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EXHIBIT 10.18
EXECUTION COPY
SECOND AMENDED AND RESTATED
AGREEMENT REGARDING GUARANTEE
This Second Amended and Restated Agreement Regarding Guarantee
(this "Agreement") is made by and among Motorola, Inc., a Delaware corporation
("Motorola"), Iridium LLC, a Delaware limited liability company ("Iridium"),
and Iridium Operating LLC, a Delaware limited liability company and a
wholly-owned subsidiary of Iridium ("Operating"), is dated as of May 11, 1998,
and amends and restates the Amended and Restated Agreement Regarding Guarantee,
dated as of July 11, 1997 (the "First Amended Agreement Regarding Guarantee"),
which amended and restated the Agreement Regarding guarantee originally dated
as of August 21, 1996 (the "Original Agreement Regarding Guarantee") between
Motorola and Iridium. Reference is made to that certain Amended and Restated
Memorandum of Understanding (the "MOU"), dated May 11, 1998, between Motorola,
Iridium and Operating.
Motorola has entered into a Guarantee Agreement, dated as of
August 21, 1996, as amended (the "Bridge Guarantee Agreement"), pursuant to
which Motorola has guaranteed the payment of up to $450,000,000 of the
obligations of Iridium under that certain Credit Agreement, dated as of August
21, 1996, as amended, between Iridium and the Lenders named therein (the
"Bridge Agreement"). The First Amended Agreement Regarding Guarantee and the
Original Agreement Regarding Guarantee defined certain rights and obligations
of the parties relating to such guarantee and possible additional guarantees by
Motorola. Capitalized terms used and not otherwise defined herein shall have
the meanings defined in the Bridge Agreement.
On December 18, 1997, following the date of the First Amended
Agreement Regarding Guarantee, Iridium entered into an asset drop-down
transaction (the "Asset Drop-Down Transaction") with Operating, pursuant to
which substantially all of the assets and liabilities of Iridium were
transferred to Operating.
Operating and Motorola intend to entered into that certain
Standby Purchase Agreement (the "Handset Purchase Agreement") pursuant to which
Operating may become obligated to purchase hand-held phones or belt-worn pagers
(collectively, "Subscriber Equipment") from Motorola to use with the Iridium
communications system (the "IRIDIUM System"). In order to fund such purchases
of Subscriber Equipment from Motorola, Operating may be required to borrow
funds from one or more lenders pursuant to a Credit Agreement. Motorola desires
to assist Operating in obtaining such a Credit Agreement by agreeing to provide
a guarantee of Operating's obligations relating to such Credit Agreement,
subject to certain conditions.
The purpose of this Agreement is to set forth certain binding
agreements among Motorola, Iridium and Operating that are intended to (i)
incorporate the remaining pertinent terms of the First Amended Agreement
Regarding Guarantee, as modified in
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connection with the Asset Drop-Down Transaction and (ii) reflect the agreements
of the parties in respect of the Handset Guarantee (as defined).
The parties agree as follows:
1. Handset Guarantee
(a) Motorola Agreement to Provide Handset Guarantee. If
at any time and from time to time Operating becomes obligated to purchase
Subscriber Equipment pursuant to the Handset Purchase Agreement, Motorola
hereby agrees, upon the written request of Operating, to provide a Guarantee
relating to an aggregate of up to $175 million (the "Handset Guarantee") under
the Bridge Agreement or under a separate Credit Agreement having the same terms
as the then current Bridge Agreement provided, however, that Motorola shall not
be required to provide the Handset Guarantee unless the Commitments (and
corresponding borrowings) under the Bridge Agreement have been permanently
reduced to $275 million or less (not including the Commitment Increase or the
Handset Increase (each as defined in the MOU)).
(b) Operating Agreements with Respect to Handset
Guarantee. Operating hereby agrees that any funds borrowed that are subject to
the Handset Guarantee ("Handset Borrowings") will be used exclusively for (i)
payments to Motorola under the Handset Purchase Agreement, (ii) payments of
overdue amounts owed by Operating to Motorola under other agreements (the
amounts under clauses (i) and (ii) being "Overdue Amounts") and (iii) payments
of interest (including interest on interest), fees and expenses payable to the
Lenders and agents in respect of borrowings to fund the payments described
clauses (i) and (ii). Operating hereby agrees that, if Motorola provides the
Handset Guarantee, to the extent of available funds that are subject to the
Handset Guarantee, Operating shall borrow available funds under the Handset
Guarantee and pay all Overdue Amounts.
2. Reimbursement Obligation.
(a) Operating Default. Other than as set forth under
Section 2(b) below, if and to the extent that any Lenders demand that Motorola
pay, and Motorola does pay, any Guaranteed Amount pursuant to any Guarantee,
Operating shall, promptly upon receipt from Motorola of a written demand for
reimbursement, reimburse Motorola for such Guarantee Payment, plus interest
accruing at a rate equal to that which would be in effect under the Credit
Agreement relating to such Guaranteed Amount, without duplication.
(b) Motorola Default. If a Guarantee Payment is made in
respect of a Guaranteed Amount that has been accelerated or otherwise become
due as a result of a
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Motorola-Based Default, then (i) Motorola shall assume and become subject to
the obligations of the Lenders under the applicable Credit Agreement vis-a-vis
Operating (including, without limitation, the obligation to make loans in the
aggregate principal amount of such Lenders' commitments under such Credit
Agreement), (ii) Motorola shall assume and become entitled to the benefits of
the rights of the Lenders under such Credit Agreement vis-a-vis Operating
(including, without limitation, the right to receive payments in respect of
loans made under such Credit Agreement, upon acceleration or otherwise), but
not including any provisions relating to a Guarantee or any right or remedy
arising as a result of the occurrence of a Motorola-Based Default, (iii)
Operating shall become obligated to reimburse Motorola for such Guarantee
Payment and to repay any additional amounts for which Operating may become
indebted to Motorola pursuant to clause (ii) above on the terms and conditions
contained in such Credit Agreement as such Credit Agreement is modified by
clause (ii) above, and (iv) Operating shall continue to be subject to the terms
and conditions of such Credit Agreement (including, without limitation, the
covenants contained therein), as such Credit Agreement is modified by clause
(ii) above, it being expressly understood that Motorola shall in such
circumstances have the right to accelerate payments under and otherwise
exercise its rights under any such Credit Agreement to the extent set forth
therein as if it were a lender thereunder to the extent that such right to
accelerate or other rights arise from some event or circumstance other than a
Motorola-Based Default or a Guarantee.
(c) Costs and Expenses. Operating further agrees to
reimburse Motorola for all reasonable out-of-pocket costs and expenses
(including, without limitation, the fees and expenses of legal counsel) in
connection with any enforcement of Operating's obligations under Section 2(a)
(including, without limitation, any fees and expenses incurred in connection
with any bankruptcy proceedings).
(d) Subordination. The rights of Motorola under this
Section 2 shall be subject to the terms and conditions of any applicable
subordination agreements then in effect executed by Motorola for the benefit of
creditors of Operating.
3. Compensation to Motorola.
(a) Warrant Compensation. Except as described in Section
3(e), Iridium shall compensate Motorola for incurring the Motorola Exposure by
issuing warrants (the "Warrants") to purchase Class 1 Interests in Iridium
("Shares") to Motorola. The Warrants shall (i) be in substantially the form of
the warrants issued pursuant to the Original Agreement Regarding Guarantee,
(ii) provide for a ten year term and an exercise price of $0.00013 per Class 1
Interest; (iii) become exercisable on March 1, 2001 and (iv) provide for
issuance of Shares that (A) with respect to Shares issued for warrants received
on or prior to the Commercial Activation Date, may be sold without transfer
restrictions (other than transfer restrictions imposed by the LLC Agreement,
the Interest Exchange
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Agreement and applicable securities law) at any time after the fifth
anniversary of the exercise of the Warrants and (B) with respect to Shares
issued for warrants received after the Commercial Activation Date, may be sold
without transfer restrictions (other than transfer restrictions imposed by the
LLC Agreement, the Interest Exchange Agreement and applicable law) at any time
after the exercise of the Warrants. In addition, in the event that Motorola
earns Warrants with respect to periods beginning after March 1, 2001, Iridium
shall compensate Motorola with Shares issued directly to Motorola in the
amounts described below in lieu of Warrants. On the 45th day following the end
of each calendar quarter during which any Motorola Exposure was outstanding at
any time, Iridium shall issue a certificate to Motorola evidencing the Warrants
or Shares earned by Motorola in respect of the total of such Motorola Exposure
outstanding in such quarter.
(b) Calculation of Warrant Compensation. Motorola shall
earn Warrants or Shares based on the amount and duration of Motorola Exposure.
The number of Warrants or Shares shall be earned according to the following
table, pro rated both (A) for the actual dollar amount of Motorola Exposure
outstanding during each relevant period and (B) for the number of days such
Motorola Exposure was outstanding during such period. The following table
indicates the maximum amount of Warrants or Shares issuable for each full $100
million of Motorola Exposure, assuming such Motorola Exposure was outstanding
during the entire relevant period.
MOTOROLA EXPOSURE NUMBER OF WARRANTS PER $100 MILLION
OF MOTOROLA EXPOSURE PER YEAR
(Prior to the Commercial Activation Date)
$ 0 -- $ 275,000,000 0/412,500(1)
275,000,001 -- 499,999,000 412,500
500,000,000 -- 749,999,999 637,500
750,000,000 -- (or more) 825,000
(AFTER THE COMMERCIAL ACTIVATION DATE)
$ 0 -- $275,000,000 0/412,500(1)
275,000,001 -- 499,999,999 412,500
500,000,000 -- 749,999,999 637,500
750,000,000 -- 849,999,999 825,000
850,000,000 -- 949,999,999 847,500
950,000,000 -- 1,049,999,999 877,500
1,050,000,000 -- (or more) 900,000
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(1) See Section 3(e) below
For example, (A) if there is $750,000,000 of Motorola Exposure outstanding for
a period of one year, which year is prior to the Commercial Activation Date,
Motorola will have earned Warrants relating to 6,187,500 Shares ($750,000,000 /
100,000,000 = 7.5; 7.5* 825,000 = 6,187,500), and (B) if there is $850,000,000
of Motorola Exposure outstanding for a period of two years, one of which years
is prior to the Commercial Activation Date and one of which is after the
Commercial Activation Date, Motorola will
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have earned Warrants relating to 14,216,250 Shares ($850,000,000 / 100,000,000
= 8.5; 8.5 * 825,000 = 7,012,500; 8.5 * 847,500 = 7,203,750;
7,012,500+7,203,750 = 14,216,250).
(c) Limitations on Warrant Compensation. Prior to the
Commercial Activation Date, Motorola shall not be eligible to earn Warrants
relating to more than (i)11,250,000 Shares with respect to the first
$749,999,999 in Motorola Exposure and (ii) 3,750,000 Shares with respect to the
additional amounts between and including $750,000,000 and $1,100,000,000 in
Motorola Exposure, in each case subject to antidilution adjustments in
accordance with the terms of the Warrants. Motorola shall earn Warrants on the
entire Motorola Exposure from and after the Commercial Activation Date.
(d) Warrants Issued to Date. The parties acknowledge that
Warrants for 7,527,730 Shares have been earned by Motorola as of March 31, 1998
with respect to outstanding Motorola Exposure and such Warrants apply toward
the limitations set forth in Section 3(c)(i) of this Agreement.
(e) High Yield Equivalent Compensation. During any period
in which each of the following conditions (the "High Yield Equivalent
Conditions") exists: (i) the Motorola Exposure outstanding shall be $275,000,00
or less; (ii) no other person or party providing guarantees for the support of
Iridium's indebtedness for borrowed money is receiving equity compensation from
Iridium or IWCL in respect of such guarantees (other than Kyocera Corporation
in connection with its Guarantee of Operating's borrowings to fund the purchase
of Subscriber Equipment from Kyocera); (iii) Kyocera is receiving equity
compensation, if any, at no greater rate (in relation to amount of Guarantee)
than Motorola, (iv) no mandatory prepayment or redemption or acceleration of
any Senior Notes (as defined in the MOU) has occurred (except as a result of
Motorola's disposition of Class 1 Interests causing a "change in control" (as
defined in the Offering Memorandum) to occur under the Senior Notes); and (v)
Iridium has complied with the terms of this Agreement and the MOU, then at
Iridium's option, in lieu of issuing Warrants pursuant to Section 3(a) above:
(1) Operating shall pay Motorola cash
compensation for the Motorola Exposure, in an amount equal to (x) the
average daily Motorola Exposure during any period for which the
Motorola Exposure is greater than zero multiplied by the excess, if
any, of (A) the weighted average daily interest rate applicable to the
Series A Notes and Series B Senior Notes over (B) the weighted average
daily interest rate actually charged by the Lenders under the Credit
Agreements related to the Motorola Exposure for such period.
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(2) Iridium shall issue to Motorola Warrants to
purchase Shares in an amount equal to the average daily principal
amount of Motorola Exposure during such period multiplied by the daily
equivalent of the warrant compensation payable to the initial holders
of the units comprised of warrants to purchase IWCL common stock and
Series A Notes with respect to such amount (calculated on a pro rata
daily basis from the date of the issuance of such Series A Notes to
the stated maturity thereof).
(3) In each case (1) and (2) multiplied by the
number of days the Motorola Exposure is outstanding.
(4) High Yield Equivalent Compensation shall be
paid semi-annually in arrears within 45 days after the end of each
semi-annual period.
(f) Guarantee Reduction. In connection with any permanent
reduction of the Commitments under the Bridge Agreement, as amended, or any
separate Credit Agreement Iridium will use its reasonable efforts to cause the
Lenders thereunder to amend the Bridge Agreement Guarantee or other Guarantee
to provide for a similar reduction in Motorola's maximum liability thereunder.
(g) Additional Member and Interests. Iridium shall
provide Motorola with the additional Banking and Finance Committee member and
the Series B, Class 2 interests as described in Section 7 of the MOU.
4. Representations and Warranties of Iridium and
Operating. Each of Iridium and Operating represents and warrants that:
(a) the representations and warranties of Iridium and
Operating set forth in Section 7 of the Bridge
Agreement were true and correct as of the date given
under the Bridge Agreement and the representations
and warranties given under any subsequent Credit
Agreement will be true and correct on the date given;
(b) the Certificates of Designation relating to Iridium's
Series B Class 2 interests and Series C Class 2
Interests have been duly adopted by Iridium's Banking
and Financing Committee in the form attached as Annex
J to the Original Agreement Regarding Guarantee and
all other necessary corporate actions have been taken
to duly authorize the issuance to Motorola of the
Series B Class 2 Interests and Series C Class 2
Interests; and
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(c) the execution, delivery and performance of this
Agreement, the Warrants, the amendments and the other
agreements and instruments contemplated hereby to
which Iridium or Operating is a party, have been duly
authorized by Iridium or Operating (as the case may
be); this Agreement, the Warrants, such amendments,
such waiver letter and the Certificates of
Designation relating to Iridium's Series B Class 2
Interests and Series C Class 2 Interests and all
other agreements contemplated hereby to which Iridium
or Operating is a party each constitutes a valid and
binding obligation of Iridium or Operating (as the
case may be), enforceable in accordance with its
terms; the execution and delivery by Iridium and
Operating of this Agreement, the Warrants, such
amendments, such other agreements and instruments
contemplated hereby to which Iridium or Operating is
a party, the offering, sale and issuance of Iridium's
Series B Class 2 Interests and the Warrants
hereunder, the issuance of Iridium's Class 1
interests upon exercise of Warrants and the
fulfillment of and compliance with the respective
terms hereof and thereof by Iridium and Operating, do
not and shall not (i) conflict with or result in a
breach of the terms, conditions or provisions of,
(ii) constitute a default under, (iii), except as
provided in the Security Agreement, result in the
creation of any lien, security interest, charge or
encumbrance upon Iridium's or Operating's or any
Subsidiary's equity capital or assets pursuant to,
(iv) give any third party the right to modify,
terminate or accelerate any obligation under, (v)
result in a violation of, or (vi) require any
authorization, consent, approval, exemption or other
action by or notice or declaration to, or filing
with, any court or administrative or governmental
body or agency by, or in respect of, Iridium,
Operating, any Subsidiary, IWCL or any of their
respective directors or shareholders pursuant to, the
charter, limited liability company agreement or
bylaws of Iridium, Operating, any Subsidiary or IWCL
(as the case may be), or any law, statute, rule or
regulation to which Iridium, Operating, any
Subsidiary or IWCL is subject, or any agreement,
instrument, order, judgment or decree to which
Iridium, Operating, any Subsidiary or IWCL is
subject.
5. Motorola Protection Rights. Either Operating or
Iridium (as the case may be) will provide Motorola with written notice at least
five full business days (and no more than ten business days) prior to giving
notice to the banks under any Credit Agreement or any proposed borrowing which
is covered by a Guarantee. In addition, for so long as any Guarantees remain
outstanding (unless the High Yield Equivalent Conditions exist), without the
prior written approval of Motorola (which may be withheld
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in the absolute discretion of Motorola), Iridium shall not (in the case of (a),
(b), (e), (f) and (g) below) and Operating shall not (in the case of (c), (d),
(e), (g) and (h) below):
(a) sell, lease or otherwise dispose of, or permit any
Subsidiary to sell, lease or otherwise dispose of,
more than 5% of the consolidated assets of Iridium
and its Subsidiaries (computed on the basis of book
value, determined in accordance with generally
accepted accounting principles consistently applied,
or fair market value, determined by Iridium's board
of directors in its reasonable good faith judgment)
in any transaction or series of related transactions
or sell or permanently dispose of any of its or any
Subsidiary's Intellectual Property Rights (other than
commercially available software designed for
operation on a personal computer or network of
personal computers);
(b) merger or consolidate with any Person or permit any
Subsidiary to merge or consolidate with any Person
(other than a Wholly-Owned Subsidiary);
(c) liquidate, dissolve or effect a recapitalization or
reorganization of its capital structure in any form
of transaction;
(d) effect a change in its equity capitalization that
requires the approval of the holders of Shares;
(e) directly or indirectly declare or pay any dividends
or make any distributions upon any of its equity
capital other than distributions of Iridium to
members made pursuant to Section 3.07(a) of the LLC
Agreement with respect to certain members' U.S. tax
liabilities;
(f) directly or indirectly redeem (other than a
redemption of the Series B or C Class 2 Interests of
Iridium pursuant to the LLC Agreement), purchase or
otherwise acquire, or permit any Subsidiary to
redeem, purchase or otherwise acquire, any of
Iridium's or any Subsidiary's capital stock or other
equity securities (including, without limitation,
warrants, options and other rights to acquire such
capital stock or other equity securities) other than
pursuant to the exercise of Iridium's remedies
against any holder of Shares pursuant to the terms of
the LLC Agreement or the 1993 Stock Purchase
Agreement (as defined in the LLC Agreement);
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(g) incur any indebtedness for borrowed money other than
indebtedness the amount, terms and conditions
(including without limitations, the subordination
provisions) or which have been approved in advance by
the lenders to the extent required under any Credit
Agreement; or
(h) take any action or permit any circumstances to exist
which is prohibited under the terms of any Credit
Agreement or fail to take any action required to be
taken by it under the terms of any Credit Agreement,
in each case subject to the grace period applicable
to any default created by such action or circumstance
pursuant to such Credit Agreement; provided, however,
that this clause (h) shall not apply to any action or
circumstance that would constitute a Motorola Default
(as defined in the Bridge Agreement).
6. Amendments and Modifications to Credit Agreements.
Operating shall not enter into any amendment, waiver, supplement or
modification of any Credit Agreement (other than as contemplated by this
Agreement or the MOU) without the prior written consent of Motorola, which
consent may be granted or withheld by Motorola in its sole discretion, but
acting in good faith.
7. Use of Proceeds. Operating will use the proceeds of
the loans made under any Credit Agreement solely (i) to make payments to
Motorola at the times and in the amounts required pursuant to the SSC, the TNDC
or the O&M Contract, (ii) to pay fees and expenses payable to the Lenders and
agents in connection with such Credit Agreement, (iii) to pay for Subscriber
Equipment and (iv) for general corporate purposes so long as the amount subject
to this clause (iv) does not exceed the amounts budgeted for such purposes in
the budget plans approved by Iridium's board of directors from time to time.
8. Copies of Information and Notices. Any and all
material information, notices and correspondence provided by or on behalf of
Operating to any Lender (whether or not required under the applicable Credit
Agreement) shall be provided at the same time to Motorola.
9. Referral of Matters to Related Party Contracts
Committee. Each of Iridium and Operating acknowledges and agrees that the
Contract Committee (as defined in the LLC Agreement) of Iridium's board of
directors has a limited scope of authority with respect to the relationship
between Motorola on the one hand and Iridium and Operating on the other, and
that only those matters specifically required by the LLC Agreement and matters
related to the Amended Guarantee Agreement, other contracts between Motorola
and Iridium and actions or claims by Iridium or Operating against
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Motorola and other Affiliate Transactions (as defined in the Offering
Memorandum) will be taken to the Contract Committee for approval.
10. Access. Operating shall permit Motorola to have
access to relevant meetings, documents or other materials, other than Internal
Meetings, Documents and Materials (as defined below), directly relating to the
Guarantees or any Credit Agreement. "Internal Meetings, Documents and
Materials" means meetings between or among executives or employees of IWCL,
Operating or Iridium or between or among Iridium, Operating or IWCL and their
consultants, advisors and/or counsel; documents or other materials which are
prepared in connection with such meetings; and documents or other materials
which are circulated solely between or among executives or employees of
Iridium, Operating or IWCL or between or among Iridium, Operating or IWCL and
their consultants, advisors and/or counsel.
11. Notices under this Agreement. All notices, requests,
demands, claims, and other communications hereunder will be in writing. Any
notice, request, demand, claim or other communication hereunder shall be deemed
duly given (i) when delivered, if personally delivered, (ii) when receipt is
electronically confirmed, if faxed (with hard copy to follow via first class
mail, postage prepaid) or (iii) one day after deposit with a reputable
overnight courier, in each case addressed to the intended recipient as set
forth below:
If to Iridium:
Iridium LLC
0000 Xxx Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
Attention: Vice President and Chief Financial Officer and
Vice President - General Counsel
Telecopy #: (000) 000-0000
If to Operating:
Iridium Operating LLC
0000 Xxx Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
Attention: Vice President and Chief Financial Officer and
Vice President - General Counsel
Telecopy #: (000) 000-0000
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If to Motorola:
Motorola, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Treasurer
Telecopy #: (000) 000-0000
with a copy (which shall not constitute notice) to:
Motorola, Inc.
000 Xxxxx Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Vice President - Law Department, Iridium Matters
Telecopy #: (000) 000-0000
12. Definitions. The following terms when used in this
Agreement have the following meanings:
"Commercial Activation Date" means the date of the first
"Revenue Producing Communication Message" as defined in the SSC
(excluding subscriber trials).
"Credit Agreement" means any agreement pursuant to which
Iridium incurs indebtedness for borrowed money which is Guaranteed by
Motorola, including without limitation, the Bridge Agreement, as
amended.
"Guarantee" means any guarantee by Motorola of any obligations
of Iridium under any Credit Agreement or any note, agreement or other
instrument executed in connection therewith, including without
limitation, the guarantee set forth in the Amended Guarantee Agreement
with respect to the Bridge Agreement.
"Guarantee Agreement" means any agreement which evidences any
Guarantee, including without limitation the Bridge Guarantee
Agreement.
"Guarantee Payment" means any payment which is demanded of
Motorola by a Lender pursuant to any Guarantee which is actually paid
by Motorola, to the extent so paid.
"Guaranteed Amount," with respect to any period, means the
maximum amount of Iridium's obligations for which Motorola has
provided a Guarantee
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during such period (regardless of the actual amount of Iridium's
obligations outstanding to any Lender during such period) together,
without duplication, with any Guarantee Payments which have been made
by Motorola but not repaid by Iridium.
"Lender" means any lender under any Credit Agreement, or any
agent or other authorized representative of any lender, including
without limitation the Global Arrangers (as defined in the Bridge
Agreement, as amended).
"Intellectual Property Rights" means all (i) patents, patent
applications, patent disclosures and inventions, (ii) trademarks,
service marks, trade dress, trade names, logos and corporate names and
registrations and applications for registration thereof together with
all of the goodwill associated therewith, (iii) copyrights (registered
or unregistered) and copyrightable works and registrations and
applications for registration thereof, (iv) mask works and
registrations and applications for registration thereof, (v) computer
software, data, data bases and documentation thereof, (vi) trade
secrets and other confidential information (including, without
limitation, ideas, formulas, compositions, inventions (whether
patentable or unpatentable and whether or not reduced to practice),
know-how, manufacturing and production processes and techniques,
research and development information, drawings, specifications,
designs, plans, proposals, technical data, copyrightable works,
financial and marketing plans and customer and supplier lists and
information), (vii) other intellectual property rights and (viii)
copies and tangible embodiments thereof (in whatever form or medium).
"Interest Exchange Agreement" means the Interest Exchange
Agreement, dated as of June 9, 1997, by and between IWCL and Iridium.
"IWCL" means Iridium World Communications Ltd.
"LLC Agreement" means the limited liability company Agreement
of Iridium LLC dated as of July 19, 1996 as amended.
"Motorola-Based Default" means a default under the Bridge
Agreement or any other Credit Agreement which is caused solely and
directly by actions taken by Motorola other than a default occurring
as the result of the ownership percentage of Motorola and its
affiliates falling below the thresholds set forth in the Bridge
Agreement (as amended by the amendment described in Section 1(c))
unless it falls below such thresholds as the result of Motorola or an
affiliate disposing of Iridium's voting securities.
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Also, a Motorola-Based Default means a default under the
Bridge Agreement or any other Credit Agreement which is caused solely
and directly by actions taken by Motorola as a result of a demand for
payment under a Guarantee which has arisen as a result of a material
default by Motorola under (1) the SSC, the TNDC or the O&M Contract,
so long as Iridium has fully complied in all material respects with
its obligations under the SSC, the TNDC and the O&M Contract and
Motorola's default is the primary cause for the default under the
applicable Credit Agreement which has caused such demand for payment,
or (2) under any gateway purchase agreement between Motorola and a
gateway purchaser, so long as the default by Motorola thereunder was
not excused or caused by any default on the part of the purchaser
thereunder.
"Motorola Exposure" means the Commitments (including
Commitments under the Bridge Agreement or a separate Credit Agreement
having the same terms as the Bridge Agreement), the Guarantee Payments
(to the extent not repaid by Iridium) and the Vendor Financing
Amount.
"Offering Memorandum" means the Offering Memorandum dated
October 9, 1997 related to the issuance and sale by Iridium of its
11.25% Senior Notes due 2005, Series C.
"O&M Contract" means the Operations and Maintenance Contract
effective July 29, 1993 between Iridium and Motorola, as amended from
time to time.
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization and a
governmental entity or any department, agency or political subdivision
thereof.
"Senior Notes" has the meaning set forth in the MOU.
"SSC" means the Space System Contract effective July 29, 1993
between Iridium and Motorola, as amended from time to time.
"Subsidiary" means, with respect to any Person, any
corporation, limited liability company, partnership, association or
other business entity of which (i) if a corporation, a majority of the
total voting power of shares of stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a
limited liability company, partnership,
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association or other business entity, a majority of the partnership or
other similar ownership interest thereof is at the time owned or
controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that Person or a combination thereof. For purposes
hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership,
association or other business entity if such Person or Persons shall
be allocated a majority of limited liability company, partnership,
association or other business entity gains or losses or shall be or
control any managing director or general partner of such limited
liability company, partnership, association or other business entity.
"TNDC" means the Terrestrial Network Development Contract
effective January 1, 1993 between Iridium and Motorola, as amended
from time to time.
"Vendor Financing Amount" means the total amount (including
interest and expenses) of any vendor financing, including without
limitation, vendor financing contemplated by an amendment to the TNDC
or any other payment deferrals or payments made to, or for the benefit
of, Iridium, provided to Iridium or third parties by Motorola but not
including (i) any vendor financing or payment deferrals under the TNDC
(including Amendment No. 3) in effect on July 11, 1997, so long as
payments are made under the TNDC when owed or (ii) any amounts which
would not be deemed to be part of this "Vendor Financing Amount"
pursuant to Amendment No. 4 to the TNDC (Article 6.I.3).
13. Complete Agreement. This Agreement and the other
agreements and instruments referred to herein embody the complete agreement and
understanding among the parties with respect to the matters addressed herein
and supersede and preempt the Original Agreement Regarding Guarantee and any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any
way.
14. Miscellaneous. This Agreement (a) is made under and
shall be governed by the laws of the State of New York without regard to
principles of conflict of laws, (b) is intended for the benefit of the parties
hereto and is not intended to benefit any other person and no person other than
the parties hereto may rely upon the provisions hereof, (c) may be executed in
counterparts, each of which taken together shall constitute one and the same
instrument, and (d) may be amended or waived only if such amendment or waiver
is in writing and signed by the party against whom it is sought to be enforced.
15. No Third Party Beneficiaries; Limited Rights Against
Motorola. The parties hereto agree that Iridium shall have no rights (apart
from those set forth in this Agreement, the MOU or any other written agreements
between such parties) against
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Motorola as a result of Iridium's inability to meet drawing or other conditions
under the Bridge Agreement.
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IN WITNESS WHEREOF, the parties have entered into this
Amended and Restated Agreement Regarding Guarantee in each case as of the date
first above written.
IRIDIUM LLC
By:
----------------------------
Name:
Title:
IRIDIUM OPERATING LLC
By:
----------------------------
Name:
Title:
MOTOROLA, INC.
By:
----------------------------
Name:
Title:
