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EXHIBIT 1.1
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DRAFT 6/3/97
IRIDIUM WORLD COMMUNICATIONS LTD.
(a Bermuda company)
8,000,000 Shares of Class A Common Stock
U.S. PURCHASE AGREEMENT
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Dated: ________, 1997
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TABLE OF CONTENTS
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U.S. PURCHASE AGREEMENT...........................................................................................1
SECTION 1. Representations and Warranties.............................................................4
(a) Representations and Warranties by the Company and Iridium.........................................4
(i) Compliance with Registration Requirements............................................4
(ii) Independent Accountants..............................................................5
(iii) Financial Statements.................................................................5
(iv) No Material Adverse Change in Business...............................................6
(v) Good Standing of the Company and Iridium.............................................6
(vi) No Significant Subsidiary............................................................6
(vii) Capitalization.......................................................................7
(viii) Authorization of Agreement...........................................................7
(ix) Authorization and Description of Securities..........................................7
(x) Absence of Defaults and Conflicts....................................................8
(xi) Absence of Labor Dispute.............................................................9
(xii) Absence of Proceedings...............................................................9
(xiii) Accuracy of Exhibits.................................................................9
(xiv) Possession of Intellectual Property..................................................9
(xv) Absence of Further Requirements.....................................................10
(xvi) Possession of Licenses and Permits..................................................10
(xvii) Title to Property...................................................................10
(xviii) Compliance with Cuba Act............................................................11
(xix) Investment Company Act..............................................................11
(xx) Environmental Laws..................................................................11
(xxi) Registration Rights.................................................................11
(xxii) Principal Agreements................................................................12
(xxiii) Governance Agreements...............................................................12
(xxiv) FCC License.........................................................................13
(xxv) Forward Looking Statements..........................................................13
(xxvi) Certain Descriptions................................................................13
(xxvii) Accounting Controls.................................................................13
(b) Officers' Certificates..............................................................14
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing...........................................14
(a) Initial Securities...............................................................................14
(b) Option Securities................................................................................14
(c) Payment..........................................................................................15
(d) Denominations; Registration......................................................................15
SECTION 3. Covenants of the Company..................................................................16
(a) Compliance with Securities Regulations and Commission Requests...................................16
(b) Filing of Amendments.............................................................................16
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(c) Delivery of Registration Statements..............................................................16
(d) Delivery of Prospectuses.........................................................................17
(e) Continued Compliance with Securities Laws........................................................17
(f) Blue Sky Qualifications..........................................................................17
(g) Rule 158.........................................................................................18
(h) Use of Proceeds..................................................................................18
(i) Listing..........................................................................................18
(j) Restriction on Sale of Securities................................................................18
(k) Reporting Requirements...........................................................................19
(l) Compliance with NASD Rules.......................................................................19
(m) Compliance with Rule 463.........................................................................19
(n) Exchange Agreement...............................................................................19
SECTION 4. Covenants of Iridium......................................................................19
(a) Exchange Agreement...............................................................................19
(b) Use of Proceeds..................................................................................19
SECTION 5. Payment of Expenses.......................................................................20
(a) Expenses.........................................................................................20
(b) Termination of Agreement.........................................................................20
SECTION 6. Conditions of U.S. Underwriters' Obligations..............................................21
(a) Effectiveness of Registration Statement..........................................................21
(b) Letter and Opinion of Counsel for the Company and Iridium........................................21
(c) Opinion of Bermuda Counsel for the Company.......................................................21
(d) Opinion of Regulatory Counsel for Motorola Satellite Communications, Inc.........................21
(e) Opinion of Assistant Secretary of the Company and General Counsel of Iridium.....................21
(f) Opinion of Counsel for U.S. Underwriters.........................................................22
(g) Opinion of Regulatory Counsel for the U.S. Underwriters..........................................22
(h) Officers' Certificates...........................................................................22
(i) Accountant's Comfort Letter......................................................................22
(j) Bring-down Comfort Letter........................................................................23
(k) Approval of Listing..............................................................................23
(l) No Objection.....................................................................................23
(m) Motorola Certificate.............................................................................23
(n) Purchase of Initial International Securities.....................................................23
(o) Conditions to Purchase of U.S. Option Securities.................................................23
(p) Transactions.....................................................................................24
(q) Additional Documents.............................................................................24
(r) Termination of Agreement.........................................................................24
(s) Lock-up Agreements...............................................................................25
SECTION 7. Indemnification...........................................................................26
(a) Indemnification of U.S. Underwriters.............................................................26
(b) Indemnification of Company, Iridium, Directors and Officers......................................27
(c) Actions against Parties; Notification............................................................27
(d) Settlement without Consent if Failure to Reimburse...............................................28
(e) Indemnification for Reserved Securities..........................................................28
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SECTION 8. Contribution..............................................................................29
SECTION 9. Representations, Warranties and Agreements to Survive Delivery............................30
SECTION 10. Termination of Agreement..................................................................30
(a) Termination; General.............................................................................30
(b) Liabilities......................................................................................31
SECTION 11. Default by One or More of the U.S. Underwriters...........................................31
SECTION 12. Notices...................................................................................32
SECTION 13. Parties...................................................................................32
SECTION 14 Governing Law and Time....................................................................32
SECTION 15 Effect of Headings........................................................................32
SCHEDULES
SCHEDULE A - LIST OF UNDERWRITERS.........................................................SCH A-1
SCHEDULE B - PRICING INFORMATION..........................................................SCH B-1
SCHEDULE C - PERSONS SUBJECT TO LOCK-UP.................................................SCH C - 1
EXHIBITS
EXHIBIT A-1 - FORM OF OPINION OF COMPANY'S AND
IRIDIUM'S COUNSEL......................................................A-1
EXHIBIT A-2 - FORM OF OPINION OF COMPANY'S
BERMUDA COUNSEL........................................................A-4
EXHIBIT A-3 - FORM OF OPINION OF REGULATORY COUNSEL
FOR MOTOROLA SATELLITE COMMUNICATIONS, INC.............................A-7
EXHIBIT A-4 - FORM OF OPINION OF ASSISTANT
SECRETARY AND GENERAL COUNSEL..........................................A-8
EXHIBIT B - FORM OF MOTOROLA CERTIFICATE.....................................................B-1
EXHIBIT C - FORM OF LOCK-UP AGREEMENT........................................................C-1
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Draft of June 3, 1997
IRIDIUM WORLD COMMUNICATIONS LTD.
(a Bermuda company)
8,000,000 Shares of Class A Common Stock
(Par Value $.01 Per Share)
U.S. PURCHASE AGREEMENT
________, 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation
▇▇▇▇▇▇▇, Sachs & Co.
as U.S. Representatives of the several U.S. Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Each of Iridium World Communications Ltd., a Bermuda company (the
"Company"), and Iridium LLC, a Delaware limited liability company ("Iridium"),
confirms its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇
& ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of the other U.S. Underwriters
named in Schedule A hereto (collectively, the "U.S. Underwriters," which term
shall also include any underwriter substituted as hereinafter provided in
Section 11 hereof), for whom ▇▇▇▇▇▇▇ Lynch, Donaldson, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation and ▇▇▇▇▇▇▇, Sachs & Co. are acting as representatives
(in such capacity, the "U.S. Representatives"), with respect to the issue and
sale by the Company and the purchase by the U.S. Underwriters, acting severally
and not jointly, of the respective numbers of shares of Class A Common Stock,
par value $.01 per share, of the Company ("Class A Common Stock") set forth in
said Schedule A, and with respect to the grant by the Company to the U.S.
Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of 1,200,000 additional shares
of Class A Common Stock to cover over-allotments, if any. The aforesaid
8,000,000 shares of Class A Common Stock (the "Initial U.S. Securities") to
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be purchased by the U.S. Underwriters and all or any part of the 1,200,000
shares of Class A Common Stock subject to the option described in Section 2(b)
hereof (the "U.S. Option Securities") are hereinafter called, collectively, the
"U.S. Securities."
It is understood that each of the Company and Iridium is concurrently
entering into an agreement dated the date hereof (the "International Purchase
Agreement") providing for the offering by the Company of an aggregate of
2,000,000 shares of Class A Common Stock (the "Initial International
Securities") through arrangements with certain underwriters outside the United
States and Canada (the "International Managers") for which ▇▇▇▇▇▇▇ ▇▇▇▇▇
International, ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation and ▇▇▇▇▇▇▇
Sachs International are acting as lead managers (the "Lead Managers") and the
grant by the Company to the International Managers, acting severally and not
jointly, of an option to purchase all or any part of each International
Manager's pro rata portion of up to 300,000 additional shares of Class A Common
Stock solely to cover overallotments, if any (the "International Option
Securities" and, together with the U.S. Option Securities, the "Option
Securities"). The Initial International Securities and the International Option
Securities are hereinafter called, collectively the "International Securities."
It is understood that the Company is not obligated to sell and the U.S.
Underwriters are not obligated to purchase, any Initial U.S. Securities unless
all of the Initial International Securities are contemporaneously purchased by
the International Managers.
The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters," the Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities," and the U.S. Securities, and the International Securities
are hereinafter collectively called the "Securities."
The Underwriters are concurrently entering into an Intersyndicate
Agreement of even date herewith (the "Intersyndicate Agreement") providing for
the coordination of certain transactions among the Underwriters under the
direction of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated (in such capacity, the "Global Coordinator").
The Company understands that the U.S. Underwriters propose to make a
public offering of the U.S. Securities as soon as the U.S. Representatives deem
advisable after this Agreement has been executed and delivered.
The Company and the U.S. Underwriters agree that up to 1,000,000
shares of the Initial U.S. Securities to be purchased by the U.S. Underwriters
(the "Reserved Securities") shall be reserved for sale by the Underwriters to
eligible employees of the Company and Iridium and persons having business
relationships with Iridium, as part of the distribution of the Securities by
the Underwriters, subject to the terms of this Agreement, the applicable rules,
regulations and interpretations of the National Association of Securities
Dealers, Inc. and all other applicable laws, rules and regulations. To the
extent that such Reserved Securities are not orally confirmed for purchase by
such eligible employees of the Company and Iridium and persons having business
relationships with Iridium by the end of the first business day after the date
of this Agreement, such Reserved Securities may be offered to the public as
part of the public offering contemplated hereby. Offers and sales of Reserved
Securities to eligible employees of the
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Company and Iridium and persons having business relationships with Iridium in
the Province of Quebec, Canada will be effected by the U.S. Underwriters or
their affiliates at the request of and as agent of the Company pursuant to
prospectus exemption available in Quebec.
The Company and Iridium have entered into (i) an Interest Exchange
Agreement (the "Exchange Agreement"), (ii) a 1997 Subscription Agreement (the
"1997 Subscription Agreement"), (iii) a Share Issuance Agreement (the "Share
Issuance Agreement") and (iv) a Management Services Agreement (the "Management
Services Agreement" and, collectively with the Exchange Agreement, the 1997
Subscription Agreement, the Share Issuance Agreement and the LLC Agreement (as
defined below), the "Governance Agreements"). On or prior to the Closing Time
(as defined below), (A) pursuant to an amendment to the LLC Agreement, each
Class 1 Membership Interest in Iridium (each a "Class 1 Interest") shall be
subdivided into 75 Class 1 Interests and each warrant and option to purchase
Class 1 Interests, and the conversion price of each limited liability company
interest in Iridium that is or may become convertible into or exchangeable for
Class 1 Interests, shall be adjusted accordingly, (B) Iridium shall issue and
sell to the Company and the Company shall purchase from Iridium Class 1
Interests under the 1997 Subscription Agreement with the proceeds from the
issuance and sale of the Securities as contemplated by this Agreement, the
International Purchase Agreement and the Registration Statement (as defined
below) and (C) the Company shall be admitted as a member of Iridium
(collectively, the "Transactions").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-23419) covering the
registration of the Securities under the Securities Act of 1933, as amended
(the "1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will
either (i) prepare and file a prospectus in accordance with the provisions of
Rule 430A ("Rule 430A") of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule
424(b)") of the 1933 Act Regulations or (ii) if the Company has elected to rely
upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term
sheet (a "Term Sheet") in accordance with the provisions of Rule 434 and Rule
424(b). Two forms of prospectus are to be used in connection with the offering
and sale of the Securities: one relating to the U.S. Securities (the "Form of
U.S. Prospectus") and one relating to the International Securities (the "Form
of International Prospectus"). The Form of International Prospectus is
identical to the Form of U.S. Prospectus, except for the front cover and back
cover pages and the information under the caption "Underwriting." The
information included in any such prospectus or in any such Term Sheet, as the
case may be, that was omitted from such registration statement at the time it
became effective but that is deemed to be part of such registration statement
at the time it became effective (a) pursuant to paragraph (b) of Rule 430A is
referred to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule
434 is referred to as "Rule 434 Information." Each Form of U.S. Prospectus and
Form of International Prospectus used before such registration statement became
effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, is herein called a
"preliminary prospectus." Such registration statement, including the exhibits
thereto and schedules thereto at the time it became effective and including
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the Rule 430A Information and the Rule 434 Information, as applicable, is
herein called the "Registration Statement." Any registration statement filed
pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred to as
the "Rule 462(b) Registration Statement," and after such filing the term
"Registration Statement" shall include the Rule 462(b) Registration Statement.
The final Form of U.S. Prospectus and the final Form of International
Prospectus in the forms first furnished to the Underwriters for use in
connection with the offering of the Securities are herein called the "U.S.
Prospectus" and the "International Prospectus," respectively, and collectively,
the "Prospectuses." If Rule 434 is relied on, the terms "U.S. Prospectus" and
"International Prospectus" shall refer to the preliminary U.S. Prospectus dated
May 9, 1997 and preliminary International Prospectus dated May 9, 1997,
respectively, each together with the applicable Term Sheet and all references
in this Agreement to the date of such Prospectuses shall mean the date of the
applicable Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the U.S. Prospectus, the
International Prospectus or any Term Sheet or any amendment or supplement to
any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("▇▇▇▇▇").
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company and Iridium. Each of
the Company and Iridium jointly and severally represents and warrants to each
U.S. Underwriter as of the date hereof, as of the Closing Time referred to in
Section 2(c) hereof, and as of each Date of Delivery (if any) referred to in
Section 2(b), hereof and agrees with each U.S. Underwriter, as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or,
to the knowledge of the Company or Iridium, are contemplated by the
Commission, and any request on the part of the Commission for
additional information has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments
thereto became effective and at the Closing Time (and, if any U.S.
Option Securities are purchased, at the Date of Delivery), the
Registration Statement, the Rule 462(b) Registration Statement and any
post-effective amendments and supplements thereto complied and will
comply in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations and did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and the Prospectuses, any preliminary
prospectuses and any supplement thereto or prospectus wrapper prepared
in connection therewith, at their respective times of issuance and at
the Closing Time, complied and will comply in all material respects
with any applicable laws or regulations of foreign jurisdictions in
which the Prospectuses and such preliminary
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prospectuses, as amended or supplemented, if applicable, are
distributed in connection with the offer and sale of Reserved
Securities. Neither of the Prospectuses nor any amendments or
supplements thereto (including any prospectus wrapper), at the time
the Prospectuses or any amendments or supplements thereto were issued
and at the Closing Time (and, if any U.S. Option Securities are
purchased, at the Date of Delivery), included or will include an
untrue statement of a material fact or omitted or will omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. If Rule 434 is used, the Company will comply with the
requirements of Rule 434 and the Prospectuses shall not be "materially
different," as such term is used in Rule 434, from the prospectuses
included in the Registration Statement at the time it became
effective.
Each preliminary prospectus and the prospectuses filed as
part of the Registration Statement as originally filed or as part of
any amendment thereto, or filed pursuant to Rule 424 under the 1933
Act, complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectuses
delivered to the Underwriters for use in connection with this offering
was identical in all material respects to the electronically
transmitted copies thereof filed with the Commission pursuant to
▇▇▇▇▇, except to the extent permitted by Regulation S-T. The
representations and warranties in this subsection (a)(i) shall not
apply to statements in or omissions from the Registration Statement or
the U.S. Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any U.S.
Underwriter through the U.S. Representatives expressly for use in the
Registration Statement or the U.S. Prospectus.
(ii) Independent Accountants. The accountants who
certified the financial statement and the consolidated financial
statements included in the Registration Statement are independent
public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(iii) Financial Statements. The financial statement and the
consolidated financial statements included in the Registration
Statement and the Prospectuses, together with the related notes,
present fairly the financial position of the Company, Iridium,
Iridium's predecessor and their respective consolidated subsidiaries
at the dates indicated and the statement of operations, stockholders'
equity, members' equity and cash flows of the Company, Iridium,
Iridium's predecessor and their respective consolidated subsidiaries
for the periods specified; said financial statement and the
consolidated financial statements have been prepared in conformity
with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved, except, in the case
of the interim financial statements, for the absence of complete
footnote disclosure and customary year-end adjustments. The selected
financial data included in the Prospectuses present fairly the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statement and the consolidated
financial statements included in the Registration Statement.
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(iv) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectuses, except for the matters disclosed in
the Registration Statement, (A) there has been no material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company or Iridium,
whether or not arising in the ordinary course of business (a "Material
Adverse Effect"), (B) there have been no transactions entered into by
the Company or Iridium, other than those in the ordinary course of
business, which are material with respect to the Company or Iridium,
and (C) except for quarterly, in-kind dividends on the Series A Class
2 Interests in Iridium (the "Series A Interests") in amounts per
Series A Interest that are consistent with the terms of the Series A
Interests and the Limited Liability Company Agreement of Iridium LLC,
dated as of July 29, 1996, as amended as of the date hereof (the "LLC
Agreement"), there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock, or Iridium on any class or series of its limited liability
company interests (its "Interests").
(v) Good Standing of the Company and Iridium. The Company
has been duly incorporated and is validly existing as an exempted
company in good standing under the laws of Bermuda and has all
requisite power and authority to conduct its business as described in
the Prospectuses and to enter into and perform its obligations under
this Agreement; and the Company has been duly qualified as a foreign
company to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect.
Iridium has been duly formed and is an existing limited
liability company in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectuses and to enter into and perform its
obligations under this Agreement; and Iridium has been duly qualified
as a foreign limited liability company to transact business and is in
good standing in each other jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property
or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(vi) No Significant Subsidiary. Neither the Company
nor Iridium has any "significant subsidiary" as such term is defined
in Rule 1-02 of Regulation S-X.
(vii) Capitalization. The authorized, issued and outstanding
capital stock of the Company are as set forth in the Prospectuses in
the column entitled "Actual" under the caption "Capitalization--The
Company." The shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully
paid and non-assessable; none of the outstanding shares of capital
stock of the Company was
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issued in violation of the preemptive or other similar rights of any
securityholder of the Company.
The authorized, issued and outstanding Interests of Iridium
are as set forth in the Prospectuses in the column entitled "Actual"
under the caption "Capitalization--Iridium." The issued and
outstanding Interests of Iridium have been duly authorized and validly
issued and are fully paid and non-assessable (except as disclosed in
the Registration Statement under the captions "Description of Iridium
LLC Limited Liability Company Agreement--Limitations on Liability" and
"Description of Iridium LLC Limited Liability Company
Agreement--Capital Contributions; Reserve Capital Call"); none of the
outstanding Interests of Iridium was issued in violation of the
preemptive or other similar rights of any member of Iridium. Pursuant
to the LLC Agreement, and in accordance with the Delaware Limited
Liability Company Act (the "Delaware Act"), the Company has waived the
limitation on liability contained in the Delaware Act, provided that
the Company has no liability to any person, including Iridium, for any
debt, obligation or liability of Iridium until all of the assets and
capital of Iridium have first been exhausted in satisfaction thereof.
(viii) Authorization of Agreement. This Agreement and the
International Purchase Agreement have been duly authorized, executed
and delivered by each of the Company and Iridium.
(ix) Authorization and Description of Securities. The
Securities to be purchased by the U.S. Underwriters and the
International Managers from the Company have been duly authorized for
issuance and sale to the U.S. Underwriters pursuant to this Agreement
and the International Managers pursuant to the International Purchase
Agreement, respectively, and, when issued and delivered by the Company
pursuant to this Agreement and the International Purchase Agreement,
respectively, against payment of the consideration set forth herein
and in the International Purchase Agreement, respectively, will be
validly issued, fully paid and non-assessable; the Class A Common
Stock will conform in all material respects to the descriptions
thereof contained in the Prospectuses; upon full payment of the
consideration therefor no holder of the Securities will be subject to
personal liability by reason of being such a holder; and the issuance
of the Securities is not subject to the preemptive or other similar
rights of any securityholder of the Company.
The Class 1 Interests to be purchased by the Company from
Iridium have been duly authorized for issuance and sale to the Company
pursuant to the 1997 Subscription Agreement and, when issued and
delivered by Iridium pursuant to the 1997 Subscription Agreement
against payment of the consideration set forth therein, will be
validly issued, and (except as set forth in Section 2.09 of the LLC
Agreement) fully paid and non-assessable; such Class 1 Interests will
conform in all material respects to the descriptions thereof contained
in the Prospectuses and such descriptions conform to the rights set
forth in the instruments defining the same (except as disclosed in the
Prospectuses under the caption "Description of Iridium LLC Limited
Liability Company
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Agreement--Limitations on Liability"); except as described in the
Prospectuses under the caption "Description of Iridium LLC Limited
Liability Company Agreement--Limitations on Liability," no holder of
such Class 1 Interests will be subject to personal liability by reason
of being such a holder; and the issuance of the Class 1 Interests
pursuant to the 1997 Subscription Agreement is not subject to the
preemptive or other similar rights of any member of Iridium. Pursuant
to the LLC Agreement, and in accordance with the Delaware Act, the
Company has waived the limitation on liability contained in the
Delaware Act, provided that the Company has no liability to any
person, including Iridium, for any debt, obligation or liability of
Iridium until all of the assets and capital of Iridium have first been
exhausted in satisfaction thereof.
(x) Absence of Defaults and Conflicts. Neither the Company
nor Iridium is in violation of its memorandum of association,
bye-laws, certificate of formation or limited liability company
agreement or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement (including the Governance
Agreements) or instrument to which the Company or Iridium is a party
or by which it or any of them may be bound, or to which any of the
property or assets of the Company or Iridium is subject (collectively,
"Agreements and Instruments") except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement and the International Purchase Agreement
and the consummation of the transactions contemplated in this
Agreement, the International Purchase Agreement, the Governance
Agreements and in the Registration Statement (including the issuance
and sale of the Securities and the use of the proceeds from the sale
of the Securities as described in the Prospectuses under the caption
"Use of Proceeds") and by the Transactions and compliance by each of
the Company and Iridium with its obligations under this Agreement, the
International Purchase Agreement and the Governance Agreements have
been duly authorized by all necessary corporate action and do not and
will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or Iridium pursuant to, the Agreements and
Instruments (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not result in a Material Adverse
Effect), nor will such action result in any violation of the
provisions of the memorandum of association, bye-laws, certificate of
formation or limited liability company agreement of the Company or
Iridium or any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or
Iridium or any of their assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition which gives
the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder's behalf) the right to require
the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or Iridium.
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13
(xi) Absence of Labor Dispute. No labor dispute with
the employees of the Company or Iridium exists or, to the knowledge of
the Company or Iridium, is imminent.
(xii) Absence of Proceedings. Except for matters which are
described in the Registration Statement, there is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company or Iridium, threatened, against or
affecting the Company or Iridium, which is required to be disclosed in
the Registration Statement, or which might reasonably be expected to
result in a Material Adverse Effect, or which might reasonably be
expected to materially and adversely affect the properties or assets
thereof or the consummation of the transactions contemplated in this
Agreement and the International Purchase Agreement or the Transactions
or the performance by, if determined adversely to the Company or
Iridium of its obligations hereunder or thereunder; all pending legal
or governmental proceedings to which the Company or Iridium is a party
or of which any of their respective property or assets is the subject
which are not described in the Registration Statement, including
ordinary routine litigation incidental to the business, would not
reasonably be expected to result in a Material Adverse Effect.
(xiii) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectuses or to be filed as exhibits thereto which
have not been described and filed as required.
(xiv) Possession of Intellectual Property. Except as
described in the Registration Statement or as would not have a
Material Adverse Effect, Iridium owns or possesses or reasonably
believes it can acquire on reasonable terms, adequate patents, patent
rights, licenses, inventions, copyrights (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures, but excluding any required
regulatory licenses or approvals), trademarks, service marks, trade
names or other intellectual property (collectively, "Intellectual
Property"), or that it can contract on reasonable terms with third
parties who can acquire the Intellectual Property necessary to carry
on the business now operated by Iridium or described in the
Registration Statement and neither the Company nor Iridium, has
received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any
Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or Iridium and which infringement or conflict
(if the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would result in
a Material Adverse Effect.
(xv) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company or
Iridium of its obligations hereunder, in connection with the offering,
issuance or sale of the Securities under this Agreement and the
International Purchase
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Agreement or the consummation of the transactions contemplated by this
Agreement and the International Purchase Agreement or by the
Transactions, except (i) such as have been already obtained or as may
be required under the 1933 Act or the 1933 Act Regulations and foreign
or state securities or blue sky laws and (ii) such as have been
obtained under the laws and regulations of jurisdictions outside the
United States in which the Reserved Securities are offered.
(xvi) Possession of Licenses and Permits. Except as
disclosed in the Registration Statement or as would not have a
Material Adverse Effect, (i) Iridium possesses such permits, licenses,
approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state,
local or foreign regulatory agencies or bodies necessary to conduct
the business now operated by Iridium and (ii) Iridium is in compliance
with the current terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or
in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except
where the invalidity of such Governmental Licenses or the failure of
such Governmental Licenses to be in full force and effect would not
have a Material Adverse Effect; and neither the Company nor Iridium
has received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect. This
representation does not extend to Governmental Licenses required for
Iridium to conduct its business as proposed to be conducted, most of
which have not been obtained.
(xvii) Title to Property. The Company owns no real property.
Iridium has good and marketable title to all real property it owns;
and the Company and Iridium have good title to all other properties
owned by them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances of any
kind except such as (a) are described in the Registration Statement or
(b) would not, singly or in the aggregate, reasonably be expected to
have a Material Adverse Effect; and all of the leases and subleases
material to the business of the Company and Iridium, considered as one
enterprise, and under which the Company and Iridium hold properties
described in the Prospectuses, are in full force and effect, and
neither the Company nor Iridium has any notice of any material claim
of any sort that has been asserted by anyone adverse to the rights of
the Company or Iridium under any of the leases or subleases mentioned
above, or affecting or questioning the rights of the Company or
Iridium to the continued possession of the leased or subleased
premises under any such lease or sublease, except such as would not
reasonably be expected to have a Material Adverse Effect.
(xviii) Compliance with Cuba Act. The Company has complied
with, and is and will be in compliance with, the provisions of that
certain Florida act relating to disclosure of doing business with
Cuba, codified as Section 517.075 of the Florida statutes, and the
rules and regulations thereunder (collectively, the "Cuba Act") or is
exempt therefrom.
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(xix) Investment Company Act. The Company believes that it
is not, and upon the issuance and sale of the Securities as herein
contemplated and the application of the net proceeds therefrom as
described in the Prospectuses, will not be, an "investment company" or
an entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940
Act").
(xx) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the
Company nor Iridium is in violation of any federal, state, local or
foreign statute, law, rule, regulation, ordinance, code, policy or
rule of common law or any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent,
decree or judgment, relating to pollution or protection of human
health, the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials")
or to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials
(collectively, "Environmental Laws"), (B) Iridium has all permits,
authorizations and approvals required under any applicable
Environmental Laws and is in compliance with its requirements, (C)
there are no pending or threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against Iridium and (D) there are no
events or circumstances that might reasonably be expected to form the
basis of an order for clean-up or remediation, or an action, suit or
proceeding by any private party or governmental body or agency,
against or affecting the Company or Iridium relating to Hazardous
Materials or any Environmental Laws.
(xxi) Registration Rights. There are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or, except as set
forth in the Registration Statement, otherwise registered by the
Company under the 1933 Act.
(xxii) Principal Agreements. Except as disclosed in the
Registration Statement and except as would not reasonably be expected
to have a Material Adverse Effect, to the best of the Company's and
Iridium's knowledge, none of the parties to (i) the Gateway
Authorization Agreements (as defined in the Prospectuses), (ii) the
Space System Contract (as defined in the Prospectuses), (iii) the
Operations and Maintenance Contract (as defined in the Prospectuses),
(iv) the Iridium Business Support System Contract with ▇▇▇▇▇▇▇▇
Consulting (the "IBSS Contract"), (v) the Terrestrial Network
Development Contract (as defined in the Prospectus), and (vi) the
Support Agreement between Iridium and Motorola (the "Support
Agreement") (collectively, the foregoing are herein called the
"Principal Agreements"), is in breach of, or in default in the
performance or observance of, any material obligation, term, covenant
or condition contained therein. Each of the Principal Agreements that
the Company has delivered to the U.S. Underwriters is a true
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and correct copy, and there have been no additional amendments,
alterations, modifications or waivers thereto or in the exhibits or
schedules thereto. Iridium has duly and validly authorized, executed
and delivered each of the Principal Agreements to which it is a party
and, to the best of the Company's and Iridium's knowledge, the other
parties to each of the Principal Agreements have duly and validly
executed and delivered each of the Principal Agreements and, assuming
due and valid authorization, execution and delivery by such other
parties, each of the Principal Agreements is a legally valid and
binding agreement of Iridium, enforceable against Iridium in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; provided that no representation or warranty is made with
respect to any provision of such agreement purporting to require
indemnification of, or contribution to, the liability losses, damages
or claims of any person to the extent that such provision may be
limited by applicable laws.
(xxiii) Governance Agreements. Neither the Company nor
Iridium, nor to the best knowledge of the Company and Iridium, any
other party to any of the Governance Agreements, is in breach of, or
in default in the performance or observance of, any material
obligation, term, covenant or condition contained in any of the
Governance Agreements. Each of the Governance Agreements that the
Company has delivered to the U.S. Underwriters is a true and correct
copy, and there have been no additional amendments, alterations,
modifications or waivers thereto or in the exhibits or schedules
thereto. Each of the Company and Iridium has duly and validly
authorized, executed and delivered each of the Governance Agreements
and, to the best of the Company's and Iridium's knowledge, the other
parties to each of the Governance Agreements have duly and validly
executed and delivered each of the Governance Agreements and, assuming
due and valid authorization, execution and delivery by such other
parties, each of the Governance Agreements is a legally valid and
binding agreement of the Company and Iridium, enforceable against the
Company and Iridium in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights
and to general equity principles; provided that no representation or
warranty is made with respect to any provision of such agreement
purporting to require indemnification of, or contribution to, the
liability losses, damages or claims of any person to the extent that
such provision may be limited by applicable laws.
(xxiv) FCC License. The Federal Communications Commission
(the "FCC") has authorized Motorola, Inc. (Motorola, Inc., together
with its subsidiaries, "Motorola") to construct a mobile satellite
system capable of operating in the 1616 to 1626.5 MHz frequency bands,
consistent with the technical specifications set forth in its
application, as modified, the FCC's rules and the conditions set forth
in the FCC's Orders and Authorization (DA 95-131, released January 31,
1995, DA 95-372, released February 28, 1995, FCC 96-279, released June
27, 1996, DA 96-1789, released October 30, 1996).
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(xxv) Forward Looking Statements. The statements (including
the assumptions described therein) included in the Registration
Statement and the Prospectuses relating to Iridium's operations,
expected markets, size of expected addressable markets for mobile
satellite services, expected technical capabilities, expected funding
needs, expected financing sources, expected pricing, expected launch
schedule, expected commercial operations schedule, the estimate of the
last year in which Iridium will have negative cash flow and a net
increase in year-end borrowings and expected future regulatory
approvals as well as information concerning expected characteristics
of competing systems and expected actions of third parties such as
equipment suppliers, gateway operators, service providers and roaming
partners were made by the Company with a reasonable basis and reflect
the Company's good faith estimate of the matters described therein.
(xxvi) Certain Descriptions. The statements set forth in the
Prospectuses under the captions "Governance of the Company and
Relationship with Iridium," "Description of Capital Stock" and
"Description of Iridium LLC Limited Liability Company Agreement,"
insofar as they purport to constitute a summary of the terms of the
Class A Common Stock and the Interests, as the case may be, and to
describe the provisions of the laws and documents referred to therein,
and under the captions "Risk Factors--Risks Associated with Licensing
and Spectrum Allocation," "Risk Factors--Risks Associated with
Principal Supply Contracts," "Principal Contracts for the Development
of the Iridium System," "Certain Relationships and Related
Transactions," "Tax Considerations" and "Underwriting," insofar as
they purport to describe the provisions of the laws and documents
referred to therein, are accurate, complete and fair in all material
respects.
(xxvii) Accounting Controls. The Company and Iridium maintain
a system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance
with management's general or specific authorization; (B) transactions
are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles
and to maintain accountability for assets; (C) access to assets is
permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(b) Officer's Certificates. Any certificate signed by any officer
of the Company or Iridium delivered to the Global Coordinator, the U.S.
Representatives or to counsel for the U.S. Underwriters shall be deemed a
representation and warranty by the Company and Iridium to each U.S. Underwriter
as to the matters covered thereby, but no personal liability therefor shall
attach to the officer providing any such certificate.
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to
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each U.S. Underwriter, severally and not jointly, and each U.S. Underwriter,
severally and not jointly, agrees to purchase from the Company, at the price
per share set forth in Schedule B, the number of Initial U.S. Securities set
forth in Schedule A opposite the name of such U.S. Underwriter, plus any
additional number of Initial U.S. Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 11 hereof.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the U.S.
Underwriters, severally and not jointly, to purchase up to an additional
1,200,000 shares of Class A Common Stock at the price per share set forth in
Schedule B, less an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial U.S. Securities but not
payable on the U.S. Option Securities. The option hereby granted will expire 30
days after the date hereof and may be exercised in whole or in part from time
to time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial U.S. Securities
upon notice by the Global Coordinator to the Company and Iridium setting forth
the number of U.S. Option Securities as to which the several U.S. Underwriters
are then exercising the option and the time and date of payment and delivery
for such U.S. Option Securities. Any such time and date of delivery for the
U.S. Option Securities (a "Date of Delivery") shall be determined by the Global
Coordinator, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined. If the option is exercised as to all or any portion of the
U.S. Option Securities, each of the U.S. Underwriters, acting severally and not
jointly, will purchase that proportion of the total number of U.S. Option
Securities then being purchased which the number of Initial U.S. Securities set
forth in Schedule A opposite the name of such U.S. Underwriter bears to the
total number of Initial U.S. Securities, subject in each case to such
adjustments as the Global Coordinator in its discretion shall make to eliminate
any sales or purchases of fractional shares.
(c) Payment Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ or at
such other place as shall be agreed upon by the Global Coordinator and the
Company, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing
occurs after 4:30 P.M. (Eastern time) on any given day) business day after the
date hereof (unless postponed in accordance with the provisions of Section 11),
or such other time not later than ten business days after such date as shall be
agreed upon by the Global Coordinator and the Company (such time and date of
payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the U.S. Option
Securities are purchased by the U.S. Underwriters, payment of the purchase
price for, and delivery of certificates for, such U.S. Option Securities shall
be made at the above-mentioned offices, or at such other place as shall be
agreed upon by the Global Coordinator and the Company, on each Date of Delivery
as specified in the notice from the Global Coordinator to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery
to the U.S. Representatives for
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the respective accounts of the U.S. Underwriters of certificates for the U.S.
Securities to be purchased by them. It is understood that each U.S. Underwriter
has authorized the U.S. Representatives, for its account, to accept delivery
of, receipt for, and make payment of the purchase price for, the Initial U.S.
Securities and the U.S. Option Securities, if any, which it has agreed to
purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as representative of the U.S.
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial U.S. Securities or the U.S. Option Securities, if any, to
be purchased by any U.S. Underwriter whose funds have not been received by the
Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such U.S. Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial U.S.
Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. Representatives may
request in writing at least one full business day before the Closing Time or
the relevant Date of Delivery, as the case may be. The certificates for the
Initial U.S. Securities and the U.S. Option Securities, if any, will be made
available for examination and packaging by the U.S. Representatives in The City
of New York not later than 10:00 A.M. (Eastern time) on the business day prior
to the Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with
each U.S. Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will comply with the requirements of Rule
430A or Rule 434, as applicable, and will notify the Global Coordinator
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any
supplement to the Prospectuses or any amended Prospectuses shall have been
filed, (ii) of the receipt of any comments from the Commission, (iii) of any
request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectuses or for additional information,
and (iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, or of
the initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect the filings necessary pursuant to Rule 424(b) and
will take such steps as it deems necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will promptly
file such prospectus. The Company will make every reasonable effort to prevent
the issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Global
Coordinator notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term Sheet
or any amendment, supplement or revision to either the prospectus included in
the Registration Statement at the time it became effective or to the
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Prospectuses, will furnish the Global Coordinator with copies of any such
documents a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file or use any such document to which the Global
Coordinator or counsel for the U.S. Underwriters shall object promptly after it
receives copies thereof.
(c) Delivery of Registration Statements. The Company has furnished
or will deliver to the U.S. Representatives and counsel for the U.S.
Underwriters, without charge, signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the U.S.
Representatives, without charge, a conformed copy of the Registration Statement
as originally filed and of each amendment thereto (without exhibits) for each
of the U.S. Underwriters. The copies of the Registration Statement and each
amendment thereto furnished to the U.S. Underwriters will be identical in all
material respects to the electronically transmitted copies thereof filed with
the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation
S-T.
(d) Delivery of Prospectuses. Subject to paragraph (e), the Company
has delivered to each U.S. Underwriter, without charge, as many copies of each
preliminary prospectus as such U.S. Underwriter reasonably requested, and the
Company hereby consents to the use of such copies for purposes permitted by the
1933 Act. The Company will furnish to each U.S. Underwriter, without charge
during the period when the U.S. Prospectus is required to be delivered under
the 1933 Act or the Securities Exchange Act of 1934 (the "1934 Act"), such
number of copies of the U.S. Prospectus (as amended or supplemented) as such
U.S. Underwriter may reasonably request. The U.S. Prospectus and any amendments
or supplements thereto furnished to the U.S. Underwriters will be identical in
all material respects to the electronically transmitted copies thereof filed
with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement, the International Purchase Agreement and in the Prospectuses. If at
any time during the nine month period immediately following the time of issue
of the U.S. Prospectus a prospectus is required by the 1933 Act to be delivered
in connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel for
the U.S. Underwriters or for the Company, to amend the Registration Statement
or amend or supplement any Prospectus in order that the Prospectuses will not
include any untrue statements of a material fact or omit to state a material
fact necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a purchaser,
or if it shall be necessary, in the opinion of such counsel, at any such time
to amend the Registration Statement or amend or supplement any Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectuses comply with such requirements, and the Company will furnish to the
U.S. Underwriters such number of copies of
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such amendment or supplement as the U.S. Underwriters may reasonably request.
In case any U.S. Underwriter is required to deliver a prospectus in connection
with the sale of U.S. Securities at any time nine months or more after the time
of issue of the U.S. Prospectus, upon request of the U.S. Underwriters but at
the expense of such U.S. Underwriters, the Company agrees to prepare and
deliver to such U.S. Underwriters as many copies as the U.S. Underwriters may
request of an amended or supplemented U.S. Prospectus complying with Section
10(a)(3) of the 1933 Act.
(f) Blue Sky Qualifications. The Company will use its best efforts,
in cooperation with the U.S. Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Global Coordinator may designate and
to maintain such qualifications in effect for a period of not less than one
year from the later of the effective date of the Registration Statement and any
Rule 462(b) Registration Statement; provided, however, that the Company shall
not be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation
or other governmental fees and charges in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each jurisdiction in
which the Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such jurisdiction to
continue such qualification in effect for a period of not less than one year
from the effective date of the Registration Statement and any Rule 462(b)
Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received
by it from the sale of the Securities in the manner specified in the
Prospectuses under "Use of Proceeds." The Company shall take such steps as
shall be necessary to ensure that the Company shall not become an "investment
company" within the meaning of such term under the 1940 Act and the rules and
regulations thereunder; provided that the Company is not able to control the
occurrence of a "Company Change in Control" or "Reduction in Interest," as such
terms are defined in the LLC Agreement, and the related consequences under the
1940 Act.
(i) Listing. The Company will use its best efforts to effect and
maintain the quotation of the Securities on the Nasdaq National Market and will
file with the Nasdaq National Market all documents and notices required by the
Nasdaq National Market of companies that have securities that are traded in the
over-the-counter market and quotations for which are reported by the Nasdaq
National Market.
(j) Restriction on Sale of Securities. During a period of 180 days
from the date of the Prospectuses, the Company will not, without the prior
written consent of the Global Coordinator, (i) directly or indirectly, offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or
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otherwise transfer or dispose of any share of Class A Common Stock or any
securities convertible into or exercisable or exchangeable for Class A Common
Stock or file any registration statement under the 1933 Act with respect to any
of the foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Class A Common Stock, whether any such
swap or transaction described in clause (i) or (ii) above is to be settled by
delivery of Class A Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to the Securities to be sold
hereunder or under the International Purchase Agreement, the Company's Global
Ownership Program or the Iridium LLC Share Option Plan, each as described in
the Prospectuses. In addition, the foregoing restriction shall not apply to the
issuance of warrants to purchase shares of Class A Common Stock in connection
with any offering of debt securities of Iridium or any of its subsidiaries;
provided, that (i) such warrants have a per share exercise price not lower than
the market price of the Class A Common Stock on the date the warrants are
issued and (ii) such warrants are not exercisable earlier than 180 days from
the date of their issuance.
(k) Reporting Requirements. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant to
the 1934 Act within the time periods required by the 1934 Act and the rules and
regulations of the Commission thereunder.
(l) Compliance with NASD Rules. The Company hereby agrees that it
will ensure that the Reserved Securities will be restricted as required by the
National Association of Securities Dealers, Inc. (the "NASD") or the NASD rules
from sale, transfer, assignment, pledge or hypothecation for a period of three
months following the date of this Agreement. The Underwriters will notify the
Company as to which persons will need to be so restricted. At the request of
the Underwriters, the Company will direct the transfer agent to place a stop
transfer restriction upon such securities for such period of time. Should the
Company release, or seek to release, from such restrictions any of the Reserved
Securities, the Company agrees to reimburse the Underwriters for any reasonable
expenses (including, without limitation, legal expenses) they incur in
connection with such release.
(m) Compliance with Rule 463. The Company will file with the
Commission such reports on Form SR as may be required pursuant to Rule 463 of
the 1933 Act Regulations.
(n) Exchange Agreement. During a period of 180 days from the date
of the Prospectuses, the Company will not enter into any amendment to, or waive
the application of any provision of, the Exchange Agreement or take any action
that would have any effect similar to the foregoing, in each case if the effect
thereof is to permit exchanges of Class 1 Interests for Class A Stock during
such 180-day period.
SECTION 4. Covenants of Iridium. Iridium covenants and agrees
with each U.S. Underwriter as follows:
(a) Exchange Agreement. During a period of 180 days from the date
of the Prospectuses, Iridium will not enter into any amendment to, or waive the
application of any
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provision of, the Exchange Agreement or take any action that would have any
effect similar to the foregoing.
(b) Use of ProceedsIridium shall apply the proceeds of the sale of
its Class 1 Interests to the Company substantially as set forth in the
Prospectuses.
SECTION 5. Payment of Expenses
(a) Expenses. Iridium will pay all expenses incident to the
performance of the obligations of Iridium and the Company under this Agreement,
including (i) the preparation, printing and filing of the Registration
Statement (including financial statements and exhibits) as originally filed and
of each amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable upon
the sale, issuance or delivery of the Securities to the Underwriters and the
transfer of the Securities between the U.S. Underwriters and the International
Managers, (iv) the fees and disbursements of the Company's and Iridium's
counsel, accountants and other advisors, (v) the qualification of the
Securities under securities laws in accordance with the provisions of Section
3(f) hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection therewith and in connection with the
preparation of the Blue Sky Survey and any supplement thereto, (vi) the
printing and delivery to the Underwriters of copies of each preliminary
prospectus, any Term Sheets and of the Prospectuses and any amendments or
supplements thereto, (vii) the preparation, printing and delivery to the
Underwriters of copies of the Blue Sky Survey and any supplement thereto,
(viii) the fees and expenses of any transfer agent or registrar for the
Securities, (ix) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the review by
the National Association of Securities Dealers, Inc. (the "NASD") of the terms
of the sale of the Securities, (x) the fees and expenses incurred in connection
with the inclusion of the Securities in the Nasdaq National Market and (xi) all
costs and expenses of the Underwriters, including the fees and disbursements of
counsel for the Underwriters, in connection with matters related to the
Reserved Securities which are designated by Iridium for sale to employees and
others having a business relationship with Iridium. It is understood, however,
that except as provided in this Section, Section 7 and Section 8, the U.S.
Underwriters will pay all of their own costs and expenses, including the fees
and expenses of their counsel, transfer taxes on resale of any of the
securities and any advertising expenses connected with any offers they make.
(b) Termination of Agreement. If this Agreement is terminated by
the U.S. Representatives in accordance with the provisions of Section 6 or
Section 10(a)(i) hereof, Iridium shall reimburse the U.S. Underwriters for all
of their reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the U.S. Underwriters.
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SECTION 6. Conditions of U.S. Underwriters' Obligations. The
obligations of the several U.S. Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Company and Iridium
contained in Section 1 hereof or in certificates of any officer of the Company
or Iridium delivered pursuant to the provisions hereof, to the performance by
the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the U.S. Underwriters. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely upon Rule
434, a Term Sheet shall have been filed with the Commission in accordance with
Rule 424(b).
(b) Letter and Opinion of Counsel for the Company and Iridium. At
Closing Time, the U.S. Representatives shall have received the favorable
opinion and letter, dated as of Closing Time, of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel
for the Company and Iridium, in form and substance satisfactory to counsel for
the U.S. Underwriters, together with signed or reproduced copies of such
letters for each of the other U.S. Underwriters to the effect set forth in
Exhibit A-1 hereto.
(c) Opinion of Bermuda Counsel for the Company. At Closing Time, the
U.S. Representatives shall have received the favorable opinion, dated as of
Closing Time, of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇, Bermuda counsel for the Company, in
form and substance satisfactory to counsel for the U.S. Underwriters, together
with signed or reproduced copies of such letter for each of the other U.S.
Underwriters to the effect set forth in Exhibit A-2 hereto.
(d) Opinion of Regulatory Counsel. At Closing Time, the U.S.
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Steptoe & ▇▇▇▇▇▇▇ LLP, regulatory counsel for Motorola Satellite
Communications as FCC license holder, in form and substance satisfactory to
counsel for the U.S. Underwriters, together with signed or reproduced copies of
such letter for each of the other U.S. Underwriters to the effect set forth in
Exhibit A-3 hereto.
(e) Opinion of Assistant Secretary of the Company and General
Counsel of Iridium. At Closing Time, the U.S. Representatives shall have
received the favorable opinion, dated as of Closing Time, of F. ▇▇▇▇▇▇ ▇▇▇▇▇▇,
Esq., Assistant Secretary of the Company and General Counsel of Iridium, in
form and substance satisfactory to counsel for the U.S. Underwriters, together
with signed or reproduced copies of such letter for each of the other U.S.
Underwriters to the effect set forth in Exhibit ▇-▇ ▇▇▇▇▇▇.
-▇▇-
▇▇
(▇) Opinion of Counsel for U.S. Underwriters. At Closing Time, the
U.S. Representatives shall have received the favorable opinion, dated as of
Closing Time, of Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the U.S.
Underwriters, together with signed or reproduced copies of such letter for each
of the other U.S. Underwriters with respect to the matters set forth in clauses
(i) and (iv) and certain portions of the penultimate paragraph of Exhibit A-1
hereto. In giving such opinion such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of New
York and the federal law of the United States and the Delaware Act, upon the
opinions of counsel satisfactory to the U.S. Representatives. Such counsel may
also state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Company and Iridium and certificates of public officials.
(g) Opinion of Regulatory Counsel for the U.S. Underwriters. At
Closing Time, the U.S. Representatives shall have received the favorable
opinion, dated as of Closing Time, of Goldberg, Godles, Wiener & ▇▇▇▇▇▇,
regulatory counsel for the U.S. Underwriters together with signed or reproduced
copies of such letter for each of the other U.S. Underwriters to such effect as
the U.S. Underwriters may reasonably request.
(h) Officer's Certificates. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectuses, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company or Iridium, whether or not arising in the
ordinary course of business, and the U.S. Representatives shall have received a
certificate of the President or a Vice President of each of the Company and
Iridium and of the chief financial or chief accounting officer of each of the
Company and Iridium, dated as of Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) the representations and warranties
in Section 1(a) hereof are true and correct with the same force and effect as
though expressly made at and as of Closing Time, (iii) the Company or Iridium,
as the case may be, has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or are contemplated by the Commission.
(i) Accountant's Comfort Letter. At the time of the execution of
this Agreement, the U.S. Representatives shall have received from KPMG Peat
Marwick LLP a letter dated such date, in form and substance satisfactory to the
U.S. Representatives, together with signed or reproduced copies of such letter
for each of the other U.S. Underwriters containing statements and information
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectuses.
(j) Bring-down Comfort Letter. At Closing Time, the U.S.
Representatives shall have received from KPMG Peat Marwick LLP a letter, dated
as of Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (i) of this
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Section (updated to include the final Prospectuses), except that the specified
date referred to shall be a date not more than three business days prior to
Closing Time.
(k) Approval of Listing. At Closing Time, the Securities shall have
been approved for inclusion in the Nasdaq National Market, subject only to
official notice of issuance.
(l) No Objection. At or prior to Closing Time, the NASD shall
have confirmed that it has not raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(m) Motorola Certificate At Closing Time, the U.S. Representatives
shall have received a certificate, dated as of Closing Time, of the President
or a Vice President of Motorola, Inc., in form and substance satisfactory to
counsel for the U.S. Underwriters, as to the accuracy of the statements
attributed to Motorola in the Prospectuses, and to such other matters relating
to Motorola as counsel for the U.S. Underwriters may reasonably request (a
draft of such certificate is attached as Exhibit B hereto).
(n) Purchase of Initial International Securities. Contemporaneously
with the purchase by the U.S. Underwriters of the Initial U.S. Securities under
this Agreement, the International Managers shall have purchased the Initial
International Securities under the International Purchase Agreement.
(o) Conditions to Purchase of U.S. Option Securities. In the event
that the U.S. Underwriters exercise their option provided in Section 2(b)
hereof to purchase all or any portion of the U.S. Option Securities, the
representations and warranties of the Company and Iridium contained herein and
the statements in any certificates furnished by the Company or Iridium
hereunder shall be true and correct as of each Date of Delivery and, at the
relevant Date of Delivery, the U.S. Representatives shall have received:
(i) Officers' Certificates. A certificate, dated such Date
of Delivery, of the President or a Vice President of
each of the Company and Iridium and of the chief
financial or chief accounting officer of each of the
Company and Iridium confirming that the certificate or
certificates delivered at Closing Time pursuant to
Section 6(h) hereof remain true and correct as of such
Date of Delivery.
(ii) Opinion of Counsel for the Company and Iridium. The
favorable opinion of each of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
counsel for the Company and Iridium, ▇▇▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇, Bermuda counsel for the Company, Steptoe &
▇▇▇▇▇▇▇ LLP, regulatory counsel for Motorola Satellite
Communications, Inc. as FCC license holder, and F.
▇▇▇▇▇▇ ▇▇▇▇▇▇, Assistant Secretary of the Company and
General Counsel of Iridium, each in form and substance
satisfactory to counsel for the U.S. Underwriters,
dated such Date of Delivery, relating to the U.S.
Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the
opinions required by Sections 6(b), 6(c), 6(d) and
6(e) hereof, respectively.
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27
(iii) Opinion of Counsel for U.S. Underwriters. The
favorable opinion of each of Fried, Frank, Harris,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the U.S. Underwriters,
and Goldberg, Godles, Wiener & ▇▇▇▇▇▇, regulatory
counsel for the U.S. Underwriters, each dated such
Date of Delivery, relating to the U.S. Option
Securities to be purchased on such Date of Delivery
and otherwise to the same effect as the opinions
required by Sections 6(f) and 6(g) hereof,
respectively.
(iv) Bring-down Comfort Letter. A letter from KPMG Peat
Marwick LLP, in form and substance satisfactory to the
U.S. Representatives and dated such Date of Delivery,
substantially in the same form and substance as the
letter furnished to the U.S. Representatives pursuant
to Section 6(j) hereof, except that the "specified
date" in the letter furnished pursuant to this
paragraph shall be a date not more than five days
prior to such Date of Delivery.
(v) Motorola Certificate. A certificate, dated such Date
of Delivery, of the president or a Vice President of
Motorola, Inc. confirming that the certificate
delivered at Closing Time pursuant to 6(m) hereof
remains true and correct as of such Date of Delivery.
(p) Transactions At or prior to Closing Time, the Transactions
shall have been duly and validly effected and all corporate proceedings and
legal matters incident to the Transactions shall be satisfactory to counsel for
the U.S. Underwriters.
(q) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the U.S. Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them to
pass upon the issuance and sale of the Securities as herein contemplated, or in
order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained.
(r) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of U.S. Option
Securities on a Date of Delivery which is after Closing Time, the obligations
of the several U.S. Underwriters to purchase the relevant Option Securities,
may be terminated by the U.S. Representatives by notice to the Company at any
time at or prior to Closing Time or such Date of Delivery, as the case may be,
and such termination shall be without liability of any party to any other party
except as provided in Section 5 and except that Sections 1, 7, 8 and 9 shall
survive any such termination and remain in full force and effect.
(s) Lock-up Agreements. At the date of this Agreement, the U.S.
Representatives shall have received an agreement substantially in the form of
Exhibit C hereto signed by each of the persons specified on Schedule C hereto.
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SECTION 7. Indemnification.
(a) Indemnification of U.S. Underwriters Each of the Company and
Iridium jointly and severally agrees to indemnify and hold harmless each U.S.
Underwriter and each person, if any, who controls any U.S. Underwriter within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as
follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectuses (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of (A) the violation of
any applicable laws or regulations of foreign jurisdictions where
Reserved Securities have been offered and (B) any untrue statement or
alleged untrue statement of a material fact included in the supplement
or prospectus wrapper material distributed in Argentina, Brazil,
Canada, Hong Kong, Indonesia, Japan, Korea, the United Kingdom and
Venezuela in connection with the reservation and sale of the Reserved
Securities to eligible employees of the Company and Iridium and
persons having business relationships with Iridium or the omission or
alleged omission therefrom of a material fact necessary to make the
statements therein, when considered in conjunction with the
Prospectuses or preliminary prospectuses, not misleading; (iii)
against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission or in connection with
any violation of the nature referred to in Section 7(a)(ii)(A) hereof;
provided that (subject to Section 7(d) below) any such settlement is
effected with the written consent of the Company and Iridium; and
(iii) against any and all expense whatsoever, as incurred
(including subject to Section 7(c) hereof, the reasonable fees and
disbursements of counsel chosen by ▇▇▇▇▇▇▇ ▇▇▇▇▇), reasonably incurred
in investigating, preparing or defending against any litigation, or
any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission or in connection with any violation of the nature referred to
in Section 7(a)(ii)(A) hereof, to the extent that any such expense is
not paid under (i), or (ii) or (iii) above;
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provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
U.S. Underwriter through the U.S. Representatives expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the U.S. Prospectus (or any amendment or supplement thereto); and
provided, further, that neither Iridium nor the Company will be liable to an
Underwriter with respect to any preliminary prospectus to the extent that
Iridium or the Company shall sustain the burden of proving that any such loss,
liability, claim, damage or expense resulted from the fact that such
Underwriter in contravention of a requirement of this Agreement or applicable
law, sold Securities to a person to whom such Underwriter failed to send or
give, at or prior to Closing Time, a copy of the U.S. Prospectus as then
amended or supplemented if the Company has previously furnished copies thereof
(sufficiently in advance of Closing Time to allow for distribution by Closing
Time) to the Underwriter and the loss, liability, claim, damage or expense of
such Underwriter resulted from an untrue statement or omission or alleged
untrue statement or omission of a material fact contained in or omitted from
the preliminary prospectus which was corrected in the U.S. Prospectus as, if
applicable, amended or supplemented prior to Closing Time.
(b) Indemnification of Company, Iridium, Directors and Officers.
Each U.S. Underwriter severally agrees to indemnify and hold harmless the
Company and Iridium, their directors, each of their officers who signed the
Registration Statement, and each person, if any, who controls the Company or
Iridium within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary U.S. prospectus or the U.S.
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such U.S.
Underwriter through the U.S. Representatives expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary
prospectus or the U.S. Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it
is not materially prejudiced as a result thereof and in any event shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. In the case of parties indemnified pursuant to
Section 7(a) above, counsel to the indemnified parties shall be selected by
▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in the case of parties indemnified pursuant to Section 7(b)
above, counsel to the indemnified parties shall be selected by the Company and
Iridium. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the
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indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar
or related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 7 or Section 8 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of
any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 7(a)(ii) or Section 7(a)(iii) effected without
its written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement
at least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(e) Indemnification for Reserved Securities. In connection with
the offer and sale of the Reserved Securities, each of the Company and Iridium
jointly and severally agrees, promptly upon a request in writing, to indemnify
and hold harmless the Underwriters from and against any and all losses,
liabilities, claims, damages and expenses incurred by them as a result of (i)
the failure of eligible employees of the Company and Iridium and persons having
business relationships with Iridium to pay for and accept delivery of Reserved
Securities which, following the effectiveness of the Registration Statement,
were subject to a properly confirmed agreement to purchase and (ii) the
violation of any securities laws of foreign jurisdictions in connection with
any offer and/or sale of Reserved Securities (including, without limitation,
all regulations governing ▇▇▇▇▇▇▇ ▇▇▇▇▇ International in its capacity as
"authorized person" under the Financial Services Act in the United Kingdom).
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SECTION 8. Contribution. If the indemnification provided for in
Section 7 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and Iridium on the one hand and the U.S. Underwriters on the other hand
from the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and Iridium
on the one hand and of the U.S. Underwriters on the other hand in connection
with the statements or omissions, or in connection with any violation of the
nature referred to in Section 7(a)(ii)(A) hereof, which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and Iridium on the one
hand and the U.S. Underwriters on the other hand in connection with the
offering of the U.S. Securities pursuant to this Agreement shall be deemed to
be in the same respective proportions as the total net proceeds from the
offering of the U.S. Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the total underwriting discount received
by the U.S. Underwriters, in each case as set forth on the cover of the U.S.
Prospectus, or, if Rule 434 is used, the corresponding location on the Term
Sheet, bear to the aggregate initial public offering price of the U.S.
Securities as set forth on such cover.
The relative fault of the Company and Iridium on the one hand and the
U.S. Underwriters on the other hand shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company and Iridium or by the U.S. Underwriters and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission or any violation of the nature
referred to in Section 7(a)(ii)(A) hereof.
The Company, Iridium and the U.S. Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation (even if the U.S. Underwriters were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this
Section 8. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
8 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 8, no U.S. Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the U.S. Securities underwritten by it and distributed to
the public were offered to the public exceeds the
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amount of any damages which such U.S. Underwriter has otherwise been required
to pay by reason of any such untrue or alleged untrue statement or omission or
alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, each person, if any, who controls a
U.S. Underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as such U.S.
Underwriter, and each director of the Company or Iridium, each officer of the
Company or Iridium who signed the Registration Statement, and each person, if
any, who controls the Company or Iridium within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company. The U.S. Underwriters' respective obligations to
contribute pursuant to this Section 8 are several in proportion to the number
of Initial U.S. Securities set forth opposite their respective names in
Schedule A hereto and not joint.
SECTION 9. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or Iridium submitted
pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any U.S. Underwriter or
controlling person, or by or on behalf of the Company or Iridium, and shall
survive delivery of the Securities to the U.S. Underwriters.
SECTION 10. Termination of Agreement.
(a) Termination; General. The U.S. Representatives may terminate
this Agreement, by notice to the Company, at any time at or prior to Closing
Time (i) if there has been, since the time of execution of this Agreement or
since the respective dates as of which information is given in the U.S.
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and Iridium considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
U.S. Representatives, impracticable to market the Securities or to enforce
contracts for the sale of the Securities, or (iii) if trading in any securities
of the Company has been suspended or materially limited by the Commission or
the Nasdaq National Market or Bermuda, or if trading generally on the American
Stock Exchange or the New York Stock Exchange or in the Nasdaq National Market
has been suspended or materially limited, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the
National Association of Securities Dealers, Inc. or any other governmental
authority, or (iv) if a banking moratorium has been declared by either Federal
or New York authorities.
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(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 5 hereof, and provided further that
Sections 1, 7, 8 and 9 shall survive such termination and remain in full force
and effect.
SECTION 11. Default by One or More of the U.S. Underwriters. If
one or more of the U.S. Underwriters shall fail at Closing Time or a Date of
Delivery to purchase the Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the U.S. Representatives
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting U.S. Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such
amounts as may be agreed upon and upon the terms herein set forth; if, however,
the U.S. Representatives shall not have completed such arrangements within such
24-hour period, then:
(a) if the number of Defaulted Securities does not exceed
10% of the number of U.S. Securities to be purchased on such date,
each of the non-defaulting U.S. Underwriters shall be obligated,
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder
bear to the underwriting obligations of all non-defaulting U.S.
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of
the number of U.S. Securities to be purchased on such date, this
Agreement or, with respect to any Date of Delivery which occurs after
the Closing Time, the obligation of the U.S. Underwriters to purchase
and of the Company to sell the Option Securities to be purchased and
sold on such Date of Delivery shall terminate without liability on the
part of any non-defaulting U.S. Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
U.S. Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the
obligation of the U.S. Underwriters to purchase and the Company to sell the
relevant U.S. Option Securities, as the case may be, either the U.S.
Representatives or the Company shall have the right to postpone Closing Time or
the relevant Date of Delivery, as the case may be, for a period not exceeding
seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements. As used
herein, the term "U.S. Underwriter" includes any person substituted for a U.S.
Underwriter under this Section 11.
SECTION 12. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
U.S. Underwriters shall be directed to the U.S. Representatives at North Tower,
World Financial Center, New York, New York 10281-1201, attention of __________;
notices to the Company shall be directed to it at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ 11, Bermuda, attention of the Secretary (with a copy to
Iridium);
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and notices to Iridium shall be directed to it at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇, attention of General Counsel.
SECTION 13. Parties. This Agreement shall each inure to the
benefit of and be binding upon the U.S. Underwriters, the Company and Iridium
and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the U.S. Underwriters, the Company and Iridium and
their respective successors and the controlling persons and officers and
directors referred to in Sections 7 and 8 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the U.S. Underwriters, the Company and Iridium and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any U.S.
Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
-30-
35
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the U.S. Underwriters, the Company and Iridium in accordance
with its terms.
Very truly yours,
IRIDIUM WORLD COMMUNICATIONS
LTD.
By:
----------------------------------
Name:
Title:
IRIDIUM LLC
By:
----------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇▇, SACHS & CO.
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
------------------------------------------------
Authorized Signatory
For themselves and as U.S. Representatives of the
other U.S. Underwriters named in Schedule A hereto.
-31-
36
SCHEDULE A
Number of
Initial U.S.
Name of U.S. Underwriter Securities
------------------------ ------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated.................................................................
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation.........................................................
▇▇▇▇▇▇▇, Sachs & Co.....................................................................
Total...................................................................................
SCH-A-1-
37
SCHEDULE B
IRIDIUM WORLD COMMUNICATIONS LTD.
8,000,000 Shares of Class A Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $__________.
2. The purchase price per share for the U.S. Securities to be paid
by the several U.S. Underwriters shall be $__________, being an amount equal to
the initial public offering price set forth above less $__________ per share;
provided that the purchase price per share for any U.S. Option Securities
purchased upon the exercise of the over-allotment option described in Section
2(b) shall be reduced by an amount per share equal to any dividends or
distributions declared by the Company and payable on the Initial U.S.
Securities but not payable on the U.S. Option Securities.
SCH-B-1-
38
SCHEDULE C
List of Persons Subject to Lock-up
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇
SCH-B-1-
39
Exhibit A-1
FORM OF OPINION OF COMPANY'S AND IRIDIUM'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 6(b)
(i) Iridium has been duly formed and is an existing limited
liability company in good standing under the laws of the State of
Delaware, with all requisite limited liability company power and
authority to own its properties and to conduct its business as
described in the Prospectuses and to enter into and perform its
obligations under the U.S. Purchase Agreement, the International
Purchase Agreement and the 1997 Governance Agreements.
(ii) Iridium has been duly qualified as a foreign limited
liability company to transact business and is in good standing under
the laws of each jurisdiction set forth in an officer's certificate
delivered to you on the Closing Date specifying the jurisdictions in
which Iridium owns or leases properties or conducts any business (such
counsel shall have no responsibility for the matters set forth in such
officer's certificate and such counsel shall be entitled to rely in
respect of the opinion in this clause upon opinions of local counsel
and in respect of matters of fact upon certificates of officers of
Iridium).
(iii) The LLC Agreement provides for the issuance of up to
250,000,000 Class 1 Interests, 50,000 Series M Class 2 Interests and
300,000 additional Class 2 Interests, of which ______, ______ and
______ have been authorized for issuance. The outstanding limited
liability company interests of Iridium (i) are shown as outstanding
under "Actual" in the Prospectus under the caption
"Capitalization-Iridium" (ii) have been duly authorized and validly
issued and are fully paid and non-assessable.
(iv) The U.S. Purchase Agreement and the International Purchase
Agreement have been duly authorized, executed and delivered by
Iridium.
(v) All regulatory consents, authorizations, approvals and
filings required to be obtained or made by the Company or Iridium
under the Federal laws of the United States, the laws of the State of
New York and the Limited Liability Company Act of the State of
Delaware for the issuance, sale and delivery of the Securities by the
Company to the Underwriters have been obtained or made; provided,
however, that, for purposes of this clause (v), such counsel shall
express no opinion with respect to Federal or state communications
laws.
(vi) The execution, delivery and performance of the U.S. Purchase
Agreement, the International Purchase Agreement, the 1997 Subscription
Agreement and the consummation of the transactions herein and therein
contemplated (including the issuance and sale of the Securities, and
the use of the proceeds from the sale of the Securities as described
in the Prospectuses under the caption "Use Of Proceeds") do not and
will not (i) violate, conflict with or result in a breach or violation
of any of the terms or provisions of, or consitute a default under,
the Principal Agreements nor will such action result in
A-1-
40
any violation of the provisions of the certificate of formation or
limited liability company agreement of Iridium or (ii) violate any
Federal law of the United States or the laws of the State of New York
or the Limited Liability Company Act of the State of Delaware, in each
case applicable to Iridium; provided, however, that, for purposes of
this paragraph (vi), such counsel shall express no opinion with
respect to Federal or state securities laws, other antifraud laws,
fraudulent transfer laws or communications laws; provided, further,
that such counsel shall express no opinion as to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights or with respect to any provision of such agreements
purporting to require indemnification of, or contribution to, the
losses, damages, claims, expenses or liability of any person.
(vii) The Company is not, and upon the issuance and sale of
the Securities as contemplated in the Purchase Agreements and the
application of the net proceeds therefrom as described in the
Prospectuses will not be, an "investment company" as such term is
defined in the 1940 Act.
Such counsel shall also furnish you with a letter to the effect
that as counsel to the Company and Iridium, they reviewed the
Registration Statement and the Prospectuses, participated in
discussions with representatives of the Underwriters, the Company,
Iridium and their accountants, Motorola and the Company's Bermuda
counsel and advised the Company and Iridium as to the requirements of
the 1933 Act and the applicable rules and regulations thereunder;
between the effectiveness of the registration statement and Closing
Time, such counsel participated in further discussions with
representatives of the Underwriters, the Company, Iridium and their
accountants, and Motorola, in which the contents of certain portions
of the Prospectuses and related matters were discussed, and reviewed
certain documents filed by the Company with the Commission,
certificates of certain officers of the Company, an opinion addressed
to the Underwriters from Steptoe & ▇▇▇▇▇▇▇ and a letter from the
Company's and Iridium's independent accountants; on the basis of the
information that such counsel gained in the course of the performance
of the services referred to above, considered in the light of such
counsel's understanding of the applicable law and the experience such
counsel has gained through their practice under the 1933 Act, such
counsel will confirm to you that in such counsel's opinion, the
Registration Statement, as of its effective date, and the
Prospectuses, as of the date of the Prospectuses, appeared on their
face to be appropriately responsive in all material respects to the
requirements of the 1933 Act and the 1933 Act Regulations; further,
nothing that came to such counsel's attention in the course of such
review has caused such counsel to believe that the Registration
Statement, as of its effective date, and the Prospectuses, as of such
effective date, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; or that the
Prospectuses, as of the date of the Prospectuses contained any untrue
statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made not misleading; also, nothing
that has come to such counsel's attention in the course of the
A-2-
41
procedures described in the second clause of this paragraph has caused
such counsel to believe that the Prospectuses, as of the Closing Time,
contained any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein in
the light of the circumstances under which they were made, not
misleading; in addition, such counsel shall state that such counsel
does not know of any litigation or any governmental proceeding
instituted or threatened against the Company or Iridium that would be
required to be disclosed in the Prospectuses and is not so disclosed
and that such counsel does not know of any documents that would be
required to be filed as exhibits to the Registration Statement and are
not so filed or of any documents that are required to be summarized in
the Prospectuses and are not so summarized; such counsel shall state
that the limitations inherent in the independent verification of
factual matters and the character of determinations involved in the
registration process are such, however, that such counsel does not
assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement or the
Prospectuses except for those made under the captions "Risk
Factors-Risks Associated with Principal Supply Contracts," "Risk
Factors - Risk of Loss of Management Rights Upon Change of Control,"
"Risk Factors - Risks Related to the Investment Company Act of 1940,"
"Risk Factors - Tax Consequences Related to Passive Foreign Investment
Companies," "Principal Contracts for the Development of the Iridium
System," "Governance of the Company and Relationship with Iridium,"
"Description of Iridium LLC Limited Liability Company Agreement" and
"Tax Considerations,", in the Prospectuses insofar as they relate to
provisions of law or documents therein described; also, such counsel
need express no opinion or belief as to (i) the financial statements
or other financial data contained in the Registration Statement or the
Prospectuses (including any financial projections) and (ii) the
description of statutes, regulations, proceedings or matters referred
to in Section 6(d) of the Purchase Agreement.
In rendering such opinion and letter, such counsel shall
state that they express no opinion as to the laws of any jurisdiction
other than the Federal laws of the United States, the laws of the
State of New York and the Limited Liability Company Act of the State
of Delaware. In rendering such opinion, such counsel may (A) rely as
to matters involving the application of the laws of Bermuda, upon the
opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇, Bermuda counsel to the Company
(which opinion shall be dated and furnished to the U.S.
Representatives at Closing Time, shall be satisfactory in form and
substance to counsel for the U.S. Underwriters and shall expressly
state that the U.S. Underwriters may rely on such opinion as if it
were addressed to them), provided that ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ shall state
in their opinion that they believe that they and the U.S. Underwriters
are justified in relying upon such opinion, and (B) rely as to matters
of fact (but not as to legal conclusions), to the extent they deem
proper, on information obtained from public officials or certificates
of responsible officers of Iridium and the Company and other sources
believed by such counsel to be responsible and (C) assume that the
signatures on all documents examined by such counsel are genuine
(which assumption such counsel need not independently verify).
A-3-
42
Exhibit A-2
FORM OF OPINION OF COMPANY'S BERMUDA
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 6(c)
(i) The Company has been duly incorporated and is validly
existing as an exempted company under the laws of Bermuda and is in
good standing (meaning that it has not failed to make any required
filing with any Bermuda governmental authority or to pay any Bermuda
government fee or tax the failure of which might make it liable to be
struck off the Register of Companies and thereby cease to exist under
the laws of Bermuda) under the laws of Bermuda.
(ii) The Company has all requisite corporate power and authority
necessary to own or hold its respective properties and conduct its
business as described in the Registration Statement and the
Prospectuses.
(iii) Based solely upon the Certified Register, the minutes,
resolutions, memorandum of association and bye-laws of the Company
which we have examined, the authorized capitalisation of the Company
as of [ ] 1997 is as set forth in the column entitled "Actual" under
"Capitalization-the Company" in the Prospectus and all shares of the
Company's issued and outstanding Common Stock requiring authorization
for issuance by the Company's Board of Directors have been duly
authorised and, to such counsel's knowledge after due inquiry, are
validly issued, fully paid and non-assessable (which term when used
herein shall mean no further sums are required to be paid by the
holders thereof in connection with the issue of such shares) and
conform as to legal matters to the description thereof contained in
the Prospectus.
(iv) The shares of Common Stock to be purchased by the U.S. and
the International Managers from the Company pursuant to the Purchase
Agreements, and the shares of Common Stock issuable upon exercise of
options granted to the U.S. Underwriters and the International
Managers to cover over-allotments, if any, have been duly authorised
for issuance and sale and upon issuance and delivery by the Company in
accordance with the terms of such Purchase Agreement against payment
in full of the consideration set forth in such Purchase Agreements
will be duly and validly issued, fully paid and non-assessable and
will not be issued in violation of the preemptive rights of any
shareholders of the Company.
(v) The Company has the necessary corporate power and authority
to enter into and perform its obligations under the Documents. The
execution and delivery of the Documents and the performance of the
obligations therein set forth and the consummation of the transactions
therein contemplated, will not result in a breach or violation of, or
constitute a default under the Memorandum of Association, or Bye-laws
or any of the other Documents, or in violation of any material order,
rule, regulation, writ,
A-4-
43
injunction, or decree of any government, governmental instrumentality
or court in Bermuda the effect of any which breach, violation or
default would have a material adverse effect on the Company.
(vi) The Company has taken all corporate action required to
authorise its execution and delivery of the Documents and the
performance of its obligations under the Documents in accordance with
their respective terms. The Documents have been duly and validly
authorised and executed by or on behalf of the Company and each
constitutes the legal, valid and binding obligations of the Company
enforceable against it in accordance with its respective terms and
upon delivery will be duly and validly delivered.
(vii) To the best of our knowledge, no order, consent, approval,
licence, authorisation or validation of or exemption by any government
or public body or authority of Bermuda or any sub-division thereof is
required to authorise or is required in connection with the execution
and delivery by the Company of the Documents, the performance and
enforcement of its obligations thereunder or the conduct of its
business as described in the Prospectus except that permission of the
Bermuda Monetary Authority is required to the issue of the shares of
Common Stock and such permission has been obtained. The issuance and
sale of the shares of the Common Stock is in compliance with all
applicable requirements in Bermuda.
(vii) It is not necessary or advisable, in order to ensure their
enforceability in Bermuda, that the Documents be registered in any
register kept by, or filed with, any governmental authority or
regulatory body in Bermuda.
(viii) The Share Certificates evidencing the shares of Common
Stock are in valid and proper legal form and conform with the
requirements of Bermuda law.
(x) Based solely on a search of the Cause Book of the Supreme
Court of Bermuda conducted at 10:00 am on [ ], 1997 there are no
pending or threatened legal or governmental proceedings to which the
Company is a party which could materially adversely affect the
business, property, financial condition or operations of the Company,
or which question the validly of the shares of Common Stock, the
Documents, or of any action taken or to be taken by the Company
pursuant to the Documents; and no such proceedings are known to us to
be contemplated against the Company.
(xi) The statements in the Registration Statement under the
caption "Risk Factors-Risk Associated with Incorporation under Bermuda
law" and "Description of Capital Stocks" have been reviewed by us and
insofar as they refer to descriptions of agreements, statements of
law, descriptions of statutes, licences, rules or regulations or legal
conclusions of Bermuda, are correct in all material respects.
A-5-
44
Exhibit A-3
FORM OF OPINION OF REGULATORY COUNSEL TO
MOTOROLA SATELLITE COMMUNICATIONS, INC. AS FCC
LICENSE HOLDER TO BE DELIVERED PURSUANT TO
SECTION 6(d)
(i) The information in the Prospectuses under "Risk
Factors--Risks Associated with Licensing and Spectrum Allocation" and
"Regulation of Iridium," accurately summarize in all material respects
the status of all material FCC licenses, permits, approvals and other
FCC authorizations granted to Motorola Satellite Communications, Inc.
with respect to the provision of satellite services via the IRIDIUM
System in the United States as described therein.
(ii) To the best of such counsel's knowledge, Motorola Satellite
Communications, Inc.: (a) is in substantial compliance with the
Communications Act of 1934, as amended, and the rules and regulations
of the FCC promulgated thereunder as they relate to the FCC licenses,
permits, approvals and authorizations referred to in clause (i) above,
and (b) has made all material filings, reports, applications and
submissions required thereunder as they relate to the FCC licenses,
permits, approvals and authorizations referred to in clause (i) above,
except as indicated in the Registration Statement, which filings,
reports, applications and submissions, to the best of such counsel's
knowledge, are true, complete and correct in all material respects.
(iii) No consent, approval, authorization or order of the FCC is
required to be obtained by Motorola Satellite Communications, Inc. in
connection with the authorization, issuance, sale or delivery of the
Securities by Iridium.
(iv) Nothing has come to such counsel's attention that has caused
such counsel to believe that the descriptions relating solely to the
allocation of spectrum in the United States and to the licensing of
the Iridium System in the United States contained under the captions
"Regulation of Iridium" and "Risk Factors--Risks Associated with
Licensing and Spectrum Allocation" of the Registration Statement,
contain any untrue statements of a material fact or omit to state a
material fact necessary to make such descriptions not misleading.
(v) The FCC has authorized Motorola Satellite Communications,
Inc. to construct a mobile satellite system capable of operating in
the 1616-1626.5 MHz frequency bands, consistent with the technical
specifications set forth in its application, as modified, the FCC's
rules (unless specifically waived) and the conditions set forth in the
FCC's Order and Authorization (DA 95-131), released January 31, 1995,
erratum (DA 95-372, released February 28, 1995), as affirmed by FCC
96-279, released June 27, 1996; Order and Authorization (DA 96-1789),
released October 30, 1996; provided, however,
A-6-
45
that such authorizations are subject to modification, stay or
revocation through appeals or reconsideration within the FCC or the
courts.
A-7-
46
Exhibit A-4
FORM OF OPINION OF ASSISTANT SECRETARY
OF THE COMPANY AND GENERAL COUNSEL OF IRIDIUM
TO BE DELIVERED PURSUANT TO
SECTION 6(e)
(i) Except as described in the Prospectuses, the Company has not
granted any outstanding options, warrants or commitments with respect
to any shares of the capital stock of the Company, whether issued or
unissued; except as described in the Prospectuses, Iridium has not
granted any warrants, rights or options with respect to the limited
liability company interests of Iridium.
(ii) The Governance Agreements have been duly authorized,
executed and delivered by Iridium.
(iii) To the best of my knowledge, Iridium is not in violation of
its Certificate of Formation or Limited Liability Company Agreement
and no default by Iridium exists in the due performance or observance
of any material obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument that is described or referred to in the
Registration Statement or the Prospectuses or filed or incorporated by
reference as an exhibit to the Registration Statement.
(iv) The execution, delivery and performance of the U.S. Purchase
Agreement, the International Purchase Agreement, the 1997 Subscription
Agreement and the consummation of the transactions herein and therein
contemplated (including the issuance and sale of the Securities, and
the use of the proceeds from the sale of the Securities as described
in the Prospectuses under the caption "Use Of Proceeds") do not and
will not, whether with or without the giving of notice or lapse of
time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined in Section 1(a)(x) of the Purchase
Agreements) under any contract, indenture, mortgage, deed of trust,
loan or credit agreement, any other agreement or instrument, known to
such counsel, to which the Company or Iridium is a party or by which
it or any of them may be bound, or to which any of the property or
assets of the Company or Iridium is subject (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not have a Material Adverse Effect).
(v) Except as described in the Registration Statement, there are
no persons with registration rights or other similar rights to have
any securities registered pursuant to the Registration Statement or
otherwise registered by Iridium under the 1933 Act.
(vi) Iridium has duly and validly authorized, executed and
delivered each of the Principal Agreements to which it is a party and,
assuming due authorization,
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execution and delivery by the other parties to the Principal
Agreements, each of the Principal Agreements is a legally valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles or with respect to any provision of such agreements
purporting to require indemnification of, or contribution to, the
losses, damages, claims, expenses or liability of any person.
(vii) Each of the Company and Iridium has duly and validly
authorized, executed and delivered each of the Governance Agreements
and, assuming due authorization, execution and delivery by the other
parties to the Governance Agreements, each of the Governance
Agreements is a legally valid and binding agreement of the Company and
Iridium, enforceable against the Company and Iridium in accordance
with its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(viii) Except as disclosed in the Registration Statement, to the
best of my knowledge, there is not pending or threatened any action,
suit, proceeding, inquiry or investigation, to which the Company or
Iridium is a party, or to which the property of the Company or Iridium
is subject, before or brought by any court or governmental agency or
body, domestic or foreign, which might reasonably be expected to
result in a Material Adverse Effect, or which might reasonably be
expected to materially and adversely affect the properties or assets
thereof or the consummation of the transactions contemplated in the
U.S. Purchase Agreement, the International Purchase Agreement or the
1997 Subscription Agreement or the performance by the Company or
Iridium of their obligations thereunder or the consummation of the
Transactions.
In rendering such opinion, such counsel shall state that such
counsel expresses no opinion as to the laws of any jurisdiction other
than the Federal laws of the United States and the Limited Liability
Company Act of the State of Delaware. In rendering such opinion, such
counsel may rely (A) as to matters involving the application of the
laws of Bermuda, upon the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇, Bermuda
counsel to the Company (which opinion shall be dated and furnished to
the U.S. Representatives at Closing Time, shall be satisfactory in
form and substance to counsel for the U.S. Underwriters and shall
expressly state that the U.S. Underwriters may rely on such opinion as
if it were addressed to them), and (B), as to matters of fact (but not
as to legal conclusions), to the extent he deems proper, on
information obtained from public officials or certificates of
responsible officers of Iridium and the Company and other sources
believed by such counsel to be responsible and (C) assume that the
signatures on all documents examined by such counsel (other than those
of officers or directors of Iridium or the Company) are genuine (which
assumption such counsel need not independently verify).
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Exhibit C
____________ , 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation
▇▇▇▇▇▇▇, Sachs & Co.
as U.S. Representatives of the several
U.S. Underwriters to be named in the
within-mentioned U.S. Purchase Agreement
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation
▇▇▇▇▇▇▇ Sachs International
as Lead Manager(s) of the several International Managers
c/o Merrill ▇▇▇▇▇ International
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Re: Proposed Public Offering by Iridium World Communications Ltd.
Dear Sirs:
The undersigned, a stockholder of Iridium World Communications Ltd, a
Bermuda company (the "Company"), understands that ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation and ▇▇▇▇▇▇▇, Sachs & Co. propose to
enter into a U.S. Purchase Agreement (the "U.S. Purchase Agreement") with the
Company providing for the public offering of shares (the "Securities") of the
Company's Class A common stock, par value $.01 per share (the "Class A Common
Stock"). In recognition of the benefit that such an offering will confer upon
the undersigned as a stockholder of the Company, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each underwriter to be named in the
U.S. Purchase Agreement that, during a period of 180 days from the date of the
U.S. Purchase Agreement, the undersigned will not, without the prior written
consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly, (i) offer, pledge, sell,
contract to sell, sell any option or contract to
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49
purchase, purchase any option or contract to sell, grant any option, right or
warrant for the sale of, or otherwise dispose of or transfer any shares of the
Company's Class A Common Stock or any securities convertible into or
exchangeable or exercisable for Class A Common Stock, whether now owned or
hereafter acquired by the undersigned or with respect to which the undersigned
has or hereafter acquires the power of disposition, or file any registration
statement under the Securities Act of 1933, as amended, with respect to any of
the foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Class A Common Stock, whether any such
swap or transaction is to be settled by delivery of Class A Common Stock or
other securities, in cash or otherwise.
Very truly yours,
Signature:
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Print Name:
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