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EXHIBIT 10.36
(EXHIBIT F TO THE CREDIT AGREEMENT)
DEPOSIT, DISBURSEMENT AND ACCOUNT CONTROL AGREEMENT dated as of
December 19, 1997 between: IRIDIUM OPERATING LLC, a Delaware limited liability
company (the "Company"); THE CHASE MANHATTAN BANK ("Chase"), in its capacity as
collateral agent under the Credit Agreement and the other Credit Documents
referred to below (together with its successors and permitted assigns in such
capacity, the "Collateral Agent"); and THE CHASE MANHATTAN BANK in its capacity
as depositary bank (together with its successors in such capacity, the
"Depositary Bank").
R E C I T A L S
WHEREAS, the Company (as transferee of Iridium LLC) is currently
developing the Iridium global mobile wireless communications system (the
"Project");
WHEREAS, to finance a portion of the costs of the Project, the
Company, the Global Arrangers named therein, the Lenders parties thereto, the
Collateral Agent, Chase, in its capacity as the Administrative Agent, and
Barclays Bank PLC, in its capacity as the Documentation Agent, have entered into
the Credit Agreement dated as of December 19, 1997 (as amended, supplemented or
otherwise modified and in effect from time to time, the "Credit Agreement"),
providing, subject to the terms and conditions thereof, for the Lenders to make
loans to the Company in an aggregate principal amount not exceeding
$1,000,000,000;
WHEREAS, the obligations of the Company under the Credit Agreement
and the other Credit Documents (as defined in the Credit Agreement) will be
secured by certain of the assets of the Company pursuant to certain of the
Security Documents;
WHEREAS, the Collateral Agent and the Company desire to appoint
the Depositary Bank to act as depositary bank with respect to the various
Project Accounts (as defined below) established with the corporate trust
department of the Depositary Bank at its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ pursuant to this Agreement; and
WHEREAS, the Depositary Bank has agreed to establish and maintain
the Project Accounts in accordance with this Agreement;
NOW THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
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ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned thereto in the Credit
Agreement, whether specifically set forth therein or by reference to another
document. Unless otherwise stated, any reference in this Agreement to any Person
shall include its permitted successors and assigns and, in the case of any
Government Authority, any Person succeeding to its functions and capacities. In
addition, as used herein the following terms shall have the following respective
meanings (all terms defined in this Section and in the other provisions of this
Agreement in the singular to have the same meanings when used in the plural and
vice versa):
"Authorized Officer" means (a) with respect to the Company, any
Responsible Officer the names (and specimen signatures) of which shall be
specified in writing from time to time by the Company to the Depositary Bank and
(b) with respect to the Collateral Agent, any officer or other representative of
the Collateral Agent designated in writing to the Depositary Bank to act for the
Collateral Agent for purposes of this Agreement.
"General Receipt & Disbursement Account" means the account
entitled "Iridium General Receipt & Disbursement Account" established and
maintained by the Depositary Bank.
"Iridium Clearing Account" means one or more Dollar accounts
(including, without limitation, the Iridium Sub-Clearing Account) of the Company
established and maintained with depository institutions that may be located in
the United States of America or offshore and will be used for the purpose of
settling payments due to the Company and its Subsidiaries from, and payments due
by the Company and its Subsidiaries to, other parties in connection with the
operation of the IRIDIUM System, all as generally contemplated by Article VI of
the Gateway Authorization Agreements.
"Iridium Sub-Clearing Account" means one or more accounts that are
part of the Iridium Clearing Account and hold moneys paid from time to time to
the Company or any of its Subsidiaries as a result of the settlement process
effected through the Iridium Clearing Account.
"Loss Proceeds Account" means the account entitled "Iridium Loss
Proceeds Account" established and maintained by the Depositary Bank.
"Permitted Investments" means:
(a) direct obligations of, or obligations guaranteed by, the
United States of America for the payment of which obligations or
guarantee the full faith and credit of the
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▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ is pledged and which have a remaining Average
Life of not more than 365 days from the date of acquisition thereof;
(b) investments in commercial paper maturing not more than 270
days after the date of acquisition thereof and having, at such date of
acquisition, a credit rating of at least P-1 from S&P or A-1 from
▇▇▇▇▇'▇ (or such similar equivalent rating by at least one "nationally
recognized statistical rating organization" (as defined in Rule 436
under the Securities Act of 1933, as amended));
(c) investments in certificates of deposit, banker's acceptances
and time deposits maturing not more than 270 days after the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any commercial bank or
trust company organized under the laws of the United States of America
or any State thereof or any other country which is a member of the
Organization for Economic Cooperation and Development, in each case
which has a combined capital, surplus and undivided profits of not less
than $500,000,000 or its equivalent in foreign currency, and whose debt
is rated at least A- by S&P or A-3 by ▇▇▇▇▇'▇ (or such similar
equivalent rating by a "nationally recognized statistical rating
organization" (as defined above);
(d) repurchase obligations with a term of not more than 7 days for
securities described in clause (a) of this definition and entered into
with a financial institution which has a combined capital, surplus and
undivided profits of not less than $500,000,000 or its equivalent in
foreign currency, and whose debt is rated at least A- by from S&P or
A-3 by ▇▇▇▇▇'▇ (or such similar equivalent rating by a "nationally
recognized statistical rating organization" (as defined above); and
(e) any mutual or similar fund investing exclusively in Permitted
Investments of the type described in clauses (a), (b) and/or (c) above.
"Pre-Funding Account" means the account entitled "Iridium
Pre-Funding Account" established and maintained by the Depositary Bank.
"Prepayment Account" means the account entitled "Iridium
Prepayment Account" established and maintained by the Depositary Bank.
"Project Accounts" means the accounts specified in Section 3.01.
"Responsible Officer" means the chief executive officer, chief
financial officer, general counsel, any senior vice president or any vice
president of the Company.
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"Restoration Sub-Account" means the "Iridium Restoration
Sub-Account" established and maintained by the Depositary Bank.
"Secured Obligations" has the meaning assigned to such term in the
Security Agreement.
"Termination Date" means the date on which the Collateral Agent
shall advise the Depositary Bank in writing that all principal of and interest
on the Loans and all other amounts owing by the Company or any of its
Subsidiaries under the Credit Agreement and the other Credit Documents have been
paid in full and that the Commitments have expired or terminated.
SECTION 1.02. Uniform Commercial Code. As used herein, the term
"UCC" shall mean the Uniform Commercial Code as in effect in the State of New
York. All terms defined in the UCC shall have the respective meanings given to
those terms in the UCC, except where the context otherwise requires.
SECTION 1.03. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified, including an amendment
and restatement thereof, but subject to any restrictions on such amendments,
supplements or modifications set forth herein, (b) any reference herein to any
Person shall be construed to include such Person's successors and assigns or, in
the case of any Government Authority, any successor or other entity that
performs equivalent functions in whole or in part, (c) the words "herein",
"hereof" and "hereunder", and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision
hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules
shall be construed to refer to Articles and Sections of, and Exhibits and
Schedules to, this Agreement and (e) the words "asset" and "property" shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
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ARTICLE II
ACCEPTANCE OF APPOINTMENT AS COLLATERAL AGENT
AND DEPOSITARY BANK
SECTION 2.01. Acceptance of Appointment as Collateral Agent .
Chase does hereby agree to serve as Collateral Agent for the benefit of the
Secured Parties under this Agreement.
SECTION 2.02. Depositary Bank.
(a) Acceptance of Appointment of Depositary Bank. Chase hereby
agrees to act as Depositary Bank under this Agreement. The Company and the
Collateral Agent hereby acknowledge and agree that the Depositary Bank shall act
as Depositary Bank under this Agreement.
(b) Confirmation and Agreement. The Depositary Bank acknowledges,
confirms and agrees that (i) the Depositary Bank has established the Project
Accounts as set forth in Section 3.01, (ii) each Project Account is a securities
account, (iii) the Company is the entitlement holder of the Project Accounts
other than the Pre-Funding Account, which shall be held in the name of the
Collateral Agent, (iv) all cash and other property delivered to the Depositary
Bank pursuant to this Agreement or the other Security Documents will be promptly
credited to a Project Account, (v) all securities in registered form or payable
to, or to order of a person, and credited to any Project Account shall be
registered in the name of, payable to or to the order of, or specially indorsed
to, the Depositary Bank or in blank, or credited to another securities account
maintained in the name of the Depositary Bank, and in no case will any
securities credited to any Project Account be registered in the name of, payable
to or to the order of, or specially indorsed to, the Company except to the
extent the foregoing have been specially indorsed by the Company to the
Depositary Bank or in blank, (vi) the Depositary Bank shall promptly comply with
all instructions of the Collateral Agent and, to the limited extent set forth in
Section 2.03, the Company in connection with the transfer or withdrawal of
amounts in the Project Accounts and (vii) the Depositary Bank shall not change
the name or account number of any Project Account without the prior written
consent of the Collateral Agent and at least 5 Business Days prior notice to the
Company.
(c) Financial Assets Election. Each of the Company, the Collateral
Agent and the Depositary Bank agrees that each item of property (whether cash, a
security, an instrument or obligation, share, participation, interest or any
other property whatsoever) credited to any Project Account shall be treated as a
financial asset under Article 8 of the UCC.
(d) Entitlement Orders. Anything herein to the contrary
notwithstanding, the Company irrevocably agrees that the Depositary Bank may,
and the Depositary Bank agrees that
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it shall, comply with entitlement orders originated by the Collateral Agent and
relating to any Project Account without further consent by the Company or any
other Person and without regard to whether the Collateral Agent is, under the
terms and conditions of this Agreement, entitled to give such entitlement
orders. If there is any conflict between entitlement orders originated by the
Company and entitlement orders originated by the Collateral Agent, the latter
shall control.
(e) Subordination of Lien; Waiver of Set-Off. In the event that
the Depositary Bank has or subsequently obtains by agreement, operation of law
or otherwise a lien or security interest in any Project Account or any security
entitlement credited thereto, the Depositary Bank agrees that such lien or
security interest shall be subordinate to the lien and security interest of the
Collateral Agent. The financial assets standing to the credit of the Project
Accounts will not be subject to deduction, set-off, banker's lien, or any other
right in favor of any Person other than the Collateral Agent (except the amount
of any checks which have been credited to any Project Account but are
subsequently returned unpaid because of uncollected or insufficient funds).
(f) No Other Agreements. None of the Depositary Bank, the
Collateral Agent or the Company has entered into any agreement with respect to
the Project Accounts or any financial assets credited to any Project Account
other than this Agreement, in the case of the parties hereto, and the Credit
Agreement and the Security Agreement, in the case of the Company and the
Collateral Agent and agreements to which payments are to be made into the
Project Accounts. The Depositary Bank has not entered into any agreement with
the Company or any other Person purporting to limit or condition the obligation
of the Depositary Bank to comply with entitlement orders originated by the
Collateral Agent in accordance with Section 2.02(d). In the event of any
conflict between this Agreement (or any portion hereof) or any other Security
Document or any other agreement now existing or hereafter entered into (other
than the Credit Agreement), the terms of this Agreement shall prevail for
purposes hereof.
(g) Notice of Adverse Claims. Except for the claims and interest
of the Collateral Agent and the Company in each of the Project Accounts, the
Depositary Bank does not know of any claim to, or interest in, any Project
Account or in any financial asset credited thereto. If any Person asserts any
lien, encumbrance or adverse claim (including any writ, garnishment, judgment,
warrant of attachment, execution or similar process) against any Project Account
or in any financial asset credited thereto, the Depositary Bank will promptly
notify the Collateral Agent and the Company thereof.
(h) Rights and Powers of the Collateral Agent. The agreement
hereunder of the Depositary Bank to comply with entitlement orders of the
Collateral Agent is irrevocable during the term of this Agreement and has been
made in order to perfect the lien upon and security interests in the Project
Accounts in favor of the Collateral Agent and will be affected by neither the
bankruptcy of the Company nor the lapse of time.
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SECTION 2.03. Limitation on Company's Rights. Until the
Termination Date, the Company shall not have any rights to withdraw cash or
other property held in or credited to the Project Accounts, except for the right
to give instructions to the Depositary Bank to make withdrawals of moneys held
in the Project Accounts as permitted by this Agreement and the right to direct
the investment of moneys held in the Project Accounts as permitted by Section
5.03. Without limiting the foregoing (but notwithstanding anything to the
contrary herein or in any other Credit Document), the Company will have no
rights in or any claim whatsoever on any cash or other property held in or
credited to the Pre-Funding Account prior to satisfaction of the conditions
precedent set forth in Section 4.02 of the Credit Agreement and the transfer
thereof to the General Receipt & Disbursement Account pursuant to Section
4.04(b).
ARTICLE III
ESTABLISHMENT OF THE PROJECT ACCOUNTS
SECTION 3.01. Establishment of the Project Accounts. The
Depositary Bank has established the following special, segregated securities
accounts (the "Project Accounts") which (except as expressly provided herein)
shall be maintained at all times until the termination of this Agreement:
(1) the General Receipt & Disbursement Account;
(2) the Loss Proceeds Account;
(3) the Prepayment Account; and
(4) the Pre-Funding Account.
The Depositary Bank has established the Restoration Sub-Account
within the Loss Proceeds Account.
In the event that, in accordance with this Agreement, the
Depositary Bank is required to segregate certain moneys in any Project Account
from any other amounts on deposit in such Project Account pending transfer or
withdrawal in accordance with this Agreement, the Depositary Bank shall (subject
to Section 5.03) either (i) hold such moneys in such Project Account for use
solely for such transfer or withdrawal or (ii) if requested in a certificate of
an Authorized Officer of the Collateral Agent, create a separate sub-account for
such purpose. For ease of administration or if deemed advisable or necessary by
the Collateral Agent to give effect to the purposes of this Agreement, the
Depositary Bank may, with the consent of the Collateral Agent and upon notice to
the Company and the Collateral Agent, establish other sub-accounts within any
Project Account.
SECTION 3.02. Lien and Security Interest, Etc. As collateral
security for the prompt payment in full when due of the Secured Obligations, the
Company hereby pledges,
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assigns, hypothecates and transfers to the Collateral Agent for the equal and
ratable benefit of the Secured Parties, and hereby grants to the Collateral
Agent for the equal and ratable benefit of the Secured Parties a lien on and
security interest in, all of the Company's right, title and interest, whether
now owned or hereafter acquired, in and to (i) each Project Account and (ii) all
cash, investments, securities or other property at any time on deposit in or
credited to any Project Account, including all income or gain earned thereon and
any proceeds thereof. For avoidance of doubt, the security interests purported
to be created by this Agreement and the Security Agreement do not include the
Iridium Clearing Account or any cash or other property on deposit therein or
credited thereto.
SECTION 3.03. Termination. This Agreement shall remain in full
force and effect until the Termination Date.
ARTICLE IV
OPERATION OF THE PROJECT ACCOUNTS
SECTION 4.01. General Receipt & Disbursement Account.
(a) Deposits into General Receipt & Disbursement Account. The
Company agrees, and will take all necessary action to ensure, that the following
amounts shall be deposited directly into the General Receipt & Disbursement
Account:
(i) all proceeds of the Loans under the Credit Agreement (other
than the proceeds of the Term Loans made pursuant to Section 2.01(a) of
the Credit Agreement, which initially shall be deposited into the
Pre-Funding Account);
(ii) all proceeds of the loans under the Motorola Guaranteed
Credit Agreement made after the date of this Agreement;
(iii) all amounts transferred from the Loss Proceeds Account
pursuant to Section 4.02(b)(iii);
(iv) all amounts transferred from the Prepayment Account pursuant
to Section 4.03(b)(iii);
(v) all amounts transferred from the Pre-Funding Account
pursuant to Section 4.04(b)(i);
(vi) all dividends or other distributions, or other payments, in
cash by any Subsidiary of the Company to the Company;
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(vii) any income from the investment of moneys in the Project
Accounts pursuant to Section 5.03;
(viii) all other income (howsoever earned), revenue (howsoever
generated) and proceeds of any nature whatsoever received by the
Company or any of its Subsidiaries (but excluding (i) any amounts
required or permitted by this Agreement to be deposited to another
Project Account and (ii) any amounts which are held in, or to be
credited to, the Iridium Clearing Account, or any interest earned with
respect to such amount while so held in the Iridium Clearing Account
(other than the Iridium Sub-Clearing Account to the extent provided in
clause (ix) below)); and
(ix) all amounts in the Iridium Sub-Clearing Account to the
extent required to be transferred to the General Receipt & Disbursement
Account pursuant to Section 4.01(d).
(b) Disbursements from General Receipt & Disbursement Account.
Except as otherwise provided in this Agreement, the amounts held in the General
Receipt & Disbursement Account shall be applied solely for the payment of
Project Costs. All moneys withdrawn from the General Receipt & Disbursement
Account shall be withdrawn in accordance with the disbursement procedures set
forth below:
(i) The Company may request the withdrawal of moneys in the
General Receipt & Disbursement Account for the purpose of paying
Project Costs or to transfer funds to one or more of the Local
Accounts. Upon receipt of instructions from an Authorized Officer of
the Company requesting a withdrawal of funds from the General Receipt &
Disbursement Account, the Depositary Bank shall effect such withdrawal
and either pay such funds to the intended payee(s) thereof or transfer
such funds to a Local Account, in each case as specified in such
instructions. The Company will furnish a copy of each such instruction
to the Collateral Agent. All funds held in the General Receipt &
Disbursement Account shall be used by the Company from time to time to
make payment of Project Costs as the Company shall direct, but in any
event all payments in respect of the Space System Contract, the
Terrestrial Network Development Contract and the O&M Contract and all
payments in respect of Indebtedness of the Company and its Subsidiaries
will be made from funds in the General Receipt & Disbursement Account.
(ii) If at any time the amount available to be applied to the
payment of any of the Company's obligations under clause (i) above is
insufficient to pay in full all amounts required to be paid thereunder,
the Depositary Bank shall promptly advise the Company (with a copy to
the Collateral Agents) of such insufficiency and shall not make payment
of any amounts unless and until the Company has specified in writing to
the Depositary Bank the payee(s) and amount(s) to be so paid with the
amounts available.
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(iii) Notwithstanding anything herein to the contrary, the amount
of any proceeds of workers' compensation insurance, comprehensive
general liability insurance and comprehensive automobile liability
insurance received by the Company and deposited into the General
Receipt & Disbursement Account which is required to be paid over by the
Company to any Person other than the Company or any of its Subsidiaries
shall be, upon receipt of a written request from an Authorized Officer
of the Company that such proceeds that have been deposited into the
General Receipt & Disbursement Account are required to be so paid over,
promptly disbursed to the Company, whereupon such proceeds shall be
paid over by the Company to the Person(s) entitled thereto.
(c) Local Accounts. In addition to the Project Accounts, the
Company may at any time from and after the date hereof establish and maintain
one or more other deposit accounts (each hereinafter referred to as a "Local
Account") with (i) The Chase Manhattan Bank (or such other commercial bank which
shall from time to time act as the Collateral Agent hereunder) (the "Chase Local
Account") and (ii) any other depository institution designated by the Company
located in the United States of America (the "Other Local Account"); provided
that (x) the maximum aggregate amount of cash or other property at any time held
in or credited to the Other Local Account shall be $7,500,000; and (y) each
Local Account shall be and at all times remain subject to the security interest
created under this Agreement and the Security Agreement, and the Company shall
cause each such depositary institution therefor to execute and deliver such
acknowledgment, agreement or other documentation, and/or establish such control
arrangements, as the Collateral Agent may reasonably request to give effect to
the purposes of this Section. All funds held in the Local Accounts may be used
by the Company from time to time to make payment of Project Costs as the Company
shall direct (subject to the last sentence of Section 4.01(b)(i)). The Local
Accounts shall not constitute Project Accounts and, except as provided in this
Section 4.01(c), shall not be subject to the terms of this Agreement.
(d) Iridium Clearing Account. Notwithstanding anything herein to
the contrary, no cash or other property in the Iridium Clearing Account shall be
required to be deposited into any of the Project Accounts (nor shall the Secured
Parties have any interest in such cash or other property), except as provided in
this paragraph. So long as no Event of Default shall have occurred and be
continuing, the Company will cause, within two Business Days following the last
day of each calendar month, all cash and other property held in or credited to
the Iridium Sub-Clearing Account as of such last day to be transferred into the
General Receipt & Disbursement Account. Upon deposit into the General Receipt &
Disbursement Account, such cash and other property may be withdrawn in
accordance with the provisions of Section 4.01(b). If at any time an Event of
Default shall have occurred and be continuing, the Depositary Bank, upon
direction of an Authorized Officer of the Collateral Agent, shall direct the
Company to, and upon receipt of any such direction the Company will, immediately
transfer all cash or other property then held in or credited to the Iridium
Sub-Clearing Account to the General Receipt & Disbursement Account and,
thereafter so long as any Event of Default shall continue, will sweep all cash
and other
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property on a periodic basis (as directed by the Collateral Agent) from the
Iridium Sub-Clearing Account into the General Receipt & Disbursement Account.
SECTION 4.02. Loss Proceeds Account.
(a) Deposits into Loss Proceeds Account. The Company agrees, and
will take all necessary action to ensure, that all Loss Proceeds in respect of
each Event of Loss payable to or received by the Company or any of its
Subsidiaries shall be deposited directly into the Loss Proceeds Account.
(b) Disbursements from Loss Proceeds Account.
(i) The Depositary Bank shall, subject to Section 5.04, from
time to time upon instructions of the Collateral Agent transfer the
amounts on deposit in the Loss Proceeds Account to the Administrative
Agent for application to a prepayment of the Loans at the times and in
the amounts in accordance with Section 2.09(d) of the Credit Agreement.
(ii) If the Company wishes to apply any Loss Proceeds deposited
to the Loss Proceeds Account to the Restoration of the property
affected by an Event of Loss, the Company shall give written notice
thereof to the Depositary Bank (with a copy to the Collateral Agent)
prior to the date 20 Business Days following receipt of such Loss
Proceeds by delivering a certificate of an Authorized Officer of the
Company to that effect and specifying that portion of such Loss
Proceeds that the Company intends to use for such Restoration. Upon
receipt of such notice, the Depositary Bank will segregate in the
Restoration Sub-Account such portion of the Loss Proceeds. Thereafter,
the Company shall, upon request to the Depositary Bank, be permitted to
withdraw from time to time all and any portion of such amounts from the
Restoration Sub-Account to make expenditures in respect of such
Restoration. Upon receipt of each such request, the Depositary Bank
shall withdraw and transfer from the Restoration Sub-Account and shall
remit to the Company (or such payee(s) as the Company shall direct) the
amount specified in such request, and (if remitted to the Company), the
Company shall remit to the relevant payees the amounts the Company
receives. Upon completion of such Restoration, the Company shall advise
the Depositary Bank and the Collateral Agent thereof, and the
Depositary Bank shall transfer any portion of such amount remaining in
the Restoration Sub-Account in respect of the relevant Event of Loss to
the Loss Proceeds Account for application to a prepayment of the Loans
to the extent required by Section 2.09(d) of the Credit Agreement or
otherwise as provided in this Section.
(iii) Notwithstanding anything herein to the contrary, any amounts
payable by the Company or any of its Subsidiaries with respect to fees,
costs, taxes or other amounts specified in determining the Net
Available Proceeds of any Event of Loss shall, upon a
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written request of the Company, be remitted to the Company for payment
to the applicable payee(s) thereof. For avoidance of doubt, if any such
amount is deducted from proceeds to the Company or any of its
Subsidiaries before the receipt thereof, it shall not be a violation of
Section 4.02(a).
SECTION 4.03. Prepayment Account.
(a) Deposits into Prepayment Account. The Company agrees, and will
take all necessary action to ensure, that the following amounts shall be
deposited directly into the Prepayment Account:
(i) all proceeds of any Disposition received by the Company or
any of its Subsidiaries;
(ii) all proceeds of any Equity Issuance (other than an Excluded
Equity Issuance) received by the Company or any of its Subsidiaries
(including, without limitation, all amounts paid (or deemed paid) by
Iridium LLC as a capital contribution in the Company in respect of the
Reserve Capital Call Obligations);
(iii) all proceeds of any Debt Incurrence (other than an Excluded
Debt Issuance) received by the Company or any of its Subsidiaries;
(iv) all proceeds of any Project Document Claim; and
(v) all other amounts collected or received by the Collateral
Agent or by any other Secured Party in respect of any exercise of
Security Agreement Remedies with respect to the Collateral under the
Security Documents.
(b) Disbursements from Prepayment Account.
(i) The Depositary Bank shall, subject to Section 5.04, from
time to time upon instructions of the Collateral Agent transfer the
amounts on deposit in the Prepayment Account to the Administrative
Agent for application to a prepayment of the Loans at the times and in
the amounts in accordance with Section 2.09 of the Credit Agreement.
(ii) Subject to Section 5.04, the Depositary Bank shall, at the
written instructions of an Authorized Officer of the Collateral Agent,
transfer to the General Receipt & Disbursement Account any amounts
deposited in the Prepayment Account to the extent (x) not required to
be applied to the prepayment of outstanding Loans pursuant to Section
2.09 of the Credit Agreement and (y) not used for the Restoration of
property affected by
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the relevant Event of Loss or for fees, costs, taxes or other such
amounts, as permitted under Section 4.02(b)(iii), as determined by the
Collateral Agent.
(iii) Notwithstanding anything herein to the contrary, any amounts
payable by the Company or any of its Subsidiaries with respect to fees,
costs, taxes or other amounts specified in determining the Net Cash
Proceeds or the Net Available Proceeds, as the case may be, of any
Disposition, Equity Issuance, Debt Incurrence or Project Document Claim
shall, upon the written request of an Authorized Officer of the
Company, be remitted to the Company for payment to the applicable
payee(s) thereof. For avoidance of doubt, if any such amount is
deducted from proceeds to the Company or any of its Subsidiaries before
the receipt thereof, it shall not be a violation of Section 4.03(a).
(iv) Notwithstanding anything herein to the contrary, any amounts
referred to in clause (v) of paragraph (a) above shall be applied to
the payment of the Secured Obligations (as defined in the relevant
Security Documents) in accordance with the terms of the respective
Security Document under which such amounts were received as directed by
the Collateral Agent, and upon receiving such direction the Depositary
Bank shall pay such amount as so directed.
(c) Instructions to Project Parties. The Company hereby
acknowledges that it has irrevocably instructed each Project Party that is a
party to each Principal Project Document to make all payments that may be made
to or received by the Company thereunder directly to the Depositary Bank for
deposit into the Prepayment Account and that such payment will be credited to
the Prepayment Account in accordance with the terms of this Agreement.
SECTION 4.04. Pre-Funding Account.
(a) Deposits into Pre-Funding Account. The Company agrees that the
proceeds of the Term Loans made pursuant to Section 2.01(a) of the Credit
Agreement shall be deposited by the Term Lenders into the Pre-Funding Account.
(b) Disbursements from Pre-Funding Account.
(i) Upon written notification by the Collateral Agent to the
Depositary Bank that the conditions precedent set forth in Section 4.02
of the Credit Agreement have been satisfied, the Depositary Bank shall
transfer all cash and other property held in or credited to the
Pre-Funding Account as of the relevant date to the General Receipt &
Disbursement Account. Upon such transfer, the Pre-Funding Account will
be closed and no longer used under this Agreement.
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(ii) If prior to the transfer of moneys in the Pre-Funding
Account pursuant to clause (i) above the Collateral Agent shall notify
the Depositary Bank that the Commitments have been terminated, the
Depositary Bank shall immediately liquidate all investments in respect
of funds held in or credited to the Pre-Funding Account and transfer
all cash to the Administrative Agent for application to the prepayment
of the Term Loans on a pro rata basis to the Term Lenders holding the
outstanding Term Loans.
ARTICLE V
OTHER ACCOUNT MATTERS
SECTION 5.01. Remittances to the Company or the Collateral Agent.
(a) In the event that any payments or other amounts required
pursuant to this Agreement to be deposited directly into one of the Project
Accounts are remitted instead to the Company or any of its Subsidiaries, the
Company shall (or shall cause any such Subsidiary to) promptly remit such
payments or other amounts, in the form received, with any necessary
endorsements, to the Depositary Bank for deposit into the relevant Project
Account as provided herein and, pending such remittance to the Depositary Bank,
the Company shall (or shall cause any such Subsidiary to) segregate such
payments and other amounts from all other funds of the Company (or such
Subsidiary, as the case may be) and hold the same in trust for the Secured
Parties.
(b) In the event that any payments or other amounts required
pursuant to this Agreement to be deposited directly into one of the Project
Accounts are remitted instead to the Collateral Agent, the Collateral Agent
shall promptly remit such payments or other amounts, in the form received, with
any necessary endorsements, to the Depositary Bank for deposit to the relevant
Project Account as provided herein.
SECTION 5.02. Right of Withdrawal. Except as specifically set
forth in this Agreement, the Company shall have no right of withdrawal in
respect of any of the Project Accounts.
SECTION 5.03. Permitted Investments.
(a) Moneys held in any Project Account shall be invested and
reinvested in Permitted Investments at the written direction (which may be in
the form of a standing instruction) of an Authorized Officer of the Company;
provided, however, that at any time when (i) the Depositary Bank shall have
received written notice from the Collateral Agent that an Event of Default shall
have occurred and be continuing or (ii) an Authorized Officer of the Company has
not timely furnished such a written direction or, after a request by the
Depositary Bank, has not so
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confirmed a standing instruction to the Depositary Bank, the Depositary Bank
shall invest such moneys only in Permitted Investments described in clause (e)
of the definition thereof that have a maturity of 30 days or less. Any written
direction of an Authorized Officer of the Company with respect to the investment
or reinvestment of moneys held in any Project Account shall direct investment or
reinvestment only in Permitted Investments. All Permitted Investments shall be
credited to the relevant Project Account and shall comply with Section
2.02(b)(v) hereof.
(b) Earnings on Permitted Investments held in each Project Account
(other than the Pre-Funding Account) shall be deposited upon receipt in the
General Receipt & Disbursement Account as provided in Section 4.01(a). Earnings
on Permitted Investments held in the Pre-Funding Account shall be deposited in
the Pre-Funding Account.
(c) The Depositary Bank shall have no liability for any loss
resulting from any investment contemplated by this Section other than by reason
of its bad faith, intentional misconduct or gross negligence.
(d) The Depositary Bank may sell or liquidate any Permitted
Investment (without regard to maturity date) whenever the Depositary Bank
reasonably deems it necessary to make any deposit, transfer or distribution
required by this Agreement (using reasonable efforts to minimize the costs or
losses resulting from such liquidation), provided that the Depositary Bank shall
not be liable to any Person for any loss suffered because of such sale or
liquidation or by any delay in liquidation other than by reason of its bad
faith, intentional misconduct or gross negligence.
(e) For purposes of any income tax payable on account of any
income or gain on an investment, such income or gain shall be for the account of
the Company.
(f) Each of the parties hereto acknowledges that in connection
with Permitted Investments of the type described in clause (c) of the definition
of "Permitted Investments" for which the Depositary Bank or an affiliate of the
Depositary Bank serves as an investment advisor, administrator, shareholder,
servicing agent and/or custodian or subcustodian (i) the Depositary Bank or an
affiliate of the Depositary Bank charges and collects fees and expenses from
such funds for services rendered, (ii) the Depositary Bank charges and collects
fees and expenses for services rendered pursuant to the standard terms and
conditions and (iii) services performed for such Permitted Investments and
pursuant to the standard terms and conditions may converge at any time. Each of
the parties hereto hereby specifically authorizes the Depositary Bank or an
affiliate of the Depositary Bank to charge and collect all fees and expenses
from such funds for services rendered to such funds, in addition to any fees and
expenses the Depositary Bank may charge and collect for services rendered
pursuant to the standard terms and conditions.
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SECTION 5.04. Defaults. Notwithstanding anything contained in this
Agreement to the contrary, upon receiving notice from the Collateral Agent of
the occurrence and during the continuation of an Event of Default, the
Depositary Bank shall accept all notices and instructions required to be given
to the Depositary Bank pursuant to the terms of this Agreement only from the
Collateral Agent and not from any other Person, and, notwithstanding anything
herein to the contrary, the Depositary Bank shall not withdraw, transfer, pay or
otherwise distribute any moneys in any of the Project Accounts except pursuant
to such notices and instructions from the Collateral Agent (it being understood
that, upon and during the continuance of an Event of Default, the Collateral
Agent may direct any or all of the moneys in the Project Accounts to be applied
to pay when due any of the Secured Obligations). No amounts from time to time
held in each Project Account shall constitute payment of any Indebtedness or any
other obligation of the Company until applied as herein provided.
SECTION 5.05. Identification of Amounts. In the event the
Depositary Bank receives moneys without adequate identification or adequate
instruction with respect to the proper Project Account in which such moneys are
to be deposited, the Depositary Bank shall deposit such moneys into the General
Receipt & Disbursement Account and segregate such moneys from all other amounts
on deposit in the General Receipt & Disbursement Account and notify the Company
of the receipt of such moneys. Upon receipt of instructions of an Authorized
Officer of the Company as to identification of such moneys, the Depositary Bank
shall transfer such moneys from the General Receipt & Disbursement Account to
the Project Account as so instructed by the Company.
SECTION 5.06. Other Transfers. If at any time any amount required
hereby to be deposited into a particular Project Account is deposited into
another Project Account, the Depositary Bank shall have the right to transfer
such amount to the proper Project Account.
SECTION 5.07. Account Balance Statements. The Depositary Bank
shall, on a monthly basis, provide to the Collateral Agent and the Company,
account statements in respect of each of the Project Accounts, sub-accounts and
amounts segregated in any of the Project Accounts or sub-accounts. Such account
statement shall also include deposits, withdrawals and transfers from and to
each Project Account and sub-account and any segregated amounts. At such other
times as the Collateral Agent or the Company may from time to time reasonably
request (but not more frequently than once each week unless an Event of Default
shall have occurred and is continuing), the Depositary Bank shall provide
written informal account information regarding (a) cash and other items credited
to each of the Project Accounts, sub-accounts and, to the extent reasonably
available, amounts segregated in any of the Project Accounts or sub-accounts and
(b) deposits, withdrawals and transfers from and to any Project Account,
sub-account and, to the extent reasonably available, segregated amounts.
ARTICLE VI
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THE DEPOSITARY BANK
SECTION 6.01. Tax Identification. The Company shall on the
signature page of this Agreement provide the Depositary Bank with its Tax
Identification Number (TIN) as assigned by the Internal Revenue Service. All
interest or other income earned hereunder shall be allocated and paid as
provided herein and reported by the recipient to the Internal Revenue Service as
having been so allocated and paid.
SECTION 6.02. Action. (a) The Depositary Bank may rely and shall
be protected in acting or refraining from acting upon any written notice,
instruction or request furnished to it hereunder (or, as contemplated in this
Agreement, any telephonic notice, instruction or request) and believed by it to
be genuine and to have been signed or presented by an Authorized Officer of the
proper party or parties. The Depositary Bank shall be under no duty to inquire
into or investigate the validity, accuracy or content of any such notice,
instruction or request. The Depositary Bank shall have no duty to solicit any
payments which may be due it hereunder.
(b) The Depositary Bank shall not be liable for any action taken
or omitted by it in good faith unless a court of competent jurisdiction
determines that the Depositary Bank's gross negligence, intentional misconduct
or bad faith was the primary cause of any loss to any such party. In the
administration of the Project Accounts hereunder, the Depositary Bank may
execute any of its powers and perform its duties hereunder directly or through
agents or attorneys and may consult with counsel, accountants and other skilled
persons to be selected and retained by it. The Depositary Bank shall not be
liable for anything done, suffered or omitted in good faith by it in accordance
with the advice or opinion of any such counsel, accountants or other skilled
persons.
(c) The duties and responsibilities of the Depositary Bank
hereunder shall be determined solely by the express provisions of this
Agreement, and no other or further duties or responsibilities shall be implied.
The Depositary Bank shall not have any liability under, nor duty to inquire into
the terms and provisions of, any agreement or instructions, other than as
provided in the Agreement.
(d) In the event that the Depositary Bank shall be uncertain as to
its duties or rights hereunder or shall receive notice, instructions or requests
from any party hereto which, in its opinion, conflict with any of the provisions
of this Agreement, it shall be entitled to refrain from taking any action and
its sole obligation shall be to keep safely all property held by it until it
shall be directed otherwise in writing by all of the other parties hereto or by
a final order or judgment of a court of competent jurisdiction.
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SECTION 6.03. Resignation. Subject to the appointment and
acceptance of a successor Depositary Bank, the Depositary Bank may resign and be
discharged from its duties or obligations hereunder by giving notice in writing
to the Collateral Agent and the Company of such resignation specifying a date
when such resignation shall take effect. Upon receipt of such notice, the
Collateral Agent shall have the right to designate a successor Depositary Bank
which shall be a Lender and a bank with an office in New York, New York and a
combined capital and surplus of at least $500,000,000, with the prior consent of
the Company (which consent shall not be unreasonably withheld). If no successor
shall have been so designated and shall have accepted such designation within 30
days of the retiring Depositary Bank's giving notice of such resignation, the
retiring Depositary Bank may appoint its successor provided such appointed
successor is a Lender and a bank with an office in the New York, New York with a
combined capital surplus of at least $500,000,000. Upon acceptance by a
successor Depositary Bank of its appointment hereunder, the retiring Depositary
Bank shall be discharged from its duties and obligations hereunder. In
connection with its resignation hereunder, the Depositary Bank shall have the
right to withhold an amount equal to the amount due and owing to the Depositary
Bank plus any costs and expenses the Depositary Bank shall reasonably believe
may be incurred by the Depositary Bank in connection with its resignation.
SECTION 6.04. Compensation. The Company hereby agrees to (i) pay
the Depositary Bank upon execution of this Agreement reasonable compensation for
the services to be rendered hereunder, as described in a written schedule
provided from time to time by the Depositary Bank to the Company and (ii) pay or
reimburse the Depositary Bank upon request for all expenses, disbursements and
advances, including reasonable attorney's fees, incurred or made by it in
connection with the preparation, execution, performance, delivery modification,
and termination of this Agreement.
SECTION 6.05. Indemnification. The Company hereby agrees to
indemnify the Depositary Bank for, and to hold it harmless against, any loss,
liability or expense arising out of or in connection with this Agreement and
carrying out its duties hereunder, including the costs and expenses of defending
itself against any claim of liability, except for costs and expenses resulting
from the gross negligence, intentional misconduct or bad faith of the Depositary
Bank. Anything in this Agreement to the contrary notwithstanding, in no event
shall the Depositary Bank be liable for special, indirect or consequential loss
or damage of any kind whatsoever (including but not limited to lost profits),
even if the Depositary Bank has been advised of the likelihood of such loss or
damage and regardless of the form of action.
SECTION 6.06. Transfer Instructions. (a) In the event funds
transfer instructions are given, whether in writing, by telecopier or otherwise,
the Depositary Bank is authorized to seek confirmation of such instructions by
telephone call-back to an Authorized Person, and the Depositary Bank may rely
upon the confirmations of anyone purporting to be the person or persons so
designated. The persons and telephone numbers for call-backs may be
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changed only in a writing actually received and acknowledged by the Depositary
Bank. The parties to this Agreement acknowledge that such security procedure is
commercially reasonable.
(b) It is understood that, with respect to any funds transfer, the
Depositary Bank may rely solely upon any account numbers or similar identifying
number provided by either of the other parties hereto to identify (i) the
intended payee, (ii) such payee's bank, or (iii) an intermediary bank through
which such funds transfer is to be made. The Depositary Bank may apply any of
the funds for any payment order it executes using any such identifying number,
even where its use may result in a person other than the intended payee being
paid, or the transfer of funds to a bank other than the intended payee's bank or
an intermediary bank designated.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. No Waiver. No failure on the part of the Collateral
Agent or any of its agents to exercise and no delay in exercising, and no course
of dealing with respect to, any right, power or remedy hereunder shall operate
as a waiver thereof, and no single or partial exercise by the Collateral Agent
or any of its agents of any right, power or remedy hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. The remedies provided herein are cumulative and are not exclusive of any
remedies provided by law.
SECTION 7.02. Notices. All notices, requests and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telex or telecopy) and
delivered (a) if to the Depositary Bank, the Company or the Collateral Agent, at
the "Address for Notices" specified beneath its name on the signature page
hereof or (b) as to any party, at such other address as shall be designated by
such party in a notice to each other party. Except as otherwise provided in this
Agreement, all such communications shall be deemed to have been duly given when
transmitted by telex or telecopier or personally delivered or, in the case of a
mailed notice, upon receipt, in each case given or addressed as aforesaid.
SECTION 7.03. Amendments, Etc. The terms of this Agreement may be
waived, altered or amended only by an instrument in writing duly executed by the
Company, the Collateral Agent and the Depositary Bank. Any such amendment or
waiver shall be binding upon the Collateral Agent, each other Secured Party and
the Company.
SECTION 7.04. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of the Company, the Collateral
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Agent and the Depositary Bank; provided, however, that the Company shall not
assign or transfer its rights hereunder without the prior written consent of the
Collateral Agent.
SECTION 7.05. Captions. The caption and section headings used
herein are for convenience of reference only, are not part of this Agreement and
shall not affect the construction of, or be taken into consideration in
interpreting, this Agreement.
SECTION 7.06. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.
SECTION 7.07. Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of New York, except as
required by mandatory provisions of law and except to the extent that the
validity or perfection of the lien and security interest hereunder, or the
remedies hereunder, are governed by the law of any jurisdiction other than the
State of New York. Regardless of any provision in any other agreement, for
purposes of the UCC, the "securities intermediary's jurisdiction" of the
Depositary Bank with respect to the Project Accounts is the State of New York.
SECTION 7.08. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 7.09. No Third Party Beneficiaries. The agreements of the
parties hereto are solely for the benefit of the Company, the Collateral Agent,
the Depositary Bank and the other Secured Parties, and no other Person
(including, without limitation, any other Credit Party, any contractor,
subcontractor, supplier or materialman furnishing supplies, goods or services to
or for the benefit of the Project or any other creditor of the Company or any of
its Subsidiaries) shall have any rights hereunder.
Depositary Agreement
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SECTION 7.10. Agents and Attorneys-in-Fact. The Collateral Agent
may employ agents and attorneys-in-fact in connection herewith and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith.
SECTION 7.11. Severability. Any provision of this Agreement held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 7.12. Reinstatement. This Agreement and any Lien created
hereunder shall automatically be reinstated if and to the extent that for any
reason any payment by or on behalf of the Company in respect of the Secured
Obligations is rescinded or must otherwise be restored by any holder of the
Secured Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise.
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IN WITNESS WHEREOF, the parties hereto have caused this Deposit,
Disbursement and Account Control Agreement to be duly executed and delivered as
of the day and year first above written.
IRIDIUM OPERATING LLC
By__________________________
Name:
Title:
Address for Notices:
Iridium Operating LLC
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: General Counsel
(Telecopy No.: 202-408-3761)
Tax Identification No.: ____________
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THE CHASE MANHATTAN BANK,
as Collateral Agent
By__________________________
Name:
Title:
Address for Notices:
Attention:
Telephone:
Telecopier:
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THE CHASE MANHATTAN BANK,
as Depositary Bank
By_____________________________
Name:
Title:
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇/8178
Depositary Agreement