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Satellite System Operations & Maintenance Contract

This is an actual contract between Iridium and Motorola Solutions.

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Sectors: Telecommunications, Electronics+and+Miscellaneous+Technology
Governing Law: Arizona , View Arizona State Laws
Effective Date: January 14, 1997
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IRIDIUM(R)



COMMUNICATIONS SYSTEM

OPERATIONS AND MAINTENANCE



IRIDIUM LLC







CONTRACT EFFECTIVE DATE: JULY 29, 1993 (CONFORMED 1/14/97 TO INCLUDE AMENDMENTS 1, 2, 3, 4, 5 AND 6)



IRIDIUM IS A REGISTERED TRADEMARK AND SERVICE MARK OF IRIDIUM LLC









TABLE OF CONTENTS TITLE PAGE

- ----- ----

RECITALS. 1

ARTICLE 1. DEFINITIONS. 2

ARTICLE 2. DESCRIPTION OF WORK. 3

ARTICLE 3. PERFORMANCE SCHEDULE. 4

ARTICLE 4. CONTRACTOR'S COMPENSATION. 4

ARTICLE 5. PAYMENT. 6

ARTICLE 6. TITLE TRANSFER. 6

ARTICLE 7. CHANGES. 6

ARTICLE 8. EXCUSABLE DELAYS. 7

ARTICLE 9. OWNER'S ACCESS. 7

ARTICLE 10. REPORTS. 8

ARTICLE 11. INTELLECTUAL PROPERTY RIGHTS. 8

ARTICLE 12. PATENT INDEMNITY. 9

ARTICLE 13. WARRANTY. 11

ARTICLE 14. TAXES. 11

ARTICLE 15 PERMITS AND LICENSES. 11

ARTICLE 16. CROSS WAIVER OF LIABILITY. 13

ARTICLE 17. INDEMNIFICATION. 14

ARTICLE 18. INSURANCE. 15

ARTICLE 19. EXPORT REGULATIONS. 15

ARTICLE 20. DEFAULT BY CONTRACTOR. 15

ARTICLE 21. DEFAULT BY OWNER. 17

ARTICLE 22. EXTENSION TO CONTRACT. 18

ARTICLE 23. TERMINATION OF SPACE SYSTEM CONTRACT. 18

ARTICLE 24. NEXT GENERATION SPACE SYSTEM. 18

ARTICLE 25. LIMITATION OF LIABILITY. 18

ARTICLE 26. DISCLOSURE AND USE OF INFORMATION BY THE PARTIES. 18

ARTICLE 27. PUBLIC RELEASE OF INFORMATION. 19

ARTICLE 28. ASSIGNMENT. 20

ARTICLE 29. RELATIONSHIP WITH OTHER AGREEMENTS. 20

ARTICLE 30. NOTICES. 20

ARTICLE 31. AUTHORIZED REPRESENTATIVES. 21

ARTICLE 32. EXHIBITS. 21

ARTICLE 33. ORDER OF PRECEDENCE. 21

ARTICLE 34. APPLICABLE LAW. 21

ARTICLE 35. ENTIRE AGREEMENT. 22

ARTICLE 36. EFFECTIVE DATE. 22



EXHIBIT A STATEMENT OF WORK



IRIDIUM Operations and Maintenance Contract





IRIDIUM OPERATIONS AND MAINTENANCE CONTRACT



THIS CONTRACT is hereby made between Motorola, Inc. (hereinafter called "Motorola" or "Contractor") a corporation organized under the laws of the State of Delaware, U.S.A., and Iridium, Inc. (hereinafter called "Owner"), a corporation organized under the laws of the State of Delaware, U.S.A. The Effective Date of this Contract is the date specified in ARTICLE 36, EFFECTIVE DATE.





A. On June 26, 1990, Motorola formally announced that it intended to

develop a global communication system that would allow communication

via portable radio telephones anywhere on Earth -- whether on land, at

sea or in the air. The new system, known as IRIDIUM(R), has at the

heart of its operation, a constellation of nominally sixty-six (66)

satellites in low-earth orbit working together as a digitally-switched

communications Space System in space. The system is intended to handle

both voice and data. One or more ground-based spacecraft control

facilities will maintain the satellite constellation and overall

operation of the system.



B. A key component of the IRIDIUM Communications System will be a Space

System of "gateway" surface facilities in various countries that will

link the satellites with the public-switched telephone network. These

gateways will also store customer billing information and will keep

track of each user's location.



C. Other key components to the system are the Subscriber Units (ISUs) and

Mobile Exchange Units (MXUs).



D. On June 14, 1991 Motorola incorporated Iridium, Inc. to, among other

things, become the owner/operator of the Space System portion of the

IRIDIUM Communications System.



E. A Space System Contract has been or will be executed to function as

the mechanism whereby Motorola will sell to Iridium, Inc. the Space

System portion of the IRIDIUM Communications System.



F. Separate agreements between Iridium, Inc., Motorola, and/or other

appropriate parties will provide for the production and sale of the

Gateways, Subscriber Units, MXUs, and other components of the IRIDIUM

Communications System. Neither this Contract nor the Space System

Contract include the development, sale, operation or maintenance of

the Gateways of the IRIDIUM Communications System.



G. This contract is intended to function as the vehicle whereby Motorola

will operate or direct the operation of the entire IRIDIUM

Communications System, and will maintain the Space System itself by the

routine replacement of individual space vehicles.





CONFORMED 1/14/97











IRIDIUM Operations and Maintenance Contract





ARTICLE 1. DEFINITIONS



Capitalized terms and the terms specified below used and not otherwise defined herein shall have the following meanings:



A. Constellation or Space Segment: That part of the IRIDIUM

Communications System consisting solely of the space vehicles (also

referred to as spacecrafts or satellites) in low-earth orbit. It does

not include the System Control Segment, Gateways, ISUs, MXUs or other

components necessary for complete utilization of the IRIDIUM

Communications System.



B. Gateway: The Gateways encompass the ground-based facilities

constructed in accordance with the Gateway Interface Specification

supporting the subscriber billing/information functions in addition to

call processing operations and the connection of the IRIDIUM

subscriber communications through the Public Switched Telephone

Network (PSTN).



C. Gateway Interface Specification: The functional specification that

defines the radio frequency interface, logical and physical protocols,

and functionality necessary for Gateway interoperability with the

Space System. It does not include the voice encoding algorithm

necessary for complete interoperability with the IRIDIUM

Communications System.



D. IRIDIUM Communications Service: The telephony of voice and data

service between subscribers and PSTN customers and the paging service

to subscribers provided by IRIDIUM Communications Systems.



E. IRIDIUM Communications System (or simply "IRIDIUM"): The complete

integrated satellite- based digitally-switched communication system.

This term refers collectively to the Space Segment, System Control

Segment, Gateways and Subscriber Unit Segment.



F. Mobile Exchange Units (MXUs): The equipment designed to interconnect

multiple voice or data channels to the IRIDIUM Communications System

using the subscriber unit radio frequency interface to the Space



G. Paging Unit Interface Specification: The functional specification

that defines the radio frequency interface, logical and physical

protocols and paging unit functionality necessary for paging unit

interoperability with the Space System.



H. Satellite Subscriber Unit (Voice) Interface Specification: The radio

frequency interface, logical and physical protocols, and unit

functionality necessary for subscriber unit (voice) interoperability

with the Space System. It does not include the voice encoding

algorithm necessary for complete interoperability with the IRIDIUM

Communications System.



I. Space System Operations Plan: Documentation developed under the Space

System Contract that details the functional operation of the Space

System. It also



CONFORMED 1/14/97











IRIDIUM Operations and Maintenance Contract





describes the functional operation of the entire IRIDIUM

Communications System.

J. Space System: The term refers to the integrated combination of the

Space Segment and System Control Segment.



K. Space Vehicles: The terms "space vehicle", "satellite", or

"spacecraft" all have the same meaning throughout this contract and

refer to the individual or multiple satellites of the Constellation.



L. Spare Space Vehicle: A space vehicle built by Contractor to

substantially the same performance specifications as those Space

Vehicles built under the Space System Contract. Such Spare Space

Vehicles are intended to be used by Contractor to replace space

vehicles of the Constellation in accordance with its obligations under

this contract. Contractor may store such Spare Space Vehicles on the

ground or may launch one or more of them into an orbit below the orbit

of the Constellation (i.e. a storage orbit) for later insertion into

the Constellation.



M. Subscriber Unit Segment: The Subscriber Unit Segment refers

collectively to the individual equipment units to be used by

subscribers and capable of initiating and receiving communications

through the IRIDIUM Communications System. These may include for

example hand-held portable units, aircraft units, marine units,

portable office units, and pay phone units. As used herein, this term

also includes paging units.



N. System Control Segment (SCS): This term refers to the various

ground-based sites, equipment, and facilities to manage and control

the individual space vehicles of the Constellation, and the

communication links of the IRIDIUM Communications System. The System

Control Segment is composed of a Master Control Facility, a Backup

Control Facility, and associated Telemetry, Tracking and Command

Facilities (TTAC's).



O. ODN: A communications link, separate from the Space System and the

Constellation, which is solely between and among the MCF and the

Gateway Equipment, and which is sufficient for the transmission of

network management data between the MCF and the Gateway Equipment and

message delivery requests from the MOC to the MTC. Backup link

capabilities will be provided to the backup location(s) for the

Network Management and MTC functions. The ODN shall not include

intra-SCS communications, nor the transmission of IRIDIUM subscriber

data and fax transmissions. The ODN under this Contract is the same

communications link described under the same term in the Terrestrial

Network Development Contract between Contractor and Owner.



P. Gateway Equipment: The hardware and software for the IRIDIUM Gateway

necessary to perform the functions specified in Section 3.1 of Exhibit

A of the Terrestrial Network Development Contract.







CONFORMED 1/14/97











IRIDIUM Operations and Maintenance Contract





Q. Initial GEPAs: GEPAs for the installation of Gateway Equipment for

the following IRIDIUM Investors, provided the installation of such

Gateway Equipment is scheduled to occur prior to the Commercial

Activation Date:



1. Iridium U.S., L.P.



2. Iridium SudAmerica



3. Nippon Iridium Corp.



4. United Communication Industry Public Company Limited

[Thai Satellite Telecommunications Co., Ltd.]



5. Pacific Communications Co., Ltd. - #1 [Taiwan]



6. Pacific Communications Co., Ltd. - #2 [Indonesia]



7. Iridium Services Deutschland and STET



8. Khrunichev State Research and Production Space Center



9. Iridium China (Hong Kong), Ltd.



10. Iridium India Telecom, Ltd.



11. Korea Mobile Telecommunications Corp.



R. GEPA: A Gateway Equipment Purchase Agreement between Motorola and a

gateway equipment purchaser.



ARTICLE 2. DESCRIPTION OF WORK.



A. Contractor shall provide the necessary labor to operate the System

Control Segment facilities as specified by the Space System Operations

Plan to control the space vehicles of the Constellation and the

day-to-day Space System management for the entire IRIDIUM

Communications System. Such Space System management functions include

the monitoring of the Space System interface of the Space System with

the Gateways, Subscriber Units, Paging Units and Mobile Exchange Units

(MXUs).







CONFORMED 1/14/97











IRIDIUM Operations and Maintenance Contract





B. Contractor shall exert its best efforts to monitor, upgrade and

replace, the hardware and software of the Space System (including the

individual space vehicles) as necessary to maintain it at a quarterly

Average Actual Service Provided (AASP) coverage factor and capacity

factor of no less than 98.0%. The AASP shall be calculated pursuant

to Exhibit A hereto. However, if the Space System Contract is

completed and accepted by Owner at an AASP coverage or capacity factor

of less than 98.0%, the most recent AASP coverage factor and capacity

factor computed by Contractor preceding such completion and acceptance

shall apply to this contract for the first complete quarterly period

(and any initial partial quarterly period). This activity shall

additionally include the routine updating of the Space System

Operations Plan as specified by Exhibit A hereto.



C. Space vehicles lost or damaged by the acts of third parties during the

five (5) year period of this contract shall be replaced by Contractor

in accordance with Paragraph D of ARTICLE 4, CONTRACTORS COMPENSATION,

of this Contract.



D. (1) ODN Connectivity:



Motorola shall manage and provide for the Operations and Maintenance

of the Operations Data Network (ODN), a frame relay network separate

from the Space System and the Constellation, which links the Gateways

and the MCF, and provides backup links to the BCF, or to other backup

sites at which the Network Management Function and the redundant MTC

may be located. The ODN shall include links and capacity as designated

by Iridium LLC for IBSS requirements, including connectivity of

remotely located GBS installations. Availability of the ODN shall be

consistent with the requirements for reliable delivery of the traffic

carried, and Motorola and Iridium shall periodically review ODN

performance data and make adjustments, if required, as mutually



(2) ODN Capacity, Traffic Allocation and Cost Allocation



Initial Capacity:



Initially, Motorola shall provide a 64 KBPS link between the frame

relay network and each gateway and a 256KBPS link between the frame

relay network and the MCF. Sizing of the link to the BCF, or to other

backup sites at which the Network Management Function and the

redundant MTC may be located shall be sufficient to accommodate the

equivalent traffic as would be carried by the link to the MCF. In

addition, Motorola shall provide links to remotely located GBS sites,

as designated by Iridium LLC. Such remote site designations and the

initial capacity of each link shall be communicated to Motorola by

Iridium LLC by a mutually agreeable date consistent with commercial

and operational needs.







CONFORMED 1/14/97











IRIDIUM Operations and Maintenance Contract





Anticipated Traffic:



Traffic (data) to be transported by the ODN includes:



- Motorola responsible network management data between the MCF and the

Gateways and message delivery requests from the MOC to the MTC.



- Iridium LLC responsible Call Detail Record traffic among GBS

(whether colocated with the gateway or remotely located), Gateway and

IBS (whether colocated with MCF or remotely located).



Network management and performance data will be shared between

Motorola and Iridium LLC in order to jointly plan network capacity

allocations and adjustments.



Cost Allocation:



Motorola shall procure and manage the configuration, operation and

maintenance of the entire ODN. Iridium LLC will reimburse Motorola for

the following costs:



- Non-recurring installation charges and recurring operating costs for

links with GBS



installations remote from the Gateways and IBS installations remote

from the MCF.



- Non-recurring installation charges and recurring operating costs for

the IBSS traffic and associated links beyond the cost of the initially

installed capacity as described above.



Each party has first rights to capacity it acquires for its respective traffic. To the extent spare link capacity exists, Motorola and Iridium agree to share such spare capacity in order to achieve more efficient use of installed capacity and to minimize unnecessary expansions.



ARTICLE 3. PERFORMANCE SCHEDULE.



Contractor shall immediately commence all appropriate preparations in order for it to be responsible for the performance of all of the work described in ARTICLE 2, DESCRIPTION OF WORK, immediately upon completion of the final milestone of the Space System Contract. Such effort shall continue thereafter for a period of five (5) years after the completion of the final milest o ne of the Space System Contract. Both Owner and Contractor recognize the Contractor may need to hire and train personnel, order materials from suppliers, produce Spare Space Vehicles, and, in the event Contractor utilizes an on-orbit sparing approach, to launch such Spare Space Vehicles, all prior to completion of the Space System Contract.







CONFORMED 1/14/97











IRIDIUM Operations and Maintenance Contract





Contractor hereby grants to Owner the Option to extend this Contract for eight calendar quarters beyond the five-year period of this Contract. Such Option must be unconditionally exercised by Owner by delivering a written notice to Contractor no later tha n the last day of the 20th month after the start of the five year period of this Contract. In the event Owner exercises this Option, during such additional eight calendar quarters, Owner will pay Contractor the applicable quarterly payments determined from the table in paragraph A of Article 4, "CONTRACTOR'S COMPENSATION."



CONFORMED 1/14/97











IRIDIUM Operations and Maintenance Contract





ARTICLE 4. CONTRACTOR'S COMPENSATION.



A. During each of the twenty (20) calendar quarters of the five (5) years

of this Contract, Owner shall pay Contractor quarterly payments as

determined from the table below.





PAYMENT (U.S.)

Year Per Calendar Quarter*

---- --------------------

1998 $129,360,000

1999 $134,360,000

2000 $139,360,000

2001 $145,360,000

2002 $151,360,000

2003 $157,748,000

2004 $164,762,000

2005 $171,777,000

2006 $178,794,000



*Although the parties anticipate that the five year period of this Contract will commence at the beginning of the fourth quarter of 1998 the actual date cannot be determined at this time, but will be the day of the acceptance of the final milestone of the Space System under the Space System Contract. The quarterly periods will be January through March, April through June, July through September, and, October through December. The quarterly payment of the first period shall be prorated against the applicabl e quarterly period and be based upon the actual number of days remaining in the quarter from and including the day of final acceptance of the Space System under the Space System Contract compared to the total number of days in the quarter. The quarterly pa y ment for the final period of the five year duration of this contract shall be prorated based upon the actual number of days covered in the final quarter up to and including the last day of the fifth year compared to the total number of days in the quarter . Notwithstanding the foregoing, in the event the completion of the Space System Contract and, therefore, the commencement of the five year period of this Contract is delayed for more than six (6) months for any reason other than causes within the reasonab le control of Contractor, the quarterly payments specified in Paragraph A above shall be adjusted to account for any additional costs incurred by Contractor.



Nineteen (19) months after the commencement of this Contract, Contractor will evaluate its relativ e risks and cost experience on the Contract to date and will consider as appropriate a possible downward only price adjustment to the quarterly prices stated herein. Any such price adjustment will be based upon Contractor's sole and absolute discrition.





CONFORMED 1/14/97











IRIDIUM Operations and Maintenance Contract





B. Upon termination of this Contract prior to its expiration, as a result

of the termination of the Space System Contract prior to completion of

its final milestone for the convenience of Owner, Owner shall

immediately pay Contractor:



1. the sum of $46,000,000 (U.S.) for each Spare Space Vehicle

then located in a low-earth storage orbit; and



2. the sum of $31,000,000 (U.S.) for each Spare Space Vehicle

not yet launched; and,



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