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EXHIBIT 10.14
TERMINATION AGREEMENT
THIS TERMINATION AGREEMENT (this "Agreement") is entered into as of the
6th day of October, 2000, among MOTOROLA, INC., a Delaware corporation
("Motorola"), TELEDESIC LLC, a Delaware limited liability company ("Teledesic"),
TELEDESIC CORPORATION, a Delaware corporation ("Teledesic Corp."), TELEDESIC
HOLDINGS LIMITED, a Bermuda entity ("Teledesic Holdings") and EAGLE RIVER
INVESTMENTS LLC ("Eagle River").
RECITALS
A. Motorola and Teledesic are parties to that certain Amended and
Restated Teledesic System Agreement, dated June 30, 1999 (as amended, modified
and supplemented from time to time in accordance with the terms thereof, the
"TSA"), providing for the sale, delivery and completion of the Teledesic System
(this and other capitalized terms used herein and defined in the TSA will have
the same meanings given such terms in the TSA).
B. Under the terms of the TSA, Teledesic has the right to terminate the
TSA for convenience, provided that such right is exercised no later than October
6, 2000. In light of the existing facts and circumstances, Motorola and
Teledesic agree that it is in their mutual best interest to terminate the TSA
and other agreements entered into between themselves, and in some cases, the
other parties hereto, as specified and in accordance with the terms hereof.
AGREEMENT
In consideration of the mutual covenants and agreements contained herein
and other valuable consideration, receipt of which is hereby acknowledged, the
parties agree as follows:
SECTION 1. TERMINATION OF TSA AND OTHER PROGRAM AGREEMENTS
The parties hereby agree that from and after December 22, 2000 (the
"Termination Date"), the following agreements are hereby released and terminated
and, notwithstanding anything to the contrary set forth in the TSA or any other
agreement, shall be of no force and effect and all obligations and liabilities
of each party thereto are discharged, except to extent expressly set forth
below:
1.1 TSA
All terms and conditions of the TSA shall be terminated, except to the
extent otherwise expressly provided below, with the following effect:
1.1.1 MOTOROLA ACTIONS
Effective as of the Termination Date, Motorola shall cease performing
the Work.
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1.1.2 PAYMENTS
Motorola will make the following payments to Teledesic at its account
set forth in Section 10.5 of the TSA:
(i) Twenty Million Dollars ($20 million) on December 22, 2000; plus
(ii) Fifty Million Dollars ($50 million) representing the Third
Payment (as defined in the Combination Agreement) for the
benefit of Teledesic Corporation of which Twenty-Five Million
Dollars ($25 million) shall be due no later than three (3)
business days after the consummation of the Teledesic/New ITGL
Merger (as defined in the Governance Resolution Agreement) and
the remaining Twenty-Five Million Dollars ($25 million) shall be
due no later than thirty (30) calendar days after the due date
for the first Twenty-Five Million payment; provided, however,
that if the Teledesic/New ITGL Merger is not consummated by
December 1, 2000 then the first Twenty-Five Million Dollar
payment will be due on December 4, 2000 and the second
Twenty-Five Million Dollar payment will be due on January 3,
2001.
In addition, Motorola shall use all commercially reasonable efforts to
submit the invoice and reasonable supporting detail contemplated by Section 3.5
of the Joint Development Agreement, and to pay any refund amount equal to the
difference of (x) Fifty-Five Million Dollars ($55 million) less (y) unpaid
"costs and expenses" owing to Motorola under Section 3.5 of the Joint
Development Agreement, in each case, by consummation of the Teledesic/New ITGL
Merger, but in any event Motorola shall provide such invoice documentation and
any refund amount no later than December 1, 2000.
1.1.3 TOTAL DISCHARGE
Effective from and after the Termination Date, except to the extent set
forth in Section 1.1.5 below, (i) all of Teledesic's liabilities are totally
discharged, and (ii) upon Motorola's payments to Teledesic pursuant to Section
1.1.2 above, all of Motorola's liabilities are totally discharged, and
thereafter no party in any event will be liable to the other for any additional
amounts (including, without limitation, the Contract Price and the Variable Sums
and any amounts for Teledesic-Procured Equipment or Cost Reimbursable Items)
with respect to or in connection with any of the terminated agreements described
herein or any of the transactions contemplated hereby or thereby or otherwise in
connection with the Work.
1.1.4 TRANSFER OF TITLE TO WORK
Any licenses provided for in Article 11.5(e) (including those licenses
in Article 19 not otherwise terminated in Article 11.5(e)) of the TSA shall
continue in full force and effect under the terms set forth therein. Motorola
agrees that all licenses provided for in Article 11.5(e) (including those
licenses in Article 19 not otherwise terminated in Article 11.5(e)) of the TSA
may be assigned to any Affiliate of Teledesic. If the Teledesic/ITGL Merger
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Agreement (as defined in the Governance Resolution Agreement) shall be
terminated for any reason or if the Teledesic/New ITGL Merger shall not have
taken place by June 30, 2001, then the assignment rights in the foregoing
sentence shall be terminated and the license grants will continue in full force
and effect under their original terms.
1.1.5 SURVIVAL
Notwithstanding Article 31.9 (Survival) of the TSA, only the following
Articles will, except to the extent expressly limited by their terms or modified
by the terms herein, survive such termination of the TSA to the extent necessary
to ensure the enforcement of the obligations thereunder: Articles 1
(Definitions), 11.5(e), 17.2 (Authorization), 18.2 (Authorization), 20
(Intellectual Property Indemnification), 21 (Proprietary Information), 22
(Indemnification), 24 (Limitations of Liability), 25 (Order of Precedence), 26
(Dispute Resolution), 28 (Relationship of Teledesic and Motorola), 30 (Public
Release of Information) and 31 (Miscellaneous), but excluding 31.9 (Survival).
No other provisions of the TSA will survive the termination thereof.
1.1.6 SIDE LETTERS TO TSA
The Side Letter to Amended and Restated Teledesic System Agreement,
dated June 30, 1999 (the "TSA Side Letter"), regarding the Status of Side
Letters to the Teledesic System Agreement remains in full force and effect to
the extent that such TSA Side Letter terminated or provided for the supersession
of the January 22 Side Letters and the June 30 Side Letters as provided therein.
Each of the following remaining January 22 Side Letters and June 30 Side Letters
referred to in such TSA Side Letter is terminated in its entirety on the
Termination Date and no provision thereof shall survive and all parties thereto
shall be discharged of any and all obligations thereunder:
(i) Technical Review and Price Adjustment side letter dated as of
June 30, 1999;
(ii) Program Status and Management Agreement side letter dated as
of June 30, 1999;
(iii) Fixed Asset and Asset Tracking Language side letter dated as
of January 22, 1999;
(iv) Cost Disclosure under TSA for Initial Contract Price, Changes,
and Excusable Delays side letter dated as of January 22, 1999;
(v) Specifications Reference Documents side letter dated as of
January 22, 1999;
(vi) R&D Tax Credits side letter dated as of January 22, 1999;
provided that Motorola hereby acknowledges that Teledesic shall have the
right to claim the
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R&D Credits, and that Motorola shall not take any position with the
Internal Revenue Service or otherwise which is contrary to Teledesic's
claims to such R&D Credits and Motorola shall assist Teledesic in making
its claims by providing accounting statements and other supporting
documentation that may be requested by Teledesic;
(vii) Motorola Lock-up side letter dated as of June 30, 1999; and
(viii) Teledesic Financing Side Letter dated as of June 30, 1999.
The Amendment to the Combination Agreement dated July 15, 1998 shall be
treated in accordance with the terms of Section 2.1 hereof.
1.2 ESCROW AGREEMENT
The Escrow Agreement is terminated in its entirety on the Termination
Date and the parties thereto shall execute and deliver the Joint Notice of
Termination in the form of Exhibit A hereto (the "Joint Notice of Termination")
to the Escrow Agent concurrently herewith. No provisions of the Escrow Agreement
shall survive.
1.3 INVESTMENT MANAGEMENT AGREEMENT
The Investment Management Agreement is terminated in its entirety on the
Termination Date and the parties thereto shall execute and deliver the Joint
Notice of Termination in the form of Exhibit A hereto to the Investment Manager.
No provisions of the Investment Management Agreement shall survive.
1.4 O&M AGREEMENT
The O&M Agreement (including, for the avoidance of doubt, any agreements
set forth in the draft Definitive Operations and Maintenance Agreement) is
terminated in its entirety on the Termination Date, and no provisions thereof
shall survive. Without limiting the generality of the foregoing, the parties
hereby acknowledge that the term of the O&M Agreement had not commenced and that
(i) all of Teledesic's liabilities are totally discharged, and, (ii) all of
Motorola's liabilities are totally discharged under the O&M Agreement, and
thereafter no party in any event will be liable to the other for any additional
amounts (including, without limitation, any quarterly payments, termination
costs, subcontractor termination costs and anticipated profits) with respect to
or in connection with any of the terminated agreements described herein or any
of the transactions contemplated thereby.
1.5 USER EQUIPMENT SUPPLY AGREEMENT
The Acknowledgement of Status of User Equipment Supply Agreement
Negotiations, dated June 30, 1999, between the parties thereto (including, for
the avoidance of doubt, any agreements set forth in the draft User Equipment
Supply Agreement, Version 1.3c, dated May 5, 1999) is terminated in its entirety
on the Termination Date, and no provisions thereof shall survive.
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1.6 PERFORMANCE OPTION AGREEMENT
The Performance Option Agreement, dated June 30, 1999, between Teledesic
Corporation and Motorola is terminated in its entirety on the Termination Date,
and no provisions thereof shall survive.
SECTION 2. EFFECT ON COMBINATION AGREEMENT AND OTHER JOINT VENTURE AGREEMENTS
From and after the date hereof, the following agreements shall have the
status and be treated by the parties thereto as expressly set forth below,
notwithstanding anything to the contrary set forth in the TSA, the Combination
Agreement or any other agreement:
2.1 COMBINATION AGREEMENT
All terms and conditions of the Combination Agreement (including as
amended by the Amendment to the Combination Agreement dated July 15, 1998) shall
remain in full force and effect, except as expressly set forth below (and all
capitalized terms used in this Section 2.1 which are not defined herein or in
the TSA shall have the meanings ascribed thereto in the Combination Agreement):
2.1.1 CONTRIBUTION OF CELESTRI ASSETS
The provisions set forth in Sections 1.4, 1.5 and 8.3 of the Combination
Agreement relating to Celestri Assets, Celestri License and Celestri Options
shall be modified and amended as follows:
(i) With respect to the Celestri Assets that have been used, but
not exclusively, by ASD, Motorola agrees the licenses to the Celestri
Assets that are provided for in Section 1.4.1 may be assigned to any
Affiliate of Teledesic; provided that nothing herein shall limit or
terminate the rights of Teledesic and the obligations of Motorola in
respect of the Celestri Assets that have been used exclusively by
Motorola's ASD in the Celestri Activities or in respect of the Celestri
Licenses as set forth in Section 1.4.2. If the Teledesic Merger
Agreement shall be terminated for any reason or if the Teledesic/New
ITGL Merger shall not have taken place by June 30, 2001, then the
assignment rights provided for in the previous sentence will also
terminate and the license grants will continue in full force and effect
under their original terms;
(ii) Teledesic hereby terminates the right to use the marks and
names provided for in Section 1.4.1(d) and the nonexclusive royalty-free
right granted to Motorola to use the Celestri Assets in furtherance of
the System as provided in Section 1.4.1;
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(iii) With respect to the Celestri Options set forth in Section
1.5, the assignment of the Millenium License, the Celestri LEO
Application (or any authorization granted as a result of that
application), the Celestri GEO Application (or any authorization granted
as a result of that application), and the M-Star Application (or any
authorization granted as a result of that application) to Teledesic or
any Subsidiary of Teledesic shall occur, subject to FCC approval, the
earlier of five (5) business days after the date of the FCC order
transferring control of the Teledesic License, the consummation date of
the Teledesic/New ITGL Merger, or December 1, 2000. Notwithstanding the
provisions of the Combination Agreement, no amounts will be payable by
Teledesic in connection with the foregoing assignment;
(iv) In the event that Motorola is required to respond to any
request from the FCC or any other governmental agency regarding the
Celestri Options, Motorola agrees to notify and consult with Teledesic
about the appropriate course of action. After such consultation,
Teledesic will either take immediate assignment of the Celestri Options
or allow Motorola to respond to the request. If Motorola is allowed to
respond, Teledesic agrees that Motorola will have no liability to
Teledesic for any response it may make and its resulting impact on the
Celestri Options. In the event that Motorola becomes aware of any
filings made by other parties that relate to the Celestri Options,
Motorola agrees to notify Teledesic of such filings and to not respond
to the filings if so directed by Teledesic. Teledesic agrees that with
respect to the Celestri Options, Motorola has no obligation to take any
affirmative actions or respond to any filings made by other parties.
(v) With respect to any Celestri License Action, Motorola's
obligations set forth in Section 1.5(e) and Teledesic's obligations set
forth in Section 1.5(f) are hereby terminated; and
(vi) Except as expressly set forth above, all the provisions set
forth in Sections 1.4, 1.5 and 8.3 (provided that Teledesic's
obligations under Section 8.3 are hereby terminated) of the Combination
Agreement shall remain in full force and effect.
2.1.2 THIRD PAYMENT
Motorola shall pay the remaining $50 million balance of the Third
Payment in accordance with Section 1.1.2 hereof.
2.2 AMENDED AND RESTATED EXCLUSIVITY AGREEMENT
The parties hereby acknowledge and affirm that the Amended and Restated
Exclusivity Agreement has been terminated in its entirety as of January 20,
2000; and notwithstanding anything to the contrary set forth therein or in the
TSA or any other agreement, no provisions thereof shall survive and each party
thereto shall be discharged of all of its obligations thereunder.
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2.3 JOINT DEVELOPMENT AGREEMENT
The Joint Development Agreement is terminated in its entirety on the
Termination Date, notwithstanding anything to the contrary set forth in the TSA,
the Combination Agreement, the Joint Development Agreement or any other
agreement, except that the provisions as expressly set forth and, in some cases,
modified below shall survive (and all capitalized terms used in this Section 2.3
which are not defined herein or in the TSA shall have the meanings ascribed
thereto in the Joint Development Agreement):
2.3.1 OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS AND LICENSES
All licenses provided for in Section 1.5 of the Joint Development
Agreement, as well as the rights to any documents or other tangible materials as
set forth in Section 1.5(e), will continue in full force and effect under the
terms set forth therein. The parties agree that the grant provided in Section
1.5(f) will be at Teledesic's continuing option (notwithstanding the previous
execution of any of the Program Agreements) and, upon such exercise, will be
subject to a commercially reasonable royalty as provided in such Section.
Motorola further agrees that the licenses, as well as the rights to any
documents or other tangible materials, that are granted to Teledesic in Section
1.5 may be assigned to any Affiliate of Teledesic. If the Teledesic Merger
Agreement shall be terminated for any reason or if the Teledesic/New ITGL Merger
shall not have taken place by June 30, 2001, then the assignment rights in the
foregoing sentence shall be terminated and the license grants will continue in
full force and effect under their original terms.
2.3.2 DISCHARGE OF OBLIGATIONS
All of the respective rights and obligations of Motorola and Teledesic
in respect of Joint Work are terminated and discharged on the Termination Date,
and thereafter no party will be liable to the other for any amounts with respect
to or in connection with any of the terminated agreements described therein or
any of the transactions contemplated thereby or otherwise in connection with the
Joint Work; provided, however that (i) the obligations of Motorola to submit
invoices for "costs" and "expenses" and to reimburse Teledesic to the extent
unpaid costs and expenses are less than $55 Million and (ii) the provisions set
forth in clause 2.3.3 below shall survive.
2.3.3 SURVIVAL
Notwithstanding anything to the contrary set forth in the Joint
Development Agreement, including the survival provisions set forth in Section
5.5 thereof, only the following Sections will, except to the extent expressly
limited by their terms or expressly modified by the terms hereof, survive such
termination of the Joint Development Agreement to the extent necessary to ensure
the enforcement of the obligations thereunder: Sections 1.1 (Inventions, Patents
and Design Assignments), 1.2 (Ownership of Intellectual Property), 1.5
(Architecture License), 1.6 (disclaimer of warranty), 3.2 (reimbursement for
"costs and expenses"), 3.5 ($85 million cap on "costs and expenses"), 4
(Definitions), 5.1 (no
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interference with Teledesic suppliers), 5.2 (NDA), 5.3 (no export in violation
of law), 5.6 (limitation of liability), 5.7 (dispute resolution), 5.8
(publicity), 5.9 (no precedent), 5.10 (assignment) (provided that Teledesic may
assign any of its rights to any of its Affiliates), 5.11 (governing law), 5.14
(notices), and 5.15 (severability).
2.4 NON-DISCLOSURE AGREEMENTS
The Non-Disclosure Agreements referred to in Schedule 1 hereto are
hereby terminated in their entirety, and no provisions thereof shall survive
(except for such confidentiality obligations as expressly provided therein to
survive, as such obligations may have been modified herein).
2.5 TRADEMARK AGREEMENT
All terms and conditions of the Trademark Agreement (as defined in the
Combination Agreement) shall remain in full force and effect, except Paragraph 4
is terminated in its entirety.
2.6 MEMORANDUM OF AGREEMENT
The parties hereto acknowledge and agree that Memorandum of Agreement
has expired by its terms, and to the extent of any provisions surviving the
expiration thereof, such provisions are hereby terminated in their entireties,
such that no provisions of the Memorandum of Agreement shall survive. The
parties hereto further acknowledge and agree that, without limiting the
provisions expressly set forth in this Agreement, all of the respective rights
and obligations of the parties under the Memorandum of Agreement are hereby
terminated and discharged, and hereafter no party will be liable to the other
for any amounts with respect to or in connection with the terminated agreements
set forth therein or the transactions contemplated thereby.
SECTION 3. MISCELLANEOUS
3.1 FURTHER ASSURANCES
Each party hereto agrees that to the extent consents or acknowledgments
or any other actions are required in respect of the terminations, waivers,
amendments, and modifications set forth herein or to effect any of the
transactions contemplated hereby, each party shall cooperate to obtain such
consents or acknowledgements and shall take such other necessary actions.
3.2 ASSIGNMENT
Any Affiliate of Teledesic may (without the prior consent of Motorola)
assign any licenses granted to it pursuant to this Agreement to a successor
company or corporation as part of a corporate merger, recapitalization,
reorganization, or transfer of assets, if such merger, recapitalization,
reorganization, or transfer of assets has the effect of transferring all
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or substantially all of the assets related to the Teledesic System, provided
that the terms of Article 31.2(c) of the TSA shall continue to apply to such
assignment.
3.3 ENTIRE AGREEMENT
This Agreement contains the entire agreement among the parties regarding
the subject matter hereof and supersedes all communications, negotiations, and
other agreements, either written or oral, relating thereto made prior to the
date hereof.
3.4 AMENDMENTS
This Agreement may not be modified except by a written instrument signed
by all of the parties.
3.5 APPLICABLE LAW
This Agreement and performance under it will be governed by, construed,
and enforced in accordance with the laws of the State of New York, United States
of America, as if entered into in such State by citizens thereof to be performed
wholly within such State, and without regard to its conflict of laws provisions.
3.6 HEADINGS
The article headings are for convenience of reference only and will not
be considered in interpreting the text of this Agreement.
3.7 COUNTERPARTS
This Agreement may be executed in counterparts, which taken together
constitute one single contract among the parties.
3.8 CONFIDENTIALITY
This Agreement, and its execution, existence, terms and performance,
shall be kept confidential by the parties hereto and shall not be disclosed by
any party without the prior written consent of the others, and any public
announcement regarding this Agreement will be subject to the written agreement
of each of the parties.
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IN WITNESS WHEREOF this Agreement has been issued in counterparts and
has been executed on behalf of each of the parties by persons authorized in that
behalf at Schaumburg, Illinois and Seattle, Washington.
MOTOROLA, INC.
By: /s/ Linda Valentine
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Title: Sr. Vice President & Assistant
General Counsel
TELEDESIC LLC,
BY TELEDESIC CORPORATION,
MANAGING MEMBER
By: /s/ Dennis James
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Title: President
TELEDESIC CORPORATION
By: Dennis James
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Title: President
TELEDESIC HOLDINGS LIMITED
By: Dennis James
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Title: Chief Legal Officer
EAGLE RIVER INVESTMENTS LLC
By: /s/ Dennis M. Weibling
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Title:
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SIGNATURE PAGE
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Schedule 1 to
Termination Agreement
NON-DISCLOSURE AGREEMENTS
(i) Non-Disclosure Agreement among Teledesic Corporation, Eagle
River Investments LLC and Motorola Inc., effective May 21, 1998;
(ii) Highly Sensitive Information Non-Disclosure Agreement between
Motorola Inc., Teledesic LLC, Teledesic Corporation, and Eagle River
Investments LLC, effective October 30, 1998 (as amended);
(iii) Highly Sensitive Information Non-Disclosure Agreement between
Motorola Inc., Teledesic LLC, Teledesic Corporation, and Eagle River
Investments LLC, effective January 11, 1999 (as amended);
(iv) Agreements to Maintain Confidentiality between Motorola Inc.
and each of the following: Michael Doyle, Farzad Ghazvinian, Bill
Hoglund, Steven W. Hooper, Dennis James, Craig McCaw, John J. Nokleberg,
Iradj Shahriary, and Dennis W. Weibling; and
(v) Agreements to Maintain Confidentiality between Teledesic LLC
and each of the following: Richard D. Severns, John R. Owings, Robert W.
Bigony, Carl F. Koenemann, Steve Earhart, Bary Bertiger, Robert
Marcotte, and Joe Zimmel.
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Exhibit A to
Termination Agreement
FORM OF JOINT NOTICE OF TERMINATION
TO: Bankers Trust Company of California, N.A. ("Escrow Agent")
Cascade Investment L.L.C. ("Investment Manager")
FROM: Teledesic LLC ("Teledesic")
Motorola, Inc. ("Motorola")
DATE: October 6, 2000
RE: Termination of Escrow Agreement and Investment Management Agreement
Reference is made to (i) that certain Escrow Agreement, dated as of June
30, 1999 (the "Escrow Agreement"), among Motorola, Teledesic and Escrow Agent
and (ii) that certain Investment Management Agreement, dated as of June 30, 1999
(the "Investment Management Agreement"), between Motorola and Teledesic and
Investment Manager.
Each of Teledesic and Motorola hereby confirms and consents to the
termination of the Escrow Agreement and Investment Management Agreement, in
accordance with the respective terms thereof. Effective as of the date hereof,
the Escrow Agreement and the Investment Management Agreement shall have no
further force and effect.
This Joint Notice of Termination may be executed on separate
counterparts, each of which will be deemed an original, which counterparts may
be delivered to the other parties by facsimile transmission, and all of which
taken together will constitute one and the same agreement.
TELEDESIC LLC
By: TELEDESIC CORPORATION, MOTOROLA, INC.
its managing member
By: By:
------------------------------ ----------------------------------
Name: Name:
------------------------- -----------------------------
Title: Title:
------------------------ ----------------------------
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ACKNOWLEDGED AND CONSENTED
to this _____ day of_______, 2000
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., as Escrow Agent
By:
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Name:
-------------------------
Title:
------------------------
ACKNOWLEDGED AND CONSENTED
to this _____ day of ______, 2000
CASCADE INVESTMENT L.L.C.,
as Investment Manager
By:
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Name:
-------------------------
Title:
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