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EXHIBIT 7
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THIRD AMENDED AND RESTATED
AGREEMENT REGARDING GUARANTEE
This Third 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 December 23, 1998, and
amends and restates the Second Amended and Restated Agreement Regarding
Guarantee, dated as of May 11, 1998 (the "Second Amended Agreement Regarding
Guarantee") among Motorola, Iridium and Operating, which amended and restated
the Amended and Restated Agreement Regarding Guarantee, dated as of July 11,
1997 (the "First Amended Agreement Regarding Guarantee") between Motorola and
Iridium, which amended and restated the Agreement Regarding guarantee originally
dated as of August 21, 1996 (the "Original Agreement Regarding Guarantee")
between Motorola and Iridium. In connection with, and as a condition to,
entering this Agreement, Operating, Iridium and Motorola have entered into that
certain Second Amended and Restated Memorandum of Understanding (the "MOU"),
dated December 23, 1998.
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 $275,000,000 of the
obligations of Iridium under that certain Credit Agreement, dated as of August
21, 1996, as amended, between Operating (as successor to 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 ascribed thereto 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 has entered into a $1 billion senior secured interim
Credit Agreement, dated as of December 19, 1997, with the banks and other
financial institutions named therein (the "Secured Bank Facility").
Operating, Iridium and IWCL intend to raise new funds and
engage in other transactions to finance Operating's development, construction
and operation of the Iridium satellite communications system (the "Iridium
System"), including the refinancing of Operating's indebtedness under the
Secured Bank Facility. As set forth in
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the MOU, Motorola has conditionally agreed to provide certain additional support
to the efforts of Operating and Iridium to obtain such financing, including the
Guarantee Increase (as defined in the MOU), the Alternative Guarantee (as
defined in the MOU), the $475 Million Guarantee Amendment (as defined in the
MOU), the O&M Deferrals (as defined in the MOU) and the O&M Guarantee (as
defined in the MOU).
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 Second Amended Agreement
Regarding Guarantee and (ii) reflect certain agreements of the parties in
respect of the Guarantee Increase, the Alternative Guarantee, the $475 Million
Guarantee Amendment, the O&M Deferrals and the O&M Guarantee.
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 hand-held
phones or belt-worn pagers (collectively, "Subscriber Equipment") from Motorola
pursuant to that certain Standby Purchase Agreement between Motorola and
Operating (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 of Commitments (the "Handset Guarantee") under the Bridge
Agreement or under a separate Credit Agreement having the terms identical in all
material respects to the then current Bridge Agreement; provided, however, that
Motorola shall not be required to agree to a Handset Guarantee to the extent
that Motorola's liability under the Handset Guarantee would exceed $175 million
(inclusive of principal, interest and other amounts).
(b) Operating Agreements with Respect to Handset Guarantee.
Operating hereby agrees that all funds borrowed that are subject to the Handset
Guarantee ("Handset Borrowings") will be used exclusively for payments to
Motorola under the Handset Purchase Agreement. 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 amounts due under the Handset Purchase
Agreement.
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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; provided that
this Section 2(a) shall not affect the obligations of Iridium and Operating to
pay compensation pursuant to Section 3.
(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 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.
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3. Compensation to Motorola.
(a) Warrant Compensation. Except as set forth in Sections 3
(e) and 3(f), Iridium shall compensate Motorola for incurring the Motorola
Exposure by issuing warrants (the "Warrants") to purchase Class 1 Interests in
Iridium ("Shares") to Motorola in the amounts specified in the table below. 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 or upon receipt if issued after that date and (iv) provide for
issuance of Shares that (A) with respect to Shares issued for Warrants received
on or prior to November 1, 1998, may be sold without transfer restrictions
(other than transfer restrictions imposed by the LLC Agreement, the Interest
Exchange 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 November 1, 1998, 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 (a form of Warrant is attached hereto as Exhibit
1). In addition, in the event that Motorola earns Warrants with respect to
periods beginning after March 1, 2001, at Motorola's election, Iridium shall
compensate Motorola with Shares issued directly to Motorola in the amounts
specified in the table below in lieu of Warrants.
(b) Calculation of Warrant Compensation. Subject to
Sections 3(e) and 3(f), 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 SHARES PER $100 MILLION
OF MOTOROLA EXPOSURE PER YEAR
(PRIOR TO NOVEMBER 1, 1998)
$ 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 NOVEMBER 1, 1998)
$ 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
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MOTOROLA EXPOSURE NUMBER OF SHARES PER $100 MILLION
OF MOTOROLA EXPOSURE PER YEAR
1,050,000,000 -- (or more) 900,000
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(1) See Section 3(e) below
For example, if there were $750,000,000 of Motorola Exposure outstanding for a
period of one year, 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).
(c) Payments of Compensation Due Pursuant to This Agreement.
Operating and Iridium hereby agree that they will pay, or cause to be paid, all
compensation due to Motorola pursuant to this Agreement, including, without
limitation, Warrants, Shares or IWCL Warrants due pursuant to Sections 3(a),
3(e) and 3(f) and cash due pursuant to Sections 3(e) and 3(f), quarterly (for
the fiscal quarter of Motorola then ending) no later than 48 hours prior to the
last day of each fiscal quarter of Motorola.
(d) Warrants Issued to Date; No Further Limitations on
Warrant Compensation. The parties acknowledge that Warrants for 7,741,346 Shares
have been earned by Motorola as of December 15, 1998 with respect to outstanding
Motorola Exposure (not including compensation earned pursuant to Section 3(e)).
The parties agree that no limitation shall apply to compensation earned pursuant
to this Section 3.
(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 $275,000,000
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, (iii) 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 (iv) Iridium has complied with the terms of this
Agreement and the MOU, then, at Iridium's option, in lieu of issuing Warrants or
Shares pursuant to Sections 3(a) and 3(b). Iridium and Operating shall pay
compensation to Motorola (the "High Yield Compensation") as follows:
(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 (13.625% / 360 = 0.0378472%) 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
("IWCL Warrants") to purchase shares of Class A Common Stock of IWCL (the
"Common Stock") 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 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, such amount being IWCL Warrants to purchase 66.758
shares of Common Stock per each full $100,000,000 of Motorola Exposure
per day (calculated on a pro rata basis for the actual amount of Motorola
Exposure outstanding)). IWCL Warrants issued pursuant to this paragraph
(2) will have the same exercise price as the warrants issued with the
Series A Notes ($20.90 per share of Common Stock, subject to
anti-dilution adjustments) but all other terms of the IWCL Warrants and
Common Stock will be as specified for Warrants and Shares, respectively,
in Section 3(a) (the IWCL Warrants will provide for a ten year term,
become exercisable on March 1, 2001 or upon receipt if issued after that
date and be issued free of restrictions on transfer (other than
restrictions imposed by applicable law)); provided, however, that, if
Motorola's holdings of Common Stock, including Common Stock issuable upon
exercise of IWCL Warrants or similar securities (but not including Common
Stock issuable under the Interest Exchange Agreement), would cause the
Iridium Bermuda Special Rights Period (as defined in the LLC Agreement)
to terminate, Motorola will not be issued IWCL Warrants or Common Stock
but instead will be issued Warrants or Shares (with substitution on a
one-for-one basis, subject to the anti-dilution provisions of the
Interest Exchange Agreement). A form of IWCL Warrant is attached hereto
as Exhibit 2. Iridium hereby agrees to exercise its rights under the
Share Issuance Agreement and to take all other necessary actions to cause
IWCL to (i) reserve sufficient shares of Common Stock for issuance upon
exercise of all outstanding IWCL Warrants and (ii) issue shares of Common
Stock in respect of IWCL Warrants at the time or times such IWCL Warrants
are duly exercised, and Iridium agrees not to agree to any amendment to
the Share Issuance Agreement that would be reasonably likely to adversely
affect Iridium's ability to perform its obligations hereunder.
(3) In each case (1) and (2) multiplied by the number
of days the Motorola Exposure is outstanding.
(f) Limited Term Cash and IWCL Warrant Compensation for
Certain Motorola Exposure. Prior to October 1, 1999, Motorola shall not be
compensated pursuant to Section 3(a) or Section 3(e) for Motorola Exposure that
results from the $475 Million Guarantee Amendment, the Handset Guarantee, the
O&M Guarantee or the O&M Deferrals (collectively, the "New Exposure") but shall
be compensated for such New Exposure as set forth in this Section 3(f).
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(1) For all New Exposure relating to the $475 Million
Guarantee Amendment, the Handset Guarantee or the O&M Guarantee which
exists at any time prior to October 1, 1999 (the "New Guarantee
Exposure"), Motorola shall be paid cash and IWCL Warrant compensation
calculated pursuant to clauses (1), (2) and (3) of Section 3(e) with such
New Guarantee Exposure being Motorola Exposure for the purposes of such
calculation.
(2) For all New Exposure relating to the O&M Deferrals which
exists at any time prior to October 1, 1999 (the "O&M New Exposure"),
Motorola shall be paid cash compensation in an amount equal to (V)
multiplied by (W), where (V) equals the average daily O&M New Exposure
for the relevant payment period (with each component of O&M New Exposure
to be included in such calculation from the date it is first incurred)
multiplied by 0.0003288 (the daily equivalent of 12% interest per annum)
and (V) equals the number of days in the relevant payment period.
(3) For all New Exposure which exists at any time on or
after October 1, 1999 Motorola shall be compensated pursuant to Section
3(a).
Prior to October 1, 1999, all New Exposure for which Motorola is compensated
pursuant to this Section 3(f) shall not be considered Motorola Exposure for
purpose of determining whether the High Yield Equivalent Conditions of Section
3(e) exist and Motorola shall not be compensated for such New Exposure pursuant
to any other provisions of this Agreement; provided, however, that New Exposure
shall constitute Motorola Exposure in the case of all other provisions of this
Agreement and the MOU. For the avoidance of doubt, the parties acknowledge and
agree that Motorola Exposure from the Guarantee Increase and the Alternative
Guarantee shall be compensated pursuant to Section 3(a) and not as New Exposure
(with the entire amount thereof compensated as specified in Section 1(b) of the
MOU). Compensation pursuant to this Section 3(f) for each item of New Exposure
shall commence no later than the time that (but for this Section 3(f)) it would
first constitute Motorola Exposure.
(g) Guarantee Reduction. In connection with any permanent
reduction of the Commitments under the Bridge Agreement, the O&M Credit Facility
or any separate Credit Agreement (subject in the case of the Permanent Bank
Facility to Section 1(f) of the MOU), each of Iridium and Operating will use its
best efforts to cause the Lenders thereunder to amend the Bridge Agreement
Guarantee, O&M Guarantee or other relevant Guarantee, as the case may be, to
provide for a similar reduction in Motorola's maximum liability thereunder; and
neither Iridium nor Operating will voluntarily cause a permanent reduction in
the Commitments under the Bridge Agreement, the O&M Credit Facility or any
separate Credit Agreement (subject in the case of the Permanent Bank Facility to
Section 1(f) of the MOU), unless a similar reduction in Motorola's maximum
liability thereunder is effected no later than the time such permanent reduction
is effected.
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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
(c) the execution, delivery and performance of this
Agreement, the MOU, the Warrants, the Iridium warrants underlying
the IWCL 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); each of this Agreement, the MOU, the Warrants, the
Iridium warrants underlying the IWCL 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, or, when issued or executed,
will constitute, 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 MOU, the Warrants, the Iridium warrants underlying
the IWCL 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 agreements related to the Permanent Bank Facility, 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 lender, security holder, lessor, third party,
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
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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, except in the case of (vi) for
such authorizations, consents, approvals, exemptions, actions by,
notices to or filings with, parties (other than Iridium or
Operating) as would not be reasonably expected to have a material
adverse effect on the performance by Iridium and Operating of their
respective obligations hereunder.
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 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),
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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);
(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. Except as otherwise contemplated by
this Agreement and the MOU, 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 repay the loans under the Secured Credit
Agreement 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;
provided, however, that Operating will not use such proceeds for the purposes
specified in clauses (ii), (iii) or (iv) if this Agreement or the MOU otherwise
restricts the use of such proceeds to any of the purposes specified in clause
(i).
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.
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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 hand,
and that only those matters specifically required by the LLC Agreement and
matters related to the other contracts between Motorola on the one hand and
Iridium or Operating on the other hand and actions or claims by Iridium or
Operating against Motorola and other Affiliate Transactions (as defined in the
Offering Memorandum) will be taken to the Contract Committee for approval.
10. Access. Iridium and 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
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: Vice President and Chief Financial Officer and
Vice President - General Counsel
Telecopy #: (▇▇▇) ▇▇▇-▇▇▇▇
If to Operating:
Iridium Operating LLC
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: Vice President and Chief Financial Officer and
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Vice President - General Counsel
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If to Motorola:
Motorola, Inc.
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Attention: Senior Vice President - Corporate Finance
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with a copy (which shall not constitute notice) to:
Motorola, Inc.
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Attention: Vice President - Law Department, Iridium Matters
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12. Definitions.
The following terms when used in this Agreement have the following meanings:
"Credit Agreement" means any agreement pursuant to which
Iridium or Operating incurs indebtedness for borrowed money which is
Guaranteed by Motorola, including, without limitation, the Bridge
Agreement, the O&M Credit Facility, the Permanent Bank Facility (as
defined in the MOU) to the extent guaranteed by Motorola, and any
substitute or replacement agreement which is Guaranteed by Motorola.
"Guarantee" means any guarantee by Motorola of any
obligations of Iridium or Operating under any Credit Agreement or
any note, agreement or other instrument executed in connection
therewith, including, without limitation, the guarantees set forth
in the Bridge Guarantee Agreement, the O&M Guarantee Agreement, the
Guarantee Increase, the Alternative Guarantee and any substitute or
replacement guarantee by Motorola.
"Guarantee Agreement" means any agreement which evidences any
Guarantee.
"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.
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"Guaranteed Amount," with respect to any period, means
the maximum amount of Iridium's obligations for which Motorola has
provided a Guarantee 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.
"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.
"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).
"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 unless it falls below such thresholds as the
result of Motorola or an affiliate disposing of Iridium's voting
securities.
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 a material provision of the
TNDC, the O&M Contract or the MOU, so long as Iridium and Operating
have fully complied in all material respects with their respective
obligations under the SSC, the O&M Contract, this Agreement and the
MOU and Motorola's default is the primary cause for the default
under the applicable Credit Agreement which has caused such demand
for payment.
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"Motorola Exposure" means the Commitments under any
Credit Agreement to the extent such Commitments are subject to a
Guarantee, including, without limitation, the Commitments under the
Bridge Agreement, the Permanent Bank Facility and the O&M Credit
Facility to the extent they are subject to the Bridge Guarantee
Agreement (including any increase thereof and the Handset
Guarantee), the Alternative Guarantee and the O&M Guarantee, the
Guarantee Payments (to the extent not repaid by Iridium or
Operating), the outstanding amount of the O&M Deferrals and the
Vendor Financing Amount; provided, however, that with respect to the
Guarantee Increase and the Alternative Guarantee, if Operating
incurs any obligations under a Credit Agreement that are guaranteed
by the Guarantee Increase (or any part thereof or the Alternative
Guarantee), the entire amount of the Guarantee Increase (including,
without duplication, the Alternative Guarantee, if available) that
is, or could be, made available under the MOU shall constitute
Motorola Exposure regardless of whether Operating has arranged for
commitments from lenders or incurred obligations that are subject to
such amount.
"O&M Contract" means the Operations and Maintenance
Contract effective July 29, 1993 between Iridium and Motorola, as
amended from time to time.
"O&M Credit Facility" has the meaning ascribed thereto in the
MOU.
"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.
"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 definition 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 (i) vendor financing contemplated by any
amendment to the TNDC or any other payment deferrals made available
to Iridium or Operating by Motorola and (ii) payment deferrals or
other financings from third party vendors made available to Iridium
or Operating as a result of Motorola providing credit support for
such deferrals or other financings. "Vendor Financing Amount",
however, does not include any payment being deferred pursuant to
Section 8 of the MOU for up to twelve months after completion of an
applicable TNDC milestone, so long as such payment and all accrued
and unpaid interest are paid in full by the end of such twelve month
period.
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 Second Amended and Restated 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. Limited Rights Against Motorola. The parties hereto
agree that Iridium and Operating shall have no rights (apart from those set
forth in this Agreement, the MOU or any other written agreements between such
parties) against Motorola as a
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result of Iridium's or Operating's inability to meet drawing or other conditions
under the Bridge Agreement or any other Credit Agreement.
* * * *
IN WITNESS WHEREOF, the parties have entered into this
Third 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:
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Name:
Title:
MOTOROLA, INC.
By:
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Name:
Title:
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