolation Test Plan and
Procedures and a package for each
tested Site
- --------------------------------------------------------------------------------
[*****]
Section 13.2 (a) and (b) (Exhibit B)
Owner's Approval of Final RF
Engineering Test Plan and Test
Procedures
- --------------------------------------------------------------------------------
[*****]
Section 13.2 (Exhibit B) (c) Test Plan
Validation and delivery of Revised
Test Plan and Procedures
- --------------------------------------------------------------------------------
[*****]
Section 13.3 (Exhibit B) Delivery of
Document detailing Simulcast Delay
Analysis Process
- --------------------------------------------------------------------------------
[*****]
Section 13.4 (Exhibit B) Delivery of
Technical Report detailing Boston
Satellite Comparison Study
- --------------------------------------------------------------------------------
[*****]
Section 13.5 (a) (Exhibit B)
Completion of Final Critical
System Specifications and
Technical Parameters Report
- --------------------------------------------------------------------------------
[*****]
Section 13.5 (b) (Exhibit B)
Completion of Cluster Testing
Report
- --------------------------------------------------------------------------------
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 20
<PAGE>
CONFIDENTIAL
11.2 Unit Pricing
Not applicable.
11.3 Task Order Pricing
As applicable pursuant to Section 1.2 (c) above.
11.4 Cost-Plus Pricing
Not applicable.
12. ANNUAL ADJUSTMENT TO PRICING
The pricing herein is subject to annual adjustment beginning July 16,
2001; such adjustment to be calculated using a percent change methodology
(whether up or down) based on the Consumer Price Index for All Urban Consumers,
not seasonally adjusted, as published by the Department of Labor, Bureau of
Labor Statistics (hereinafter "CPI"). For the first adjustment, August 1999 will
serve as the base rate period and the CPI Index published closest to but not
after July 15, 2001 as the reference point to measure the percent change for
such adjustment.
For the second adjustment on July 16, 2002, the CPI Index published
closest to, but not after, July 15, 2001 will serve as the base rate period and
the CPI Index published closest to but not after July 15, 2002 as the reference
point to measure the percent change for such adjustment. Subsequent adjustments
will be made on the 16th of July of each year using the same year-to-year
percent change methodology.
If no CPI Index data is published during the twelve-month period prior to
the 16th day of July in any given year, the Parties shall mutually agree upon a
substitute Index.
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 21
<PAGE>
CONFIDENTIAL
ATTACHMENT 1.1
PART I: MILESTONES PAYMENTS AND MILESTONE ACHIEVEMENT CRITERIA
The following Milestone Payments (1-12) will be paid on a Site-by-Site
basis upon satisfactory completion of the corresponding Milestone Achievement
Criteria in accordance with the requirements of the Contract. All Work
associated with each Work Unit set forth under each Milestone must be
satisfactorily completed in accordance with the requirements of the Contract for
the Milestone Achievement Criteria to be met and the Milestone Payment to be
payable.
Contractor shall only be entitled to payment for Work Units performed on
multiple candidate Sites within a Search Ring where the multiple instances for
payment of those Work Units are specifically indicated in this Exhibit C. Any
such payments shall be payable upon satisfactory completion of the corresponding
Work Unit Achievement Criteria.
- --------------------------------------------------------------------------------
Milestone Milestone Achievement Milestone Milestone Milestone
Payment Criteria (applicable Work Payment Payment Payment
Number Unit Achievement Criteria Amount for Amount for Amount for
are defined in Part II of Normal-Area Medium Area Wide-Area
this Attachment 1.1) Site Site Site
- --------------------------------------------------------------------------------
Milestone 1 RF1 [*****] [*****] [*****]
Total [*****] [*****] [*****]
- --------------------------------------------------------------------------------
Milestone 2 SA1 [*****] [*****] [*****]
SA2 [*****] [*****] [*****]
RF2 [*****] [*****] [*****]
AE1(a) [*****] [*****] [*****]
RC3 [*****] [*****] [*****]
Total [*****] [*****] [*****]
- --------------------------------------------------------------------------------
Milestone 3 RF3 [*****] [*****] [*****]
RC6** [*****] [*****] [*****]
[*****] [*****] [*****]
Total
- --------------------------------------------------------------------------------
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 22
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
- --------------------------------------------------------------------------------
Milestone Achievement Milestone Milestone Milestone
Criteria (applicable Work Payment Payment Payment
Milestone Unit Achievement Criteria Amount for Amount for Amount for
Payment are defined in Part II of Normal-Area Medium Area Wide-Area
Number this Attachment 1.1) Site Site Site
- --------------------------------------------------------------------------------
Milestone 4 RC4 [*****] [*****] [*****]
RC5 [*****] [*****] [*****]
Total [*****] [*****] [*****]
- --------------------------------------------------------------------------------
Milestone 5 SA3 [*****] [*****] [*****]
Total [*****] [*****] [*****]
- --------------------------------------------------------------------------------
Milestone 6 ZN1 [*****] [*****] [*****]
AE1(b) [*****] [*****] [*****]
Total [*****] [*****] [*****]
- --------------------------------------------------------------------------------
Milestone 7 AE2 [*****] [*****] [*****]
ZN2 [*****] [*****] [*****]
Total [*****] [*****] [*****]
- --------------------------------------------------------------------------------
Milestone 8 SC1* [*****] [*****] [*****]
Total [*****] [*****] [*****]
- --------------------------------------------------------------------------------
Milestone 9 RF4 [*****] [*****] [*****]
Total [*****] [*****] [*****]
- --------------------------------------------------------------------------------
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 23
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
- --------------------------------------------------------------------------------
Milestone Achievement Milestone Milestone Milestone
Criteria (applicable Work Payment Payment Payment
Milestone Unit Achievement Criteria Amount for Amount for Amount for
Payment are defined in Part II of Normal-Area Medium Area Wide-Area
Number this Attachment 1.1) Site Site Site
- --------------------------------------------------------------------------------
Milestone 10 SC2* Not Not Not
applicable; applicable; applicable;
see below* see below* see below*
AE3 [*****] [*****] [*****]
AE4 [*****] [*****] [*****]
RC7** Not Not Not
applicable; applicable; applicable;
see below** see below** see below**
Total [*****] [*****] [*****]
- --------------------------------------------------------------------------------
Milestone 11 RF5 [*****] [*****] [*****]
ZN3 [*****] [*****] [*****]
Total [*****] [*****] [*****]
- --------------------------------------------------------------------------------
Milestone 12 RF6 [*****] [*****] [*****]
Total [*****] [*****] [*****]
- --------------------------------------------------------------------------------
*Pricing for Site Construction Work Units is set forth below:
- --------------------------------------------------------------------------------
Standard Site 1 Standard Site 2 Non-Standard Site
- --------------------------------------------------------------------------------
SC1 (90%) [*****] [*****] [*****]
- --------------------------------------------------------------------------------
SC2 (10%) [*****] [*****] [*****]
- --------------------------------------------------------------------------------
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 24
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
** Pricing for Regulatory Compliance Work Units RC6 and RC7 is set forth below:
- --------------------------------------------------------------------------------
Single Tenant Multi-tenant
Monopole Site Rooftop Site Rooftop Site
- --------------------------------------------------------------------------------
RC6 [*****] [*****] [*****]
- --------------------------------------------------------------------------------
RC7 [*****] [*****] [*****]
- --------------------------------------------------------------------------------
Notes:
1. Payment amounts for RC1 and RC2 are set forth in Section 10 herein.
2. Payment amounts and Milestone Achievement Criteria for Systems Engineering
Work are set forth in Section 11 herein.
3. Payment amounts for Project Management Services are set forth in Section 2
herein.
4. Pricing and payment amounts for other items (e.g., antennas) are as set
forth in this Exhibit C.
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 25
<PAGE>
CONFIDENTIAL
ATTACHMENT 1.1
PART II: WORK UNIT ACHIEVEMENT CRITERIA
A Work Unit shall be deemed completed when completed in accordance with the
requirements of the Contract.
- --------------------------------------------------------------------------------
ID DISCIPLINE WORK UNIT ACHIEVEMENT CRITERIA
- --------------------------------------------------------------------------------
SA1 Site Candidate Identification: This Work Unit is achieved
Acquisition when Contractor has identified and submitted the
Site Survey Form to Owner that have met the
Search/Leasing and RF Design criteria in accordance
with the requirements of Section 4 of Exhibit B
(SOW).
- --------------------------------------------------------------------------------
SA2 Site Site Qualification: This Work Unit is achieved when
Acquisition Contractor has identified, caravaned, obtained RF
engineering's acceptance, ranked/selected and
submitted the Site as the Primary Candidate Site.
Contractor shall provide a ranking of the Sites
within the Search Area Ring ("SAR") if more than one
Site is examined.
A rejected SAR will be reviewed by RF and Site
Acquisition services along with Program Management
and Owner to determine if a redesign of a SAR is
necessary.
The deliverable is a completed WINDS Candidate Site
Ranking Form justifying such ranking.
This Work Unit shall be accomplished in accordance
with the requirements of Section 4 of Exhibit B
(SOW).
- --------------------------------------------------------------------------------
SA3 Site Site Lease Agreement: Contractor's submission to
Acquisition Owner of an executable Site Lease Agreement and
preliminary title report for such Site in accordance
with the requirements of Section 4 of Exhibit B
(SOW).
- --------------------------------------------------------------------------------
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 26
<PAGE>
CONFIDENTIAL
- --------------------------------------------------------------------------------
ID DISCIPLINE WORK UNIT ACHIEVEMENT CRITERIA
- --------------------------------------------------------------------------------
ZN1 Zoning Filing of Zoning Application: This Work Unit is
achieved when Contractor has Submitted and Filed the
Primary Site zoning application request or
acceptable evidence to Owner that no zoning approval
is required.
The deliverable to Owner is a copy of the zoning
application or certification by Contractor that no
approval is required.
This Work Unit shall be accomplished in accordance
with the requirements of Section 6 of Exhibit B
(SOW).
- --------------------------------------------------------------------------------
ZN2 Zoning Approval or Denial of Zoning Application: This Work
Unit is achieved when the local zoning authority has
approved or denied the Primary Site zoning
application request or acceptable evidence to Owner
that no zoning approval is required. If the parties
determine that a denied Application is not to be
appealed by some means, then the SAR will be
redesigned.
The deliverable to Owner is a copy of the
governmental authorization action or certification
by Contractor that no approval is required.
This Work Unit shall be accomplished in accordance
with the requirements of Section 6 of Exhibit B
(SOW).
- --------------------------------------------------------------------------------
ZN3 Zoning City Network Acceptance in accordance with the
requirements of Article 8 of the Terms and
Conditions.
- --------------------------------------------------------------------------------
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 27
<PAGE>
CONFIDENTIAL
- --------------------------------------------------------------------------------
ID DISCIPLINE WORK UNIT ACHIEVEMENT CRITERIA
- --------------------------------------------------------------------------------
RF1 RF Engineering Preliminary City Network Design Report: A
propagation tool will be set up for the market, a
satellite blockage plot made, land use plot made,
coverage prediction plot made -- and the terrestrial
repeater coverage prediction plots correlated with
satellite line of site and land use plots to assure
that the Preliminary City Network Design is a
reasonable approximation of the citywide preliminary
design goals, in accordance with the requirements of
Section 3 of Exhibit B (SOW). The output of the
Preliminary Design Report is coverage plots and
search area maps with respect to the Defined
Coverage Area and exclusion zones of the City within
the citywide boundaries.
This Work Unit will be achieved upon Owner's
approval of the Preliminary City Network Design in
accordance with the requirements of Section 3 of
Exhibit B (SOW).
- --------------------------------------------------------------------------------
RF2 RF Engineering Preliminary Site Selection: Contractor shall have
selected a primary Site from the Search Ring and
initially screened RF, environmental, zoning and
leasing sufficiently to confirm that the Site has a
reasonable probability of being used as a final
Site. If a Primary Candidate Site cannot be selected
from the candidates, then RF and site acquisition
services, along with Program Management, will
determine if a redesign of the SAR is necessary.
This Work Unit shall be accomplished in accordance
with the requirements Section 3 of Exhibit B (SOW).
The deliverable to Owner is a WINDS Candidate Site
Ranking Form completed in accordance with the
requirements of Section 3 of Exhibit B (SOW).
- --------------------------------------------------------------------------------
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 28
<PAGE>
CONFIDENTIAL
- --------------------------------------------------------------------------------
ID DISCIPLINE WORK UNIT ACHIEVEMENT CRITERIA
- --------------------------------------------------------------------------------
RF3 RF Engineering Final Site Selection and Site/Cluster Test Report:
Contractor shall have technically qualified or
rejected the Site through testing or other means,
performed rooftop studies as needed, determined that
the zoning, permitting and leasing process has a
reasonable probability of success, and that the Site
will not be affected by action on adjacent sites.
The deliverable shall be the Site/Cluster Test
Report, including signal strength plot showing the
coverage and CW transmission provided by that Site.
This Work Unit shall be accomplished in accordance
with the requirements of Section 3 of Exhibit B
(SOW).
- --------------------------------------------------------------------------------
RF4 RF Engineering Terrestrial Repeater Unit Acceptance Test: The
repeater will have been received from the
manufacturer, acceptance tested (prior to
installation), installed, and passed a Terrestrial
Repeater Unit Acceptance Test, and the Site is
certified as ready for operation and a repeater
activation report is submitted to Owner in
accordance with the requirements of Sections 3 and
7.6 of Exhibit B (SOW).
- --------------------------------------------------------------------------------
RF5 RF Engineering City Network Acceptance in accordance with the
requirements of Article 8 of the Terms and
Conditions.
- --------------------------------------------------------------------------------
RF6 RF Engineering Satellite Receive Antenna Repointing to be performed
in accordance with the requirements of Section 9 of
Exhibit B (SOW).
The deliverable to Owner shall be a certification by
Contractor that such repointing has been
successfully completed in accordance with the
requirements of Section 9 of Exhibit B (SOW).
- --------------------------------------------------------------------------------
RC1 Regulatory Policy and Enforcement Summary ReportA report will
Compliance be delivered to Owner, summarizing regulatory policy
and enforcement environment for Environmental,
Airspace, FCC and RF Exposure Compliance
requirements in accordance with the requirements of
Section 11 of Exhibit B (SOW).
- --------------------------------------------------------------------------------
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 29
<PAGE>
CONFIDENTIAL
- --------------------------------------------------------------------------------
ID DISCIPLINE WORK UNIT ACHIEVEMENT CRITERIA
- --------------------------------------------------------------------------------
RC2 Regulatory System Level Compliance Plan: Policy and process
Compliance will be agreed upon by Contractor and Owner for
Regulatory Compliance in accordance with the
requirements of Section 11 of Exhibit B (SOW).
The deliverable is a System Level Compliance Plan in
accordance with the requirements of Section 11 of
Exhibit B (SOW).
- --------------------------------------------------------------------------------
RC3 Regulatory NEPA Initial Screening: Each candidate within an RF
Compliance Search Ring will be evaluated for environmental
considerations applicable to the National
Environmental Policy Act. This evaluation is to
select the Primary Candidate Sites by eliminating
sites based upon environmental considerations in
accordance with the requirements of Section 11 of
Exhibit B (SOW).
The deliverable is a NEPA Initial Screening report
in accordance the requirements of Section 11 of
Exhibit B (SOW).
- --------------------------------------------------------------------------------
RC4 Regulatory Transactional Screening: The Primary Candidate Site
Compliance from the RF Search Ring will be screened for
additional environmental considerations in
accordance with the requirements of Section 11 of
Exhibit B (SOW).
The deliverable is a Transactional Screening report
in accordance with the requirements of Section 11 of
Exhibit B (SOW).
- --------------------------------------------------------------------------------
RC5 Regulatory FAA Screening & Studies: The Primary Sites within
Compliance the RF Search Ring will be evaluated. The
appropriate FAA studies and filings will be
submitted as required in accordance with the
requirements of Section 11 of Exhibit B (SOW).
The deliverable to Owner is an FAA Report and/or FAA
Impact Study (if so required) in accordance with the
requirements of Section 11 of Exhibit B (SOW).
- --------------------------------------------------------------------------------
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 30
<PAGE>
CONFIDENTIAL
- --------------------------------------------------------------------------------
ID DISCIPLINE WORK UNIT ACHIEVEMENT CRITERIA
- --------------------------------------------------------------------------------
RC6 Regulatory RF Exposure Site Characterization: The Primary
Compliance Candidate Sites will have been evaluated and
characterized for RF Exposure in accordance with the
requirements of Section 11 of Exhibit B (SOW).
The deliverable to Owner is the RF Exposure
compliance evaluation/characterization and
mitigation in accordance with the requirements of
Section 11 of Exhibit B (SOW).
- --------------------------------------------------------------------------------
RC7 Regulatory Site RF Safety Plan: The documentation for Site RF
Compliance Safety Report will be completed in accordance with
the requirements of Section 11 of Exhibit B (SOW).
The deliverable is a copy of the Safety Plan and
other documentation required for regulatory
compliance.
- --------------------------------------------------------------------------------
AE1(a) Architectural & Submission of Leasing Exhibit and Drawing Package
Engineering Contractor submits the completed Site Acquisition
Exhibits and Drawings Package to Site Acquisition
Services and Owner in accordance with the
requirements of Section 5 of Exhibit B (SOW).
- --------------------------------------------------------------------------------
AE1(b) Architectural & Submission of Zoning Exhibit and Drawing Package:
Engineering Contractor submits the completed Zoning Exhibits and
Drawings to Zoning Services and Owner in
accordance with the requirements of Section 5 of
Exhibit B (SOW).
- --------------------------------------------------------------------------------
AE2 Architectural & Construction Documents and Building Permits:
Engineering Contractor submits to Owner completed Construction
Drawings and Documents to the issuance ready stage
in accordance with the requirements of Section 5 of
Exhibit B (SOW).
- --------------------------------------------------------------------------------
AE3 Architectural & Final "As Built" Drawings: Contractor submits to
Engineering Owner completed, final "As-Built" drawings in
accordance with the requirements of Section 5 of
Exhibit B (SOW).
- --------------------------------------------------------------------------------
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 31
<PAGE>
CONFIDENTIAL
- --------------------------------------------------------------------------------
ID DISCIPLINE WORK UNIT ACHIEVEMENT CRITERIA
- --------------------------------------------------------------------------------
AE4 Architectural & Completion of Construction: Resolution of all punch
Engineering list items to complete the Site in accordance with
the requirements of Section 7 of Exhibit B (SOW).
The deliverable is a copy of the resolved punchlist.
- --------------------------------------------------------------------------------
SC1 Site Substantial Completion: The Site has been
Construction constructed to the point where the Site is ready to
receive the repeater equipment including all coax,
power and telco services have been provisioned,
repeater mounting frame defined and antenna
structure developed and all items satisfactorily
tested in accordance with the requirements of
Section 7 of Exhibit B (SOW).
The deliverable to Owner is the Preliminary Site
Test Report completed in accordance with the
requirements of Section 7 of Exhibit B (SOW).
- --------------------------------------------------------------------------------
SC2 Site Completion of Construction: Resolution of all punch
Construction list items to complete the Site in accordance with
the requirements of Section 7 of Exhibit B (SOW).
The deliverable is a copy of the resolved punchlist.
- --------------------------------------------------------------------------------
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 32
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
ATTACHMENT 1.2(b)
Unit Prices
---------------------------------------------------------------------------
Item Units Price
---------------------------------------------------------------------------
Construction Labor, Services & Materials
---------------------------------------------------------------------------
Furnish and Install Ice Bridge (Over 50 feet) lf [*****]
---------------------------------------------------------------------------
Furnish And Install Transformer ea [*****]
---------------------------------------------------------------------------
Furnish And Install Submeter ea [*****]
---------------------------------------------------------------------------
Furnish and Install 1-5/8" Coax Runs (Over 100 feet) lf [*****]
---------------------------------------------------------------------------
Furnish and Install 7/8" Coax (Over 100 feet) lf [*****]
---------------------------------------------------------------------------
Furnish And Install Power Runs (Over 100 feet) lf [*****]
---------------------------------------------------------------------------
Furnish And Install Telco Runs (Over 100 feet) lf [*****]
---------------------------------------------------------------------------
Furnish and install grounding runs (Over 100 feet) lf [*****]
---------------------------------------------------------------------------
Core Drilling ea [*****]
---------------------------------------------------------------------------
Slab X-Ray ea [*****]
---------------------------------------------------------------------------
Furnish and Install load center (120/240V, 100A, 12 ea [*****]
circuits)
---------------------------------------------------------------------------
Furnish and Install meter socket (4 Terminal, 100A) ea [*****]
---------------------------------------------------------------------------
Additional RF Services
---------------------------------------------------------------------------
Isolation Testing, RF Per Site [*****]
---------------------------------------------------------------------------
Additional A&E Services
---------------------------------------------------------------------------
2-C Site Survey W / Certification ea [*****]
---------------------------------------------------------------------------
Photo Simulations (2 Views) ea [*****]
---------------------------------------------------------------------------
Abbreviations: ea: each
lf: per foot
sf: per square foot
cuyd: per cubic yard
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 33
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
ATTACHMENT 1.2(c)
HOURLY RATE FOR TIME AND MATERIALS PRICING
------------------------------------------------------
LCC International, Inc.
------------------------------------------------------
Title Hourly Rate
------------------------------------------------------
General Manager of Ops [*****]
------------------------------------------------------
Regional Program Manager [*****]
------------------------------------------------------
Market Manager [*****]
------------------------------------------------------
Administrative Assistant [*****]
------------------------------------------------------
Project Schedule Analyst [*****]
------------------------------------------------------
Database Specialist [*****]
------------------------------------------------------
Documentation Control Specialist [*****]
------------------------------------------------------
System Support [*****]
------------------------------------------------------
RF Project Manager [*****]
------------------------------------------------------
RF Senior Engineer [*****]
------------------------------------------------------
RF Design Engineer [*****]
------------------------------------------------------
RF Associate [*****]
------------------------------------------------------
RF Local Assistant [*****]
------------------------------------------------------
RF Technical Assistant [*****]
------------------------------------------------------
Site Acq/Zoning Manager [*****]
------------------------------------------------------
Administrative Assistant [*****]
------------------------------------------------------
Lawyer [*****]
------------------------------------------------------
Leasing Paralegal [*****]
------------------------------------------------------
Leasing Assistant [*****]
------------------------------------------------------
NEPA Supervisor [*****]
------------------------------------------------------
NEPA Specialist (s) [*****]
------------------------------------------------------
Administrative Assistant [*****]
------------------------------------------------------
Site Acquisition Supervisor [*****]
------------------------------------------------------
Site Acquisition Specialist [*****]
------------------------------------------------------
Zoning Supervisor [*****]
------------------------------------------------------
Zoning Specialist [*****]
------------------------------------------------------
Construction Manager [*****]
------------------------------------------------------
Contracts Manager [*****]
------------------------------------------------------
Utility Coordinator [*****]
------------------------------------------------------
Construction Field Inspector [*****]
------------------------------------------------------
Materials Manager [*****]
------------------------------------------------------
Materials Coordinator [*****]
------------------------------------------------------
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 34
<PAGE>
CONFIDENTIAL
ATTACHMENT 1.2(e)
Permitted Reimbursable Expenses
Owner shall reimburse Contractor for 103% of the costs and expenses set
forth below as incurred by Contractor in performance of the services hereunder.
Part I. No Owner Consent Required (Except for Single Items Above $2,000.00,
which shall require the prior written consent of Owner's authorized
representative, which consent may be provided by e-mail).
1. Zoning fees, building permit fees and other fees and charges paid to local
jurisdictions, utility providers and governmental and quasi-governmental
agencies for review, filing, processing, permitting and inspection of
potential Sites, including fees to third parties or costs incurred in
obtaining local zoning maps and regulations;
2. Permit extensions or renewal fees if incurred as a result of Excusable
Delay;
3. Fees paid to third parties for title search and preliminary title reports;
and
4. Express courier charges for site-package document control.
Part II. Owner Consent Required*
1. Third-party expenses for site appraisals, estimates, and expert witnesses
at zoning hearings;
2. Upgrades or modifications required for existing structures to meet
required codes, including costs incurred as a result of hidden or
concealed obstructions and latent structural problems;
3. Flood investigations (other than consulting local flood mapping as a part
of the site feasibility process);
4. Public relations support performed by third parties;
5. If required by landlord, reimbursement of landlord's legal expenses in
connection with review of Site Lease Agreements;
6. AM Tower Analysis, if required;
7. Crane rentals as required for drive testing;
8. Riggers (Tower Crews), if required;
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 35
<PAGE>
CONFIDENTIAL
9. Payments made, upon Owner's request, to Landlords under Site Lease
Agreements, Site option payments.
10. Third party services related to securing additional title assurance beyond
preliminary title report;
11. Interim Maintenance Program Equipment as described in Section 9.2(b) of
this Exhibit C;
12. Construction Consultant as defined in Section 7 of this Exhibit C;
13. A & E Consultant as defined in Section 5 of this Exhibit C.
14. FAA consultant services as required pursuant to Section 11.1(a)(5) of
Exhibit B (SOW).
* Requires the prior written consent by Owner's authorized representative, which
consent may be given by e-mail.
Pass-Through Expenses
Owner shall reimburse Contractor for one hundred percent (100%) of sales taxes
or duties related to the Work.
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 36
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
ATTACHMENT 7.2
Standard Site Design Descriptions
- --------------------------------------------------------------------------------
Roof Top Standard Site Description
- --------------------------------------------------------------------------------
Standard Site 1 Standard Site 2
- --------------------------------------------------------------------------------
[*****]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
For purposes of clarification, the descriptions and pricing associated with the
Standard Sites do not include the following materials, labor or services:
1. Complete Structural Analysis of a Site pursuant to Section 5(b)(i)
of Exhibit B (SOW) (but pricing does include architectural and
engineering review fees charged by building/property owners)
2. roof penetration
3. lightning rods
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 37
<PAGE>
CONFIDENTIAL
4. cable ladders
5. transformers
6. circuit box or Ground Fault Interruption Circuit
7. submeter.
* For purposes of further clarification, the repeater hardware will be delivered
to each Site location by the repeater manufacturer and Contractor will receive
and install such repeater hardware in accordance with Section 7.6 of Exhibit B
(SOW).
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 38
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
ATTACHMENT 9.1
ANTENNA PRICING (attached)
[*****]
(entire table has been omitted)
Exhibit C - Contract Pricing, Payments and Milestone Achievement Criteria
Page 39
<PAGE>
CONFIDENTIAL
CONTRACT
FOR
ENGINEERING AND CONSTRUCTION
OF
TERRESTRIAL REPEATER NETWORK SYSTEM
By and Between
XM Satellite Radio Inc.
and
LCC International, Inc.
EXHIBIT D -- DATA AND DOCUMENTATION
PROPRIETARY NOTICE
This attached Exhibit D -- Data and Documentation -- and the information
contained herein is confidential and proprietary to XM Satellite Radio Inc., and
shall not be published or disclosed to any third party without the express
written consent of a duly authorized representative of XM Satellite Radio Inc.
<PAGE>
CONFIDENTIAL
CONTRACT
FOR
ENGINEERING AND CONSTRUCTION
OF
TERRESTRIAL REPEATER NETWORK SYSTEM
EXHIBIT D -- DATA AND DOCUMENTATION
As a part of the Work, Contractor shall deliver to Owner the following
Data and Documentation in accordance with the schedule indicated:
- --------------------------------------------------------------------------------
Data & Documentation Delivery Date Owner Response
- --------------------------------------------------------------------------------
Initial City Project Schedules, EDC + 45 Calendar Review and Approval
in accordance with Section 2.3 of Days
Exhibit B
- --------------------------------------------------------------------------------
For each City, a City Budget, in See Section 2.4 of Information
accordance with Section 2.4 of Exhibit B
Exhibit B
- --------------------------------------------------------------------------------
Weekly Status Reports, in See Section 2.6 of
accordance with Section 2.6 of Exhibit B Information
Exhibit B
- --------------------------------------------------------------------------------
Monthly Status Reports, in See Section 2.6 of
accordance with Section 2.6 of Exhibit B Information
Exhibit B
- --------------------------------------------------------------------------------
Quarterly Status Reports, in See Section 2.6 of
accordance with Section 2.6 of Exhibit B Information
Exhibit B
- --------------------------------------------------------------------------------
For each City, a Preliminary City August 20, 1999 Approval
Network Design, in accordance
with Section 3.3 of Exhibit B
- --------------------------------------------------------------------------------
For each City, the Revised City See Initial City
Network Design, in accordance Schedule Approval
with Section 3.4 of Exhibit B
- --------------------------------------------------------------------------------
For each City, the Build-To City See Initial City
Network Design, in accordance Schedule Approval
with Section 3.5 of Exhibit B
- --------------------------------------------------------------------------------
For each City, the Final System See Section 3.7 of
Configuration, in accordance with Exhibit B Information
Section 3.7 of Exhibit B
- --------------------------------------------------------------------------------
Exhibit D (Data and Documentation)
Page 1
<PAGE>
CONFIDENTIAL
- --------------------------------------------------------------------------------
Data & Documentation Delivery Date Owner Response
- --------------------------------------------------------------------------------
For each Site, a Site Acquisition See Section 4.2 of Approval and
Agreement in accordance with Exhibit B Execution By Owner
Section 4.2 of Exhibit B
- --------------------------------------------------------------------------------
Preliminary Site Test Report, in See Section 7.5 of
accordance with Section 7.5 of Exhibit B Information
Exhibit B
- --------------------------------------------------------------------------------
Repeater Unit Acceptance Test See Section 7.6 of
results in accordance with Exhibit B Information
Section 7.6 of Exhibit B
- --------------------------------------------------------------------------------
Repeater Acceptance Test Plan and EDC + 30 Calendar Days Approval
Procedures, in accordance with
Section 2 of Exhibit E
- --------------------------------------------------------------------------------
Repeater Acceptance Test Report, See Section 4 of
in accordance with Section 4 of Exhibit B Approval
Exhibit E
- --------------------------------------------------------------------------------
Site Package, in accordance with See Initial City
Section 2.8 of Exhibit B Schedule Information
- --------------------------------------------------------------------------------
NMS Report, in accordance with See Section 12.2 of
Section 12.2 of Exhibit B Exhibit B Information
- --------------------------------------------------------------------------------
Exhibit D (Data and Documentation)
Page 2
<PAGE>
CONFIDENTIAL
CONTRACT
FOR
ENGINEERING AND CONSTRUCTION
OF
TERRESTRIAL REPEATER NETWORK SYSTEM
By and Between
XM Satellite Radio Inc.
and
LCC International, Inc.
EXHIBIT E - NETWORK TESTING AND
ACCEPTANCE CRITERIA
CONFIDENTIALITY NOTICE
This attached Exhibit E - Network Testing and Acceptance Criteria -- and the
information contained herein is confidential to the Parties and shall not be
published or disclosed to any third party without the express written consent of
a duly authorized representative of each Party.
<PAGE>
CONFIDENTIAL
CONTRACT
FOR
ENGINEERING AND CONSTRUCTION
OF
TERRESTRIAL REPEATER NETWORK SYSTEM
EXHIBIT E - NETWORK TESTING AND
ACCEPTANCE CRITERIA
1. Definitions. As used in this Exhibit E:
A. "Central Business District" or "CBD" shall mean, for each City, that
geographic area on which is situated a substantial portion of that
City's business and through which travels a substantial portion of
the City's vehicular traffic and for which there is a high
probability that Owner's satellites, when properly launched and
functioning in accordance with their specification, will not provide
adequate coverage. As of EDC, the CBD for certain Cities is set
forth in Attachment 1 hereto. On or before EDC plus thirty (30)
Calendar Days, Owner will identify the CBDs for the remaining
Cities. The CBD identification shall be incorporated into the
Contract by an Amendment in accordance with Article 28.3 of the
Terms and Conditions.
B. "Drive Test Route" shall mean, with respect to a City, those
thoroughfares within the Defined Coverage Area on which a
substantial portion of the City's vehicular traffic (including
commuter traffic) travels and from which Contractor shall test the
City Network. The Drive Test Routes consist of the aggregate of the
individual Primary Drive Test Routes and Secondary Drive Test
Routes. As of EDC, the Drive Test Routes for certain Cities are as
set forth in Attachment 2 hereto. The Parties shall mutually agree
on the Drive Test Routes for the remainder of the Cities on or
before EDC plus thirty (30) Calendar Days. The Drive Test Routes for
such remaining Cities shall be roughly equivalent to, and as
comprehensive as, those set forth in Attachment 2 hereto and such
Drive Test Routes shall be incorporated into the Contract by an
Amendment in accordance with Article 28.3 of the Terms and
Conditions.
C. "Defined Coverage Area" shall have the meaning set forth in Section
3.2 of Exhibit B (SOW).
D. "Primary Drive Test Route" shall mean, with respect to either a City
or a CBD of a City, a series of individual traffic routes on which
there is the highest density of a City's vehicular traffic
(including commuter traffic) and from which Contractor shall test
the City Network. As of the Effective Date, the Primary Drive Test
Routes for certain Cities and CBDs are as set forth in Attachment 2
hereto. The Parties shall mutually agree on the Drive Test Routes
for the remainder of the Cities and CBDs on or before EDC plus
thirty (30) Calendar Days. The Primary
Exhibit E (Network Testing and Acceptance Criteria)
Page 1
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
Drive Test Routes for such remaining Cities shall be roughly
equivalent to, and as comprehensive as, those set forth in
Attachment 2 hereto and such Primary Drive Test Routes shall be
incorporated into the Contract by an Amendment in accordance with
Article 28.3 of the Terms and Conditions.
E. "Repeater Acceptance Test Criteria" shall mean the criteria against
which a City Network shall be tested, and the conformity to which
shall indicate that Contractor has successfully completed the
Repeater Acceptance Test with respect to such City Network. The
Repeater Acceptance Test Criteria are set forth in Section 2.B
below.
F. "Secondary Drive Test Route" shall mean a Drive Test Route that is
not a Primary Drive Test Route. As of the Effective Date, the
Secondary Drive Test Route for certain Cities and CBDs are as set
forth in Attachment 2 hereto. The Parties shall mutually agree on
the Drive Test Routes for the remainder of the Cities and CBDs on or
before EDC plus thirty (30) Calendar Days. The Secondary Drive Test
Routes for such remaining Cities shall be roughly equivalent to, and
as comprehensive as, those set forth in Attachment 2 hereto and such
Secondary Drive Test Routes shall be incorporated into the Contract
by an Amendment in accordance with Article 28.3 of the Terms and
Conditions.
G. "Signal Reliability" shall mean that the Repeater Network Acceptance
Testing verifies a signal level greater than [*****].
H. "Signal Outage" shall mean any testing distance interval during
which the Repeater Acceptance Testing verifies a signal level at or
below [*****].
2. Repeater Network Acceptance Testing
A. In accordance with Article 8.1 of the Contract, Contractor shall
perform Repeater Network Acceptance Testing with respect to each
City Network in accordance with the Repeater Acceptance Test Plan
and Procedures, including testing intervals and test equipment
configuration(s) to be used by Contractor hereunder. Contractor
shall deliver to Owner for Owner's review and approval the Repeater
Acceptance Test Plan and Procedures on or before EDC plus thirty
(30) Calendar Days. Contractor shall incorporate Owner's reasonable
comments. The Owner-approved Repeater Acceptance Test Plan and
Procedures will be incorporated into the Contract as Attachment 3
hereto by an Amendment in accordance with Article 28.3 of the Terms
and Conditions.
B. A City Network shall be deemed to have no defects when the City
Network satisfies the following criteria (the "Repeater Acceptance
Test Criteria"):
Exhibit E (Network Testing and Acceptance Criteria)
Page 2
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
(1) For each individual Primary Drive Test Route in the Central Business
District of a City there is: (a) [*****] Signal Reliability
(excluding Exclusion Zones and those areas reasonably determined to
be covered by signals from Owner's satellites) along the length of
each Primary Drive Test Route; and (b) no individual Signal Outage
greater than [*****].
(2) For each individual Primary Drive Test Route outside the Central
Business District of a City there is: (a) [*****] Signal Reliability
(excluding Exclusion Zones and those areas reasonably determined to
be covered by signals from Owner's satellites) along the length of
each Primary Drive Test Route; and (b) no individual Signal Outage
greater than [*****].
(3) For the aggregate of the Secondary Drive Test Routes for a City,
there is: (a) [*****] Signal Reliability (excluding Exclusion Zones
and those areas reasonably determined to be covered by signals from
Owner's satellites) along the aggregate of the lengths of such
Secondary Drive Test Routes; and (b) no individual Signal Outage
greater than [*****].
3. Witness of Repeater Acceptance Testing. For each City Network, and in
accordance with this Exhibit E, the following shall apply: (i) Owner shall be
entitled to attend and witness all testing performed hereunder; and (ii)
Contractor shall provide Owner with fourteen (14) Calendar Days prior written
notice of commencement of any such testing.
4. Repeater Acceptance Test Report. With respect to each City Network, within
twenty-one (21) Calendar Days after Contractor's completion of all testing
performed in accordance with this Exhibit E, Contractor shall provide to Owner
the Repeater Acceptance Test Report. The Repeater Acceptance Test Report shall
set forth the following: (i) for each set of routes set forth in Sections B.1,
B.2, and B.3 above, respectively, an RF coverage plot showing the location of
each measurement and whether or not such measurement proves Signal Reliability;
(ii) for each set of routes set forth in Sections B.1, B.2, and B.3 above,
respectively, a graph of distance against signal strength showing where
measurements prove or fail to prove Signal Reliability; and (iii) for the City
Network, detailed analysis showing whether or not the City Network meets the
Repeater Acceptance Test Criteria set forth above.
5. Certification. In the event the Repeater Acceptance Test Report states that
the City Network meets the Repeater Acceptance Test Criteria set forth above,
concurrent with Contractor's delivery of such report, Contractor shall provide
to Owner a detailed report setting forth the test results and a certification in
the form of Attachment 3 (Form of Certification for Acceptance) hereto. In the
event the Repeater Acceptance Test Report sets forth that the City Network fails
to meet the Repeater Acceptance Test Criteria set forth above, the Parties shall
proceed to correct
Exhibit E (Network Testing and Acceptance Criteria)
Page 3
<PAGE>
CONFIDENTIAL
the City Network in accordance with Article 8.1 (c) of the Contract (as if Owner
had delivered to Contractor an undisputed Notice of Defects).
6. Notice of Acceptance. Owner shall provide Contractor notice of its acceptance
of the City Network or Notice of Defects thereof in accordance with Article 8 of
the Terms and Conditions.
Exhibit E (Network Testing and Acceptance Criteria)
Page 4
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
ATTACHMENT 1
CENTRAL BUSINESS DISTRICTS
[*****]
(Maps attached hereto have been omitted)
Exhibit E - Attachment 1
Page 1-1
<PAGE>
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
ATTACHMENT 2
PRIMARY AND SECONDARY DRIVE
TEST ROUTES
[*****]
(Maps attached hereto have been omitted)
Exhibit E - Attachment 1
Page 1-2
<PAGE>
CONFIDENTIAL
ATTACHMENT 3
REPEATER ACCEPTANCE TEST PLAN
AND TEST PROCEDURES
Exhibit E - Attachment 2
Page 2-1
<PAGE>
CONFIDENTIAL
ATTACHMENT 4
FORM OF ACCEPTANCE CERTIFICATION
This certificate is being delivered pursuant to the Contract for
Engineering and Construction of Terrestrial Repeater Network System, dated as of
___________ ___, 1999 (as more particularly defined therein, the "Contract"), by
and between XM Satellite Radio Inc. ("Owner") and LCC International, Inc.
("Contractor"). All capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed to them in the Contract.
Pursuant to Section 4 (Repeater Acceptance Test Report) of Exhibit E of
the Contract, the undersigned, a duly authorized officer of Contractor, hereby
certifies to Owner as follows with respect to the City Network for
________________ [identify the applicable City] (the "Certified City Network"):
(a) All testing required by the Repeater Acceptance Test Plan and Test
Procedures for the Certified City Network has been performed in
accordance with the requirements of the Contract, including, without
limitation, Exhibit E (Network Testing Plan and Acceptance
Criteria);
(b) The testing completed pursuant to the Repeater Acceptance Test Plan
and Test Procedures shows that the City Network satisfies the
Repeater Acceptance Test Criteria; and
(c) Contractor has delivered to Owner the Repeater Acceptance Test
Report in accordance with the requirements of the Contract.
For LCC International, Inc.
Signature:_____________________________
Name:__________________________________
Title:_________________________________
Date:__________________________________
Exhibit E - Attachment 3
Page 3-1
