DCX and Sirius Installs

September 20, 2006

It seems that every time an auto manufacturer annonces production cuts that folks in this sector get an impression that this means less satellite radio installs. Quite simply, an assumption such as this, while it may seem reasonable, is off base.

We took a look at the Sirius/Chrysler deal, and found that, in the simplest terms, the warrants that Chrysler can earn are tied to the NUMBER OF INSTALLS DCX DOES, and NOT what percentage of installs DCX does.

The short answer is this. If DCX wants to earn their warrants they need to install a certain and specified number of Sirius radios. Should they fail to meet the terms of the agreement........They wont get paid. DCX has every reason to install Sirius regardless of production cuts.

While I have not spelled out the terms of the Ford deal, there are many similarities. An assumption made by anyone that production cuts will impact the installations of satellite radio is an assumption that these companies are going to give up on warrants.

SIRIUS/DCX Contract Excerpts:

(a) with respect to 750,000 shares of Common Stock, on the earlier of (i) June 30, 2004, if DCC has included a one-year subscription to the Sirius Service as part of the sales price or leasing cost of every 2005 model year DCC Factory Enabled Vehicle or (ii) the date on which 250,000 Eligible Vehicles have been produced;

(b) with respect to 750,000 shares of Common Stock, on the earlier of (i) June 30, 2005, if DCC has included a one-year subscription to the Sirius Service as part of the sales price or leasing cost of every 2006 model year DCC Factory Enabled Vehicle or (ii) the date on which 250,000 Eligible Vehicles have been produced;

(c) with respect to 2,000,000 shares of Common Stock, on the earlier of (i) December 31, 2004, if on or before such date DCC has certified to the Company in writing (which certification shall include reasonable supporting documentation) that it has commenced factory
installation of Sirius Receivers in production models of 12 of the following 13 vehicle lines: PT Cruiser, Durango, Ram, Dakota, 300 Series, Sebring/Stratus, Magnum, Grand Cherokee, Liberty, Wrangler, Caravan, Town & Country and Pacifica or (ii) the date on which 250,000
Eligible Vehicles have been produced;

(d) with respect to 2,500,000 shares of Common Stock, on the earlier of (i) August 31, 2005, if on or before such date DCC has delivered, or caused a supplier reasonably acceptable to the Company to deliver, to the Company an Integrated Head Unit suitable for commencement of DCC's design verification, and such Integrated Head Unit has passed the Company's reasonable type acceptance requirements; provided that if DCC fails to deliver, or fails to cause a supplier
reasonably acceptable to the Company to deliver, such Integrated Head Unit on or prior to August 31, 2005 solely as a result of the failure of the Company (or a supplier to the Company) to deliver to DCC, on or prior to December 31, 2004, a Sirius Standard Module suitable for
commencement of DCC's design verification, then such August 31, 2005 date shall be extended by the number of days such delivery to DCC has been delayed, or (ii) the date on which 3,200,000 Eligible Vehicles have been produced;

(e) with respect to 2,500,000 shares of Common Stock, on the earlier of (i) December 31, 2006, if on or before such date DCC has commenced, or caused a supplier reasonably acceptable to the Company to commence, production of commercial quantities of an Integrated Head Unit, and such Integrated Head Unit has passed the Company's reasonable type acceptance
requirements; provided that if DCC fails to commence, or fails to cause a supplier reasonably acceptable to the Company to commence, such production on or prior to December 31, 2006 solely as a result of the failure of the Company (or a supplier to the Company) to deliver
to DCC, on or prior to September 30, 2005, commercial quantities of the Sirius Standard Module, then such December 31, 2006 date shall be extended by the number of days such delivery to DCC has been delayed, or (ii) the date on which 3,200,000 Eligible Vehicles have been produced;

(f) with respect to 1,500,000 shares of Common Stock, on the earlier of (i) December 31, 2004,if on or prior to such date, DCC has shipped 100,000 Bundled DCC Factory Enabled Vehicles to its authorized dealers or DCC approved "ship-to-points" or (ii) the date on which
250,000 Eligible Vehicles have been produced;

(g) with respect to 2,500,000 shares of Common Stock, on the earlier of (i) December 31, 2005, if on or prior to such date DCC has shipped 400,000 Bundled DCC Factory Enabled Vehicles to its authorized dealers or DCC approved "ship-to-points" or (ii) the date on which 800,000 Eligible Vehicles have been produced;

(h) with respect to 2,500,000 shares of Common Stock, on the earlier of (i) December 31, 2006, if on or prior to such date DCC has shipped 700,000 Bundled DCC Factory Enabled Vehicles to its authorized dealers or DCC approved "ship-to-points" or (ii) the date on which
1,600,000 Eligible Vehicles have been produced;

(i) with respect to 5,000,000 shares of Common Stock, on the earlier of (i) December 31, 2007, if on or prior to such date DCC has shipped 1,000,000 Bundled DCC Factory Enabled Vehicles to its authorized dealers or DCC approved "ship-to-points" or (ii) the date on which 2,400,000 Eligible Vehicles have been produced; and

(j) with respect to 1,500,000 shares of Common Stock, upon execution and delivery of an agreement between the Company and Mitsubishi Motors North America, Inc., in form and substance acceptable to the Company, pursuant to which, among other things, Mitsubishi
Motors North America, Inc. agrees to factory-install Sirius Receivers in its vehicles on an exclusive basis.

9/20/2006 04:55:00 PM

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