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EXHIBIT 10.43
CHINA GATEWAY COMPENSATION AGREEMENT
This China Gateway Compensation Agreement (this "Agreement"), dated as
of April __, 1998, is made by and between Motorola, Inc., a Delaware
corporation ("Motorola"), and Iridium Operating LLC, a Delaware limited
liability company ("Iridium").
WHEREAS, the Board of Directors of Iridium LLC ("Parent") authorized a
gateway incentive program pursuant to which Parent, under certain
circumstances, would issue warrants ("Gateway Incentive Warrants") to its
gateway territory owners and to Motorola;
WHEREAS, (i) Iridium China (Hong Kong), Ltd. ("IC(HK)"), the owner of
the gateway territory which includes China (the "China Gateway Territory"), has
agreed to waive any right to receive Gateway Incentive Warrants for the timely
construction and operation of the gateway in the China Gateway Territory (the
"China Warrants") and (ii) the Board of Directors of Parent at a meeting on
March 13, 1998 has agreed, subject to certain conditions, to issue the China
Warrants to Motorola for using its best efforts to cause such gateway to
achieve commercial activation on a timely basis and for certain revenue earned
by that gateway;
WHEREAS, in an effort to facilitate the construction and
implementation of a gateway in China, (i) pursuant to the Iridium Gateway
Conveyance Agreement, dated as of April 10, 1998 (the "MPT Agreement"), among
Motorola, Iridium and China Telecommunications Broadcast Satellite Corporation
("China Sat"), Motorola has agreed to provide to China Sat, at no cost to China
Sat, certain equipment and services relating to the construction and operation
of the China gateway (the "China Gateway Equipment") and (ii) Iridium has
agreed to provide to China Sat, at no cost to China Sat, a Gateway Business
System; and
WHEREAS, pursuant to an Iridium China Call Option Agreement between
Motorola and IC(HK), dated as of March 30, 1998, Motorola has granted to IC(HK)
an option to purchase from Motorola (the "China Call Option") all China
Warrants that Motorola receives;
NOW, THEREFORE, in order to properly allocate the compensation
reflected by any exercise of the China Call Option or the benefit of the China
Warrants, the parties agree as follows:
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1. Definitions.
China Call Option Expiration Date: The last date upon which the China
Call Option shall remain available to IC(HK) under the MPT Agreement,
calculated as the ninetieth (90th) calendar day following the date that Parent
declares as the last date for issuance of Gateway Incentive Warrants.
China Call Option Payment: The receipt of full payment by Motorola
from IC(HK) in respect of the exercise of the China Call Option.
Interest: Interest with respect to any amount means interest thereon,
calculated at a rate equal to 10.5% on the basis of a 360 day year and the
actual days elapsed compounded monthly, from the date of Motorola's shipment of
equipment pursuant to the MPT Agreement, until the date of payment of such
amount.
2. China Call Option. Motorola agrees not to amend the China Call Option
in writing without Iridium's consent. Motorola agrees not to accept any
payment in respect of the China Call Option from IC(HK) other than full payment
and not to transfer any Gateway Incentive Warrants to IC(HK) except in exchange
for full payment under the China Call Option made within 30 calendar days after
the China Call Option Expiration Date.
3. China Call Option Payment Distribution Obligation. If IC(HK)
exercises the China Call Option on or prior to the China Call Option Expiration
Date and makes the China Call Option Payment within 30 calendar days after such
Expiration Date, then Motorola shall, within five (5) days of receipt of the
China Call Option Payment, distribute to Iridium the sum of $6 million plus
Interest on the $6 million.
4. Sale and Purchase Rights. (a) If IC(HK) does not exercise the China
Call Option on or prior to the China Call Option Expiration Date and make the
China Call Option Payment within 30 calendar days after such Expiration Date,
then:
(i) Motorola may, by written notice delivered to Iridium
at any time within sixty (60) calendar days after the China Call
Option Expiration Date, elect to sell to Iridium, and Iridium shall
have the obligation to buy from Motorola, all (but not less than all)
of the China Warrants; and
(ii) Iridium may, by written notice delivered to Motorola
at any time within sixty (60) calendar days after the China Call
Option Expiration Date, elect to purchase from Motorola, and Motorola
shall have the obligation to sell to Iridium, all (but not less than
all) of the China Warrants.
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(b) The aggregate purchase price for the China Warrants
in any purchase and sale under Section 4(a) above shall be (a) US
$26,005,880 plus (b) the actual cost of shipping the China Gateway
Equipment plus (c) optional gateway services provided (which shall not
exceed US $1,250,000). Settlement of such purchase and sale shall be
made at the offices of Iridium on the tenth (10th) business day
following the first election notice sent pursuant to Section 4(a)
above. Payment of such purchase price shall be made against delivery
of the certificate(s) evidencing the Iridium Warrants, together with
any stock powers or other instruments reasonably requested by Iridium
to give effect to such purchase and sale.
5. In the event (i) IC(HK) does not exercise the China Call Option on or
prior to the China Call Option Expiration Date and (ii) the China Warrants are
not purchased by Iridium pursuant to Section 4(a) above on or prior to the date
that is thirty (30) calendar days after the China Call Option Expiration Date,
Motorola shall have the obligation to sell to Iridium, and Iridium shall have
the obligation to purchase, 6/32 (18.75%) of the China Warrants for an
aggregate purchase price of $1. Payment of such purchase price shall be made
against delivery of the certificate(s) evidencing the Iridium Warrants,
together with any stock powers or other instruments reasonably requested by
Iridium to give effect to such purchase and sale. Settlement of such purchase
and sale shall be made at the offices of Iridium on the tenth (10th) business
day following the date that is thirty (30) calendar days after the China Call
Option Expiration Date.
6. Enforceability of Agreement Contingent Upon Issuance of China
Warrants. This Agreement shall terminate upon the latest of (i) the date when
Parent has complied with its obligations to issue the China Warrants, (ii) the
date when Iridium's obligations under this Agreement have expired or been
satisfied and (iii) the date when Motorola's obligations under this Agreement
have expired or been satisfied.
7. Assignment. Neither party shall have the right to assign or delegate
its rights or obligations hereunder to any other person without the prior
written consent of the other party.
8. Iridium Representations. Iridium hereby represents that (a) Iridium
has the power and authority to perform this Agreement, (b) this Agreement is
the binding obligation of Iridium, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, moratorium and other laws of general
applicability relating to or affecting creditors' rights and general equity
principles and (c) the actions of Iridium and Parent contemplated hereby have
been duly authorized by Iridium and Parent, as the case may be and each of
Iridium, Parent and IWCL has received all the approvals necessary for Iridium
to enter into this Agreement, as applicable, and to fully carry out the
transactions contemplated by this Agreement.
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9. Motorola Representations. Motorola hereby represents that (a)
Motorola has the power and authority to perform this Agreement and the MPT
Agreement, (b) each of this Agreement and the MPT Agreement is a binding
obligation of Motorola, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, moratorium and other laws of general applicability
relating to or affecting creditors' rights and general equity principles and
(c) the actions of Motorola contemplated hereby and by the MPT Agreement have
been duly authorized by Motorola and Motorola has received all approvals
necessary for it to enter into this Agreement and to carry out the transactions
contemplated by this Agreement.
10. Notices. All notices and other communications hereunder will be in
writing. Any notice or other communication hereunder shall be deemed duly
given (i) when delivered, if personally delivered, (ii) when receipt is
electronically confirmed, if telecopied (with hard copy to follow via first
class mail, postage prepaid) or (iii) one business day after deposit with a
reputable overnight courier, in each case addressed to the intended recipient
as set forth below:
(a) If to Motorola:
Motorola, Inc.
Satellite Ventures Division
425 Martingale Drive
Schaumburg, Illinois 60173
(Telecopy No.: (847) 435-3328)
(b) If to Iridium:
Iridium Operating LLC
1575 Eye Street, N.W.
Washington, D.C. 20005
Attention: General Counsel
(Telecopy No.: (202) 408-3897)
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the law of the State of New York, without regard to its
principle of conflicts of laws.
12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instruments.
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13. Amendment. This Agreement cannot be amended except in a
writing signed by both parties.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
MOTOROLA, INC.
By:
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Name:
Title:
IRIDIUM OPERATING LLC
By:
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Name:
Title:
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