Contract For Engineering And Construction of Terrestrial Repeater Network System

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 AND LCC INTERNATIONAL, INC., AND SHALL NOT BE PUBLISHED OR DISCLOSED TO ANY THIRD PARTY WITHOUT THE EXPRESS WRITTEN CONSENT OF A DULY AUTHORIZED REPRESENTATIVE OF XM SATELLITE RADIO INC.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.


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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


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CONTRACT


FOR


ENGINEERING AND CONSTRUCTION


OF


TERRESTRIAL REPEATER NETWORK SYSTEM


BY AND BETWEEN


XM SATELLITE RADIO INC.


AND


LCC INTERNATIONAL, INC.


TERMS AND CONDITIONS 4
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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..........................................................16 5.7 RESERVED..............................................................17 5.8 WITHHOLDING OF PAYMENT................................................17 5.9 CONTRACTOR'S RIGHT TO SUSPEND THE WORK................................17 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


8.1 REPEATER ACCEPTANCE TESTING (CITY NETWORK TESTING OF REPEATERS ONLY)..26


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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..........................................................52 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


21. INSURANCE...............................................................57


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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.....................................74 26.4 TERMINATION/EXPIRATION ASSISTANCE...................................76


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........................................................83


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ATTACHMENTS Attachment A Key Personnel


Attachment B Form of Certification Accompanying Invoices


Attachment C Contractor's Software License Terms and Conditions


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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:


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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.


(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


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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).


(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).


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(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 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).


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(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.


(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


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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.


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