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.
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▇▇▇▇▇ ▇▇
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AND
Fraunhofer Gesellschaft zur Forderung
Der angewandten Forschung e.V.,
ADDRESS
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July 16, 1999
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 ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇.▇.▇.
(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-▇▇▇▇ 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 ▇▇▇▇ ▇▇▇▇▇
notifying them that such invoice has been faxed. Fixed
***** 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
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***** 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.
Technical and Program: Stell Patsiokas Technical and Program: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Contractual: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Contractual: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
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.
***** 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
***** 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:
***** 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.
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
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.
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
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 ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇,
▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Contracts Manager
Telephone: ▇▇▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇▇▇-▇▇▇-▇▇▇▇
If to Customer: XM Satellite Radio Inc.
XM Innovation Center
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ Patsiokas
Senior Vice President, Technology
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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
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:_____________________________
***** 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"
***** 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
***** 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
***** 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
***** 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
***** 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
***** 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
***** 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
***** 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
***** 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
***** 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
***** 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
***** 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
***** 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
***** 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
[*****]
-------------------------------------------------------------------------------------
WP-ID Work package Description Deliverables Required Input
-------------------------------------------------------------------------------------
SYS-1-2 [*****]
-------------------------------------------------------------------------------------
SYS-1-3
-------------------------------------------------------------------------------------
SYS-1-4
-------------------------------------------------------------------------------------
SYS-1-5
-------------------------------------------------------------------------------------
SYS-1-6
-------------------------------------------------------------------------------------
SYS-1-7
-------------------------------------------------------------------------------------
PAGE 215
***** 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
[*****]
-------------------------------------------------------------------------------------
WP-ID Work package Description Deliverables Required Input
-------------------------------------------------------------------------------------
SYS-2-1 [*****]
-------------------------------------------------------------------------------------
SYS-2-2
-------------------------------------------------------------------------------------
SYS-2-3
-------------------------------------------------------------------------------------
Note: [*****]
PAGE 216
***** 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 [*****]
-------------------------------------------------------------------------------------
WP-ID Work package Description Deliverables Required Input
-------------------------------------------------------------------------------------
SYS-4-1 [*****]
-------------------------------------------------------------------------------------
SYS-4-2
-------------------------------------------------------------------------------------
SYS-4-3
-------------------------------------------------------------------------------------
SYS-4-4
-------------------------------------------------------------------------------------
SYS-4-5
-------------------------------------------------------------------------------------
PAGE 217
***** 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 [*****]
[*****].
-------------------------------------------------------------------------------------
WP-ID Work package Description Deliverables Required Input
-------------------------------------------------------------------------------------
SYS-5-1 [*****]
-------------------------------------------------------------------------------------
SYS-5-2
-------------------------------------------------------------------------------------
PAGE 218
***** 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
***** 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
***** 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
***** 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
***** 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
***** 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
***** 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
***** 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
9.3 [*****]
--------------------------------------------------------------------------------
Review Purpose Input Requirements Expected review result
--------------------------------------------------------------------------------
o [*****] o [*****] o [*****]
--------------------------------------------------------------------------------
*** End of document ***
[*****]
PAGE 227
***** 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
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
***** 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
***** 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
***** 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
***** 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
***** 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
***** 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
Exhibit E
MONTHLY AIR TRAVEL SUMMARY
For the Month and Year:_________________________________________
------------------------------------------------------------------------------------------------------------------------------------
Destination Return
Name and Title of Person Traveling (Place & Date) (Place & Date) Purpose Amount*
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
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
------------------------------------------------------------------------------------------------------------------------------------
PAGE 11