1
EXHIBIT 10.44
STANDBY PURCHASE AGREEMENT
THIS STANDBY PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of this __ day of ______, 1998 by and between Iridium Operating LLC, a
Delaware limited liability company ("Iridium"), and Motorola, Inc., a Delaware
corporation ("Motorola").
In order to stimulate the manufacture and distribution of Iridium
hand-held and mobile phones (each, a "Transceiver") and belt-worn pagers (each,
a "Pager") to be used in the IRIDIUM System (Transceivers and Pagers are
collectively referred to herein as "Subscriber Devices"), Iridium and Motorola
have agreed as follows:
1.Subscriber Device Purchases. Subject to Section 3 of this Agreement, and
upon receipt of a Purchase Notice by Motorola, Iridium agrees to purchase (I)
the number of Transceivers up to a total of (x) minus (y) the aggregate
amount of Transceivers Paid For by Gateway Operators and Service Providers,
(as defined in the Iridium LLC Limited Liability Company Agreement) as
specified in the Purchase Notice, at a purchase price per Transceiver of
Dollars, and (II) the number of Pagers up to a total of (x) minus (y) the
aggregate amount of Pagers Paid For by Gateway Operators, (as defined in the
Iridium LLC Limited Liability Company Agreement) as specified in the Purchase
Notice, at a purchase price per Pager Dollars.
The calculations set forth in subparagraphs (I) and (II) above are
intended to cover a commitment from Iridium and the Gateway Operators that a
total of Transceivers and Pagers will be purchased from Motorola
prior to December 31, 1998. Purchase orders for delivery dates after December
31, 1998 are not part of the commitment or calculations. In this Agreement,
Transceivers will be deemed "Paid For" if (i) payment for such Transceivers has
been made by or on behalf of the relevant Gateway Operator or Service Provider
pursuant to the terms of the purchase order applicable to such Transceiver, or
(ii) such Transceivers has been shipped pursuant to a standby letter of credit.
In this Agreement, Pagers will be deemed "Paid For" if (i) payment for such
Transceivers has been made by or on behalf of the relevant Gateway Operator
pursuant to the terms of the purchase order applicable to such Transceiver, or
(ii) such Transceivers has been shipped pursuant to a standby letter of credit.
As used in this Agreement, the term "Purchase Notice" shall mean one of a series
of written notices dated no earlier than January 1, 1999, or the first business
day thereafter, which is sent by Motorola and received by Iridium, in which the
aggregate number of Transceivers Paid For by Gateway Operators and Service
Providers and the aggregate number of Pagers Paid For by Gateway Operators, all
as of the date of such Purchase Notice, shall be specified. Sales of Subscriber
Devices to the U.S. Government by Motorola are outside the terms of this
Agreement and will not be included in any calculations to determine Iridium's
purchase
1
2
obligations herein.
2. Delivery and Payment Obligations. Upon the purchase of Subscriber
Devices by Iridium pursuant to Section 1 hereof, Motorola shall promptly ship to
Iridium or its designee the Subscriber Devices so purchased. All deliveries are
FOB Libertyville. Title to the Subscriber Devices will pass to Iridium at the
FOB point. If any Subscriber Device has been previously shipped by Motorola to a
Gateway Operator and such Subscriber Device has not been Paid For, then Motorola
may fulfill its shipment obligations pursuant to this Section 2 with respect to
such Subscriber Device by assigning to Iridium all of Motorola's rights against
the relevant Gateway Operator with respect to such Subscriber Device pursuant to
the purchase order and other documents with respect to such Subscriber Device.
Payment for Subscriber Devices delivered to Iridium is due and payable within
ten (10) business days from date of invoice. Motorola will invoice for
Subscriber Devices upon shipment. Payment for Subscriber Devices not Paid For by
Gateway Operators is due and payable within ten (10) business days of receipt of
Purchase Notice by Iridium from Motorola. If after the date of the Purchase
Notice Motorola receives any payment with respect to a Subscriber Device
specified or any return thereof, Motorola shall immediately pay over to Iridium
such payment or shall deliver to Iridium or its designee such returned
Subscriber Device. As more fully described in a Memorandum of Understanding,
Iridium agrees to use the funds available under a new $175 million credit
agreement, which Motorola has conditionally agreed to guarantee, only to make
payments to Motorola, Inc. for amounts that Iridium owes under this Standby
Purchase Agreement, as well as other agreements with Motorola, Inc., to the
extent those amounts are owed but have not been paid and to the extent that
other funds are not available.
3. Limitation on Purchases. The parties acknowledge that purchases of
Subscriber Devices by Gateway Operators will be made pursuant to written
purchase agreements between Motorola and such Gateway Operators (such
agreements, the "Purchase Agreements"). Motorola has the right, without
receiving the consent of Iridium, to modify, amend, waive, extend or otherwise
change the Purchase Agreements, and the Gateway Operators' obligations
thereunder, except that Motorola agrees that it will not consent to
modifications, deletions or additions to paragraph 5.2 of the Purchase
Agreements. To the extent that Motorola has not filled firm orders placed by
Gateway Operators for reasons under Motorola's control and the Gateway Operators
and Motorola have been unable to work out a reasonable extension of time for
delivery dates after good faith attempts to do so, (as described in Paragraph
5.3 of the Purchase Agreements with Gateway Operators), Iridium shall be
entitled to reduce the number of Subscriber Devices specified in clauses (I)(x)
and (II)(x) of Section 1 of this Agreement by the amount of any such production.
4. Other Terms of Purchase. All terms of any purchase of Subscriber
Devices
2
3
by Iridium pursuant to the Agreement, other than purchase price, payment
and delivery terms, shall be subject to the terms set forth in Attachment A.
5. Termination. This Agreement shall terminate on the date that (i) an
aggregate of Transceivers shall have been Paid For by the Gateway
Operators, or Service Providers or Iridium or any combination of them and (ii)
an aggregate of Pagers shall have been Paid For by either the Gateway
Operators or Iridium or both.
6. Party Relationship. Each party will be deemed to be an independent
contractor and not an agent, joint venturer, or representative of the other, and
neither party may create any obligations or responsibilities on behalf of or in
the name of the other. Under no circumstances may Iridium hold itself out to be
a partner, employee, franchisee, representative, servant or agent of Motorola.
Iridium will not impose or create any obligation or responsibility, express or
implied, or make any promises, representations or warranties on behalf of
Motorola, other than as expressly provided herein.
7. Dispute Resolution. The parties agree that any claims or disputes
arising from this Agreement will be submitted to non-binding mediation prior to
initiation of any formal legal process; provided, however, that this provision
shall not preclude either party from resorting to judicial proceedings if: (i)
good faith efforts to resolve the dispute under mediation are unsuccessful; or
(ii) the claim or dispute relates to intellectual property rights; or (iii)
interim relief from a court is necessary to prevent serious and irreparable
injury to the party or to third parties.
8. Representations. This Standby Purchase Agreement constitutes the valid
and legally binding obligation of Iridium and Motorola enforceable in accordance
with its terms. The parties each represent that they have the power to execute
and deliver this Agreement and to perform the obligations hereunder. Iridium
agrees that it will take all necessary steps to obtain any required approvals
for performance under this Agreement from its directors and its securities
holders, and from anyone else whose approval or consent is required for
Iridium's performance of this Agreement.
9. Notices. All notices and other communications hereunder will be in
writing. Any notice or other communication hereunder shall be deemed duly given:
(i) when delivered, if personally delivered; (ii) when receipt is electronically
confirmed, if faxed (with a hard copy to follow via first class mail, postage
prepaid); or (iii) one day after deposit with a reputable overnight courier, in
each case addressed to the intended recipient as set forth below:
If to Iridium:
Iridium Operating LLC
-3-
4
0000 Xxx Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
Attention: Chief Financial Officer
Fax #: (000)000-0000
If to Motorola:
Xxxx Xxxxxx
Director of Marketing and Business Development
Satellite Subscriber Products Division
Cellular Subscriber Sector
000 Xxxxx X.X. Xxxxxxx 00
Xxxxxxxxxxxx, Xxxxxxxx 00000
Fax #: (000) 000-0000
and
Xxx Xxxxx
Marketing Manager
Iridium Pager Operations
Messaging Systems Products Group
MS112 Xxxxxxx Xxxxx, XX 00000
Fax #: (000) 000-0000
10. Governing Law: This Agreement shall be governed by the laws of the
State of Illinois.
11. General: This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instruments. The failure of either party to insist
in any one or more instances upon the performance of any of the terms or
conditions herein or to exercise any right hereunder will not be construed as a
waiver or relinquishment of the future performance of any such terms or
conditions or the future exercise of such right but the obligation of the other
party with respect to such future performance will continue in full force and
effect. Except as otherwise expressly permitted hereunder, no alterations or
modifications of this Agreement will be binding upon either Iridium or Motorola
unless made in writing and signed by an authorized representative of each party.
If any term or condition of this Agreement will to any extent be held by a court
or other tribunal to be invalid, void or unenforceable, then that term or
condition will be inoperative and void insofar as it is in conflict with law,
but the remaining rights and obligations of the parties will be construed and
enforced as if this Agreement did not contain the particular term or condition
held to be invalid, void or unenforceable. Neither party may disclose the terms
of this Agreement to any party without the prior written consent of the other
party hereto; provided, however,
4
5
that a party may make such disclosure (I) upon order of a court of competent
jurisdiction subject to first providing the other party hereto with prompt
written notice of such court order to allow the other party to seek relief from
such order, (ii) if so required by law including but not limited to any federal
or states securities laws, or (iii) if requested in connection with any due
diligence investigation by such party's financial or legal advisors or by any
lending institution or its representatives. In the event that a party so
discloses, other than in accordance with the preceding sentence, the other party
may immediately terminate this Agreement.
IN WITNESS WHEREOF, the parties have hereunder signed their names in the
space provided below as of the date first above written.
MOTOROLA, INC.
By:
Name:
Title:
IRIDIUM OPERATING, LLC
By:
Name:
Title:
5
6
ATTACHMENT A
PURCHASE TERMS
The following terms apply to the Purchase of Subscriber Devices by Iridium
from Motorola to the extent that Iridium purchases Subscriber Devices pursuant
to the Standby Purchase Agreement:
1. WARRANTY
Subscriber Devices Warranty. Motorola will warrant each Subscriber Device
only to the original end user buyers or lessees in accordance with a limited one
year, parts and labor warranty which will be shipped with the Subscriber
Devices.
Accessory Warranty. Motorola will warrant each Accessory only to the
original end user buyers or lessees in accordance with a limited one year, parts
and labor warranty which will be shipped with the Accessories.
EXCEPT AS OTHERWISE PROVIDED IN THE LIMITED WARRANTIES, MOTOROLA
SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. IF ANY PRODUCT IS DEFECTIVE AT TIME OF DELIVERY TO CUSTOMER,
CUSTOMER'S SOLE REMEDY WILL BE TO RETURN THE PRODUCT TO MOTOROLA FOR
REPLACEMENT, REPAIR, OR REFUND, AS DETERMINED BY MOTOROLA.
2. FORCE MAJEURE
Neither party shall be held liable for any delay or failure to perform due
to any cause beyond its reasonable control, including, without limitation, lack
of supplies due to a supplier's inability or failure to deliver materials,
except the obligation to pay money when due. The delivery schedule shall be
considered extended by a period of time equal to the time lost because of any
excusable delay.
3. EXPORT CONTROL
Iridium or Brightpoint shall be the exporter of record and shall be
responsible for obtaining all export licenses that may be required to export the
Subscriber Devices from the U.S. to Iridium's requested "ship to" location(s).
Iridium agrees to comply with all applicable export laws, regulations and
orders. Specifically, but without limitation, Iridium agrees that it will not
resell, re-export or ship, directly or indirectly, any Subscriber Device or
technical data in any form without obtaining appropriate export or re-export
licenses
6
7
from the United States Government.
4. TAXES
The prices set forth in the Standby Purchase Agreement are exclusive of
any amount for federal, state, provincial and/or local excise, sales, use,
property, retailer's, occupation or any other assessment in the nature of taxes
however designated, on the Subscriber Devices and/or services provided under
this Agreement. Iridium shall pay all applicable fees, custom duties,
assessments or taxes which may be assessed or levied by the government of any
applicable jurisdiction and any departments and subdivision thereof, as a result
of Iridium's performance under this Agreement or against any of the Subscriber
Devices purchased hereunder by Iridium.
5. PATENT AND COPYRIGHT INDEMNIFICATION.
Motorola agrees to defend, at its expense, any suits against Iridium based
upon a claim that any Subscriber Device furnished hereunder directly infringe a
patent or copyright in the Gateway Operator's Marketing Area where Iridium sells
the Subscriber Device and to pay costs, fines, and damages finally awarded in
any such suit, provided that Motorola is notified promptly in writing of the
suit and at Motorola's request and at its expense is given control of said suit
and all requested assistance for defense of same. If the use or sale of any
Subscriber Devices furnished hereunder is enjoined as a result of such suit,
Motorola at its option and at no expense to Iridium, will obtain for Iridium the
right to use or sell said Subscriber Device or will substitute an equivalent
Device reasonably acceptable to Iridium and extend this indemnity thereto or
will accept the return of the Subscriber Device and reimburse Iridium the
purchase price therefor, less a reasonable charge for reasonable wear and tear.
This indemnity does not extend to any suit based upon any infringement or
alleged infringement of any patent or copyright by the alteration of any
Subscriber Devices furnished by Motorola or by the combination of any Subscriber
Devices furnished by Motorola and other elements nor does it extend to any
Subscriber Devices of Iridium's design or formula. The foregoing states the
entire liability of Motorola for patent or copyright infringement.
IN NO EVENT WILL MOTOROLA BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES TO
IRIDIUM ARISING FROM INFRINGEMENT OR ALLEGED INFRINGEMENT OF PATENTS,
COPYRIGHTS, OR OTHER INTELLECTUAL PROPERTY RIGHTS.
6. LIMITATION OF LIABILITY
EXCEPT FOR PERSONAL INJURY, AND EXCEPT FOR PARAGRAPH 16 (PATENT AND
COPYRIGHT INDEMNIFICATION) ABOVE, MOTOROLA'S TOTAL LIABILITY, WHETHER FOR BREACH
OF CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY
7
8
IN TORT OR OTHERWISE, IS LIMITED TO THE PRICE OF THE PARTICULAR PRODUCTS SOLD
HEREUNDER WITH RESPECT TO WHICH LOSSES OR DAMAGES ARE CLAIMED. CUSTOMER'S SOLE
REMEDY IS TO REQUEST MOTOROLA, AT MOTOROLA'S OPTION, TO EITHER REFUND THE
PURCHASE PRICE OR REPAIR OR REPLACE PRODUCT(S) THAT ARE NOT AS WARRANTED. IN NO
EVENT WILL MOTOROLA BE LIABLE FOR ANY LOSS OF USE, LOSS OF TIME, INCONVENIENCE,
COMMERCIAL LOSS, LOST PROFITS OR SAVINGS OR OTHER INCIDENTAL OR CONSEQUENTIAL
DAMAGES TO THE FULL EXTENT SUCH MAY BE DISCLAIMED BY LAW. MOTOROLA EXPRESSLY
DISCLAIMS ANY LIABILITY FOR FAILURE TO OBTAIN EQUIPMENT CERTIFICATION IN TIME
FOR CUSTOMER'S SERVICE LAUNCH; FOR ANY FAILURE OF THE IRIDIUM SYSTEM WHATSOEVER;
AND FOR RANGE, COVERAGE, AVAILABILITY OR OPERATION OF ANY COMMUNICATIONS SYSTEM.
8
9
7. LOGOS AND TRADEMARKS
All use of Motorola's trademarks, service marks, tradenames, slogan, and
logos by Iridium shall be in accordance with the terms specified in the
"Motorola Subscriber Devices Marketing Guidelines" incorporated herein by
reference. Iridium shall not deviate from the Motorola Subscriber Devices
Marketing Guidelines without Motorola's written approval, which shall not be
unreasonably withheld. Any goodwill deriving from such use by Iridium shall
inure to Motorola's benefit.
8. GOVERNMENT SALES
In the event that Iridium elects to sell Subscriber Devices to a
government entity, directly or indirectly, Motorola makes no representations
with respect to the ability of the Subscriber Devices or any of its other
products, services or prices, to satisfy any statutes, regulations or provisions
relating to such governmental sales.
9
