Document:

Senior Subordinated Term Loan Agreement

Exhibit 10.6

Execution Copy

SENIOR SUBORDINATED TERM LOAN AGREEMENT

DATED AS OF DECEMBER 11, 2000

BETWEEN

IRIDIUM SATELLITE LLC,

as Borrower,

and

MOTOROLA, INC.,

as Lender

 

Table of Contents

Page

1.

DEFINITIONS AND INTERPRETATION OF AGREEMENT...........................

1

1.1

Definitions.................................................................................

1

1.2

Other Definitional Provisions...........................................................

7

1.3

Interpretation of Agreement.............................................................

7

2.

COMMITMENT OF THE LENDER...........................................................

7

2.1

Commitment of the Lender..............................................................

8

2.2

Note Evidencing the Loan...............................................................

8

3.

INTEREST AND FEES...........................................................................

8

3.1

Interest......................................................................................

8

3.2

Method of Calculating Interest.........................................................

8

3.3

Commitment Fee..........................................................................

8

3.4

Loan Success Fee.........................................................................

8

4.

PAYMENTS AND PREPAYMENTS.........................................................

9

4.1

Place of Payment.........................................................................

9

4.2

Prepayments..............................................................................

9

5.

WARRANTIES....................................................................................

10

5.1

Existence...................................................................................

10

5.2

Authorization..............................................................................

10

5.3

No Conflicts...............................................................................

10

5.4

Validity and Binding Effect.............................................................

11

5.5

No Default.................................................................................

11

5.6

Litigation...................................................................................

11

5.7

Liens........................................................................................

11

5.8

Subsidiaries................................................................................

11

5.9

Purpose.....................................................................................

11

5.10

Compliance................................................................................

11

6.

AFFIRMATIVE COVENANTS................................................................

11

6.1

Financial Statements.....................................................................

11

6.2

Certificates; Other Information.........................................................

12

6.3

Maintenance of Existence and Compliance with Law..............................

13

6.4

Maintenance of Property; Insurance..................................................

13

6.5

Inspection of Property: Books and Records: Discussions..........................

13

6.6

Notices....................................................................................

13

6.7

Environmental Laws....................................................................

15

i

6.8

Obligations and Taxes......................................................................

15

6.9

Future Assurances.......................................................................

15

7.

NEGATIVE COVENANTS....................................................................

16

7.1

Limitation on Indebtedness.............................................................

16

7.2

Limitation on Liens.....................................................................

17

7.3

Limitation on Guarantee Obligations..................................................

18

7.4

Limitation on Fundamental Changes..................................................

18

7.5

Limitation on Sale of Assets...........................................................

18

7.6

Limitation on Restricted Payments/Dividends.......................................

19

7.7

Limitation on Investments, Loans and Advances....................................

19

7.8

Limitation on Transactions with Affiliates.............................................

20

7.9

Limitation on Sales and Leasebacks...................................................

20

7.10

Limitation on Equity Issuances of Satellite or its Subsidiaries.....................

20

7.11

Limitation on Equity Issuances of Holdings..........................................

21

7.12

Prepayment of Senior Indebtedness.....................................................

21

7.13

Other Agreements........................................................................

21

7.14

Amendments to Other Agreements......................................................

21

8.

CONDITIONS PRECEDENT TO THE LOAN................................................

21

8.1

Note.......................................................................................

21

8.2

Guaranty..................................................................................

21

8.3

Charter; Good Standings Resolutions.................................................

21

8.4

Incumbency Certificate..................................................................

21

8.5

Opinion...................................................................................

21

9.

EVENTS OF DEFAULT AND REMEDIES.................................................

21

9.1

Events of Default........................................................................

21

9.2

Remedies.................................................................................

23

10.

GENERAL.........................................................................................

23

10.1

Waiver and Amendments...............................................................

23

10.2

Notices.....................................................................................

23

10.3

Expenses.................................................................................

24

10.4

Information...............................................................................

24

10.5

Severability...............................................................................

24

10.6

LAW......................................................................................

24

10.7

Successors................................................................................

24

10.8

Forum Selection and Consent to Jurisdiction........................................

24

10.9

Waiver of Jury Trial.....................................................................

25

11.

SUBORDINATION..............................................................................

25

11.1

Bankruptcy Events......................................................................

25

11.2

Turnover..................................................................................

27

11.3

Subrogation...............................................................................

27

ii

11.4

Reinstatement.............................................................................

27

11.5

No Waiver of Subordination Provisions...............................................

27

11.6

Benefits of Subordination...............................................................

28

11.7

Provisions Solely Defining Relative Rights..........................................

28

11.8

Credit Enhancements....................................................................

29

EXHIBIT A - Note

EXHIBIT B - Guaranty

iii

SENIOR SUBORDINATED TERM LOAN AGREEMENT

THIS SENIOR SUBORDINATED TERM LOAN AGREEMENT, dated as of December 11, 2000, is entered into between Iridium Satellite LLC, a Delaware limited liability company (“Satellite”), and Motorola, Inc., a Delaware corporation (the “Lender”).

In consideration of the mutual agreements herein contained, the parties hereto agree as follows:

1.

DEFINITIONS AND INTERPRETATION OF AGREEMENT.

1.1

Definitions. In addition to the terms defined elsewhere in this Agreement, the following terms shall have the meanings indicated for purposes of this Agreement (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“Affiliate” means as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 20% or more of the securities having ordinary voting power for the election of directors of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

“Agreement” means this Senior Subordinated Term Loan Agreement, as it may be amended, modified or supplemented from time to time.

“Business Day” means any day other than a Saturday, Sunday or legal holiday on which banks are authorized or required to be closed in Chicago, Illinois.

“Change of Control” means the occurrence of any of the following events: (a) any Person who owns any Interests of Holdings at and as of the date of this Agreement (“Initial Investor”), together with such Person’s Affiliates, shall have acquired beneficial ownership of Interests entitling the holders thereof to more than 50% of the income of, or the liquidation proceeds from, Holdings; or (b) any Person who is not an Initial Investor, together with such Person’s Affiliates and with other Persons constituting a “group” (within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended) shall have acquired beneficial ownership of Interests entitling the holders thereof to more than 50% of the income of, or the liquidation proceeds from, Holdings; or (c) Holdings shall cease to own 100% of the equity interests of Satellite; provided that a Change of Control (other than the one described in clause (c) of this paragraph) shall not include (x) a transaction in which a Person or “group” acquires beneficial ownership of Interests entitling the holders thereof to more than 50% of the income of, or liquidation proceeds from, Holdings in exchange for the transfer to Holdings of such Person’s or group’s ownership of a business or entity in a purchase or merger permitted hereby and which does not involve the payment of cash to the seller or (y) a transaction in which one of the Initial Investors, together with such Person’s Affiliates, acquires beneficial ownership of Interests as a result of such Person’s or Persons’ subscription to purchase from Holdings additional Interests 

included in the first $150 million of equity securities issued by Holdings. As used in this paragraph “Interests” shall mean any equity interest, whether voting or non-voting, entitling the holder thereof to a share of the income of, or liquidation proceeds from, Holdings.

“Code” means the Internal Revenue Code of 1986 and any successor statute of similar import, together with the regulations thereunder, in each case as in effect from time to time. References to sections of the Code shall be construed to also refer to any successor sections.

“Commonly Controlled Entity” means an entity, whether or not incorporated, which is under common control with Satellite within the meaning of Section 4001 of ERISA or is part of a group which includes Satellite and which is treated as a single employer under Section 414 of the Code.

“Constellation” means Iridium Constellation LLC, a Delaware limited liability company.

“Contractual Obligation” means as to any Person, any provision of any material security issued by such Person or of any material agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“Distribution Event” means the (i) direct or indirect (a) payment of any dividend or other distribution (in the form of cash or otherwise) in respect of the equity interests of Holdings or (b) purchase, conversion, redemption or other acquisition for value or otherwise by Holdings of any equity interest of Holdings or (ii) initial public offering or any secondary public offering by Holdings or Satellite in which any holders of equity interests of Holdings shall be afforded the opportunity to participate as a selling equity holder in such offering.

“EBITDA” shall mean, with respect to Satellite for any fiscal year, an amount equal to (a) consolidated net income of Satellite for such period, as determined in accordance with GAAP, minus (b) the sum of (i) gain from extraordinary items for such period and (ii) any other non-cash gains which have been added in determining consolidated net income, in each case to the extent included in the calculation of consolidated net income of Satellite for such period in accordance with GAAP, but without duplication, plus (c) the sum of (i) interest expense, (ii) loss from extraordinary items for such period, (iii) the amount of non-cash charges (including depreciation and amortization) for such period, (iv) amortized debt discount for such period, (v) the amount of any deduction to consolidated net income as the result of any grant to any members of the management of Satellite of any membership interests, and (vi) all cash and noncash charges in accordance with GAAP for federal and state taxes and all distributions by Satellite to Holdings on account of federal or state taxes payable by Holdings or its members, in each case to the extent included in the calculation of consolidated net income of Satellite for such period in accordance with GAAP, but without duplication.

“Environmental Law” means any and all applicable foreign, federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental Authority having the force and effect of law or other Requirements of Law (including, without limitation, common law) regulating, relating to or imposing liability or 

2

standards of conduct concerning protection of the environment or space, or human health as related to the environment or space, as now or at any relevant time hereafter in effect.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute of similar import, together with the regulations thereunder, in each case as in effect from time to time. References to sections of ERISA shall be construed to also refer to any successor sections.

“Event of Default” means any of the events described in Section 8.1.

“Exchange Securities” means any debt or equity securities (including common stock) of Satellite or any other Person that are distributed to the Lender in respect of the Obligations pursuant to a confirmed plan of reorganization or readjustment and which are subordinated to the Senior Indebtedness to at least the same extent as the Obligations are subordinated to the Senior Indebtedness under this Agreement.

“Fiscal Quarter” means any quarter of a Fiscal Year.

“Fiscal Year” means any period of 12 consecutive calendar months ending on the 31st day of December. References to a Fiscal Year with a number corresponding to any calendar year (e.g. “Fiscal Year 2000”) refer to the Fiscal Year ending on the 31st day of December occurring during such calendar year.

“Former Plan” means any employee benefit plan in respect of which Satellite or a Commonly Controlled Entity has engaged in a transaction described in Section 4069 or Section 4212(c) of ERISA.

“GAAP” means generally accepted accounting principles as applied in the preparation of the audited consolidated financial statements of Satellite.

“Governmental Authority” means any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

“Guarantee Obligation” means as to any Person (the “guaranteeing person”), any obligation of (a) the guaranteeing person or (b) another Person (including, without limitation, any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or other obligations (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any such obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefore, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in 

3

respect thereof; provided that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by Satellite in good faith.

“Guaranty” means, collectively, that certain Guaranty dated as of the date hereof by Holdings in favor of the Lender, and each other guaranty executed by any Subsidiary in favor of the Lender, each as amended, supplemented or modified from time to time.

“Holdings” means Iridium Holdings LLC, a Delaware limited liability company.

“Holdings LLC Agreement” means that certain Iridium Holdings LLC Limited Liability Company Agreement dated as of December __, 2000.

“Indebtedness” means of any Person at any date, (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services (other than trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices), (b) any other indebtedness of such Person which is evidenced by a note, bond, debenture or similar instrument, (c) all obligations of such Person under any leases of property that are required by GAAP to be capitalized on the balance sheet of such Person, (d) all obligations of such Person in respect of bankers’ acceptances issued or created for the account of such Person, (e) all obligations of such Person in respect of interest rate protection agreements, interest rate futures, interest rate options, interest rate caps and any other interest rate hedge arrangements, (f) all preferred stock issued by such Person which, pursuant to its terms, is subject to mandatory redemption, retirement or acquisition by such Person on or prior to the Maturity Date and (g) all indebtedness or obligations of the types referred to in the preceding clauses (a) through (f) secured by any Lien on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof.

“Interest Payment Date” has the meaning given to such term in Section 3.1. 

“Lender” – see Preamble.

“Lien” means any mortgage, pledge, hypothecation, assignment, security deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any other transaction or agreement having substantially the same economic effect as any of the foregoing).

“Loan” means, collectively, the loans described in Section 2.1. 

4

“Loan Documents” means this Agreement, the Note, the Guaranty and the other documents and agreements contemplated hereby and executed by Satellite, Holdings or any other Person in favor of the Lender.

“Material Adverse Effect” means a material adverse effect on (a) the business, operations, property, condition (financial or otherwise) or prospects of Holdings and its Subsidiaries taken as a whole or (b) the validity or enforceability of this Agreement, the Note or the Guaranty or the rights and remedies of the Lender under this Agreement, the Note or the Guaranty.

“Maturity Date” means the earliest to occur of (a) the date on which any Change of Control shall occur, (b) the date on which Satellite shall fail to maintain direct and beneficial ownership, free and clear of any Lien, of 100% of the outstanding membership interests of Constellation or (c) May 30, 2005.

“Multiemployer Plan” means a Plan which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“Note” means Satellite’s promissory note, substantially in the form set forth as Exhibit A with appropriate insertions, as such promissory note may be amended, modified or supplemented from time to time, and the term “Note” shall include any substitutions for, or replacements of, such promissory note.

“Obligations” means all unpaid principal of and accrued and unpaid interest on the Loan, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations of Satellite to the Lender or any indemnified party arising under the Loan Documents.

“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor thereto).

“Person” means an individual, partnership, corporation, limited liability company, trust, joint venture, joint stock company, association, unincorporated organization, government or agency or political subdivision thereof, or other entity.

“Plan” any employee benefit plan which is covered by ERISA and in respect of which Satellite or a Commonly Controlled Entity is an “employer” as defined in Section 3(5) of ERISA.

“Reference Rate” means, at any time, the latest “Prime Rate”, as indicated in the “Money Rates” column of The Wall Street Journal. Each change in the interest rate on the Loan shall take effect on the effective date of the change in the Reference Rate.

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty day notice period is waived under subsection .22, .23, .25, .27 or .28 of PBGC Reg. § 4043 or any successor regulation thereto.

5

“Requirement of Law” means as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, statute, ordinance, code, decree, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its material property or to which such Person or any of its material property is subject; provided that the foregoing shall not apply to any non-binding recommendation of any Governmental Authority.

“Responsible Officer” means as to any Person, any of the following officers of such Person: (a) the chief executive officer or the president of such Person and, with respect to financial matters, the chief financial officer, the treasurer or the controller of such Person, (b) any vice president of such Person or, with respect to financial matters, any assistant treasurer or assistant controller of such Person, who has been designated in writing to the Lender as a Responsible Officer by such chief executive officer or president of such Person or, with respect to financial matters, such chief financial officer of such Person, (c) with respect to Section 6.6 and without limiting the foregoing, the general counsel of such Person and (d) with respect to ERISA related matters, the vice president of human resources of such Person.

“Single Employer Plan” means any Plan which is covered by Title IV of ERISA, but which is not a Multiemployer Plan.

“Senior Credit Documents” means, collectively, the Senior Note, each guaranty executed thereunder and each other agreement or instrument executed thereunder, in each case as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms, including any agreement executed in connection with any refinancing, replacement, refunding, extension, renewal or restructuring of all or any portion of the Senior Indebtedness provided for under the Senior Note or any successor instrument or agreement thereto (whether or not with the same creditors).

“Senior Creditor” means the holders of Senior Indebtedness from time to time.

“Senior Indebtedness” means the following liabilities, obligations and Indebtedness of Satellite: (a) all obligations of Satellite incurred under or in respect of the Senior Note, whether for principal, premium (if any), interest (including interest which would accrue but for the filing of a petition initiating any bankruptcy or similar proceeding and whether or not the same is allowed as a claim in any such proceeding), expenses, indemnities, penalties, fees, charges or other amounts or sums payable by Satellite from time to time under the Senior Credit Documents; provided, that the aggregate principal amount at any one time outstanding under the Senior Note shall not exceed $18,500,000, plus any amount of “Excess Principal” (as defined in the Senior Note), and minus the amount of principal amortization payments that have been made thereunder; and (b) any and all refinancings, replacements or refundings, extensions, renewals or restructurings of any of the liabilities, obligations and indebtedness of Satellite referred to in this definition.

“Senior Note” means the Senior Convertible Promissory Note dated as of the date hereof by Satellite in favor of Iridium LLC, a Delaware limited liability company, or any subsequent holder or holders thereof, as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms of this Agreement.

6

“Senior Securities” means the Senior Indebtedness and all securities issued in exchange for or distributed pursuant to a confirmed plan of reorganization or readjustment to the holders of Senior Indebtedness in respect of the Senior Indebtedness.

“Subsidiary” means as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership, limited liability company or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Note shall refer to a Subsidiary or Subsidiaries of Holdings.

“Taxes” with respect to any Person means taxes, assessments or other governmental charges or levies imposed upon such Person, its income or any of its properties, franchises or assets.

“Trade Accounts Payable” of any Person means trade accounts payable of such Person with a maturity of not greater than 90 days incurred in the ordinary course of such Person’s business.

“Trigger Event” means the first to occur of (a) the occurrence of any Change of Control, (b) the consummation of an initial public offering by Holdings or Satellite, and (c) the sale of all or a material portion of the assets of Holdings or Satellite.

“Underfunding” means an excess of all accrued benefits under a Plan (based on those assumptions used to fund such Plan), determined as of the most recent annual valuation date, over the value of the assets of such Plan allocable to such accrued benefits.

“Unmatured Event of Default” means any event or condition which, with the lapse of time or giving of notice to the Company or both, would constitute an Event of Default.

1.2

Other Definitional Provisions. Unless otherwise defined or the context otherwise requires, all financial and accounting terms used herein or in any certificate or other document made or delivered pursuant hereto shall be defined in accordance with GAAP. Unless otherwise defined therein, all terms defined in this Agreement shall have the defined meanings when used in the Note or in any certificate or other document made or delivered pursuant hereto.

1.3

Interpretation of Agreement. A Section or an Exhibit is, unless otherwise stated, a reference to a section hereof or an exhibit hereto, as the case may be. Section captions used in this Agreement are for convenience only, and shall not affect the construction of this Agreement. The words “hereof,” “herein,” “hereto” and “hereunder” and words of similar purport when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

2.

COMMITMENT OF THE LENDER.

7

2.1

Commitment of the Lender. Subject to the terms and conditions of this Agreement and in reliance upon the warranties of Satellite herein set forth, the Lender agrees to make a term loan to Satellite in two draws in an aggregate principal amount of $30,000,000 (collectively, the “Loan”), with the first advance to be made on the date of this Agreement in an amount equal to $24,155,000, and the second advance to be made in an amount equal to $5,845,000 for the purpose set forth in Section 5.9.

2.2

Note Evidencing the Loan. The Loan shall be evidenced by the Note and shall be payable in full on the Maturity Date.

3.

INTEREST AND FEES.

3.1

Interest. The unpaid principal amount of the Loan shall bear interest prior to maturity at a rate per annum equal to the Reference Rate in effect from time to time plus 3.0% per annum. Accrued interest shall be payable in arrears in cash on the last day of each calendar month and at maturity (each, an “Interest Payment Date”), commencing with the first of such dates to occur after the date of the Note; provided, that prior to the first to occur of (x) the maturity of the Loan, whether by acceleration or otherwise, and (y) the payment in full of the Senior Indebtedness, on each Interest Payment Date which arises (a) from the date of this Agreement through December 31, 2001, all accrued interest on the Loan for the prior month shall not be paid in cash, but shall instead be added to the principal amount of the Loan, and (b) thereafter, accrued interest for the prior month shall be in paid in cash at a rate of 6.5% per annum and all remaining accrued interest on the Loan for the prior month shall be added to the principal amount of the Loan. While an Event of Default has occurred and is continuing, at the Lender’s sole option, the unpaid principal amount of the Loan and any due and unpaid fees shall bear interest thereafter until paid in full at a rate per annum equal to the Reference Rate in effect from time to time plus 5.0% per, annum After maturity, accrued interest shall be payable in cash on demand.

3.2

Method of Calculating Interest. Interest on the unpaid principal amount of the Loan shall accrue from and including the date each advance is made to, but not including, the date the Loan is paid. Interest shall be calculated on the basis of a year consisting of 365 (or, when applicable, 366) days and paid for actual days elapsed.

3.3

Commitment Fee. Satellite shall pay the Lender a commitment fee of $5,000,000, payable upon the earlier of (a) December 11, 2010 and (b) the occurrence of the Trigger Event (in each case subject to the provisions of Section 3.4(c) below).

3.4

Loan Success Fee. Satellite shall pay the Lender one or more payments of a loan success fee as follows:

(a)

Upon the occurrence of each Distribution Event, Satellite shall pay to the Lender, concurrent with the consummation of such Distribution Event, an amount equal to (and in the form of the payment or distribution which is made to any equity holder or holders of Holdings with respect to such Distribution Event) what a person having originally received Class B Units (as defined in the Holdings LLC Agreement) constituting 5% of the total number of issued and outstanding Class A Units (as defined in the Holdings LLC Agreement) and Class B Units taken together would have received (or would have 

8

been afforded the opportunity to receive under clause (ii) of the definition of Distribution Event) as a distribution on equity (or payment for the sale of equity into the offering in the case of such clause (ii)) held by such person and also having received any additional equity or other benefits or detriments contained in or resulting from the anti-dilution provisions and other similar protections afforded to or applicable to holders of Class B Membership Interests in Holdings, in each case under the Holdings LLC Agreement. Any payments under this Section 3.4(a) shall be in addition to (but without duplication of) any required payments under Sections 3.3 and 3.4(b).

(b)

Upon the first to occur of (x) any Change of Control or (y) the sale of all or a material portion of the assets of Holdings or Satellite, Satellite shall pay to Lender a cash amount, upon the occurrence of such event, equal to the lesser of (a) (i) (A) the highest EBITDA for any complete fiscal year beginning after the date of this Agreement and ending prior to the date on which such Trigger Event occurs, times (B) 12, less (ii) the aggregate “Capital Contributions” remaining unreturned to “Class A Members” (each, as defined in the Holdings LLC Agreement), times (iii) .05 and less (iv) the amount of the commitment fee provided for in Section 3.3 which has been or is concurrently being paid and (b) the value of the consideration which a person having originally received Holdings’ Class B Units constituting 5% of the total number of issued and outstanding Class A Units and Class B Units taken together, and also having received any additional equity or other benefits or detriments contained in or resulting from the anti-dilution provisions and other similar protections afforded to or applicable to holders of Class B Membership Interests in Holdings, in each case under the Holdings LLC Agreement, would have received in such transaction under clause (x) or (y) of this subparagraph (b) as a distribution or payment on equity held by such person.

(c)

The payment by Holdings of the Obligations under Section 3.3 and Section 3.4 shall be subject to the prior payment in full of all Senior Indebtedness.

4.

PAYMENTS AND PREPAYMENTS.

4.1

Place of Payment. All payments hereunder (including payments with respect to the Notes) shall be made without setoff or counterclaim and shall be made to the Lender in immediately available funds prior to 12:30 p.m., Chicago time, on the date due at its office at 1303 E. Algonquin Road, Schaumburg, Illinois 60196, or at such other place as may be designated by the Lender to Satellite in writing. Any payments received after such time shall be deemed received on the next Business Day. Whenever any payment to be made hereunder or under the Note shall be stated to be due on a date other than a Business Day, such payment may be made on the next succeeding Business Day, and such extension of time shall be included in the calculation of interest.

4.2

Prepayments.

(a)

Satellite may from time to time prepay the principal of the Loan in whole or in part without any premium or penalty.

9

(b)

Satellite will prepay the Loan and the Senior Indebtedness in an amount equal to the percentage of the proceeds realized by Holdings, Satellite or any of their respective Subsidiaries from the incurrence of Indebtedness not otherwise permitted by the terms of this Note or expressly permitted by the Lender in a written waiver or the issuance of equity, in each case on or after the date hereof, as follows:

(i)

0% of all proceeds less than $70 million;

(ii)

30% of all proceeds greater than or equal to $70 million but less than $90 million;

(iii)

35% of all proceeds greater than or equal to $90 million but less than $110 million; and

(iv)

88.75% of all proceeds greater than or equal to $110 million;

provided that the amounts payable under clauses (ii), (iii) and (iv) of this sentence shall be applied by Satellite to prepay equally, on a dollar-for-dollar basis, the Senior Indebtedness and the Loan (to the extent any principal amount is outstanding under the Senior Indebtedness and the Loan); provided further that this Section 4.2(b) shall not require a mandatory prepayment upon the occurrence of (x) the conversion of the Senior Note, or (y) the acquisition by Holdings or any of its Subsidiaries, whether by merger, purchase or otherwise, of the equity or assets of any other business which acquisition does not include the payment of any cash by Holdings or any of its Subsidiaries.

5.

WARRANTIES. To induce the Lender to make the Loan, Satellite warrants that:

5.1

Existence. Each of Satellite and each of its Subsidiaries is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Each of Satellite and each of its Subsidiaries is in good standing and is duly qualified to do business in each state where, because of the nature of its activities or properties, such qualification is required.

5.2

Authorization. Each of Satellite and Holdings is duly authorized to execute and deliver the Loan Documents to which it is a party, and Satellite is and will continue to be duly authorized to borrow monies hereunder and to perform its obligations under this Agreement and the Note. The execution, delivery and performance by each of Satellite and Holdings of the Loan Documents to which it is a party and the borrowing by Satellite hereunder do not and will not require any consent or approval of any governmental agency or authority.

5.3

No Conflicts. The execution, delivery and performance by each of Satellite and Holdings of the Loan Documents to which it is a party do not and will not conflict with (a) any provision of law, (b) the charter documents of Satellite or any of its Subsidiaries, (c) any agreement binding upon Satellite or any of its Subsidiaries, or (d) any court or administrative order or decree applicable to Satellite or any of its Subsidiaries, and do not and will not require, or result in, the creation or imposition of any Lien on any asset of Satellite or any of its Subsidiaries.

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5.4

Validity and Binding Effect. Each Loan Document to which it is a party is a legal, valid and binding obligation of Satellite or Holdings, as applicable, enforceable against Satellite or Holdings, as applicable, in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors’ rights or by general principles of equity limiting the availability of equitable remedies.

5.5

No Default. Neither Satellite nor any of its Subsidiaries is in default under any agreement or instrument to which Satellite or any Subsidiary is a party or by which any of their respective properties or assets is bound or affected, which default might materially and adversely affect the financial condition or operations of Satellite and its Subsidiaries taken as a whole. No Event of Default or Unmatured Event of Default has occurred and is continuing.

5.6

Litigation. No claims, litigation, arbitration proceedings or governmental proceedings are pending or threatened against or are affecting Satellite or any of its Subsidiaries, the results of which might materially and adversely affect the financial condition or operations of Satellite and its Subsidiaries taken as a whole. Neither Satellite nor any of its Subsidiaries has any contingent liabilities which are material to Satellite and its Subsidiaries taken as a whole.

5.7

Liens. None of the property, revenues or assets of Satellite or any of its Subsidiaries is subject to any Lien.

5.8

Subsidiaries. Satellite has no Subsidiaries except Constellation.

5.9

Purpose. The proceeds of the initial advance of the Loan will be used by Satellite for general working capital purposes and the proceeds of the second advance made after the date of this Agreement shall be retained by the Lender (on behalf of Iridium U.S. L.P.) as payment in full for the transfer to Satellite on the date concurrent with such advance of the INA real estate pursuant to the terms of that certain Iridium Transition Services, Products and Asset Agreement dated as of the date hereof between the Lender and Satellite.

5.10

Compliance. Satellite and its Subsidiaries are in material compliance with all statutes and governmental rules and regulations applicable to them.

6.

AFFIRMATIVE COVENANTS. From the date of this Agreement and thereafter until the Note and other liabilities of Satellite hereunder are paid in full, each of Holdings and Satellite agrees that, unless the Lender shall otherwise expressly consent in writing, it will and (except in the case of delivery of financial information, reports and notices) cause each of its Subsidiaries to:

6.1

Financial Statements. Furnish to the Lender:

(a)

as soon as available, but in any event not later than 90 days after the end of each fiscal year of Holdings, a copy of the consolidated balance sheet of Holdings and its consolidated Subsidiaries as at the end of such year and the related consolidated statements of income and of cash flows for such year, setting forth in each case in comparative form the figures for and as of the end of the previous year; such financial statements shall be in audited form if an audit has been obtained, and shall otherwise be unaudited;

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(b)

as soon as available, but in any event not later than 45 days after the end of each of the first three quarterly periods of each fiscal year of Holdings, the unaudited consolidated balance sheet of Holdings and its consolidated Subsidiaries as at the end of such quarter and the related unaudited consolidated statements of income and of cash flows of Holdings and its consolidated Subsidiaries for such quarter and the portion of the fiscal year through the end of such quarter, setting forth in each case in comparative form the budgeted figures (as adjusted consistent with past practice) for the relevant period and the figures for the corresponding period of the previous fiscal year, certified by a Responsible Officer of Holdings as being fairly stated in all material respects (subject to normal year-end audit and other adjustments); and

(c)

as soon as available, but in any event not later than 30 days after the end of each fiscal month of each fiscal year of Holdings (or 45 days in the case of any such month ending on the last day of a fiscal quarter), a copy of the unaudited consolidated balance sheet of Holdings and its consolidated Subsidiaries as of the end of such month and the related unaudited consolidated statements of income and of cash flows for such month and the portion of the fiscal year through the end of such month, setting forth in each case, in comparative form the figures for the corresponding fiscal month of the previous year, certified by a Responsible Officer of Holdings as being fairly stated in all material respects (subject to normal quarter-end or year-end audit and other adjustments).

All such financial statements delivered pursuant to Sections 6.1(a) or 6.1(b) shall be certified by a Responsible Officer of Holdings as being complete and correct in all material respects, in conformity with GAAP applied consistently throughout the periods reflected therein and with prior periods that began on or after the date hereof (except as approved by such officer and disclosed therein, and except, in the case of the financial statements delivered pursuant to Section 6.1(b), for the absence of certain notes).

6.2

Certificates; Other Information. Furnish to the Lender:

(a)

concurrently with the delivery of the financial statements referred to in Section 6.1(a) or 6.1(b), a certificate signed by a Responsible Officer of Satellite stating that, to the best of such Responsible Officer’s knowledge, Holdings, Satellite and each of their respective Subsidiaries during such period has observed or performed all of its covenants and other agreements, and satisfied every condition, contained in this Agreement, and that such Responsible Officer has obtained no knowledge of an Event of Default or Unmatured Event of Default, except, in each case, as specified in such certificate;

(b)

as soon as available, but in any event not later than the beginning of each fiscal year of Holdings, a copy of the projections by Holdings of the operating budget and cash flow budget of Holdings, Satellite and their respective Subsidiaries for such fiscal year, such projections to be accompanied by a certificate of a Responsible Officer of Holdings to the effect that such Responsible Officer believes such projections to have been prepared on the basis of reasonable assumptions; and

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(c)

promptly, such additional financial and other information as the Lender may from time to time reasonably request.

6.3

Maintenance of Existence and Compliance with Law. Keep in full force and effect its limited liability company existence and take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of the business of Holdings, Satellite and their respective Subsidiaries, except as otherwise expressly permitted pursuant to Section 7.4, provided that Holdings, Satellite and their respective Subsidiaries shall not be required to maintain any such rights, privileges or franchises, if the failure to do so would not reasonably be expected to have a Material Adverse Effect, and comply with all Contractual Obligations and Requirements of Law except to the extent that failure to comply therewith, in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

6.4

Maintenance of Property; Insurance. Keep all property useful and necessary in the business of Holdings, Satellite and their respective Subsidiaries, taken as a whole, in good working order and condition; maintain with financially sound and reputable insurance companies insurance on all property material to the business of Holdings, Satellite and their respective Subsidiaries, taken as a whole, in at least such amounts and against at least such risks (but including in any event public liability, product liability and business interruption) as are usually insured against in the same general area by companies engaged in the same or a similar business; and furnish to the Lender, upon written request, information in reasonable detail as to the insurance carried, together with certificates of insurance and other evidence of such insurance, if any.

6.5

Inspection of Property: Books and Records: Discussions. Keep proper books of records and account in which full, complete and correct entries in conformity with GAAP and all material Requirements of Law shall be made of all dealings and transactions in relation to its business and activities; and permit representatives of the Lender to visit and inspect any of its properties and examine and, to the extent reasonable, make abstracts from any of its books and records and to discuss the business, operations, properties and financial and other condition of Holdings, Satellite and their respective Subsidiaries with officers and employees of Holdings, Satellite and their respective Subsidiaries and with its independent certified public accountants, in each case at any reasonable time during normal business hours, upon reasonable notice, and as often as may reasonably be desired.

6.6

Notices. Promptly give notice to the Lender of:

(a)

as soon as possible after a Responsible Officer of Holdings or Satellite knows or reasonably should know thereof, the occurrence of any Event of Default or Unmatured Event of Default;

(b)

as soon as possible after a Responsible Officer of Holdings or Satellite knows or reasonably should know thereof, any (i) default or event of default under any Contractual Obligation of Holdings, Satellite or any of their respective Subsidiaries, other than as previously disclosed in writing to the Lender, or (ii) litigation, investigation or proceeding which may exist at any time between Holdings, Satellite or any of their respective Subsidiaries and any Governmental Authority, which in either case, if not cured 

13

or if adversely determined, as the case may be, would reasonably be expected to have a Material Adverse Effect;

(c)

as soon as possible after a Responsible Officer of Holdings or Satellite knows or reasonably should know thereof, any litigation or proceeding affecting Holdings, Satellite or any of their respective Subsidiaries in which the amount involved is $1 million or more or in which injunctive or similar relief is sought that would reasonably be expected to have a Material Adverse Effect;

(d)

the following events, as soon as possible and in any event within 30 days after a Responsible Officer of Holdings or Satellite knows or reasonably should know thereof: (i) the occurrence or expected occurrence of any Reportable Event with respect to any Single Employer Plan (other than a Reportable Event described in Section 4043(c)(9) of ERISA), a failure to make any required contribution to a Single Employer Plan or Multiemployer Plan, the creation of any Lien on the property of Holdings, Satellite or any of their respective Subsidiaries in favor of the PBGC or a Plan or any withdrawal from, or the termination, reorganization or insolvency of, any Multiemployer Plan if, as a result thereof, Holdings, Satellite or any of their respective Subsidiaries would reasonably be expected to incur any material liability; (ii) the existence of an Underfunding under a Single Employer Plan determined as of the most recent annual valuation date of such Single Employer on the basis of the actuarial assumptions used to determine the funding requirements of such Single Employer Plan as of such date; (iii) the institution of proceedings or the taking of any other formal action by the PBGC or Satellite or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the termination, reorganization or insolvency of, any Single Employer Plan or Multiemployer Plan if, as a result thereof, Holdings, Satellite or any of their respective Subsidiaries would reasonably be expected to incur any material liability; or (iv) the occurrence or expected occurrence of any event or condition under which Satellite or any Commonly Controlled Entity has incurred or could incur any liability in respect of a Former Plan;

(e)

as soon as possible after a Responsible Officer of Holdings or Satellite knows or reasonably should know thereof, and except as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, (i) any release or discharge by Holdings, Satellite or any of their respective Subsidiaries of any materials required to be reported under applicable Environmental Laws to any Governmental Authority; (ii) any condition, circumstance, occurrence or event that would result in liability pursuant to applicable Environmental Laws or would result in the imposition of any lien or other restriction on the title, ownership or transferability of any property; (iii) any proposed action to be taken by Holdings, Satellite or any of their respective Subsidiaries that would reasonably be expected to subject Holdings, Satellite or any of their respective Subsidiaries to any additional or different requirements or liabilities, to the knowledge of Holdings, Satellite or any of their respective Subsidiaries or Holdings under any applicable Environmental Law; (iv) any Governmental Authority has notified Holdings, Satellite or any of their respective Subsidiaries that any such Person is a potentially responsible party under the Comprehensive Environmental Response, 

14

Compensation and Liability Act or any comparable law for the cleanup of materials at any location, whether or not owned, leased or operated by Holdings, Satellite or any of their respective Subsidiaries; (v) any Governmental Authority has notified Holdings, Satellite or any of their respective Subsidiaries that it will revoke any permit pursuant to any Environmental Law held by Holdings, Satellite or any of their respective Subsidiaries, or deny or refuse to renew any such permit sought by Holdings, Satellite or any of their respective Subsidiaries; or (vi) any Governmental Authority has notified Holdings. Satellite or any of their respective Subsidiaries that any property owned, leased, or operated by Holdings, Satellite or any of their respective Subsidiaries is being listed on, or proposed for listing on, the National Priorities List (NPL) or the Comprehensive Environmental Response, Compensation and Liability Information System (CERCLIS) maintained by the U.S. Environmental Protection Agency, or on any similar list maintained by any Governmental Authority.

Each notice pursuant to this Section 6.6 shall be accompanied by a statement of a Responsible Officer of Holdings and Satellite (and, if applicable, the relevant Subsidiary) setting forth details of the occurrence referred to therein and stating what action Holdings or Satellite (or, if applicable, the relevant Subsidiary) proposes to take with respect thereto.

6.7

Environmental Laws. Comply substantially with all Environmental Laws applicable to it, and obtain, comply substantially with and maintain any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws; and (ii) take all reasonable efforts to ensure that all tenants, subtenants, contractors, subcontractors and invitees comply substantially with all Environmental Laws, and obtain, comply substantially with and maintain any and all licenses, approvals, notifications, registrations or permits -required by Environmental Laws applicable to any of them insofar as any failure to so comply, obtain or maintain reasonably would be expected to adversely affect Holdings, Satellite or any of their respective Subsidiaries. For purposes of this Section 6.7, noncompliance shall be deemed not to constitute a breach of this covenant; provided that, upon learning of any actual or suspected noncompliance, Satellite shall in a timely fashion undertake or cause to be undertaken reasonable efforts to achieve substantial compliance, and provided, further that, in any case, such noncompliance, and any other noncompliance with any Environmental Law, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

6.8

Obligations and Taxes. Pay and discharge promptly all taxes, assessments and governmental charges or levies imposed upon Holdings, Satellite or any of their respective Subsidiaries or in respect of any of their properties, before the same shall become in default; as well as all lawful claims of labor, materials and supplies or otherwise that, if unpaid, might become a Lien or charge upon such properties or any part thereof; provided that such Persons shall not be required to pay and discharge, or cause to be paid and discharged, any such tax, assessment, charge, levy, or claim so long as the validity thereof shall be contested in good faith by appropriate proceedings and adequate reserves shall have been set aside and reflected on the financial statements furnished to the Lender with respect to any such tax, assessment, charge, levy, or claim so contested.

6.9

Future Assurances. Cause each Subsidiary (other than Constellation) which is formed or acquired after the date hereof to provide a guaranty of the Obligations in substantially 

15

the form of the Guaranty; provided, that if such new Subsidiary is a “Controlled Foreign Corporation”, as that term is defined in Section 957 of the Code, then in lieu of the guaranty otherwise required, the parent entity of such Controlled Foreign Corporation shall pledge 65% of its outstanding equity interest as security for the Obligations and the Senior Indebtedness.

7.

NEGATIVE COVENANTS. From the date of this Agreement and thereafter until the Note and other liabilities of Satellite hereunder are paid in full, Holdings and Satellite agree that, unless the Lender shall otherwise expressly consent in writing, neither Holdings nor Satellite shall, and neither shall permit any of its respective Subsidiaries to, directly or indirectly:

7.1

Limitation on Indebtedness. Create, incur, assume or suffer to exist any Indebtedness (including any Indebtedness of any of its Subsidiaries), except:

(a)

(i) Indebtedness of Satellite under this Agreement and (ii) the Senior Indebtedness;

(b)

Indebtedness of Satellite to any of its Subsidiaries and of any Subsidiary of Satellite to Satellite or any other Subsidiary;

(c)

Indebtedness, whether secured or unsecured, of Satellite and any of its Subsidiaries incurred to finance (whether pursuant to a loan or otherwise) the acquisition or refinancing of fixed or capital assets, including but not limited to the facility owned by Iridium North America LLC as of the date hereof, provided that such Indebtedness is (x) incurred substantially simultaneously with such acquisition or in connection with a refinancing thereof, (y) is secured by no assets other than the fixed or capital assets so financed, and (z) except as provided in clause (y), is otherwise expressly subordinated to the Obligations;

(d)

to the extent that any Guarantee Obligation permitted under Section 7.3 constitutes Indebtedness, such Indebtedness;

(e)

Indebtedness of Satellite or any of its Subsidiaries incurred to finance insurance premiums in the ordinary course of business;

(f)

Indebtedness arising from the honoring of a check, draft or similar instrument against insufficient funds, provided that such Indebtedness is extinguished within two Business Days of its incurrence;

(g)

Indebtedness of Satellite or any of its Subsidiaries described in clause (c), (d) or (e) of the definition of “Indebtedness” incurred in the ordinary course of business that is not secured by a Lien on any property of Satellite or any of its Subsidiaries;

(h)

Indebtedness incurred in connection with letters of credit furnished by Satellite or any of its Subsidiaries in the ordinary course of business; and

(i)

Indebtedness in the form of revolving lines of credit from one or more institutional lenders to provide for Satellite’s working capital needs in an amount not to 

16

exceed $10,000,000 in the aggregate, which Indebtedness is not secured by any Lien on any property of Satellite or any of its Subsidiaries.

7.2

Limitation on Liens. Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, except for:

(a)

Liens for taxes not yet delinquent or the nonpayment of which in the aggregate would not reasonably be expected to have a Material Adverse Effect, or which are being contested in good faith by appropriate proceedings diligently conducted;

(b)

carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business which are not overdue for a period of more than 60 days or which are being contested in good faith by appropriate proceedings diligently conducted;

(c)

Liens of landlords or of mortgagees of landlords arising by operation of law or pursuant to the terms of real property leases; provided that the rental payments secured thereby are not yet due and payable;

(d)

pledges, deposits or other Liens in connection with workers’ compensation, unemployment insurance, other social security benefits or other insurance-related obligations (including, without limitation, pledges or deposits securing liability to insurance carriers under insurance or self-insurance arrangements);

(e)

Liens arising by reason of any judgment, decree or order of any court or other Governmental Authority, if appropriate legal proceedings which may have been duly initiated for the review of such judgment, decree or order are being diligently prosecuted and shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired;

(f)

Liens to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds, judgment and like bonds, replevin and similar bonds and other obligations of a like nature (including reimbursement obligations with respect to letters of credit) incurred in the ordinary course of business;

(g)

zoning restrictions, easements, rights-of-way, restrictions on the use of property, other similar encumbrances incurred in the ordinary course of business and minor irregularities of title, which do not materially interfere with the ordinary conduct of the business of Satellite and its Subsidiaries taken as a whole;

(h)

Liens securing Indebtedness of Satellite and its Subsidiaries permitted by Section 7.1(c) incurred to finance the acquisition of fixed or capital assets;

(i)

Liens existing on assets or properties at the time of the acquisition thereof by Satellite or a Subsidiary which do not materially interfere with the use of the property 

17

subject thereto or extend to or cover any assets of Satellite or such Subsidiary other than the assets or property being acquired; and

(j)

Liens granted to The Boeing Company, a Delaware corporation (“Boeing”), described in the agreement by and between Boeing and Constellation, which agreement provides for, among other things, the operation and maintenance of the Iridium system.

7.3

Limitation on Guarantee Obligations. Create, incur, assume or suffer to exist any Guarantee Obligation except:

(a)

Guarantee Obligations in respect of the Obligations and the Senior Indebtedness;

(b)

Guarantee Obligations for performance, appeal, judgment, replevin and similar bonds, or suretyship and similar arrangements, all in the ordinary course of business; provided, that this Section 7.3(b) shall not permit Guarantee Obligations of Satellite or any of its Subsidiaries for the benefit of Holdings or any of its Subsidiaries other than Satellite or any of its Subsidiaries;

(c)

obligations to insurers required in connection with worker’s compensation and other insurance coverage incurred in the ordinary course of business; and

(d)

Guarantee Obligations in favor of the government of the United States of America or any of its agencies or instrumentalities in connection with the operation, maintenance or decommissioning of the Iridium system.

7.4

Limitation on Fundamental Changes. Enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer or otherwise dispose of, all or substantially all of its property, business or assets, except:

(a)

any Subsidiary of Satellite may be merged or consolidated with or into Satellite (provided that Satellite shall be the continuing or surviving entity);

(b)

any Subsidiary of Satellite may sell, lease, transfer or otherwise dispose of any or all of its assets (upon voluntary liquidation or otherwise) to Satellite or any other Subsidiary; and

(c)

as expressly permitted by Section 7.5 (so long as, if Satellite is party to any merger, consolidation or amalgamation, Satellite shall be the surviving entity).

7.5

Limitation on Sale of Assets. Other than in the ordinary course of business, convey, sell, lease, assign, transfer or otherwise dispose of any of its property, business or assets (including, without limitation, receivables and leasehold interests), whether now owned or hereafter acquired, or, in the case of any Subsidiary, issue or sell any equity interest of such Subsidiary’s equity interest, to any Person other than Holdings, Satellite or any of their respective Subsidiaries, except as permitted in Section 7.4(b).

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7.6

Limitation on Restricted Payments/Dividends. Declare or pay any dividend (other than dividends payable in equity interests of Holdings, Satellite or any of their respective Subsidiaries or options, warrants or other rights to purchase equity interests of Holdings, Satellite or any of their respective Subsidiaries) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any equity interests of any class of Holdings, Satellite or any of their respective Subsidiaries or any warrants or options to purchase any such equity interests, whether now or hereafter outstanding, or make any other distribution (other than distributions payable solely in equity interests of Holdings, Satellite or any of their respective Subsidiaries or options, warrants or other rights to purchase equity interest of Holdings, Satellite or any of their respective Subsidiaries) in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings, Satellite or any Subsidiary. Notwithstanding the foregoing, nothing herein shall prohibit any payment of dividends or any other distribution by Satellite or Satellite’s Subsidiaries in order (i) to permit any payment to the Senior Creditor pursuant to Section 4.2 or the Senior Note, (ii) to permit any payment to the Lender, (iii) to permit any payment to Satellite or any of its Subsidiaries by Holdings, Satellite or any of their respective Subsidiaries or (iv) to permit any payment to the owner of an equity interest in Holdings up to the amount of taxes incurred by such Owner as a result of the profits earned by Holdings.

7.7

Limitation on Investments, Loans and Advances. Make any advance, loan, extension of credit or capital contribution to, or purchase any stock, bonds, notes, debentures or other securities of, or make any other investment in (each an “Investment”), any Person, except:

(a)

extensions of trade credit in the ordinary course of business;

(b)

Investments in cash equivalents;

(c)

Investments in notes receivable in connection with transactions permitted by Section 7.5;

(d)

loans and advances to officers, directors or employees of Holdings, Satellite or any of their respective Subsidiaries in the ordinary course of business for travel and entertainment or relocation expenses;

(e)

Investments by Holdings, Satellite or any of their respective Subsidiaries in Satellite or any Subsidiaries of Satellite or Holdings;

(f)

Investments in the nature of pledges or deposits with respect to leases or utilities provided to third parties in the ordinary course of business or otherwise described in Sections 7.2(c), 7.2(d) or 7.2(f); and

(g)

Investments representing evidences of Indebtedness, securities or other property received from another Person by Holdings, Satellite or any of their respective Subsidiaries in connection with any bankruptcy proceeding or other reorganization of such other Person or as a result of foreclosure, perfection or enforcement of any Lien or exchange for evidences of Indebtedness, securities or other property of such other Person held by Holdings, Satellite or any of their respective Subsidiaries.

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7.8

Limitation on Transactions with Affiliates. Enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of property or the rendering of any service, with any Affiliate of Holdings unless such transaction is (a) otherwise permitted under this Agreement, and (b) upon terms no less favorable to Holdings, Satellite or such Subsidiary, as the case may be, than it would obtain in a comparable arm’s length transaction with a Person which is not an Affiliate; provided that nothing contained in this Section 7.8 shall be deemed to prohibit:

(a)

Holdings, Satellite or any of their respective Subsidiaries from entering into or performing any consulting, management or employment agreements or other compensation arrangements with a director, officer or employee of Holdings, Satellite or any of their respective Subsidiaries, provided that the annual aggregate base compensation with respect to any such director, in its capacity as such is not in excess of $100,000 for each such director;

(b)

the payment of transaction expenses in connection with this Agreement and the other transactions contemplated hereby; or

(c)

any transaction permitted under Section 7.4, 7.6 or 7.7(d), any transaction with a Subsidiary of Satellite or Holdings.

For purposes of this Section 7.8, (A) any transaction with any Affiliate shall be deemed to have satisfied the standard set forth in clause (b) of the first sentence hereof if (i) such transaction is approved by a majority of the Disinterested Directors of the Board of Directors of Holdings, Satellite or the applicable Subsidiary, or (ii) in the event that at the time of any such transaction, there are no Disinterested Directors serving on the Board of Directors of Holdings, Satellite or such Subsidiary, such transaction shall be approved by a nationally recognized expert with expertise in appraising the terms and conditions of the type of transaction for which approval is required, and (B) “Disinterested Director” shall mean, with respect to any Person and transaction, a member of the Board of Directors of such Person who does not have any material direct or indirect financial interest in or with respect to such transaction.

7.9

Limitation on Sales and Leasebacks. Enter into any arrangement with any Person providing for the leasing by Holdings, Satellite or any of their respective Subsidiaries of real or personal property which has been or is to be sold or transferred by Holdings, Satellite or such Subsidiary to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of Holdings, Satellite or such Subsidiary (any of such arrangements, a “Sale and Leaseback Transaction”); provided, that nothing in this Section 7.9 shall prohibit a transaction otherwise permitted under Section 7.1(c) hereof.

7.10

Limitation on Equity Issuances of Satellite or its Subsidiaries. Issue to any Person other than Holdings, Satellite or any of its Subsidiaries any equity interest in Satellite or any Subsidiary of Satellite.

20

7.11

Limitation on Equity Issuances of Holdings. Issue to any Person any class of equity interest in Holdings other than the classes existing on the date hereof, such classes being Class A and Class B.

7.12

Prepayment of Senior Indebtedness. Not make any optional prepayments of the Senior Indebtedness unless an equal amount is applied concurrently to repay the Obligations.

7.13

Other Agreements. Not, and not permit any Subsidiary to, enter into any agreement containing any provision which would be violated or breached by Satellite’s performance of its obligations hereunder or under any instrument or document delivered or to be delivered by Satellite hereunder or in connection herewith.

7.14

Amendments to Other Agreements. Not, and not permit any Subsidiary to amend its charter documents or any Senior Credit Document if any such amendment would be materially adverse to the Lender.

8.

CONDITIONS PRECEDENT TO THE LOAN. The obligation of the Lender to make the Loan is subject to the satisfaction of each of the following conditions precedent:

8.1

Note. Satellite shall have delivered to the Lender its duly executed Note.

8.2

Guaranty. Holdings shall have delivered to the Lender the Guaranty duly executed by it.

8.3

Charter; Good Standings Resolutions. Each of Satellite and Holdings shall have delivered to the Lender a copy, duly certified by the secretary or an assistant secretary of such Person, of (a) the resolutions of such Person’s Board of Directors authorizing or ratifying the execution and -delivery of (i) this Agreement and the Note and authorizing the borrowing hereunder, in the case of Satellite, and (ii) the Guaranty, in the case of Holdings, and (b) its charter documents certified by the Secretary of State of its state of organization, together with a good standing certificate from the secretary of state of its state of organization.

8.4

Incumbency Certificate. Each of Satellite and Holdings shall have delivered to the Lender a certificate of the secretary or an assistant secretary of such Person certifying the names of such Person’s officers authorized to sign (i) this Agreement and the Note in the case of Satellite, and (ii) the Guaranty, in the case of Holdings, and all other documents or certificates to be delivered hereunder, together with the true signatures of such officers.

8.5

Opinion. Satellite shall have delivered to the Lender an opinion of Neuberger, Quinn, Gielen, Rubin & Gibber, P.A., counsel to Satellite and Holdings, addressed to the Lender.

9.

EVENTS OF DEFAULT AND REMEDIES.

9.1

Events of Default. Each of the following shall constitute an Event of Default under this Agreement:

21

(a)

The failure of Satellite to pay any sum when due under this Agreement or the Note, except that Satellite shall have a five-day grace period from the due date to deliver payment to the Lender;

(b)

If any representation, warranty, affidavit, certificate, or statement made or delivered to the Lender by Satellite or on Satellite’s behalf from time to time in connection with this Agreement (whether or not included in this Agreement) shall prove to have been false, incorrect or misleading in any material respect at the time it was made; provided that if Satellite shall bring the underlying factual circumstances into conformity with any such representation, warranty, affidavit, certificate or statement within 45 days after it is made, such correction shall cure any Event of Default hereunder;

(c)

The occurrence of an “Event of Default” (as that term is defined in the Senior Note) under the Senior Note;

(d)

The admission by Satellite of its inability to pay any Indebtedness or other financial obligation of Satellite when due;

(e)

The issuance by a Governmental Authority of one or more judgments, decrees or orders in excess of $1 million against Holdings, Satellite or any of their respective Subsidiaries that is not covered by insurance or stayed or otherwise bonded pending appeal;

(f)

The express repudiation by Satellite of any of its obligations under this Agreement or the Note or any declaration by Satellite of its intention not to perform any such obligations as and when the same become due;

(g)

The disposition, transfer or exchange of all or substantially all of Satellite’s assets, or the issuance of any levy, attachment, charging order, garnishment or other process against all or any substantial part of the property of Holdings, Satellite and their respective Subsidiaries taken as a whole;

(h)

If Satellite shall (i) apply for or consent to the appointment of a receiver, trustee in bankruptcy, or liquidator for itself or any of its property; (ii) admit in writing its inability to pay its debts as they mature or generally fail to pay such debts as they mature; (iii) make a general assignment for the benefit of creditors; (iv) be adjudicated as bankrupt or insolvent; or (v) file a voluntary petition in bankruptcy, or a petition or an answer seeking reorganization or an arrangement with creditors, or seeking to take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute or an answer admitting an act of bankruptcy alleged in a petition filed against it in any proceeding under any such law;

(i)

If an order, judgment or decree shall be entered against Satellite without its application, approval or consent, or by any court of competent jurisdiction, approving a petition seeking the reorganization of it or appointing a receiver, trustee or liquidator of Satellite, or of all or a substantial part of its assets, and such order, judgment or decree shall 

22

continue unstayed and in effect for a period of 45 consecutive days from the date of entry thereof;

(j)

If Satellite shall have concealed, transferred, removed, or permitted to be concealed or transferred or removed, any part of its property with intent to hinder, delay or defraud any of its creditors; or

(k)

If any Governmental Authority shall take any action to condemn, assume custody or control of, seize or appropriate all or substantially all of the property or assets of the Satellite and its Subsidiaries taken as a whole.

9.2

Remedies. If any Event of Default described in Section 9.1 shall have occurred and be continuing, the Lender may declare the commitment of the Lender to make the Loan to be terminated and the Loan to be due and payable, whereupon such commitment shall immediately terminate and the Loan shall become immediately due and payable, all without notice of any kind (except that if an event described in Section 9.1(h) or (i) occurs, such commitment shall immediately terminate and the Loan shall become immediately due and payable without declaration or notice of any kind). The Lender shall promptly advise Satellite of any such declaration, but failure to do so shall not impair the effect of such declaration.

10.

GENERAL.

10.1

Waiver and Amendments. No failure or delay on the part of the Lender or the holder of a Note in the exercise of any power or right, and no course of dealing between Satellite and the Lender or a holder of a Note, shall operate as a waiver of such power or right, nor shall any single or partial exercise of any power or right preclude other or further exercise thereof or the exercise of any other power or right. The remedies provided for herein are cumulative and not exclusive of any remedies which may be available to the Lender at law or in equity. No notice to or demand on Satellite not required hereunder shall in any event entitle Satellite to any other or further notice or demand in similar or other circumstances or constitute a waiver of the right of the Lender or the holder of a Note to any other or further action in any circumstances without notice or demand. No amendment, modification or waiver of, or consent with respect to, any provision of this Agreement or any Note shall in any event be effective unless the same shall be in writing and signed and delivered by the Lender. Any waiver of any provision of this Agreement or any Note, and any consent to any departure by Satellite from the terms of any provision of this Agreement or any Note, shall be effective only in the specific instance and for the specific purpose for which given.

10.2

Notices. Except as otherwise expressly provided herein, any notice hereunder to Satellite or the Lender shall be in writing (including telecopy communication) and shall be given to Satellite or the Lender at its address or telecopier number set forth on the signature pages hereof or at such other address or telecopier number as Satellite or the Lender may, by written notice, designate as its address or telecopier number for purposes of notice hereunder. All such notices shall be deemed to be given when transmitted by telecopier, personally delivered or, in the case of a mailed notice, when sent by registered or certified mail, postage prepaid, in each case addressed as specified in this Section 10.2; provided, however, that notices to the Lender under Sections 2.1 and 4.2 shall not be effective until actually received by the Lender.

23

10.3

Expenses. Satellite agrees, whether or not the Loan is made hereunder, to pay the Lender upon demand for all reasonable expenses, including reasonable fees of attorneys and paralegals for the Lender (who may be employees of the Lender) and other legal expenses and costs of collection, incurred by the Lender in connection with (i) the preparation, negotiation and execution of any and all amendments to this Agreement, the Note or any other instrument or document provided for herein or delivered or to be delivered hereunder or in connection herewith, and (ii) the enforcement of Satellite’s obligations hereunder or under the Note or any such other instrument or document. Satellite also agrees to (a) indemnify and hold the Lender harmless from any loss or expense which may arise from or be created by making the Loan (other than expenses incurred by the Lender in connection with the preparation, negotiation and execution of this Agreement) or disbursing the proceeds thereof, or any other transaction contemplated by this Agreement and (b) pay, and save the Lender harmless from all liability for, any stamp or other tax which may be payable with respect to the execution or delivery of this Agreement or the issuance of the Note or any other instrument or document provided for herein or delivered or to be delivered hereunder or in connection herewith. Satellite’s foregoing obligations shall survive any termination of this Agreement.

10.4

Information. The Lender may furnish any information concerning Satellite in the possession of the Lender from time to time to assignees of the rights and/or obligations of the Lender hereunder (including prospective assignees) and may furnish information in response to credit inquiries consistent with general banking practice.

10.5

Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

10.6

LAW. THIS AGREEMENT AND THE NOTE SHALL BE CONTRACTS MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAWS PROVISIONS THEREOF.

10.7

Successors. This Agreement shall be binding upon Satellite and the Lender and their respective successors and assigns, and shall inure to the benefit of Satellite and the Lender and the successors and assigns of the Lender. Satellite shall not assign its rights or duties hereunder without the consent of the Lender.

10.8

Forum Selection and Consent to Jurisdiction. ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR THE NOTES, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE LENDER OR SATELLITE SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE LENDER’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. SATELLITE HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE 

24

COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. SATELLITE FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. SATELLITE HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT SATELLITE HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SATELLITE HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE NOTES.

10.9

Waiver of Jury Trial. EACH OF SATELLITE AND THE LENDER WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (A) UNDER THIS AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR (B) ARISING FROM ANY LENDING RELATIONSHIP EXISTING IN CONNECTION WITH. THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

11.

SUBORDINATION.  Notwithstanding any provision to the contrary in this Agreement, Satellite, for itself and its Subsidiaries and its and their respective successors and assigns, and the Lender agree that (a) payments shall not be made in respect of the Obligations to the extent set forth in this Section 11, and (b) all of the Obligations shall be subordinated and junior in right of payment to the prior payment in full in cash of all Senior Indebtedness to the extent set forth in this Section 11.

11.1

Bankruptcy Events.  (1)  Upon any distribution of assets of Satellite or any of its Subsidiaries of any kind or character (x) upon any dissolution, winding up, total or partial liquidation or reorganization of Satellite or any of its Subsidiaries (whether in bankruptcy, insolvency or receivership proceedings or upon an assignment for the benefit of creditors or otherwise) or (y) following the occurrence and during the continuance of an “Event of Default” under Section 9(h) of the Senior Note:

(i)

the holders of all Senior Indebtedness shall first be entitled to receive payment in full in cash of all obligations owing in respect thereof before the Lender is entitled to receive any payment on account of the Obligations; provided, that notwithstanding the preceding provision, the Lender shall be entitled to receive and retain any Exchange Securities; and

25

(ii)

any payment or distribution of assets of Satellite or any of its Subsidiaries of any kind or character, whether in cash, property or securities, to which the Lender would be entitled except for the provisions of this Section 11 (including any such payment or distribution arising out of the exercise by the Lender of a right of set-off or counterclaim and any such payment or distribution by reason of any other indebtedness or obligations of Satellite or any such Subsidiary, as the case may be, being subordinated to all or any portion of the Obligations), shall be paid by the liquidating trustee or agent or other person making such payment or distribution directly to the holders of Senior Indebtedness or their representative(s) under the agreements pursuant to which such Senior Indebtedness may have been issued, to the extent necessary to make payment in full of all Senior Indebtedness remaining unpaid after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness.

(b)

Upon any payment or distribution of assets of Satellite or any of its Subsidiaries referred to in this Section 11.1, the holders of the Obligations shall be entitled to rely upon any order or decree entered by any court of competent jurisdiction in which such insolvency, bankruptcy, receivership, liquidation, partial liquidation, reorganization, dissolution, winding-up or similar case or proceeding under any state or federal law now or hereafter in effect s pending, for the purpose of ascertaining the persons entitled to participate in such payment or distribution to the holders of Senior Indebtedness of Satellite or any such Subsidiary, as the case may be, the amount thereof or payment thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Section 11.

(c)

During the pendency of any proceeding of the type referred to in this Section 11.1, while any Senior Indebtedness is outstanding. (i) the Lender shall duly and promptly take such action as any holder of Senior Indebtedness may reasonably request to collect any payment in respect of the Obligations to which the holders of Senior Indebtedness may be entitled under this Agreement, and to file appropriate claims or proofs of claim in respect of the Obligations and (ii) the Lender shall not oppose or interfere with any payment made in respect of the Senior Indebtedness or any effort of any Senior Creditor to secure payment of the Senior Indebtedness or any portion thereof, including without limitation, (A) any effort of any Senior Creditor to have any automatic stay lifted or (b) any order by a court of competent jurisdiction authorizing any payment to any Senior Creditor with respect to the Senior Indebtedness. Upon the failure of the Lender to take any such action, each holder of Senior Indebtedness is hereby irrevocably authorized and empowered (in its own name or otherwise), but shall have no obligation, to demand, sue for, collect and receive every payment or distribution upon or in respect of the Obligations and to file claims and proofs of claim with respect thereto, and on behalf of the Lender to accept and receive any payment or distribution which may be payable or deliverable at any time upon or in respect of the Obligations in an amount not in excess of the Senior Indebtedness then outstanding and to take such other action as may be reasonably necessary to effectuate the foregoing, and the Lender hereby appoints each holder of Senior Indebtedness or its representative(s) as attorney-in-fact for the Lender to take any and all actions permitted by this Section 11.1 to be taken by the Lender. Without limiting the foregoing, the holders of Senior Indebtedness or their representative(s) are hereby irrevocably authorized and empowered (in its or their own name or otherwise), but shall have no obligation, (i) if the Lender shall fail to file proper 

26

claims or proofs of claim with respect to the Obligations in any such proceeding prior to 10 days before the expiration of the time to file such claims or proofs of claim, to file such claims or proofs of claim and/or (ii) if the Lender shall fail to vote any such claim at least 10 days prior to the expiration of the time to vote such claim, to vote such claim; provided, that if the holders of Senior Indebtedness or their representative(s) vote any such claim in accordance with the provisions of this Section 11.1 the Lender shall not be entitled to modify, revoke or withdraw such vote. The Lender shall execute and deliver, at its expense, such agreements, instruments and documents as the holders of the Senior Indebtedness and/or their representative(s) may reasonably request to carry out the provisions of this Section 11.1(c). The Lender shall provide to the holders of Senior Indebtedness or their representative(s) all information and documents reasonably necessary to present claims or seek enforcement as aforesaid.

11.2

Turnover. If any payment or distribution of assets of Satellite or any of its Subsidiaries of any kind or character, whether in cash, property or securities, shall be received by the Lender on account of the Obligations (including, without limitation, any such payment or distribution arising out of the exercise by the Lender of a right of set-off or counterclaim and any such payment or distribution by reason of other indebtedness of Satellite or any such Subsidiary, as the case may be, being subordinated to the Obligations) that, because of the provisions of this Section 11, should not have been made, then such payment or distribution shall be received and held in trust for, and shall be paid over to, the holders of Senior Indebtedness remaining unpaid for application to the payment of the Senior Indebtedness until all Senior Indebtedness shall have been paid in full, after giving effect to any concurrent payment or distribution to the holders of Senior Indebtedness.

11.3

Subrogation. Upon the payment in full in cash of all Senior Indebtedness, the Lender shall be subrogated to the rights of the holders of Senior Indebtedness to receive payments and distributions of cash, property and securities made to the holders of Senior Indebtedness to which the Lender would be entitled except for the provisions of this Section 11 until the Obligations shall be paid in full in cash. For purposes of such subrogation, no payments or distributions to the holders of Senior Indebtedness of any cash, property or securities to which the Lender would be entitled except for the provisions of this Section 11, and no payments over pursuant to the provisions of this Section 11 to the holders of Senior Indebtedness, by the Lender shall, as among Satellite and its respective creditors (other than the holders of Senior Indebtedness and the Lender), be deemed to be a payment or distribution by Satellite to or on account of the Senior Indebtedness.

11.4

Reinstatement. If, at any time, all or part of any payment with respect to Senior Indebtedness theretofore made by Satellite or any other Person is rescinded for any reason whatsoever (including, without limitation, the insolvency, bankruptcy or reorganization of Satellite or such other Person), the subordination provisions set forth in this Agreement shall continue to be effective or be reinstated, as the case may be, all as though such payment had not been made.

11.5

No Waiver of Subordination Provisions. No right of any Senior Creditor or any representative thereof to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of Satellite or by any act or failure to act, in good faith, by any Senior Creditor, or by any non-compliance by Satellite with the terms, provisions and covenants of this Agreement or the Senior Credit Documents, regardless of any

27

 knowledge thereof any Senior Creditor may have or be otherwise charged with. The Lender agrees and consents that without notice to or assent by the Lender, and without affecting the liabilities and obligations of Satellite and the rights and benefits of the holders of Senior Indebtedness set forth in this Agreement:

(i)

the obligations and liabilities of Satellite, any of its Subsidiaries and/or any other Person(s) upon or in respect of the Senior Indebtedness may, from time to time, be renewed, refinanced, extended, modified, amended, restated, compromised, supplemented, terminated, waived or released (subject to limitations on the amount of Senior Indebtedness set forth in the definition thereof in Section 1);

(ii)

the holders of Senior Indebtedness and their representative(s) may exercise or refrain from exercising any right, remedy or power granted by or in connection with any agreements relating to the Senior Indebtedness;

(iii)

the holders of Senior Indebtedness and their representative(s) may release any Person liable in any manner for the Senior Indebtedness; and

(iv)

any balance or balances of funds with any holder of Senior Indebtedness at any time outstanding to the credit of Satellite or any of its Subsidiaries may from time to time, in whole or in part, be surrendered or released,

all as the holders of any Senior Indebtedness or their representative(s) may deem advisable, and all without impairing, abridging, diminishing, releasing or affecting the subordination of the Obligations to Senior Indebtedness.

11.6

Benefits of Subordination. The provisions of this Section 11 are for the benefit of the holders of Senior Indebtedness from time to time and, as such, the holders of Senior Indebtedness are entitled to rely thereon and to enforce the provisions of this Agreement against the Lender. Without limiting the foregoing, the Lender and Satellite hereby expressly agree that the holders of Senior Indebtedness may enforce any and all rights derived herein by suit, either in equity or at law, for specific performance of any agreement contained in this Agreement or for judgment at law and any other relief whatsoever appropriate to such action or procedure. To the extent permitted by applicable law, each of the Lender and Satellite and its Subsidiaries hereby waives notice of acceptance hereof by the holders of the Senior Indebtedness.

11.7

Provisions Solely Defining Relative Rights. The provisions of this Section 11 are and are intended solely for the purpose of defining the relative rights of the Lender on the one hand and the holders of Senior Indebtedness on the other hand. Nothing contained in this Section 11 or elsewhere in this Agreement is intended to or shall (a) impair, as among Satellite and its Subsidiaries and their respective creditors (other than the holders of Senior Indebtedness and the Lender), the obligations of Satellite, which are absolute and unconditional, to pay to the Lender the principal of, premium, if any, and interest under this Agreement as and when the same shall become due and payable in accordance with their terms; or (b) affect the relative rights against Satellite or any of its Subsidiaries of the Lender and creditors of Satellite or any of its Subsidiaries, as applicable, other than the holders of Senior Indebtedness; or (c) prevent the Lender from exercising all remedies otherwise permitted by applicable law or under the Loan Documents,

28

subject to the rights, if any, under this Section 11 of the holders of Senior Indebtedness in any case, proceeding, dissolution, liquidation or other winding up, assignment for the benefit of creditors or other marshaling of assets and liabilities of Satellite or any of its Subsidiaries referred to in Section 11.1, to receive, pursuant to and in accordance with such Section, cash, property and securities otherwise payable or deliverable to such holder.

11.8

Credit Enhancements. Nothing in this Agreement shall require the Lender to deliver to or otherwise turn over to the Senior Creditors any amounts to which the Lender may be entitled under credit enhancements (including, without limitation, insurance policies) that are paid for, directly or indirectly, by entities other than Satellite or any of its Subsidiaries; provided, that neither Satellite nor any of its Subsidiaries shall have any liability in respect of any such credit enhancement.

[signature page follows]

29

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed at Chicago, Illinois by their respective officers thereunto duly authorized as of the date first written above.

IRIDIUM SATELLITE LLC

By Iridium Holdings LLC, its Managing Member 

By:

/s/ Dan A. Colussy

Title:

Chairman

Address:

44330 Woodbridge Parkway

Leesburg, VA 20176

Attention: Dan A. Colussy

Telephone number: (281) 244-4056

Telecopier number: _____________

IRIDIUM HOLDINGS LLC

 

By:

/s/ Dan A. Colussy

Title:

Chairman

Address:

44330 Woodbridge Parkway

Leesburg, VA 20176

Attention: Dan A. Colussy

Telephone number: (281) 244-4056

Telecopier number: _____________

MOTOROLA, INC.

By:

/s/ Ted Schaffner

Title:

Senior Vice President and Director of

Corporate Development

Address:

1303 E. Algonquin Road

Schaumburg, Illinois 60196

Attention: Ted Schaffner

Telephone number: (847) 576-6600

Telecopier number: (847) 576-8890

30

with a copy to:

Motorola, Inc.

1303 E. Algonquin Road

Schaumburg, Illinois 60196

Attention: General Counsel

Telecopier number: (847) 576-3750

 

31Boeing - Operations and Maintenance

Exhibit 10.7

April 26, 2007

AMENDMENT NO. 013 TO CONTRACT NO. BSC-2000-001 BETWEEN IRIDIUM

CONSTELLATION LLC AND THE BOEING COMPANY

This Amendment No. 013 (the “Amendment”) to Contract No. BSC-2000-001 (as amended, the “Contract”) between Iridium Constellation LLC, a Delaware limited liability company (“Owner”) and The Boeing Company, a Delaware company (“Boeing”) incorporates a Time and Material (T&M) billing rate for work performed during CY 2006 on the Broadband Special Project under Annex 18 to this Contract. The CY 2006 Time and Material (T&M) hourly billing rate is set forth in Annex 5 of the Contract. This Amendment is dated and effective as of April 15, 2006 (“Effective Date”). Owner and Boeing may be individually referred to as a “Party” and collectively referred to as “Parties”. Capitalized terms used but not defined in this Amendment are used as they are defined in the Contract.

RECITALS

A.

WHEREAS, Owner has agreed to incorporate a CY 2006 T&M billing rate for work performed on the Broadband Special Project, and;

B.

WHEREAS, Boeing performed work on this Special Project during CY 2006;

NOW THEREFORE, the Parties hereby agree to amend the Contract as of the Effective Date as follows:

Add Amendment 013 to the List of Amendments:

“CY 2006 T&M Billing Rate(s) for Special Projects”

Add new T&M rate(s) to paragraph 5.2 to Annex 5 as follows:

5.2

As indicated in Article 1.4.4, the Time and Material Hourly Billing Rate for each direct labor hour for Special Projects is:

			
	 

Year

 

	Basic Engineer and

Software Developer

 

	Senior Engineer and Management

 

	2006

 

	$133.09

 

	$160.09

 

	2007

 

	$138.00

 

	$166.00

 

	2008 and

thereafter

 

	Apply EPA Index

 

	Apply EPA Index

 

No amendments or waivers of this Amendment may be made unless both Parties provide their prior written consent to the amendment or waiver. This Amendment constitutes the entire agreement and understanding among any and all of the Parties with respect to its subject matter. This Amendment shall be governed by, subject to and construed in accordance with the laws of the State of Delaware without giving effect to 

the conflict of laws provisions thereof. No provision of the Contract is amended or otherwise affected, except as is provided above in this Amendment.

		
	IRIDIUM CONSTELLATION LLC

By:   /s/ Michael Deutschman               

Name: Michael Deutschman

Title: Chief Administrative Officer

Date: May 8, 2007

	THE BOEING COMPANY

By:   /s/ Danny White                         

Name: Danny White

Title: Business Manager So&G5

Date: April 26, 2007

AMENDED AND RESTATED CONTRACT

Boeing No. BSC-2000-001

BETWEEN

IRIDIUM CONSTELLATION LLC

AND

THE BOEING COMPANY

FOR

TRANSITION, STEADY STATE OPERATIONS AND

MAINTENANCE, AND RE-ORBIT

OF THE

IRIDIUM CONSTELLATION SYSTEM

List of Amendments

to

The Amended and Restated Contract

		
	Amendment Number

	Description

	 
	 

	001

	See Amendment #001 Summary

	002

	Annex 5, Paragraph 2.2.5

	003

	Article 20 - Added EEOC

	004

	Add Annex 11, “Letter of Credit”

	005

	Add Annex 12, “Letter of Credit for March 2003 Payment Draw Down

	006

	Amended and Restated Contract

	007

	De-orbit Price Revision

	008

	Added Annex 17, “Group Call Functionality”

	009

	Revised Revenue Sharing

	010

	Amended and Restated Contract

Retirement of Promissory Notes and Personal Property Liens and Revise Letter of Credit

	011

	Discontinuance of Additional Fee Payments; Revised EPA

	012

	Added Annex 18, “Broadband Functionality”

	013

	CY 2006 T&M Billing Rate(s) for Special Projects

 

1

TABLE OF CONTENTS

Contracting Terms and Conditions

Page No.

Article 1.

Subject Matter of Contract.................................................................

4

Article 2.

Price, Taxes, and Payment.................................................................

6

Article 3.

Owner-Furnished Facilities, Equipment, Information, and Third-Party

Maintenance and Technical Support Agreements.......................................

8

Article 4.

Changes.......................................................................................

9

Article 5.

Inspections and Quality Control...........................................................

9

Article 6.

Delivery.......................................................................................

9

Article 7.

Excusable Delay..............................................................................

9

Article 8.

Indemnification/Insurance................................................................

10

Article 9.

Advance Payments, Re-orbit, Security for Payments, and Additional Fee.........

12

Article 10.

Assignment and Modification............................................................

16

Article 11.

No Warranty.................................................................................

17

Article 12.

Termination for Default...................................................................

17

Article 13.

Default by Owner...........................................................................

18

Article 14.

LIMITATION OF LIABILITY..........................................................

18

Article 15.

Intellectual Property........................................................................

19

Article 16.

Dispute Resolution.........................................................................

20

Article 17.

Export Control..............................................................................

21

Article 18.

Permits and Licenses......................................................................

21

Article 19.

Disclosure and Use of Information by the Parties.....................................

22

Article 20.

Nondiscrimination, Equal Opportunity, and Other Requirements...................

23

Article 21.

Notices.......................................................................................23

Article 22.

Miscellaneous..............................................................................

24

Annex 1 - A. In-Orbit Insurance Policy

B. Insurance Schedule

2

Annex 2 - Reserved

Annex 3 - Statement of Work for Steady State Operations and Maintenance

Annex 4 - Statement of Work for Iridium System Re-orbit

Annex 5 - Price and Payment Schedule

Annex 6 - Reserved

Annex 7 - Dispute Resolution

Annex 8 - Bankruptcy Court Order

Annex 9 - U.S. Government Indemnification Contract

Annex 10 - Reserved

Annex 11 - Letter of Credit

Annex 12 - Irrevocable Standby Letter of Credit for $2.5M Payment Draw Down

Annex 13 - Binder Letters from Owner’s Insurance Agent

Annex 14 - Insurance Agent’s Letter Confirming Schedule A Risks Covered

when Schedule B is in Effect

Annex 15 - SF30 Evidencing USG Approval to Change In-orbit Insurance Policy

Annex 16 - Reserved.

Annex 17 - Group Call Functionality

Annex 18 - Broadband Functionality

3

AMENDED AND RESTATED CONTRACT

THIS AMENDED AND RESTATED CONTRACT (including as amended, modified or supplemented from time to time hereafter, this “Contract”) is made and entered into as of January 1, 2003 (the “Effective Date”) between IRIDIUM CONSTELLATION LLC, a Delaware limited liability company (“Owner”), whose obligations arising hereunder shall be guaranteed by Iridium Satellite LLC, also a Delaware limited liability company and the parent of Owner (“Iridium Satellite”), and THE BOEING COMPANY, a Delaware corporation (“Boeing”) (Owner and Boeing are each referred to as a “Party” and collectively referred to as the “Parties”).

Contracting Terms and Conditions

Article 1.

Subject Matter of Contract

1.1

Background

1.1.1

Boeing and Owner have heretofore entered into a contract (Boeing No. BSC-2000-001) for Transition, Steady State Operations and Maintenance, and Re-orbit of the Iridium Constellation System dated as of December 11, 2000 (which as heretofore amended by Amendments Number 001 through 009 is the “Original Contract”). The Parties wish to amend and restate the Original Contract in its entirety as hereinafter set forth and incorporated as Amendment Number 010 to the Original Contract, as of July 14, 2006, the Effective Date.

1.1.2

The Parties acknowledge that Motorola, Inc. (“Motorola”) is an express third-party beneficiary of certain provisions of the Original Contract as set forth therein and that neither of the Parties intends that this Amendment Number 010 or any of the prior amendments to the Contract effected hereby will affect any of their respective obligations to Motorola thereunder, all of which shall remain in full force and effect. Conferring such third-party benefits to Motorola is a material part of this Contract and Motorola may enforce such provision directly against either Party.

The Parties further acknowledge that each of them has certain obligations to the United States of America under the U.S. Government Indemnification Contract (as hereinafter defined) and that neither this Amendment Number 010 nor any of the amendments to the Original Contract effected hereby are intended to affect any of those obligations.

1.1.3

Boeing, acting through its wholly-owned subsidiary Boeing Service Company, will provide to Owner all program management, engineering, technical, operations and maintenance, and administrative resources necessary to accomplish the Statements of Work included as Annexes 3 and 4 to this Contract.

1.2

Definitions

1.2.1

“Contract” means this document and all its attachments, as amended, modified or supplemented from time to time hereafter.

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1.2.2

“Excusable Delay” means any of the items listed in Article 7, Excusable Delay.

1.2.3

“Re-orbit” means the removal of functional ICS satellites from operational or storage orbits, and preparation of the satellites for re-entry into the earth’s atmosphere, including, without limitation, venting of all remaining fuel, depressurizing the batteries and turning off the electronics, all in a professionally competent manner and as described in Annex 4 of this Contract.

1.2.4

“De-orbit” means the removal (whether in a controlled, uncontrolled, natural or spontaneous manner) of ICS satellites and related devices, including but not limited to, the orbit, Re-orbit, descent and re-entry through low earth orbit and the earth’s atmosphere, and landing or falling on or near any part, surface, structure or other object, animate or inanimate, above, on, at, near, or below the earth’s surface.

1.2.5

“O&M Statement of Work” means Annex 3, Statement of Work for Iridium System Steady State Operations and Maintenance, as the same may from time to time be amended or modified.

1.2.6

“Re-orbit Statement of Work” means Annex 4, Statement of Work for Iridium System Re-orbit, as the same may from time to time be amended or modified.

1.2.7

“Statements of Work” means the O&M Statement of Work and the Re-orbit Statement of Work.

1.2.8

“Steady State O&M Services” means O&M services as provided in Annex 3, “Statement of Work for Iridium System Steady State Operations and Maintenance”.

1.2.9

“Useful Life” means the useful life of the ICS (currently estimated to be 2014) as measured by the ability of the ICS to function as a global voice communication system as declared by Owner within its full complement of sixty-six (66) LEO operational satellites.

1.2.10

“U.S. Government Indemnification Contract” means the Indemnification Contract dated December 5, 2000 among Iridium Satellite, Boeing, Motorola, and the United States of America, a copy of which is attached hereto as Annex 9.

1.2.11

Other definitions are set forth in the O&M Statement of Work.

1.3

Period of Performance.

1.3.1

The period of performance covered by this Contract will commence on December 11, 2000 and continue for the duration of the Useful Life of the ICS.

1.3.2

The period of performance shall immediately terminate upon the commencement of Re-orbit pursuant to Articles 9.4 or 9.5, provided that Boeing shall complete the Re-orbit Statement of Work.

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1.4

Services.  Boeing will perform and sell to Owner and Owner will purchase from Boeing the following services which will be performed in accordance with the Statements of Work and under the terms and conditions of this Contract in support of the day-to-day operations and maintenance of the ICS.

1.4.1

Steady State Operations and Maintenance (O&M) - Engineering, systems analysis, operations and maintenance services on a firm, fixed price basis in support of the ICS. Boeing shall perform the work described in the O&M Statement of Work (the “Steady State O&M Services”) within the time period and at the price shown in the Payment Schedule under Annex 5.

1.4.2

Training.  During the Steady State Operations and Maintenance period of performance, Boeing shall provide training to Owner as requested on a Time and Material (T&M) basis at the hourly rates shown in Annex 5.

1.4.3

Re-orbit - Engineering technical and operations services on a firm, fixed price basis in support of the Re-orbit of the Constellation. Boeing shall perform the work described in the Re-orbit Statement of Work, if necessary, at the price shown in Article 2.3.6 of this Contract.

1.4.4

Special Projects.  Upon mutual consent of the Parties and during the term of this Contract, Boeing will provide engineering support services to Owner for Special Projects as identified by Owner. Such Special Projects will be incorporated into this Contract by Annexation or by other means as mutually agreed to by the Parties.

Article 2.

Price, Taxes, and Payment

2.1

Price  “Price” is defined as the total cost plus profit of the defined services to be provided under this Contract.

2.2

Taxes

2.2.1

“Taxes” are defined as all taxes, fees, charges, or duties and any interest, penalties, fines, or other additions to tax, including, but not limited to sales, use, value added, gross receipts, stamp, excise, transfer, and similar taxes imposed by any domestic or foreign taxing authority, arising out of or in connection with the performance of this Contract or the sale, delivery, transfer, or storage of any services, Owner-furnished equipment, or other things furnished under this Contract. Owner will be responsible for and pay all Taxes, other than Taxes imposed upon the gross receipts or net income of Boeing derived hereunder. Owner is responsible for filing all tax returns, reports, declarations and payment of any taxes related to or imposed on Owner’s furnished equipment.

2.2.2

Reimbursement of Boeing.  Owner will promptly reimburse Boeing on demand, net of additional taxes thereon, for any Taxes (other than income Taxes) that are imposed on and paid by Boeing or that Boeing is responsible for collecting plus interest in accordance with Annex 5, Article 7.0 of this Contract.

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2.3

Payment Provisions

2.3.1

Steady State Operations and Maintenance (O&M).  In consideration for Steady State O&M Services performed by Boeing, Owner shall make payments in accordance with Annex 5 at least five (5) business days prior to the first day of each calendar month during the Steady State O&M Services period. The payment amount will be payable by Owner each month in advance as provided in Annex 5.

2.3.2

Guaranteed Payment Alternative.  The Parties agree that the terms set forth in Article 2.3.1 are the prevailing payment terms for use under this Contract. The terms of this Article 2.3.2 are an alternative to be used only upon Boeing’s prior written approval.

2.3.2.1

In accordance with this Article 2.3.2, subparagraphs 2.3.2.2 and 2.3.2.3, Owner may elect to use the alternative guaranteed payment method to pay for monthly services provided by Boeing for any given month in lieu of Article 2.3.1. Owner will request Boeing’s approval to pay in accordance with this Article 2.3.2 five (5) days prior to either the first day of each month or up to a specified number of months if previously coordinated with Boeing. The request shall state the purpose of the request, applicable period, and invoice amount(s).

2.3.2.2

In order to facilitate payments to Boeing, so as to insure an electronic funds transfer of such payments, Owner shall establish and maintain at Owner’s expense an automatic payment instruction with Owner’s bank. This instruction shall direct the bank to make monthly payments to Boeing on the business day of, or business day after, Owner’s receipt of the payment from their U.S. government customer. Owner shall provide evidence satisfactory to Boeing of the selected method, and the establishment and maintenance of the payment instruction hereunder. Owner shall immediately notify Boeing in the event (i) the U.S. Government terminates its contract (Contract No. DCA 100-01 C-4007 with the Defense Information Services Agency, as amended) with Owner; and/or (ii) Owner intends to withdraw or modify the automatic payment instruction described in this Article 2.3.2.2. In any event, Owner covenants that it shall not withdraw or modify such payment instruction without the prior written consent of Boeing.

Owner shall provide immediate notification to Boeing in the event the current payment terms of “Net 30 Days” is revised in the above identified contract.”

2.3.2.3

In the event that any one guaranteed payment is not rendered on time and in accordance with Article 2.3.2, then the Parties hereby stipulate: a) that such event constitutes a material breach of this Contract; b) that Article 2.3.2 will become null and void and have no further effect under this Contract with all future payments, as applicable, being made pursuant to Article 2.3.1, unless Boeing specifically agrees in writing otherwise; c) that Boeing may exercise any and all of the rights available to it under this Contract, including but not limited to, termination of this Contract for Owner’s default.

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2.3.2.4

The guaranteed payment method shall automatically revert to the advance payment method set forth in Article 2.3.1 if Owner is in default in accordance with Article 2.3.2.3.

2.3.3

Time and Material Rates for Training and Special Projects.  The Time and Material Hourly Billing Rate for each direct labor hour for training and Special Projects is as set forth in Annex 5.

2.3.4

Payment Escalation.  Beginning with the payment for work performed in January 2005, the monthly payments are subject to increase (but not decrease) as provided in Paragraph 3.0 of Annex 5.

2.3.5

Constellation Re-orbit.  Boeing shall perform all activities and tasks required and necessary by the Re-Orbit Statement of Work on a firm, fixed price basis as set forth in Annex 5 of this Contract.

Article 3.

Owner-Furnished Facilities, Equipment, Information, and Third-Party Maintenance and Technical Support Agreements

3.1

Owner shall provide to Boeing all facilities and equipment necessary to enable Boeing to accomplish the Statements of Work and otherwise available to Owner so that Boeing may perform the services required under this Contract. Owner shall have access to all facilities at all times, including but not limited to lab access, for verification of changes to the ICS and of Boeing’s services hereunder. Boeing has no obligation under this Contract to provide any facilities or equipment.

3.2

Title and risk of loss or damage to Owner-furnished facilities, equipment and information shall remain with Owner and shall not pass to Boeing, and the furnished items shall not be used other than for the purposes of the Contract without the prior written approval of Owner.

3.3

In the event that any Owner-furnished equipment is found to be deficient, damaged or unserviceable when delivered or otherwise made available to Boeing, or becomes lost due to reasons other than willful misconduct or lack of good faith on the part of Boeing, or becomes deficient, damaged or unserviceable during normal and proper use while in the physical custody of Boeing, and such deficiency, damage or unserviceability is reported in writing to Owner as soon as practicable after the deficiency, damage, or unserviceability has been discovered by Boeing, then Owner shall arrange for repair, replacement or modifications as appropriate at no cost to Boeing. Owner shall arrange for repair, replacement or modification at its discretion after such consultation with Boeing as is required to minimize any adverse effects on the performance of the Contract.

3.4

Owner shall provide to Boeing the intellectual property, data, and other information owned or otherwise available to Owner and necessary to enable Boeing to accomplish the Statements of Work in a usable format. Boeing will use the intellectual property so provided only for the purpose of performing under the Contract and in compliance with any

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nondisclosure or other restrictions to which the use of such intellectual property is subject of which Boeing has notice. Boeing has no obligation under this Contract to provide any additional intellectual property, data or other information.

3.5

Owner agrees to provide, at Owner’s expense, third-party software and hardware maintenance agreements to support Boeing’s performance of the Statements of Work under this Contract. 3.6 Failure to provide the items specified in Articles 3.1, 3.3, 3.4, and 3.5 above within the timeframe requested or suitable for its intended purpose or in the event that any of the items so specified are insufficient in the reasonable judgment of Boeing to allow it to perform the services otherwise provided for under this Contract, the costs of such items will constitute a change to this Contract for which Boeing shall be entitled to an equitable adjustment to any affected terms of this Contract including but not limited to price or schedule.

Article 4.

Changes

Changes, which can be proposed by either Party to this Contract, may be made only by mutual agreement of both Parties hereto. Such changes shall be evidenced by a written agreement executed by authorized representatives of both Parties. No change shall be binding on either Party unless and until such written agreement is fully executed by both Parties. In the event a change is required, Boeing will submit a change proposal that will be negotiated and the results will be incorporated into this Contract. No amendment or waiver of any provision of this Contract of which Motorola is a third-party beneficiary shall be effective without the written consent of Motorola. Motorola is a third-party beneficiary of this Article 4.

Article 5.

Inspections and Quality Control

5.1

Inspection.  Subject to Article 17, Export Control, Owner’s representatives may inspect Boeing’s services at any reasonable time, provided such inspection does not interfere with Boeing’s performance.

5.2

Quality Control.  Boeing shall maintain quality control consistent with industry standards and in accordance with the performance criteria set forth in the Statements of Work contained in Annexes 3 and 4 of this Contract.

Article 6.

Delivery

6.1

Boeing shall deliver services necessary to perform the Statements of Work included in Annexes 3 and 4 of this Contract on a timely basis within the period of time set forth in Article 1.3, Period of Performance.

Article 7.

Excusable Delay

7.1

General.  Boeing and its subcontractors will not be liable for any delay in the scheduled delivery of services or other performance under the Contract caused by (i) acts of God; (ii) war or armed hostilities or terrorist attack; (iii) government acts, or failure of government to act, or priorities; (iv) fires, floods, or earthquakes; (v) strikes or labor troubles causing cessation,

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slowdown, or interruption of work; (vi) inability, after due and timely diligence and best efforts, to procure materials, systems, accessories, equipment or parts; or (vii) any other cause to the extent such cause is beyond Boeing’s and its subcontractors’ reasonable control and not occasioned by Boeing’s or its subcontractors’ fault or negligence (collectively, “Excusable Delay”).

7.2

Notice of Delay.  Boeing will give written notice to Owner (i) of any delay as soon as Boeing concludes that its services will be delayed beyond the scheduled performance due to an Excusable Delay and, when known, (ii) of a revised performance date based on Boeing’s appraisal of the facts.

7.3

Adjustment to Price.  In the event of any such Excusable Delay, the performance schedule shall be extended by mutual agreement of the Parties and the monthly payments shall be adjusted by mutual agreement of the Parties to account for any additional costs incurred by Boeing as a result of such Excusable Delay. Boeing shall exert its best efforts to mitigate such additional costs to the extent reasonable.

7.4

Performance Impact.  In the event of any such Excusable Delay, Boeing shall be relieved of its obligations to meet the performance criteria set forth in the Statements of Work contained in Annexes 3 and 4 of this Contract during, and only during, the period of Excusable Delay.

7.5

Exceptions.  Notwithstanding anything contained to the contrary in this Article 7, (a) there shall be no Excusable Delay by Boeing for operating and maintaining the Constellation and System Control Segment, except for the acts or events described in Article 7.1.

Article 8.

Indemnification/Insurance

8.1

Definition of “Boeing.”  For the purposes of this Article 8, “Boeing” is defined as The Boeing Company, its divisions, subsidiaries, affiliates, subcontractors, assignees of each, and their respective directors, officers, employees and agents.

8.2

Insurance Provided by Boeing.  Boeing shall procure and maintain during the performance of this Contract, at its sole cost and expense, Worker’s Compensation Insurance covering all employees of Boeing performing any work hereunder in statutory amounts; provided, however, that Boeing may maintain a self-insurance program in lieu of Worker’s Compensation Insurance if authorized and qualified to do so pursuant to statutory authority.

8.3

Indemnification of Boeing by Owner.

8.3.1

Except for matters covered by Article 8.2 above, Owner shall indemnify and hold harmless Boeing, its divisions, subsidiaries, and affiliates, the assignees of each, and their directors, officers and employees against any and all claims and liabilities in excess of the insurance required by Article 8.4, or in the event the insurance does not respond, is not collectible, or is not recoverable, for any reason. Such claims and liabilities include costs and expenses (including attorneys’ fees incident thereto or incident to successfully establishing the 

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right to indemnity) for injury to or death of any person, including employees of Owner and Boeing or for loss or damage to any property of any kind, arising out of or in any way relating to the performance of Boeing under this Contract, including but not limited to development, operation, use, Re-orbit or De-orbit of the Iridium Satellite Constellation, whether or not such injury, death, loss or damage is due to the negligence of Boeing, but excluding injury, death, loss or damage caused by the gross negligence or willful misconduct of Boeing. Owner and Boeing shall cause their insurers to waive all rights of subrogation or recourse against each other. Owner’s obligations under this indemnity will survive the expiration, termination or completion or cancellation of this Contract.

8.3.2

Owner shall retain all risk of loss of and title to the Iridium Communications System. Owner hereby releases and relieves Boeing, its directors, officers, agents, employees, invitees and contractors and waives its entire claim of recovery, including claims by Owner, Customers or their Customers, for loss or damage to the ICS, any individual ICS spacecraft (including without limitation) loss of use, loss of revenues, profit and any consequential damages of any kind suffered by Owner pursuant to the provisions of this Contract, whether or not such loss or damage is due to the negligence of Boeing. Owner shall cause its insurers to waive all rights of subrogation or recourse against Boeing.

8.3.3

Owner will provide Boeing with certificates of insurance annually showing that Boeing is named as an “additional insured” under Owner’s policies. Specifically, the policies should state that Boeing is an additional insured pursuant to the provisions of this Contract.

8.4

Insurance Provided by Owner.  As a condition precedent to any Boeing legal obligations arising under this Contract, Owner shall procure and maintain during performance of this Contract, at its sole cost and expense, insurance which specifically includes: (a) the In-Orbit Insurance Policy in the form attached hereto in Annex 1 or in such other form as is reasonably satisfactory to Boeing, (b) comprehensive general liability insurance (“General Liability Insurance Policy”), (c) property insurance and (d) other insurance specified in Annex 1, all on such terms and conditions, coverage amounts and with such insurers as are acceptable to Boeing. Such insurance shall name Boeing, its contractors and subcontractors as additional insureds. Owner shall furnish Boeing with a waiver of its insurance carrier’s rights of subrogation, and, with respect to the insurance obligations under this Article, such insurance shall also provide that the insurers shall give sixty (60) days notice to Boeing prior to the effective date of cancellation or termination of such insurance. Owner shall provide Boeing with a binder letter and form of policy from its insurance agent no later than twenty-one (21) days before effective date of cancellation. The binder letter shall be included as Annex 13 to this Contract. Boeing shall be responsible and liable to Owner for any increase in premium for the In-Orbit Insurance Policy and General Liability Insurance Policy resulting from Boeing’s deviation from the Statements of Work set forth in Annexes 3 and 4 without the prior written consent of Owner. Boeing shall, at no cost or expense to Owner, support any and all insurance presentations and technical review requested by Owner or any of its insurance underwriters.

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Article 9.

Advance Payments, Re-orbit, Security for Payments, and Additional Fee

9.1

Advance Payments.  To ensure adequate funds are provided to enable Boeing to perform the Annex 4 Statement of Work, Owner shall make the following advance payments to Boeing:

9.1.1

In the event of Owner’s default, Owner shall pay to Boeing U.S. $12,900,000.00 for Boeing services for Re-orbiting of the Constellation in accordance with the Re-orbit Statement of Work included as Annex 4 to this Contract. This amount covers preparation and execution of the de-orbit activity. This amount shall escalate annually effective January 1 of each year. Annual escalation shall be in accordance with Annex 5, Paragraph 3.0. The Parties agree that the escalation base shall be the third quarter of calendar year 2004.

9.1.2

An amount equal to the premium for the In-Orbit Insurance Policy, Section B Coverage as set forth in Owner’s insurance agent’s binder letter described in Article 8.4 to this Contract.

9.1.3

Owner’s insurance agent shall provide a letter to Boeing stating that Schedule A of the In-orbit Insurance Policy (covers in-orbit risks) does not have to be in effect during de-orbit of the constellation that is covered by Schedule B, the de-orbit rider. Schedule B will cover in-orbit risk and de-orbit risk concurrently. The letter shall be included as Annex 14, “Insurance Agent Letter”, to this Contract.

9.2

Security for Payment.  Owner’s obligations to make payments hereunder have been or will be secured as follows:

9.2.1

As security for payment of Boeing’s price for the work required under the Re-orbit Statement of Work, currently set at U.S. $12,900,000.00 and subject to escalation in accordance with Annex 5, Paragraph 6.1, and an additional U.S. $2,500,000.00 for payment of the premium for Schedule B, In-orbit Insurance Policy (Annex 1), Owner has provided, or has caused Iridium Satellite to provide, concurrently with the execution hereof, an irrevocable standby letter of credit in the revised amount of U.S. $15,400,000.00 (a copy of which is attached as Annex 11) naming Boeing as beneficiary, which letter of credit shall be renewed annually or replaced with another letter of credit from a financial institution with a credit rating of no less than “AA-” and in a form and format reasonably acceptable to Boeing not less than forty-five (45) days before its expiration date so as to extend the term thereof through the period of performance of this Contract (which letter of credit as so renewed or replaced is the “Letter of Credit”). Boeing shall have the unilateral right to draw the full amount of the Letter of Credit in the event that: (i) the Letter of Credit is not renewed or replaced as required by the preceding sentence at least forty-five (45) days before its expiration or (ii) upon the occurrence of any of the events identified in this Contract that results in Boeing’s commencement of a Re-orbit of the Constellation.

In addition, the Re-orbit Letter of Credit shall serve as security for the full and timely performance of Owner’s obligations to make payments under this Contract. As such, Boeing shall have the unilateral right to draw an amount equal to any indebtedness that Owner may have

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to Boeing as a result of non-payment of monthly invoices in accordance with the payment provisions included in Annex 5 or for any other amounts due to Boeing under the Contract. In the event Boeing draws down the letter of credit, Owner shall immediately replenish the Letter of Credit balance via amendment by the drawn amount.

9.2.2

Reserved.

9.2.3

Reserved.

9.2.4

In addition, the above letter of credit will be used to secure Boeing’s price for its activities associated with Re-orbit delay of, if any, and Re-orbit of the ICS, and to pay the premium for Schedule B of the In-orbit Insurance Policy and to secure any monies due to Boeing as a result of and during performance of this Contract .

9.2.5

Reserved.

9.2.6

Reserved.

9.2.7

Reserved.

9.2.8

Equitable Adjustment.  Owner agrees that the amount set forth in the Letter of Credit (Annex 11) for purposes of payment of the insurance policy premium shall be adjusted annually such that it reflects changes in the annual premium amount in the In-orbit Insurance Policy. The equitable adjustment shall be equal to the amount set forth in the binder letter described in Article 8.4 of this Contract. Additionally, the amount set forth in the letter of credit for purposes of payment of Boeing’s Re-orbit effort, currently U.S. $12,900,000.00, shall be adjusted each January 1 based on the Economic Price Adjustment provision included in Annex 5, Paragraph 6.0. Failure by the Parties to amend this Contract to incorporate the annual adjustments shall not constitute a waiver of the applicable price escalation. Owner agrees that the index base (reference Annex 5, Paragraph 3.0 for the specific index) for the de-orbit price adjustment shall be the third quarter of calendar year 2004.

9.2.9

The Bankruptcy Court Order in the form of that attached hereto as Annex 8 shall have been entered by the Bankruptcy Court and not be subject to a stay. The rights of Boeing under the Bankruptcy Court Order will be retained by Boeing until Boeing has received all of the payments required under Article 9.1. Such payments shall be made in accordance with Article 9.2.

9.2.10

Reserved

9.3

Additional Payment. Previously the indirect parent of the Owner.  Iridium Holdings LLC (“Holdings”), had agreed to make certain payments to Boeing for services and expertise rendered under this Contract. Boeing and the Owner have estimated what the present value of these payments would be over the Term of this Contract and have agreed that in lieu of these payments that Owner, would pay in addition to the other payments, otherwise payable for services

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hereunder the sum $7,750,000 US, payable as follows:   On or before April 15, 2007 Owner 

shall pay to Boeing U.S. $3,000,000.00.

On or before June 30, 2007 Owner shall pay to Boeing an amount of U.S. $2,500,000.00.

On or before December 1, 2007 Owner shall pay to Boeing an amount of U.S. $2,250,000.00.

Once paid, there shall be no Additional Payments due Boeing under this Section

9.4

Boeing’s Rights with Respect to Re-orbit.  The occurrence of any one of the following events shall provide to Boeing the unilateral right to commence Re-orbit of the Constellation. None of the provisions of this Article 9.4 are subject to dispute under Article 16 of this Contract or Article 7 (Excusable Delay) of this Contract.

9.4.1

Owner’s failure to make contract payments including advance payments to Boeing in the amounts and on the dates set forth in Articles 9.1 and 9.2 of this Contract after forty-five (45) days’ written notice from Boeing;

9.4.2

the commencement of (x) a voluntary bankruptcy proceeding or (y) an involuntary bankruptcy proceeding that is not dismissed within 20 days of its filing, in each case against Owner or Iridium Satellite LLC;

9.4.3

Reasonable grounds for Boeing to question the financial stability of Owner after providing owner thirty (30) days’ written notice and opportunity to cure its performance in accordance with Uniform Commercial Code provision regarding adequate assurances;

9.4.4

The failure for any reason by Owner to maintain continuous uninterrupted coverage under the In-Orbit Insurance Policy and/or to maintain the availability of policy coverage for Re-orbiting the Satellite Constellation in accordance with the Re-orbit Statement of Work;

9.4.5

Failure of Owner to provide Boeing quarterly financial statements for Iridium Constellation LLC and Iridium Satellite LLC after 30 days written notice by Boeing to Owner;

9.4.6

If Owner is in Default in accordance with Article 13 of this Contract;

9.4.7

Should new or modified U.S. or international regulation requirements threaten to increase the risk of Constellation operation and/or the Re-orbit process or the cost of operation and/or Re-orbit. However, Boeing may waive Re-orbit rights as to increased cost or risk if Owner executes an acceptable equitable adjustment. Boeing shall provide Owner written notice of its intent to exercise its right under this Article 9.4.7 at least thirty (30) calendar days prior to commencing any Re-orbit activity.

9.4.8

It is understood by the Parties that upon the occurrence of any one of the above events, Boeing will promptly begin Re-orbiting the satellites in accordance with the Re-

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orbit Statement of Work with the end result being the decommissioning of the entire Constellation.

9.5

U.S. Government’s Rights with Respect to Re-orbit.  Upon the occurrence of any event requiring Re-orbit of the Constellation identified in the U.S. Government Indemnification Contract (which is incorporated herein by reference), Boeing shall have the unilateral right to commence Re-orbit of the Constellation. None of the provisions of this Article 9.5 are subject to dispute under Article 16 of this Contract or to Article 7 (Excusable Delay) of this Contract.

9.6

Motorola’s Rights with Respect to Re-orbit.  Upon the occurrence of any of the following events, Owner agrees to cause Boeing and Boeing shall promptly perform the tasks and activities set forth in Annex 4 hereto (as updated from time to time) to commence Re-orbit of the Constellation. None of the provisions of this Article 9.6 are subject to dispute under Article 16 of this Contract or to Article 7 (Excusable Delay) of this Contract.

9.6.1

Owner’s failure to make the payment required by Section 4.A (2)(b) of the Motorola Agreement;

9.6.2

the commencement of (x) a voluntary bankruptcy proceeding or (y) an involuntary bankruptcy proceeding that is not dismissed within 20 days of its filing, in each case against Owner or Iridium Satellite LLC;

9.6.3

a material breach by Iridium Satellite LLC under the Motorola Agreement which has not been cured within 20 days of such breach;

9.6.4

a material breach by Boeing under this Contract or the Motorola Side Letter which has not been cured within 20 days of such breach;

9.6.5

an order from the U.S. government ordering Owner or Iridium Satellite LLC to direct Boeing to commence Re-orbiting;

9.6.6

upon written notice from Motorola that it has concluded that there are reasonable grounds to believe that an imminent change in law or regulation is reasonably likely to result in material claims, damages, obligations, costs, liabilities, penalties or expenses to Motorola in connection with or arising from the operation, maintenance, Re-orbiting and De-orbiting of the ICS, including any terrestrial-based portion of the ICS; provided, however, that there are reasonable grounds to believe that the prompt Re-orbit and De-orbit of the ICS will mitigate such claims, damages, obligations, costs, liabilities, penalties or expenses; and

9.6.7

upon written notice from Motorola that (i) it is unable to obtain on commercially reasonable terms aviation product liability insurance sufficient to protect it from potential claims, damages, obligations, costs, liabilities, penalties or expenses in connection with the ICS, and (ii) the U.S. Government, pursuant to the U.S. Government Indemnification Contract, has not agreed to cover the amount that would otherwise have been paid by the

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Aviation Policy (as described in the Motorola Agreement), despite Motorola’s good faith efforts to comply with Paragraph (c)(2) of the U.S. Government Indemnification Contract.

9.6.8

Motorola is a third-party beneficiary of this Article 9.6.

9.7

Re-orbit Plan.  The value specified in paragraph 6.0 of Annex 5 of this Contract is predicated upon Boeing utilizing the U.S. Government coordinated Re-orbit Plan, as it existed on August 6, 2003, as heretofore amended. Any changes to this plan by Owner or U.S. Government agency will entitle Boeing or Owner to an equitable adjustment in the affected terms of this Contract including but not limited to price and schedule and insurance costs. Owner shall be required to promptly make additional advance payments to Boeing consistent with Boeing’s equitable adjustment rights.

9.8

Relief from Stay, etc.  Notwithstanding any other provision of this Contract, Owner acknowledges and agrees, as a freely negotiated, essential condition to and an inducement for Boeing’s entry into this Contract, that (a) if Owner becomes a debtor in a case under the U.S. Bankruptcy Code or other bankruptcy or insolvency law, and fails to pay on a current basis, in cash, any amounts payable to Boeing under this Contract or any related agreements, Boeing shall be entitled to obtain (i) immediate relief from the automatic stay or other stay to exercise the De-orbiting Rights (as defined in the Bankruptcy Court Order attached as Annex 8 to this Contract) in addition to its de-orbiting rights under Article 9.4 of this Contract, and (ii) an immediate determination by Owner whether to assume or reject this Contract; and (b) this provision shall be deemed conclusive evidence of the negotiated ongoing intention of the Parties, and is intended to remain the primary element in determining whether cause exists for granting such relief to Boeing.

Article 10.

Assignment and Modification

10.1

Assignment.  This Contract is for the benefit of the Parties and their respective successors and assigns. No rights or duties of either Party may be assigned or delegated without the prior written consent of the other Party, except:

10.1.1

Either Party may assign its interest to a corporation or other entity that (i) results from any merger, reorganization, or acquisition of such Party and (ii) acquires substantially all the assets of such Party;

10.1.2

Boeing may assign its rights to receive money; and

10.1.3

Boeing may assign any of its rights and duties to any wholly-owned subsidiary of Boeing provided that Boeing will remain fully and solely responsible to Owner and to Motorola (only to the extent it is a third-party beneficiary) for all responsibilities of Boeing under the Contract.

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10.2

Modification.  None of the provisions, terms or conditions contained in this Contract may be added to, modified, superseded or otherwise altered, except by a written instrument signed by authorized representatives of both Parties.

Article 11.

No Warranty

BOEING HAS NOT MADE NOR DOES IT MAKE ANY WARRANTY WITH RESPECT TO THE SERVICES, OTHER THAN REASONABLE EFFORTS REQUIRED TO COMPLY WITH ANNEXES 3 AND 4 STATEMENTS OF WORK, MATERIALS OR EQUIPMENT SUPPLIED UNDER THIS CONTRACT, WHETHER STATUTORY, WRITTEN OR ORAL, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE ALL OF WHICH ARE EXPRESSLY EXCLUDED AND SUBJECT TO ARTICLE 14 LIMITATION OF LIABILITY.

Article 12.

Termination for Default

12.1

If Boeing fails to exert its best efforts as required by the performance criteria set forth in the O&M Statement of Work, Owner may terminate this Contract for cause by providing written notice of default to Boeing by registered letter. Such termination of this Contract as a result of default by Boeing shall be deemed effective ten (10) days from receipt by Boeing of such written notice of default. Boeing has the right to correct such default within the ten (10) day period without penalty or loss of rights granted anywhere in this Contract.

12.2

If this Contract is terminated as provided in this Article, Boeing shall:

12.2.1

Promptly refund to Owner the monthly payment paid by Owner to Boeing prorated for the remaining days in the month during which such termination is effective; and,

12.2.2

Be paid the applicable monthly payments earned for all completed months of this Contract prior to the month in which such termination is effective; and,

12.2.3

Upon request by Owner and at Owner’s expense, protect and preserve property in the possession of Boeing in which Owner has an interest; and,

12.2.4

Notwithstanding Article 14.3 of this Contract, Boeing agrees to pay to Owner all reasonable costs to have this Contract completed by another responsible contractor, to the extent such costs exceed the total amount which Owner would have had to pay Boeing for this Contract had Boeing completed the Contract as required; provided however that Owner enters into a contract with a responsible contractor to complete the terminated effort within one (1) year of notification of termination for default;

12.2.5

Return to Owner all drawings and other technical data associated with the ICS which Owner provided to Boeing in order for Boeing to perform under this Contract; and

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Boeing shall repay unused Advanced Payments provided by Owner under Article 9 hereof and release any and all liens and security interests securing payments by Owner hereunder.

12.3

If, after Owner’s issuance of a notice of default under the provisions of this Article, it is determined for any reason that Boeing was not in default under the provisions of this Article, or that the delay was excusable under the provisions of the Article 7, Excusable Delays, the rights and obligations of the parties shall be the same as if Owner defaulted in performance of its obligations under this Contract as provided by Article 13, Default by Owner.

Article 13.

Default by Owner

13.1

In the event Owner fails to perform any obligation which it is required to perform pursuant to this Contract, including without limitation, Owner’s failure to make timely payments as required by this Contract, Boeing may, if such failure is not corrected by Owner within ten (10) days after notice of such failure is given by Boeing, (five (5) days in the case of Owner’s failure to make timely payments), stop work on this Contract (except as otherwise provided herein) and consider Owner to be in default of this Contract. If the Owner is in default of this Contract, Owner shall:

1.

Immediately pay to Boeing, to the extent it had not already done so, all payments for all months completed prior to the monthly period during which such default by Owner occurs; and

2.

Immediately pay to Boeing the full payment for the monthly period during which such default by Owner occurs.

Article 14.

LIMITATION OF LIABILITY

14.1

THE PARTIES TO THIS CONTRACT EXPRESSLY RECOGNIZE THAT COMMERCIAL SPACE VENTURES INVOLVE SUBSTANTIAL RISKS AND RECOGNIZE THE COMMERCIAL NEED TO DEFINE, APPORTION AND LIMIT CONTRACTUALLY ALL RISKS ASSOCIATED WITH THIS COMMERCIAL SPACE VENTURE. THE WARRANTIES, OBLIGATIONS, AND LIABILITIES OF BOEING AND OWNER, AND THE REMEDIES OF BOEING AND OWNER, AND THE LIMITATIONS OF LIABILITY SET FORTH IN THIS CONTRACT FULLY REFLECT THE PARTIES’ NEGOTIATIONS, INTENTIONS, AND BARGAINED-FOR ALLOCATION OF THE RISKS ASSOCIATED WITH THIS COMMERCIAL SPACE VENTURE.

14.2

Exclusive Remedies.  THE SOLE REMEDIES OF EACH PARTY (AND ITS AFFILIATES AND AGENTS) FOR ANY CLAIMS AGAINST THE OTHER PARTY (AND ITS AFFILIATES AND AGENTS) WITH RESPECT TO ALL CLAIMS OF ANY KIND, WHETHER IN CONTRACT, WARRANTY, STRICT LIABILITY, TORT, OR OTHERWISE, AND WHETHER ARISING BEFORE OR AFTER DELIVERY OF ANY DELIVERABLE ITEM, FOR ANY LOSSES ARISING OUT OF OR RELATED TO THIS CONTRACT OR 

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THE WORK ARE LIMITED TO THE REMEDIES SET FORTH IN THIS CONTRACT, WHICH ARE IN LIEU OF ANY OTHER REMEDIES AT LAW OR IN EQUITY.

14.3

Limitation of Contractor’s Liability.  IN NO EVENT SHALL BOEING BE LIABLE TO OWNER AND ITS AFFILIATES AND ASSOCIATES IN AN AGGREGATE AMOUNT THAT EXCEEDS THE TOTAL CONSIDERATION PAYABLE FOR AUTHORIZED WORK UNDER THIS CONTRACT. THE LIABILITY LIMITATION INCLUDES BUT IS NOT LIMITED TO LIQUIDATED DAMAGES, BOEING’S INCURRED COSTS, INCURRED IN REPAIR OR REPLACEMENT OF DEFECTS IN DELIVERABLE ITEMS AND IN REPERFORMANCE OF SERVICES, ANY PRICE REDUCTIONS OR REFUNDS GRANTED TO CUSTOMER UNDER ANY PROVISION OF THIS CONTRACT.

The limitation of liability will apply regardless of the forum in which the Claim is brought, whether in court or in arbitration or by notice to Boeing to remedy a Defect, or whether it is paid as a result of a settlement. The amount of the limitation is cumulative, commencing from the time the Original Agreement was signed. Once Boeing has paid Owner an amount equal to the limit of Boeing’s liability, then Owner will not have any further right to receive money from Boeing for any Claim.

14.4

No Consequential Damages, etc.  NEITHER BOEING NOR OWNER SHALL HAVE ANY OBLIGATION OR LIABILITY TO THE OTHER WITH RESPECT TO THE SUBJECT MATTER HEREOF, WHETHER ARISING IN CONTRACT (INCLUDING WARRANTY), TORT (INCLUDING ACTIVE, PASSIVE, OR IMPUTED NEGLIGENCE) OR OTHERWISE FOR ANY CLAIM FOR LOSS OF USE, REVENUE OR PROFIT (OTHER THAN PROFIT FROM PAYMENTS UNDER THIS CONTRACT), OR FOR ANY PUNITIVE, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, WHETHER FORESEEABLE OR NOT.

Article 15.

Intellectual Property

15.1

Data.

15.1.1

Any specifications, drawings, technical information or other data furnished by Boeing to Owner shall remain Boeing’s property, shall be kept confidential by Owner, and shall be returned to Boeing at Boeing’s request.

15.1.2

Any specifications, drawings, technical information or other data furnished by Owner to Boeing (including, but not limited to, any Intellectual Property Rights, Patents or other technical information provided to Owner by Motorola under an Intellectual Property Rights Agreement) shall remain Owner’s property, shall be kept confidential by Boeing, and shall be returned to Owner at Owner’s request.

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15.2

Indemnity.  Owner agrees to indemnify and hold Boeing harmless for any claim by any third party that Owner is not the legal owner or valid licensee of any specifications, drawings, technical information or other data furnished to Boeing by Owner under this Contract.

15.3

Jointly-Developed Property.  Boeing and Owner agree that any specifications, drawings, technical information or other data that is developed after the Effective Date, and developed under this Contract, to enhance or improve the ICS shall be considered jointly developed intellectual property, and each Party may use and exploit such property for its own use and account in addition to its utilization with the ICS.

15.4

Special Projects.  To the extent Boeing develops intellectual property under Special Projects, and Boeing is reimbursed for its work under Special Projects on a Time and Material basis, all intellectual property shall be owned exclusively by Owner as set forth in the annex incorporating the Special Project into this Contract.

Article 16.

Dispute Resolution

16.1

Procedures.  All disputes arising out of or related to this Contract, unless specifically exempted by the language of this Article, will be decided by the internal dispute resolution procedures of this Article 16 and those other dispute resolution procedures set forth in attached Annex 7, Dispute Resolution Procedures, or by the courts within the State of Illinois for Owner or California for Boeing as set forth in Annex 7 hereto, in an effort to reduce the incidence and costs of extended disputes. No act, omission, or knowledge, actual or constructive, of a Party will in any way be deemed to be a waiver of the requirement for timely notice of a dispute unless there is an explicit, unequivocal written waiver thereof.

16.2

Internal Dispute Resolution; Notice and Negotiation.  Subject to the provisions of Article 16.C entitled “Injunctive Relief; Letter of Credit,” the Parties will, prior to the initiation of any other dispute resolution procedure, attempt to resolve any dispute as follows:

16.2.1

The Party raising the dispute will provide to the person designated under Article 21 of the other Party a notice of such dispute (a “Dispute Notice”). The Dispute Notice will include a clear and detailed description of the dispute and the specific provisions of this Contract relevant thereto. Each Party shall within fifteen (15) days following the day the Dispute Notice is received provide the other with all documentation supporting its position in the dispute. The person designated under Article 21 or such other appropriate individual will attempt to resolve the dispute promptly and in good faith.

16.2.2

If the dispute is not resolved within twenty-five (25) days after the receipt of a Dispute Notice by the receiving Party, at either Party’s written request the dispute will be forwarded to its corresponding senior management for resolution. The appropriate senior level managers of each Party will attempt to resolve the dispute promptly and in good faith.

16.2.3

If a dispute has not been resolved within twenty (20) days after request by either Party to forward the dispute to its corresponding senior management, the dispute shall thereafter be subject to the provisions of attached Annex 7, Dispute Resolution Procedures.

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16.2.4

All negotiations pursuant to these internal dispute procedures will be confidential and will be treated as compromise and settlement negotiations for purposes of applicable rules of evidence.

16.3

Injunctive Relief; Letters of Credit.  Notwithstanding any other provision of this Article 16, either Party will have the right to apply to a court having appropriate jurisdiction to seek interim injunctive relief until the dispute is resolved and may draw on any applicable letters of credit irrespective of whether there is a dispute.

16.4

Co-Party/Third Party Claims.  The provisions of this Article 16 shall not be binding for disputes in the nature of cross-claims, impleaders, or any similar co-party or third-party claims, by one Party against another, resulting from and in connection with any action brought by any person other than a Party to this Contract.

16.5

Intellectual Property Rights.  Notwithstanding the foregoing, the provisions of this Article 16 shall not be binding for disputes arising from or related to either Party’s intellectual property rights.

16.6

Third-party beneficiary.  To the extent that a dispute involves Motorola’s third-party beneficiary rights, Motorola is a third-party beneficiary of this Article 16.

Article 17.

Export Control

17.1

Neither Party shall export, directly or indirectly, any information or technical data disclosed under this Contract to any individual or country which the U.S. government at the time of export requires an export license or other government approval without first obtaining such license or approval. The Parties recognize that Owner may be comprised of individuals or entities for which Owner and Boeing must ensure no disclosure of technical data unless and until Owner and Boeing obtains appropriate export licenses from the U.S. Government.

17.2

Owner agrees to provide to Boeing the information necessary to allow Boeing to evaluate the need to obtain licenses from the U.S. Government. The information will be provided in a timely manner in order to minimize the impact to Boeing’s performance of the Statements of Work.

17.3

Boeing shall not be required to perform any work under this Contract requiring export licenses until such licenses have been obtained from the U.S. Government. Any Boeing delay resulting from the lack of an approved export license will be an excusable delay within the meaning of Article 7 hereof.

Article 18.

Permits and Licenses

18.1

Owner shall use its reasonable best efforts to defend and maintain all permits, licenses and approvals required by the United States Federal Communications Commission (FCC) or by any applicable U.S. law or regulation, as well as all necessary orbital locations and 

21

radio frequency spectrum, to operate the Constellation and to operate the System Control Segment in accordance with their respective terms and conditions.

18.2

Owner shall use its reasonable best efforts to operate the Constellation and System Control Segment in accordance with all applicable laws and government regulations.

18.3

Owner shall pay for its costs of applying for, obtaining and renewing the aforementioned approvals, licenses and permits.

18.4

Owner agrees not to take any action or enter into any agreement or arrangement with a third party that conflicts with Boeing’s rights and obligations under this Contract, or to act or fail to act in any manner which would interfere with Boeing’s aforementioned responsibilities.

18.5

Nothing contained herein shall be interpreted as requiring Boeing to apply for or obtain the blanket mobile licenses to operate subscriber units nor the authorizations necessary to operate gateways in the United States or any other country.

Article 19.

Disclosure and Use of Information by the Parties

19.1

“Proprietary Information” is defined as information which the disclosing party at the time of disclosure identifies in writing as Proprietary Information by means of a proprietary legend, marking, stamp or other positive written notice identifying the information to be proprietary. In order for information disclosed orally or visually by a party to this Contract to be Proprietary Information protected hereunder, the disclosing party shall identify the information as proprietary at the time of the disclosure and, within thirty (30) days after such oral or visual disclosure, reduce the subject matter of the disclosure to writing, properly stamped with the proprietary legend, marking, stamp or other positive written notice and submit it to the receiving party.

19.2

Except as may be specifically provided otherwise in this Contract, Proprietary Information of Boeing disclosed hereunder to Owner may only be used by Owner for monitoring the progress of the performance of this Contract by Boeing.

19.3

Except as may be specifically provided otherwise in this Contract, Proprietary Information of Owner disclosed hereunder to Boeing may only be used by Boeing in performance of the work specified in this Contract.

19.4

It is agreed that for a period of ten (10) years following the receipt of Proprietary Information, the receiving party will use such information only for the purpose(s) provided in Articles 19.2 and 19.3 above as applicable and shall take reasonable efforts to preserve in confidence such Proprietary Information and prevent disclosure thereof to third parties. Each of the parties agree that it will use the same reasonable efforts to protect the other’s Proprietary Information as are used to protect its own but will at least use reasonable care. Disclosures of such information shall be restricted to those individuals directly participating in the efforts provided in Articles 19.2 and 19.3 above who have a need to know such information, and, who 

22

have been made aware of and consent to abide by the restrictions contained herein concerning the use of such information.

19.5

The obligation to protect Proprietary Information, and the liability for unauthorized disclosure or use of Proprietary Information, shall not apply with respect to such information which is now available or becomes available to the public without breach of this Contract; information lawfully received without restrictions from other sources; information known to the receiving party prior to disclosure not subject to a separate nondisclosure obligation; information published or disclosed by the disclosing party to others, without restriction; information developed by the receiving party independent of and without use of information disclosed by the disclosing party; or, information for which further use or disclosure by the recipient is authorized in writing by the disclosing party.

Article 20.

Nondiscrimination, Equal Opportunity, and Other Requirements

During the performance of this Agreement, Boeing agrees to comply with all United States federal, state and local laws concerning discrimination in employment and non segregation of facilities including, but not limited to, the requirements of Executive Order 11246 (41 CFR 60-1.4), Section 503 of the Rehabilitation Act of 1973 (41 CFR 60-741.4), and the Vietnam Era Veteran’s Readjustment Assistance Act of 1974 (41 CFR 60-250.4), which equal opportunity clauses are hereby incorporated by reference.

Article 21.

Notices

All notices required by this Contract will be in English, will be effective on the date of receipt, and will be transmitted by any customary means of written communication, addressed as follows:

		
	Boeing:

The Boeing Company

13100 Space Center Blvd.

Houston, Texas 77059-3556

Attention: Danny White

Mail Stop: HM6-40

	Owner:

Iridium Constellation LLC

6701 Democracy Blvd., Suite 500

Bethesda, MD 20817

Attention: Michael Deutschman

with copies to:

Isaac M. Neuberger, Esquire

Neuberger, Quinn, Gielen,

Rubin & Gibber, P.A.

One South Street, 27th Floor

Baltimore, Maryland 21202

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	Iridium Constellation LLC

8440 S. River Parkway

Tempe, AZ 85284

Attention: Dannie Stamp

Iridium Satellite LLC

6701 Democracy Blvd., Suite 500

Bethesda, MD 20817

Attention: Michael Deutschman

Article 22.

Miscellaneous

22.1

Headings.  Article and paragraph headings used in this Contract are for convenient reference only and are not intended to affect the interpretation of this Contract.

22.2

GOVERNING LAW.  THIS CONTRACT WILL BE INTERPRETED UNDER AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE, U.S.A., EXCEPT THAT DELAWARE CHOICE OF LAW RULES SHALL NOT BE INVOKED FOR THE PURPOSE OF APPLYING THE LAW OF ANOTHER JURISDICTION.

22.3

Waiver/Severability.  Failure by either Party to enforce any provision of this Contract will not be construed as a waiver. If any provision of this Contract is held unlawful or otherwise ineffective by a court of competent jurisdiction, the remainder of the provisions of the Contract will remain in effect.

22.4

Survival of Obligations.  The Articles of and Annexes to this Contract, including but not limited to those relating to INTELLECTUAL PROPERTY, INSURANCE, ADVANCE PAYMENTS, RE-ORBIT, INDEMNIFICATION, LIMITATION OF LIABILITY, EMPLOYEE NON-SOLICITATION, Annex 5, Paragraphs 2.2 and 7.7, Annex 17, Annex 18, and ADDITIONAL FEE will survive termination or cancellation of any part thereof to the extent that the rights of a Party thereunder have accrued as of the date of termination or cancellation.

22.5

Contract Changes.  The parties as of the Effective Date have mutually agreed to this Contract. From time to time the parties may elect, by mutual agreement to update, or modify the existing articles as written, subject to the provisions of this Contract.

22.6

Order of Precedence. In the event of inconsistency among or between the Parts of this Contract, such inconsistency shall be resolved by giving precedence in the order of the parts as set forth below:

1.

These Contract Articles and Annex 5 (Price and Payment Schedule)

2.

Statements of Work.

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22.7

Laws.  Each party warrants that in the performance of this Contract, it will comply with all applicable federal, state, local and foreign laws and ordinances and all lawful orders, directives, rules and regulations thereunder (collectively “Laws”).

22.8

Access to Information.  Boeing shall provide full access to Owner to all meetings at the Satellite Network Operations Center (SNOC) and information pertaining to operation and maintenance of the System. Access shall be provided on a reasonable basis, consistent with Boeing’s policies (and requiring compliance with applicable law) and is not intended to interfere with Boeing’s ability to perform as required under this Contract.

22.9

Financial Statements.  Owner shall provide to Boeing on a monthly basis detailed financial statements including income statements, balance sheets, and business plans until payments to Boeing are in accordance with the requirements in Annex 5, Paragraph 2.0.

Owner shall provide to Boeing on an annual basis financial statements or Owner’s annual report for the immediately preceding year. These financial statements or the data included in the annual report shall have been audited by an independent audit firm.

Owner shall provide to Boeing Owner’s “90 Day Cash Forecast” at the end of each ninety day forecasting period.

22.10

Use of Owner’s Facilities.  Boeing is authorized to utilize Owner’s facilities to support Boeing’s other business activities as may evolve during the Contract period of performance, provided that such other activities do not involve any cost to Owner or interfere with Owner’s operations or business.

22.11

Motorola as Third-Party Beneficiary.  The Parties acknowledge that Motorola is an express third-party beneficiary of certain provisions of the Original Contract as set forth therein and that neither of the Parties intends that this Contract or any of the amendments to the Original Contract effected hereby affect any of their respective obligations to Motorola thereunder, all of which shall remain in full force and effect.

22.12

Employee Nonsolicitation.  Each Party agrees that, for the entire period of the Contract term, and continuing for one (1) year after the termination or completion of the Contract (as it may be extended or otherwise amended), neither Party nor any of its successors shall directly or through any recruiting agency, headhunter or similar entity or person acting on its behalf , solicit or recruit any “key” employee of the other Party (which as to Boeing means only an employees who was or currently is assigned to the Iridium O&M contract). If any “key” employee should freely resign from a Party, and provided that the other Party had not previously solicited or recruited such employee, then such other Party will be free of this restriction. The list of “key” employees may be provided by a Party or its successor(s) at any time on or before a contract termination and/or the sale or other transfer of a majority of Owner’s assets. This Article 22.12 shall survive this Contract’s termination.

22.13

Entire Agreement.  Except to the extent set forth in Article 22.11, this Contract as between Boeing and Owner constitutes the entire agreement between the Parties and, as of the 

25

Effective Date, supersedes all prior understandings, commitments, and representations, if any, of the Parties with respect to the subject matter hereof As between Boeing and Owner, it is understood and agreed that the letter agreement between Boeing and Motorola dated December 11, 2000 (the “Motorola Side Letter”) shall in no way affect the relationship between Boeing and Owner under this Contract or otherwise. Nothing contained herein shall in any way affect or impair any of the rights or obligations of Boeing or Motorola under the Motorola Side Letter.

		
	THE BOEING COMPANY

By:   /s/ Danny White                              

Name: Danny White

Title: Business Mgr., So&G5

Date: April 26, 2007

	IRIDIUM CONSTELLATION LLC

By:   /s/ Michael Deutschman                         

Name: Michael Deutschman

Title: Chief Counsel

Date: May 14, 2007

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