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EXHIBIT 10.1
LIMITED LIABILITY COMPANY
AGREEMENT
OF
IRIDIUM LLC
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LIMITED LIABILITY COMPANY AGREEMENT
OF
IRIDIUM LLC
LIMITED LIABILITY COMPANY AGREEMENT of IRIDIUM LLC ("LLC") dated as of
July 29, 1996 among the undersigned.
WHEREAS, the Members are forming a limited liability company pursuant
to the terms and provisions of this Agreement and in accordance with the
Delaware Limited Liability Company Act, 6 Del. C. Sections 18-101, et seq. as
amended from time to time (the "Delaware Act");
WHEREAS, On June 14, 1993, Iridium, Inc. was formed as a corporation
under the laws of the State of Delaware and commenced operations on July 29,
1993;
WHEREAS, the stockholders of Iridium, Inc. have determined that it is
advantageous and desirable, for tax and other reasons, to conduct the business
of Iridium in a limited liability company;
WHEREAS, on July 29, 1996, Iridium, Inc. was merged with and into LLC
(the "LLC Merger") pursuant to 8 Del.C. Section 264 with LLC as the surviving
entity; and
WHEREAS, certain terms shall have the meanings assigned in ARTICLE XII
hereof;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
GENERAL PROVISIONS
Section 1.01 Formation and Name
The name of LLC is Iridium LLC. The business of LLC may be conducted
under any other name deemed necessary or desirable by the Class 1 Members in
order to comply with local law.
The parties hereto agree to form LLC and enter into this Agreement,
and do hereby form LLC and enter into this Agreement, pursuant to the
provisions of the Delaware Act and for the purposes hereinafter described and
agree that the rights and liabilities of the Members shall be as provided in
the Delaware Act except as provided herein.
Section 1.02 Place of Business and Office:
Registered Agent
LLC shall maintain a registered office in the State of Delaware at The
Corporation Trust Company, Corporation Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The principal executive office
of LLC shall be ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ or such other
place as the Board of Directors may determine. The name and address of LLC's
registered agent in the State of Delaware is The Corporation Trust Company,
Corporation Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Section 1.03 Purpose of LLC
LLC is organized for the purpose of acquiring, owning and managing the
low-earth orbit satellite space system to be delivered under the Space System
Contract, and any successor or replacement
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space system, and the management of the access to any use of such space system
by the Members and/or their Affiliates through their Gateways and/or their
Service Providers and by others and the engagement in activities necessary,
appropriate or incidental to the foregoing.
Section 1.04 Fiscal Year
The fiscal year of LLC (the "Fiscal Year") shall be fixed by
resolution of the Class 1 Members.
Section 1.05 Directors: Number, Appointment,
Removal, Qualifications, Etc.
(a) Board of Directors. There shall initially be a Board of
Directors comprised of 23 Directors, which number may be changed, subject to
the rights of the Class 2 Members, as determined from time to time by the Class
1 Members. Each Class 1 Member owning at least 5,250,000 Class 1 Interests
shall be a Director (accordingly, each such Class 1 Member shall appoint a
representative who will represent it on the Board of Directors and who shall be
the Director in respect of such Class 1 Member for purposes of this Agreement)
and in addition shall be entitled to designate one Director for each additional
5,250,000 Class 1 Interests owned by such Class 1 Member. In addition, two or
more Class 1 Members may aggregate their Class 1 Interests and appoint a
Director for each 5,250,000 Class 1 Interests owned by such Class 1 Members in
the aggregate. The persons listed in Annex A hereto as Directors are hereby
designated by the Class 1 Member(s) set forth next to such Director's name as
the initial Board of Directors of LLC. In addition, the chairman of the Board
of Directors and the vice chairman and chief executive officer elected pursuant
to Section 2.03 shall be a Director and a member of the Board of Directors.
The business address of each Director is set forth opposite his name on Annex A
hereto. Directors appointed pursuant to this Agreement shall be managers for
purposes of the Delaware Act. During the Iridium Bermuda Special Rights
Period, and notwithstanding the second and third sentences of this Section
1.05(a), Iridium Bermuda shall be entitled to designate two Directors. No
Director designated by Iridium Bermuda shall be an employee or Affiliate of
Motorola or any other Member owning more than five percent of the outstanding
Class 1 Membership Interests.
(b) Alternate Directors. The Member(s) who are or who have
appointed a Director under Section 1.05(a) may appoint an alternate Director to
act for and fulfill the obligations of such Director in the event that such
Director is unable to attend any meeting of the Board of Directors or any
committee thereof. Any such alternates are listed on Annex A hereto or if
appointed after the date hereof shall be specified in writing by such Member to
the secretary of LLC. Any appointment of an alternate Director may be changed
by the Member(s) by providing written notice of such change to the secretary of
LLC.
(c) Removal and Resignation. A Director may be removed with or
without cause by the Member who appointed such Director by providing written
notice of such removal to the secretary of LLC and to each Member. A Director
may not otherwise be removed. If, as a result of the removal, resignation or
death of any member of the Board of Directors, a vacancy occurs in the Board of
Directors, such vacancy shall be filled by the Member(s) who appointed such
Director by written notice to the secretary of LLC and to each Member of the
name of the new Director who shall fill such vacancy (such notice may be
included with notice of removal as provided by the preceding sentence).
(d) Assumption and Acceptance of Powers and Duties. Any Director
designated pursuant to this Section 1.05, and any alternate acting for such
Director, shall assume the powers, duties and obligations of a Director as
provided under this Agreement and of a director under the Delaware Act and
shall be subject to the terms hereof. Any person designated as a Director and
any alternate shall be deemed to have agreed to accept such Director's rights
and authority hereunder and to perform and discharge such Director's duties and
obligations hereunder by performing any act in the capacity of Director
hereunder (including but not limited to participating in any meeting of the
Board of Directors or executing any written consent of the Board of Directors),
and such rights, authority, duties and
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obligations hereunder shall continue until such Director's successor is
designated or until such Director's earlier resignation or removal in
accordance with this Agreement.
Section 1.06 Members
(a) Initial Members. The initial Members of LLC, their business
addresses and their respective Interests shall be as set forth in Annex B
hereto. The initial Members shall become Members upon the filing of the
certificate of formation of LLC and the execution of this Agreement by such
Members.
(b) Rights and Obligations. A Member shall have the rights,
powers, duties and obligations provided herein for a Member.
(c) Investment Company Restrictions. Each Member organized in the
United States covenants and agrees that it will not make a public offering of
its own securities if as a result of such offering, LLC will become an entity
controlled by an investment company registered under the Investment Company Act
of 1940.
(d) Annual Meetings. An annual meeting of the Class 1 Members
shall be held each year within 120 days after the close of the immediately
preceding fiscal year of LLC for the purpose of conducting such proper business
as may come before the meeting. The date, time and place of the annual meeting
shall be determined by the president of LLC; provided, that if the president
does not act, the Board of Directors shall determine the date, time and place
of such meeting. At such annual meetings, each Member shall provide notice to
the secretary of LLC and the other Member of the names of the Director(s) such
Member is entitled to appoint and each person so named shall serve as Director
until a substitute shall be appointed at the next annual meeting or pursuant to
Section 1.05(c).
(e) Special Meetings. Special meetings of Members may be called
for any purpose and may be held at such time and place, within or without the
State of Delaware, as shall be stated in a notice of meeting or in a duly
executed waiver of notice thereof. Such meetings may be called at any time by
the Board of Directors, the chairman of the Board of Directors, the vice
chairman and chief executive officer, the president or the holders of not less
than a majority of the Class 1 Interests outstanding.
(f) Place of Meetings. The Directors may designate any place,
either within or outside of the State of Delaware, as the place of meeting for
any annual meeting or for any special meeting called by the Directors. If no
designation is made, or if a special meeting be otherwise called, the place of
meeting shall be the principal executive office of LLC.
(g) Notice. Whenever Members are required or permitted to take
action at a meeting, written or printed notice stating the place, date, time,
and, in the case of special meetings, the purpose or purposes, of such meeting,
shall be given to each Member entitled to vote at such meeting and to each
Director not less than 10 nor more than 60 days before the date of the meeting.
All such notices shall be delivered, either personally or by mail, by or at the
direction of the Directors, the chairman of the Board of Directors, the vice
chairman and chief executive officer, the president or the secretary, and if
mailed, such notice shall be deemed to be delivered when deposited in the
United States mail, postage prepaid, addressed to the Member at his, her or its
address as the same appears on the records of LLC. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting, except when the
person attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened.
(h) Members List. The officer having charge of the records
referred to in Section 2.07 shall make, at least 10 days before every meeting
of the Members, a complete list of the Members entitled to
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vote at such meeting arranged in alphabetical order, showing the address of
each Member and the Interest of each Member. Such list shall be open to the
examination of any Member, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least 10 days prior to the meeting,
either at a place within the city where the meeting is to be held, which place
shall be specified in the notice of the meeting or, if not so specified, at the
place where the meeting is to be held. The list shall also be produced and kept
at the time and place of the meeting during the whole time thereof, and may be
inspected by any Member who is present.
(i) Quorum. The holders of a majority of the Interests entitled
to vote, present in person or represented by proxy, shall constitute a quorum
at all meetings of the Members. If a quorum is not present, the holders of a
majority of the Interests present in person or represented by proxy at the
meeting, and entitled to vote at the meeting, may adjourn the meeting to
another time and/or place. When a specified item of business requires a vote by
a class or series (if LLC shall then have outstanding Interests of more than
one class or series) voting as a class, the holders of a majority of the
Interests of such class or series shall constitute a quorum (as to such class
or series) for the transaction of such item of business. When a quorum is once
present to commence a meeting of Members, it is not broken by the subsequent
withdrawal of any Members or their proxies.
(j) Adjourned Meetings. If at any meeting of Members there shall
be, with respect to a particular matter, less than a quorum present, the
Members present in person or by proxy and entitled to vote thereat on such
matter may without further notice, following the completion of such action, if
any, with respect to other matters as the Members present in person or by proxy
and constituting a quorum to vote thereat on such matters desire to take,
adjourn the meeting from time to time until a quorum with respect to such
matter shall be present. When a meeting is adjourned to another time and
place, notice need not be given of the adjourned meeting if the time and place
thereof are announced at the meeting at which the adjournment is taken. At the
adjourned meeting LLC may transact any business which might have been
transacted at the original meeting. If the adjournment is for more than 30
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each Member
entitled to vote at the meeting.
(k) Vote Required. When a quorum is present, the affirmative vote
of the majority of Interests present in person or represented by proxy at the
meeting and entitled to vote on the subject matter shall be the act of the
Members, unless the question is one upon which by express provisions of an
applicable law or of this Agreement a different vote is required, in which case
such express provision shall govern and control the decision of such question.
Where a separate vote by class is required, the affirmative vote of the
majority of Interests of such class present in person or represented by proxy
at the meeting shall be the act of such class, unless the question is one upon
which by express provisions of an applicable law or of this Agreement a
different vote is required, in which case such express provision shall govern
and control the decision of such question.
(l) Proxies. Each Member entitled to vote at a meeting of Members
or to express consent or dissent to any action in writing without a meeting may
authorize another person or persons to act for him or her by proxy, but no such
proxy shall be voted or acted upon after three years from its date, unless the
proxy provides for a longer period. A duly executed proxy shall be irrevocable
if it states that it is irrevocable and if, and only as long as, it is coupled
with an interest sufficient in law to support an irrevocable power. A proxy
may be made irrevocable regardless of whether the interest with which it is
coupled is an interest in the membership Interest itself or an interest in LLC
generally. Any proxy is suspended when the person executing the proxy is
present at a meeting of Members and elects to vote, except that when such proxy
is coupled with an interest and the fact of the interest appears on the face of
the proxy, the agent named in the proxy shall have all voting and other rights
referred to in the proxy, notwithstanding the presence of the person executing
the proxy. At each meeting of the Members, and before any voting commences,
all proxies filed at or before the meeting shall be submitted to and
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examined by the secretary or a person designated by the secretary, and no
Interests may be represented or voted under a proxy that have been found to be
invalid or irregular.
(m) Action by Written Consent. Unless otherwise provided in the
Delaware Act, any action required to be taken at any annual or special meeting
of Members, or any action which may be taken at any annual or special meeting
of such Members, may be taken without a meeting, without prior notice and
without a vote, if a consent or consents in writing, setting forth the action
so taken and bearing the dates of signature of the Members who signed the
consent or consents, shall be signed by the holders of not less than the
minimum Interests that would be necessary to authorize or take such action at a
meeting at which all Interests entitled to vote thereon were present and voted
and shall be delivered to LLC by delivery to its registered office in the State
of Delaware, or LLC's principal place of business, or an officer or agent of
LLC having custody of the book or books in which proceedings of meetings of the
Members are recorded. Delivery made to LLC's registered office shall be by
hand or by certified or registered mail, return receipt requested; provided,
that no consent or consents delivered by certified or registered mail shall be
deemed delivered until such consent or consents are actually received at the
registered office. All consents properly delivered in accordance with this
section shall be deemed to be recorded when so delivered. No written consent
shall be effective to take any action referred to therein unless, within 60
days of the earliest dated consent delivered to LLC as required by this
section, written consents signed by the holders of Interests sufficient to take
such action are so recorded. Prompt notice of the taking of the action without
a meeting by less than unanimous written consent shall be given to those
Members who have not consented in writing. Any action taken pursuant to such
written consent or consents of the Members shall have the same force and effect
as if taken by the Members at a meeting thereof.
(n) Record Dates. For purposes of determining the Members entitled
to notice of or to vote at a meeting of Members or to give approvals without a
meeting as provided in Section 2.03(l), the Board of Directors may set a record
date, which shall not be less than 10 nor more than 60 days before (a) the date
of the meeting or (b) in the event that approvals are sought without a meeting,
the date by which Members are requested in writing by the Board of Directors to
give such approvals.
(o) Communications Equipment. The Members may participate in and
act at any meeting of such Members through the use of a conference telephone or
other communications equipment by means of which all persons participating in
the meeting can hear each other, and participating in the meeting pursuant to
this section shall constitute presence in person at the meeting.
Section 1.07 Liability of Members and Directors
No Member or Director shall have any liability under this Agreement or
under the Delaware Act except as provided in Section 1.08 or elsewhere herein
or as required by the Delaware Act. Except as required by the Delaware Act,
the debts, obligations and liabilities of LLC, whether arising in contract,
tort or otherwise (including without limitation those arising as member, owner
or shareholder of another company, partnership or entity), shall be solely the
debts, obligations and liabilities of LLC, and no Member or Director shall be
obligated personally for any such debt, obligation or liability of LLC solely
by reason of being a Member or acting as a Director of LLC. No Member or
Director shall be liable for any debts, obligations and liabilities, whether
arising in contract, tort or otherwise, of any other Member or Director.
Section 1.08 Certain Duties and Liabilities of
Members and Directors
(a) Duties of Members and Directors. Except as otherwise
specifically provided in this Agreement, the duties and obligations owed to LLC
and to the Members by the Directors and officers of LLC, and any such duties
that may be owed by any Member or by any Affiliates of any Member, shall be
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the same as the respective duties and obligations owed to a corporation
organized under the Delaware General Corporation Law by its directors and
officers and any such duties that may be owed to such corporation by any
similarly situated stockholder or affiliate thereof, respectively; provided,
that a Director shall not be liable as a Director if such Director would not
have had liability if LLC were a corporation subject to the Delaware General
Corporation Law as the same exists or may hereafter be amended and had in its
certificate of incoroporation the same provision as Article X of the
Certificate of Incorporation of Iridium, Inc., a Director shall not be liable
to LLC or its Members for monetary damages for a breach of fiduciary duty as a
Director and any repeal or modification of this Section 1.08(a) shall not
adversely affect any right or protection of a Director of LLC existing at the
time of such repeal or modification.
(b) Limitations on Liability of Members, Directors and Officers. To
the extent that any Member, Director or officer has duties (including fiduciary
duties) and liabilities relating thereto to LLC or to a Member, (1) any such
Member, Director or officer acting under this Agreement shall not be liable to
LLC or to any such other Member for the Member's or Director's good faith
reliance on the provisions of this Agreement, the records of LLC and such
information, opinions, reports or statements presented to LLC by any of LLC's
officers or employees, or committees of the Board of Directors, or by any other
person as to matters the Director reasonably believes are within such other
person's professional or expert competence and who has been selected with
reasonable care by or on behalf of LLC, and (2) the Member's, Director's or
officer's duties and liabilities are restricted by the provisions of this
Agreement to the extent that such provisions restrict the duties and
liabilities of the Members, Directors or officers otherwise existing at law or
in equity.
Section 1.09 Reliance by Third Parties
Persons dealing with LLC are entitled to rely conclusively upon the
power and authority of the Directors and officers as herein set forth. Persons
dealing with LLC are entitled to rely conclusively upon a certificate of any
secretary or assistant secretary as to the incumbency of any Director, officer
or other personnel of LLC.
Section 1.10 Organizational Expenses
LLC shall be solely responsible for the expenses of organizing LLC.
Section 1.11 Seal of LLC
The Board of Directors may adopt a seal, alter such seal at its
pleasure and authorize it to be used by causing it or a facsimile to be affixed
or impressed or reproduced in any other manner.
Section 1.12 Ratification and Authorization of Certain Actions
The actions of the officers of LLC, including the preparation of the
Merger Agreement, with respect to the formation of LLC and the LLC Merger are
hereby ratified and approved and such officers are further authorized to
execute and deliver the Merger Agreement simultaneously herewith and upon such
execution and delivery to file a corresponding Certificate of Merger in the
office of the Secretary of State of the State of Delaware.
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ARTICLE II
MANAGEMENT AND OPERATIONS OF LLC
Section 2.01 Power and Authority of Members
The Members shall manage LLC only through their designated Directors
on the Board of Directors and the Members, in their capacity as such, shall
have no authority or right to act on behalf of or bind LLC in connection with
any matter.
Section 2.02 Power and Authority of Directors
The business and affairs of LLC shall be managed by or under the
direction of the Board of Directors, except as may be otherwise provided in
this Agreement. The Board of Directors shall have the power on behalf and in
the name of LLC to carry out any and all of the objects and purposes of LLC
contemplated by Section 1.03 and to perform all acts which they may deem
necessary or advisable in connection therewith.
The Members agree that all determinations, decisions and actions made
or taken by the Board of Directors (or their designee(s)) shall be conclusive
and absolutely binding upon LLC, the Members (but only in their capacity as
such) and their respective successors, assigns and personal representatives.
Section 2.03 Directors: Meetings, Committees, and Delegation
(a) Annual and Special Meetings. An annual meeting of the Board
of Directors shall be held without other notice than this provision immediately
after, and at the same place as, the annual meeting of Members (or execution by
all Class 1 Members of a unanimous written consent in lieu thereof). At the
annual meeting of the Board of Directors, the Directors shall, by resolution
duly adopted by a majority of the Directors present and voting, elect a
chairman of the Board of Directors and shall elect a vice chairman and chief
executive officer who, in accordance with Section 2.05(g), shall also serve as
chief executive officer of LLC. During the Iridium Bermuda Special Rights
Period, the Board of Directors shall, by resolution duly adopted by a majority
of the Directors present and voting, elect one of the Directors designated by
Iridium Bermuda as a vice chairman of the Board of Directors, such vice
chairman to be responsible for such matters as shall be designated by the Board
of Directors from time to time. Regular meetings, other than the annual
meeting, of the Board of Directors shall be held without notice at such time
and at such place as shall from time to time be determined by resolution of the
Board of Directors. Special meetings of the Board of Directors may be called by
or at the request of any Director on at least 48 hours notice to each Director,
either personally, by telephone, by mail or by telegraph. One-half of the
total number of Directors shall constitute a quorum for the transaction of
business. The vote of a majority of Directors present at a meeting at which a
quorum is present shall be the act of the Board of Directors, unless a previous
resolution of the Board of Directors requires a majority greater than one-half
(a "supermajority") to take such action, in which case the vote of such
supermajority shall be the act of the Board of Directors; such supermajority
requirement shall remain in effect unless amended by a vote of the
supermajority of Directors; provided, however, that at any meeting held during
any period in which Directors have been elected by holders of Series C Class 2
Interests, in their capacity as such, the vote required to approve any merger,
liquidation, sale, lease, conveyance or transfer of LLC or all or substantially
all of its assets or to approve or recommend to the Members any changes in the
capital structure or in the rights of any interests or security of LLC or to
approve the incurrence of any debt of LLC which debt would exceed $10,000,000
or any amendments to this Agreement which would have a material effect on any
of the Members, shall require the affirmative vote of 66 2/3% of all of the
directors. If a quorum shall not be present at any meeting of the Board of
Directors, the Directors present thereat
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may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
(b) Representation of Certain Members. LLC shall give each of
Raytheon Company ("Raytheon") and Lockheed ▇▇▇▇▇▇ Corporation ("Lockheed
▇▇▇▇▇▇") (in each case so long as it has complied in all material respects with
the terms of this Agreement and has not Transferred any of its Class 1
Interests other than in a Transfer referred to in clause (i) of the definition
of Exempt Transfer in the 1993 Stock Purchase Agreement) written notice of each
meeting of the Board of Directors at the same time and in the same manner as
notice is given to the Directors, and LLC shall permit a representative of each
of Raytheon and Lockheed ▇▇▇▇▇▇ to attend as a non-participating observer all
meetings of the Board of Directors; provided, that in the case of telephonic
meetings conducted in accordance with this Agreement and applicable law, each
of Raytheon and Lockheed ▇▇▇▇▇▇ need receive only actual notice thereof at
least 48 hours prior to any such meeting, and each of their representatives
shall be given the opportunity to listen to such telephonic meetings. Raytheon
and Lockheed ▇▇▇▇▇▇ shall designate in writing to LLC their respective
representatives under this Section 2.03(b) (which representatives upon written
notice to LLC can be changed by the appointing party from time to time). Each
representative shall be entitled to receive all written materials and other
information (including, without limitation, copies of meeting minutes) given to
Directors in connection with such meetings at the same time such materials and
information are given to the Directors. If LLC proposes to take any action by
written consent in lieu of a meeting of the Board of Directors, LLC shall give
written notice thereof to each of the representatives of Raytheon and Lockheed
▇▇▇▇▇▇ prior to the effective date of such consent describing in reasonable
detail the nature and substance of such action.
(c) Committees. The Board of Directors may, by resolution passed
by a majority of all the Directors, designate one or more committees, in
addition to those provided for in this Agreement, each committee to consist of
one or more of the Directors, which to the extent provided in such resolution
or this Agreement shall have and may exercise the powers of the Board of
Directors in the management and affairs of LLC except as otherwise limited by
law; provided, that no such committee of the Board of Directors shall have the
power or authority to amend this Agreement (except that a committee may, to the
extent authorized in the resolution or resolutions providing for the issuance
of Interests adopted by the Board of Directors, fix the designations and any of
the preferences or rights of such Interests relating to distributions,
redemption, dissolution, any distribution of assets of LLC or the conversion
into, or the exchange of such Interests for, Interests of any other class or
classes or any other series of the same or any other class or classes of
Interests of LLC or fix the aggregate number of Interests comprising any series
of Interests or authorize the increase or decrease of the aggregate number of
Interests comprising any series of Interests), adopting any agreement of merger
or consolidation, recommending to the Members the sale, lease or exchange of
all or substantially all of LLC's property and assets, recommending to the
Members a dissolution of LLC or revocation of a dissolution; and, unless a
resolution of the Board of Directors or this Agreement expressly so provides,
no such committee shall have the power or authority to declare a dividend or
other distribution or to authorize the issuance of Interests. The Directors
may designate one or more Directors as alternate members of any such committee,
who may replace any absent or disqualified Director at any meeting of such
committee. Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the Directors. Each
committee shall keep regular minutes of its meetings and report the same to the
Board of Directors when required. During the Iridium Bermuda Special Rights
Period, one Director designated by Iridium Bermuda shall be a member of each
committee of the Board of Directors.
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(d) Committee Rules. Each committee of Directors may fix its own
rules of procedure and shall hold its meetings as provided by such rules,
except as may otherwise be provided by a resolution of the Board of Directors
designating such committee. Unless otherwise provided in such a resolution,
the presence of at least a majority of the members of the committee shall be
necessary to constitute a quorum. In the event that a committee member and
that committee member's alternate, if alternates are designated by the Board of
Directors as provided in Section 2.03(c), of such committee is or are absent or
disqualified, the committee member or members present at any meeting and not
disqualified from voting, whether or not such committee member or members
constitute a quorum, may unanimously appoint another Director to act at the
meeting in place of any such absent or disqualified committee member.
(e) Audit Committee. There shall be an audit committee of the
Board of Directors and the audit committee shall consist of not fewer than two
(2) Directors as shall from time to time be appointed by resolution of the
Board of Directors. No Director who is an officer or an employee of LLC or
any subsidiary of LLC shall be eligible to serve on the audit committee. The
audit committee shall review and, as it shall deem appropriate, recommend to
the Board of Directors internal accounting and financial controls for LLC and
accounting principles and auditing practices and proce dures to be employed in
the preparation and review of financial statements of LLC. The audit
committee shall make recommendations to the Board of Directors concerning the
engagement of independent public accountants to audit the annual financial
statements of LLC and the scope of the audit to be undertaken by such
accountants.
(f) Compensation Committee. There shall be a compensation
committee of the Board of Directors and the compensation committee shall
consist of not fewer than three Directors as from time to time shall be
appointed by resolution of the Board of Directors. No Director who is an
officer or an employee of LLC or any subsidiary of LLC shall be eligible to
serve on the compensation committee. The compensation committee shall review
and, as it deems approriate, recommend to the president and the Directors
policies, practices and procedures relating to the compensation of managerial
employees and the establishment and administration of employee benefit plans.
The compensation committee shall have and exercise all authority under any
employee stock option plans of LLC as the committee therein (unless the Board
of Directors by resolution appoints any other committee to exercise such
authority), and shall advise and consult with the officers of LLC as may be
requested regarding managerial personnel policies.
(g) Related Party Contract Committee. There shall be a related
party contract committee of the Board of Directors (the "Contract Committee")
and the Contract Committee shall consist of all Directors other than any
Director who is a director, officer, employee of, or person designated as a
Director by, Motorola, Inc. ("Motorola"), Lockheed ▇▇▇▇▇▇ or Raytheon;
provided, however, that (i) any such Director so designated by Motorola shall
be added to the Contract Committee at such time as Motorola ceases to be a
party to the Space System Contract, the O&M Contract and the Terrestrial
Network Development Contract or such contracts are terminated (other than as a
result of a breach by Motorola), (ii) any such Director so designated by
Lockheed ▇▇▇▇▇▇ shall be added to the Contract Committee at such time as
Lockheed ▇▇▇▇▇▇ and its Affiliates cease to be subcontractors to Motorola in
connection with the Space System Contract, the O&M Contract and the Terrestrial
Network Development Contract and (iii) any such Director so designated by
Raytheon shall be added to the Contract Committee at such time as Raytheon and
its Affiliates cease to be subcontractors to Motorola in connection with the
Space System Contract, the O&M Contract and the Terrestrial Network Development
Contract. The Contract Committee shall have the authority on behalf of LLC to
review and monitor the Space System Contract, the O&M Contract, and the
Terrestrial Network Development Contract and, as it deems appropriate, cause
LLC to enforce its rights thereunder and propose amendments, waivers and/or
modifications thereto (it being understood that the Space System Contract, the
O&M Contract, and the Terrestrial Network Development Contract can be amended
only in accordance with the terms thereof or by mutual consent of the parties
thereto). A resolution adopted by
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the Contract Committee, if within the above-described authority of the Contract
Committee, shall be deemed to be a resolution adopted by the Board of Directors
as if approved by a majority of the Directors then in office.
(h) Banking and Financing Committee. There shall be a banking and
financing committee of the Board of Directors and the banking and financing
committee shall consist of not fewer than eight (8) Directors as shall from
time to time be appointed by resolution of the Board of Directors. A quorum of
the banking and financing committee shall require the presence at any meeting
of such committee of at least five (5) members thereof. The banking and
financing committee shall (i) deal with important decisions concerning future
financings of LLC in the interim period between meetings of the Board of
Directors, (ii) consult with and advise management on future financing strategy
and direction, (iii) review debt and equity financing proposals submitted by
LLC's financial advisors and make recommendations to the Board of Directors
with respect thereto, (iv) supervise generally the financial affairs of LLC,
(v) supervise the investment of idle funds of LLC, and (vi) exercise such other
powers delegated by the Board of Directors regarding the implementation of
financing plans approved by the Board of Directors. Subject to the authority of
the Board of Directors, the banking and financing committee is authorized to
exercise all the powers and authority of the Board of Directors in all matters
related to the future financing of LLC.
(i) Communications Equipment. The Directors or any committee
thereof may participate in and act at any meeting of such Directors or
committee through the use of a conference telephone or other communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in the meeting pursuant to this section shall
constitute presence in person at the meeting.
(j) Waiver of Notice and Presumption of Assent. Any Director or
any member of a committee of the Board of Directors who is present at a meeting
shall be conclusively presumed to have waived notice of such meeting except
when such member attends for the express purpose of objecting at the beginning
of the meeting to the transaction of any business because the meeting is not
lawfully called or convened. Such member shall be conclusively presumed to
have assented to any action taken unless his or her dissent shall be entered in
the minutes of the meeting or unless his or her written dissent to such action
shall be filed with the person acting as the secretary of the meeting before
the adjournment thereof or shall be forwarded by registered mail to the
secretary of LLC immediately after the adjournment of the meeting. Such right
to dissent shall not apply to any member who voted in favor of such action.
(k) Initial Committee Members. The initial members of the audit
committee, the compensation committee, the related party contracts committee
and the banking and financing committee shall be the same Directors who served
on such committees of the Board of Directors of Iridium, Inc. as of the date of
the LLC Merger.
(l) Action by Written Consent. Unless otherwise restricted by
this Agreement or the Delaware Act, any action required or permitted to be
taken at any meeting of the Board of Directors, or of any committee thereof,
may be taken without a meeting if all the Directors or members of the committee
thereof, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board of Directors or
committee.
(m) Tax Consequences to the Members. At the request of any
Director, the Board of Directors shall consider, as part of any determination,
decision or action, the tax consequences to the Members that result from any
proposed action by LLC.
(n) Resolutions. The resolutions of the Board of Directors of
Iridium, Inc. are hereby adopted by LLC with only such changes as are necessary
to reflect LLC as the successor to Iridium, Inc.
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Section 2.04 Compensation of the Directors
No Director shall be entitled to any compensation for services as
Director.
Section 2.05 Officers
(a) Establishment, Nomination and Election. The officers of LLC
shall be nominated by the chairman of the Board of Directors and elected by the
Directors and shall consist of a chief executive officer, a president, one or
more vice-presidents, a chief operating officer, a chief financial officer, a
secretary, a treasurer, and such other officers and assistant officers as may
be deemed necessary or desirable by the chairman of the Board of Directors.
Any number of offices may be held by the same person. In their discretion, the
Directors may choose not to fill any office for any period as they may deem
advisable, except that the offices of president and secretary shall be filled
as expeditiously as possible. The initial officers of LLC are set forth in
Annex A.
(b) Election and Term of Office. The officers of LLC shall be so
nominated and elected annually by the Board of Directors at their first meeting
held after each annual meeting of Members or as soon thereafter as conveniently
may be. Vacancies may be filled or new offices created and filled at any
meeting of the Board of Directors. Each officer shall hold office until a
successor is duly elected and qualified or until his or her earlier death,
resignation or removal as hereinafter provided.
(c) Removal. Any officer or agent elected by the Directors may be
removed by the Directors whenever in their judgment the best interests of LLC
would be served thereby, but such removal shall be without prejudice to the
contract rights, if any, of the person so removed.
(d) Vacancies. Any vacancy occurring in any office because of
death, resignation, removal, disqualification or otherwise, may be filled by
the Directors for the unexpired portion of the term by the Directors then in
office.
(e) Compensation. Compensation of all officers shall be fixed by
the Board of Directors, and no officer shall be prevented from receiving such
compensation by virtue of his or her also being a Director of LLC.
(f) Chairman of the Board. The chairman of the Board of Directors
shall be selected according to the terms set forth in Section 2.03(a). He
shall preside at all meetings of the Board of Directors and Members. The
chairman of the Board of Directors shall also counsel the vice chairman and
cheif executive officer, when appropriate, and shall perform such other duties
as may be prescribed by the Board of Directors or provided in this Agreement.
(g) Vice Chairman and Chief Executive Officer. The vice chairman
and chief executive officer shall serve as both the chief executive officer and
a director and shall be selected as provided in Section 2.03(a). He shall in
general supervise and control all the business affairs of LLC, subject to the
powers of the Board of Directors. In the absence of the chairman of the Board
of Directors, he shall preside at meetings of the Board of Directors and
Members and shall have such other powers and perform such other duties as may
be prescribed by the Board of Directors or provided in this Agreement.
(h) President. The president shall, subject to the powers of the
vice chairman and chief executive officer and the Directors, have general
charge of the business, affairs and property of LLC, and control over its
officers, agents and employees; and shall see that all orders and resolutions
of the Board of Directors are carried into effect. The president shall execute
bonds, mortgages and other contracts requiring a seal, under the seal of LLC,
except where required or permitted by law to be otherwise signed and executed
and except where the signing and execution thereof shall be expressly delegated
by the Board of Directors to some other officer or agent of LLC. The president
shall have such
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other powers and perform such other duties as may be prescribed by the Board of
Directors or as may be provided in this Agreement.
(i) Chief Operating Officer. The chief operating officer of LLC,
subject to the powers of the vice chairman and chief executive officer and the
Directors, shall have general and active management of the business of LLC; and
shall see that all orders and resolutions of the Board of Directors are carried
into effect. The chief operating officer shall have such other powers and
perform such other duties as may be prescribed by the chairman of the Board of
Directors or the Board of Directors or as may be provided in this Agreement.
(j) Chief Financial Officer. The chief financial officer of LLC
shall, under the direction of the vice chairman and chief executive officer and
the President, be responsible for all financial and accounting matters and for
the direction of the offices of treasurer and controller. The chief financial
officer shall have such other powers and perform such other duties as may be
prescribed by the chairman of the Board of Directors or the Board of Directors
or as may be provided in this Agreement.
(k) Vice-presidents. The vice-president, or if there shall be
more than one, the vice-presidents in the order determined by the chairman of
the Board of Directors, shall, in the absence or disability of the president,
act with all of the powers and be subject to all the restrictions of the
president. The vice-presidents shall also perform such other duties and have
such other powers as the Board of Directors, the vice chairman and chief
executive officer, the president or this Agreement may, from time to time,
prescribe.
(l) Secretary and Assistant Secretaries. The secretary shall
attend all meetings of the Board of Directors (other than the portion of any
such meeting during which the Compensation Committee shall be reporting to the
Board of Directors), all meetings of the committees thereof except the
Compensation Committee and all meetings of the Members and record all the
proceedings of the meetings except meetings of the Compensation Committee in a
book or books to be kept for that purpose. The record of proceedings of
meetings of the Compensation Committee and of any portion of any meeting of the
Board of Directors during which the Compensation Committee shall be reporting
to the Board of Directors (and related discussion by the Directors) included by
the secretary in such book or books of LLC shall be prepared by the chairman of
the Compensation Committee as provided in this Section 2.05(k). The chairman
of the Compensation Committee shall be responsible for recording all the
proceedings of that Committee and of any report by that committee to the
Directors (and related discussion by the Directors) and shall provide to the
secretary complete and accurate minutes of the proceedings of the Compensation
Committee and of such report to the Board of Directors and related discussion
which minutes shall be included by the secretary in the book or books of LLC
kept for the purpose of recording such proceedings. Under the president's
supervision, the secretary: shall give, or cause to be given, all notices
required to be given by this Agreement or the Delaware Act; shall have such
powers and perform such duties as the Directors, the chairman of the Board of
Directors, the vice chairman and chief operating officer, or this Agreement
may, from time to time, prescribe; and shall have custody of the seal of LLC.
The secretary, or an assistant secretary, shall have authority to affix the
seal to any instrument requiring it and when so affixed, it may be attested by
his signature or by the signature of such assistant secretary. The Board of
Directors may give general authority to any other officer to affix the seal of
LLC and to attest the affixing by his signature. The assistant secretary, or
if there be more than one, the assistant secretaries in the order determined by
the Board of Directors, shall, in the absence or disability of the secretary,
perform the duties and exercise the powers of the secretary and shall perform
such other duties and have such other powers as the Board of Directors, the
chairman of the Board of Directors, the vice chairman and chief executive
officer, or secretary may, from time to time, prescribe.
(m) Treasurer and Assistant Treasurer. The treasurer shall have
the custody of LLC's funds and securities; shall keep full and accurate
accounts of receipts and disbursements in books belonging
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to LLC; shall deposit all monies and other valuable effects in the name and to
the credit of LLC as may be ordered by the Board of Directors; shall cause the
funds of LLC to be disbursed when such disbursements have been duly authorized,
taking proper vouchers for such disbursements; and shall render to the
president and the Board of Directors, at its regular meeting or when the Board
of Directors so require, an account of LLC; shall have such powers and perform
such duties as the Board of Directors, the vice chairman and chief operating
officer, or this Agreement may, from time to time, prescribe. If required by
the Board of Directors, the treasurer shall give LLC a bond (which shall be
rendered every six years) in such sums and with such surety or sureties as
shall be satisfactory to the Board of Directors for the faithful performance of
the duties of the office of treasurer and for the restoration to LLC, in case
of death, resignation, retirement, or removal from office, of all books,
papers, vouchers, money, and other property of whatever kind in the possession
or under the control of the treasurer belonging to LLC. The assistant
treasurer, or if there shall be more than one, the assistant treasurers in the
order determined by the Board of Directors, shall in the absence or disability
of the treasurer, perform the duties and exercise the powers of the treasurer.
The assistant treasurers shall perform such other duties and have such other
powers as the Board of Directors, the vice chairman and chief executive
officer, or treasurer may, from time to time, prescribe.
(n) Other Officers, Assistant Officers and Agents. Officers,
assistant officers and agents, if any, other than those whose duties are
provided for in this Agreement, shall have such authority and perform such
duties as may from time to time be prescribed by resolution of the Board of
Directors.
(n) Absence or Disability of Officers. In the case of the absence
or disability of any officer of LLC and of any person hereby authorized to act
in such officer's place during such officer's absence or disability, the Board
of Directors may by resolution delegate the powers and duties of such officer
to any other officer or to any Director, or to any other person whom it may
select.
Section 2.06 Interested Directors
(a) Contracts Permitted. No contract or transaction between LLC and
one or more of its Directors or officers, or between LLC and any other limited
liability company, corporation, partnership, association, or other organization
in which one or more of its managers, directors or officers, are Directors or
officers of LLC, or have a financial interest, shall be void or voidable solely
for this reason, or solely because the Director or officer is present at or
participates in the meeting of the Board or committee which authorizes the
contract or transaction, or solely because his or their votes are counted for
such purpose, if:
(i) The material facts as to such Director's or officer's
relationship or interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or the committee, and
the Board or committee in good faith authorizes the contract or
transaction by the affirmative vote of a majority of the disinterested
Directors, even though the disinterested Directors be less than a
quorum; or
(ii) The material facts as to the relationship or interest and
as to the contract or transaction are disclosed or are known to the
Members entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by vote of the Members; or
(iii) The contract or transaction is fair as to LLC as of the
time it is authorized, approved or ratified by the Board of Directors,
a committee or the Members.
(b) Quorum. Interested Directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or of a committee
which authorizes the contract or transaction.
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Section 2.07 Books and Records
(a) Books and Records to be Kept. LLC shall keep; (i) correct and
complete books and records of account, (ii) minutes of the proceedings of
meetings of the Members, the Board of Directors and any committee thereof, and
(iii) a current list of the Directors and officers and their residence
addresses; and LLC shall also keep at its principal executive office a record
containing the names and addresses of all Members, the total Interests held by
each Member, the number thereof that are Class 1 Interests and Class 2
Interests and the dates when they respectively became the owners of record
thereof (the "Members' Interest Register"). Any of the foregoing books,
minutes or records may be in written form or in any other form capable of being
converted into written form within a reasonable time. The financial statements
of LLC shall be audited at the end of each fiscal year by an internationally
recognized firm of independent certified public accountants based in the United
States.
(b) Inspection of Books and Records. Any Member, in person or by
attorney or other agent, shall, upon written demand under oath stating the
purpose thereof, have the right during the usual hours for business to inspect
for any proper purpose LLC's Members' Interest Register and its other books and
records, and to make copies of extracts therefrom. A proper purpose shall mean
any purpose reasonably related to such Person's interest as a Member. In every
instance where an attorney or other agent shall be the Person who seeks the
right to inspection, the demand under oath shall be accompanied by a power of
attorney or such other writing which authorizes the attorney or other agent to
so act on behalf of the Member. The demand under oath shall be directed to LLC
at its registered office in the State of Delaware or at its principal place of
business.
(c) Directors' Rights to Inspect. Any Director shall have the
right to examine LLC's Members' Interest Register and its other books and
records for a purpose reasonably related to his position as a Director.
(d) Members' Interest Register as Evidence. The Members' Interest
Register shall be the only evidence as to who are the Members entitled to vote
in person or by proxy at any meeting of Members.
Section 2.08 Indemnification
(a) Third Party Actions, Suits and Proceedings. Each person who
was or is made a party or is threatened to be made a party to or is involved in
any action, suit or proceeding, whether civil, ▇▇▇▇▇ nal, administrative or
investigative (other than an action by or in the right of LLC), by reason of
the fact that he or she, or a person of whom he or she is the legal
representative, is or was a Director or officer, of LLC or is or was serving at
the request of LLC as a manager, director, officer, employee, fiduciary, or
agent of another limited liability company or of a corporation, partnership,
joint venture, trust or other enterprise (hereinafter a "proceeding"), shall be
indemnified and held harmless by LLC, against all expenses (including
attorneys' fees) judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such proceeding if such
person acted in good faith and in a manner such person reasonably believed to
be in or not opposed to the best interests of LLC, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe such person's
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which such person reasonably believed to
be in or not opposed to the best interests of LLC, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
(b) Actions by LLC. LLC shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of LLC to procure a judgment in its
favor by reason of the fact that such person, or a person of whom he or she is
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the legal representative, is or was a Director or officer of LLC, or is or was
serving at the request of LLC as a manager or director, officer, employee,
fiduciary or agent of another limited liability company or of a corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by such person in
connection with the defense or settlement of such action or suit if such person
acted in good faith and in a manner such person reasonably believed to be in or
not opposed to the best interests of LLC and except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to LLC unless and only to the extent that
the Court of Chancery of the State of Delaware or the court in which such
action or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
(c) Procedure for Indemnification. Any indemnification of a
Director or officer of LLC under Section 2.08(a) or 2.08(b) or advance of
expenses under Section 2.08(f) shall be made promptly, and in any event within
30 days, upon the written request of the Director or officer. If a
determination by LLC, by action of its Board of Directors, that the Director or
officer is entitled to indemnification pursuant to this Section 2.08 is
required, and LLC fails to respond within 60 days to a written request for
indemnity, LLC shall be deemed to have approved the request. If LLC denies a
written request for indemnification or advancing of expenses, in whole or in
part, or if payment in full pursuant to such request is not made within 30
days, the right to indemnification or advances as granted by this Section 2.08
shall be enforceable by the Director or officer in any court of competent
jurisdiction. Such person's costs and expenses incurred in connection with
successfully establishing his or her right to indemnification, in whole or in
part, in any such action shall also be indemnified by LLC. It shall be a
defense to any such action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any, has been tendered to LLC)
that the claimant has not met the standards of conduct which would make it
permissible under the Delaware General Corporate Law if LLC were a corporation
for LLC to indemnify the claimant for the amount claimed, but the burden of
such defense shall be on LLC. Neither the failure of LLC (including its
Directors, independent legal counsel or Members) to have made a determination
prior to the commencement of such action that indemnification of the claimant
is proper in the circumstances because he or she has met the standard of
conduct set forth for a director or officer of a corporation in the Delaware
General Corporate Law, nor an actual determination by LLC (including its
Directors, independent legal counsel or Members) that the claimant has not met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that the claimant has not met the appli cable standard of
conduct.
(d) Rights Non-exclusive. The rights to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Section 2.08 shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
provision of this Agreement, agreement, vote of Members or disinterested
Directors or otherwise.
(e) Insurance. LLC may purchase and maintain insurance on its own
behalf and on behalf of any person who is or was a Director, officer, employee,
fiduciary, or agent of LLC or was serving at the request of LLC as a manager,
officer, employee or agent of another limited liability company, corpo ration,
partnership, joint venture, trust or other enterprise against any liability
asserted against him or her and incurred by him or her in any such capacity,
whether or not LLC would have the power to indemnify such person against such
liability under this Section 2.08.
(f) Expenses. Expenses incurred by any person described in
Section 2.08(a) or 2.08(b) in defending a proceeding shall be paid by LLC in
advance of such proceeding's final disposition upon receipt of an undertaking
by or on behalf of the Director or officer to repay such amount if it shall
ultimately be determined that he or she is not entitled to be indemnified by
LLC. Such expenses incurred
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by other employees and agents may be so paid upon such terms and conditions, if
any, as the Board of Directors deems appropriate.
(g) Employees and Agents. Persons who are not covered by the
foregoing provisions of this Section 2.08 and who are or were Members,
employees or agents of LLC, or who are or were serving at the request of LLC as
employees or agents of another limited liability company, corporation,
partnership, joint venture, trust or other enterprise, may be indemnified to
the extent authorized at any time or from time to time by the Board of
Directors.
(h) Contract Rights. The provisions of this Section 2.08 shall be
deemed to be a contract right between LLC and each Director or officer who
serves in any such capacity at any time while this Section 2.08 and the
relevant provisions of the Delaware Act or other applicable law are in effect,
and any repeal or modification of this Section 2.08 or any such law shall not
affect any rights or obligations then existing with respect to any state of
facts or proceeding then existing. The indemnification and other rights
provided for in this Section 2.08 shall inure to the benefit of the heirs,
executors and administrators of any person entitled to such indemnification.
Except as provided in Section 2.08(c) hereof, LLC shall indemnify any such
person seeking indemnification in connection with a proceeding initiated by
such person only if such proceeding was authorized by the Directors.
(i) Merger or Consolidation; Other. For purposes of this Section
2.08, references to "LLC" shall include, in addition to the resulting company,
any constituent company (including any constituent of a constituent) absorbed
in a consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its managers, directors,
officers, and employees or agents, so that any person who is or was a manager,
director, officer, employee or agent of such constituent company, or is or was
serving at the request of such constituent company as a director, officer,
employee or agent of another company, partnership, joint venture, trust or
other enterprise, shall stand in the same position under this Section 2.08 with
respect to the resulting or surviving company as he or she would have with
respect to such constituent company if its separate existence had continued.
For purposes of this Section 2.08, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of LLC" shall include any service as a
manager, director, officer, employee or agent of LLC which imposes duties on,
or involves services by, such manager, director, officer, employee, or agent
with respect to an employee benefit plan, its participants or beneficiaries;
and a person who acted in good faith and in a manner he reasonably believed to
be in the interest of the participants and beneficiaries of an employee benefit
plan shall be deemed to have acted in a manner "not opposed to the best
interests of LLC" as referred to in this Section 2.08.
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Section 2.09 Special Rights of Iridium Bermuda.
(a) Waiver of Limited Liability. Pursuant to
Section 18-303(b) of the Delaware Act, Iridium Bermuda waives,
commencing on the first day of the Iridium Bermuda Special
Rights Period, the limitation on liability contained in
Section 18-303(a) of the Delaware Act and Section 1.07 of this
Agreement; provided that Iridium Bermuda shall have no
liability to any person, including LLC, for any debt,
obligation or liability of LLC until all of the assets and
capital of LLC have first been exhausted in satisfaction
thereof.
(b) Special Approval Rights. In addition to any
other voting rights which Iridium Bermuda may have hereunder,
under the Delaware Act or otherwise, during the Iridium
Bermuda Special Rights Period, LLC shall not take any of the
following actions, or permit any of the following actions or
events to occur, without the consent of one of the Directors
designated by Iridium Bermuda:
(i) Make any material amendments or modifications
to this Agreement;
(ii) Approve any business plan of LLC that would
result in any material change in the purpose
of LLC as set forth in Section 1.03 of this
Agreement or otherwise change LLC's business
so that it varies materially from the
business purpose contemplated by Section 1.03
of this Agreement;
(iii) Acquire, other than in the ordinary course of
business of LLC, (A) a controlling interest
or a majority of the voting stock or equity
of any corporation or other entity that would
be a
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Significant Subsidiary (as such term is
defined in Rule 405 under the United States
Securities Act of 1933, or any successor rule
thereto) or (B) any other assets if the
aggregate fair market value thereof is
greater than $50 million;
(iv) Sell, lease (as lessor), exchange or
otherwise dispose of all or substantially all
of the assets of LLC (other than to a person
controlled by LLC);
(v) Cause the dissolution and/or liquidation of
LLC;
(vi) Take any action for the (A) commencement of a
voluntary case with respect to LLC under any
applicable bankruptcy, insolvency or similar
law now or hereafter in effect, (B) consent
to the entry of any order for relief in an
involuntary case under any such law with
respect to LLC to the extent that the giving
or withholding of such consent is within
LLC's discretion, (C) consent to the
appointment or taking possession by a
receiver, liquidator, assignee, custodian
trustee, sequestrator (or similar official)
of LLC or of any substantial part of LLC's
property or (D) making by LLC of a general
assignment for the benefit of creditors."
ARTICLE III
CAPITAL CONTRIBUTIONS, ALLOCATIONS AND DISTRIBUTIONS
Section 3.01 Form of Contribution
The contribution with respect to a Member of LLC may, as determined by
the Board of Directors in its discretion, be in cash or other legal
consideration. The initial capital contribution of the initial Members are the
shares of Iridium, Inc. stock surrendered for Interests in LLC pursuant to the
LLC Merger and no Member shall be required to make any additional contributions
with respect thereto (except as required by law and except as set forth in
Section 4.02).
Section 3.02 Contributions by the Class 1 Members
There shall be contributed to the capital of LLC, with respect to each
Person who purchases a Class 1 Interest, an amount equal to the net purchase
price to the Company for such Class 1 Interest (such amount being such Person's
capital contribution to LLC). Class 1 Members, in their capacity as Members of
LLC, shall not be required to make any additional contributions to LLC (except
as required by law and except as set forth in Section 4.02).
The Class 1 Members shall cause their Class 1 Interests in the
aggregate to be entitled to at least 21% of each item of the capital, income,
gain, loss, deduction, or credit distributions of LLC at all times.
Section 3.03 Contributions with Respect to
the Class 2 Members
There shall be contributed to the capital of LLC, with respect to each
Person who purchases a Class 2 Interest, an amount equal to the net purchase
price to the Company for such Class 2 Interest (such amount being such Person's
capital contribution to LLC). Class 2 Members, in their capacity as Members of
LLC, shall not be required to make any additional contributions to LLC (except
as required by law and except as set forth in Section 4.02).
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Section 3.04 Allocation of Distributions
The distributions of LLC shall, subject to the applicable terms of
this Article, Article IV of this Agreement and the rights of the Class 2
Members, be allocated entirely to the Class 1 Members pro rata in proportion to
their percentage ownership of all outstanding Class 1 Interests.
Section 3.05 Allocation of Tax Items
(a) For U.S. federal income tax purposes, items of income and
gain, to the extent available, shall be allocated first to the Class 2 Members
in amounts that match the distributions made to the Class 2 Members pursuant to
Article IV of this Agreement. Items of income or gain not allocated to the
Class 2 Members pursuant to the immediately preceding sentence, and all items
of loss, deduction, expense or credit, shall be allocated to the Class 1
Members pro rata in proportion to their percentage ownership of all Class 1
Interests.
(b) Asset Contributions. If there is a difference between the
adjusted tax basis of any LLC asset and its fair market value as of the date of
contribution of the asset, allocations of depreciation, amortization and gain
or loss with respect to such asset, as computed for U.S. federal income tax
purposes, shall be made among the Members for U.S. federal income tax purposes
in accordance with Code Section 704(c) and the regulations thereunder. In
complying with the requirements of Code Section 704(c), LLC is authorized to
utilize any method permitted by the Treasury Regulations under Code Section
704(c) that is approved by a majority of the Directors.
(c) Allocations Solely for Tax Purposes. Allocations pursuant to
this Section 3.05 are solely for purposes of U.S. federal, state and local
taxes and shall not affect, or in any way be taken into account in computing,
any Member's share of distributions pursuant to any provision of this
Agreement.
Section 3.06 Withholding
LLC shall comply with withholding requirements under U.S. federal,
state and local law and shall remit amounts withheld to and file required forms
with applicable jurisdictions. To the extent that LLC is required to withhold
and pay over any amounts to any authority with respect to distributions or
allocations to any Member, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Member. To the fullest
extent permitted by law, in the event of any claimed over-withholding, Members
shall be limited to an action against the applicable jurisdiction. If the
amount withheld was not withheld from actual distributions, LLC may reduce
subsequent distributions by the amount of such withholding. Each Member, by
its acceptance of an Interest in LLC, shall be deemed to agree to furnish LLC
with any representations and forms as shall reasonably be requested by LLC to
assist it in determining the extent of, and in fulfilling, its withholding
obligations.
Section 3.07 Distributions
(a) Declaration. Subject to the terms of this Article III and the
Delaware Act, Class 2 Members shall receive periodic distributions
("dividends"), if any, in accordance with Article IV of this Agreement, as and
when declared by the Board of Directors, and Class 1 Members shall receive
periodic dividends, subject to Section 3.07(c) and Article IV of this Agreement
and to the provisions of the Delaware Act, as and when declared by the Board of
Directors, in their discretion. In addition to the provisions of Section
3.07(c), in determining whether to declare a dividend to Class 1 Members, the
Board of Directors shall consider the total tax liability of Class 1 Members
with respect to their Class 1 Interests, including the tax liability of Class 1
Members in countries other than the home country of each Class 1 Member.
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(b) Accounting. Each time the Board of Directors declares a
dividend, it shall determine the amount of such distribution that is from
retained earnings and the amount that constitutes a return of capital for
accounting purposes and will make a record of such determination in the minutes
of the Board meeting at which the dividend was declared.
(c) Tax. Each Non-U.S. Class 1 Member, upon receiving notice from
LLC or its allocation pursuant to Section 3.05, shall compute its U.S. federal,
state and local income tax liability resulting solely from such allocation and
shall notify LLC, within 30 days of receiving notice of its allocation of the
amount of such U.S. federal, state and local income tax liability. The Board
of Directors shall then be required, to the extent LLC has funds legally
available therefore, to promptly declare and pay a dividend (pro rata as
provided in Section 3.04) in an amount which, when added to any prior dividends
paid with respect to the profits of the same fiscal year, is sufficient to
ensure that each Non-U.S. Class 1 Member receives not less than the amount of
such U.S. federal, state and local income tax liability (the "Minimum
Dividend"); provided, that for purposes of determining the amount of the
dividend, the Board of Directors shall take into account any withholding
pursuant to Section 3.06. To the extent that LLC has insufficient funds
legally available to pay the Minimum Dividend in any year, the Minimum Dividend
that the Board of Directors shall be required to declare and pay in subsequent
years shall be increased by the amount of such shortfall. Subject to the
rights of Class 2 Interests, any amounts required to be declared and paid as
Minimum Dividends shall be declared and paid prior to the declaration and
payment of any other dividend or distribution whatsoever to Members.
For purpose of this Section 3.07 (c), a "Non-U.S. Class 1 Member" is
any Class 1 Member that is for U.S. federal income tax purposes: (i) a
nonresident alien individual or (ii) a foreign corporation, partnership or
estate or trust.
(d) Legal Funds. A Member shall not be entitled to receive any
dividend with respect to any dividend payment date (and any such dividend shall
not be considered due and payable), irrespective of whether such dividend has
been declared by the Board of Directors, until such time as LLC shall have
funds legally available for the payment of such dividend to such Member
pursuant to the terms of this Agreement and the Delaware Act, and
notwithstanding any provision of Section 18-606 of the Delaware Act to the
contrary, until such time, a Member shall not have the status of a creditor of
LLC, or the remedies available to a creditor of LLC.
(e) Record Dates. For purposes of determining the Members
entitled to receive payment of any dividend or other distribution, the Board of
Directors may set a record date, which shall not precede the date upon which
the resolution fixing the record date is adopted, and which shall be not more
than 60 days before such action. If no record date is fixed, the record date
for determining Members for any such purpose shall be at the close of business
on the day on which the Board of Directors adopts the resolution relating
thereto.
Section 3.08 Limitations on Distributions
Notwithstanding any provision to the contrary contained in this
Agreement, LLC shall not pay a dividend to any Member on account of any of its
Interests if such dividend would violate Section 18-607 of the Delaware Act or
other applicable law.
Section 3.09 Interests as Personal Property
Each Member hereby agrees that its Interests shall for all purposes be
personal property. A Member has no interest in specific LLC property.
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Section 3.10 Tax Matters Partner
Motorola shall be the tax matters partner (the "Tax Matters Partner")
of LLC and, as such, shall assume all the rights and duties of a Tax Matters
Partner as set forth in the Code and in the Treasury Regulations promulgated
thereunder. The Tax Matters Partner agrees to act as a liaison between LLC and
the Internal Revenue Service (the "IRS") in connection with all administrative
and judicial proceedings involving tax controversies regarding LLC.
(a) As Tax Matters Partner, Motorola agrees:
(i) to take all actions necessary to preserve the rights
of the members with respect to audits;
(ii) to notify and keep all other Members informed of all
administrative and judicial proceedings, as required by Section
6223(g) of the Code, and to furnish to each Member, a copy of each
notice or other communication which the Tax Matters Partner receives
from the IRS or sends to the IRS;
(iii) to be reasonably available to respond to inquiries
concerning any and all tax controversies;
(iv) to employ experienced tax counsel to represent LLC in
connection with any audit or investigation by the IRS, and in
connection with all subsequent administrative and judicial proceedings
arising out of such audit. The fees and expenses of such counsel
shall be an expense of LLC and shall be paid by LLC. Such counsel
shall be responsible for representing LLC; it shall be the
responsibility of the Members, at their expense, to employ tax counsel
to represent their respective interests; and
(v) to employ an international firm of certified public
accountants to prepare federal, state, local and other required
returns for LLC. At least 30 days prior to the due date of such
returns, the Tax Matters Partner (or the firm of certified public
accountants that has been retained to prepare the returns) shall
transmit copies of the Form 1065 (U.S. Partnership Return of Income)
to the Members for their review. The Tax Matters Partner shall not
sign or file the Form 1065 unless the Members have collectively
consented to its filing. If, however, a Member does not object to the
filing of the Form 1065 within 15 days after receiving the return, the
Tax Matters Partner may sign the return and LLC may file it after
making a good faith effort to incorporate in the return any comments
previously received from any Member.
(b) The Members agree that the chief financial officer, relying if
he/she deems appropriate on the advice of outside counsel or of LLC's firm of
independent certified public accountants, will make all material decisions
relating to any tax controversy. Without limiting the scope of the foregoing,
the Tax Matters Partner agrees that it shall not take any of the following
actions without the written consent of the Board of Directors:
(i) settle any significant claims by the IRS against the
LLC;
(ii) initiate judicial proceedings contesting adverse
determinations by the IRS against the LLC; and
(iii) enter into an agreement to extend the statute of
limitations.
(c) The Tax Matters Partner shall not be required to take any
action or incur any expenses for the prosecution of any administrative or
judicial remedies in its capacity as Tax Matters Partner
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unless the Members agree on a method of sharing expenses incurred in connection
with the prosection of such remedies. As long as the Tax Matters Partner is
not grossly negligent and acts in good faith pursuant to instructions it
receives from the Members, the Tax Matter Partner shall be fully protected in
acting as such and the LLC shall indemnify and hold harmless the Tax Matters
Partner from and against any and all expenses incurred by the Tax Matters
Partner in connection with any activities or undertakings taken by it in its
capacity as the Tax Matters Partner. Any Member that enters into a settlement
or closing agreement with the IRS or any comparable U.S. governmental
authorities with respect to any LLC tax item shall notify the Tax Matters
Partner of such agreement and its terms within 30 days of the execution of such
agreement. The Tax Matters Partner shall take such action as may be reasonably
necessary to constitute the other Members as "notice partners" within the
meaning of Section 6231(a)(8) of the Code.
ARTICLE IV
INTERESTS AND OTHER SECURITIES
Section 4.01 Class 1 Interests and Class 2 Interests
(a) Authorization. The Interests in LLC shall be divided into two
classes, Class 1 Interests and Class 2 Interests. Class 1 Interests shall be
represented by certificates, unless otherwise specified by resolution of the
Board of Directors pursuant to Section 4.10, evidencing any number of whole
Class 1 Interests. Class 2 Interests shall be issued in series, as described
below, with each series represented by certificates, unless otherwise specified
by resolution of the Board of Directors pursuant to Section 4.10, evidencing
any number of whole Class 2 Interests of such series. All series of Class 2
Interests are referred to herein collectively as "Class 2 Interests" and the
Class 1 Interests and Class 2 Interests are referred to herein collectively as
"Interests". The total number of Interests which LLC has the authority to
issue is 225,000,000 Class 1 Interests, 50,000 Series M Class 2 Interests and
300,000 additional Class 2 Interests. Subject to Article VII of this
Agreement, Class 2 Interests may be issued in series from time to time by the
Board of Directors, and the Board of Directors are expressly authorized by the
Members to fix by resolution or resolutions the designations and the powers,
preferences and rights, and the qualifications, limitations and restrictions
thereof, of each series of Class 2 Interests, including without limitation the
following:
(i) the distinctive serial designation of such series which
shall distinguish it from other series;
(ii) the number of Class 2 Interests included in such series,
which number may be increased or decreased from time to time unless
otherwise provided by the Board of Directors in the resolution or
resolutions providing for the issue of such series;
(iii) the dividend rate (or method of determining such rate)
payable to the holders of the Class 2 Interests of such series, any
conditions upon which such dividends shall be paid and the date or
dates upon which such dividends shall be payable;
(iv) whether dividends on the Class 2 Interests of such
series shall be cumulative and, in the case of Class 2 Interests of
any series having cumulative dividend rights, the date or dates or
method of determining the date or dates from which dividends on the
Class 2 Interests of such series shall be cumulative;
(v) the amount or amounts which shall be payable out of the
assets of LLC to the holders of the Class 2 Interests of such series
upon voluntary or involuntary liquidation,
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dissolution or winding up of LLC (including designations of priority
between and among any series of Class 2 Interests, Series M Class 2
Interests and Series A Class 2 Interests);
(vi) the price or prices at which, the period or periods
within which and the terms and conditions upon which the Class 2
Interests of such series may be redeemed, in whole or in part, at the
option of LLC or at the option of the holder or holders thereof or
upon the happening of a specified event or events;
(vii) the obligation, if any, of LLC to purchase or redeem
Class 2 Interests of such series pursuant to a sinking fund or
otherwise and the price or prices at which, the period or periods
within which and the terms and conditions upon which the Class 2
Interests of such series shall be redeemed or purchased, in whole or
in part, pursuant to such obligation;
(viii) whether or not the Class 2 Interests of such series
shall be convertible or exchangeable, at any time or times at the
option of the holder or holders thereof or at the option of LLC or
upon the happening of a specified event or events, into Interests of
any other class or classes or any other series of the same or any
other class or classes of Interests in LLC, and the price or prices or
rate or rates of exchange or conversion and any adjustments applicable
thereto; and
(ix) the voting rights, if any, of the holders of the Class 2
Interests of such series.
(b) Certificate of Designations; Convertible Interests and
Securities. When any series of Class 2 Interests has been authorized by the
Board of Directors, the special rights, preferences and other terms of such
series of Class 2 Interests shall be as set forth in a certificate of
designations which shall be approved and adopted by a majority of the Board of
Directors and annexed to this Agreement. The annexation of a certificate of
designations to this Agreement shall not be considered an amendment of this
Agreement. When authorized as provided in Article VII, the Board of Directors
may also provide for the issuance of Class 1 Interests and Class 2 Interests
upon the exercise, conversion or exchange of rights of purchasers represented
by options, warrants, convertible debt securities or such other interests or
instruments as they may determine.
(c) Outstanding Convertible Securities. The Members hereby
acknowledge that LLC has issued (i) a warrant to Motorola (the "Motorola
Warrant"), as amended hereby in the form of Exhibit 3-B hereto, to purchase
Series M Class 2 Interests, (ii) Warrants to certain Members, in the form of
Exhibit 2- B hereto, to purchase in the aggregate 5,132,025 Class 1 Interests
(the "Third Round Warrants") and (iii) Series A Class 2 Interests, which are
convertible into Class 1 Interests; and, that (A) in connection with the
negotiation, execution and implementation of any Agreements Regarding Guarantee
with Guarantors, LLC is authorized to issue warrants to purchase up to
11,250,000 Class 1 Interests to the Guarantors, and (B) in order to provide
incentive to the gateway service territory owners to achieve commercial
activation of their gateways by the date of completion of Milestone 47 under
the Space System Contract and to achieve specified service revenues within 15
months from said date of completion of Milestone 47, LLC is authorized to issue
warrants to purchase up to 9,165,000 Class 1 Interests to the gateway territory
owners; provided, however that the banking and financing committee of the Board
of Directors shall have full authority to (x) approve the terms of the
foregoing warrants (including the inclusion of customary anti-dilution
provisions comparable to those included in the Third Round Warrants); and (y)
determine the recipients of warrants and the number of warrants to be issued to
each such recipient.
Section 4.02 Reserve Capital Call
Each Member named on Annex D hereto hereby irrevocably and
unconditionally agrees to purchase additional Class 1 Interests in an amount up
to the number of Class 1 Interests specified on
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Annex D for such Member, at a purchase price of $13.33 per Class 1 Interest, in
such manner and at such time(s) as the Board of Directors may determine if and
when the Board of Directors has determined that the purchase of such additional
Class 1 Interests is necessary for the successful operation of LLC; provided,
however, that the full capital call contemplated by this Section 4.02 shall be
mandatory (the "Mandatory Call") upon a determination by the Treasurer of LLC
that on the forty-fifth Business Day following such determination, and taking
into account funds available under the $1.1 billion bank facility guaranteed by
Motorola, LLC will not have available to it sufficient funds to meet its
contractual obligations and other funding requirements absent the Reserve
Capital Call funds, at which time the Treasurer shall deliver a notice (a
"Funding Notice") notifying each Member named on Annex D hereto that the
Reserve Capital Call is being exercised and specifying a date thirty days after
delivery of the Funding Notice for payment; provided, however, that the
Mandatory Call (A) is not effective if, at the time of occurrence of the
condition giving rise to the Mandatory Call, Motorola or another Guarantor is
in default on its milestone commitments or other material obligations under
its Guarantee, and (B) terminates immediately upon the lending of any funds to
LLC by banks, which loans are not fully Guaranteed by one or more Guarantors.
Any obligation to purchase additional Class 1 Interests under this Section
4.02 shall be on a pro rata basis, with each Member only being required to
purchase a percentage of the Class 1 Interests to be purchased under this
Section 4.02 equal to the number of Class 1 Interests set forth next to such
Members' name in Annex D hereto divided by the total number of Class 1
Interests set forth next to all of the Members names in Annex D. The number of
and purchase price for Class 1 Interests that each Member shall be obligated
to purchase pursuant to this Section 4.02 shall be appropriately adjusted for
stock splits, stock dividends and other recapitalizations having a similar
effect. In connection with a purchase of Class 1 Interests under this Section
4.02, each Member acquiring Class 1 Interests shall be deemed to have made the
acknowledgements and agreements set forth on Annex C hereto.
Section 4.03 Class 1 Interests
(a) Voting Rights. Subject to the rights of holders of Series M
Class 2 Interests, Series A Class 2 Interests and of any other Class 2
Interests, and except as otherwise provided herein and in the Delaware Act, all
voting rights of the Members shall be vested exclusively in the Class 1
Members. The Class 1 Interests shall entitle the Class 1 Members to vote in
proportion to the number of Class 1 Interests owned by each Class 1 Member upon
all matters upon which Class 1 Members have the right to vote. A Member shall
have one vote in respect of each Class 1 Interest owned by such Member.
(b) Liquidation Rights. Subject to the rights of holders of
Series M Class 2 Interests, Series A Class 2 Interests and of any other Class 2
Interests, each Class 1 Member shall be entitled to receive all distributions
to the holders of Class 1 Interests in any liquidation, dissolution or winding
up of LLC pro rata on the basis of the number of Class 1 Interests held by each
of them as a percentage of all outstanding Class 1 Interests.
(c) Dividends. To the extent permitted under the Delaware Act and
subject to the rights of holders of Series M Class 2 Interests, Series A Class
2 Interests and of any other Class 2 Interests, dividends may be paid on the
Class 1 Interests as and when declared by the Board of Directors, in their
discretion, subject to the requirements of Section 3.07 (c) of this Agreement.
In addition to the provisions of Section 3.07 (c), in determining whether to
declare a dividend on the Class 1 Interests, the Board of Directors shall
consider the total tax liability of Class 1 Members in respect of their Class 1
Interests, including the tax liability of Class 1 Members in countries other
than the home country of each Class 1 Member.
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Section 4.04 Series M Class 2 Interests
(a) Voting Rights. Except as otherwise provided herein and as
otherwise required by law, the Series M Class 2 Interests shall have no voting
rights; provided that each holder of Series M Class 2 Interests shall be
entitled to notice of all meetings of Members at the same time and in the same
manner as notice is given to the Members entitled to vote at such meeting.
(b) Liquidation Rights. Upon any liquidation, dissolution or
winding up of LLC, each holder of Series M Class 2 Interests shall be entitled
to be paid, before any distribution or payment is made upon any Junior
Interests, an amount in cash equal to the aggregate Liquidation Value (plus all
accrued and unpaid dividends) of all Series M Class 2 Interests held by such
holder, and the holders of Series M Class 2 Interests shall not be entitled to
any further payment. If upon any such liquidation, dissolution or winding up
of LLC, LLC's assets to be distributed among the holders of the Series M Class
2 Interests are insufficient to permit payment to such holders of the aggregate
amount which they are entitled to be paid, then the entire assets to be
distributed shall be distributed ratably among such holders based upon the
aggregate Liquidation Value (plus all accrued and unpaid dividends) of the
Series M Class 2 Interests held by each such holder. LLC shall mail written
notice of such liquidation, dissolution or winding up, not less than 60 days
prior to the payment date stated therein, to each record holder of Series M
Class 2 Interests. Neither the consolidation or merger of LLC into or with any
other entity or entities, nor the sale or transfer by LLC of all or any part of
its assets, nor the reduction of the aggregate number of Interests in LLC,
shall be deemed to be a liquidation, dissolution or winding up of LLC within
the meaning of this Section 4.04(b).
(c) Dividends.
(i) General Obligation. When and as declared by the
Board of Directors and to the extent permitted under the Delaware Act,
LLC shall pay preferential dividends to the holders of the Series M
Class 2 Interests as provided in this Section 4.04(c)(i). Except as
otherwise provided herein, dividends on each Series M Class 2 Interest
shall accrue on a daily basis at the rate of 8% per annum of the sum
of the Liquidation Value thereof plus all accumulated and unpaid
dividends thereon, from and including the date of issuance of such
Series M Class 2 Interest to and including the date on which the
Liquidation Value of such Series M Class 2 Interest (plus all accrued
and unpaid dividends thereon) is paid or the date on which such Series
M Class 2 Interest is converted into Class 1 Interests hereunder
("Series M Dividends"). Series M Dividends shall accrue whether or
not they have been declared and whether or not there are profits,
surplus or other funds of LLC legally available for the payment of
dividends. Series M Dividends shall be cumulative such that all
accrued and unpaid dividends shall be fully paid or declared with
funds irrevocably set apart for payment before any dividend,
distribution or payment may be made with respect to any Junior
Interests (Series M).
In addition, as and when dividends are declared or paid on the
Class 1 Interests, whether in cash, property or additional Interests
in LLC, the holders of Series M Class 2 Interests shall be entitled to
participate with the holders of Class 1 Interests in such dividends
ratably on a per interest basis.
The date on which LLC initially issues any Series M Class 2
Interests shall be deemed to be its "date of issuance" regardless of
the number of times transfer of such Series M Class 2 Interests is
made on the records maintained by or for LLC and regardless of the
number of Certificates which may be issued to evidence such Series M
Class 2 Interests.
(ii) Series M Dividend Reference Dates. To the extent not
paid on January 1, April 1, July 1 and October 1 of each year,
beginning January 1, 1997 (the "Series M Dividend Reference Dates"),
all Series M Dividends which have accrued on each Series M Class 2
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Interest outstanding during the three-month period (or other period in
the case of the initial Series M Dividend Reference Date) ending upon
each such Series M Dividend Reference Date shall be accumulated and
shall remain accumulated dividends with respect to such Series M Class
2 Interests until paid.
(iii) Distribution of Partial Dividend Payments. Except as
otherwise provided herein, if at any time LLC pays less than the total
amount of Series M Dividends then accrued with respect to the Series M
Class 2 Interests, such payment shall be distributed ratably among the
holders thereof based upon the number of Series M Class 2 Interests
held by each such holder.
(d) Conversion.
(i) Conversion Procedure.
(A) At any time and from time to time, any holder of
Series M Class 2 Interests may convert all or any portion of
the Series M Class 2 Interests (including any fraction of a
Series M Class 2 Interest) held by such holder into a number
of Class 1 Interests computed by multiplying the number of
Series M Class 2 Interests to be converted by $1,000 and
dividing the result by the Series M Conversion Price then in
effect.
(B) Each conversion of Series M Class 2 Interests
shall be deemed to have been effected as of the close of
business on the date on which the Certificate or Certificates
representing the Series M Class 2 Interests to be converted
have been surrendered at the principal executive office of
LLC. At such time as such conversion has been effected, the
rights of the holder of such Series M Class 2 Interests as
such holder shall cease and the Person or Persons in whose
name or names any Certificate or Certificates for Class 1
Interests are to be issued upon such conversion shall be
deemed to have become the holder or holders of record of the
Class 1 Interests represented thereby.
(C) Notwithstanding any other provision hereof, if a
conversion of Series M Class 2 Interests is to be made in
connection with a Public Offering, the conversion of any
Series M Class 2 Interests may, at the election of the holder
of such Series M Class 2 Interests, be conditioned upon the
consummation of the Public Offering in which case such
conversion shall not be deemed to be effective until the
consummation of the Public Offering.
(D) As soon as possible after a conversion has been
effected (but in any event within five business days in the
case of Section 4.04(d)(i)(D)(I) below), LLC shall deliver to
the converting holder:
(I) a Certificate or Certificates
representing the number of Class 2 Interests issuable
by reason of such conversion in such name or names
and such denomination or denominations as the
converting holder has specified;
(II) payment in an amount equal to all
accrued Series M Dividends with respect to each
Series M Class 2 Interest converted, which have not
been paid prior thereto, plus the amount payable
under Section 4.04(d)(i)(H) below with respect to
such conversion; and
(III) a Certificate representing any Series
M Class 2 Interests which were represented by the
Certificate or Certificates delivered to LLC in
connection with such conversion but which were not
converted.
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(E) If LLC is not permitted under applicable law to
pay any portion of the accrued Series M Dividends on the
Series M Class 2 Interests being converted, LLC shall pay such
dividends to the converting holder as soon thereafter as funds
of LLC are legally available for such payment. At the request
of any such converting holder, LLC shall provide such holder
with written evidence of its obligation to such holder.
(F) The issuance of Certificates for Class 1 Interests
upon conversion of Series M Class 2 Interests shall be made
without charge to the holders of such Series M Class 2
Interests for any issuance tax in respect thereof or other
cost incurred by LLC in connection with such conversion and
the related issuance of Class 1 Interests. Upon conversion of
each Series M Class 2 Interest, LLC shall take all such
actions as are necessary in order to insure that the Class 1
Interests issuable with respect to such conversion shall be
validly issued.
(G) LLC shall assist and cooperate with any holder of
Series M Class 2 Interests required to make any governmental
filings or obtain any governmental approval prior to or in
connection with any conversion of Series M Class 2 Interest
hereunder (including, without limitation, making any filings
required to be made by LLC).
(H) If any fractional interest in a Class 1 Interest
would, except for the provisions of this subsection, be
deliverable upon any conversion of the Series M Class 2
Interests of LLC, in lieu of delivering the fractional
interest therefor, shall pay an amount to the holder thereof
equal to the market price of such fractional interest as of
the date of conversion.
(I) LLC shall at all times reserve and keep available
out of its authorized but unissued Class 1 Interests, solely
for the purpose of issuance upon the conversion of the Series
M Class 2 Interests, the number of Class 1 Interests issuable
upon the conversion of all outstanding Series M Class 2
Interests. All Class 1 Interests which are so issuable shall,
when issued, be duly and validly issued and free from all
taxes, liens and charges. LLC shall take all such actions as
may be necessary to assure that all such Class 1 Interests may
be so issued without violation of any applicable law or
governmental regulation (except for official notice of
issuance which shall be immediately delivered by LLC upon each
such issuance).
(ii) Series M Conversion Price. The initial Series M
Conversion Price shall be $13.33. In order to prevent dilution of the
conversion rights granted under this subdivision, the Series M
Conversion Price shall be subject to adjustment from time to time
pursuant to this Section 4.04(d)(ii). If LLC at any time subdivides
(by any split of Interests, Interest dividend or distribution,
recapitalization or otherwise) one or more classes of its outstanding
Class 1 Interests into a greater number of Interests, the Series M
Conversion Price in effect immediately prior to such subdivision shall
be proportionately reduced, and if LLC at any time combines (by
reverse split of Interests or otherwise) one or more classes of its
outstanding Class 1 Interests into a smaller number of Interests, the
Series M Conversion Price in effect immediately prior to such
combination shall be proportionately increased.
(iii) Reorganization, Reclassification, Consolidation, Merger
or Sale. Any recapitalization, reorganization, reclassification,
consolidation, merger, sale of all or substantially all of LLC's
assets to another Person or other transaction which is effected in
such a manner that holders of Class 1 Interests are entitled to
receive (either directly or upon subsequent liquidation) membership
interests, stock, securities or assets with respect to or in exchange
for Class 1 Interests is referred to herein as an "Organic Change".
Prior to the consummation of any Organic Change, LLC shall make
appropriate provisions (in form and substance satisfactory to the
holders of a majority of the Series M Class 2 Interests then
outstanding) to insure that each of the holders of Series M Class 2
Interests shall thereafter have the right to acquire and receive, in
lieu of or in addition to (as the case may be) the Class 1 Interests
immediately theretofore acquirable and receivable upon the conversion
of such holder's Series M Class 2 Interests, such membership
interests, shares of stock, securities or assets as such holder would
have received in connection with such Organic Change if such holder
had converted its Series M Class 2 Interests immediately prior to such
Organic Change. In each such case, LLC shall also make appropriate
provisions (in form and substance satisfactory
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to the holders of a majority of the Series M Class 2 Interests then
outstanding) to insure that the provisions of this Section 4.04(d) and
Sections 4.04(e) and (f) shall thereafter be applicable to the Series
M Class 2 Interests (including, in the case of any such consolidation,
merger or sale in which the successor entity or purchasing entity is
other than LLC, an immediate adjustment of the Series M Conversion
Price to the value for the Class 1 Interests reflected by the terms of
such consolidation, merger or sale, and a corresponding immediate
adjustment in the number of Class 1 Interests acquirable and
receivable upon conversion of Series M Class 2 Interests, if the value
so reflected is less than the Conversion Price in effect immediately
prior to such consolidation, merger or sale). LLC shall not effect
any such consolidation, merger or sale, unless prior to the
consummation thereof, the successor Person (if other than LLC)
resulting from consolidation or merger or the corporation purchasing
such assets assumes by written instrument (in form reasonably
satisfactory to the holders of a majority of the Series M Class 2
Interests then outstanding), the obligation to deliver to each such
holder such membership interests, shares of stock, securities or
assets as, in accordance with the foregoing provisions, such holder
may be entitled to acquire.
(iv) Notices.
(A) Immediately upon any adjustment of the Series M
Conversion Price, LLC shall give written notice thereof to all
holders of Series M Class 2 Interests, setting forth in
reasonable detail and certifying the calculation of such
adjustment.
(B) LLC shall give written notice to all holders of
Series M Class 2 Interests at least 20 days prior to the date
on which LLC closes its books or takes a record (a) with
respect to any dividend or distribution upon Class 1
Interests, (b) with respect to any pro rata subscription offer
to holders of Class 1 Interests (c) for determining rights to
vote with respect to any Organic Change, dissolution or
liquidation.
(C) LLC shall also give written notice to the holders of
Series M Class 2 Interests at least 20 days prior to the date
on which any Organic Change shall take place.
(e) Liquidating Dividends. If LLC declares or pays a dividend
upon the Class 1 Interests payable otherwise than in cash out of earnings or
earned surplus (determined in accordance with generally accepted accounting
principles, consistently applied) except for an Interest dividend payable in
Class 1 Interests (a "Liquidating Dividend"), then LLC shall pay to the holders
of Series M Class 2 Interests at the time of payment thereof the Liquidating
Dividends which would have been paid on the Class 1 Interests had such Series M
Class 2 Interests been converted immediately prior to the date on which a
record is taken for such Liquidating Dividend, or, if no record is taken, the
date as of which the record holders of Class 1 Interests entitled to such
dividends are to be determined.
(f) Rights. If at any time LLC grants, issues or sells any Right
to acquire Class 1 Interests pro rata to the record holders of any class of
Class 1 Interests, then each holder of Series M Class 2 Interests shall be
entitled to acquire, upon the terms applicable to such Rights, the aggregate
Rights which such holder could have acquired if such holder had held the number
of Class 1 Interests acquirable upon conversion of such holder's Series M Class
2 Interests immediately before the date on
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which a record is taken for the grant, issuance or sale of such Rights, or, if
no such record is taken, the date as of which the record holders of Class 1
Interests are to be determined for the grant, issue or sale of such Rights.
(g) Events of Noncompliance.
(i) Definition. An Event of Noncompliance shall be
deemed to have occurred if:
(A) LLC fails to pay on any Series M Dividend Reference
Date the full amount of Series M Dividends then accrued on the
Series M Class 2 Interests, whether or not such payment is
legally permissible or is prohibited by any agreement to which
LLC is subject; or
(B) LLC or any Subsidiary makes an assignment for the benefit
of creditors or admits in writing its inability to pay its
debts generally as they become due; or an order, judgment or
decree is entered adjudicating LLC or any Subsidiary bankrupt
or insolvent; or any order for relief with respect to LLC or
any Subsidiary is entered under the United States Federal
Bankruptcy Code; or LLC or any Subsidiary petitions or applies
to any tribunal for the appointment of a custodian, trustee,
receiver or liquidator of LLC or any Subsidiary or of any
substantial part of the assets of LLC or any Subsidiary, or
com mences any proceeding (other than a proceeding for the
voluntary liquidation and dissolution of a Subsidiary)
relating to LLC or any Subsidiary under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction; or any
such petition or application is filed, or any such proceeding
is commenced, against LLC or any Subsidiary and either (a) LLC
or any such Subsidiary by any act indicates its approval
thereof, consent thereto or acquiescence therein or (b) such
petition, application or proceeding is not dismissed within 60
days.
(ii) Consequences of Certain Events of Noncompliance.
(A) If an Event of Noncompliance has occurred, the
holder or holders of a majority of the Series M Class 2
Interests then outstanding may demand (by written notice
delivered to LLC) immediate redemption of all or any portion
of the Series M Class 2 Interests owned by such holder or
holders at a price per Series M Class 2 Interests equal to the
Liquidation Value thereof (plus all accrued and unpaid
dividends thereon). LLC shall redeem all Series M Class 2
Interests as to which rights under this section have been
exercised within 15 days after receipt of the initial demand
for redemption. Notwithstanding the foregoing, LLC shall not
have any obligation to redeem the Series M Class 2 Interests
so long as (i) such redemption is prohibited by the provisions
of applicable state law or (ii) such redemption is prohibited
by, or would otherwise cause a default under, indebtedness of
LLC having a principal amount of excess of $1,000,000.00.
(B) If any Event of Noncompliance has occurred, the
number of Directors of LLC shall, at the request of the
holders of a majority of the Series M Class 2 Interests then
outstanding, be increased by one (1), and the holders of
Series M Class 2 Interests shall have the special right,
voting separately as a single class (with each Series M Class
2 Interest being entitled to one vote) and to the exclusion of
all other Interests in LLC, to elect an individual to fill
such newly created Director position, to remove any individual
elected to such position and to fill any vacancies in such
position. The special right of the holders of Series M Class
2 Interests to elect Directors may be exercised at the special
meeting called pursuant to this subsection (B), at any annual
or other special meeting of Members and, to the extent and in
the manner permitted by applicable law,
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pursuant to a written consent in lieu of a meeting of Members.
Such special right shall continue until such time as there is
no longer any Event of Noncompliance in existence, at which
time such special right shall terminate subject to revesting
upon the occurrence and continuation of any Event of
Noncompliance which gives rise to such special right
hereunder.
At any time when such special right has vested in the holders
of Series M Class 2 Interests, a proper officer of LLC shall, upon the
written request of the holders of at least 10% of the Series M Class 2
Interests then outstanding, addressed to the secretary of LLC, call a
special meeting of the holders of Series M Class 2 Interests for the
purpose of electing a Director pursuant to this subsection. Such
meeting shall be held at the earliest legally permissible date at the
principal executive office of LLC, or at such other place designated
by the holders of at least 10% of the Series M Class 2 Interests then
outstanding. If such meeting has not been called by a proper officer
of LLC within 10 days after personal service of such written request
upon the secretary of LLC or within 20 days after mailing the same to
the secretary of LLC at its principal executive office, then the
holders of at least 10% of the Series M Class 2 Interests then
outstanding may designate in writing one of their number to call such
meeting at the expense of LLC, and such meeting may be called by such
Person so designated upon the notice required for annual meetings of
Members and shall be held at LLC's principal executive office, or at
such other place designated by the holders of at least 10% of the
Series M Class 2 Interests then outstanding. Any holder of Series M
Class 2 Interests so designated shall be given access to the Members'
Interests Register for the purpose of causing a meeting of Members to
be called pursuant to this section.
At any meeting or at any adjournment thereof at which the
holders of Series M Class 2 Interests have the special right to elect
Directors, the presence, in person or by proxy, of the holders of a
majority of the Series M Class 2 Interests then outstanding shall be
required to constitute a quorum for the election or removal of any
Director by the holders of the Series M Class 2 Interests exercising
such special right. The vote of a majority of such quorum shall be
required to elect or remove any such Director.
Any Director so elected by the holders of Series M Class 2
Interests shall continue to serve as a Director until the expiration
of the lesser of (a) a period of one month following the date on which
there is no longer any Event of Noncompliance in existence or (b) the
remaining period of the full term for which such Director has been
elected. After the expiration of such one-month period or when the
full term for which such Director has been elected ceases (provided
that the special right to elect Directors has terminated), as the case
may be, the number of Directors of LLC shall decrease to such number
as constituted the total number of Directors of LLC immediately prior
to the occurrence of the Event or Events of Noncompliance giving rise
to the special right to elect Directors.
(C) If any Event of Noncompliance exists, each holder of Series M
Class 2 Interests shall also have any other rights which such holder
is entitled to under any contract or agreement at any time and any
other rights which such holder may have pursuant to applicable law.
(h) Registration of Transfer. LLC shall keep at its principal
executive office the Members' Interest Register. Upon the surrender of any
Certificate representing Series M Class 2 Interests at such place, LLC shall,
at the request of the record holder of such Certificate, execute and deliver
(at the LLC's expense) a new Certificate or Certificates in exchange therefor
representing in the aggregate the number of Series M Class 2 Interests
represented by the surrendered Certificate. Each such new Certificate shall be
registered in such name and shall represent such number of Series M Class 2
Interests as is requested by the holder of the surrendered Certificate and
shall be substantially identical in form to the surrendered Certificate, and
dividends shall accrue on the Series M Class 2 Interests
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represented by such new Certificate from the date to which dividends have been
fully paid on such Series M Class 2 Interests represented by the surrendered
Certificate.
(i) Replacement. Upon receipt of evidence reasonably satisfactory
to LLC (an affidavit of the registered holder shall be satisfactory) of the
ownership and the loss, theft, destruction or mutilation of any Certificate
evidencing Series M Class 2 Interests, and in the case of any such loss, theft
or destruction, upon receipt of indemnity reasonably satisfactory to LLC
(provided that if the holder is a financial institution or other institutional
investor its own agreement shall be satisfactory), or, in the case of any such
mutilation upon surrender of such Certificate, LLC shall (at its expense)
execute and deliver in lieu of such Certificate a new Certificate of like kind
representing the number of Series M Class 2 Interests of such class represented
by such lost, stolen, destroyed or mutilated Certificate and dated the date of
such lost, stolen, destroyed or mutilated Certificate, and dividends shall
accrue on the Series M Class 2 Interests represented by such new Certificate
from the date to which dividends have been fully paid on such lost, stolen,
destroyed or mutilated Certificate.
(j) Amendment and Waiver. No amendment, modification or waiver
shall be binding or effective with respect to any provision of Sections (a) to
(i) hereof without the prior written consent of the holders of at least a
majority of the Series M Class 2 Interests outstanding at the time such action
is taken; provided, that no such action shall change (i) the rate at which or
the manner in which dividends on the Series M Class 2 Interests accrue or the
times at which such dividends become payable or the amount payable on
redemption of the Series M Class 2 Interests or the times at which redemption
of Series M Class 2 Interests is to occur, without the prior written consent of
the holders of at least 90% of the Series M Class 2 Interests then outstanding,
(ii) the Series M Conversion Price of the Series M Class 2 Interests or the
number of interests or class of Interests into which the Series M Class 2
Interests are convertible, without the prior written consent of the holders of
at least 90% of the Series M Class 2 Interests then outstanding, or (iii) the
percentage required to approve any change described in clauses (i) and (ii)
above, without the prior written consent of the holders of at least 90% of the
Series M Class 2 Interests then outstanding; and provided further that no
change in the terms hereof may be accomplished by merger or consolidation of
LLC with another limited liability company or entity unless LLC has obtained
the prior written consent of the holders of the applicable percentage of the
Series M Class 2 Interests then outstanding.
(k) Notices. Except as otherwise expressly provided hereunder,
all notices referred to herein shall be in writing and shall be delivered by
registered or certified mail, return receipt requested and postage prepaid, or
by reputable overnight courier service, charges prepaid, and shall be deemed to
have been given when so mailed or sent (i) to LLC, at its principal executive
offices and (ii) to any holder of Series M Class 2 Interests, at such holder's
address as it appears in the records of LLC (unless otherwise indicated by any
such holder).
Section 4.05 Series A Class 2 Interests
(a) Ranking. The Series A Class 2 Interests shall rank, with
respect to dividends and distributions upon the liquidation, dissolution and
winding-up of LLC:
(i) senior to all classes or series of Junior Interests
(Series A);
(ii) on a parity with all classes of Parity Interests
(Series A); and
(iii) junior to all classes of Senior Interests (Series A).
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(b) Dividends.
(i) Beginning on the Original Issue Date, holders of Series A
Class 2 Interests shall be entitled to receive, when, as and if
declared by the Board of Directors, out of funds legally available for
the payment of dividends, dividends on each outstanding Series A Class
2 Interest, at a rate per annum equal to 14 1/2% of the Series A
Liquidation Preference per Series A Class 2 Interest, payable with
respect to each Series A Dividend Period. All dividends shall be
cumulative and shall be payable in arrears for each Series A Dividend
Period on each Series A Dividend Payment Date. For all Series A
Dividend Periods through and including the Series A Dividend Period
ending on February 28, 2001, LLC may, at its option, pay the dividend
on the Series A Class 2 Interests in cash or in newly issued Series A
Class 2 Interests with an aggregate Series A Liquidation Preference
equal to the amount of such dividend. Commencing with the Series A
Dividend Period beginning on March 1, 2001, dividends on the Series A
Class 2 Interests will be payable only in cash.
(ii) Each dividend paid on the Series A Class 2 Interests
shall be payable to holders of record as their names shall appear in
the Members' Interest Register of LLC on the Series A Dividend Record
Date for such dividend, except that dividends in arrears for any past
Series A Dividend Payment Date may be declared and paid at any time
without reference to such regular Series A Dividend Payment Date to
holders of record on a later dividend record date determined by the
Board of Directors.
(iii) Dividends shall cease to accumulate in respect of
Series A Class 2 Interests on the day prior to the Series A Redemption
Date with respect thereto, unless LLC shall have failed to pay the
Series A Optional Redemption Price on the Series A Redemption Date
with respect to such Series A Class 2 Interests.
(iv) All dividends paid with respect to the Series A Class 2
Interests shall be paid pro rata to the holders entitled thereto based
upon the number of Series A Class 2 Interests held by each such holder
on the relevant Series A Dividend Record Date.
(v) No full dividends shall be declared by the Board of
Directors or paid or funds set apart for payment by LLC on the Series
A Class 2 Interests or any Parity Interests (Series A) for any period
unless full cumulative dividends have been or contemporaneously are
declared and paid, or declared and a sum set apart sufficient for such
payment, on all Senior Interests (Series A) and on the Series A Class
2 Interests and any Parity Interests (Series A) for all dividend
periods terminating on or prior to the date of payment of such full
dividends on the Series A Class 2 Interests or such Parity Interests
(Series A). If any dividends are not paid in full, as aforesaid, upon
the Series A Class 2 Interests and any other Parity Interests (Series
A) but all dividends are paid in full, as aforesaid, upon the Senior
Interests, all dividends declared upon the Series A Class 2 Interests
and any other Parity Interests (Series A) shall be declared pro rata
so that the amount of dividends declared per interest on the Series A
Class 2 Interests and such Parity Interests (Series A) shall in all
cases bear to each other the same ratio that accrued and unpaid
dividends per Interest on the Series A Class 2 Interests and such
Parity Interests (Series A) bear to each other. Except as
contemplated herein, no interest or additional dividends, or sum of
money in lieu of interest or additional dividends, shall be payable in
respect of any dividend payment or payments on the Series A Class 2
Interests or any other Parity Interests (Series A) which may be in
arrears.
(vi) So long as any Series A Class 2 Interests are
outstanding, except with respect to (i) repurchases of Class 1
Interests or Rights to acquire Class 1 Interests issued under an
employee incentive or benefit plan of LLC or a Subsidiary of LLC, (ii)
dividends or distributions payable in additional Junior Interests
(Series A) or Rights to acquire Junior Interests (Series A)
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and (iii) repurchases of Junior Interests (Series A) or Rights to
acquire Junior Interests (Series A) pursuant to provisions of the
agreements under which those interests or securities were issued or
under this Agreement allowing LLC to repurchase such securities at a
discount to their issue price upon a default of any Person in its
obligations thereunder, LLC shall not declare, pay or set apart for
payment any dividend on any Junior Interests, or make any payment on
account of, or set apart for payment money for a sinking or other
similar fund for, the purchase, redemption or other retirement of, any
of the Junior Interests (Series A) or any Rights to acquire Junior
Interests (Series A), and shall not permit any corporate or other
entity directly or indirectly controlled by LLC to purchase or redeem
any Junior Interests (Series A) or Rights to acquire Junior Interests
(Series A), unless prior to or concurrently with such declaration,
payment, setting apart for payment, purchase, redemption or
distribution, as the case may be, all accrued and unpaid dividends on
the Series A Class 2 Interests not paid on the dates provided for in
Section 4.05(b)(i) hereof (and, to the extent previously due but not
yet paid, any and all redemption payments on the Series A Class 2
Interests) shall have been or are concurrently being paid.
(vii) Dividends payable on Series A Class 2 Interests for any
period less than a year shall be computed on the basis of a 360-day
year of twelve 30-day months and the actual number of days elapsed in
the period for which payable. If any Series A Dividend Payment Date
occurs on a day that is not a Business Day, any accrued dividends
otherwise payable on such Series A Dividend Payment Date shall be paid
on the next succeeding Business Day.
(c) Liquidation Rights.
(i) Upon any voluntary or involuntary liquidation,
dissolution or winding-up of the affairs of LLC, holders of Series A
Class 2 Interests will be entitled to receive out of the assets of LLC
available for distribution to the holders of Interests in LLC, after
satisfaction of the liquidation preference of Senior Interests (Series
A), whether such assets are capital, surplus or earnings, an amount in
cash equal to the Series A Liquidation Preference, before any payment
shall be made or any assets distributed to the holders of any of the
Junior Interests (Series A). Except as set forth in the preceding
sentence, holders of Series A Class 2 Interests shall not be entitled
to any distribution in the event of voluntary or involuntary
liquidation, dissolution or winding-up of the affairs of LLC. If upon
any voluntary or involuntary liquidation, dissolution or winding-up of
the affairs of LLC, the assets of LLC are not sufficient to pay in
full the liquidation payments payable to the holders of outstanding
Series A Class 2 Interests and all Parity Interests (Series A), then
the holders of all such Interests shall share equally and ratably in
any distribution of assets in proportion to the full liquidation
preferences, determined as of the date of such voluntary or
involuntary liquidation, dissolution or winding-up, to which they are
entitled.
(ii) For the purposes of this Section 4.05(c) only, neither
the sale, lease, conveyance, exchange or transfer (for cash, shares of
stock, limited liability company interests, securities or other
consideration) of all or substantially all of the property or assets
of LLC nor the consolidation or merger of LLC with or into one or more
corporations, limited liability companies or other entities shall be
deemed to be a liquidation, dissolution or winding-up of the affairs
of LLC.
(d) Redemption.
(i) Optional Redemption.
(A) LLC may, at its option, redeem, at any time
after March 1, 2001, from any source of funds legally
available therefor, in whole or in part, in the manner
provided in Section 4.05(d)(ii) hereof, any or all of the
Series A Class 2 Interests, at the redemption prices
(expressed as a percentage of the Series A Liquidation
Preference thereof) set
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forth below plus an amount in cash equal to all accumulated
and unpaid dividends per Series A Class 2 Interest for the
period from the Series A Dividend Payment Date immediately
prior to the Series A Redemption Date to the day prior to the
Series A Redemption Date (the "Series A Optional Redemption
Price"), if redeemed during the 12-month period beginning
March 1 of the years indicated:
Year Percentage
---- ----------
2001 107.5%
2002 105.625
2003 103.75
2004 101.875
2005 and thereafter 100.0
(B) In the event of a redemption pursuant to this
Section 4.05(d)(i) of only a portion of the then outstanding
Series A Class 2 Interests, LLC shall effect such redemption
pro rata according to the percentage of all outstanding Series
A Class 2 Interests held by each holder of such Interests.
(ii) Procedure for Redemption.
(A) Not more than sixty (60) and not less than
thirty (30) days prior to the date fixed for any redemption of
the Series A Class 2 Interests, written notice (the "Series A
Redemption Notice") shall be given by first-class mail,
postage prepaid, to each holder of record of Series A Class 2
Interests to be redeemed on the record date fixed for such
redemption at such holder's address as the same appears on the
Members' Interest Register of LLC; provided, that no failure
to give such notice nor any deficiency therein shall affect
the validity of the procedure for the redemption of any Series
A Class 2 Interests to be redeemed except as to the holder or
holders to whom LLC has failed to give such notice or except
as to the holder or holders whose notice was defective. The
Redemption Notice shall state:
(I) the Series A Optional Redemption Price;
(II) whether all or less than all the
outstanding Series A Class 2 Interests are to be
redeemed and the total number of Series A Class 2
Interests being redeemed;
(III) the number of Series A Class 2
Interests held by the holder that LLC intends to
redeem;
(IV) the date fixed for redemption (the
"Series A Redemption Date");
(V) that the holder is to surrender to LLC,
at the place or places which shall be designated in
such Series A Redemption Notice, its Certificates
representing the Series A Class 2 Interests to be
redeemed;
(VI) that dividends on the Series A Class 2
Interests to be redeemed shall cease to accrue on the
day prior to such Series A Redemption Date unless LLC
defaults in the payment of the Series A Optional
Redemption Price; and
(VII) the name of any bank or trust company
performing the duties referred to in Section
4.05(d)(ii)(E) below.
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(B) On or before the Series A Redemption Date,
each holder of Series A Class 2 Interests to be redeemed shall
surrender the Certificate or Certificates representing such
Series A Class 2 Interests to LLC, in the manner and at the
place designated in the Series A Redemption Notice, and on the
Series A Redemption Date the full Series A Optional Redemption
Price for such Interests shall be payable in cash to the
Person whose name appears on such Certificate or Certificates
as the owner thereof, and each surrendered Certificate shall
be returned to authorized but unissued Interests. In the
event that less than all of the Interests represented by any
such Certificate are redeemed, a new Certificate shall be
issued representing the unredeemed Interests.
(C) Unless LLC defaults in the payment in full of
the Series A Optional Redemption Price, dividends on the
Series A Class 2 Interests called for redemption shall cease
to accumulate on the day prior to the Series A Redemption
Date, and the holders of such Interests shall cease to have
any further rights with respect thereto on the Series A
Redemption Date, other than the right to receive the Series A
Optional Redemption Price, without interest.
(D) If a Series A Redemption Notice shall have
been duly given, and if, on or before the Series A Redemption
Date specified therein, all funds necessary for such
redemption shall have been set aside by LLC, separate and
apart from its other funds, in trust for the pro rata benefit
of the holders of the Series A Class 2 Interests called for
redemption so as to be and continue to be available therefor,
then, notwithstanding that any Certificate for Interests so
called for redemption shall not have been surrendered for
cancellation, all Interests so called for redemption shall no
longer be deemed outstanding, and all rights with respect to
such Interests shall forthwith on such Series A Redemption
Date cease and terminate, except only the right of the holders
thereof to receive the amount payable on redemption thereof,
without interest.
(E) If a Series A Redemption Notice shall have
been duly given or if LLC shall have given to the bank or
trust company hereinafter referred to irrevocable
authorization promptly to give such notice, and if on or
before the Series A Redemption Date specified therein the
funds necessary for such redemption shall have been deposited
by LLC with such bank or trust company in trust for the pro
rata benefit of the holders of the Series A Class 2 Interests
called for redemption, then, notwithstanding that any
Certificate for Interests so called for redemption shall not
have been surrendered for cancellation, from and after the
time of such deposit, all Interests so called, or to be so
called pursuant to such irrevocable authorization, for
redemption shall no longer be deemed to be outstanding and all
rights with respect to such Interests shall forthwith cease
and terminate, except only the right of the holders thereof to
receive from such bank or trust company at any time after the
time of such deposit the funds so deposited, without interest,
and the right of the holders thereof to convert such Interests
as provided in Section 4.05(f) hereof to and including the
Business Day preceding the date fixed for redemption. The
aforesaid bank or trust company shall be organized and in good
standing under the laws of the United States of America or of
the State of New York, shall be doing business in the Borough
of Manhattan, The City of New York or in Washington D.C.,
shall have capital, surplus and undivided profits aggregating
at least $100,000,000 according to its last published
statement of condition, and shall be identified in the Series
A Redemption Notice. Any interest accrued on such funds shall
be paid to LLC from time to time. Any funds so set aside or
deposited, as the case may be, in respect of Series A Class 2
Interests that are subsequently converted shall be promptly
returned to LLC. Any funds so set aside or deposited, as the
case may be, and unclaimed at the end of three years from such
Series A Redemption Date shall, to the
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extent permitted by law, be released or repaid to LLC, after
which repayment the holders of the Interests so called for
redemption shall look only to LLC for payment thereof.
(F) In connection with any redemption of Series
A Class 2 Interests, LLC may arrange for the purchase and
conversion of any such Interests by an agreement with one or
more investment banks or other purchasers to purchase such
Interests by paying to the holders or to the Series A
Conversion Agent in trust for such holders, on or before the
close of business on the day prior to the Series A Redemption
Date, an amount, in cash, not less than the Series A Optional
Redemption Price payable by LLC on redemption of such
Interests. Notwithstanding anything to the contrary contained
herein, the obligation of LLC to pay the Series A Optional
Redemption Price of such Series A Class 2 Interests shall be
satisfied and discharged to the extent such amount is so paid
by such purchasers. Pursuant to such an agreement, any such
Series A Class 2 Interests tendered by the holders for
redemption or not duly surrendered for conversion by such
holders shall be deemed acquired by such purchasers from such
holders and surrendered by such purchasers for conversion, all
as of immediately prior to the close of business on the day
prior to the Series A Redemption Date, subject to payment of
the Series A Optional Redemption Price as aforesaid.
(e) Voting Rights.
(i) Holders of the Series A Class 2 Interests, except as
otherwise required under Delaware law and as set forth in Sections
4.05(e)(ii) and (iii) below, shall not be entitled or permitted to
vote on any matter required or permitted to be voted upon by the Class
1 Members of LLC.
(ii) Without the approval of holders of at least a
majority of the Series A Class 2 Interests then outstanding, voting or
consenting, as the case may be, as one class, given in person or by
proxy, either in writing or by resolution adopted at an annual or
special meeting called for the purposes, LLC will not (A) except in
connection with the Series M Class 2 Interests, create, authorize or
issue any Senior Interests (Series A) or Rights to acquire Senior
Interests (Series A), including in connection with a merger,
consolidation or other reorganization or (B) reclassify any Junior
Interests (Series A), Parity Interests (Series A) or other outstanding
Interests of LLC into any Senior Interests (Series A) or Rights to
acquire Senior Interests (Series A).
(iii) Without the approval of holders of at least a majority
of the Series A Class 2 Interests then outstanding, voting or
consenting, as the case may be, as one class, given in person or by
proxy, either in writing or by resolution adopted at an annual or
special meeting called for the purpose, LLC will not amend, modify or
repeal this Agreement or any other specified designations, rights
preferences or powers of the Series A Class 2 Interests in a manner
adverse to holders of the Series A Class 2 Interests; provided, that
the amendment of the provisions of this Agreement so as to authorize
or create, or to increase the authorized amount of, any Junior
Interests (Series A) or any Parity Interests (Series A) shall not be
deemed to affect adversely the holders of the Series A Class 2
Interests; and provided further the authorization of the issuance from
time to time of additional Series A Class 2 Interests, which are
included in the number of Series A Class 2 Interests authorized under
this Agreement, shall not be subject to the requirements of this
Section 4.05(e)(iii).
(iv) The holders of at least a majority of the Series A
Class 2 Interests then outstanding, voting or consenting, as the case
may be, as one class, whether voting in person or by proxy, either in
writing or by resolution adopted at an annual or special meeting
called for the purpose, may waive compliance with any provision of
this Section 4.05.
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(v) Notwithstanding anything herein to the contrary, (A)
the creation, authorization or issuance of any Series M Class 2
Interests, Parity Interests (Series A) or Junior Interests (Series A),
or (B) the increase or decrease in the amount of authorized Interests
of any class, including any Class 2 Interests, shall not require the
consent of the holders of the Series A Class 2 Interests and shall not
be deemed to affect adversely the rights, preferences, privileges or
voting rights of holders of the Series A Class 2 Interests.
(f) Conversion.
(i) General Rights. Each Series A Class 2 Interest shall
be convertible, at any time, at the option of the holder thereof (but
if such Interest is called for redemption pursuant to Section 4.05(d),
then only to and including but (except as provided in Section
4.05(d)(ii)(E)) not after the close of business on the Business Day
preceding the date fixed for such redemption, provided that no default
by LLC in the payment of the applicable Optional Redemption Price
shall have occurred and be continuing on the date fixed for such
redemption, in which case such right of conversion shall be
reinstated), into that number of Class 1 Interests of LLC (calculated
as to each conversion to the nearest 1/100th of an Interest) obtained
by dividing the Original Series A Liquidation Preference of the Series
A Class 2 Interests surrendered for conversion by the Series A
Conversion Price (as defined below) then in effect (such date of
conversion, a "Series A Conversion Date").
The conversion price per Series A Class 2 Interest shall
initially be U.S. $54.025 (the "Series A Conversion Price").
In order to exercise the conversion privilege, a holder shall
surrender the Certificate(s) representing such Interests, accompanied
by transfer instrument(s) satisfactory to LLC and sufficient to
transfer the Series Class 2 Interests being converted to LLC free of
any adverse interest, at any of the offices or agencies maintained for
such purpose by the conversion agent designated by LLC (the "Series A
Conversion Agent") and shall give written notice to LLC that the
holder elects to convert such Interests. LLC may, at its option, act
as Series A Conversion Agent. Such notice shall also state the
name(s), together with address(es), in which the Certificate(s) for
Class 1 Interests shall be issued. As promptly as practicable after
the surrender of such Series A Class 2 Interests as aforesaid, LLC
shall issue and deliver at the office of such Series A Conversion
Agent to such holder, or on his written order, Certificate(s)
representing the number of full Class 1 Interests issuable upon the
conversion of such Interests in accordance with the provisions hereof,
and any fractional interest in respect of a Class 1 Interest arising
upon such conversion shall be settled as provided for below.
Certificates will be issued representing the balance of any remaining
Series A Class 2 Interests in any case in which fewer than all of the
Series A Class 2 Interests represented by a Certificate are converted.
Each conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which Series A Class 2
Interests shall have been surrendered and notice received by LLC as
aforesaid, and the Person(s) in whose name(s) any Certificate(s) for
Class 1 Interests shall be issuable upon such conversion shall be
deemed to have become the holder(s) of record of the Class 1 Interests
represented thereby at such time, unless the Members' Interest
Register shall be closed on the date on which Series A Class 2
Interests are so surrendered for conversion, in which event such
conversion shall be deemed to have been effected immediately prior to
the close of business on the next succeeding day on which the Members'
Interest Register is open, and such person(s) shall be deemed to have
become such holder(s) of record of the Class 1 Interests at the close
of business on such later day. In either circumstance, such
conversion shall be at the Series A Conversion Price in effect on the
date upon which such Interest shall have been surrendered and such
notice received by LLC.
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The dividend payable on a Series A Class 2 Interest on a
Series A Dividend Payment Date shall be payable to the holder of
record of such Interest at the close of business on the Series A
Dividend Record Date applicable thereto, notwithstanding the
conversion of such Interest after such Series A Dividend Record Date
and prior to the opening of business on such Series A Dividend Payment
Date or the default by LLC in the payment of the dividend due on such
Series A Dividend Payment Date. Except as provided in the next
sentence, Series A Class 2 Interests surrendered for conversion during
the period from the close of business on any Series A Dividend Record
Date to the opening of business on the Series A Dividend Payment Date
with respect to such dividend shall be accompanied by payment in
immediately available funds or other funds acceptable to LLC of an
amount equal to the dividend payable on such Series A Dividend Payment
Date on the Series A Class 2 Interests being surrendered for
conversion. The dividend with respect to a Series A Class 2 Interest
called for redemption on a Series A Redemption Date during the period
from the close of business on a Series A Dividend Record Date to the
opening of business on the Series A Dividend Payment Date shall be
payable on such Series A Dividend Payment Date to the holder of record
of such Interest on such Series A Dividend Record Date notwithstanding
the conversion of such Series A Class 2 Interest after the close of
business on such Series A Dividend Record Date and prior to the
opening of business on such Series A Dividend Payment Date, and the
holder converting such Series A Class 2 Interest need not include a
payment of such dividend amount upon surrender of such Series A Class
2 Interest for conversion. A holder of Series A Class 2 Interests
surrendered for conversion into Class 1 Interests on a Series A
Dividend Payment Date will receive the dividend payable by LLC on such
Series A Class 2 Interests on such date, and the converting holder
need not include payment of the amount of such dividend upon surrender
of Series A Class 2 Interests for conversion. Except as provided in
this section, no payment or adjustment shall be made upon any
conversion on account of any dividends accrued on Series A Class 2
Interests surrendered for conversion or on account of any dividends on
the Class 1 Interests issued upon conversion.
No fractional interest in a Class 1 Interest shall be issued
by LLC upon the conversion of any Series A Class 2 Interest(s). Any
fractional interest in a Class 1 Interest resulting from conversion of
any Series A Class 2 Interest(s) shall be paid in cash (computed to
the nearest cent) based on the Closing Price of the Class 1 Interest
on the last Business Day prior to the date on which such Series A
Class 2 Interest(s) are surrendered for conversion in the manner set
forth above. If more than one Certificate representing Series A Class
2 Interests shall be surrendered for conversion at one time by the
same holder, the number of full Interests issuable upon conversion
thereof shall be computed on the basis of the aggregate number of
Series A Class 2 Interests represented by such Certificates which are
to be converted.
(ii) Series A Conversion Price Adjustments. The
Conversion Price shall be adjusted from time to time as follows:
(A) In case LLC shall pay or make a dividend or
other distribution on any Interests of LLC in Class 1
Interests, the Conversion Price in effect at the opening of
business on the day following the date fixed for the
determination of holders of Interests entitled to receive such
dividend or other distribution shall be reduced by multiplying
such Series A Conversion Price by a fraction the numerator of
which shall be the number of Class 1 Interests outstanding at
the close of business on the date fixed for such determination
and the denominator of which shall be the sum of such number
of Interests and the total number of Interests constituting
such dividend or other distribution, such reduction to become
effective immediately after the opening of business on the day
following the date fixed for such determination. For the
purposes of this subsection (A), the number of Class 1
Interests at any time outstanding shall not
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include Interests held in the treasury of LLC. LLC will not
pay any dividend or make any distribution on Class 1 Interests
held in the treasury of LLC.
(B) In case LLC shall issue rights or warrants to
all holders of its Class 1 Interests entitling them to
subscribe for, purchase or acquire Class 1 Interests at a
price per Interest less than the current market price per
Interest (determined as provided in subsection (F) below) of
the Class 1 Interests on the date fixed for the determination
of holders of Interests entitled to receive such rights or
warrants, the Series A Conversion Price in effect at the
opening of business on the day following the date fixed for
such determination shall be reduced by multiplying such Series
A Conversion Price by a fraction the numerator of which shall
be the number of Class 1 Interests outstanding at the close of
business on the date fixed for such determination plus the
number of Class 1 Interests which the aggregate of the
offering price of the total number of Class 1 Interests so
offered for subscription, purchase or acquisition would
purchase at such current market price and the denominator of
which shall be the number of Class 1 Interests outstanding at
the close of business on the date fixed for such determination
plus the number of Class 1 Interests so offered for
subscription, purchase or acquisition, such reduction to
become effective immediately after the opening of business on
the day following the date fixed for such determination. For
the purposes of this subsection (B), the number of Class 1
Interests at any time outstanding shall not include Interests
held in the treasury of LLC. LLC will not issue any Rights in
respect of Class 1 Interests held in the treasury of LLC.
(C) In case the outstanding Class 1 Interests
shall be subdivided into a greater number of Class 1
Interests, the Series A Conversion Price in effect at the
opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately
reduced, and, conversely, in case the outstanding Class 1
Interests shall each be combined into a smaller number of
Class 1 Interests, the Series A Conversion Price in effect at
the opening of business on the day following the day upon
which such combination becomes effective shall be
proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening
of business on the day following the day upon which such
subdivision or combination becomes effective.
(D) In case LLC shall, by dividend or otherwise,
distribute to all holders of its Class 1 Interests (I)
evidences of its indebtedness and/or (II) cash or other assets
(excluding (x) any rights or warrants referred to in
subsection (B) above, (y) any dividend or distribution
referred to in subsection (A) above, and (z) cash dividends or
distributions from current or accumulated earnings, then in
each case, the Series A Conversion Price in effect at the
opening of business on the day following the date fixed for
the determination of holders of Class 1 Interests entitled to
receive such distribution shall be adjusted by multiplying
such Series A Conversion Price by a fraction of which the
numerator shall be the current market price per Class 1
Interest (determined as provided in subsection (F) below) on
such date of determination (or, if earlier, on the date on
which the Class 1 Interest goes "ex-dividend" in respect of
such distribution) less the then Fair Market Value as
determined by the Board of Directors (whose determination
shall be conclusive) of the portion of the other assets or
evidences of indebtedness so distributed (and for which an
adjustment to the Series A Conversion Price has not previously
been made pursuant to the terms of this Section 4.05(f))
applicable to one Class 1 Interest, and the denominator shall
be such current market price per Class 1 Interest, such
adjustment to become effective immediately after the opening
of business on the day following such date of determination.
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(E) The reclassification or change of Class 1
Interests into Interests including Interests other than Class
1 Interests (other than any reclassification upon a
consolidation or merger to which Section 4.05(f)(ii)(I) below
applies) shall be deemed to involve (I) a distribution of such
securities other than Class 1 Interests to all holders of
Class 1 Interests (and the effective date of such
reclassification shall be deemed to be "the date fixed for the
determination of holders of Class 1 Interests entitled to
receive such distribution" within the meaning of subsection
(D) above), and (II) a subdivision or combination, as the case
may be, of the number of Class 1 Interests outstanding
immediately prior to such reclassification into the number of
Class 1 Interests outstanding immediately thereafter (and the
effective date of such reclassification shall be deemed to be
"the day upon which such subdivision becomes effective" or
"the day upon which such combination becomes effective," as
the case may be, and "the day upon which such subdivision or
combination becomes effective" within the meaning of
subsection (C) above).
(F) For the purpose of any computation under
subsection (B) or (D) above, the current market price per
Class 1 Interest on any day shall be deemed to be the average
of the Closing Prices of the Class 1 Interests for the 20
consecutive Business Days selected by the Board of Directors
commencing no more than 30 Business Days before and ending no
later than the day before the day in question; provided, that
in the case of clause (D), if the period between the date of
the public announcement of the dividend or distribution and
the date for the determination of holders of Class 1 Interests
entitled to receive such dividend or distribution (or, if
earlier, the date on which the Class 1 Interests go
"ex-dividend" in respect of such dividend or distribution)
shall be less than 20 Business Days, the period shall be such
lesser number of Business Days but, in any event, not less
than five Business Days.
(G) No adjustment in the Series A Conversion
Price shall be required unless such adjustment would require
an increase or decrease of at least 1% of such price;
provided, that any adjustments which by reason of this
Subsection (G) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment
and provided further that adjustments shall be required and
made in accordance with the provisions of this Section 4.05(f)
(other than this Subsection (G)) not later than such time as
may be required in order to preserve the tax free nature of a
distribution to the holders of Class 1 Interests. Anything in
this Subsection (G) to the contrary notwithstanding, LLC shall
be entitled, at its option, to make such reductions in the
Series A Conversion Price, in addition to those required by
this Section 4.05(f), as it in its discretion shall determine
to be advisable in order that any dividend of Interests,
subdivision or combination of Interests, distribution of
Interests or rights or warrants to purchase Interests or
securities, or distribution of evidences of indebtedness or
assets (other than cash dividends or distributions paid from
earnings) or other event shall be a tax free distribution for
federal income tax purposes. All calculations under this
Subsection (G) shall be made to the nearest cent.
(H) Whenever the Series A Conversion Price is
adjusted as herein provided, LLC shall promptly mail a
certificate setting forth the Conversion Price after such
adjustment and setting forth a brief statement of the facts
requiring such adjustment and the manner of computing same,
which certificate shall constitute conclusive evidence, absent
manifest error, of the correctness of such adjustment. The
certificate shall be mailed to each holder at his last address
as the same appears on the Members' Interest Register of LLC
and to the Series A Conversion Agent.
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(I) In case of (X) any consolidation of LLC with,
or merger of LLC into, any other entity, (Y) any merger of
another entity into LLC (other than a merger which does not
result in any reclassification, conversion, exchange or
cancellation of outstanding Class 1 Interests) or (Z) any sale
or transfer of all or substantially all of the assets of LLC,
each holder shall have the right thereafter to convert such
Interest only into the kind and amount of securities, cash and
other property receivable upon such consolidation, merger,
sale or transfer by a holder of the number of Class 1
Interests into which such Series A Class 2 Interest might have
been converted immediately prior to such consolidation,
merger, sale or transfer, assuming such holder of Class 1
Interests is not an entity with which LLC consolidated or into
which LLC merged or which merged into LLC or to which such
sale or transfer was made, as the case may be (a "constituent
entity"), or an Affiliate of a constituent entity and failed
to exercise its rights of election, if any, as to the kind or
amount of securities, cash or other property receivable upon
such consolidation, merger, sale or transfer (provided that if
the kind or amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer
is not the same for each Class 1 Interest held immediately
prior to such consolidation, merger, sale or transfer by other
than a constituent entity or an Affiliate thereof and in
respect of which such rights of election shall not have been
exercised (a "non-electing interest"), then for the purpose of
this Section 4.05(f)(ii)(I) the kind and amount of securities,
cash and other property receivable upon such consolidation,
merger, sale or transfer by each non-electing Interest shall
be deemed to be the kind and amount so receivable per Interest
by a plurality of the non-electing Interests). If necessary,
appropriate adjustment shall be made in the application of the
provisions set forth herein with respect to the rights and
Interests thereafter of the holders, to the end that the
provisions set forth herein shall thereafter correspondingly
be made applicable, as nearly as may reasonably be, in
relation to any Interests, securities or property thereafter
deliverable on the conversion of the Interests. Any such
adjustment shall be evidenced by a certificate of LLC and a
notice of such adjustment filed and mailed in the manner set
forth in subsection (H) above and containing the information
set forth in such subsection (H), and any adjustment so
certified, shall for all purposes hereof conclusively be
deemed to be an appropriate adjustment, absent manifest error.
The above provisions shall similarly apply to successive
consolidations, mergers, sales or transfers.
For purposes of this Section 4.05(f), "Class 1
Interests" includes any interests of any class of LLC which
have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary
liquidation, dissolution or winding-up of LLC and which are
not subject to redemption by LLC. However, subject to the
provisions of Section 4.05(f)(ii)(I) above, Interests issuable
on conversion of Series A Class 2 Interests shall include only
Interests of the class designated as Class 1 Interests of LLC
on the date of the initial issuance of Series A Class 2
Interests by LLC, or Interests of any class or classes
resulting from any reclassification thereof and which have no
preferences in respect of dividends or amounts payable in the
event of any voluntary or involuntary liquidation, dissolution
or winding-up of LLC and which are not subject to redemption
by LLC; provided, that if at any time there shall be more than
one such resulting class, the Interests of each such class
then so issuable shall be substantially in the proportion
which the total number of Interests of such class resulting
from all such reclassifications bears to the total number of
Interests of all such classes resulting from all such
reclassifications.
(iii) Notice of Certain Events. In case:
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(A) LLC shall take any action that would result in
an adjustment to the Series A Conversion Price; or
(B) of any consolidation, merger or share or
Interest exchange to which LLC is a party and for which
approval of any members of LLC is required, or of the sale or
transfer of all or substantially all of the assets of LLC; or
(C) of the voluntary or involuntary dissolution,
liquidation or winding-up of LLC;
then LLC shall cause to be filed with any Series A Conversion Agent
and shall cause to be mailed to each holder of Series A Class 2
Interests at its last address as the same appears on the Members'
Interest Register at least 15 days prior to the applicable record or
effective date hereinafter specified, a notice stating (I) the date on
which a record is to be taken for the purpose of such actions, or, if
the record is not to be taken, the date as of which the holders of
Class 1 Interests of record are to be determined, or (II) the date on
which such consolidation, merger, share exchange, sale, transfer,
dissolution, liquidation or winding-up is expected to become
effective, and the date as of which it is expected that holders of
Class 1 Interests of record shall be entitled to exchange their Class
1 Interests for securities, cash or other property deliverable upon
such consolidation, merger, share exchange, sale, transfer,
dissolution, liquidation or winding-up. Neither the failure to give
such notice nor any defect therein shall affect the legality or
validity of the proceedings described in clauses (A) through (C)
above.
(iv) Payment of Taxes. LLC will pay any and all
documentary stamp or similar issue or transfer taxes payable in
respect of the issue or delivery of Class 1 Interests on conversion of
Series A Class 2 Interests pursuant hereto; provided, that LLC shall
not be required to pay any tax which may be payable in respect of any
transfer involved in the issue or delivery of Class 1 Interests in a
name other than that of the holder of the Series A Class 2 Interests
to be converted, and no such issue or delivery shall be made unless
and until the Person requesting such issue or delivery has paid to LLC
the amount of any such tax or has established, to the satisfaction of
LLC, that such tax has been paid.
(v) Interests Issuable Upon Conversion. LLC covenants
that all Class 1 Interests which may be issued upon conversions of
Series A Class 2 Interests will, upon issue, be duly and validly
issued, free of all liens and charges and not subject to any
preemptive rights. LLC covenants that it will at all times reserve
and keep available, free from preemptive rights, out of the aggregate
of its authorized but unissued Class 1 Interests, for the purpose of
effecting conversions of Series A Class 2 Interests, the full number
of Class 1 Interests deliverable upon the conversion of all
outstanding Series A Class 2 Interests not theretofore converted.
(g) Mutilated or Missing Series A Class 2 Interests Certificates.
If any Series A Class 2 Interest Certificate shall be mutilated, lost, stolen
or destroyed, LLC shall issue, in exchange and in substitution for and upon
cancellation of the mutilated Series A Class 2 Interest Certificate, or in lieu
of and substitution for the Series A Class 2 Interest Certificate lost, stolen
or destroyed, a new Series A Class 2 Interest Certificate of like tenor and
representing an equivalent number of Series A Class 2 Interests, but only upon
receipt of evidence of such loss, theft or destruction of such Series A Class 2
Interest Certificate and indemnity, if requested, satisfactory to LLC.
(h) Reissuance; Preemptive Rights.
(i) Series A Class 2 Interests that have been issued and
reacquired in any manner, including Interests purchased or redeemed,
shall (upon compliance with any applicable provisions of the laws of
the State of Delaware) have the status of authorized and unissued
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Class 2 Interests undesignated as to series and may be redesignated
and reissued as part of any series of Class 2 Interests other than the
Series A Class 2 Interests.
(ii) No Series A Class 2 Interests shall have any rights
of preemption whatsoever as to any securities of LLC, or any Rights
issued or granted with respect thereto, regardless of how such
securities or such Rights may be designated, issued or granted.
(i) Business Day. If any payment or redemption shall be required
by the terms hereof to be made on a day that is not a Business Day, such
payment, redemption or exchange shall be made on the immediately succeeding
Business Day and no further dividends shall accumulate after the day payment
was required.
(j) Limitations. Except as may otherwise be required by law, the
Series A Class 2 Interests shall not have any powers, preferences or relative,
participating, optional or other special rights other than those specifically
set forth in this Agreement (as such Agreement may be amended from time to
time).
Section 4.06 Series B Class 2 Interests
(a) Issuance and Sale. The Banking and Financing committee has the
authority to issue, sell and deliver one Series B Class 2 Interest to any
Guarantor that provides between $250 million and $750 million of Guarantees and
one additional Series B Class 2 Interest to any Guarantor that provides more
than $750 million of Guarantees to the extent such issuance is provided for in
the Agreement Regarding Guarantee between LLC and such Guarantor.
(b) Voting Rights. Except as herein provided, the voting rights of
the Series B Class 2 Interests shall be limited to the right to appoint one
Director to the Board of Directors per Series B Class 2 Interest at every
annual or special meeting of Members (the Directors so elected are referred to
herein as the "Series B Directors"). Such Series B Directors shall be in
addition to, and not in the place of, any existing Directors or Director
vacancies. Any vacancies in the number of Series B Directors created by death,
resignation, removal or for any other reason (except if caused by the reduction
of the number of such Directors upon redemption of any Series B Class 2
Interests) may be filled only by the Guarantor that appointed such Director.
(c) Redemption. LLC shall redeem for $.01 per Series B Class 2
Interest any and all Series B Class 2 Interests held by a Guarantor or its
affiliates as soon as the Guarantee Agreement of such Guarantor is terminated
or expires and any previous payments thereunder by the Guarantor have been
reimbursed.
(d) Certificate of Designations and Other Terms. The banking and
financing committee is authorized to exercise all the powers and authority of
the Board of Directors with respect to the issuance of the Series B Class 2
Interests including, without limitation, (i) the authority to establish the
specific terms of the Series B Class 2 Interests, to the extent not set forth
herein, or in lieu thereof, to authorize Authorized Officers of LLC to
establish such matters, to the extent that the delegation of such authority to
Authorized Officers is not inconsistent with applicable law or this Agreement,
and (ii) without limiting the generality of the foregoing, the banking and
financing committee is expressly authorized to fix the designations and
preferences of the Series B Class 2 Interests and to authorize the attachment
hereto of certificates of designations with respect thereto.
Section 4.07 Series C Class 2 Interests
(a) Issuance and Sale. The banking and financing committee has the
authority to issue, sell and deliver one Series C Class 2 Interest (in addition
to a Series B Class 2 Interest if provided pursuant to the preceding Section
4.06) to each Guarantor for each $10 million of Guarantees provided by such
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Guarantor to the extent such issuance is provided for in the Agreement
Regarding Guarantee Class 2 Interests shall be issued (a Series C Class 2
Interest shall only be issued in respect of each full $10 million incremental
amount of Guarantees);
(b) Voting Rights. Except as herein provided, the sole and exclusive
voting rights of the Series C Class 2 Interests shall be the right to appoint
one or more Directors as follows: if, as a result of a Payment Event (as
defined below), any Guarantor is required to make a payment pursuant to the
terms of the Guarantee Agreement entered into by such Guarantor pursuant to
such Guarantor's Agreement Regarding Guarantee, such Guarantor shall have the
right to call a special meeting of the Members (pursuant to the notice
requirements provided herein) at which the holders of Series C Class 2
Interests shall be entitled to appoint a number of Directors (the "Series C
Directors") in addition to the Series B Directors and any other directors
appointed pursuant to Section 1.05(a) or otherwise by the Guarantors and their
affiliates in their capacity as members (the "Other Guarantor Directors") such
that the Series B Directors and the Series C Directors (together, the
"Guarantor Directors") together with any such Other Guarantor Directors will
constitute a majority of the Directors on the Board of Directors and the
holders of Series C Class 2 Interests shall have the right to continue to
appoint, as a class, such Series C Directors at each succeeding annual meeting
of Members, until such time as no Payment Event exists or remains unremedied
and all amounts paid by all Guarantors pursuant to their Guarantees have been
reimbursed to them (the "Time of Cure"). Holders of Series C Class 2 Interests
shall elect Series C Directors by cumulative voting with the minimum number of
Series C Class 2 Interests required to elect a Series C Director equal to the
quotient of the number of Series C Class 2 Interests outstanding divided by the
number of Series C Directors to be elected. Upon the installation of such
Series C Directors, the Board of Directors shall call a special meeting of the
Board of Directors for the purpose of appointing the members of each committee
of the Board of Directors (excepting the Related Party Contracts Committee
which shall be constituted as provided in Section 2.03(g)). In any class vote
of the Series C Class 2 Interests, each outstanding Series C Class 2 Interest
shall be entitled to one vote. The term "Payment Event" shall mean a payment
by a Guarantor in respect of debt of LLC pursuant to such Guarantor's Guarantee
Agreement; provided, however, that no Payment Event shall exist if and so long
as Motorola is in default under (i) the Space System Contract, the O&M
Contract, the Terrestrial Network Development Contract or any other Project
Document (as defined in any bank credit agreement in respect of which the
Guarantee is made), or (ii) a Gateway Equipment Purchase Agreement if such
default was not excused and was not caused by a default on the part of the
purchaser under such Gateway Equipment Purchase Agreement. At the Time of
Cure, all Series C Directors shall immediately cease to be Directors.
Vacancies in the number, if any, of Series C Directors created by death,
resignation, removal or for any other reason (except by the reduction of the
number of such Directors at the Time of Cure or upon redemption of any Series C
Class 2 Interests) may be filled only by the holders of Series C Class 2
Interests.
(c) Redemption. LLC shall redeem for $.01 per Series C Class 2
Interest any and all Series C Class 2 Interests held by a Guarantor or its
affiliates as soon as the Guarantee Agreement of such Guarantor is terminated
or expires and any previous payments thereunder by the Guarantor have been
reimbursed.
(d) Certificate of Designation and Other Terms. The banking and
financing committee is authorized to exercise all the powers and authority of
the Board of Directors with respect to the issuance of the Series C Class 2
Interests including, without limitation, (i) the authority to establish the
specific terms of the Series C Class 2 Interests, to the extent not set forth
herein, or in lieu thereof, to authorize Authorized Officers of LLC to
establish such matters, to the extent that the delegation of such authority to
Authorized Officers is not inconsistent with applicable law or this Agreement,
and (ii) without limiting the generality of the foregoing, the banking and
financing committee is expressly authorized to fix the designations and
preferences of the Series C Class 2 Interests and to authorize the attachment
hereto of certificates of designations with respect thereto.
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Section 4.08 Issuance of Interests Upon the Admission of
Additional Members
Subject to the rights of the existing Members as set forth in this
Agreement, additional Interests may be issued to an Additional Member only upon
the admission of an Additional Member pursuant to Article VII of this
Agreement.
Section 4.09 Fractional Interests
LLC may, but shall not be required to, issue fractions of an Interest.
If it does not issue fractions of an Interest, it shall (a) arrange for the
disposition of fractional Interests by those entitled thereto, (b) pay in cash
the fair value of fractions of an Interest as of the time when those entitled
to receive such fractions are determined or (c) issue scrip or warrants in
registered form (either represented by a Certificate or uncertificated) or in
bearer form (represented by a Certificate) which shall entitle the holder to
receive a full Interest upon the surrender of such scrip or warrants
aggregating a full Interest. A certificate for a fractional Interest or an
uncertificated fractional Interest shall, but scrip or warrants shall not
unless otherwise provided therein, entitle the holder to exercise voting
rights, to receive dividends thereon and to participate in any of the assets of
LLC in the event of liquidation. The Board of Directors may cause scrip or
warrants to be issued subject to the conditions that they shall become void if
not exchanged for Certificates representing the full Interests or
uncertificated full Interests before a specified date, or subject to the
conditions that the Interests for which scrip or warrants are exchangeable may
be sold by LLC and the proceeds thereof distributed to the holders of scrip or
warrants, or subject to any other conditions which the Board of Directors may
impose.
Section 4.10 Certificates for Interests
The Interests of LLC shall be represented by Certificates; provided,
that the Board of Directors may provide by resolution or resolutions that some
or all of any or all Interests of the classes or series of its Interests shall
be uncertificated. Any such resolution shall not apply to Interests
represented by a Certificate until such Certificate is surrendered to LLC.
Notwithstanding the adoption of such a resolution by the Board of Directors,
every holder of Interests represented by Certificates and upon request every
holder of uncertificated Interests shall be entitled to have a Certificate
signed by, or in the name of, LLC by the chairman of the Board of Directors,
the vice chairman and chief executive officer, or the president or
vice-president, and by the treasurer or an assistant treasurer, or the
secretary or an assistant secretary of LLC representing the number of Interests
registered in Certificate form. Any or all of the signatures on the
Certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
Certificate shall have ceased to be such officer, transfer agent or registrar
before such Certificate is issued, it may be issued by LLC with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.
ARTICLE V
DISSOLUTION AND WINDING-UP
Section 5.01 Dissolution
LLC shall be dissolved and its affairs wound up upon the occurrence of
the earliest of following events:
(a) December 31, 2095, subject to amendment by an affirmative
vote of 66 2/3 of the Class 1 Members.
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(b) The death, retirement, resignation, bankruptcy or dissolution
of any Member or the occurrence of any other event which terminates the
continued membership of any Member, unless, within 90 days of the later of (i)
the occurrence of such event or (ii) the receipt by LLC of any written notice
provided below in this subsection (b) (but in any event no longer than 120 days
from the occurrence of an event requiring such notice), the Board of Directors
and the remaining Members exercise their right hereunder to continue the
business of LLC in accordance with this subsection (b), and in the event of
such continuation LLC shall not be dissolved.
The continuation right provided above may be exercised upon the
consent of both (i) a majority of the Board of Directors and (ii) a "majority
in interest" (as defined in IRS Revenue Procedure 94-46, 1994-2 C.B. 688) of
the remaining Members, who shall number at least two.
The Board of Directors may determine whether such consents have been
provided in any manner they deem reasonable and need not call a meeting of
Members or communicate with all Members therefor; provided, that the Board of
Directors shall reflect such determination and the manner of determination in
the books and records of LLC.
Each Member hereby covenants that within 30 days of an event of
bankruptcy which would cause such Member to cease to be a Member under Section
18-304 of the Delaware Act or of any action taken to dissolve such Member, it
will provide written notice thereof to the Secretary of LLC and to each other
Member.
(c) The adoption of a resolution by 66 2/3% of the entire Board of
Directors that it is deemed advisable in the judgment of the Board of Directors
that LLC be dissolved followed by the affirmative vote at a meeting duly called
for such purpose of 66 2/3% of the Class 1 Interests approving the dissolution;
provided, that the resolution of the Board of Directors authorizing a proposed
dissolution may provide that notwithstanding authorization or consent to the
proposed dissolution by the Class 1 Members, the Board of Directors may abandon
such proposed dissolution without further action by the Class 1 Members.
Section 5.02 Resignation of Members
A Member may resign from LLC only by Transferring its interests
pursuant to Article VI hereof. No Member shall be able to resign or be deemed
to resign if it ceases to be a Member due to bankruptcy or for any other reason
(a "Former Member") except upon the consent of 66 2/3 of the other Members, if
LLC continues, pursuant to Section 5.01(b) or otherwise, to exist. Such Former
Member, if not permitted or deemed to resign, shall not be entitled to any of
the rights granted to a Member hereunder or under applicable law but shall be,
to the extent not otherwise provided by this Agreement or applicable law,
entitled to receive distributions and allocations of items of income, gain,
loss, deduction, expense and credit as if such Former Member continued to be a
Member hereunder.
Section 5.03 Winding-Up
(a) Upon dissolution of LLC, LLC's affairs shall be wound up by
the chairman of the Board of Directors (as liquidating trustee) or, if there is
no chairman of the Board of Directors, or vice chairman and cheif executive
officer (as liquidating trustee), or, if there no chairman of the Board of
Directors or vice chairman and chief executive officer, by the person who may
be elected by a vote of the Class 1 Members.
(b) Upon the winding-up of LLC, any amounts permitted to be
distributed to Members (other than distributions to any Member upon
resignation, interim distributions to any Member and distributions to Members
in their capacity as creditors, each of which shall be distributed prior to the
distribution provided for in this Section 5.03(b), as provided in the Delaware
Act) shall be distributed first to the Class
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2 Members, if any, to the extent of the liquidation preference of their Class 2
Interests as provided herein, and second to the Class 1 Members in proportion
to the number of Class 1 Interests held by each such Class 1 Member.
ARTICLE VI
TRANSFERS
Section 6.01 Notice to LLC and to Other Holders
Except as otherwise provided in this Agreement, a Person shall not
Transfer Class 1 Interests, Class 2 Interests, Notes or Warrants ("Restricted
Interests") except pursuant to the provisions of this Article VI; provided,
that, except as permitted by Section 6.02 of this Agreement, in no event shall
any Transfer of Restricted Interests pursuant to this Article VI be made for
any consideration other than cash payable upon consummation of such Transfer or
in installments over time. Prior to making any Transfer, the Person seeking to
make such Transfer (the "Transferring Person") shall give written notice (the
"Sale Notice") to LLC and to all other holders of Restricted Interests (each an
"Other Holder" and collectively, the "Other Holders"). The Sale Notice will
disclose in reasonable detail the identity of the prospective transferee(s),
the amount of Restricted Interests to be transferred and the terms and
conditions of the proposed Transfer. The Transferring Person will not
consummate any Transfer until 40 days after the relevant Sale Notice has been
received by LLC and the Other Members, unless the parties to the Transfer have
been finally determined pursuant to this Article VI prior to the expiration of
such 40-day period. The date of the first to occur of such events is referred
to herein as the "Authorization Date".
Section 6.02 Right to Reject Transfer; First Refusal Rights
(a) Subject to subsection (b) below, LLC may reject any Transfer
if such Transfer does not receive the approval of a majority of the Directors
by giving the Transferring Person notice to such effect (a "Rejection Notice")
within 20 days after the Sale Notice has been received by LLC and, in the event
of the timely issuance of a Rejection Notice, the Transferring Person shall not
make the Transfer described in the Sale Notice; provided, that no Transfer
shall have effect if the result of such Transfer is a termination of LLC under
Section 708 of the Code. If LLC does not issue a timely Rejection Notice, LLC
may elect to purchase all (but not less than all) of the Restricted Interests
to be transferred upon the same terms and conditions as those set forth in the
Sale Notice by delivering a written notice of such election to the Transferring
Person and the Other Holders within 20 days after the Sale Notice has been
received by LLC. If LLC has not issued a Rejection Notice and has not elected
to purchase the Restricted Interests to be transferred, the Other Holders may
elect to purchase all (but not less than all) of the Restricted Interests to be
transferred upon the same terms and conditions as those set forth in the Sale
Notice by giving written notice of such election to the Transferring Person
within 30 days after the Sale Notice has been received by the Other Holders.
If more than one Other Holder elects to purchase the Restricted Interests, the
Restricted Interests to be sold will be allocated among such Other Holders pro
rata (which for this purpose shall be determined on the basis of the
Liquidation Value of Series M Class 2 Interests, the Series A Liquidation
Preference of Series A Class 2 Interests, the Accreted Value of Notes and the
purchase price paid to LLC in respect of Class 1 Interests, in each case held
by the Other Holders); provided, that no Other Holder shall be allowed to
purchase any Class 1 Interests pursuant to this Section 6.02 which, together
with the other Class 1 Interests owned by such Other Holder, would cause such
Other Holder (together with its Affiliates) to beneficially own and/or have the
current right to acquire more than 45% of the Class 1 Interests Deemed
Outstanding at such time or more than 45% of the Class 1 Interests actually
outstanding at such time. If neither LLC nor any of the Other Holders elects
to purchase the Restricted Interests specified in the Sale Notice, the
Transferring Person may transfer the Restricted Interests specified in the Sale
Notice at a price and on terms no more favorable to the transferee(s) thereof
than as specified in the Sale Notice during the 60-day period immediately
following the Authorization Date. Any Restricted Interests
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not transferred within such 60-day period will be subject to the provisions of
this Section 6.02 upon subsequent transfer.
(b) A Transferring Person shall have the right to Transfer to any
of its Affiliates, and such Affiliate shall automatically become a substituted
Member pursuant to Section 6.07 (without approval pursuant to subsection (a) of
this Section 6.02 and without being subject to the notice provisions of Section
6.01 or to LLC's or any other Member's right to elect to purchase described in
subsection (a) of this Section 6.02, for any consideration, including cash), up
to 79% of its Restricted Interests but only to the extent that this provision
shall not result in over 79% of all Class 1 Interests or 79% of all Restricted
Interests becoming transferrable without approval; provided, further that no
Transfer shall have effect if the result is a termination of LLC under Section
708 of the Code. Upon the approval of a substitution of such Affiliate as a
Member pursuant to Section 6.07, however, a Transferring Person may Transfer to
any of its Affiliates all of its Restricted Interests upon the same terms as
provided in the preceding sentence but such Transfer will not be counted toward
the 79% of all Class 1 Interests or 79% of all Restricted Interests provided
above.
Section 6.03 No Transfers Above 45%
Each Member hereby agrees not to Transfer any Class 1 Interests to any
person if after giving effect to any such Transfer such Person (together with
its Affiliates) would beneficially own and/or have the current right to acquire
more than 45% of the Class 1 Interests Deemed Outstanding at such time or more
than 45% of the Class 1 Interests actually outstanding at such time.
Section 6.04 Obligations of Transferees and Transferors
Each Person that becomes the owner of Restricted Interests pursuant to
any Transfer shall execute an agreement in form and substance satisfactory to
LLC which shall include such Person's agreement to be bound by the provisions
of this Agreement; provided, that such Person shall not be obligated to assume
any obligations to purchase additional Restricted Interests under Section 4.02
to the extent such obligations are being retained by such Person's transferor.
No Transfer shall relieve a party hereto of its contractual obligations under
this Agreement or relieve any Indirect Owner of its contractual obligations
under its Agreement of Indirect Owner unless the relief of such obligations is
approved by the holders of at least 66 2/3% of the then outstanding Class 1
Interests, but so long as Motorola is a principal supplier to LLC, such
approval shall be effective only if such holders include Motorola.
Section 6.05 Certain Motorola Transfer Restrictions
Motorola agrees that as long as it is the principal supplier to LLC
and/or Motorola or one of its subsidiaries is the holder for the benefit of LLC
of any FCC license to construct, operate or launch the IRIDIUM system, Motorola
will not Transfer (other than pursuant to an Exempt Transfer as such term is
defined in the VEBA Stock Purchase Agreement) any of its Class 1 Interests that
were issued in respect of Common Stock of Iridium, Inc. purchased under the
1993 Stock Purchase Agreement; provided, that this restriction does not apply
to any Class 1 Interests purchased by Motorola pursuant to Section 4.02 of this
Agreement. In the event that Motorola is no longer the principal supplier to
LLC and neither Motorola nor one of its subsidiaries is the holder for the
benefit of LLC of any FCC license and Motorola desires to Transfer any such
Class 1 Interests prior to July 19, 2003, at least 30 days prior to any such
Transfer, Motorola shall deliver a written notice (the "Motorola Sale Notice")
to LLC and the other Class 1 Members (the "Other Class 1 Members"), specifying
in reasonable detail the identity of the prospective transferee(s) and the
terms and conditions of the Transfer. The Other Class 1 Members may elect to
participate in the contemplated Transfer by delivering written notice to
Motorola within 30 days after delivery of the Motorola Sale Notice. If any
Other Class 1 Members have elected to participate in such Transfer, Motorola
and such Other Class 1 Members shall be entitled to sell in the contemplated
Transfer, at the same price and on the same terms, a number of Class 1
Interests equal to the product of (i) the quotient determined by dividing the
percentage of Class 1 Interests owned by such Person by
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the aggregate percentage of Class 1 Interests owned by Motorola and all of the
Other Class 1 Members participating in such sale and (ii) the number of Class 1
Interests to be sold in the contemplated Transfer.
For example, if the Sale Notice contemplated a sale of 100
Class 1 Interests by Motorola, and if Motorola at such time
owns 30% of all the Class 1 Interests outstanding and if one
Other Class 1 Member elects to participate and owns 20% of all
the Class 1 Interests outstanding, Motorola would be entitled
to sell 60 Class 1 Interests (30% / 50% x 100 interests) and
the Other Class 1 Member would be entitled to sell 40 Class 1
Interests (20% / 50% x 100 interests).
Motorola shall use its reasonable best efforts to obtain the agreement of the
prospective transferee(s) to the participation of the Other Class 1 Members in
any contemplated Transfer, and Motorola shall not transfer any of its Class 1
Interests to the prospective transferee(s) if the prospective transferee(s)
declines to allow the participation of the Other Class 1 Members.
Section 6.06 Inapplicability of Article
Article VI shall not apply to a Transfer by any Person of any
ownership interest in a Member.
Section 6.07 Substituted Members
Unless otherwise provided in this Agreement, a transferee of any Class
1 Interest or Class 2 Interest shall not become a substituted Member without
the consent of a "majority in interest" (as defined in IRS Revenue Procedure
94-46, 1994-2 C.B. 688) of the non-transferring Members, which consent may be
given or withheld in the discretion of the Members, whether or not reasonable.
Unless and until a transferee becomes a Member pursuant to this Section 6.07,
the transferee shall not be entitled to any of the rights granted to a Member
hereunder or under applicable law, other than the right to receive
distributions and allocations of items of income, gain, loss, deduction,
expense, and credit as if such transferee were a Member. However, such
transferee shall be bound by any limitations and obligations contained herein
with respect to Members.
ARTICLE VII
ADMISSION OF ADDITIONAL MEMBERS
Section 7.01 Admission of Additional Members
(a) Admission of Members. With the consent of Class 1 Members
holding a majority of the Class 1 Interests, the Board of Directors may at any
time cause LLC to admit additional Members ("Additional Members").
(b) Time of Admission. An Additional Member shall be deemed
admitted as a member upon the later of:
(i) the later of (a) the written request by such Person that
the Members' Interest Register reflect such admission and (b) the
execution by such Person of this Agreement or a counterpart hereof
whereby such person agrees to be bound by the provisions of this
Agreement, and
(ii) the time such person is listed as a Member in the
Members' Interest Register of LLC and a Certificate or Certificates
evidencing such person's ownership of such Interest is issued.
(c) Required Contribution. The Board of Directors shall determine
what, if any, contribution the Additional Member need make and the number and
class of Interests to be issued to such Member. The Board
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of Directors may provide that the required contribution may be paid prior to,
at the time of, or subsequent to, the issuance of the interest to such Member
and that any subsequent contribution may be made from distributions paid or
payable in respect of such interest. If any portion of a required contribution
is payable after the issuance of the interest, the Board of Directors may
determine that any rights otherwise incident to such interest (including,
without limitation, voting, distribution, inspection and transfer rights) will
not come into effect until such required contribution has been made. At any
time that the voting rights in respect of such interest have been suspended, in
determining whether a required percentage of Class 1 Membership Interests have
approved any action, such interests shall be excluded from both the numerator
and the denominator of such percentage computation.
(d) Affiliated Purchasers. The Affiliated Purchasers are not
Members on the date hereof but are parties to the 1996 Securities Purchase
Agreement and pursuant to that agreement have acquired Notes and Warrants.
Each Member hereby consents to the admission of each of the Affiliated
Purchasers as a Member upon the acquisition by such Affiliated Purchaser of
Class 1 Interests upon the exercise of Warrants or otherwise.
(e) Motorola Eligible Transferee. Each Member hereby consents to
the admission of each Motorola Eligible Transferee as a Member upon the
acquisition by such Person of Class 1 Interests or Class 2 Interests pursuant
to the terms of this Agreement.
Section 7.02 Preemptive Rights
(a) Offer to Sell. If LLC authorizes the issuance or sale of any
Class 1 Interests (or Rights to acquire any Class 1 Interests), then LLC shall
first offer to sell to each Class 1 Member a portion of such Class 1 Interests
(or such Rights) equal to (i) the number of Class 1 Interests held by such
Class 1 Member divided by (ii) the sum of the number of Class 1 Interests
Deemed Outstanding as of the date of such offer plus the number of Class 1
Interests issuable upon exercise, conversion or exchange of all outstanding
Rights to acquire Class 1 Interests.
(b) Right to Purchase. In order to accept an offer under Section
7.02(a), each Class 1 Member must, within 15 days after receipt of written
notice from LLC describing in reasonable detail the Class 1 Interests (or
Rights) being offered, the purchase price thereof, the payment terms and such
Class 1 Member's percentage allotment, deliver a written notice to LLC
accepting such offer.
(c) Sale of Unsubscribed Interests. During the 90 days following
the expiration of such 15 day offering period, LLC shall be entitled to sell
any such Class 1 Interests (or any such Rights) which the holders of Class 1
Interests have not elected to purchase on terms and conditions no more
favorable to the purchasers thereof than those offered to such holders. Any
Class 1 Interests or securities offered or sold by LLC after such 90 day period
must be reoffered to the holders of Class 1 Interests pursuant to the terms of
this Section 7.02.
(d) Limitation on Preemptive Right. Notwithstanding the other
provisions of this Section 7.02, each Class 1 Member shall be entitled to
purchase such Class 1 Interests (or any such Rights) under this Section 7.02
only to the extent that, immediately after such purchase, neither such holder
nor any of its Affiliates beneficially owns more than 45 percent of the Class 1
Interests Deemed Outstanding at such time.
(e) Exclusion from Preemptive Rights. The provisions of this
Section 7.02 shall not apply to any issuance of Class 1 Interests (or Rights to
acquire any Class 1 Interests) (i) to employees of LLC, (ii) in connection with
the acquisition of another business (whether by purchase of stock, purchase of
assets, merger or otherwise), (iii) pursuant to the Motorola Warrant, (iv)
pursuant to conversion of the Series M Class 2 Interests, (v) pursuant to any
obligation of LLC's Members to purchase additional securities as a result of a
capital call by LLC, (vi) pursuant to the conversion of the Series A Class 2
Interests, (vii) pursuant to exercise of the Warrants, (viii) in connection
with a debt financing, (ix) as a dividend on the outstanding Class 1
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Interests, (x) pursuant to any agreement in effect on the date of this
Agreement, (xi)(A) in connection with the issuance and exercise of warrants
to purchase Class 1 Interests issued by LLC to Guarantor pursuant to Guarantee
Agreements and (B) certain gateway territory owners as incentive to complete
construction of their gateways by September 1998 and to achieve specified
revenues by January 1, 2000, (xii) to Iridium Bermuda if such issuance has
been approved by a majority of the Board of Directors excluding any directors
designated by Iridium Bermuda, or (xiii) in an amount up to 45,000,000 Class 1
Interests in private equity placements pursuant to a purchase agreement or
purchase agreements prior to an initial public offering of IWCL Common Stock.
ARTICLE VIII
GATEWAY RIGHTS AND SPECTRUM ACCESS OBLIGATIONS
Section 8.01 Gateway Rights and Service Provider Rights
(a) Gateway Allocation. Subject to the terms and conditions set
forth below, LLC hereby authorizes each Class 1 Member and its Affiliates, to
the extent permitted by applicable law (including United States law), to
provide Gateway services and to retain Service Providers (and/or act as a
Service Provider) in the Gateway Service Territory allocated to such Class 1
Member on the Gateway Service Territory Allocation Schedule attached hereto as
Annex E and to construct an unlimited number of Gateways in such Gateway
Service Territory subject to any applicable technical and operational
limitations as determined by LLC. Subject to the terms and conditions set forth
below, to the extent permitted by applicable law (including United States law),
LLC will not authorize any other Person to provide Gateway services or
construct Gateways in any Class 1 Member's Gateway Service Territory except on
a basis consistent with the allocations set forth in Annex E hereto.
(b) Class 1 Members Gateway Covenants.
(i) Each Class 1 Member who has been allocated a Gateway
Service Territory agrees to use its best efforts to obtain the
necessary authorizations (the "Gateway Authorizations") to provide
Gateway services in each of the jurisdictions included in its Gateway
Service Territory and to construct and operate such Class 1 Member's
Gateway on a timely basis consistent with the terms of such Class 1
Member's Gateway Authorization Agreement.
(ii) Each Class 1 Member who has been allocated a Gateway
Service Territory agrees to require any Service Provider it retains in
its Gateway Service Territory to use its best efforts to obtain the
necessary authorizations to act as a Service Provider to the extent
required in such Class 1 Member's Gateway Authorization Agreement.
(c) Termination of Gateway Rights and Service Provider Rights.
(i) The allocation pursuant to Section 8.01(a) of Gateway
rights and Service Provider rights to a Class 1 Member for any
particular country will cease with respect to such country (without
any compensation whatsoever being payable in connection therewith
except to the extent set forth in Section 8.01(c)(ii) below) if such
Class 1 Member has not obtained the Gateway Authorizations in such
country within the sooner of (A) 48 months (plus any period of an
"excusable delay" that may occur under Article II of the Space System
Contract prior to the expiration of such 48 months) after the Closing
Date or (B) the date on which appropriate authorizing agencies have
finally determined, after exhaustion of all available appeals being
pursued by such Class 1 Member in good faith, that such Class 1 Member
will not be granted the Gateway Authorizations in such country;
provided, that the Board of Directors may grant to a Class 1 Member an
extension of the time period for obtaining the
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Gateway Authorizations if the Board of Directors concludes that
sufficient progress in obtaining the Gateway Authorizations has been
demonstrated by such Class 1 Member.
(ii) In the event that an allocation of rights pursuant to
Section 8.01(a) ceases with respect to a Class 1 Member's Home Gateway
Country pursuant to Section 8.01(c)(i) above and such Class 1 Member
has used its best good faith efforts to obtain the Gateway
Authorizations in such country and is not in breach of this Agreement
or such Class 1 Member's Gateway Authorization Agreement, such Class 1
Member shall be entitled to compensation for the loss of such
allocation to the extent provided in this Section 8.01(c)(ii). In such
event, such Class 1 Member shall (A) promptly enter into negotiations
in good faith with any Person designated by the Board of Directors to
agree upon the nature and amount of compensation to be paid by such
Person to such Class 1 Member for such rights, (B) use its reasonable
best efforts to conclude such negotiations within six months after
LLC's notice to such Class 1 Member of the identity of such Person and
(C) in the event that such Class 1 Member and such Person are unable
to conclude such negotiations and enter into a binding agreement with
respect thereto within such six-month period, relinquish all such
rights to such Person for the compensation determined by an
Independent Appraiser.
(iii) Notwithstanding any provision in this Agreement to the
contrary, the allocation of all Gateway rights and Service Provider
rights to a Class 1 Member pursuant to Section 8.01(a) will cease if
(A) such Class 1 Member has failed to comply in any material respect
with the terms of its Gateway Authorization Agreement, provided that
notice in writing has been given to the Class 1 Member specifying such
failure to comply and that such failure to comply continues for a
period of thirty (30) days from the date of receipt of said notice or
(B) such Class 1 Member has failed to comply in any material respect
with the terms of this Agreement, provided that notice in writing has
been given to the Class 1 Member specifying such failure to comply and
that such failure to comply continues for a period of thirty (30) days
from the date of receipt of said notice.
The loss of Gateway and Service Provider rights will not diminish a Class 1
Member's other obligations hereunder, including obligations to purchase Class 1
Interests and other interests or securities pursuant to this Agreement.
(d) Assignment of Rights; Assignment of Unallocated Gateway
Service Territories. No Class 1 Member may assign its rights granted under this
Section 8.01 to any Person other than a Person that is an Affiliate of such
Class 1 Member or a Person that would be an Affiliate of such Class 1 Member
and one or more other Members if such Class 1 Member and such other Members
were together considered as one Person; provided, that nothing in this Section
8.01(d) shall prohibit two or more Class 1 Members or their Affiliates from
sharing the rights granted under this Section 8.01 through a joint venture or
otherwise.
(e) Service Provider Rights. To the extent permitted by
applicable law (including United States law) and subject to obtaining the
necessary Government authorizations to do so and to the execution of
documentation (including the Gateway Authorization Agreement) that is
acceptable to LLC and such Class 1 Member, each Class 1 Member to which a
Gateway Service Territory has been allocated hereunder will have the exclusive
right (together with all other Class 1 Members, if any, to which such Gateway
Service Territory has been allocated hereunder) to act as, and to designate
others to act as, a Service Provider in such Gateway Service Territory.
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Section 8.02 Obligations Relating to Spectrum Access
(a) If a Class 1 Member is allocated a Gateway Service Territory
hereunder and is not a Government, such Class 1 Member hereby agrees with
respect to each jurisdiction in its Gateway Service Territory and with respect
to each other jurisdiction in which it conducts any material part of its
business (i) to use its reasonable best efforts to cause the Government of such
jurisdiction and other relevant authorities in such jurisdiction to ratify and
adopt the spectrum allocation and service definitions for low earth orbiting
satellites adopted at the World Administrative Radio Conference organized by
the International Telecommunications Union and held in February 1992, (ii) to
use its reasonable best efforts to obtain from such Governments and authorities
allocations of the frequencies necessary to operate and use the IRIDIUM system
within the jurisdictions of such Governments and authorities and (iii) to use
its reasonable best efforts to cause such Governments and authorities to
facilitate the coordination of the use of such frequencies within the
jurisdictions of such Governments and authorities.
(b) If a Class 1 Member is a Government, such Class 1 Member
hereby agrees (i) to use its reasonable best efforts to ratify and adopt the
spectrum allocation and service definitions for low earth orbiting satellites
adopted at the World Administrative Radio Conference organized by the
International Telecommunications Union and held in February 1992, (ii) to use
its reasonable best efforts to facilitate the allocation of the frequencies
necessary to operate and use the IRIDIUM system within such Government's
jurisdiction, (iii) to use its reasonable best efforts to facilitate the
coordination of the use of such frequencies with such Government's jurisdiction
and (iv) to take all of the actions specified in Section 8.02(a) above with
respect to each country in the Gateway Service Territory allocated to it
hereunder which is not within such Government's jurisdiction.
ARTICLE IX
AMENDMENT AND TERMINATION OF VARIOUS AGREEMENTS
Section 9.01 Termination of Stock Purchase Agreements
Each of the Stock Purchase Agreements is hereby terminated except that
the representations and warranties included therein shall survive as provided
in each such agreement and except that the obligations thereunder of any
investor shall not be terminated until such investor or its
successor-in-interest has executed a counterpart of this Agreement.
Section 9.02 Amendments to Outstanding Notes and Warrants
Pursuant to the LLC Merger, LLC has succeeded to all of the rights and
obligations of Iridium, Inc. including the rights and obligations of Iridium,
Inc. under the Notes and Warrants issued by Iridium, Inc. on or prior to the
date of this Agreement. Each such Note and Warrant will be deemed to be
amended as provided in Exhibits 1-A and 2-A, respectively, and LLC has issued
Notes and Warrants, as so amended, on the date hereof in replacement of each
outstanding Note and Warrant.
Section 9.03 Amendments to Gateway Authorization Agreements
Each Gateway Authorization Agreement is hereby amended to substitute
LLC for Iridium, Inc. as a party thereto and to effect such other changes as
may be necessary to refer to LLC as a limited liability company rather than a
corporation. Except as so amended each of such Gateway Authorization
Agreements shall remain in full force and effect.
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Section 9.04 Amendments to Contracts with Motorola
Each of the Space System Contract, the O&M Contract and the
Terrestrial Network Development Contract is hereby amended to substitute LLC
for Iridium, Inc. as a party thereto and to effect such other changes as may be
necessary to refer to LLC as a limited liability company rather than a
corporation. Except as so amended each of such contracts shall remain in full
force and effect.
Section 9.05 Amendments to Motorola Warrant
The Motorola Warrant shall be amended as provided in Exhibit 3-A and
LLC has issued a new Motorola Warrant, as so amended, on the date hereof in the
form of Exhibit 3-B.
ARTICLE X
MERGER AND APPRAISAL RIGHTS; SALE OF ASSETS
Section 10.01 Authority
LLC may merge or consolidate with one or more limited liability
companies, corporations, business trusts or associations, real estate
investment trusts, common law trusts or unincorporated businesses, including a
general partnership or limited partnership, formed under the laws of the State
of Delaware or any other jurisdiction, pursuant to a written agreement of
merger or consolidation ("Merger Agreement") in accordance with this Article X.
Section 10.02 Procedure for Merger or Consolidation
Merger or consolidation of LLC pursuant to this Article X requires the
prior approval of the Board of Directors. If the Board of Directors shall
determine, in the exercise of its sole discretion, to consent to the merger or
consolidation, the Board of Directors shall approve the Merger Agreement, which
shall set forth:
(a) The names and jurisdictions of formation or organization of
each of the business entities proposing to merge or consolidate;
(b) The name and jurisdiction of formation or organization of the
business entity that is to survive the proposed merger or consolidation (the
"Surviving Business Entity");
(c) The terms and conditions of the proposed merger or
consolidation;
(d) The manner and basis of exchanging or converting the equity
securities of each constituent business entity for, or into, cash, property or
general or limited partnership or limited liability company interests, rights,
securities or obligations of the Surviving Business Entity; and (i) if any
general or limited partnership or limited liability company interests, rights,
securities or obligations of any constituent business entity are not to be
exchanged or converted solely for, or into, cash, property or general or
limited partnership or limited liability company interests, rights, securities
or obligations of the Surviving Business Entity - the cash, property or general
or limited partnership or limited liability company interests, rights,
securities or obligations of any general or limited partnership, limited
liability company, corporation, trust or other entity (other than the Surviving
Business Entity) which the holders of such interests, rights, securities or
obligations of the constituent business entity are to receive in exchange for,
or upon conversion of, their interests, rights, securities or obligations and
(ii) in the case of securities represented by certificates, upon the surrender
of such certificates - which cash, property or general or limited partnership
or limited liability company interests, rights, securities or obligations of
the Surviving Business Entity or any general or limited partnership, limited
liability company,
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corporation, trust or other entity (other than the Surviving Business Entity),
or evidences thereof, are to be delivered;
(e) A statement of any changes in the constituent documents or the
adoption of new constituent documents (the articles or certificate of
incorporation, articles of trust, declaration of trust, certificate or
agreement of limited partnership or limited liability company or other similar
charter or governing document) of the Surviving Business Entity to be effected
by such merger or consolidation;
(f) The effective time of the merger or consolidation, which may
be the date of the filing of the certificate of merger pursuant to Section
10.04 or a later date specified in or determinable in accordance with the
Merger Agreement (provided, that if the effective time of the merger or
consolidation is to be later than the date of the filing of the certificate of
merger or consolidation, the effective time shall be specified in the
certificate of merger or consolidation); and
(g) Such other provisions with respect to the proposed merger or
consolidation as are deemed necessary or appropriate by the Board of Directors.
Section 10.03 Approval by Class 1 Members of Merger or
Consolidation
(a) General. The Board of Directors, upon its approval of the Merger
Agreement, shall direct that the Merger Agreement be submitted to a vote of the
Class 1 Members whether at a meeting or by written consent, in either case in
accordance with the requirements of Section 1.06(m). A copy or a summary of
the Merger Agreement shall be included in or enclosed with the notice of a
meeting or the written consent.
(b) Required Vote. The Merger Agreement shall be approved upon
receiving the affirmative vote or consent of Class 1 Members holding not less
than 66 2/3% of the outstanding Class 1 Interests unless the Merger Agreement
contains any provision which, if contained in an amendment to this Agreement,
the provisions of this Agreement or the Delaware Act would require the vote or
consent of a greater percentage of the Interests or of any class thereof, in
which case such greater percentage vote or consent shall be required for
approval of the Merger Agreement.
(c) Abandonment of Merger or Consolidation. After such approval
by vote or consent of the Class 1 Members, and at any time prior to the filing
of the certificate of merger or consolidation pursuant to Section 10.04, the
merger or consolidation may be abandoned pursuant to provisions therefor, if
any, set forth in the Merger Agreement. The Merger Agreement shall also
require the approval of any other class of Members if such approval is
specifically required by this Agreement or a Certificate of Designations
adopted pursuant to this Agreement.
Section 10.04 Certificate of Merger or Consolidation
Upon the required approval by the Board of Directors and the Class 1
Members of a Merger Agreement, a certificate of merger or consolidation shall
be executed and filed with the Secretary of State of the State of Delaware in
conformity with the requirements of the Delaware Act.
Section 10.05 Effect of Merger or Consolidation
(a) Effect of Merger. At the effective time of the certificate of
merger or consolidation:
(1) all of the rights, privileges and powers of each of
the business entities that has merged or consolidated, and all
property, real, personal and mixed, and all debts due to any of those
business entities and all other things and causes of action belonging
to each of those business entities shall be
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vested in the Surviving Business Entity and after the merger or
consolidation shall be the property of the Surviving Business Entity
to the extent they were property of each constituent business entity;
(2) the title to any real property vested by deed or
otherwise in any of those constituent business entities shall not
revert and is not in any way impaired because of the merger or
consolidation;
(3) all rights of creditors and all liens on or security
interest in property of any of those constituent business entities
shall be preserved unimpaired; and
(4) all debts, liabilities and duties of those
constituent business entities shall attach to the Surviving Business
Entity, and may be enforced against it to the same extent as if the
debts, liabilities and duties had been incurred or contracted by it.
(b) No Transfer of Assets or Liabilities. A merger or
consolidation effected pursuant to this Article X shall not be deemed to result
in a transfer or assignment of assets or liabilities from one entity to another
having occurred.
Section 10.06 Appraisal Rights
(a) Members Entitled. Any Member who holds Interests on the date of
the making of a demand pursuant to subsection (d) of this Section 10.06 with
respect to such Interests, who continuously holds such Interests through the
effective date of the merger or consolidation referred to below (a "Merger"),
who has otherwise complied with subsection (d) of this Section 10.06 and who
has neither voted in favor of the Merger nor consented thereto in writing
pursuant to Section 1.06(m) shall be entitled to an appraisal of the fair value
of his Interest under the circumstances described in subsections (b) and (c) of
this Section 10.06.
(b) Certain Exceptions. Appraisal rights shall be available for the
Interests in a Merger in which LLC is a constituent entity;
(i) provided, however, that no appraisal rights under this
section shall be available for Interests of any class or series which,
at the record date, if any, fixed to determine the Members entitled to
receive notice of and to vote upon the Merger or, if no such record
date is fixed, the date of the Merger, were either (x) listed on a
national securities exchange or designated as a national market system
security on a interdealer quotation system by the National Association
of Securities Dealers, Inc. or (y) held of record by more than 2,000
Members; and further provided that no appraisal rights shall be
available for any Interests of LLC if LLC is the surviving entity and
the Merger would not have required the approving vote of stockholders,
pursuant to subsection (f) and (g) of Section 251 of the Delaware
General Corporation Law if LLC were a corporation under Delaware Law;
(ii) notwithstanding paragraph (i) of this subsection,
appraisal rights under this section shall be available for the
Interests of any class or series if the holders thereof are required
by the terms of the agreement of merger to accept for such Interests
anything except:
a. Shares of stock of the corporation, or membership
interests in a nonstock entity, surviving or resulting from
such Merger, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or
membership interests in a nonstock entity, or depository
receipts in respect thereof, which shares of stock, membership
interests or depository receipts at the effective date of the
merger or consolidation will be either listed on a national
securities exchange or designated as a national market system
security on an interdealer quotation system by the National
Association of Securities Dealers, Inc. or held of record by
more than 2,000 holders;
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c. Cash in lieu of fractional Interests; or
d. Any combination of the shares of stock,
membership interests, depository receipts and cash in lieu of
fractional Interests.
(c) Perfection. Appraisal rights shall be perfected as follows: if a
proposed Merger for which appraisal rights are provided under this section is
to be submitted for approval at a meeting of Members or Directors, or is to be
approved by written consent, LLC, not less than 20 days prior to the meeting or
the effective date of the written consent, shall notify each of its Members
that appraisal rights are available for any or all of the Interests of LLC, and
shall include in such notice a copy of this Section 10.06. Each Member
electing to demand the appraisal of his Interests shall deliver to LLC, before
the taking of the vote on the Merger, a written demand for appraisal of his
Interests. Such demand will be sufficient if it reasonably informs LLC of the
identity of the Member and that the Member intends thereby to demand the
appraisal of his Interests. A vote against the Merger or the withholding of a
written consent by the Member or by a Director appointed by the Member shall
not constitute such a demand. A Member electing to take such action must do so
by a separate written demand as herein provided. Within 10 days after the
effective date of such Merger, the surviving or resulting entity in the Merger
shall notify each Member who has complied with this subsection and has not
voted in favor of or consented to the Merger of the date that the Merger has
become effective;
(d) Right to Petition Court. Within 120 days after the effective
date of the Merger, the surviving or resulting entity or any Member who has
complied with Sections 10.06(a) and (d) and who is otherwise entitled to
appraisal rights, may file a petition in the Court of Chancery demanding a
determination of the value of the Interests of all such Members.
Notwithstanding the foregoing, at any time within 60 days after the effective
date of the Merger, any Member shall have the right to withdraw his demand for
appraisal and to accept the terms offered upon the Merger. Within 120 days
after the effective date of the Merger, any Member who has complied with the
requirements of Sections 10.06(a) and (d), upon written request, shall be
entitled to receive from the entity surviving the Merger or resulting from the
Merger a statement setting forth the aggregate number of Interests not voted in
favor of the Merger and with respect to which demands for appraisal have been
received and the aggregate number of Members holding such Interests. Such
written statement shall be mailed to the Member within 10 days after his
written request for such a statement is received by the surviving or resulting
entity or within 10 days after expiration of the period for delivery of demands
for appraisal under Section 10.06(c), whichever is later.
(e) Service of Petition; Notice. Upon the filing of any such
petition by a Member, service of a copy thereof shall be made upon the
surviving or resulting entity, which shall within 20 days after such service
file in the office of the Register in Chancery in which the petition was filed
a duly verified list containing the names and addresses of all Members who have
demanded payment for their Interests and with whom agreements as to the value
of their Interests have not been reached by the surviving or resulting entity.
If the petition shall be filed by the surviving or resulting entity, the
petition shall be accompanied by such a duly verified list. The Register in
Chancery, if so ordered by the Court, shall give notice to the time and place
fixed for the hearing of such petition by registered or certified mail to the
surviving or resulting entity and to the Members shown on the list at the
addresses therein stated. Such notice shall also be given by one or more
publications at least one week before the day of the hearing, in a newspaper of
general circulation published in the City of Wilmington, Delaware or such
publication as the Court deems advisable. The forms of the notices by mail and
by publication shall be approved by the Court, and the costs thereof shall be
borne by the surviving or resulting corporation.
(f) Court Determines Members Entitled to Appraisal. At the hearing
on such petition, the Court shall determine the Members who have complied with
this Section 10.06 and who have become entitled to appraisal rights. The Court
may require the Members who have demanded an appraisal for their Interests and
who hold Interests represented by Certificates to submit their Certificates to
the Register in Chancery for notation thereon of the pendency of the appraisal
proceedings; and if any Member fails to comply with such direction, the Court
may dismiss the proceedings as to such Member.
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(g) Court to Appraise Interests. After determining the Members
entitled to an appraisal, the Court shall appraise the Interests, determining
their fair value exclusive of any element of value arising from the
accomplishment or expectation of the merger or consolidation, together with a
fair rate of interest, if any, to be paid upon the amount determined to be the
fair value. In determining such fair value, the Court shall take into account
all relevant factors. In determining the fair rate of interest, the Court may
consider all relevant factors, including the rate of interest which the
surviving or resulting corporation would have had to pay to borrow money during
the pendency of the proceedings. Upon application by the surviving or
resulting entity or by any Member entitled to participate in the appraisal
proceeding, the Court may, in its discretion, permit discovery or other
pretrial proceedings and may proceed to trial upon the appraisal prior to the
final determination of the Member entitled to an appraisal. Any Member whose
name appears on the list filed by the surviving or resulting entity pursuant to
Section 10.06(e) and who has submitted his Certificates to the Register in
Chancery, if such is required, may participate fully in all proceedings until
it is finally determined that he is not entitled to appraisal rights under this
Section 10.06.
(h) Payment and Interest. The Court shall direct the payment of the
fair value of the Interests, together with interest, if any, by the surviving
or resulting entity to the Members entitled thereto. Interest may be simple or
compound, as the Court may direct. Payment shall be so made to each such
Member, in the case of Members of uncertificated Interests forthwith, and in
the case of Members holding Interests represented by Certificates upon the
surrender to LLC of the Certificates representing such Interests. The Court's
decree may be enforced as other decrees in the Court of Chancery may be
enforced, whether such surviving or resulting entity be organized under the
laws of the State of Delaware or any other state.
(i) Costs. The costs of the proceeding may be determined by the
Court and taxed upon the parties as the Court deems equitable in the
circumstances. Upon application of a Member, the Court may order all or a
portion of the expenses incurred by any Member in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the Interests entitled to an appraisal.
(j) Rights in Surviving Entity. From and after the effective date of
the Merger, no Member who has demanded his appraisal rights as provided in
Section 10.06(c) shall be entitled to the rights of a Member owing Interests;
provided, however, that if no petition for an appraisal shall be filed within
the time provided in Section 10.06(d), or if such Member shall deliver to the
surviving or resulting entity a written withdrawal of his demand for an
appraisal and an acceptance of the Merger, either within 60 days after the
effective date of the Merger as provided in Section 10.06(d) or thereafter with
the written approval of LLC, then the right of such Member to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal proceeding in the
Court of Chancery shall be dismissed as to any Member without the approval of
the Court, and such approval may be conditioned upon such terms as the Court
deems just.
(k) Status of Unissued Shares. The shares or interests of the
surviving or resulting entity to which the Interests of such objecting Members
would have been converted had they or the Director(s) appointed by them
assented to the Merger shall have the status of authorized and unissued shares
or interests of the surviving or resulting entity.
Section 10.07 Sale of Substantially All Assets
(a) Required Vote. LLC may at any meeting of the Board of
Directors sell, lease or exchange all or substantially all of its property and
assets, including its goodwill and its corporate franchises, upon such terms
and conditions and for such consideration, which may consist in whole or in
part of money or other property, including shares of stock in, and/or other
securities of, another corporation, corporations or other entity, as the Board
of Directors deems expedient and for the best interests of LLC, when and as
authorized by a resolution adopted by the holders of 66 2/3% of the outstanding
Class 1 Interests, at a meeting duly called upon at least 20 days' notice. The
notice of the meeting shall state that such a resolution will be considered.
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(b) Abandonment of Sale. Notwithstanding authorization or consent
to a proposed sale, lease or exchange of LLC's property and assets by the Class
1 Members, the Board of Directors may abandon such proposed sale, lease or
exchange without further action by the Class 1 Members, subject to the rights,
if any, of third parties under any contract relating thereto.
ARTICLE XI
MISCELLANEOUS
Section 11.01 Amendments to the Agreement
(a) General. This Agreement may not be changed or amended or the
observance of any provisions by LLC waived without the consent of Class 1
Members holding not less than 66 2/3% of the outstanding Class 1 Interests;
provided, that each Class 1 Member hereby consents to any change or amendment
to, or restatement of, this Agreement approved by a majority of the Board of
Directors which becomes effective on or after the date of the Class 1 Member's
cessation as a Member.
(b) Amendments Affecting Certain Voting Rights. Notwithstanding
the provisions of Section 11.01(a), the provisions of the second sentence of
Section 1.05(a), of Section 1.05(c) and of this Section 11.01(b) (and any
definitions related thereto) may not be changed or amended without the consent
of Class 1 Members holding not less than 95% of the outstanding Class 1
Interests.
(c) Amendments Affecting Contracts Committee. Notwithstanding the
provisions of Section 11.01(a), the provisions of Section 2.03(g) and of this
Section 11.01(c) (and any definitions related thereto) may not be changed or
amended without the consent of (i) at least 66- 2/3% of the Directors serving
on the Contracts Committee, and (ii) Class 1 Members holding not less than 66
2/3% of the outstanding Class 1 Interests entitled to vote on such matter
excluding (i) for so long as Motorola's representatives are not permitted to
serve on the Contracts Committee, any such Interests held by Motorola and its
Affiliates, (ii) for so long as Lockheed ▇▇▇▇▇▇'▇ representatives are not
permitted to serve on the Contracts Committee, any such Interests held by
Lockheed ▇▇▇▇▇▇ and its Affiliates and (iii) for so long as Raytheon's
representatives are not permitted to serve on the Contracts Committee, any such
Interests held by Raytheon and its Affiliates.
(d) Amendments Affecting One or More Classes. Notwithstanding the
provisions of Section 11.01(a), Section 4.04(a), Section 4.05(e) and the
provisions of any other series of Class 2 Interests relating to voting rights
and of this Section 11.01(d), the holders of the outstanding Interests of a
class shall be entitled to vote as a class upon a proposed amendment to this
Agreement, whether or not entitled to vote thereon by any other provision of
this Agreement, if the amendment would increase or decrease the aggregate
number of authorized Interests of such class, or alter or change the powers,
preferences, or special rights of the Interests of such class so as to affect
them adversely. If any proposed amendment would alter or change the powers,
preferences, or special rights of one or more series of any class so as to
affect them adversely, but shall not so affect the entire class, then only the
Interests of the series so affected by the amendment shall be considered a
separate class for purposes of this Section 11.01(d). The number of authorized
Interests in any such class or classes may be increased or decreased (but not
below the number of Interests thereof then outstanding) by the affirmative vote
of the holders of a majority of the Interests entitled to vote irrespective of
this subsection, if so provided by this Agreement or a Certificate of
Designations adopted pursuant to this Agreement.
(e) Amendments Affecting Capital Contributions and Reserve Capital
Call. Notwithstanding the provisions of Section 11.01(a), the provisions of
Sections 3.02, 3.03, 4.02 and this Section 11.01(e) (and any definitions
related thereto) may be amended only with the consent of LLC and each party
whose rights and obligations thereunder are directly affected by such
amendment(s), except that the first and second proviso
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clauses to the first sentence of Section 4.02 may only be amended by the vote
of 85% of the entire Board of Directors.
(f) Amendments Affecting Appraisal Rights. Notwithstanding the
provisions of Section 11.01(a), no amendments to the provisions of Section
10.06 or this Section 11.01(f) may be made without the unanimous consent of the
Members.
(g) Amendments Affecting Gateway Rights Obligations. Notwithstanding
the provisions of Section 11.01(a), no amendments to the provisions of Section
8.01, other than Section 8.01(d), may be made without the consent of any party
whose rights and obligations thereunder are directly affected by such
amendment(s).
(h) Amendments Affecting the Purpose of LLC. Notwithstanding the
provisions of Section 11.01(a), Section 1.03 may be amended to permit LLC to
engage in a business other than as set forth in such section only with the
unanimous consent of the Board of Directors.
(i) Amendments Affecting Indemnification. Notwithstanding the
provisions of Section 11.01(a), the provisions of Section 1.07 shall be deemed
a contract between LLC and each director or officer who serves in any such
capacity at any time while such Section 1.07 and the relevant provisions of the
Delaware Act or other applicable law are in effect, and any repeal or
modification of Section 1.07 or any change in the Delaware Act shall not affect
any rights or obligations then existing with respect to any state of facts or
proceeding then exisiting.
(j) Amendments to Annexes by Secretary. The secretary of LLC is
permitted to amend the annexes to this Agreement to reflect changes in the
information contained therein without obtaining a separate consent of the Class
1 Members.
Section 11.02 Governing Law; Severability
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE DOMESTIC LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO ANY CHOICE
OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE
OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF DELAWARE. In particular, it shall be
construed to the maximum extent possible to comply with all of the terms and
conditions of the Delaware Act. If, nevertheless, it shall be determined by a
court of competent jurisdiction that any provision or wording of this Agreement
shall be invalid or unenforceable under said Act or other applicable law, such
invalidity or unenforceability shall not invalidate this entire Agreement. In
that case, this Agreement shall be construed so as to limit any term or
provision so as to make it enforceable or valid within the requirements of any
applicable law, and, in the event such term or provision cannot be so limited,
this Agreement shall be construed to omit such invalid or unenforceable
provisions.
Section 11.03 Remedies
(a) Remedies Available. If any entity fails to pay any of the
amounts required to be paid pursuant to Section 4.02 for the purchase of
Interests, LLC shall deliver a written notice to such entity specifying the
amount owed by the entity. If such entity fails to pay all of such amount
within 30 days of the date of such written notice, such entity shall be deemed
to be in default under this Agreement and a "Defaulting Party" and LLC may, in
its sole and absolute discretion, elect to pursue one or more of the following
alternative remedies against such Defaulting Party:
(i) Revoke all of the Defaulting Party's rights under this
Agreement and, under any Gateway Authorization Agreement to which it
is a party, and redeem the Defaulting Party's Class 1 Interests for an
amount equal to $1.33 per Interest. The Interests that are redeemable
under this Section 11.03(a)(i)
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are hereinafter referred to as the "Default Interests". The
redemption contemplated hereby may be effected whether or not the
Default Interests are then redeemable according to their terms.
(ii) Set-off any cash or property otherwise distributable to
the Defaulting Party by LLC against all amounts due from the
Defaulting Party to LLC and treat such defaulted amounts as a demand
loan from LLC to the Defaulting Party bearing interest compounded
annually, from the date of default until paid in full at a fluctuating
rate determined on the date of default and quarterly thereafter equal
to (A) the three-month LIBOR rate in effect from time to time plus (B)
200 basis points.
(iii) Offer Default Interests theretofore purchased or
otherwise acquired by the Defaulting Party to the Members (other than
the Defaulting Party) pro rata (which, for this purpose shall be
determined on the basis of the Liquidation Preference of the
outstanding Series A Class 2 Interests and any Series A Class 2
Interests issued as dividends, the Liquidation Value of any
outstanding Series M Class 2 Interests, the liquidation preference of
any other outstanding Class 2 Interests, the Accreted Value of the
outstanding Notes (Warrants will be disregarded for this purpose) and
the purchase price of outstanding Class 1 Interests). The other
Members may purchase the Defaulting Party's Default Inter ests for an
amount equal to the lower of the original cost or fair market value
(as of the date of default) of the Defaulting Party's Default
Interests (other than Underlying Class 1 Interests) and the fair
market value of Underlying Class 1 Interests included in the Default
Interests.
(iv) Recover damages resulting from such default and pursue
any other right or remedy of LLC. Each party to this Agreement
acknowledges that such damages may include (A) interest and loan fees
on funds borrowed on account of such default, (B) LLC expenses
(including fees and expenses of counsel) relating to its efforts (I)
to exercise its rights and remedies upon such default, (II) to offer
and sell such Defaulting Party's Default Interests to Members or any
third party, or (III) to amend this Agreement, and (C) profits which
may be lost or liability which may be incurred by LLC if, by reason of
such default, LLC is unable to meet its contractual payment
obligations or satisfy its other commitments, including, without
limitation, its commitments under the Space System Contact, the O&M
Contract and the Terrestrial Network Development Contract.
(b) Notice of Default and Remedies. LLC shall deliver written
notice to the Members of the existence of a default which notice shall also
specify the remedy or remedies LLC is pursuing or intends to pursue as a result
of such default.
(c) Appropriateness of Remedies. Each party to this Agreement
acknowledges that the failure of any such party to perform its obligations
hereunder (including in particular the failure of such party to pay any of the
amounts required to be paid pursuant to Section 4.02) will result in
substantial damages to LLC and each of the Members. Each such party further
acknowledges the actual damages incurred in the event of any such failure would
be extremely impractical or impossible to determine and that the remedies set
forth in this Section 11.03 do not constitute a penalty; they reflect a good
faith and reasonable attempt to estimate the actual damages which would be
incurred due to any such failure.
(d) Performance Prohibited. Notwithstanding any provision in this
Agreement to the contrary, in the event that a party to this Agreement (or an
Indirect Owner) is prohibited under any law, rule, regulation, finding or order
of any Government from owning Interests in LLC or otherwise performing its
obligations hereunder (or under an Agreement of Indirect Owner) and such party
(or Indirect Owner) has used its good faith reasonable efforts to seek to own
interests in LLC and to perform its obligations hereunder in a manner that is
not so prohibited and to seek to appeal any finding or order for which an
appeal can be made, then LLC shall not exercise any of the remedies described
in this Section 11.03 until at least nine months shall have passed during which
LLC shall use its reasonable efforts to work with such party to find a Person
to purchase the Interests to be purchased under Section 4.02 and assume such
party's obligations hereunder (and, if applicable, such party's Indirect
Owner's obligations under the Agreement of Indirect Owner entered into by such
Indirect Owner). LLC, however, shall have no obligation to use such efforts and
shall have the right to
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exercise such remedies immediately if such party (or such Party's Indirect
Owner) fails to cooperate in good faith with LLC in such efforts.
Section 11.04 Jurisdiction and Service of Process; Arbitration
Any suit, action or proceeding against any party with respect to this
Agreement may be brought in a court of the United States sitting in the State
of Delaware or, if jurisdiction is lacking in such a court, in a court of
record in the State of Delaware, and each party hereby irrevocably waives, to
the fullest extent permitted by law, any objection that it may have, whether
now or in the future, to the laying of venue in, or to the jurisdiction of, any
and each of such courts for the purpose of any such suit, action, proceeding or
judgment and further waives any claim that any such suit, action, proceeding or
judgment has been brought in an inconvenient forum, and the party hereby
submits to such jurisdiction. The party hereby agrees that service of all
writs, process and summonses in any such suit, action or proceeding brought in
the State of Delaware may be made upon The Corporation Trust Company, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such alternate process agent in
the United States designated with respect to the party in a writing delivered
to LLC (the "Process Agent") and the party hereby irrevocably appoints the
Process Agent in its name, place and stead to receive and forward such service
of any and all such writs, process and summonses and agrees that the failure of
the Process Agent to give any notice of any such service of process to such
party shall not impair or affect the validity of such service or of any
judgment based thereon. If the Process Agent is no longer able to so act for
any reason whatsoever, the party agrees to appoint a substitute process agent,
which substitute process agent shall thereafter be deemed to be the Process
Agent hereunder, and to give notice of such appointment to LLC. If the party
is a Government, it hereby irrevocably waives any and all claims of immunity in
connection with the execution, performance and enforcement of this Agreement
and others in any way related to this Agreement, including, without limitation,
with respect to service of process, submission to jurisdiction, attachment and
execution on property. In the event the foregoing provisions of this Section
11.04 are for any reason unenforceable or otherwise do not permit a party
hereto to become subject to the jurisdiction of the courts contemplated hereby,
then in the event any dispute arises in connection with the interpretation or
implementation of this Agreement which the parties are unable to resolve within
60 days, (a) any party may submit the dispute for arbitration in Stockholm,
Sweden in accordance with the Rules of the Arbitration Institute of the
Stockholm Chamber of Commerce with instructions that the arbitration be
conducted in the English language; (b) the arbitration award shall be final and
binding on the parties and shall be enforced in accordance with its terms; and
(c) the arbitration fee shall be borne by the party as designated by the
arbitration award. In the course of such arbitration, this Agreement shall be
continuously performed except with respect to the part hereof which is the
subject of, or which is directly and substantially affected by, the
arbitration. In any such arbitration proceeding, any legal proceeding to
enforce any arbitration award and any other legal action between or among the
parties hereto pursuant to or relating to this Agreement or the transactions
contemplated hereby, each party expressly waives the defense of sovereign
immunity and any other defense based on the fact or allegation that it is an
agency or instrumentality of a sovereign state. Any award of the arbitrators
shall be enforceable by any court having jurisdiction over the party against
which the award has been rendered and such award shall be enforceable in
accordance with the United Nations Convention on the Reciprocal Enforcement of
Arbitral Awards (1958).
Section 11.05 Power of Attorney and Other Authorizations
Each party does hereby constitute and appoint any vice president of
LLC and the secretary of LLC as the true and lawful representative and
attorney-in-fact of such party, in the name, place and stead of such party,
with full power of substitution, to make, execute, sign and file a Certificate
of Formation, any amendment thereof and such other instruments, documents and
certificates which may from time to time be required by the laws of the United
States of America, the State of Delaware or any other state or country in which
LLC shall determine to do business or any political subdivision or agency
thereof, to effectuate, implement and continue
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the valid and subsisting existence or qualification to do business of LLC or in
connection with any tax returns, filings or related matters.
Such representative and attorney-in-fact shall not, however, have any
right, power or authority to amend or modify this Agreement when acting in such
capacities.
The power of attorney granted hereby is coupled with an interest and
shall survive and not be affected by the subsequent dissolution, incapacity or
disability of such Member.
Each Director is hereby deemed to be an authorized person within the
meaning of the Delaware Act; the execution, delivery and filing of the
Certificate of Formation of LLC by LLC is hereby authorized, approved and
ratified; and the Directors are hereby authorized to execute, deliver and file
any amendment to and restatements of the Certificate of Formation of LLC that
are required or permitted by the Delaware Act and any and all certificates or
documents required by the Delaware Act.
Section 11.06 Actions of Members
Except as otherwise stated in this Agreement or as required by law,
any act of a party hereto that may be or is required to be taken under either
this Agreement or the Delaware Act may be taken by their respective duly
authorized officers.
Section 11.07 Notices
All notices and other communications provided for in this Agreement
shall be in writing, shall be in the English language and shall be sufficiently
given if made (i) by hand delivery or by telecopier and (ii) by reputable
express courier service (charges prepaid) or by registered or certified mail
(postage prepaid and return receipt requested) (a) if to the Company, at the
following address:
Iridium LLC
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
▇.▇.▇.
Attention: General Counsel
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as the Company shall have furnished in writing to any
Member and (b) if to any Member, at the address indicated on Exhibit B or at
such other address as the Member shall have furnished in writing to the
Company. All such notices and other communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; five business
days after being deposited with a reputable express courier service (charges
prepaid); seven business days after being deposited in the mail, postage
prepaid, if delivered by mail; and when receipt acknowledged (by a facsimile
machine or otherwise), if telecopied.
Section 11.08 Counterparts
This Agreement may be executed in any number of counterparts and by
different parties to this Agreement in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same Agreement.
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ARTICLE XII
CERTAIN DEFINITIONS
For purposes of this Agreement, the following terms have the following
meanings:
"Accreted Value" means, (a) as of any date of determination prior to
the date on which a Note first bears or accrues interest, the sum of (i) the
initial offering price of such Note and (ii) the portion of the excess of the
principal amount of such Note over such initial offering price which shall have
been accreted thereon through such date, such amount to be so accreted on a
daily basis at the rate of 14 1/2% per annum of the initial offering price of
such Note, compounded semi-annually on each March 1 and September 1 from the
date of issuance of such Note through the date of determination or (b) as of
any date of determination on or after the date on which such Note first bears
or accrues interest, 100% of the principal amount at maturity of such Note.
"Affiliate" means any person that directly, or indirectly through one
or more intermediaries, controls, or is controlled by, or is under common
control with, the person specified.
"Affiliated Purchasers" means The Inamori Foundation and VEBA Telecom
Verwaltungsgesellschaft mbH.
"Agreement" means this Limited Liability Company Agreement as it may
be amended, restated or supplemented from time to time.
"Agreement of Indirect Owner" means an Agreement of Indirect Owner
executed and delivered by an Indirect Owner in connection with a Stock Purchase
Agreement, as amended on the date of this Agreement.
"Agreement Regarding Guarantee" means any agreement entered into by
LLC and a Guarantor on or prior to October 16, 1996 providing a Guarantee of
debt incurred by LLC under a bank credit facility.
"Business Day" means a day other than a Saturday, Sunday, national or
New York State holiday or other day on which commercial banks in New York City
are authorized or required by law to close.
"Certificates" means (a) with respect to an Interest, the certificate
therefor in fully registered definitive form, (b) with respect to a Note, a
note in fully registered definitive form, without coupons, in denominations of
$1,000 or any integral multiple thereof, (c) with respect to Warrants, a
warrant certificate in fully registered definitive form, and (d) with respect
to any other interests in or securities of LLC, such instruments as the Board
of Directors may authorize.
"Class 1 Interests" means Interests in LLC which represent common
limited liability company interests in LLC and are described in this Agreement.
"Class 1 Interests Deemed Outstanding" means, at any given time, the
number of Class 1 Interests actually outstanding at such time, plus the number
of Class 1 Interests for which LLC has received written commitments to
purchase, regardless of whether there are any unfulfilled conditions to any
such commitments.
"Class 1 Member" means a Member that owns one or more Class 1
Interests.
"Class 2 Interests" means Interests which are represented by Series M
Class 2 Interests, Series A Class 2 Interests or any other preferred limited
liability company interests in LLC and are described in, or issued pursuant to,
this Agreement.
"Class 2 Member" means a Series M Class 2 Interest Member, a Series A
Class 2 Member or a holder of any other Class 2 Interests of LLC.
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"Closing Price" means, for each Business Day, the last reported sale
price regular way on the principal national securities exchange on which the
Class 1 Interests are listed or admitted for trading, or, if the Class 1
Interests are not so listed or admitted for trading on a national securities
exchange, on the NASDAQ National Market System or, if the Class 1 Interests are
not quoted on the NASDAQ National Market System, the average of the closing bid
and asked prices in the over-the-counter market as furnished by any New York
Stock Exchange member firm selected from time to time by LLC for that purpose
or, if the Class 1 Interests are not traded in the over-the-counter market, the
Fair Market Value per Class 1 Interest as determined by the Board of Directors
(whose determination shall be conclusive).
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Director" means any person authorized to act as a director of LLC
pursuant to Section 1.05.
"Eligible Transferee" means a Person who was a party to a Stock
Purchase Agreement with Iridium, Inc. on February 16, 1996 or an Affiliate of
such a Person.
"Fair Market Value" means, with respect to any Interest, asset or
property, the sale value that would be obtained in an arm's-length transaction
between an informed and willing seller under no compulsion to sell and an
informed and willing buyer under no compulsion to buy.
"FCC" means the United States Federal Communication Commission, or any
entity or body succeeding to the functions of the Federal Communications
Commission.
"First Round Stock Purchase Agreement" means a Stock Purchase
Agreement other than the 1994 Stock Purchase Agreement and the 1996 Securities
Purchase Agreement.
"Gateway" means a terrestrial interconnection point between the
IRIDIUM satellite constellation and a public switched telephone network.
"Gateway Authorization Agreement" means a written, executed agreement
between a Person and LLC pursuant to which such Person is authorized to operate
a Gateway for the IRIDIUM system.
"Gateway Equipment Purchase Agreement" means any one of those
agreements entered into by Motorola on the one hand and a Gateway Service
Territory Operator on the other pursuant to which Motorola agrees to provide
equipment to such Gateway Service Territory Operator.
"Gateway Service Territory" means a territory allocated to a Member on
the Gateway Service Territory Allocation Schedule attached hereto as Annex E.
"Government" means any nation or government, any state or other
political subdivision thereof, any ministry thereof, any wholly-owned Person
thereof, and any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government.
"Guarantee" means a guarantee of LLC's debt made pursuant to an
Agreement to Provide Guarantee.
"Guarantee Agreement" means the agreement between a Guarantor and a
lender to LLC, entered into pursuant to an Agreement to Provide Guarantee,
providing a Guarantee.
"Guarantor" means any entity providing a Guarantee.
"Home Gateway Country" means the country within a Gateway Service
Territory that constitutes a Member's principal place of business on the date
of this Agreement or as otherwise designated in writing
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(which designation shall be irrevocable) by such Member to the Board of
Directors prior to the commencement of construction of the first Gateway by
such Member pursuant to the Gateway Authorization Agreement between LLC and
such Member.
"IL&FS Stock Purchase Agreement" means the Supplemental 1994 Stock
Purchase Agreement dated as of September 15, 1994 between LLC and
Infrastructure Leasing & Financing Services.
"Independent Appraiser" means a Person mutually acceptable to the
Member which is to be compensated pursuant to Section 8.01(c)(ii) and at least
66 2/3% of the members of the Board of Directors, which has been retained to
make the compensation determinations referred to in Section 8.01(c)(ii), as
applicable. If such Member and the Board of Directors are unable to mutually
agree upon such a Person within 30 days after the obligation arises to submit
the determination of such compensation to an Independent Appraiser, each of such
Member and the Board of Directors shall select a Person of recognized
international standing with the ability to make such a determination. The two
Persons so selected shall then select a third Person of such standing who shall
act as the Independent Appraiser and such Member and LLC shall be bound by the
determination of such third Person. In the event that such two Persons are
unable to select a third Person, each of such two Persons shall select two other
Persons of such standing and one of the four Persons so selected shall be
selected by lot to become the Independent Appraiser.
"Indirect Owner" means each Person, if any, that has executed an
Agreement of Indirect Owner.
"Initial Series A Dividend Period" means the dividend period
commencing on and including the Original Issue Date and ending on and including
the day immediately preceding the next subsequent Series A Dividend Payment
Date.
"Interests" means Class 1 Interests and Class 2 Interests.
"Iridium Bermuda" means Iridium Limited, a Bermuda corporation and any
successor toall or substantially all of its assets.
"Iridium Bermuda Change of Control" means an event or series of events
not approved either by Members owning a majority of the Class 1 Member-ship
Interests or by a majority of the Board of Directors of LLC, at a time when
Iridium Bermuda owns Class 1 Membership Interests representing less than 50% of
the outstanding Class 1 Membership Interests, as a result of which (a) any
"person" or "group" (as such terms are defined in Section 12(d) and 14(d) of
the United States Securities Exchange Act of 1934, as amended (the "Exchange
Act")) other than LLC becomes the beneficial owner (as defined in Rules 13d-3
and 13d-5 under the Exchange Act), directly or indirectly, of more than 30% of
Iridium Bermuda's outstanding common stock (or equivalent securities), (b)
Iridium Bermuda consolidates with or merges into another coporation or conveys,
transfers or leases all or substantially all of its assets to any person, or
any corporation consolidates with or merges into Iridium Bermuda, in either
event pursuant to a transaction in which Iridium Bermuda's outstanding common
stock is changed into or exchanged for cash, securities or other property,
other than any transaction (i) between Iridium Bermuda and either LLC, an
affiliate of LLC or a wholly-owned subsidiary of LLC, or (ii) after which the
shareholders who beneficially owned Iridium Bermuda's common stock immediately
before such transaction beneficially own at least 50% of the outstanding voting
stock of the surviving entity and no person beneficially owns more than 30% of
the outstanding voting stock of the surviving entity, or (c) during any period
of two consecutive years, individuals who at the beginning of such period
constituted the board of directors of Iridium Bermuda (together with any new
directors whose election by the board of directors of Iridium Bermuda or whose
nomination for election was approved by a vote of 66 2/3% of the members of the
board of directors of Iridium Bermuda then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the board of directors of Iridium Bermuda then in office.
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"Iridium Bermuda Reduction in Interest" means the sale or other
disposition by Iridium Bermuda of Class 1 Membership Interests which results in
a reduction of the ownership interest of Iridium Bermuda from five percent or
more of the total outstanding Class 1 Membership Interests to below such
percent.
"Iridium Bermuda Special Rights Period" means the period commencing on
the first date on which Iridium Bermuda's Class 1 Membership Interests
represent five percent or more of the total outstanding Class 1 Membership
Interests and ending on the date of delivery by LLC of an Iridium Bermuda
Termination Notice.
"Iridium Bermuda Special Rights Termination Event" means the
occurrence of an Iridium Bermuda Change of Control or an Iridium Bermuda
Reduction in Interest.
"Iridium Bermuda Termination Notice" means a written notice from LLC
to Iridium Bermuda following an Iridium Bermuda Special Rights Termination
Event.
"ISC Stock Purchase Agreement" means the Supplemental Offering Stock
Purchase Agreement dated as of September 19, 1994 between LLC and Iridium
SudAmerica Corporation.
"Junior Interests (Series A)" means any Interests in LLC the terms of
which do not expressly provide that such Interests rank senior to or on a
parity with Series A Class 2 Interests as to dividends and distributions upon
liquidation, dissolution and winding-up of LLC.
"Junior Interests (Series M)" means any Interests in LLC other than
the Series M Class 2 Interests.
"KMTC Stock Purchase Agreement" means the Supplemental Offering Stock
Purchase Agreement dated as of September 19, 1994 between LLC and Korean Mobile
Telecommunications Corporation.
"Liquidation Value" of any Series M Class 2 Interest as of any
particular date shall be equal to $1,000.
"LLC" means Iridium LLC, a limited liability company organized under
the laws of the State of Delaware, and when used with respect to actions,
events or circumstances occurring or existing prior to July 29, 1996 means
Iridium, Inc., a corporation organized under the laws of the State of Delaware.
"Member" means any Person that holds an Interest in the Company and is
admitted as a member of LLC pursuant to the provisions of this Agreement, in
its capacity as a member of LLC. For purposes of the Delaware Act, the Class 1
Members and the Class 2 Members shall constitute separate classes or groups of
Members.
"1993 Stock Purchase Agreement" means the Stock Purchase Agreement,
dated as of July 26, 1993, between Iridium, Inc. and China Great Wall Industry
Corporation, Iridium Africa Corporation, Iridium Canada, Inc., Iridium Middle
East Corporation, Khrunichev Enterprise, Lockheed Corporation, Motorola, Inc.,
Muidiri Investments BVI, Ltd., NIPPON IRIDIUM CORPORATION, Raytheon Company,
Sprint Corporation, Pacific Electric Wire & Cable Co., Ltd., STET -- Societa
Finanziaria Telefonica per Azioni, and Thai Satellite Telecommunications Co.,
Ltd.
"1994 Stock Purchase Agreement" means the 1994 Stock Purchase
Agreement, dated as of August 15, 1994, between Iridium, Inc. and China Great
Wall Industry Corporation, Iridium Canada, Inc., Khrunichev State Research and
Production Space Center, Motorola, Inc., NIPPON IRIDIUM CORPORATION, Pacific
Electric Wire & Cable Co., Ltd., STET -- Societa Finanziaria Telefonica per
Azioni, Sprint Corporation and Thai Satellite Telecommunications Co., Ltd.
"1996 Securities Purchase Agreement" means the Securities Purchase
Agreement, dated as of February 16, 1996, between Iridium, Inc., BCE Mobile
Communications, Inc., The Inamori Foundation, Iridium
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Andes-Caribe, Ltd., Iridium Brasil Ltda., Khrunichev State Research and
Production Space Center, Korea Mobile Telecommunications Corporation, Motorola,
Inc., Raytheon Company, Sprint Corporation, STET -- Societa Finanziaria
Telefonica per Azioni, Thai Satellite Telecommunications Co., Ltd. and VEBA
Telecom Beteiligungs GmbH.
"Notes" means LLC's 14 1/2% Senior Subordinated Notes due 2006 having
the terms and provisions set forth in Exhibit 1B hereto. Such term shall also
include the 14 1/2% Senior Subordinated Notes due 2006 of Iridium, Inc. which,
by virtue of Section 9.02 have been amended to become Notes of LLC having terms
identical to those specified in Exhibit 1B.
"Officer" means persons designated as such pursuant to Section 2.05.
"O&M Contract" means the Operations and Maintenance Contract between
LLC and Motorola effective July 29, 1993, as amended from time to time.
"Original Issue Date" means the date on which each particular share of
Series A Convertible Preferred Stock which was converted into a Series A Class
2 Interest pursuant to the LLC Merger was first issued by Iridium, Inc.
"Original Series A Liquidation Preference" means U.S. $1,000 per
Series A Class 2 Interest.
"Parity Interests (Series A)" means any series of Class 2 Interests
(other than Series M Class 2 Interests), the terms of which expressly provide
that it ranks on a parity with the Series A Class 2 Interests as to dividends
and distributions upon the liquidation, dissolution and winding-up of LLC.
"Person" shall mean a natural person, partnership (whether general or
limited), limited liability company, trust, estate, association, corporation,
custodian, nominee or any other individual or entity in its own or any
representative capacity.
"Private Placement Memorandum" means any of LLC's Private Placement
Memoranda used in connection with an offering of securities of LLC, including
the exhibits and annexes thereto, as amended and supplemented.
"Public Offering" means any offering by LLC directly or indirectly of
its Interests to the public pursuant to an effective registration statement
under the Securities Act of 1933, as then in effect, or any comparable
statement under any similar United States federal statute then in force.
"Quarterly Series A Dividend Period" means the quarterly period
commencing on and including a Series A Dividend Payment Date and ending on and
including the day immediately preceding the next subsequent Series A Dividend
Payment Date.
"Right" means a warrant, right, call or option or security exercisable
for or convertible into an interest or security.
"Senior Interests (Series A)" means the Series M Class 2 Interests and
any other series of Class 2 Interests the terms of which expressly provide that
it ranks senior to the Series A Class 2 Interests as to dividends and
distributions upon the liquidation, dissolution and winding-up of LLC.
"Series A Class 2 Member" means a Member which holds one or more
Series A Class 2 Interests.
"Series A Class 2 Interests" means the Interests which represent
preferred limited liability company interests in LLC and are described in this
Agreement.
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"Series A Dividend Payment Date" means each March 1, June 1, September
1 and December 1 of each year on which dividends shall be paid or are payable,
any Series A Redemption Date and any other date on which dividends in arrears
may be paid.
"Series A Dividend Period" means the Initial Series A Dividend Period
and, thereafter, each Quarterly Series A Dividend Period.
"Series A Dividend Record Date" means, with respect to the dividend
payable on each Series A Dividend Payment Date, the close of business on the
fifteenth day immediately preceding such Series A Dividend Payment Date, or
such other record date as may be designated by the Board of Directors with
respect to the dividend payable on such Series A Dividend Payment Date;
provided, that such record date may not be more than 60 days or less than ten
days prior to such Series A Dividend Payment Date.
"Series A Liquidation Preference" means the Original Series A
Liquidation Preference, plus an amount equal to all accrued and unpaid
dividends from and after the Series A Dividend Payment Date on which such
dividends were to be paid. The Series A Liquidation Preference of a Series A
Class 2 Interests will increase by the amount of dividends that accrue on such
Interest on a Series A Dividend Payment Date and will decrease only to the
extent such dividends are actually paid, all as provided in Section 4.05(b)
hereof. Notwithstanding the foregoing, in determining the amount to be paid on
a Series A Redemption Date, Series A Liquidation Preference shall not be deemed
to include any dividends to the extent such dividends are to be paid on such
date in accordance with the requirements of this Agreement.
"Series M Class 2 Member" means a Member which holds one or more
Series M Class 2 Interests.
"Series M Class 2 Interests" means the Interests which represent
preferred limited liability company interests in LLC and are described in this
Agreement.
"Service Provider" means any provider of IRIDIUM services to end
customers.
"Space System Contract" means the Space System Contract between LLC
and Motorola effective July 29, 1993, as amended from time to time.
"Stock Purchase Agreements" means the 1993 Stock Purchase Agreement,
the 1994 Stock Purchase Agreement, the 1996 Securities Purchase Agreement, the
VEBA Stock Purchase Agreement, the IL&FS Stock Purchase Agreement, the ISC
Stock Purchase Agreement, the KMTC Stock Purchase Agreement.
"Subsidiary" means any corporation or other entity of which the shares
of outstanding capital stock or other interests possessing the voting power
(under ordinary circumstances) in electing the board of directors are, at the
time as of which any determination is being made, owned by LLC either directly
or indirectly through Subsidiaries.
"Terrestrial Network Development Contract" means the Terrestrial
Network Development Contract between LLC and Motorola, effective January 1,
1993, as amended from time to time.
"Transfer" means to sell, transfer, assign, pledge or otherwise
encumber or dispose of (whether with or without consideration and whether
voluntarily or involuntarily or by operation of law), directly or indirectly;
provided, that a lien arising with respect to Interests in connection with a
general lien on all or substantially all of the assets of the holder of
Interests shall not constitute a Transfer.
"Transfer Agent" means the transfer agent for the Series A Class 2
Interests. LLC will initially act as Transfer Agent.
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"Underlying Class 1 Interests" means Class 1 Interests into which, or
for which, rights to acquire Class 1 Interests may be converted or exercised.
"Unit" means the combination of a Note in a principal amount of $1,000
and one Warrant.
"VEBA Stock Purchase Agreement" means the Supplemental Offering Stock
Purchase Agreement dated as of August 31, 1994 between LLC and VEBA Telecom
GmbH.
"Warrants" means the Warrants, each entitling the holder to purchase
.13877 Class 1 Interests and having the rights and other terms and provisions
set forth in Exhibit 2b hereto. Such terms shall also include the Warrants of
Iridium, Inc. which, by virtue of Section 9.02 have been amended to become
Warrants of LLC having terms identical to those specified in Exhibit 2b.
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Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
---- -------
"Additional Members" 7.01(a)
"Authorization Date" 6.01
"constituent entity" 4.05(f)
"Contract Committee" 2.03(g)
"Default Interests" 11.03(a)
"Defaulting Party" 11.03(a)
"Delaware Act" Preamble
"dividends" (a)
"Event of Noncompliance" 4.04(g)
"Fiscal Year" 1.04
"Former Member" 5.02
"Gateway Authorizations" 8.01(b)
"Loan Agreements" 4.02
"Guarantor Directors" 4.07(b)
"Iridium Brazil" 2.03(b)
"LLC Merger" Preamble
"Liquidating Dividends" 4.05(e)
"Loan Agreements" 4.02
"Lockheed ▇▇▇▇▇▇" 2.03(b)
"Mandatory Call" 4.02
"Members' Interest Register" 2.07(a)
"Merger Agreement" 10.01
"Minimum Dividend" (c)
"Motorola" 2.03(g)
"Motorola Sale Notice" 6.05
"Motorola Warrant" 4.01(c)
"non-electing interest" 4.05(f)
"Organic Change" 4.04(d)
"Other Class 1 Members" 6.05
"Other Guarantor Directors" 4.07(b)
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Term Section
---- -------
"Other Holder" 6.01
"Payment Event" 4.07(b)
"proceeding" 2.08(a)
"Process Agent" 11.04
"Raytheon" 2.03(b)
"Rejection Notice" 6.02(a)
"Restricted Interests" 6.01
"Sale Notice" 6.01
"Series A Conversion Agent" 4.05(f)
"Series A Conversion Date" 4.05(f)
"Series A Conversion Price" 4.05(f)
"Series A Optional Redemption Price" 4.05(d)
"Series A Redemption Date" 4.05(d)
"Series A Redemption Notice" 4.05(d)
"Series B Directors" 4.06(b)
"Series C Directors" 4.07(b)
"Series M Conversion Price" 4.04(d)
"Series M Dividend Reference Date" 4.05(c)
"Series M Dividends 4.05(c)
"Surviving Business Entity" 10.02(b)
"Tax Matters Partner" 3.10
"Third Round Warrants" 4.01(c)
"Time of Cure" 4.07(b)
"Transferring Person" 6.01
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IN WITNESS WHEREOF, the undersigned have hereunto set their hands as
of the day and year first above written.
MEMBERS
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BCE MOBILE COMMUNICATIONS, INC.
By: /s/▇▇▇▇▇▇ ▇. Ferchat
--------------------
Name:▇▇▇▇▇▇ ▇. Ferchat
Title: Chairman
IRIDIUM AFRICA CORPORATION
By: /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Director
IRIDIUM ANDES CARIBE, LTD.
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chairman
IRIDIUM BRASIL S/A
By: /s/▇▇▇▇▇▇▇ de Oms Sobrinho
--------------------------
Name: ▇▇▇▇▇▇▇ de Oms Sobrinho
Title: President
IRIDIUM CANADA, INC.
By: /s/▇▇▇▇▇▇ Ferchat
-----------------
Name: ▇▇▇▇▇▇ Ferchat
Title: Chairman
IRIDIUM CHINA (HONG KONG) LTD.
By: /s/Wang ▇▇▇ ▇▇▇
---------------
Name: Wang ▇▇▇ ▇▇▇
Title: Chairman & President
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IRIDIUM MIDDLE EAST CORPORATION
By: /s/Hasan M Binladin
-------------------
Name: Hasan M. Binladin
Title: Board Member
IRIDIUM INDIA TELECOM LIMITED
By: /s/▇▇▇▇▇▇ ▇. Raja
-----------------
Name: Jaydey H. Raja
Title: Managing Director
IRIDIUM SUDAMERICA CORPORATION
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chairman
KHRUNICHEV STATE RESEARCH AND
PRODUCTION SPACE CENTER
By: /s/▇. ▇▇▇▇▇▇▇
----------------
Name: ▇. ▇▇▇▇▇▇▇
Title: General Director
KOREA MOBILE TELECOMMUNICATIONS
CORPORATION
By: /s/▇▇▇▇ ▇. ▇▇▇
--------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: Senior Managing Director
LOCKHEED ▇▇▇▇▇▇ CORPORATION
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President & Secretary
MOTOROLA, INC.
By: /s/▇▇▇▇▇▇ ▇▇▇▇
--------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President and Director
of Investor Relations
76
78
NIPPON IRIDIUM (BERMUDA) LIMITED
By: /s/▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
PACIFIC ELECTRIC WIRE & CABLE CO., LTD.
By: /s/▇▇▇▇ ▇. Sun
--------------
Name: ▇▇▇▇ ▇. Sun
Title: President
RAYTHEON COMPANY
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇
----------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Manager Command, Control,
Communications & Surveillance
Systems, Raytheon Electronic
Systems Division
STET - SOCIETA FINANZIARIA TELEFONICA PER
AZIONI
By: /s/▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Co-Director Strategic Planning
77
79
SOUTH PACIFIC IRIDIUM HOLDINGS LIMITED
By: /s/ HARDIANTO KAHARUDIN KAMARGA
-------------------------------
Name: Hardianto Kaharudin Kamarga
Title: Director
SPRINT IRIDIUM, INC.
By: /s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
THAI SATELLITE TELECOMMUNICATIONS CO.,
LTD.
By: /s/Sribhumi Sukhanetr
---------------------
Name: Dr. Sribhumi Sukhanetr
Title: Chairman
By: /s/Piyabutra Vasudhara
----------------------
Name: Piyabutra Vasudhara
Title: President
VEBACOM GMBH
By: /s/▇▇▇ ▇▇▇▇▇
------------
Name: ▇▇▇ ▇▇▇▇▇
Title: Chairman
By: /s/H. Wilchens
--------------
Name: H. Wilchens
Title: Chief Financial Officer
78
80
OTHER PARTIES
-----------------------------------
Solely for purposes of Sections
4.03, 6.02, 6.03, 6.04, 6.05, 6.06,
7.01(d), 9.02, 9.03 and Article X
THE INAMORI FOUNDATION
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
VEBA TELECOM VERWALTUNGSGESELLSCHAFT MBH
By: /s/ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇
----------------------------------- ----------------------
Name: ▇▇▇▇▇ Name: ▇▇▇▇▇▇
Title: Managing Director Title: Managing Director
79
81
OTHER PARTIES
-------------------------------------------------------
Solely for purposes of Article VIII and Section 11.01(h)
NIPPON IRIDIUM CORPORATION
By: /s/▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
80
82
ANNEX A
DIRECTORS
DESIGNATING MEMBER DIRECTOR(S) ALTERNATE(S)
Selected by Directors in ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (Chairman)
accordance with Section 2.03
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(Vice Chairman)
Iridium Africa Corporation ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Iridium Canada, Inc. ▇▇▇▇▇▇ ▇. Ferchat ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Iridium China (Hong Kong) Wang ▇▇▇ ▇▇▇
Ltd.
Iridium India Telecom Limited ▇.▇. ▇▇▇▇
Iridium Middle East Hassan Binladin ▇▇▇▇▇ ▇▇-▇▇▇▇▇
Corporation
Iridium SudAmerica ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ Manual ▇▇▇▇▇-Ona
Corporation ▇▇▇▇▇▇▇ de Oms ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Khrunichev State Research and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Production Space Center
Korea Mobile ▇▇▇▇ ▇. ▇▇▇
Telecommunications
Corporation
Motorola, Inc. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (Class B
Shares)
Nippon Iridium (Bermuda) ▇▇▇▇▇ ▇▇▇▇▇▇▇
Limited Yusai Okuyama
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Pacific Electric Wire & Cable Tao-Tsun Sun
Co., Ltd.
Raytheon Company and Lockheed ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ Corporation
Sprint Iridium, Inc. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ C. ▇▇▇ Love
STET--Societa Finanziaria ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telefonica per Azioni
Thai Satellite Sribhumi Sukhanetr
Telecommunications
Co., Ltd.
A-1
83
Vebacom Holdings, Inc. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
A-2
84
OFFICERS
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ - Chief Executive Officer
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ - President and Chief Operating Officer
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ - Vice President, Chief Financial Officer and Treasurer
F. ▇▇▇▇▇▇ ▇▇▇▇▇▇ - Vice President, General Counsel and Secretary of the Board
▇▇▇▇▇ ▇▇▇▇ - Vice President, Network Operations
▇▇▇▇ ▇▇▇▇ - Vice President, Human Resources
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ - Vice President, Business Operations
▇▇▇ ▇▇▇▇▇▇▇ - Vice President, Marketing & Strategic Planning
▇▇▇▇▇ ▇. ▇▇▇▇▇ - Vice President, Engineering
▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ - Vice President, Government Affairs
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. - Deputy General Counsel and
Assistant Secretary
A-3
85
ANNEX B
INTERESTS
SERIES M SERIES A SERIES B SERIES C
CLASS 1 CONVERTIBLE CLASS 2 CLASS 2 CLASS 2
NAME AND BUSINESS ADDRESS INTERESTS CLASS 2 INTERESTS INTERESTS INTERESTS INTERESTS
------------------------- --------- ----------------- --------- --------- ---------
Iridium Africa Corporation..................... 3,000,000 -- -- -- --
c/o Mawarid Services (UK) Ltd.
Berkeley ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
Iridium Andes-Caribe........................... 4,350,000 -- -- -- --
Ed. Maploca II -- Piso ▇
▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
Caracas, Venezuela
Iridium Brasil S/A............................. 2,824,755 -- -- -- --
CX. ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ - ▇▇▇▇▇▇▇▇ - ▇▇ -
▇▇▇▇▇▇
Iridium Canada, Inc. .......................... 5,250,000 -- 8,988.8 -- --
c/o BCE Mobile
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Iridium China (Hong Kong) Ltd. 5,250,000 -- -- -- --
12/F Conic Investment ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
B-1
86
SERIES M SERIES A SERIES B SERIES C
CLASS 1 CONVERTIBLE CLASS 2 CLASS 2 CLASS 2
NAME AND BUSINESS ADDRESS INTERESTS CLASS 2 INTERESTS INTERESTS INTERESTS INTERESTS
------------------------- --------- ----------------- --------- --------- ---------
Iridium Middle East Corporation.................. 6,000,000 -- -- -- --
c/o Carlyle International
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
-or-
c/o Mawarid Services (UK) Ltd. .................
Berkeley Square House, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
Iridium India Telecom Limited..................... 5,250,000 -- -- -- --
c/o Industrial Development Bank of India
IDBI Tower, Cuffe Parade
Bombay -- 400 005 India
Khrunichev State Research and.....................
Production Space Center 6,133,125 -- -- --
▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇
Russian Federation
Korea Mobile Telecommunications Corporation....... 5,250,000 -- 13,230.3 -- --
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇-▇▇, ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Lockheed ▇▇▇▇▇▇ Corporation....................... 1,500,000 -- -- -- --
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
ORGN ▇▇-▇▇, ▇▇▇▇. ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Motorola, Inc. ................................... 26,533,425 -- -- 1 75
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
B-2
87
SERIES M SERIES A SERIES B SERIES C
CLASS 1 CONVERTIBLE CLASS 2 CLASS 2 CLASS 2
NAME AND BUSINESS ADDRESS INTERESTS CLASS 2 INTERESTS INTERESTS INTERESTS INTERESTS
------------------------- --------- ----------------- --------- --------- ---------
Nippon Iridium (Bermuda) Limited................... 15,750,000 -- -- -- --
c/o NIPPON IRIDIUM CORPORATION
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Pacific Electric Wire & Cable, Co., Ltd. .......... 5,250,000 -- -- -- --
4th Floor, Pacific Commercial ▇▇▇▇.
▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇
Raytheon Company................................... 900,000 -- -- -- --
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
STET--Societa Finanziaria Telefonica per Azioni.... 5,550,000 -- -- -- --
c/o Telecom Italia SpA
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
South Pacific Iridium Holdings Limited.............
c/▇ ▇▇▇▇▇▇ Westwood & Riegels
Craigmuir ▇▇▇▇▇▇▇▇, P.O. Box 71
Road Town, Tortola
British Virgin Islands
Sprint Iridium, Inc. .............................. 5,250,000 -- 13,230.3 -- --
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Thai Satellite Telecommunications Co., Ltd. ....... 5,250,000 -- -- -- --
c/o United Communication
Industry Co. Ltd.
▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇.
Soi ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
VEBACOM Holdings, Inc. ............................ 12,427,875 -- -- -- --
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇
▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Totals..................................... 129,219,150 -- 35,449.4 1 75
B-3
88
ANNEX C
PURCHASER ACKNOWLEDGEMENTS AND AGREEMENTS
Purchaser Acknowledgments and Agreements. In
connection with the acquisition of Class 1 Interests, Class 2 Interests or
Units consisting of Notes and Warrants ("Offered Interests") under the Limited
Liability Company Agreement (the "Agreement") to which this Annex C is
attached, each purchaser (a "Purchaser", with respect to itself only,
acknowledges and agrees that:
(i) Such Purchaser (1) received and read a copy of
the Private Placement Memorandum issued in connection with the issuance of
such Offered Interests (including in particular the disclaimers set forth in
the forepart thereof and the disclosures set forth in or referred to under
the caption "RISK FACTORS" and, in the case of securities issued under
Section 4.03 of the Agreement, "Recent Developments"), (2) understands that
such Private Placement Memorandum did not contain all of the information
which may be of interest to a prospective investor and did not explain
completely the complexities of the technologies or the regulatory and
licensing considerations involved in the IRIDIUM system, (3) had an
opportunity to ask questions and receive answers concerning the IRIDIUM
system generally, the risks inherent in an investment in such Offered
Interests and the terms and conditions of the sale of such Offered Interests
and (4) had full access to such other information concerning the Company and
the IRIDIUM system as such Purchaser has requested.
(ii) Such Purchaser (1) received and read a copy of
the Space System Contract, the O&M Contract and the Terrestrial Network
Development Contract, (2) had full access to such other information
concerning the Space System Contract, the O&M Contract and the Terrestrial
Network Development Contract as such Purchaser requested, (3) understands
that LLC is bound by the provisions of the Space System Contract, the O&M
Contract and the Terrestrial Network Development Contract and hereby ratifies
LLC's execution of the Space System Contract, the O&M Contract and the
Terrestrial Network Development Contract and (4) agrees to the terms of the
Space System Contract, the O&M Contract and the Terrestrial Network
Development Contract and will not take any action in contravention of the
enforcement of, and LLC's full compliance with, the terms thereof.
(iii) Such Purchaser shall not transfer any of such
Offered Interests or Underlying Common Shares unless (1) such Transfer is
effected in accordance with the terms of the Agreement and (2)(x) such
Offered Interests and Underlying Common Shares are registered under the
United States Securities Act of 1933, as amended (the "1933 Act") and
applicable state securities laws in the United States or (y) the Transfer
does not violate any United States Federal or state securities laws or any of
the rules and regulations
C-1
89
promulgated thereunder (collectively, the "U.S. Securities Laws") and the
request for Transfer is accompanied by an opinion of counsel satisfactory to
LLC that such Transfer is in accordance with the U.S. Securities Laws.
(iv) Such Offered Interests have not been registered
under the U.S. Securities Laws. Such securities are offered and sold in
reliance upon the exemptions from registration provided in Section 4(2) of
the 1933 Act and Regulation S under the 1933 Act and applicable exemptions
under state securities laws and neither LLC nor any Person acting on its
behalf has offered or sold such Offered Interests to such Purchaser by means
of any general solicitation or general advertising within the meaning of Rule
502(c) under the 1933 Act.
(v) Such Purchaser must bear the economic risk of an
investment in such Offered Interests for an indefinite period of time
because:
(A) there is presently no public market for any
interests in or securities of LLC and LLC
does not anticipate that any public market
for such interests or securities will develop
in the future, and
(B) such Offered Interests have not been
registered under any U.S. Securities Laws
and, therefore, cannot be sold in a
transaction subject to the jurisdiction of
any of the U.S. Securities Laws unless such
securities are subsequently registered (which
is unlikely to occur) under applicable U.S.
Securities Laws or an exemption from
registration under such laws is available.
(vi) LLC has the right to deny a Transfer of Offered
Interests and Underlying Common Shares as provided in the Agreement. If so
provided in the Agreement, the certificates representing such Offered
Interests and Underlying Common Shares purchased and to be purchased by such
Purchaser pursuant to the Agreement will be held by LLC until such time as
the purchase price for all of such Purchaser's Offered Interests has been
fully paid.
(vii) The certificates representing such Offered
Interests and Underlying Class 1 Interests will bear such legend or legends,
consistent with the terms of the Agreement, as LLC or its legal counsel deems
necessary or desirable.
(viii) No securities commission or similar authority
has approved or recommended an investment in such Offered Interests or
guaranteed or passed upon the fairness of the terms of the offering of such
Offered Interests, the safety of such Offered Interests as an investment, the
realization of any economic return from an investment of such Offered
Interests or the accuracy or
C-2
90
adequacy of the disclosures set forth in the applicable Private Placement
Memorandum.
(ix) Such Purchaser will make any required filings
under the HSR Act and will comply with any requests for additional
information by the United States Federal Trade Commission or Department of
Justice pursuant to the HSR Act.
(x) LLC shall have the right to disclose to other
Persons the contents of the Agreement, including the identity of each Member
and its Indirect Owner(s), if any, the size of each Purchaser's commitment to
purchase Offered Interests and the scope of its Gateway Service Territory.
All capitalized terms which are not defined in this
Annex shall have the meanings ascribed thereto in the Agreement.
C-3
91
ANNEX D
RESERVE CAPITAL CALL COMMITMENTS
Class 1 Member(1) Capital Call Commitment
-------------- -----------------------
Iridium Africa Corporation 75,000
Iridium Canada Inc. 75,000
Iridium China (Hong Kong) Ltd. 75,000
Iridium India Telecom Limited 75,000
Iridium Middle East Corporation 150,000
Iridium SudAmerica Corporation 150,000
Khrunichev State Research and Production 75,000
Space Center
Korea Mobile Telecommunications Corporation 75,000
Lockheed ▇▇▇▇▇▇ Corporation 37,500
Motorola, Inc. 3,337,500
Nippon Iridium (Bermuda) Limited 2,250,000
Pacific Electric Wire & Cable Co., Ltd. 75,000
Raytheon 225,000
Sprint Iridium, Inc. 75,000
STET- Societa Finanziaria Telefonica 562,500
per Azioni
Thai Satellite Telecommunications 75,000
Co., Ltd.
Vebacom Holdings, Inc. 1,693,050
-----------------
(1) Members without Capital Call obligations are not listed.
D-1
92
ANNEX E
GATEWAY SERVICE TERRITORY ALLOCATION SCHEDULE
Iridium Africa Algeria Madagascar
Angola Malawi
Benin Mali
Botswana Mauritania
Burkina Faso Mozambique
Burundi Namibia
Cameroon Niger
Cape Verde Nigeria
Central African Reunion Island
Republic Rwanda
Chad Sao Tome and
Comoro Principe
Congo Senegal
Cote d'Ivoire Seychelles
Cyprus Sierra Leone
Djibouti Somalia
Equatorial Guinea South Africa
Ethiopia Sudan
Gabon Swaziland
Gambia Tanzania
Ghana Togo
Guinea Tunisia
Guinea-Bissau Turkey
Kenya Uganda
Lesotho Zaire
Liberia Zambia
Libya Zimbabwe
Iridium Canada Canada+
St. Pierre and
Miquelon+
Bermuda+
Puerto Rico+
United States+
Iridium China (Hong Kong) Ltd. China
Hong Kong
Macau
Mongolia
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ Telecom Limited Bangladesh
Bhutan
India
Maldives
Nepal
Sri Lanka
Iridium Middle East Corporation Afghanistan Morocco
Armenia Oman
Azerbaijan Pakistan
Bahrain Qatar
Egypt Saudi Arabia
Iran Syria
Iraq Tajikistan
Jordan Turkmenistan
Kuwait United Arab
Kyrgyzstan Emirates
Lebanon Yemen
Iridium SudAmerica Corporation Anguilla Martinique
Aruba Montserrat
Antigua and Netherlands Antilles
Barbuda (Bonaire Curacao,
Argentina St. Maarten and
Bahamas St. Eustatius)
Barbados Paraguay
Bolivia Peru
Brazil Saint Kitts and
Cayman Islands Nevis
Chile Saint Lucia
Colombia Saint ▇▇▇▇▇▇
Cuba Saint ▇▇▇▇▇▇▇ and
Dominica the Grenadines
Dominican Suriname
Republic Trinidad and
Ecquador Tobago
French Guiana Turks and Caicos
Grenada Islands
Guadaloupe Uruguay
Guyana Venezuela
Haiti Virgin Islands
Jamaica
▇-▇
▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Research and Belorussia Lithuania
Production Space Center Estonia Moldovia
Georgia Russian Federation
Kazakhstan Uzbekistan
Latvia
Korea Mobile Telecommunications North Korea
Corporation South Korea
Motorola, Inc. Belize Mexico
Canada+ Nicaragua
Costa Rica Panama
El Salvador Puerto Rico+
Bermuda+ St. Pierre and
Guatemala Miquelon+
Honduras United States+
NIPPON IRIDIUM Japan
CORPORATION
Pacific Electric Wire & Cable Brunei
Co., Ltd. Indonesia
Papua New
Guinea
Philippines
Taiwan
South Pacific Iridium American Samoa New Caledonia
Holdings Limited Antarctica New Zealand
Australia Solomon Islands
▇▇▇▇ Islands Tahiti
Fiji Tonga
French Polynesia Tuvalu
Kiribati Vanuatu
▇▇▇▇▇▇▇▇ Islands Western Samoa
Micronesia Wallis and Futuna
Nauru
STET- Societa Finanziaria Belgium Liechtenstein
Telefonica per Azioni Bosnia and Luxembourg
Herzegovina Macedonia
Croatia ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ San Marino
Greece Slovenia
Holy See Switzerland
Italy Yugoslavia
Sprint Iridium, Inc. Canada+
St. Pierre and
Miquelon+
Bermuda+
Puerto Rico+
United States+
E-3
95
Thai Satellite Telecommunications Cambodia
Co., Ltd. Laos
Malaysia
Myanmar
Singapore
Thailand
Vietnam
VEBACOM GmbH Albania Ireland
Andorra Israel
Austria Norway
Bulgaria Poland
Czech Republic Portugal
Finland Romania
Germany Gibraltar Spain
Greenland Sweden
Hungary Slovakia
Iceland Ukraine
United Kingdom
+Some or all of these jurisdictions are expected to be shared by a North
American gateway consortium consisting of Iridium Canada, Inc., Motorola, Inc.
and Sprint Corporation.
Note: The South Pacific Territory, which consists of American Samoa,
Antarctica, Australia, ▇▇▇▇ Islands, Fiji, French Polynesia, Kiribati, ▇▇▇▇▇▇▇▇
Islands, Micronesia, Nauru, New Caledonia, New Zealand, Solomon Islands,
Tahiti, Tonga, Tuvalu, Vanuatu, Western Samoa, Wallis and Futuna, has not yet
been allocated
E-4
96
EXHIBIT 1-A
Amendments to Outstanding Notes
FORM OF NOTE
THIS SECURITY MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND ANY
APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM THOSE REGISTRATION
REQUIREMENTS. ACCORDINGLY, THE HOLDER OF THIS SECURITY SHALL NOT BE ENTITLED TO
TRANSFER THIS SECURITY AT ANY TIME UNLESS, AT THE TIME OF SUCH TRANSFER OR
EXERCISE, (I) A REGISTRATION STATEMENT UNDER THE ACT RELATING TO THIS SECURITY
HAS BEEN FILED WITH, AND DECLARED EFFECTIVE BY, THE SECURITIES AND EXCHANGE
COMMISSION (THE "SEC"), AND NO STOP ORDER SUSPENDING THE EFFECTIVENESS OF SUCH
REGISTRATION STATEMENT HAS BEEN ISSUED BY THE SEC OR (II) THE TRANSFER OF THIS
SECURITY IS PERMITTED PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE ACT.
TRANSFER OF THIS SECURITY IS ALSO RESTRICTED BY THE TERMS OF A LIMITED
LIABILITY COMPANY AGREEMENT OF IRIDIUM LLC, DATED AS OF JULY 1, 1996, BY AND
AMONG THE PARTIES NAMED THEREIN (THE " LLC AGREEMENT"). A COPY OF THE LLC
AGREEMENT IS ON FILE AND AVAILABLE FOR INSPECTION BY THE HOLDER OF THIS SECURITY
AT THE PRINCIPAL EXECUTIVE OFFICES OF IRIDIUM LLC.
IRIDIUM LLC
14 1/2% SENIOR SUBORDINATED DISCOUNT NOTE
DUE 2006
No. _________ $ _________
Iridium LLC, A LIMITED LIABILITY COMPANY duly organized and existing under
the laws of Delaware (herein called the "Company", which term includes any
successor Person hereunder), for value received, hereby promises to pay to
_________________________, or registered assigns, the principal sum of
______________________ Dollars on ______________, 2006, and to pay interest
thereon from ___________, 2001 or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semi-annually on March 1 and
September 1 in each year, commencing September 1, 2001, at the rate of 14 1/2%
per annum, until the principal hereof is paid or made available for payment,
provided that any principal and premium, and any such instalment of interest,
which is overdue shall bear
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interest at the rate of 14 1/2% per annum (to the extent that the payment of
such interest shall be legally enforceable), from the dates such amounts are
due until they are paid or made available for payment, and such interest shall
be payable on demand.
Payment of the principal of (and premium, if any) and any such interest on
this Security will be made at the office or agency of the Company maintained
for that purpose in either the Borough of Manhattan, the City of New York or
Washington, D.C., in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register.
This Security is one of a duly authorized issue of 14 1/2% Senior
Subordinated Discount Notes due 2006 of the Company (herein called the
"Security"), issued and to be issued under instruments substantially identical
hereto and limited in aggregate principal amount to $ million.
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
"Accreted Value" means with respect to any Security, (i) as of any date of
determination prior to the date on which the Security first bears or accrues
interest, the sum of (a) the initial purchase price of each Security and (b)
the portion of the excess of the principal amount of each Security over such
initial purchase price which shall have been accreted thereon through such
date, such amount to be so accreted on a daily basis at the rate of 14 1/2% per
annum of the initial purchase price of such Security, compounded semi- annually
on each March 1 and September 1 from the date of issuance of such Security
through the date of determination or (ii) as of any date of determination on or
after the date on which the Security first bears or accrues interest, 100% of
the principal amount at maturity of each Security.
"Act", when used with respect to any Holder, has the meaning specified in
Section 102.
"Affiliate" of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For the purposes of this definition, (i) "control" when used with
respect to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; (ii) the terms "controlling" and
"controlled" have meanings correlative to the foregoing; and (iii) a Person
shall be deemed to be controlled by any other Person which owns more than 15%
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of such Person's outstanding Common Stock or which has the right, contractually
or otherwise, to elect more than 15% of the members of such Person's board of
directors.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary or
an Assistant Secretary of the Company to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such certification.
"Business Day", when used with respect to any Place of Payment, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by
law or executive order to close.
"Capital Lease Obligation" of any Person means the obligation to pay rent or
other payment amounts under a lease of (or other Debt arrangements conveying
the right to use) real or personal property of such Person which is required to
be classified and accounted for as a capital lease or a liability on the face
of a balance sheet of such Person in accordance with generally accepted
accounting principles. The stated maturity of such obligation shall be the date
of the last payment of rent or any other amount due under such lease prior to
the first date upon which such lease may be terminated by the lessee without
payment of a penalty.
"Capital Stock" of any Person means any and all shares, interests,
participation or other equivalents (however designated) of corporate stock OR
SIMILAR EQUITY INTERESTS of such Person. IN THE CASE OF THE COMPANY, CAPITAL
STOCK INCLUDES CLASS 1 MEMBERSHIP INTERESTS AND CLASS 2 MEMBERSHIP INTERESTS.
"Common Stock" of any Person means Capital Stock of such Person that does not
rank prior, as to the payment of dividends or as to the distribution of assets
upon any voluntary or involuntary liquidation, dissolution or winding up of
such Person, to shares of Capital Stock of any other class of such Person. IN
THE CASE OF THE COMPANY, "COMMON STOCK" MEANS THE CLASS 1 MEMBERSHIP INTERESTS.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Security, and thereafter "Company" shall mean
such successor Person.
"corporation" means a corporation, association, company, joint-stock company
or business trust.
"Debt" means (without duplication), with respect to any Person, whether
recourse is to all or a portion of the assets of such Person and whether or not
contingent, (i) every obligation of such Person for money borrowed, (ii) every
obligation of such Person evidenced by bonds, debentures, notes or other
similar instruments, including obligations
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Incurred in connection with the acquisition of property, assets or businesses,
(iii) every reimbursement obligation of such Person with respect to letters of
credit, bankers' acceptances or similar facilities issued for the account of
such Person, (iv) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (but excluding trade accounts
payable or accrued liabilities arising in the ordinary course of business which
are not overdue or which are being contested in good faith), (v) every Capital
Lease Obligation of such Person, (vi) the maximum fixed redemption or
repurchase price of Disqualified Stock of such Person outstanding at the time
of determination, (vii) every obligation under Interest Rate Protection
Agreements or Currency Protection Agreements of such Person and (viii) every
obligation of the type referred to in clauses (i) through (vii) of another
Person and all dividends of another Person the payment of which, in either
case, such Person has Guaranteed or is responsible or liable, directly or
indirectly, as obligor, Guarantor or otherwise. The term "Debt" shall not
include any obligations of the Company or any Restricted Subsidiary under the
Space System Contract, the Operations and Maintenance Contract or the
Terrestrial Network Development Contract.
"Defeasance" has the meaning specified in Section 302.
"Defeasance and Satisfaction Payments" has the meaning specified in Section
1002.
"Designated Senior Debt" means (i) all secured Senior Debt which is Incurred
pursuant to any agreement (or series of related agreements), (ii) any other
issue of Senior Debt which is Incurred pursuant to an agreement (or series of
related agreements) providing for indebtedness, or commitments to lend, of at
least $100 million and (iii) at any time that there is no Senior Debt that
falls within either clause (i) or (ii) above, any Senior Debt, in each case
which is specifically designated in the instrument evidencing such Senior Debt
or the agreement under which such Senior Debt arises as "Designated Senior
Debt" by the Company.
"Disqualified Stock" of any Person means any Capital Stock of such Person
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof,
in whole or in part, on or prior to the final Stated Maturity of the
Securities.
"Event of Default" has the meaning specified in Section 501.
"Generally accepted accounting principles" means generally accepted
principles in the United States, which are applicable as of the date of
determination.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Incur" means, with respect to any Debt or other obligation of any Person, to
create, issue, incur (by conversion, exchange or otherwise), assume, Guarantee
or otherwise
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become liable in respect of such Debt or other obligation or the recording, as
required pursuant to generally accepted accounting principles or otherwise, of
any such Debt or other obligation on the balance sheet of such Person (and
"Incurrence", "Incurred", "Incurrable" and "Incurring" shall have meanings
correlative to the foregoing).
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an instalment of interest on such Security.
"Interest Rate Protection Agreement or Currency Protection Agreement" of any
Person means any interest rate protection agreement (including, without
limitation, interest rate swaps, caps, floors, collars and similar agreements),
and/or other types of interest hedging agreements designed to protect such
Person against fluctuations in interest rates and which have a notional amount
no greater than the payments due with respect to the Debt being hedged thereby,
and any currency protection agreement (including foreign exchange contracts,
currency swap agreements or other currency hedging arrangements) entered into
in the ordinary course of business.
"Investment Company Act" means the Investment Company Act of 1940 and any
statute successor thereto, in each case as amended from time to time.
"Major Bank Financing" means an arrangement under which one or more
commercial banks or other institutional lenders extend or commit to extend
credit to the Company in an aggregate amount exceeding $1 billion.
"Maturity" means when used with respect to any Security, the date on which
the principal of such Security becomes due and payable as therein or herein
provided, whether at Stated Maturity or the Redemption Date and whether by
declaration of acceleration, call for redemption or otherwise.
"Motorola" means Motorola, Inc., a Delaware corporation.
"Notice of Default" means a written notice of the kind specified in Section
501(5).
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the President or a Vice President, and by
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary,
of the Company.
"Operations and Maintenance Contract" means the IRIDIUM System Operations and
Maintenance Contract between the Company and Motorola, dated as of July 29,
1993, as amended from time to time.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company.
"Outstanding Securities" means, as of the date of determination, all
Securities theretofore authenticated and delivered, except:
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(1) Securities theretofore cancelled;
(2) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; provided that, if such
Securities are to be redeemed, notice of such redemption has been duly given
pursuant to such Security or provision therefor has been made;
(3) Securities as to which Defeasance has been effected
pursuant to Section 302; and
(4) Securities which have been paid pursuant to Section 203
or in exchange for or in lieu of which other Securities have been
authenticated and delivered, other than any such Securities in respect of
which there shall have been presented to the Company proof satisfactory to it
that such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of a Security which
shall be deemed to be Outstanding shall be the amount of the principal thereof
which would be due and payable as of such date upon acceleration of the
Maturity thereof to such date pursuant to Section 502 and (B) Securities owned
by the Company or any other obligor upon the Securities shall be disregarded
and deemed not to be Outstanding. Securities so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company. The Company will initially act as its own Paying Agent.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment" means either the Borough of Manhattan, the City of New
York or Washington, DC.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 203 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
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"Proceeding" has the meaning specified in Section 1002.
"Public Offering" means an underwritten public offering of Common Stock
which, if offered primarily in the United States, is registered under the
Securities Act of 1933, as amended.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Security.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Security.
"Refinancing" means any renewal, extension, refinancing or refunding of Debt
or Preferred Stock; and the terms "Refinance"and "Refinanced" shall have
meanings correlative to the foregoing.
"Security" means this Security.
"Securities" means the Security and all other Securities constituting one of
the Company's 14 1/2% Senior Subordinated Discount Notes due 2005.
"Security Register" has the meaning specified in Section 202.
"Securities Payment" has the meaning specified in Section 1002.
"Senior Debt" means the principal of, premium, if any, and interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not such
claim for post-petition interest is allowed in such proceeding) on, or other
amount of, or fees, costs and expenses incurred in connection with, (i) Debt
for money borrowed of the Company, whether Incurred on or prior to March 1,
1996 or thereafter incurred, other than the Securities, (ii) Debt of the
Company evidenced by bonds, debentures, notes or other similar instruments,
including Debt Incurred in connection with the acquisition of property, assets
or businesses, (iii) matured and unmatured reimbursement or other obligations
of the Company with respect to letters of credit, bankers' acceptances or
similar facilities issued for the account of the Company, (iv) obligations of
the Company under Interest Rate Protection Agreements or Currency Protection
Agreements, (v) Capital Lease Obligations of the Company, (vi) guarantees by
the Company of Debt for money borrowed and (vii) amendments, modifications and
Refinancings of any such Debt; provided, however, the following does not
constitute Senior Debt: (A) any Debt which by the terms of the instrument
creating or evidencing the same is not superior in right of payment to the
Securities, (B) any Debt which is represented by Disqualified Stock, (C) any
Debt of the Company owed to a Subsidiary, (D) any Debt which is subordinated in
right of payment in respect to any other Debt of the Company, or (E) any
obligations of the Company under the Space System Contract, the Operations and
Maintenance Contract or the Terrestrial Network Development Contract.
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"Space System Contract" means the IRIDIUM Space System Contract between the
Company and Motorola, dated as of July 29, 1993, as amended from time to time.
"Stated Maturity", when used with respect to any Debt or any instalment of
principal thereof or interest thereon, means the date specified in such Debt as
the fixed date on which the principal of such Debt or such instalment of
principal or interest is deemed payable.
"Subordinated Debt" means Debt of the Company that is subordinated in right of
payment to Securities.
"Subsidiary" of any Person means (i) a corporation more than 50% of the
combined voting power of the outstanding Voting Stock of which is owned,
directly or indirectly, by such Person or by one or more other Subsidiaries of
such Person or by such Person and one or more Subsidiaries thereof or (ii) any
other Person (other than a corporation) in which such Person, or one or more
other Subsidiaries of such Person or such Person and one or more other
Subsidiaries thereof, directly or indirectly, has at least a majority ownership
and power to direct the policies, management and affairs thereof.
"Terrestrial Network Development Contract" means the Terrestrial Network
Development Contract between the Company and Motorola, entered into in June
1995, as amended from time to time.
"U.S. Government Obligation" has the meaning specified in Section 303.
"Vice President", when used with respect to the Company, means any vice
president, whether or not designated by a number or a word or words added
before or after the title "vice president".
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only so
long as no senior class of securities has such voting power by reason of any
contingency with respect to the Company. With respect to the Company, Voting
Stock means the Company's Common Stock , and any OTHER class of Common Stock
having comparable voting rights on all matters other than the election of
directors
SECTION 102. Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by the Securities to be given, made or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such
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instrument or instruments are delivered to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments.
The ownership of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Company in reliance
thereon, whether or not notation of such action is made upon such Security.
The Company may set any day as a record date for the purpose of determining
the Holders of Outstanding Securities entitled to give, make or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by the Securities to be given, made or taken by
Holders of Securities, provided that the Company may not set a record date for,
and the provisions of this paragraph shall not apply with respect to, the
giving or making of any notice, declaration, request or direction referred to
in the next paragraph. With regard to any record date set pursuant to this
paragraph, the Holders of Outstanding Securities on such record date, and no
other Holders, shall be entitled to take the relevant action, whether or not
such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date (as defined below) by Holders of the requisite principal amount
of Outstanding Securities. Nothing in this paragraph shall be construed to
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be cancelled and of no effect), and nothing in this paragraph shall be
construed to render ineffective any action taken by Holders of the requisite
principal amount of Outstanding Securities on the date such action is taken.
Promptly after any record date is set pursuant to this paragraph, the Company,
at its own expense, shall cause notice of such record date, the proposed action
by Holders and the applicable Expiration Date to be given to each Holder of
Securities.
With respect to any record date set pursuant to this Section, the party
hereto which sets such record date may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day; provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the Company in writing, and to each
Holder of Securities, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the party hereto which set such record date shall be deemed to
have initially designated the 180th day after such record date as the
Expiration Date with respect thereto, subject to its right to change the
Expiration Date as provided in this paragraph. Notwithstanding the foregoing,
no Expiration Date shall be later than the 180th day after the applicable
record date.
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SECTION 103. Notice to Holders; Waiver.
Where this Security provides for notice to Holders of any event, such notice
shall be sufficiently given (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to each Holder affected by
such event, at its address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail such notice, nor any defect in
any notice so mailed, to any particular Holder shall affect the sufficiency of
such notice with respect to other Holders and any notice which is mailed in the
manner herein provided shall be conclusively presumed to have been duly given.
Where this Security provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Company, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 104. Effect of Headings.
The Article and Section headings herein are for convenience only and shall
not affect the construction hereof.
SECTION 105. Successors and Assigns.
All covenants and agreements in this Security by the Company shall bind its
successors and assigns, whether so expressed or not.
SECTION 106. Separability Clause.
In case any provision in this Security shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 107. Benefits of Security.
Nothing in this Security, express or implied, shall give to any Person, other
than the parties hereto and their successors hereunder, the holders of Senior
Debt and the Holders, any benefit or any legal or equitable right, remedy or
claim under this Security.
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SECTION 108. Governing Law.
This Security shall be governed by and construed in accordance with the law
of the State of New York without regard to principles of conflict of laws.
SECTION 109. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Security) payment of interest
or principal (and premium, if any) need not be made at such Place of Payment on
such date, but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment Date
or Redemption Date, or at the Stated Maturity, provided that no interest shall
accrue for the period from and after such Interest Payment Date, Redemption
Date, or Stated Maturity, as the case may be.
SECTION 110. No Recourse Against Others.
A director, officer, employee, consultant, contractor or MEMBER as such, of
the Company shall not have any liability for any obligations of the Company
under the Securities or for any claim based on, in respect of or by reason of
such obligations or their creation. Each Holder by accepting any of the
Securities waives and releases all such liability.
ARTICLE TWO
THE SECURITIES
SECTION 201. Denominations.
The Securities are issuable only in registered form without coupons and only
in integral multiples of $1,000.
SECTION 202. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept a register (the "Security Register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Securities and of transfers of
Securities.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits, as the Securities surrendered upon
such registration of transfer or exchange.
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Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company duly executed, by the Holder thereof or his attorney duly authorized in
writing. The Company may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities.
If the Securities are to be redeemed in part, the Company shall not be
required (A) to issue, register the transfer of or exchange any Securities
during a period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of any such Securities selected for
redemption and ending at the close of business on the day of such mailing, or
(B) to register the transfer of or exchange any Security so selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part.
SECTION 203. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Company, the Company shall
execute and deliver in exchange therefor a new Security of like tenor and
principal amount and bearing a number not contemporaneously outstanding. If
there shall be delivered to the Company (i) evidence to its satisfaction of the
destruction, loss or theft of any Security and (ii) such security or indemnity
as it may require to save it harmless, then, in the absence of notice to the
Company that such Security has been acquired by a bona fide purchaser, the
Company shall execute, in lieu of any such destroyed, lost or stolen Security,
a new Security of like tenor and principal amount and bearing a number not
contemporaneously outstanding. In case any such mutilated, destroyed, lost or
stolen Security has become or is about to become due and payable, the Company
in its discretion may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses connected
therewith. Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone. The provisions of
this Section are exclusive and shall preclude (to the extent lawful) all other
rights and remedies with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities.
SECTION 204. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company and any agent of the Company may treat the Person in whose name such
Security is registered as the owner of such Security for the purpose of
receiving payment of principal of and any
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premium and any interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
nor any agent of the Company shall be affected by notice to the contrary.
SECTION 205. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day year of
twelve 30-day months.
ARTICLE THREE
DEFEASANCE
SECTION 301. Company's Option to Effect Defeasance.
The Company may elect, at its option at any time, to have Section 302 apply
to the Securities upon compliance with the conditions set forth below in this
Article.
SECTION 302. Defeasance and Discharge.
Upon the Company's exercise of its option to have this Section applied to the
Securities, the Company shall be deemed to have been discharged from any and
all of its obligations, and the provisions of Article Ten shall cease to be
effective, with respect to such Securities as provided in this Section on and
after the date the conditions set forth in Section 303 are satisfied
(hereinafter called "Defeasance"). For this purpose, such Defeasance means that
the Company shall be deemed to have paid and discharged the entire indebtedness
represented by such Securities and to have satisfied all its other obligations
under this Security, subject to the following which shall survive until
otherwise terminated or discharged hereunder: (1) the rights of the Holder of
this Security to receive, solely from the trust fund described in Section 303
and as more fully set forth in such Section, payments in respect of the
principal of and any premium and interest on such Securities when payments are
due, (2) the Company's obligations with respect to such Securities under
Sections 202, 203, 802 and 803 and (3) this Article.
SECTION 303. Conditions to Defeasance.
The following shall be the conditions to the application of Section 302 to
the Securities:
(1) The Company shall irrevocably have deposited or
caused to be deposited in trust with a trustee (who shall agree to comply
with the provisions of this Article applicable to it) as trust funds for the
purpose of making the following payments,
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specifically pledged as security for, and dedicated solely to, the benefit of
the Holders of the Securities, (A) money in an amount, or (B) U.S. Government
Obligations which through the scheduled payment of principal and interest in
respect thereof in accordance with their terms will provide, not later than
one day before the due date of any payment, money in an amount, or (C) a
combination thereof, in each case sufficient, in the opinion of a nationally
recognized firm of independent certified public accountants expressed in a
written certification thereof delivered to the Holders, to pay and discharge,
and which shall be applied by such trustee to pay and discharge, the
principal of (premium, if any) and each installment of interest, if any, on
the Securities on the respective Stated Maturities, in accordance with the
terms of this Security. As used herein, "U.S. Government Obligation" means
(x) any security which is (i) a direct obligation of the United States of
America for the payment of which the full faith and credit of the United
States of America is pledged or (ii) an obligation of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case
(i) or (ii), is not callable or redeemable at the option of the issuer
thereof, and (y) any depositary receipt issued by a bank (as defined in
Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with
respect to any U.S. Government Obligation which is specified in clause (x)
above and held by such bank for the account of the holder of such depositary
receipt, or with respect to any specific payment of principal of or interest
on any U.S. Government Obligation which is so specified and held, provided
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depositary receipt
from any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal or interest evidenced by such
depositary receipt.
(2) In the event of an election to have Section 302 apply
to the Securities, the Company shall have delivered to the Holders an Opinion
of Counsel stating that (A) the Company has received from, or there has been
published by, the IRS a ruling or (B) since March 1, 1996, there has been a
change in the applicable Federal income tax law, in either case (A) or (B) to
the effect that, and based thereon such opinion shall confirm that, the
Holders of the Securities will not recognize gain or loss for Federal income
tax purposes as a result of the deposit, Defeasance and discharge to be
effected with respect to the Securities and will be subject to Federal income
tax on the same amount, in the same manner and at the same times as would be
the case if such deposit, Defeasance and discharge were not to occur.
(3) At the time of such deposit, (A) no default in the
payment of any principal of or premium or interest on any Senior Debt shall
have occurred and be continuing, (B) no event of default with respect to any
Senior Debt shall have resulted in such Senior Debt becoming, and continuing
to be, due and payable prior to the date on which it would otherwise have
become due and payable (unless payment of such Senior Debt has been made or
duly provided for), and (C) no other event of default with respect to any
Senior Debt shall have occurred and be continuing permitting (after notice or
lapse of time or both) the holders of such Senior Debt (or a trustee on
behalf of such
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holders) to declare such Senior Debt due and payable prior to the date on
which it would otherwise have become due and payable.
(4) No event which is, or after notice or lapse of time
or both would become, an Event of Default shall have occurred and be
continuing at the time of such deposit or, with regard to any such event
specified in Sections 501(7) and (8), at any time on or prior to the 90th day
after the date of such deposit (it being understood that this condition shall
not be deemed satisfied until after such 90th day).
(5) Such Defeasance shall not result in a breach or
violation of, or constitute a default under, any other agreement or
instrument to which the Company is a party or by which it is bound.
(6) Such Defeasance shall not result in the trust arising
from such deposit constituting an investment company within the meaning of
the Investment Company Act of 1940, as amended, unless such trust shall be
registered under such act or exempt from registration thereunder.
(7) The Company shall have delivered to the Holders an
Officer's Certificate and an Opinion of Counsel, each stating that all
conditions precedent with respect to such Defeasance have been complied with.
SECTION 304. Deposited Money and U.S. Government Obligations to Be
Held in Trust; Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 803, all money and
U.S. Government Obligations (including the proceeds thereof) deposited with a
trustee (solely for purposes of this Section and Section 305, such trustee is
referred to as the "Trustee") pursuant to Section 303 in respect of any
Securities shall be held in trust and applied by the Trustee, in accordance
with the provisions of the Securities, to the payment, either directly or
through any such Paying Agent (including the Company acting as its own Paying
Agent) as the Trustee may determine, to the Holders of such Securities, of all
sums due and to become due thereon in respect of principal and any premium and
interest, but money so held in trust need not be segregated from other funds
except to the extent required by law. Money and U.S. Government Obligations so
held in trust shall not be subject to the provisions of Article Ten.
The Company shall pay and indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 303 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee shall
deliver or pay to the Company from time to time upon the Company's request any
money or U.S.
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Government Obligations held by it as provided in Section 303 with respect to
any Securities which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect the Defeasance with respect to such
Securities.
SECTION 305. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in accordance
with this Article with respect to any Securities by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the obligations under this
Security from which the Company has been discharged or released pursuant to
Section 302 shall be revived and reinstated as though no deposit had occurred
pursuant to this Article with respect to such Securities, until such time as
the Trustee or Paying Agent is permitted to apply all money held in trust
pursuant to Section 304 with respect to such Securities in accordance with this
Article; provided, however, that if the Company makes any payment of principal
of or any premium or interest on any such Security following such reinstatement
of its obligations, the Company shall be subrogated to the rights (if any) of
the Holders of such Securities to receive such payment from the money so held
in trust.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge.
This Security shall, upon the written election by the Company, cease to be of
further effect (except as to any surviving rights of registration of transfer
or exchange of Securities herein expressly provided for), when:
(1) either (A) all Securities theretofore authenticated
and delivered (other than (i) Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 203 and
(ii) Securities for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter repaid to
the Company or discharged from such trust, as provided in Section 803) have
been cancelled; or (B) all such Securities not theretofore cancelled (i) have
become due and payable, or (ii) will become due and payable at their Stated
Maturity within one year, or (iii) are to be called for redemption within one
year under arrangements for the giving of notice of redemption in the name,
and at the expense, of the Company, and the Company, in the case of (i), (ii)
or (iii), has irrevocably deposited or caused to be deposited with a trustee,
as trust funds in trust for the purpose of such redemption, money in an
amount sufficient to pay and discharge the entire Debt on the
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Securities not theretofore cancelled, including principal of, premium, if
any, and accrued interest, if any, on such Securities at such Maturity,
Stated Maturity or Redemption Date;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Holder of this Security
an Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Security have been complied with and that such satisfaction
and discharge will not result in a breach or violation of, or constitute a
default under, this Security or any other material agreement to which the
Company or any Subsidiary is a party.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
occasioned by the provisions of Article Ten or other subordination provisions
applicable to Securities or be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) failure to pay principal of (or premium, if any, on) any
Security when due, continued for two Business Days; or
(2) failure to pay any interest on any Security when due,
continued for 30 days; or
(3) failure to perform any covenant or agreement of the
Company under this Security (other than a covenant or agreement a default in
whose performance or whose breach is elsewhere in this Section specifically
dealt with) and continuance of such default or breach for a period of 60 days
after there has been given notice to the Company by the Holders of at least
25% in aggregate principal amount of the Outstanding Securities written
notice specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder;
(4) default under the terms of any instrument evidencing or
securing Debt for money borrowed by the Company or any Subsidiary having an
outstanding principal amount of $10 million individually or in the aggregate
which default has resulted in the
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acceleration of the payment of the principal amount of such Debt or
constitutes the failure to pay the principal amount of such Debt when due;
(5) the rendering of a final judgment or judgments (not
subject to appeal) against the Company or any Subsidiary in an amount in
excess of $10 million which remains undischarged or unstayed for a period of
60 days after the date on which the right to appeal has expired;
(6) termination by Motorola of the Space System Contract
prior to delivery thereunder by Motorola of the Space System (as defined
therein), provided that such termination has not been contested by the
Company in accordance with the Space System Contract or by appropriate
proceedings and, if such termination is so contested, within 180 days of such
notice, such termination has not been withdrawn or declared ineffective by
any court or mediator having jurisdiction;
(7) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company or any
Subsidiary in an involuntary case or proceeding under any applicable Federal
or state bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company or any Subsidiary a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company or any
Subsidiary under any applicable Federal or state law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or any Subsidiary or of any substantial part
of the property of the Company or any Subsidiary, or ordering the winding up
or liquidation of the affairs of the Company or any Subsidiary, and the
continuance of any such decree or order for relief or any such other decree
or order unstayed and in effect for a period of 60 consecutive days; or
(8) the commencement by the Company or any Subsidiary of a
voluntary case or proceeding under any applicable Federal or state
bankruptcy, insolvency, reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent, or the consent
by it to the entry of a decree or order for relief in respect of the Company
or any Subsidiary in an involuntary case or proceeding under any applicable
Federal or state bankruptcy, insolvency, reorganization or other similar law
or to the commencement of any bankruptcy or insolvency case or proceeding
against it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or state law, or the
consent by it to the filing of such peti tion or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any Subsidiary or of
any substantial part of its property, or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking of
FORMAL action by the Company or any Subsidiary in furtherance of any such
action.
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SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in Section
501(7) or 501(8)) occurs and is continuing, then in every such case the Holders
of not less than 25% in principal amount of the Outstanding Securities may
declare the Accreted Value of all the Securities to be due and payable
immediately, by a notice in writing to the Company, and upon any such
declaration such specified amount shall become immediately due and payable;
provided, however, that so long as any secured Senior Debt remains outstanding,
if any such Event of Default shall have occurred and be continuing, any such
acceleration shall not be effective until the earlier of (a) five Business Days
following a notice of acceleration given to the Company and to the holders of
the secured Senior Debt and only if upon such fifth Business Day such Event of
Default shall be continuing or (b) the acceleration of any secured Senior Debt.
If an Event of Default specified in Section 501(7) or 501(8) occurs, the
Accreted Value of all the Securities will ipso facto become immediately due and
payable without any declaration or other act on the part of any Holder.
At any time after such a declaration of acceleration has been made and before
a judgment or decree for payment of the money due has been obtained, the
Holders of a majority in principal amount of the Outstanding Securities, by
written notice to the Company, may rescind and annul such declaration and its
consequences if: (1) the Company has paid or deposited in trust a sum
sufficient to pay: (A) all overdue interest on all Securities, and (B) to the
extent that payment of such interest is lawful, interest upon overdue interest
at the rate set forth in the first paragraph of this Security; and (2) all
Events of Default, other than the non-payment of the principal of Securities
which have become due solely by such declaration of acceleration, have been
cured or waived.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default in the
payment of the principal of (or premium, if any) or interest on any Security.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured; but no such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon.
SECTION 504. Waiver of Usury, Stay or Extension Laws.
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The Company covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of its obligations under this Security; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Holder or Holders, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 505. Limitation on Suits.
No Holder of any Security shall have any right to institute any proceeding,
judicial or otherwise, with respect to rights created under the Securities
(other than any right to institute such a proceeding to enforce the Company's
obligation to pay principal (and premium, if any) and interest on such Holder's
Securities and such Holder's rights under Sections 202 and 203), or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
the Holders of not less than 25% in principal amount of the Outstanding
Securities shall have joined in such proceedings or consented to the
institution thereof.
ARTICLE SIX
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 601. Mergers, Consolidation and Certain Sales of Assets.
The Company may not, in a single transaction or a series of related
transactions, (i) consolidate with or merge into any other Person or permit any
other Person (other than a Subsidiary) to consolidate with or merge into the
Company, (ii) directly or indirectly, transfer, sell, lease or otherwise
dispose of all or substantially all of its assets, (iii) permit any of its
Subsidiaries to enter into any transaction or transactions described in clause
(i) or (ii) above, if such transaction or transactions, in the aggregate, would
result in a sale, assignment, transfer, lease or disposal of all or
substantially all the properties and assets of the Company and its Subsidiaries
taken as a whole to any other Person or group of affiliated Persons, unless:
(1) in a transaction in which the Company does not survive or
in which the Company sells, leases or otherwise disposes of all or
substantially all of its assets, the successor entity to the Company is
organized and validly existing under the laws of the United States of
America, any State thereof or the District of Columbia and shall expressly
assume, by a written agreement all of the Company's obligations under this
Security; and
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(2) immediately before and after giving effect to such
transaction and treating any Debt which becomes a direct obligation of the
Company or a Subsidiary as a result of such transaction as having been
Incurred by the Company or such Subsidiary at the time of the transaction, no
Event of Default or event that with the passing of time or the giving of
notice, or both, would constitute an Event of Default shall have occurred and
be continuing.
SECTION 602. Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company into,
any other Person or any transfer, sale, lease or other disposition of all or
substantially all of the assets of the Company in accordance with Section 601,
the successor Person formed by such consolidation or into which the Company is
merged or to which such transfer, sale, lease or other disposition is made
shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Security with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except
in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Security.
ARTICLE SEVEN
AMENDMENTS
SECTION 701. Amendments With Consent of Holders.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities, the Company may amend the terms of the
Securities for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Securities or of modifying
in any manner the rights of the Holders of Securities; provided, however, that
no such amendment shall, without the consent of the Holder of each Outstanding
Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
instalment of interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable thereon, or
reduce the amount of the principal of a Security which would be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant
to Section 502, or change any Place of Payment where, or the coin or currency
in which, any Security or any premium or interest thereon is payable, or
impair the right to institute suit for the enforcement of any such payment on
or after the Stated Maturity thereof (or, in the case of redemption, on or
after the Redemption Date), or
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(2) reduce the percentage in principal amount of the
Outstanding Securities, the consent of whose Holders is required for any such
amendment, or the consent of whose Holders is required for any waiver (of
compliance with certain provisions of this Security or certain defaults
hereunder and their consequences), or
(3) modify any of the provisions of this Section or Section
503 except to increase any such percentage or to provide that certain other
provisions of this Security cannot be modified or waived without the consent
of the Holder of each Outstanding Security affected thereby.
ARTICLE EIGHT
COVENANTS
SECTION 801. Payment of Principal, Premium and Interest.
The Company covenants and agrees that it will duly and punctually pay the
principal of (and premium, if any) and any interest on the Securities in
accordance with the terms of the Securities.
SECTION 802. Maintenance of Office or Agency.
The Company will maintain in either Place of Payment an office or agency
where Secu rities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Securities may be served.
The Company will give prompt written notice to the Holders of the location, and
any change in the location, of such office or agency.
The Company may also from time to time designate one or more other offices or
agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in each Place of
Payment for Securities for such purposes. The Company will give prompt written
notice to the Holders of any such designation or rescission and of any change
in the location of any such other office or agency.
SECTION 803. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will, on or
before each due date of the principal of (and premium, if any) or any interest
on any of the Securities, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient
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to pay the principal (and premium, if any) and any interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as
herein provided.
Any money then held by the Company in trust for the payment of the principal
of (and premium, if any) or any interest on any Security and remaining
unclaimed for two years after such principal (and premium, if any) or interest
has become due and payable shall be discharged from such trust; and the Holder
of such Security shall thereafter, as an unsecured general creditor, look only
to the Company for payment thereof, and all liability of the Company as trustee
thereof, shall thereupon cease.
SECTION 804. Existence.
Subject to Article Six, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence, rights
(charter and statutory) and franchises; provided, however, that the Company
shall not be required to preserve any such right or franchise if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Holders.
SECTION 805. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, (1) all taxes, assessments and governmental
charges levied or imposed upon the Company or any Subsidiary or upon the
income, profits or property of the Company or any Subsidiary, and (2) all
lawful claims for labor, materials and supplies which, if unpaid, might by law
become a lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
ARTICLE NINE
REDEMPTION OF SECURITIES
SECTION 901. Optional Redemption.
The Securities are subject to redemption upon not less than 30 nor more than
60 days' notice mailed to each Holder of the Securities to be redeemed at his
or her address
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appearing in the Security Register, at any time on or after March 1, 2001, as a
whole or in part, at the election of the Company, at the following Redemption
Prices (expressed as percentages of the principal amount): If redeemed during
the 12-month period beginning March 1 of the years indicated,
Redemption
Year Price
---- -------------
2001 107.5%
2002 105.0%
2003 102.5%
2004 and thereafter 100.0%
together in the case of any such redemption with accrued interest to but
excluding the Redemption Date.
Notwithstanding the limitations on redemption in the preceding paragraph, in
the event that on or prior to March 1, 1999 the Company completes a Public
Offering of its Common Stock, up to one-third of the Outstanding Securities
will also be subject to redemption, at the option of the Company, upon not less
than 30 nor more than 60 days' notice mailed to each Holder of Securities to be
redeemed at his address appearing in the Security Register, in amounts of
$1,000 or any integral multiple thereof at a Redemption Price equal to 107.5%
of their Accreted Value. Notice of redemption will be mailed not later than 90
days after the date of consummation of the Public Offering. The aggregate
Redemption Price shall not exceed the gross proceeds to the Company in the
Public Offering.
Notwithstanding the limitations on redemption in the first paragraph of this
Section 901, in the event that the Company consummates a Major Bank Financing
on or prior to March 1, 2001, the Outstanding Securities will also be subject
to redemption in whole or in part, at the option of the Company, upon not less
than 30 nor more than 60 days' notice mailed to each Holder of Securities to be
redeemed at his address appearing in the Security Register, in amounts of
$1,000 or any integral multiple thereof at a Redemption Price equal to 107.5%
of their Accreted Value. Notice of redemption will be mailed not later than 90
days after the date of the initial extension of credit under the Major Bank
Financing.
SECTION 902. Selection of Securities to Be Redeemed.
If less than all the Securities are to be redeemed, the particular Securities
to be redeemed shall be selected not more than 60 days prior to the Redemption
Date by the Company,
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from all Holders pro rata on the basis of the aggregate principal amount of all
Outstanding Securities held by such Holders.
For all purposes of this Security, unless the context otherwise requires, all
provisions relating to the redemption of Securities shall relate, in the case
of any Securities redeemed or to be redeemed only in part, to the portion of
the principal amount of such Securities which has been or is to be redeemed.
SECTION 903. Notice of Redemption.
Notice of redemption shall be given by the Company by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at his address
appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities are to be
redeemed, the identification (and, in the case of partial redemption of any
such Securities, the principal amounts) of the particular Securities to be
redeemed,
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after said
date, and
(5) the place or places where each such Security is to be
surrendered for payment of the Redemption Price.
SECTION 904. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with a Paying Agent
(or, if the Company is acting as its own Paying Agent, segregate and hold in
trust) an amount of money sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date) any
applicable accrued interest on, all the Securities which are to be redeemed on
that date.
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SECTION 905. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to be
redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price) such Securities
shall not bear interest. Upon surrender of any such Security for redemption in
accordance with said notice, such Security shall be paid by the Company at the
Redemption Price, together with any applicable accrued interest to the
Redemption Date.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the first
paragraph of this Security.
SECTION 906. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at a
Place of Payment therefor (with, if the Company so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company
duly executed by, the Holder thereof or his attorney duly authorized in
writing), and the Company shall execute and deliver to the Holder of such
Security without service charge, a new Security or Securities of like tenor, as
requested by such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Security so
surrendered.
ARTICLE TEN
SUBORDINATION OF SECURITIES
SECTION 1001. Securities Subordinate to Senior Debt.
The Company covenants and agrees, and each Holder of a Security, by his
acceptance hereof or thereof, likewise covenants and agrees that, to the extent
and in the manner hereinafter set forth in this Article (subject to the
provisions of Articles Three and Four), the payment of the principal of (and
premium, if any on) and any interest on the Securities, and any other
obligations of the Company in respect of the Securities are hereby expressly
made subordinate and subject in right of payment to the prior payment in full,
in cash or cash equivalents or in any other form acceptable to the holders of
Designated Senior Debt, of all Senior Debt that the subordination is for the
benefit of, and shall be enforceable directly by, the holders of Senior Debt,
and that each holder of Senior Debt, whether now outstanding or hereafter
created, Incurred or assumed shall be deemed to have acquired and continued to
hold, or shall have continued to hold, Senior Debt in reliance upon the
covenants and provisions contained in this Security.
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SECTION 1002. Payment Over of Proceeds Upon Dissolution, Etc.
In the event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding
in connection therewith, relative to the Company or to its creditors, as such,
or to its assets, or (b) any liquidation, dissolution or other winding up of
the Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshalling of assets and liabilities of the Company, then and in any
such event specified in (a), (b) or (c) above (each such event, if any, herein
sometimes referred to as a "Proceeding") the holders of Senior Debt will first
be entitled to receive payment in full, in cash or cash equivalents or in any
form acceptable to the holders of Designated Senior Debt, of all amounts due or
to become due thereon before the Holders of the Securities will be entitled to
receive any payment or distribution of any assets of the Company of any kind or
character, whether in cash, property or securities (including any payment or
distribution which may be payable or deliverable by reason of the payment of
any other Debt of the Company subordinated to the payment of the Securities,
such payment or distribution being hereinafter referred to as a "Junior
Subordinated Payment"), on account of the principal of, premium, if any, or
interest on such Securities and any other obligations in respect of such
Securities (including any obligation to repurchase such Securities, but
excluding any payments previously made pursuant to Article Three ("Defeasance
and Satisfaction Payments")) (all such payments, distributions, purchases and
acquisitions herein (other than payments and distributions of Permitted Junior
Interests as hereinafter defined) referred to, individually and collectively,
as a "Securities Payment").
In the event that, notwithstanding the foregoing provisions of this Section,
the Holder of any Security shall have received any Securities Payment before
all Senior Debt is paid in full or payment thereof provided for in cash or cash
equivalents or in any form acceptable to the holders of Designated Senior Debt,
then and in such event such Securities Payment shall be paid over or delivered
forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other Person making payment or distribution of
assets of the Company for application to the payment of all Senior Debt
remaining unpaid, to the extent necessary to pay all Senior Debt in full, after
giving effect to any concurrent payment or distribution to or for the holders
of Senior Debt.
For purposes of this Article only, the words "any payment or distribution of
any assets of the Company of any kind or character, whether in cash, property
or securities" shall not be deemed to include a payment or distribution of
INTERESTS or securities of the Company provided for by a plan of reorganization
or readjustment authorized by an order or decree of a court of competent
jurisdiction in a reorganization proceeding under any applicable bankruptcy law
or of any other ENTITY OR corporation provided for by such plan of
reorganization or readjustment which stock or securities are subordinated in
right of payment to all then outstanding Senior Debt to substantially the same
extent as the Securities are so subordinated as provided in this Article (such
stock or subordinated securities are referred to herein as "Permitted Junior
Interests"). The consolidation of the Company with, or the merger of the
Company into, another Person or the liquidation or
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dissolution of the Company following the conveyance or transfer of all or
substantially all of its properties and assets as an entirety to another Person
upon the terms and conditions set forth in Article Six shall not be deemed a
Proceeding for the purposes of this Section if the Person formed by such
consolidation or into which the Company is merged or the Person which acquires
by conveyance or transfer such properties and assets as an entirety, as the
case may be, shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions set forth in Article Six.
SECTION 1003. No Payment When Senior Debt in Default.
In the event that any Senior Payment Default (as defined below) shall have
occurred and be continuing, then no Securities Payment may be made unless and
until such Senior Payment Default shall have been cured or waived or shall have
ceased to exist or the Designated Senior Debt that is the subject of such
Senior Payment Default shall have been discharged or paid in full in cash or
cash equivalents or in any other form acceptable to the holders of such
Designated Senior Debt, after which the Company shall resume making any and all
required Securities Payments, including any missed payments. "Senior Payment
Default" means any default beyond the applicable grace period in the payment of
principal of, premium, if any, or interest, or any other obligation in respect
of Designated Senior Debt when due, whether at the Stated Maturity of any such
payment or by declaration of acceleration, call for redemption or otherwise.
In the event that any Senior Nonmonetary Default (as defined below) shall
have occurred and be continuing, then, upon the receipt by the Company of
written notice of such Senior Nonmonetary Default from a holder of Designated
Senior Debt (or a trustee, agent or other representative for such a holder duly
authorized in writing) which is the subject of such Senior Nonmonetary Default,
no Securities Payment, may be made for a period (the "Payment Blockage Period")
commencing on the date of receipt of such notice and ending on the earlier of
(i) the date on which such Senior Nonmonetary Default (and all other Senior
Nonmonetary Defaults that have occurred and of which the Company is aware) has
been cured or waived or ceases to exist and any acceleration of Designated
Senior Debt shall have been rescinded or annulled or all Designated Senior Debt
that is the subject of such Senior Nonmonetary Default has been discharged or
paid in full, in cash or cash equivalents or in any other form acceptable to
the holders of such Designated Senior Debt; (ii) the 179th day after the date
of such receipt of such notice; and (iii) the date on which such Payment
Blockage Period (and all other Senior Nonmonetary Defaults as to which notice
is given after such Payment Blockage Period is initiated) shall have been
terminated by written notice to the Company from a representative of the
holders of at least a majority of Designated Senior Debt initiating such
Payment Blockage Period, after which, in the case of clauses (i), (ii) and
(iii), the Company will promptly resume making any and all required Securities
Payments in respect of such Securities, including any missed payments;
provided, however, that no more than one Payment Blockage Period may be
commenced with respect to such Securities during any 360-day period and there
shall be a period of at least 181 days in each 360-day period when no Payment
Blockage Period is in effect; provided further, that no Senior Nonmonetary
Default which existed
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or was continuing on the date of the commencement of a Payment Blockage Period
may be made the basis of the commencement of a subsequent Payment Blockage
Period by holders of Designated Senior Debt or their representatives, whether
or not within a period of 360 consecutive days, unless such Senior Nonmonetary
Default shall have been cured or waived for a period of not less than 90
consecutive days. "Senior Nonmonetary Default" means a default with respect to
Designated Senior Debt, other than a Senior Payment Default, which the giving
of notice or the passage of time, or both, gives the holders of the Designated
Senior Debt (or a trustee or agent on behalf of the holders thereof) the right
to declare the Debt under such Designated Senior Debt due and payable prior to
the date on which it matures or is subject to scheduled repayment.
In the event that, notwithstanding the foregoing, the Company shall make any
Securities Payment to any Holder prohibited by the foregoing provisions of this
Section, then and in such event such Securities Payment shall be paid over and
delivered forthwith to the holders of Designated Senior Debt or their
representatives or as a court of competent jurisdiction shall determine.
The provisions of this Section shall not apply to any Securities Payment with
respect to which Section 1002 would be applicable.
SECTION 1004. Payment Permitted If No Default.
Nothing contained in this Article or elsewhere in this Security shall prevent
the Company, at any time except during the pendency of any Proceeding referred
to in Section 1002 or under the conditions described in Section 1003, from
making Securities Payments.
SECTION 1005. Subrogation to Rights of Holders of Senior Debt.
Subject to the payment in full of all amounts due or to become due on or in
respect of Senior Debt, or the provision for such payment in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of Designated
Senior Debt, the Holders of the Securities shall be subrogated to the extent of
the payments or distributions made to the holders of such Senior Debt pursuant
to the provisions of this Article (equally and ratably with the holders of all
indebtedness of the Company which by its express terms is subordi nated to
indebtedness of the Company to substantially the same extent as the Securities
are subordinated to the Senior Debt and is entitled to like rights of
subrogation by reason of any payments or distributions made to holders of such
Senior Debt) to the rights of the holders of such Senior Debt to receive
payments and distributions of cash, property and securities applicable to the
Senior Debt until the principal of (and premium, if any) and any interest on
the Securities shall be paid in full. For purposes of such subrogation, no
payments or distributions to the holders of the Senior Debt of any cash,
property or securities to which the Holders of the Securities would be entitled
except for the provisions of this Article, and no payments over pursuant to the
provisions of this Article to the
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holders of Senior Debt by Holders of the Securities, shall, as among the
Company, its creditors other than holders of Senior Debt and the Holders of the
Securities, be deemed to be a payment or distribution by the Company to or on
account of the Senior Debt.
If any payment or distribution to which the Holder of any Security would
otherwise have been entitled but for the provisions of this Article shall have
been applied, pursuant to the provisions of this Article, to the payment of all
amounts payable under the Senior Debt, then and in such case, the Holder of any
Security shall be entitled to receive from the holders of such Senior Debt at
the time outstanding any payments or distributions received by such holders of
Senior Debt in excess of the amount sufficient to pay all amounts due or to
become due on or in respect of Senior Debt in full.
SECTION 1006. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders on the one hand and the holders of
Senior Debt on the other hand. Nothing contained in this Article or elsewhere
in this Security is intended to or shall (a) impair, as among the Company, its
creditors other than holders of Senior Debt and the Holders of the Securities,
the obligation of the Company, which is absolute and unconditional (and which,
subject to the rights under this Article of the holders of Senior Debt, is
intended to rank equally with all other general obligations of the Company), to
pay to the Holders of the Securities the principal of (and premium, if any) and
any interest on the Securities as and when the same shall become due and
payable in accordance with their terms; or (b) affect the relative rights
against the Company of the Holders of the Securities and creditors of the
Company other than the holders of Senior Debt; or (c) prevent the Holder of any
Securities from exercising all remedies otherwise permitted by applicable law
upon default under this Security, subject to the rights, if any, under this
Article of the holders of Senior Debt to receive cash, property and securities
otherwise payable or deliverable to such Holder.
SECTION 1007. Company to Effectuate Subordination.
Each Holder of this Security by his acceptance hereof authorizes and directs
the Company on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article.
SECTION 1008. No Waiver of Subordination Provisions.
No right of any present or future holder of any Designated Senior Debt to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms,
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provisions and covenants of this Security, regardless of any knowledge thereof
any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Debt may, at any time and from time to time, without the
consent of or notice to the Holders of the Securities, without incurring
responsibility to the Holders of the Securities and without impairing or
releasing the subordination provided in this Article or the obligations
hereunder of the Holders of the Securities to the holders of Senior Debt, do
any one or more of the following: (i) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter, Senior Debt, or
otherwise amend or supplement in any manner Senior Debt or any instrument
evidencing the same or any agreement under which Senior Debt is outstanding or
secured; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt; (iii) release any Person
liable in any manner for the collection of Senior Debt; and (iv) exercise or
refrain from exercising any rights against the Company and any other Person;
provided, however, that in no event shall any such actions limit the right of
the Holders of the Securities to take any action to accelerate the maturity of
the Securities in accordance with the provisions set forth in Article Five or
to pursue any rights or remedies under this Security or under applicable laws
if the taking of such action does not otherwise violate the terms of this
Article.
SECTION 1009. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to in this
Article, the Holders of the Securities shall be entitled to rely upon any order
or decree entered by any court of competent jurisdiction in which such
Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of the Senior Debt and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article.
SECTION 1010. Defeasance of this Article Ten.
The subordination provided by this Article Ten is expressly made subject to
the provisions for defeasance in Article Three hereof and, anything herein to
the contrary not withstanding, upon the effectiveness of any such defeasance or
covenant defeasance, the Securities then outstanding shall thereupon cease to
be subordinated pursuant to this Article Ten.
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IN WITNESS WHEREOF, the Company has caused this Security to be duly executed,
and its corporate seal to be hereunto affixed and attested, all as of the day
and year first above written.
IRIDIUM, INC.
By
------------------------------
Attest:
-----------------------------------
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------------------ COMPARISON OF FOOTNOTES ------------------
-FOOTNOTE *-
Insert March 1 if this Note is purchased with an Accreted Value
Payment; otherwise the Date will be set to result in a maturity date on the
tenth anniversary of the issued date and interest from the fifth anniversary of
the issue date. Annex A sets forth appropriate insertions if purchased
without an Accreted Value Payment.
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EXHIBIT 1-B
Form of Note
FORM OF NOTE
THIS SECURITY MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND ANY
APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM THOSE REGISTRATION
REQUIREMENTS. ACCORDINGLY, THE HOLDER OF THIS SECURITY SHALL NOT BE ENTITLED TO
TRANSFER THIS SECURITY AT ANY TIME UNLESS, AT THE TIME OF SUCH TRANSFER OR
EXERCISE, (I) A REGISTRATION STATEMENT UNDER THE ACT RELATING TO THIS SECURITY
HAS BEEN FILED WITH, AND DECLARED EFFECTIVE BY, THE SECURITIES AND EXCHANGE
COMMISSION (THE "SEC"), AND NO STOP ORDER SUSPENDING THE EFFECTIVENESS OF SUCH
REGISTRATION STATEMENT HAS BEEN ISSUED BY THE SEC OR (II) THE TRANSFER OF THIS
SECURITY IS PERMITTED PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE ACT.
TRANSFER OF THIS SECURITY IS ALSO RESTRICTED BY THE TERMS OF A LIMITED
LIABILITY COMPANY AGREEMENT OF IRIDIUM LLC, DATED AS OF JULY 1, 1996, BY AND
AMONG THE PARTIES NAMED THEREIN (THE "LLC AGREEMENT"). A COPY OF THE LLC
AGREEMENT IS ON FILE AND AVAILABLE FOR INSPECTION BY THE HOLDER OF THIS
SECURITY AT THE PRINCIPAL EXECUTIVE OFFICES OF IRIDIUM LLC.
IRIDIUM LLC
14 1/2% SENIOR SUBORDINATED DISCOUNT NOTE
DUE 2006
No. _________ $ _________
Iridium LLC, a limited liability company duly organized and existing under
the laws of Delaware (herein called the "Company", which term includes any
successor Person hereunder), for value received, hereby promises to pay to
_________________________, or registered assigns, the principal sum of
______________________ Dollars on _________, 2006, and to pay interest thereon
from ______________, 2001 or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semi-annually on March 1 and
September 1 in each year, commencing September 1, 2001, at the rate of 14 1/2%
per annum, until the principal hereof is paid or made available for payment,
provided that any principal and premium, and any such instalment of interest,
which is overdue shall bear interest at the rate of 14 1/2% per annum (to the
extent that the payment of such interest shall be legally enforceable), from
the dates such amounts are due until they are paid or made available for
payment, and such interest shall be payable on demand.
Payment of the principal of (and premium, if any) and any such interest on
this Security will be made at the office or agency of the Company maintained
for that purpose in either the Borough of Manhattan, the City of New York or
Washington, D.C., in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register.
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This Security is one of a duly authorized issue of 14 1/2% Senior
Subordinated Discount Notes due 2006 of the Company (herein called the
"Security"), issued and to be issued under instruments substantially identical
hereto and limited in aggregate principal amount to $ million.
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
"Accreted Value" means with respect to any Security, (i) as of any date of
determination prior to the date on which the Security first bears or accrues
interest, the sum of (a) the initial purchase price of each Security and (b)
the portion of the excess of the principal amount of each Security over such
initial purchase price which shall have been accreted thereon through such
date, such amount to be so accreted on a daily basis at the rate of 14 1/2% per
annum of the initial purchase price of such Security, compounded semi-annually
on each March 1 and September 1 from the date of issuance of such Security
through the date of determination or (ii) as of any date of determination on or
after the date on which the Security first bears or accrues interest, 100% of
the principal amount at maturity of each Security.
"Act", when used with respect to any Holder, has the meaning specified in
Section 102.
"Affiliate" of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For the purposes of this definition, (i) "control" when used with
respect to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; (ii) the terms "controlling" and
"controlled" have meanings correlative to the foregoing; and (iii) a Person
shall be deemed to be controlled by any other Person which owns more than 15%
of such Person's outstanding Common Stock or which has the right, contractually
or otherwise, to elect more than 15% of the members of such Person's board of
directors.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification.
"Business Day", when used with respect to any Place of Payment, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking
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institutions in that Place of Payment are authorized or obligated by law or
executive order to close.
"Capital Lease Obligation" of any Person means the obligation to pay rent or
other payment amounts under a lease of (or other Debt arrangements conveying
the right to use) real or personal property of such Person which is required to
be classified and accounted for as a capital lease or a liability on the face
of a balance sheet of such Person in accordance with generally accepted
accounting principles. The stated maturity of such obligation shall be the date
of the last payment of rent or any other amount due under such lease prior to
the first date upon which such lease may be terminated by the lessee without
payment of a penalty.
"Capital Stock" of any Person means any and all shares, interests,
participation or other equivalents (however designated) of corporate stock or
similar equity interests of such Person. In the case of the Company, Capital
Stock includes Class 1 Membership Interests and Class 2 Membership Interests.
"Common Stock" of any Person means Capital Stock of such Person that does
not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
In the case of the Company, "Common Stock" means the Class 1 Membership
Interests.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Security, and thereafter "Company" shall mean
such successor Person.
"corporation" means a corporation, association, company, joint-stock company
or business trust.
"Debt" means (without duplication), with respect to any Person, whether
recourse is to all or a portion of the assets of such Person and whether or not
contingent, (i) every obligation of such Person for money borrowed, (ii) every
obligation of such Person evidenced by bonds, debentures, notes or other
similar instruments, including obligations Incurred in connection with the
acquisition of property, assets or businesses, (iii) every reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person, (iv)
every obligation of such Person issued or assumed as the deferred purchase
price of property or services (but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business which are not overdue or
which are being contested in good faith), (v) every Capital Lease Obligation of
such Person, (vi) the maximum fixed redemption or repurchase price of
Disqualified Stock of such Person outstanding at the time of determination,
(vii) every obligation under Interest Rate Protection Agreements or Currency
Protection Agreements of such Person and (viii) every obligation of the type
referred to in clauses (i) through (vii) of another Person and all dividends of
another Person the payment of which, in either case, such Person has Guaranteed
or is responsible
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or liable, directly or indirectly, as obligor, Guarantor or otherwise. The term
"Debt" shall not include any obligations of the Company or any Restricted
Subsidiary under the Space System Contract, the Operations and Maintenance
Contract or the Terrestrial Network Development Contract.
"Defeasance" has the meaning specified in Section 302.
"Defeasance and Satisfaction Payments" has the meaning specified in Section
1002.
"Designated Senior Debt" means (i) all secured Senior Debt which is Incurred
pursuant to any agreement (or series of related agreements), (ii) any other
issue of Senior Debt which is Incurred pursuant to an agreement (or series of
related agreements) providing for indebtedness, or commitments to lend, of at
least $100 million and (iii) at any time that there is no Senior Debt that
falls within either clause (i) or (ii) above, any Senior Debt, in each case
which is specifically designated in the instrument evidencing such Senior Debt
or the agreement under which such Senior Debt arises as "Designated Senior
Debt" by the Company.
"Disqualified Stock" of any Person means any Capital Stock of such Person
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof,
in whole or in part, on or prior to the final Stated Maturity of the
Securities.
"Event of Default" has the meaning specified in Section 501.
"Generally accepted accounting principles" means generally accepted
principles in the United States, which are applicable as of the date of
determination.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Incur" means, with respect to any Debt or other obligation of any Person,
to create, issue, incur (by conversion, exchange or otherwise), assume,
Guarantee or otherwise become liable in respect of such Debt or other
obligation or the recording, as required pursuant to generally accepted
accounting principles or otherwise, of any such Debt or other obligation on the
balance sheet of such Person (and "Incurrence", "Incurred", "Incurrable" and
"Incurring" shall have meanings correlative to the foregoing).
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an instalment of interest on such Security.
"Interest Rate Protection Agreement or Currency Protection Agreement" of any
Person means any interest rate protection agreement (including, without
limitation, interest rate swaps, caps, floors, collars and similar agreements),
and/or other types of interest hedging
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133
agreements designed to protect such Person against fluctuations in interest
rates and which have a notional amount no greater than the payments due with
respect to the Debt being hedged thereby, and any currency protection agreement
(including foreign exchange contracts, currency swap agreements or other
currency hedging arrangements) entered into in the ordinary course of business.
"Investment Company Act" means the Investment Company Act of 1940 and any
statute successor thereto, in each case as amended from time to time.
"Major Bank Financing" means an arrangement under which one or more
commercial banks or other institutional lenders extend or commit to extend
credit to the Company in an aggregate amount exceeding $1 billion.
"Maturity" means when used with respect to any Security, the date on which
the principal of such Security becomes due and payable as therein or herein
provided, whether at Stated Maturity or the Redemption Date and whether by
declaration of acceleration, call for redemption or otherwise.
"Motorola" means Motorola, Inc., a Delaware corporation.
"Notice of Default" means a written notice of the kind specified in Section
501(5).
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the President or a Vice President, and by
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary,
of the Company.
"Operations and Maintenance Contract" means the IRIDIUM System Operations
and Maintenance Contract between the Company and Motorola, dated as of July 29,
1993, as amended from time to time.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company.
"Outstanding Securities" means, as of the date of determination, all
Securities theretofore authenticated and delivered, except:
(1) Securities theretofore cancelled;
(2) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own Paying Agent)
for the Holders of such Securities; provided that, if such Securities are to
be redeemed, notice of such redemption has been duly given pursuant to such
Security or provision therefor has been made;
(3) Securities as to which Defeasance has been effected pursuant to
Section 302; and
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134
(4) Securities which have been paid pursuant to Section 203 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered, other than any such Securities in respect of which there
shall have been presented to the Company proof satisfactory to it that such
Securities are held by a bona fide purchaser in whose hands such Securities
are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of a Security which
shall be deemed to be Outstanding shall be the amount of the principal thereof
which would be due and payable as of such date upon acceleration of the
Maturity thereof to such date pursuant to Section 502 and (B) Securities owned
by the Company or any other obligor upon the Securities shall be disregarded
and deemed not to be Outstanding. Securities so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company. The Company will initially act as its own Paying Agent.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment" means either the Borough of Manhattan, the City of New
York or Washington, DC.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 203 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Proceeding" has the meaning specified in Section 1002.
"Public Offering" means an underwritten public offering of Common Stock
which, if offered primarily in the United States, is registered under the
Securities Act of 1933, as amended.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Security.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Security.
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"Security" means this Security.
"Securities" means the Security and all other Securities constituting one of
the Company's 14 1/2% Senior Subordinated Discount Notes due 2005.
"Security Register" has the meaning specified in Section 202.
"Securities Payment" has the meaning specified in Section 1002.
"Senior Debt" means the principal of, premium, if any, and interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not such
claim for post-petition interest is allowed in such proceeding) on, or other
amount of, or fees, costs and expenses incurred in connection with, (i) Debt
for money borrowed of the Company, whether Incurred on or prior to March 1,
1996 or thereafter incurred, other than the Securities, (ii) Debt of the
Company evidenced by bonds, debentures, notes or other similar instruments,
including Debt Incurred in connection with the acquisition of property, assets
or businesses, (iii) matured and unmatured reimbursement or other obligations
of the Company with respect to letters of credit, bankers' acceptances or
similar facilities issued for the account of the Company, (iv) obligations of
the Company under Interest Rate Protection Agreements or Currency Protection
Agreements, (v) Capital Lease Obligations of the Company, (vi) guarantees by
the Company of Debt for money borrowed and (vii) amendments, modifications and
Refinancings of any such Debt; provided, however, the following does not
constitute Senior Debt: (A) any Debt which by the terms of the instrument
creating or evidencing the same is not superior in right of payment to the
Securities, (B) any Debt which is represented by Disqualified Stock, (C) any
Debt of the Company owed to a Subsidiary, (D) any Debt which is subordinated in
right of payment in respect to any other Debt of the Company, or (E) any
obligations of the Company under the Space System Contract, the Operations and
Maintenance Contract or the Terrestrial Network Development Contract.
"Space System Contract" means the IRIDIUM Space System Contract between the
Company and Motorola, dated as of July 29, 1993, as amended from time to time.
"Stated Maturity", when used with respect to any Debt or any instalment of
principal thereof or interest thereon, means the date specified in such Debt as
the fixed date on which the principal of such Debt or such instalment of
principal or interest is deemed payable.
"Subordinated Debt" means Debt of the Company that is subordinated in right
of payment to Securities.
"Subsidiary" of any Person means (i) a corporation more than 50% of the
combined voting power of the outstanding Voting Stock of which is owned,
directly or indirectly, by such Person or by one or more other Subsidiaries of
such Person or by such Person and one or more Subsidiaries thereof or (ii) any
other Person (other than a corporation) in which such Person, or one or more
other Subsidiaries of such Person or such Person and
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one or more other Subsidiaries thereof, directly or indirectly, has at least a
majority ownership and power to direct the policies, management and affairs
thereof.
"Terrestrial Network Development Contract" means the Terrestrial Network
Development Contract between the Company and Motorola, entered into in June
1995, as amended from time to time.
"U.S. Government Obligation" has the meaning specified in Section 303.
"Vice President", when used with respect to the Company, means any vice
president, whether or not designated by a number or a word or words added
before or after the title "vice president".
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only so
long as no senior class of securities has such voting power by reason of any
contingency with respect to the Company. With respect to the Company, Voting
Stock means the Company's Common Stock, and any other class of Common Stock
having comparable voting rights on all matters other than the election of
directors.
SECTION 102. Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by the Securities to be given, made or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Company. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments.
The ownership of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Company in reliance
thereon, whether or not notation of such action is made upon such Security.
The Company may set any day as a record date for the purpose of determining
the Holders of Outstanding Securities entitled to give, make or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by the Securities to be given, made or taken by
Holders of Securities, provided that the
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Company may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next paragraph. With
regard to any record date set pursuant to this paragraph, the Holders of
Outstanding Securities on such record date, and no other Holders, shall be
entitled to take the relevant action, whether or not such Holders remain
Holders after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Expiration Date (as
defined below) by Holders of the requisite principal amount of Outstanding
Securities. Nothing in this paragraph shall be construed to prevent the Company
from setting a new record date for any action for which a record date has
previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be
cancelled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Company, at its
own expense, shall cause notice of such record date, the proposed action by
Holders and the applicable Expiration Date to be given to each Holder of
Securities.
With respect to any record date set pursuant to this Section, the party
hereto which sets such record date may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day; provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the Company in writing, and to each
Holder of Securities, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the party hereto which set such record date shall be deemed to
have initially designated the 180th day after such record date as the
Expiration Date with respect thereto, subject to its right to change the
Expiration Date as provided in this paragraph. Notwithstanding the foregoing,
no Expiration Date shall be later than the 180th day after the applicable
record date.
SECTION 103. Notice to Holders; Waiver.
Where this Security provides for notice to Holders of any event, such notice
shall be sufficiently given (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to each Holder affected by
such event, at its address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail such notice, nor any defect in
any notice so mailed, to any particular Holder shall affect the sufficiency of
such notice with respect to other Holders and any notice which is mailed in the
manner herein provided shall be conclusively presumed to have been duly given.
Where this Security provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Company,
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but such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
SECTION 104. Effect of Headings.
The Article and Section headings herein are for convenience only and shall
not affect the construction hereof.
SECTION 105. Successors and Assigns.
All covenants and agreements in this Security by the Company shall bind its
successors and assigns, whether so expressed or not.
SECTION 106. Separability Clause.
In case any provision in this Security shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 107. Benefits of Security.
Nothing in this Security, express or implied, shall give to any Person,
other than the parties hereto and their successors hereunder, the holders of
Senior Debt and the Holders, any benefit or any legal or equitable right,
remedy or claim under this Security.
SECTION 108. Governing Law.
This Security shall be governed by and construed in accordance with the law
of the State of New York without regard to principles of conflict of laws.
SECTION 109. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Security) payment of interest
or principal (and premium, if any) need not be made at such Place of Payment on
such date, but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment Date
or Redemption Date, or at the Stated Maturity, provided that no interest shall
accrue for the period from and after such Interest Payment Date, Redemption
Date, or Stated Maturity, as the case may be.
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SECTION 110. No Recourse Against Others.
A manager, officer, employee, consultant, contractor or member, as such, of
the Company shall not have any liability for any obligations of the Company
under the Securities or for any claim based on, in respect of or by reason of
such obligations or their creation. Each Holder by accepting any of the
Securities waives and releases all such liability.
ARTICLE TWO
THE SECURITIES
SECTION 201. Denominations.
The Securities are issuable only in registered form without coupons and only
in integral multiples of $1,000.
SECTION 202. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept a register (the "Security Register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Securities and of transfers of
Securities.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits, as the Securities surrendered upon
such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company duly executed, by the Holder thereof or his attorney duly authorized in
writing. The Company may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities.
If the Securities are to be redeemed in part, the Company shall not be
required (A) to issue, register the transfer of or exchange any Securities
during a period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of any such Securities selected for
redemption and ending at the close of business on the day of such mailing, or
(B) to register the transfer of or exchange any Security so selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part.
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SECTION 203. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Company, the Company shall
execute and deliver in exchange therefor a new Security of like tenor and
principal amount and bearing a number not contemporaneously outstanding. If
there shall be delivered to the Company (i) evidence to its satisfaction of the
destruction, loss or theft of any Security and (ii) such security or indemnity
as it may require to save it harmless, then, in the absence of notice to the
Company that such Security has been acquired by a bona fide purchaser, the
Company shall execute, in lieu of any such destroyed, lost or stolen Security,
a new Security of like tenor and principal amount and bearing a number not
contemporaneously outstanding. In case any such mutilated, destroyed, lost or
stolen Security has become or is about to become due and payable, the Company
in its discretion may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses connected
therewith. Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone. The provisions of
this Section are exclusive and shall preclude (to the extent lawful) all other
rights and remedies with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities.
SECTION 204. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company and any agent of the Company may treat the Person in whose name such
Security is registered as the owner of such Security for the purpose of
receiving payment of principal of and any premium and any interest on such
Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, nor any agent of the Company shall be
affected by notice to the contrary.
SECTION 205. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day year of
twelve 30-day months.
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ARTICLE THREE
DEFEASANCE
SECTION 301. Company's Option to Effect Defeasance.
The Company may elect, at its option at any time, to have Section 302 apply
to the Securities upon compliance with the conditions set forth below in this
Article.
SECTION 302. Defeasance and Discharge.
Upon the Company's exercise of its option to have this Section applied to
the Securities, the Company shall be deemed to have been discharged from any
and all of its obligations, and the provisions of Article Ten shall cease to be
effective, with respect to such Securities as provided in this Section on and
after the date the conditions set forth in Section 303 are satisfied
(hereinafter called "Defeasance"). For this purpose, such Defeasance means that
the Company shall be deemed to have paid and discharged the entire indebtedness
represented by such Securities and to have satisfied all its other obligations
under this Security, subject to the following which shall survive until
otherwise terminated or discharged hereunder: (1) the rights of the Holder of
this Security to receive, solely from the trust fund described in Section 303
and as more fully set forth in such Section, payments in respect of the
principal of and any premium and interest on such Securities when payments are
due, (2) the Company's obligations with respect to such Securities under
Sections 202, 203, 802 and 803 and (3) this Article.
SECTION 303. Conditions to Defeasance.
The following shall be the conditions to the application of Section 302 to
the Securities:
(1) The Company shall irrevocably have deposited or caused to be
deposited in trust with a trustee (who shall agree to comply with the
provisions of this Article applicable to it) as trust funds for the purpose
of making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of the Securities, (A) money
in an amount, or (B) U.S. Government Obligations which through the scheduled
payment of principal and interest in respect thereof in accordance with
their terms will provide, not later than one day before the due date of any
payment, money in an amount, or (C) a combination thereof, in each case
sufficient, in the opinion of a nationally recognized firm of independent
certified public accountants expressed in a written certification thereof
delivered to the Holders, to pay and discharge, and which shall be applied
by such trustee to pay and discharge, the principal of (premium, if any) and
each installment of interest, if any, on the Securities on the respective
Stated Maturities, in accordance with the terms of this Security. As used
herein, "U.S. Government Obligation" means (x) any security which is (i) a
direct
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obligation of the United States of America for the payment of which the full
faith and credit of the United States of America is pledged or (ii) an
obligation of a Person controlled or supervised by and acting as an agency
or instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the
United States of America, which, in either case (i) or (ii), is not callable
or redeemable at the option of the issuer thereof, and (y) any depositary
receipt issued by a bank (as defined in Section 3(a)(2) of the Securities
Act of 1933, as amended) as custodian with respect to any U.S. Government
Obligation which is specified in clause (x) above and held by such bank for
the account of the holder of such depositary receipt, or with respect to any
specific payment of principal of or interest on any U.S. Government
Obligation which is so specified and held, provided that (except as required
by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depositary receipt from any amount
received by the custodian in respect of the U.S. Government Obligation or
the specific payment of principal or interest evidenced by such depositary
receipt.
(2) In the event of an election to have Section 302 apply to the
Securities, the Company shall have delivered to the Holders an Opinion of
Counsel stating that (A) the Company has received from, or there has been
published by, the IRS a ruling or (B) since March 1, 1996, there has been a
change in the applicable Federal income tax law, in either case (A) or (B)
to the effect that, and based thereon such opinion shall confirm that, the
Holders of the Securities will not recognize gain or loss for Federal income
tax purposes as a result of the deposit, Defeasance and discharge to be
effected with respect to the Securities and will be subject to Federal
income tax on the same amount, in the same manner and at the same times as
would be the case if such deposit, Defeasance and discharge were not to
occur.
(3) At the time of such deposit, (A) no default in the payment of any
principal of or premium or interest on any Senior Debt shall have occurred
and be continuing, (B) no event of default with respect to any Senior Debt
shall have resulted in such Senior Debt becoming, and continuing to be, due
and payable prior to the date on which it would otherwise have become due
and payable (unless payment of such Senior Debt has been made or duly
provided for), and (C) no other event of default with respect to any Senior
Debt shall have occurred and be continuing permitting (after notice or lapse
of time or both) the holders of such Senior Debt (or a trustee on behalf of
such holders) to declare such Senior Debt due and payable prior to the date
on which it would otherwise have become due and payable.
(4) No event which is, or after notice or lapse of time or both would
become, an Event of Default shall have occurred and be continuing at the
time of such deposit or, with regard to any such event specified in Sections
501(7) and (8), at any time on or prior to the 90th day after the date of
such deposit (it being understood that this condition shall not be deemed
satisfied until after such 90th day).
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(5) Such Defeasance shall not result in a breach or violation of, or
constitute a default under, any other agreement or instrument to which the
Company is a party or by which it is bound.
(6) Such Defeasance shall not result in the trust arising from such
deposit constituting an investment company within the meaning of the
Investment Company Act of 1940, as amended, unless such trust shall be
registered under such act or exempt from registration thereunder.
(7) The Company shall have delivered to the Holders an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance have been complied with.
SECTION 304. Deposited Money and U.S. Government Obligations to Be
Held in Trust; Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 803, all money
and U.S. Government Obligations (including the proceeds thereof) deposited with
a trustee (solely for purposes of this Section and Section 305, such trustee is
referred to as the "Trustee") pursuant to Section 303 in respect of any
Securities shall be held in trust and applied by the Trustee, in accordance
with the provisions of the Securities, to the payment, either directly or
through any such Paying Agent (including the Company acting as its own Paying
Agent) as the Trustee may determine, to the Holders of such Securities, of all
sums due and to become due thereon in respect of principal and any premium and
interest, but money so held in trust need not be segregated from other funds
except to the extent required by law. Money and U.S. Government Obligations so
held in trust shall not be subject to the provisions of Article Ten.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 303 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee shall
deliver or pay to the Company from time to time upon the Company's request any
money or U.S. Government Obligations held by it as provided in Section 303 with
respect to any Securities which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect the Defeasance with respect to such
Securities.
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SECTION 305. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Security from which the Company has been discharged or released pursuant to
Section 302 shall be revived and reinstated as though no deposit had occurred
pursuant to this Article with respect to such Securities, until such time as
the Trustee or Paying Agent is permitted to apply all money held in trust
pursuant to Section 304 with respect to such Securities in accordance with this
Article; provided, however, that if the Company makes any payment of principal
of or any premium or interest on any such Security following such reinstatement
of its obligations, the Company shall be subrogated to the rights (if any) of
the Holders of such Securities to receive such payment from the money so held
in trust.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge.
This Security shall, upon the written election by the Company, cease to be
of further effect (except as to any surviving rights of registration of
transfer or exchange of Securities herein expressly provided for), when:
(1) either (A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 203 and (ii)
Securities for whose payment money has theretofore been deposited in trust
or segregated and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust, as provided in Section 803) have been
cancelled; or (B) all such Securities not theretofore cancelled (i) have
become due and payable, or (ii) will become due and payable at their Stated
Maturity within one year, or (iii) are to be called for redemption within
one year under arrangements for the giving of notice of redemption in the
name, and at the expense, of the Company, and the Company, in the case of
(i), (ii) or (iii), has irrevocably deposited or caused to be deposited with
a trustee, as trust funds in trust for the purpose of such redemption, money
in an amount sufficient to pay and discharge the entire Debt on the
Securities not theretofore cancelled, including principal of, premium, if
any, and accrued interest, if any, on such Securities at such Maturity,
Stated Maturity or Redemption Date;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Holder of this Security an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Security have been complied with and that such
satisfaction and discharge will not result in a breach or violation of, or
constitute a default under, this Security or any other material agreement to
which the Company or any Subsidiary is a party.
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ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
occasioned by the provisions of Article Ten or other subordination provisions
applicable to Securities or be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) failure to pay principal of (or premium, if any, on) any Security
when due, continued for two Business Days; or
(2) failure to pay any interest on any Security when due, continued for
30 days; or
(3) failure to perform any covenant or agreement of the Company under
this Security (other than a covenant or agreement a default in whose
performance or whose breach is elsewhere in this Section specifically dealt
with) and continuance of such default or breach for a period of 60 days
after there has been given notice to the Company by the Holders of at least
25% in aggregate principal amount of the Outstanding Securities written
notice specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder;
(4) default under the terms of any instrument evidencing or securing Debt
for money borrowed by the Company or any Subsidiary having an outstanding
principal amount of $10 million individually or in the aggregate which
default has resulted in the acceleration of the payment of the principal
amount of such Debt or constitutes the failure to pay the principal amount
of such Debt when due;
(5) the rendering of a final judgment or judgments (not subject to
appeal) against the Company or any Subsidiary in an amount in excess of $10
million which remains undischarged or unstayed for a period of 60 days after
the date on which the right to appeal has expired;
(6) termination by Motorola of the Space System Contract prior to
delivery thereunder by Motorola of the Space System (as defined therein),
provided that such termination has not been contested by the Company in
accordance with the Space System Contract or by appropriate proceedings and,
if such termination is so contested, within 180 days of such notice, such
termination has not been withdrawn or declared ineffective by any court or
mediator having jurisdiction;
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(7) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company or any Subsidiary in an
involuntary case or proceeding under any applicable Federal or state
bankruptcy, insolvency, reorganization or other similar law or (B) a decree
or order adjudging the Company or any Subsidiary a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any Subsidiary
under any applicable Federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or any Subsidiary or of any substantial part of the
property of the Company or any Subsidiary, or ordering the winding up or
liquidation of the affairs of the Company or any Subsidiary, and the
continuance of any such decree or order for relief or any such other decree
or order unstayed and in effect for a period of 60 consecutive days; or
(8) the commencement by the Company or any Subsidiary of a voluntary
case or proceeding under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by it
to the entry of a decree or order for relief in respect of the Company or
any Subsidiary in an involuntary case or proceeding under any applicable
Federal or state bankruptcy, insolvency, reorganization or other similar law
or to the commencement of any bankruptcy or insolvency case or proceeding
against it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or state law, or the
consent by it to the filing of such peti tion or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any Subsidiary or
of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in writing
of its inability to pay its debts generally as they become due, or the
taking of formal action by the Company or any Subsidiary in furtherance of
any such action.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in Section
501(7) or 501(8)) occurs and is continuing, then in every such case the Holders
of not less than 25% in principal amount of the Outstanding Securities may
declare the Accreted Value of all the Securities to be due and payable
immediately, by a notice in writing to the Company, and upon any such
declaration such specified amount shall become immediately due and payable;
provided, however, that so long as any secured Senior Debt remains outstanding,
if any such Event of Default shall have occurred and be continuing, any such
acceleration shall not be effective until the earlier of (a) five Business Days
following a notice of acceleration given to the Company and to the holders of
the secured Senior Debt and only if upon such fifth Business Day such Event of
Default shall be continuing or (b) the acceleration of any secured Senior Debt.
If an Event of Default specified in Section 501(7) or 501(8) occurs, the
Accreted Value of all the Securities will ipso facto become
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immediately due and payable without any declaration or other act on the part of
any Holder.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained, the
Holders of a majority in principal amount of the Outstanding Securities, by
written notice to the Company, may rescind and annul such declaration and its
consequences if: (1) the Company has paid or deposited in trust a sum
sufficient to pay: (A) all overdue interest on all Securities, and (B) to the
extent that payment of such interest is lawful, interest upon overdue interest
at the rate set forth in the first paragraph of this Security; and (2) all
Events of Default, other than the non-payment of the principal of Securities
which have become due solely by such declaration of acceleration, have been
cured or waived.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default in the
payment of the principal of (or premium, if any) or interest on any Security.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured; but no such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon.
SECTION 504. Waiver of Usury, Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of its obligations under this Security; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Holder or Holders, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
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SECTION 505. Limitation on Suits.
No Holder of any Security shall have any right to institute any proceeding,
judicial or otherwise, with respect to rights created under the Securities
(other than any right to institute such a proceeding to enforce the Company's
obligation to pay principal (and premium, if any) and interest on such Holder's
Securities and such Holder's rights under Sections 202 and 203), or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
the Holders of not less than 25% in principal amount of the Outstanding
Securities shall have joined in such proceedings or consented to the
institution thereof.
ARTICLE SIX
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 601. Mergers, Consolidation and Certain Sales of Assets.
The Company may not, in a single transaction or a series of related
transactions, (i) consolidate with or merge into any other Person or permit any
other Person (other than a Subsidiary) to consolidate with or merge into the
Company, (ii) directly or indirectly, transfer, sell, lease or otherwise
dispose of all or substantially all of its assets, (iii) permit any of its
Subsidiaries to enter into any transaction or transactions described in clause
(i) or (ii) above, if such transaction or transactions, in the aggregate, would
result in a sale, assignment, transfer, lease or disposal of all or
substantially all the properties and assets of the Company and its Subsidiaries
taken as a whole to any other Person or group of affiliated Persons, unless:
(1) in a transaction in which the Company does not survive or in which
the Company sells, leases or otherwise disposes of all or substantially all
of its assets, the successor entity to the Company is organized and validly
existing under the laws of the United States of America, any State thereof
or the District of Columbia and shall expressly assume, by a written
agreement all of the Company's obligations under this Security; and
(2) immediately before and after giving effect to such transaction and
treating any Debt which becomes a direct obligation of the Company or a
Subsidiary as a result of such transaction as having been Incurred by the
Company or such Subsidiary at the time of the transaction, no Event of
Default or event that with the passing of time or the giving of notice, or
both, would constitute an Event of Default shall have occurred and be
continuing.
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SECTION 602. Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company into,
any other Person or any transfer, sale, lease or other disposition of all or
substantially all of the assets of the Company in accordance with Section 601,
the successor Person formed by such consolidation or into which the Company is
merged or to which such transfer, sale, lease or other disposition is made
shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Security with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except
in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Security.
ARTICLE SEVEN
AMENDMENTS
SECTION 701. Amendments With Consent of Holders.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities, the Company may amend the terms of the
Securities for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Securities or of modifying
in any manner the rights of the Holders of Securities; provided, however, that
no such amendment shall, without the consent of the Holder of each Outstanding
Security affected thereby,
(1) change the Stated Maturity of the principal of, or any instalment of
interest on, any Security, or reduce the principal amount thereof or the
rate of interest thereon or any premium payable thereon, or reduce the
amount of the principal of a Security which would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502,
or change any Place of Payment where, or the coin or currency in which, any
Security or any premium or interest thereon is payable, or impair the right
to institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such amendment,
or the consent of whose Holders is required for any waiver (of compliance
with certain provisions of this Security or certain defaults hereunder and
their consequences), or
(3) modify any of the provisions of this Section or Section 503 except
to increase any such percentage or to provide that certain other provisions
of this Security cannot be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby.
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ARTICLE EIGHT
COVENANTS
SECTION 801. Payment of Principal, Premium and Interest.
The Company covenants and agrees that it will duly and punctually pay the
principal of (and premium, if any) and any interest on the Securities in
accordance with the terms of the Securities.
SECTION 802. Maintenance of Office or Agency.
The Company will maintain in either Place of Payment an office or agency
where Secu rities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Securities may be served.
The Company will give prompt written notice to the Holders of the location, and
any change in the location, of such office or agency.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in each Place of
Payment for Securities for such purposes. The Company will give prompt written
notice to the Holders of any such designation or rescission and of any change
in the location of any such other office or agency.
SECTION 803. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will, on or
before each due date of the principal of (and premium, if any) or any interest
on any of the Securities, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal (and premium, if
any) and any interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided.
Any money then held by the Company in trust for the payment of the principal
of (and premium, if any) or any interest on any Security and remaining
unclaimed for two years after such principal (and premium, if any) or interest
has become due and payable shall be discharged from such trust; and the Holder
of such Security shall thereafter, as an unsecured general creditor, look only
to the Company for payment thereof, and all liability of the Company as trustee
thereof, shall thereupon cease.
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SECTION 804. Existence.
Subject to Article Six, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence, rights
(charter and statutory) and franchises; provided, however, that the Company
shall not be required to preserve any such right or franchise if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Holders.
SECTION 805. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, (1) all taxes, assessments and governmental
charges levied or imposed upon the Company or any Subsidiary or upon the
income, profits or property of the Company or any Subsidiary, and (2) all
lawful claims for labor, materials and supplies which, if unpaid, might by law
become a lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
ARTICLE NINE
REDEMPTION OF SECURITIES
SECTION 901. Optional Redemption.
The Securities are subject to redemption upon not less than 30 nor more than
60 days' notice mailed to each Holder of the Securities to be redeemed at his
or her address appearing in the Security Register, at any time on or after
March 1, 2001, as a whole or in part, at the election of the Company, at the
following Redemption Prices (expressed as percentages of the principal amount):
If redeemed during the 12-month period beginning March 1 of the years
indicated,
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Redemption
Year Price
---- -------------
2001 107.5%
2002 105.0%
2003 102.5%
2004 and thereafter 100.0%
together in the case of any such redemption with accrued interest to but
excluding the Redemption Date.
Notwithstanding the limitations on redemption in the preceding paragraph, in
the event that on or prior to March 1, 1999 the Company completes a Public
Offering of its Common Stock, up to one-third of the Outstanding Securities
will also be subject to redemption, at the option of the Company, upon not less
than 30 nor more than 60 days' notice mailed to each Holder of Securities to be
redeemed at his address appearing in the Security Register, in amounts of
$1,000 or any integral multiple thereof at a Redemption Price equal to 107.5%
of their Accreted Value. Notice of redemption will be mailed not later than 90
days after the date of consummation of the Public Offering. The aggregate
Redemption Price shall not exceed the gross proceeds to the Company in the
Public Offering.
Notwithstanding the limitations on redemption in the first paragraph of this
Section 901, in the event that the Company consummates a Major Bank Financing
on or prior to March 1, 2001, the Outstanding Securities will also be subject
to redemption in whole or in part, at the option of the Company, upon not less
than 30 nor more than 60 days' notice mailed to each Holder of Securities to be
redeemed at his address appearing in the Security Register, in amounts of
$1,000 or any integral multiple thereof at a Redemption Price equal to 107.5%
of their Accreted Value. Notice of redemption will be mailed not later than 90
days after the date of the initial extension of credit under the Major Bank
Financing.
SECTION 902. Selection of Securities to Be Redeemed.
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Company, from all Holders pro rata on the basis of the
aggregate principal amount of all Outstanding Securities held by such Holders.
For all purposes of this Security, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
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SECTION 903. Notice of Redemption.
Notice of redemption shall be given by the Company by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at his address
appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities are to be redeemed, the
identification (and, in the case of partial redemption of any such
Securities, the principal amounts) of the particular Securities to be
redeemed,
(4) that on the Redemption Date the Redemption Price will become due and
payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date, and
(5) the place or places where each such Security is to be surrendered
for payment of the Redemption Price.
SECTION 904. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with a Paying Agent
(or, if the Company is acting as its own Paying Agent, segregate and hold in
trust) an amount of money sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date) any
applicable accrued interest on, all the Securities which are to be redeemed on
that date.
SECTION 905. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to be
redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price) such Securities
shall not bear interest. Upon surrender of any such Security for redemption in
accordance with said notice, such Security shall be paid by the Company at the
Redemption Price, together with any applicable accrued interest to the
Redemption Date.
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If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the first
paragraph of this Security.
SECTION 906. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at a
Place of Payment therefor (with, if the Company so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company
duly executed by, the Holder thereof or his attorney duly authorized in
writing), and the Company shall execute and deliver to the Holder of such
Security without service charge, a new Security or Securities of like tenor, as
requested by such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Security so
surrendered.
ARTICLE TEN
SUBORDINATION OF SECURITIES
SECTION 1001. Securities Subordinate to Senior Debt.
The Company covenants and agrees, and each Holder of a Security, by his
acceptance hereof or thereof, likewise covenants and agrees that, to the extent
and in the manner hereinafter set forth in this Article (subject to the
provisions of Articles Three and Four), the payment of the principal of (and
premium, if any on) and any interest on the Securities, and any other
obligations of the Company in respect of the Securities are hereby expressly
made subordinate and subject in right of payment to the prior payment in full,
in cash or cash equivalents or in any other form acceptable to the holders of
Designated Senior Debt, of all Senior Debt that the subordination is for the
benefit of, and shall be enforceable directly by, the holders of Senior Debt,
and that each holder of Senior Debt, whether now outstanding or hereafter
created, Incurred or assumed shall be deemed to have acquired and continued to
hold, or shall have continued to hold, Senior Debt in reliance upon the
covenants and provisions contained in this Security.
SECTION 1002. Payment Over of Proceeds Upon Dissolution, Etc.
In the event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding
in connection therewith, relative to the Company or to its creditors, as such,
or to its assets, or (b) any liquidation, dissolution or other winding up of
the Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshalling of assets and liabilities of the Company, then and in any
such event specified in (a), (b) or (c) above (each such event,
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if any, herein sometimes referred to as a "Proceeding") the holders of Senior
Debt will first be entitled to receive payment in full, in cash or cash
equivalents or in any form acceptable to the holders of Designated Senior Debt,
of all amounts due or to become due thereon before the Holders of the
Securities will be entitled to receive any payment or distribution of any
assets of the Company of any kind or character, whether in cash, property or
securities (including any payment or distribution which may be payable or
deliverable by reason of the payment of any other Debt of the Company
subordinated to the payment of the Securities, such payment or distribution
being hereinafter referred to as a "Junior Subordinated Payment"), on account
of the principal of, premium, if any, or interest on such Securities and any
other obligations in respect of such Securities (including any obligation to
repurchase such Securities, but excluding any payments previously made pursuant
to Article Three ("Defeasance and Satisfaction Payments")) (all such payments,
distributions, purchases and acquisitions herein (other than payments and
distributions of Permitted Junior Interests as hereinafter defined) referred
to, individually and collectively, as a "Securities Payment").
In the event that, notwithstanding the foregoing provisions of this Section,
the Holder of any Security shall have received any Securities Payment before
all Senior Debt is paid in full or payment thereof provided for in cash or cash
equivalents or in any form acceptable to the holders of Designated Senior Debt,
then and in such event such Securities Payment shall be paid over or delivered
forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other Person making payment or distribution of
assets of the Company for application to the payment of all Senior Debt
remaining unpaid, to the extent necessary to pay all Senior Debt in full, after
giving effect to any concurrent payment or distribution to or for the holders
of Senior Debt.
For purposes of this Article only, the words "any payment or distribution of
any assets of the Company of any kind or character, whether in cash, property
or securities" shall not be deemed to include a payment or distribution of
interests or securities of the Company provided for by a plan of reorganization
or readjustment authorized by an order or decree of a court of competent
jurisdiction in a reorganization proceeding under any applicable bankruptcy law
or of any other entity or corporation provided for by such plan of
reorganization or readjustment which stock or securities are subordinated in
right of payment to all then outstanding Senior Debt to substantially the same
extent as the Securities are so subordinated as provided in this Article (such
stock or subordinated securities are referred to herein as "Permitted Junior
Interests"). The consolidation of the Company with, or the merger of the
Company into, another Person or the liquidation or dissolution of the Company
following the conveyance or transfer of all or substantially all of its
properties and assets as an entirety to another Person upon the terms and
conditions set forth in Article Six shall not be deemed a Proceeding for the
purposes of this Section if the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance or
transfer such properties and assets as an entirety, as the case may be, shall,
as a part of such consolidation, merger, conveyance or transfer, comply with
the conditions set forth in Article Six.
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SECTION 1003. No Payment When Senior Debt in Default.
In the event that any Senior Payment Default (as defined below) shall have
occurred and be continuing, then no Securities Payment may be made unless and
until such Senior Payment Default shall have been cured or waived or shall have
ceased to exist or the Designated Senior Debt that is the subject of such
Senior Payment Default shall have been discharged or paid in full in cash or
cash equivalents or in any other form acceptable to the holders of such
Designated Senior Debt, after which the Company shall resume making any and all
required Securities Payments, including any missed payments. "Senior Payment
Default" means any default beyond the applicable grace period in the payment of
principal of, premium, if any, or interest, or any other obligation in respect
of Designated Senior Debt when due, whether at the Stated Maturity of any such
payment or by declaration of acceleration, call for redemption or otherwise.
In the event that any Senior Nonmonetary Default (as defined below) shall
have occurred and be continuing, then, upon the receipt by the Company of
written notice of such Senior Nonmonetary Default from a holder of Designated
Senior Debt (or a trustee, agent or other representative for such a holder duly
authorized in writing) which is the subject of such Senior Nonmonetary Default,
no Securities Payment, may be made for a period (the "Payment Blockage Period")
commencing on the date of receipt of such notice and ending on the earlier of
(i) the date on which such Senior Nonmonetary Default (and all other Senior
Nonmonetary Defaults that have occurred and of which the Company is aware) has
been cured or waived or ceases to exist and any acceleration of Designated
Senior Debt shall have been rescinded or annulled or all Designated Senior Debt
that is the subject of such Senior Nonmonetary Default has been discharged or
paid in full, in cash or cash equivalents or in any other form acceptable to
the holders of such Designated Senior Debt; (ii) the 179th day after the date
of such receipt of such notice; and (iii) the date on which such Payment
Blockage Period (and all other Senior Nonmonetary Defaults as to which notice
is given after such Payment Blockage Period is initiated) shall have been
terminated by written notice to the Company from a representative of the
holders of at least a majority of Designated Senior Debt initiating such
Payment Blockage Period, after which, in the case of clauses (i), (ii) and
(iii), the Company will promptly resume making any and all required Securities
Payments in respect of such Securities, including any missed payments;
provided, however, that no more than one Payment Blockage Period may be
commenced with respect to such Securities during any 360-day period and there
shall be a period of at least 181 days in each 360-day period when no Payment
Blockage Period is in effect; provided further, that no Senior Nonmonetary
Default which existed or was continuing on the date of the commencement of a
Payment Blockage Period may be made the basis of the commencement of a
subsequent Payment Blockage Period by holders of Designated Senior Debt or
their representatives, whether or not within a period of 360 consecutive days,
unless such Senior Nonmonetary Default shall have been cured or waived for a
period of not less than 90 consecutive days. "Senior Nonmonetary Default" means
a default with respect to Designated Senior Debt, other than a Senior Payment
Default, which the giving of notice or the passage of time, or both, gives the
holders of the Designated Senior Debt (or a trustee or agent on behalf of the
holders
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thereof) the right to declare the Debt under such Designated Senior Debt due
and payable prior to the date on which it matures or is subject to scheduled
repayment.
In the event that, notwithstanding the foregoing, the Company shall make any
Securities Payment to any Holder prohibited by the foregoing provisions of this
Section, then and in such event such Securities Payment shall be paid over and
delivered forthwith to the holders of Designated Senior Debt or their
representatives or as a court of competent jurisdiction shall determine.
The provisions of this Section shall not apply to any Securities Payment
with respect to which Section 1002 would be applicable.
SECTION 1004. Payment Permitted If No Default.
Nothing contained in this Article or elsewhere in this Security shall
prevent the Company, at any time except during the pendency of any Proceeding
referred to in Section 1002 or under the conditions described in Section 1003,
from making Securities Payments.
SECTION 1005. Subrogation to Rights of Holders of Senior Debt.
Subject to the payment in full of all amounts due or to become due on or in
respect of Senior Debt, or the provision for such payment in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of Designated
Senior Debt, the Holders of the Securities shall be subrogated to the extent of
the payments or distributions made to the holders of such Senior Debt pursuant
to the provisions of this Article (equally and ratably with the holders of all
indebtedness of the Company which by its express terms is subordi nated to
indebtedness of the Company to substantially the same extent as the Securities
are subordinated to the Senior Debt and is entitled to like rights of
subrogation by reason of any payments or distributions made to holders of such
Senior Debt) to the rights of the holders of such Senior Debt to receive
payments and distributions of cash, property and securities applicable to the
Senior Debt until the principal of (and premium, if any) and any interest on
the Securities shall be paid in full. For purposes of such subrogation, no
payments or distributions to the holders of the Senior Debt of any cash,
property or securities to which the Holders of the Securities would be entitled
except for the provisions of this Article, and no payments over pursuant to the
provisions of this Article to the holders of Senior Debt by Holders of the
Securities, shall, as among the Company, its creditors other than holders of
Senior Debt and the Holders of the Securities, be deemed to be a payment or
distribution by the Company to or on account of the Senior Debt.
If any payment or distribution to which the Holder of any Security would
otherwise have been entitled but for the provisions of this Article shall have
been applied, pursuant to the provisions of this Article, to the payment of all
amounts payable under the Senior Debt, then and in such case, the Holder of any
Security shall be entitled to receive from
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the holders of such Senior Debt at the time outstanding any payments or
distributions received by such holders of Senior Debt in excess of the amount
sufficient to pay all amounts due or to become due on or in respect of Senior
Debt in full.
SECTION 1006. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the purpose
of defining the relative rights of the Holders on the one hand and the holders
of Senior Debt on the other hand. Nothing contained in this Article or
elsewhere in this Security is intended to or shall (a) impair, as among the
Company, its creditors other than holders of Senior Debt and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional
(and which, subject to the rights under this Article of the holders of Senior
Debt, is intended to rank equally with all other general obligations of the
Company), to pay to the Holders of the Securities the principal of (and
premium, if any) and any interest on the Securities as and when the same shall
become due and payable in accordance with their terms; or (b) affect the
relative rights against the Company of the Holders of the Securities and
creditors of the Company other than the holders of Senior Debt; or (c) prevent
the Holder of any Securities from exercising all remedies otherwise permitted
by applicable law upon default under this Security, subject to the rights, if
any, under this Article of the holders of Senior Debt to receive cash, property
and securities otherwise payable or deliverable to such Holder.
SECTION 1007. Company to Effectuate Subordination.
Each Holder of this Security by his acceptance hereof authorizes and directs
the Company on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article.
SECTION 1008. No Waiver of Subordination Provisions.
No right of any present or future holder of any Designated Senior Debt to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Security, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Debt may, at any time and from time to time, without the
consent of or notice to the Holders of the Securities, without incurring
responsibility to the Holders of the Securities and without impairing or
releasing the subordination provided in this Article or the obligations
hereunder of the Holders of the Securities to the holders of Senior Debt, do
any one or more of the following: (i) change the manner, place or terms of
payment
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or extend the time of payment of, or renew or alter, Senior Debt, or otherwise
amend or supplement in any manner Senior Debt or any instrument evidencing the
same or any agreement under which Senior Debt is outstanding or secured; (ii)
sell, exchange, release or otherwise deal with any property pledged, mortgaged
or otherwise securing Senior Debt; (iii) release any Person liable in any
manner for the collection of Senior Debt; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person; provided,
however, that in no event shall any such actions limit the right of the Holders
of the Securities to take any action to accelerate the maturity of the
Securities in accordance with the provisions set forth in Article Five or to
pursue any rights or remedies under this Security or under applicable laws if
the taking of such action does not otherwise violate the terms of this Article.
SECTION 1009. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to in
this Article, the Holders of the Securities shall be entitled to rely upon any
order or decree entered by any court of competent jurisdiction in which such
Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of the Senior Debt and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article.
SECTION 1010. Defeasance of this Article Ten.
The subordination provided by this Article Ten is expressly made subject to
the provisions for defeasance in Article Three hereof and, anything herein to
the contrary not withstanding, upon the effectiveness of any such defeasance or
covenant defeasance, the Securities then outstanding shall thereupon cease to
be subordinated pursuant to this Article Ten.
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IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed, and its corporate seal to be hereunto affixed and attested, all as of
the day and year first above written.
IRIDIUM, INC.
By
----------------------------------
Attest:
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EXHIBIT 2-A
Amendments to Outstanding Warrants
FORM OF WARRANT
NEITHER THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE NOR THE CLASS 1
MEMBERSHIP INTERESTS OF IRIDIUM LLC (THE "COMPANY") FOR WHICH THE WARRANTS
REPRESENTED BY THIS WARRANT CERTIFICATE ARE EXERCISABLE (THE "WARRANT SHARES")
MAY BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND ANY APPLICABLE STATE
SECURITIES LAWS OR AN EXEMPTION FROM THOSE REGISTRATION REQUIREMENTS.
ACCORDINGLY, THE HOLDER OF THIS WARRANT CERTIFICATE SHALL NOT BE ENTITLED TO
TRANSFER OR EXERCISE SUCH HOLDER'S WARRANTS AT ANY TIME UNLESS, AT THE TIME OF
SUCH TRANSFER OR EXERCISE, (I) A REGISTRATION STATEMENT UNDER THE ACT RELATING
TO THE WARRANTS OR THE WARRANT SHARES, AS THE CASE MAY BE, HAS BEEN FILED WITH,
AND DECLARED EFFECTIVE BY, THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"),
AND NO STOP ORDER SUSPENDING THE EFFECTIVENESS OF SUCH REGISTRATION STATEMENT
HAS BEEN ISSUED BY THE SEC OR (II) THE TRANSFER OF THE WARRANTS REPRESENTED BY
THIS CERTIFICATE OR THE ISSUANCE OF THE WARRANT SHARES IS PERMITTED PURSUANT TO
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT.
TRANSFER OF THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE AND THE
WARRANT SHARES IS ALSO RESTRICTED BY THE TERMS OF A LIMITED LIABILITY COMPANY
AGREEMENT, DATED AS OF JULY 1, 1996 BY AND AMONG THE PARTIES NAMED THEREIN
(THE "LLC AGREEMENT"). A COPY OF THE LLC AGREEMENT IS ON FILE AND AVAILABLE
FOR INSPECTION BY THE HOLDER OF THIS WARRANT CERTIFICATE AT THE COMPANY'S
PRINCIPAL EXECUTIVE OFFICES.
No. __________ Warrants
WARRANT TO PURCHASE CLASS 1 MEMBERSHIP INTERESTS
of
IRIDIUM LLC
This Warrant Certificate certifies that __________, or registered permitted
assigns, is the registered holder of _____ warrants expiring March 1, 2006 to
purchase an aggregate of ________ Class 1 Membership Interests in the Company
(the "Common Interests"), of Iridium LLC, a delaware limited liability company
(the "Company"). The Warrants evidenced hereby are part of a duly authorized
issue of Warrants of the Company (the "Warrants") all evidenced by Warrant
Certificates substantially similar to this Warrant Certificate. Each Warrant
entitles the holder upon exercise to purchase from the Company at any time on
or after March 1, 2001 and prior to 5:00 p.m. New York City time on March 1,
2006, .13877 Common Interests (each a "Warrant Share") upon surrender of this
Warrant Certificate to the Warrant Agent, subject to the conditions set forth
herein. The number of Warrant Shares purchasable upon exercise thereof are
subject to adjustment upon the occurrence of certain events set forth herein.
Exercise of a Warrant by a person other than the registered holder named above
is subject to the approval of such person for admission as a Member of the
company by the Members of the Company who may grant or withhold such consent in
their absolute discretion.
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SECTION 1. EXERCISE OF THE WARRANTS. Warrants may be exercised at any time
on or after March 1, 2001 and prior to 5:00 p.m. New York City time on March 1,
2006 (the "Expiration Date"). The holder of Warrants evidenced by this Warrant
Certificate may exercise such Warrants by surrendering this Warrant
Certificate, with the form of election to purchase set forth hereon properly
completed and executed, together with payment to the Company of the Exercise
Price for each Warrant then exercised. Exercise of this Warrant by a person
other than the registered holder named in the preamble of this warrant is
subject to the approval of such person for admission as a member of the company
by the members of the company who may grant or withhold such consent in their
absolute discretion. In the event that upon any exercise of Warrants evidenced
hereby the number of Warrants exercised shall be less than the total number of
Warrants evidenced hereby, the Company shall issue to the holder hereof or his
permitted assignee a new Warrant Certificate evidencing the number of Warrants
not exercised. No cash dividend shall be paid to a holder of Warrants Shares
issuable upon the exercise of Warrants unless such holder was, as of the record
date for the declaration of such dividend, the record holder of such Warrant
Shares.
No Warrant may be exercised after the Expiration Date, and to the extent not
exercised by such time, such Warrants shall become void. The Company shall give
notice of expiration not less than 90 nor more than 120 days prior to the
Expiration Date to the registered holders of the then outstanding Warrants;
provided, however, that if the Company fails to give such notice, the Warrants
shall still terminate and become void on the Expiration Date.
SECTION 3. REGISTRATION OF TRANSFER AND EXCHANGE. The Company and its
agents may deem and treat the registered holder(s) of this Warrant Certificate
as the absolute owner(s) hereof (notwithstanding any notation of ownership or
other writing hereon made by anyone), for all purposes, and neither the Company
nor its agents shall be affected by any notice to the contrary.
References herein to "Warrant holder(s)" or "holders of the Warrant
Certificates" means in each case registered holders of Warrant Certificates.
Subject to the restrictions on transfer referred to in the Legend on page 1
of this Warrant Certificate, Warrant Certificates, when surrendered at the
office maintained by the Company for such purpose by the registered holder
thereof in person or by legal representative or attorney duly authorized in
writing, may be presented for exchange or registration of transfer without
payment of any service charge (except for stamp or any other governmental tax
or charge that may be imposed in connection with any such transfer or
exchange), for another Warrant Certificate or Warrant Certificates representing
a like tenor executed by the Company in the aggregate a like number of
Warrants.
Every Warrant Certificate surrendered for registration of transfer or
exchange shall (if so required by the Company) be duly endorsed, or be
accompanied by a written instrument of transfer in any form satisfactory to the
Company, duly executed by the Warrant holder or his attorney duly authorized in
writing (with, in the case of transfer and if requested by the Company, such
signature guaranteed by an eligible guarantor institution).
All Warrant Certificates issued upon any registration of transfer or
exchange of Warrant certificates shall be the valid obligations of the Company,
evidencing the same obligations, and entitled to the same benefits under this
Certificate, as the Warrant Certificates surrendered for such registration of
transfer
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or exchange, except for the limitation on right of exercise set forth in the
third sentence of Section 1.
SECTION 4. RETIREMENT OF WARRANTS. The Company may purchase Warrants. Any
Warrants purchased by the Company may be retired by cancellation of such
Warrants and appropriate notation thereof in the Company's register.
SECTION 5. PAYMENT OF TAXES. The Company will pay all taxes and other
governmental charges attributable to the initial issuance of Common Interests
upon the exercise of Warrants; provided, however, that the Company shall not be
required to pay any such taxes or charges which may be payable in respect of
any transfer involved in the issue of any Warrant Certificates or any
certificates for Common Interests in a name other than that of the registered
holder of a Warrant Certificate surrendered upon the exercise of a Warrant, and
the Company shall not be required to issue or deliver such Warrant Certificates
unless or until the person or persons requesting the issuance thereof shall
have paid to the Company the amount of such taxes or charges or shall have
established to the satisfaction of the Company that such taxes or charges have
been paid.
SECTION 6. MUTILATED OR MISSING WARRANT CERTIFICATES. In case this Warrant
Certificate shall be mutilated, lost, stolen or destroyed, the Company may in
its discretion issue, in exchange and substitution for and upon cancellation of
the mutilated Warrant Certificate, or in lieu of and substitution for the
Warrant Certificate lost, stolen or destroyed, a new Warrant Certificate of
like tenor and representing an equivalent number of Warrants, but only upon
receipt of evidence satisfactory to the Company of such loss, theft or
destruction for such Warrant Certificate and indemnity and security therefor,
if requested, also satisfactory to the Company. Applicants for such substitute
Warrant Certificates shall also comply with such other reasonable regulations
and pay such other reasonable charges as the Company may prescribe.
SECTION 7. RESERVATIONS OF WARRANT SHARES. The Company (i) shall at all
times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Class 1 Membership Interests, for the
purpose of enabling it to satisfy any obligation to issue Warrant Shares upon
exercise of Warrants, the maximum number of Common Interests which would then
be deliverable upon the exercise of all outstanding Warrants if all such
outstanding Warrants were then exercisable and (ii) shall not take any action
which results in any adjustment of the Exercise Rate if the total number of
Warrant Shares would exceed the total number of Common Interests then
authorized by the Company's certificate of incorporation and available for the
purpose of issue upon such exercise.
The transfer agent for the Common Interests (which may be the Company if it
is acting as transfer agent) (the "Transfer Agent") and every subsequent
transfer agent for any interests of the Company issuable upon the exercise of
any of the rights of purchase aforesaid will be irrevocably authorized and
directed at all times to reserve such number of authorized interests as shall
be required for such purpose.
The Company covenants that all Warrant Shares which may be issued upon
exercise of Warrants will, upon payment of the Exercise Price and issuance, be
duly and validly issued,
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free of preemptive rights and free from all taxes, liens, charges and security
interests with respect to the issue thereof.
SECTION 8. ADJUSTMENT OF WARRANT SHARES ISSUABLE. The Warrants
represented by this Warrant Certificate will initially be exercisable by the
holder thereof to purchase 10.40775 Common Interests at $.01 per interest. The
number of Warrant Shares that may be purchased upon the exercise of each
Warrant (the "Exercise Rate") will be subject to adjustment from time to time
upon the occurrence of the events enumerated in this Section 8. For purposes of
this Section 8, "Common Interests" means the Common Interests and any other
interests in the Company for which the Warrants may be exercised and where, as
a result of this definition, the term refers to more than one class of
interests, the adjustment provisions of this Section 8 shall be equitably
adjusted to achieve as nearly as practicable the intended result as evidenced
by the text of such adjustment provisions.
(a) Adjustments for Change in Common Interests.
If at any time after March 1, 1996 the Company:
(1) pays a dividend or makes a distribution on its Common Interests in
Common Interests;
(2) subdivides its outstanding Common Interests into a greater number of
Common Interests;
(3) combines its outstanding Common Interests into a smaller number of
common Interests;
(4) pays a dividend or makes a distribution on its Common interests
other than Common Interests; or
(5) issues by reclassification of its Common Interests any of its other
interests;
then the Exercise Rate in effect immediately prior to such action shall be
proportionately adjusted so that the holder of any Warrant thereafter exercised
may receive the aggregate number and kind of shares of, or interests in, the
Company which such holder would have owned immediately following such action if
such Warrant had been exercised immediately prior to such action.
The adjustment shall become effective immediately after the record date in
the case of a dividend or distribution and immediately after the effective date
in the case of a subdivision, combination or reclassification.
If after an adjustment and upon exercise of a Warrant the holder may receive
two or more classes of interests in the Company, the Company shall determine
the allocation of the adjusted Exercise Price between the classes.
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Notwithstanding any other provision hereof, the Exercise Price with respect to
the issuance of any Warrant Share shall not be less than $.01 per share. After
such allocation, the exercise privilege and the Exercise Rate with respect to
each class of interests shall thereafter be subject to adjustment on terms
comparable to those applicable to Common Interests in this Section 8.
Such adjustment shall be made successively whenever any event listed above
occurs.
(b) Adjustment for Rights Issue.
If the Company distributes any rights, options or warrants to all holders of
its Common Interests entitling them for a period expiring within 60 days after
the record date mentioned below to purchase Common Interests or securities
convertible into, or exchangeable or exercisable for, Common Interests at a
price per interest less than the Current Market Value (as defined in subsection
(d)) per interest as of the Time of Determination (as defined in subsection
(d)), the Exercise Rate shall be adjusted in accordance with the formula:
E' = E x O+N
--------------
N x P
O -----
+ M
where:
E' = the adjusted Exercise Rate.
E = the current Exercise Rate.
O = the number of Common Interests outstanding on the record date.
N = the number of additional Common Interests offered.
P = the offering price per additional Common Interests.
M = the Current Market Value per interest (as defined in Subsection (d)).
The adjustment shall become effective immediately after the record date for
the determination of stockholders entitled to receive the rights, warrants or
options to which this subsection (b) applies. To the extent that Common
Interests are not delivered after the expiration of such rights or warrants,
the Exercise Rate shall be readjusted to the Exercise Rate which would
otherwise be in effect had the adjustment made upon the issuance of such rights
or warrants been made on the basis of delivery of only the number of Common
Interests actually delivered. In the event that such rights or warrants are not
so issued, the Exercise Rate shall again be adjusted to be the Exercise Rate
which would then be in effect if such date fixed for determination of holders
entitled to receive such rights or warrants had not been so fixed.
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No adjustment shall be made under this subsection (b) if the application of
the formula stated above in this subsection (b) would result in a value of E'
that is lower than the value of E.
(c) Adjustment for Other Distributions.
If the Company distributes to all holders of its Common Interests any of its
assets, debt securities or any rights, options or warrants to purchase debt
securities, assets or other interests in or securities of the Company
(including securities or cash, but excluding (1) distributions of Common
Interests or interests referred to in subsection (a) and distributions of
rights, warrants or options referred to in subsection (b) and (2) cash
dividends or other cash distributions that are paid out of current or
accumulated earnings), the Exercise Rate shall be adjusted in accordance with
the formula:
E' = E x M
---
M-F
where:
E' = the adjusted Exercise Rate.
E = the current Exercise Rate.
M = the Current Market Value per Common Interest on the record date for
the determination of holders entitled to receive the distribution.
F = the fair market value (as determined by the Board of Directors whose
determination shall be conclusive) of the assets, securities,
interests, rights or warrants applicable to one Common Interest as of
the Time of Determination for the determination of holders entitled to
receive the distribution.
The adjustment shall be made successively whenever any such distribution is
made and shall become effective immediately after the record date for the
determination of holders entitled to receive the distribution.
The Company shall give the Warrant holders at least 10 days notice of a
record date for any dividend payment or other distribution on the Common
Interests.
(d) Current Market Value; Time of Determination.
"Current Market Value" per Common Interest or any other Interest or security
at any date means, on any date of determination the average of the Closing
Prices of the Common Interests (or such interest or security) for the 20
consecutive Business Days selected by the Board of Directors commencing no
more than 30 Business Days before and ending no later than the day before the
day in question; provided that, in the case of clause (c), if the period
between the date of the public announcement of the dividend or distribution and
the date for the determination of holders of Common Interests (or such interest
or security) entitled to
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receive such dividend or distribution (or, if earlier, the date on which the
Common Interests (or such interest or security) go "ex-dividend" in respect of
such dividend or distribution) shall be less than 20 Business Days, the period
shall be such lesser number of Business Days but, in any event, not less than
five Business Days.
"Closing Price" means, for each Business Day, the last reported sale price
regular way on the principal national securities exchange on which the Common
Interests (or such other Interest OR security) are listed or admitted for
trading, or, if the Common Interests (or such other interest or security) are
not so listed or admitted for trading on a national securities exchange, on the
NASDAQ National Market System or, if the Common Interests (or such other
interest or security) are not quoted on the NASDAQ National Market System, the
average of the closing bid and asked prices in the over-the-counter market as
furnished by any New York Stock Exchange member firm selected from time to time
by the Company for that purpose or, if the Common Interests (or such other
interest or security) are not traded in the over-the-counter market, the Fair
Market Value per Common Interest (or such other Interest or security) as
determined by the Board of Directors whose determination shall be conclusive.
"Time of Determination") means the time and date of the earlier of (i) the
determination of holders entitled to receive rights, warrants, or options or a
distribution, in each case, to which subsection (b) or (c) applies and (ii) the
time ("Ex-Dividend Time") immediately prior to the commencement of
"ex-dividend" trading for such rights, warrants or distribution on such
national or regional exchange or market on which the Common Interests are then
listed or quoted.
(e) When De Minimis Adjustment May Be Deferred.
No adjustment in the Exercise Rate need be made unless the adjustment would
require an increase or decrease of at least 1% in the Exercise Rate; provided,
however, that any adjustments that are not made shall be carried forward and
taken into account in any subsequent adjustment.
All calculations under this Section 8 shall be made to the nearest cent or
to the nearest 1/100th of a interest, as the case may be.
(f) When No Adjustment Required.
To the extent the Warrants become convertible into cash pursuant to
subsection (j), no adjustment need be made thereafter as to the cash. Interest
will not accrue on the cash.
(g) Notice of Adjustment.
Whenever the Exercise Rate is adjusted, the Company shall provide the
notices required by Section 11 hereof.
(h) Voluntary Increase or Reduction.
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The Company from time to time may increase the Exercise Rate by any amount
for any period of time if the period is at least 20 days and if the increase or
decrease, as the case may be, is irrevocable during the period.
Whenever the Exercise Rate is increased the Company shall mail to registered
Warrant holders a notice of the increase or decrease, as the case may be. The
Company shall mail the notice at least 15 days before the date the increased
Exercise Rate, takes effect. The Notice shall state the increased Exercise
Rate, and the period it will be in effect.
An increase in the Exercise Rate, does not change or adjust the Exercise
Rate, as the case may be, otherwise in effect, or as used for calculations, for
purposes of subsections (a), (b), and (c) of this Section 8.
(i) Notice of Certain Transactions.
If: (1) the Company takes any action that would require an adjustment in the
Exercise Rate pursuant to subsections (a), (b) or (c) of this Section 8 or (2)
the Company takes any action that would require a Supplemental Agreement
pursuant to subsection (j) of this Section 11, the Company shall mail to
registered Warrant holders a notice stating the proposed record date for a
dividend or distribution or the expected effective date of a subdivision,
combination, reclassification, consolidation, merger, transfer, lease,
liquidation or dissolution. The Company shall mail the notice at least 20 days
before such date. Failure to mail the notice or any defect in it shall not
affect the validity of the transaction.
(j) Consolidation, Merger or Reorganization of the Company.
If the Company consolidates or mergers with or into, or transfers or leases
all or substantially all its assets to, any person, upon consummation of such
transaction the Warrants shall automatically become exercisable for the kind
and amount of securities, interests, cash or other assets which the holder of a
Warrant would have owned immediately after the consolidation, merger, transfer
or lease if the holder had exercised the Warrant immediately before the
effective date of the transaction and assuming such holder, as a holder of
Common Interests of the Company, failed to exercise its rights of election, if
any, as to the kind or amount of securities, interests, cash and other assets
receivable upon such consolidation, merger, transfer or lease (provided that if
the kind or amount of securities, interests, cash and other assets receivable
upon such consolidation, merger, sale, transfer or lease is not the same for
each Common Interest of the Company held immediately prior to such
consolidation, merger, transfer or lease by other than a constituent person or
an affiliate thereof and in respect of which such rights of election shall have
not been exercised ("non-electing interest"), then for the purpose of this
Section 8 the kind and amount of securities, cash and other assets receivable
upon such consolidation, merger, sale or transfer by each non-electing
interest shall be deemed to be the kind and amount so receivable per interest
by a plurality of the non-electing interests). Concurrently with the
consummation of such transaction, the entity formed by or surviving any such
consolidation or merger if other than the Company, or the person to which such
sale or conveyance shall have been made, shall enter into a Supplemental
Agreement (as defined in Section 13 so providing and further providing for
adjustments in the future which shall be as nearly equivalent as may be
practical to the adjustments provided for in this Section 8.
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If the issuer of securities deliverable upon exercise of Warrants under the
Supplemental Agreement is an affiliate of the formed, surviving, transferee or
lessee corporation, that issuer shall join in the Supplemental Agreement.
Notwithstanding the first paragraph of this subsection (j), in the case of
any merger, reverse stock split, or other transaction in which the publicly
held Common Interests, if any, shall be converted into the right to receive a
consideration consisting solely of cash, (A) the Warrants shall terminate and
(B) each holder of a Warrant, without having to take any other action than the
surrendering of such Warrant to the Company, shall receive an amount equal to
the amount (if any) by which the price per interest payable to, or which would
be received by, any public holder of Common Interests in connection with such
transaction exceeds the Exercise Price effective at that time.
If this subsection (j) applies, subsections (a), (b) and (c) of this Section
8 shall not apply.
(k) When Issuance or Payment May Be Deferred.
In any case in which this Section 8 shall require that an adjustment in the
Exercise Rate be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event (i) issuing to
the holder of any Warrant exercised after such record date the Warrant Shares
and other interests in the Company, if any, issuable upon such exercise over
and above the Warrant Shares and other interests in the Company, if any,
issuable upon such exercise on the basis of the Exercise Rate and (ii) paying
to such holder any amount in cash in lieu of a fractional interest pursuant to
Section 10 hereof; provided, however, that the Company shall deliver to such
holder a due ▇▇▇▇ or other appropriate instrument evidencing such holder's
right to receive such additional Warrant Shares, other capital stock and cash
upon the occurrence of the event requiring such adjustment.
(l) Form of Warrants.
Irrespective of any adjustments in the Exercise Rate or kind of interests or
other assets purchasable upon the exercise of the Warrants, Warrant
Certificates theretofore or thereafter issued may continue to express the same
price and number and kind of interests or other assets as are stated in the
Warrant Certificates as initially issued.
SECTION 9. NO DILUTION OR IMPAIRMENT. If any event shall occur as to which
the provisions of Section 8 are not strictly applicable but the failure to make
any adjustment would adversely affect the purchase rights represented by the
Warrants in a way that is contrary to the manifest and essential intent and
principles of Section 8, then, in each such case, the Company shall appoint an
investment banking firm of recognized national standing, or any other financial
expert that does not (or whose directors, officers, employees, affiliates or
stockholders do not) have a direct or material indirect financial interest in
the Company, who has not been, and, at the time it is called upon to give
independent financial advice to the Company, is not (and none of its directors,
officers, employees, affiliates or stockholders are) a promoter, director or
officer of the Company, which shall give their opinion upon the adjustment, if
any, on a basis consistent with the manifest and essential intent
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and principles established in Section 8, necessary to preserve, without
dilution, the purchase rights, represented by the Warrant. Upon receipt of
such opinion, the Company will promptly mail a copy thereof to the Warrant
Agent and the Warrant holders and shall make the adjustment described therein.
SECTION 10. FRACTIONAL INTERESTS. The Company shall not be required to
issue fractional Common Interests on the exercise of Warrants, although it may
do so in its sole discretion. If more than one Warrant shall be presented for
exercise in full at the same time by the same holder, the number of full
Warrant Shares which shall be issuable upon the exercise thereof shall be
computed on the basis of the aggregate number of Common Interests purchasable
on exercise of the Warrants so presented. If any fraction of a Common Interest
would, except for the provisions of this Section 10, be issuable upon the
exercise of any such Warrants (or specified portion thereof), the Company shall
pay to the Warrant holder an amount in cash equal to the Current Market Value
per Common Interest, as determined on the day immediately preceding the date
the Warrant is presented for exercise, multiplied by such fraction, computed to
the nearest whole cent.
SECTION 11. NOTICES TO WARRANT HOLDERS; RIGHTS OF WARRANT HOLDERS. Upon
any adjustment of the Exercise Rate pursuant to Section 8, the Company shall
promptly thereafter cause to be given to each of the registered holders of the
Warrant certificates at his or her address appearing on the Warrant register
written notice of such adjustments by first-class mail, postage prepaid. Where
appropriate, such notice may be given in advance and included as a part of the
notice required to be mailed under the other provisions of this Section 11.
In case:
(a) the Company shall authorize the issuance to all holders of Common
Interests of rights, options or warrants to subscribe for or purchase Common
Interests or of any other subscription rights or warrants and other than
issuances in exchange for equivalent consideration; or
(b) the Company shall authorize the distribution to all holders of
Common Interests of evidences of its indebtedness or assets (other than cash
dividends or cash distributions payable out of consolidated earnings or
earned surplus or dividends payable in Common Interests or distributions
referred to in subsection (a) or Section 8 hereof) and other than
distributions in exchange for equivalent consideration; or
(c) of any consolidation or merger to which the Company is a party and
for which approval of any holders of shares of or interests in the Company
is required, or of the conveyance or transfer of the properties and assets
of the Company substantially as an entirety, or of any reclassification or
change of Common Interests issuable upon exercise of the Warrants (other
than as a result of a subdivision or combination), or a tender offer or
exchange offer by the Company for Common Interests; or
(d) of the voluntary or involuntary dissolution, liquidation or winding
up of the Company; or
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(e) the Company proposes to take any action (other than actions of the
character described in Section 8(a)) which would require an adjustment of
the Exercise Rate pursuant to Section 8;
then the Company shall cause to be given to each of the registered holders of
the Warrant Certificates at the address appearing on the Warrant register, at
least 20 days (or 10 days in any case specified in clauses (a) or (b) above)
prior to the applicable record date hereinafter specified, or promptly in the
case of events for which there is no record date, by first-class mail, postage
prepaid, a written notice stating (i) the date as of which the holders of
record of Common Interests to be entitled to receive any such rights, options,
warrants or distributions are to be determined, or (ii) the initial or record
expiration date set forth in any tender offer or exchange offer for Common
Interests, or (iii) the date on which any such consolidation, merger,
conveyance, transfer, reclassification, dissolution, liquidation, or winding up
is expected to become effective or consummated, and the date as of which it is
expected that holders of record of Common Interests shall be entitled to
exchange such shares for securities or other property, if any, deliverable upon
such consolidation, merger, conveyance, transfer, reclassification,
dissolution, liquidation or winding up. The failure to give the notice required
by this Section 11 or any defect therein shall not affect the legality or
validity of any issuance, right, option, warrant, distribution, tender offer,
exchange offer, consolidation, merger, conveyance, transfer, reclassification,
dissolution, liquidation or winding up, or the vote upon any action.
Nothing contained in this Warrant Certificate shall be construed as
conferring upon the holder hereof the right to vote or to consent or to receive
notice of meetings of members or the election of directors of the Company or
any other matter, or any other rights of members of the Company, including any
right to receive dividends. In addition, the holders of Warrant Certificates
shall have no preemptive rights and shall not be entitled to share in the
assets of the Company in the event of the liquidation, dissolution or winding
up of the Company's affairs in respect of Common Interests issuable upon
exercise hereof.
SECTION 12. NOTICES TO THE COMPANY. Any notice or demand authorized by
this Warrant Certificate to be given or made by the holder of any Warrant
Certificate to the Company shall be sufficiently given or made when deposited
in the mail, first class or registered, postage prepaid, addressed, as follows:
Iridium, Inc.
▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇ - ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇
;or to such other addressee or at such other address or location as may be
notified by the Company to the holders of Warrant Certificates from time to
time.
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SECTION 13. SUPPLEMENTS AND AMENDMENTS. The Company by entering into a
supplemental agreement (a "Supplemental Agreement") signed by the Company may
amend the terms of this Warrant Certificate; provided that any amendment which
would adversely affect the interests of the holders of Warrants must be
approved by holders of a majority of the then outstanding Warrants. A copy of
any Supplemental Agreement shall be mailed by the Company to each Warrant
holder within 30 days of its effective date. The consent of each Warrant holder
affected shall be required for any amendment pursuant to which the Exercise
Rate would be decreased (other than in connection with a waiver of any
provisions of Section 8 or 10 hereof).
SECTION 14. GOVERNING LAW. This Warrant Certificate and the Warrants shall
be governed and construed in accordance with the laws of the State of New York.
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IN WITNESS WHEREOF, Iridium LLC has caused this Warrant Certificate to be
signed by a duly authorized officer of the Company and has caused its seal to
be affixed hereunto or imprinted hereon.
Dated: IRIDIUM LLC
By:
-------------------------
Name:
Title:
Attested by: (seal)
-------------------------
Name: F. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: General Counsel
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Form of Election to Purchase
(To Be Executed Upon Exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right, represented
by this Warrant Certificate, to receive __________ Class 1 Membership Interests
("Common Shares") and hereby tenders payment for such Common Interests to the
order of Iridium LLC in the amount of $_____ in accordance with the terms
hereof.
The undersigned requests that a certificate for such Common Interests be
registered in the name of __________________, whose address is
_____________________________________ and that such shares be delivered to
_____________________________________________ whose address is
__________________________________________.
If said number of Common Interests is less than all of the Common Interests
purchasable hereunder, the undersigned requests that a new Warrant Certificate
representing the remaining balance of such Common Interests be registered in
the name of _________________________, whose address is
____________________________, and that such Warrant Certificate be delivered to
__________________________, whose address is _______________________
_______________.
_________________________(1) (Signature)
Date: ________________
Signature Guaranteed by:
_______________________
Name:
Title: (1)
(1) The signature must correspond with the name as written upon the face of
the within Warrant Certificate in every particular, without alteration or
enlargement or any change whatsoever, and, at the option of the Company,
must be guaranteed by an "eligible guarantor institution" which meets the
requirements of the Company (which requirements may include membership or
participation in STAMP or such other "signature guaranty program" as may
be determined by the Company in addition to, or in substitution for,
STAMP).
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EXHIBIT 2-B
Form of Warrant
FORM OF WARRANT
NEITHER THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE NOR THE CLASS 1
MEMBERSHIP INTERESTS OF IRIDIUM LLC (THE "COMPANY") FOR WHICH THE WARRANTS
REPRESENTED BY THIS WARRANT CERTIFICATE ARE EXERCISABLE (THE "WARRANT SHARES")
MAY BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND ANY APPLICABLE STATE
SECURITIES LAWS OR AN EXEMPTION FROM THOSE REGISTRATION REQUIREMENTS.
ACCORDINGLY, THE HOLDER OF THIS WARRANT CERTIFICATE SHALL NOT BE ENTITLED TO
TRANSFER OR EXERCISE SUCH HOLDER'S WARRANTS AT ANY TIME UNLESS, AT THE TIME OF
SUCH TRANSFER OR EXERCISE, (I) A REGISTRATION STATEMENT UNDER THE ACT RELATING
TO THE WARRANTS OR THE WARRANT SHARES, AS THE CASE MAY BE, HAS BEEN FILED WITH,
AND DECLARED EFFECTIVE BY, THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"),
AND NO STOP ORDER SUSPENDING THE EFFECTIVENESS OF SUCH REGISTRATION STATEMENT
HAS BEEN ISSUED BY THE SEC OR (II) THE TRANSFER OF THE WARRANTS REPRESENTED BY
THIS CERTIFICATE OR THE ISSUANCE OF THE WARRANT SHARES IS PERMITTED PURSUANT TO
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT.
TRANSFER OF THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE AND THE
WARRANT SHARES IS ALSO RESTRICTED BY THE TERMS OF A LIMITED LIABILITY COMPANY
AGREEMENT, DATED AS OF JULY 1, 1996 BY AND AMONG THE PARTIES NAMED THEREIN (THE
"LLC AGREEMENT"). A COPY OF THE LLC AGREEMENT IS ON FILE AND AVAILABLE FOR
INSPECTION BY THE HOLDER OF THIS WARRANT CERTIFICATE AT THE COMPANY'S PRINCIPAL
EXECUTIVE OFFICES.
No. __________ Warrants
WARRANT TO PURCHASE CLASS 1 MEMBERSHIP INTERESTS
of
IRIDIUM LLC
This Warrant Certificate certifies that __________, or registered permitted
assigns, is the registered holder of _____ warrants expiring March 1, 2006 to
purchase an aggregate of ____________ Class 1 Membership Interests in the
Company (the "Common Shares"), of Iridium LLC, a Delaware limited liability
company (the "Company"). The Warrants evidenced hereby are part of a duly
authorized issue of Warrants of the Company (the "Warrants") all evidenced by
Warrant Certificates substantially similar to this Warrant Certificate. Each
Warrant entitles the holder upon exercise to purchase from the Company at any
time on or after March 1, 2001 and prior to 5:00 p.m. New York City time on
March 1, 2006, .13877 Common Interests (each a "Warrant Share") upon surrender
of this Warrant Certificate to the Warrant Agent, subject to the conditions set
forth herein. The number of Warrant Shares purchasable upon exercise thereof
are subject to adjustment upon the occurrence of certain events set forth
herein. Exercise of a Warrant by a person other than the registered holder
named above is subject to the approval of such person for admission as a Member
of the Company by the Members of the Company who may grant or withhold such
consent in their absolute discretion.
SECTION 1. EXERCISE OF THE WARRANTS. Warrants may be exercised at any time on
or after March 1, 2001 and prior to 5:00 p.m. New York City time on March 1,
2006 (the "Expiration Date"). The holder of Warrants evidenced by this Warrant
Certificate may exercise such Warrants by surrendering this Warrant
Certificate, with the form of election to purchase set forth hereon properly
completed and executed, together with payment to the Company of the Exercise
Price fo each Warrant
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then exercised. Exercise of this Warrant by a person other than the registered
holder named in the preamble of this Warrant is subject to the approval of such
person for admission as a Member of the Company by the Members of the Company
who may grant or withhold such consent in their absolute discretion. In the
event that upon any exercise of Warrants evidenced hereby the number of
Warrants exercised shall be less than the total number of Warrants evidenced
hereby, the Company shall issue to the holder hereof or his permitted assignee
a new Warrant Certificate evidencing the number of Warrants not exercised. No
cash dividend shall be paid to a holder of Warrants Shares issuable upon the
exercise of Warrants unless such holder was, as of the record date for the
declaration of such dividend, the record holder of such Warrant Shares.
No Warrant may be exercised after the Expiration Date, and to the extent not
exercised by such time, such Warrants shall become void. The Company shall give
notice of expiration not less than 90 nor more than 120 days prior to the
Expiration Date to the registered holders of the then outstanding Warrants;
provided, however, that if the Company fails to give such notice, the Warrants
shall still terminate and become void on the Expiration Date.
SECTION 3. REGISTRATION OF TRANSFER AND EXCHANGE. The Company and its
agents may deem and treat the registered holder(s) of this Warrant Certificate
as the absolute owner(s) hereof (notwithstanding any notation of ownership or
other writing hereon made by anyone), for all purposes, and neither the Company
nor its agents shall be affected by any notice to the contrary.
References herein to "Warrant holder(s)" or "holders of the Warrant
Certificates" means in each case registered holders of Warrant Certificates.
Subject to the restrictions on transfer referred to in the Legend on page 1
of this Warrant Certificate, Warrant Certificates, when surrendered at the
office maintained by the Company for such purpose by the registered holder
thereof in person or by legal representative or attorney duly authorized in
writing, may be presented for exchange or registration of transfer without
payment of any service charge (except for stamp or any other governmental tax
or charge that may be imposed in connection with any such transfer or
exchange), for another Warrant Certificate or Warrant Certificates representing
a like tenor executed by the Company in the aggregate a like number of
Warrants.
Every Warrant Certificate surrendered for registration of transfer or
exchange shall (if so required by the Company) be duly endorsed, or be
accompanied by a written instrument of transfer in any form satisfactory to the
Company, duly executed by the Warrant holder or his attorney duly authorized in
writing (with, in the case of transfer and if requested by the Company, such
signature guaranteed by an eligible guarantor institution).
All Warrant Certificates issued upon any registration of transfer or
exchange of Warrant certificates shall be the valid obligations of the Company,
evidencing the same obligations, and entitled to the same benefits under this
Certificate, as the Warrant Certificates surrendered for such registration of
transfer or exchange, except for the limitation on right of exercise set forth
in the third sentence of Section 1.
SECTION 4. RETIREMENT OF WARRANTS. The Company may purchase Warrants. Any
Warrants purchased by the Company may be retired by cancellation of such
Warrants and appropriate notation thereof in the Company's register.
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SECTION 5. PAYMENT OF TAXES. The Company will pay all taxes and other
governmental charges attributable to the initial issuance of Common Interests
upon the exercise of Warrants; provided, however, that the Company shall not be
required to pay any such taxes or charges which may be payable in respect of
any transfer involved in the issue of any Warrant Certificates or any
certificates for Common Interests in a name other than that of the registered
holder of a Warrant Certificate surrendered upon the exercise of a Warrant, and
the Company shall not be required to issue or deliver such Warrant Certificates
unless or until the person or persons requesting the issuance thereof shall
have paid to the Company the amount of such taxes or charges or shall have
established to the satisfaction of the Company that such taxes or charges have
been paid.
SECTION 6. MUTILATED OR MISSING WARRANT CERTIFICATES. In case this Warrant
Certificate shall be mutilated, lost, stolen or destroyed, the Company may in
its discretion issue, in exchange and substitution for and upon cancellation of
the mutilated Warrant Certificate, or in lieu of and substitution for the
Warrant Certificate lost, stolen or destroyed, a new Warrant Certificate of
like tenor and representing an equivalent number of Warrants, but only upon
receipt of evidence satisfactory to the Company of such loss, theft or
destruction for such Warrant Certificate and indemnity and security therefor,
if requested, also satisfactory to the Company. Applicants for such substitute
Warrant Certificates shall also comply with such other reasonable regulations
and pay such other reasonable charges as the Company may prescribe.
SECTION 7. RESERVATIONS OF WARRANT SHARES. The Company (i) shall at all
times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Class 1 Membership Interests, for the
purpose of enabling it to satisfy any obligation to issue Warrant Shares upon
exercise of Warrants, the maximum number of Common Interests which would then
be deliverable upon the exercise of all outstanding Warrants if all such
outstanding Warrants were then exercisable and (ii) shall not take any action
which results in any adjustment of the Exercise Rate if the total number of
Warrant Shares would exceed the total number of Common Interests then
authorized by the Company's certificate of incorporation and available for the
purpose of issue upon such exercise.
The transfer agent for the Common Interests (which may be the Company if it
is acting as transfer agent) (the "Transfer Agent") and every subsequent
transfer agent for any interests of the Company issuable upon the exercise of
any of the rights of purchase aforesaid will be irrevocably authorized and
directed at all times to reserve such number of authorized interests as shall
be required for such purpose.
The Company covenants that all Warrant Shares which may be issued upon
exercise of Warrants will, upon payment of the Exercise Price and issuance, be
duly and validly issued, free of preemptive rights and free from all taxes,
liens, charges and security interests with respect to the issue thereof.
SECTION 8. ADJUSTMENT OF WARRANT SHARES ISSUABLE. The Warrants
represented by this Warrant Certificate will initially be exercisable by the
holder thereof to purchase .13877 Common Interests at $.01 per interest. The
number of Warrant Shares that may be purchased upon the exercise of each
Warrant (the "Exercise Rate") will be subject to adjustment from time to time
upon the occurrence of the events enumerated in this Section 8. For purposes of
this Section 8, "Common Interests" means the Common Interests and any other
interests in the Company for which the Warrants
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may be exercised and where, as a result of this definition, the term refers to
more than one class of interests, the adjustment provisions of this Section 8
shall be equitably adjusted to achieve as nearly as practicable the intended
result as evidenced by the text of such adjustment provisions.
(a) Adjustments for Change in Common Interests.
If at any time after March 1, 1996 the Company:
(1) pays a dividend or makes a distribution on its Common Interests in
Common Interests;
(2) subdivides its outstanding Common Interests into a greater number of
Common Interests;
(3) combines its outstanding Common Interests into a smaller number of
Common Interests;
(4) pays a dividend or makes a distribution on its Common Interests in
interests other than Common Interests; or
(5) issues by reclassification of its Common Interests any of its other
interests;
then the Exercise Rate in effect immediately prior to such action shall be
proportionately adjusted so that the holder of any Warrant thereafter exercised
may receive the aggregate number and kind of shares of, or interests in, the
Company which such holder would have owned immediately following such action if
such Warrant had been exercised immediately prior to such action.
The adjustment shall become effective immediately after the record date in
the case of a dividend or distribution and immediately after the effective date
in the case of a subdivision, combination or reclassification.
If after an adjustment and upon exercise of a Warrant the holder may receive
two or more classes of interests in the Company, the Company shall determine
the allocation of the adjusted Exercise Price between the classes.
Notwithstanding any other provision hereof, the Exercise Price with respect to
the issuance of any Warrant Share shall not be less than $.01 per share. After
such allocation, the exercise privilege and the Exercise Rate with respect to
each class of interests shall thereafter be subject to adjustment on terms
comparable to those applicable to Common Interests in this Section 8.
Such adjustment shall be made successively whenever any event listed above
occurs.
(b) Adjustment for Rights Issue.
If the Company distributes any rights, options or warrants to all holders of
its Common Interests entitling them for a period expiring within 60 days after
the record date mentioned below to purchase Common Interests or securities
convertible into, or exchangeable or exercisable for, Common Interests at a
price per interest less than the Current Market Value (as defined in subsection
(d)) per interest as of the Time of Determination (as defined in subsection
(d)), the Exercise Rate shall be adjusted in accordance with the formula:
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E' = E x O+N
-------
N x P
O --------
+ M
where:
E' = the adjusted Exercise Rate.
E = the current Exercise Rate.
O = the number of Common Interests outstanding on the record date.
N = the number of additional Common Interests offered.
P = the offering price per additional Common Interests.
M = the Current Market Value per interest (as defined in Subsection (d)).
The adjustment shall become effective immediately after the record date for
the determination of stockholders entitled to receive the rights, warrants or
options to which this subsection (b) applies. To the extent that Common
Interests are not delivered after the expiration of such rights or warrants,
the Exercise Rate shall be readjusted to the Exercise Rate which would
otherwise be in effect had the adjustment made upon the issuance of such rights
or warrants been made on the basis of delivery of only the number of Common
Interests actually delivered. In the event that such rights or warrants are not
so issued, the Exercise Rate shall again be adjusted to be the Exercise Rate
which would then be in effect if such date fixed for determination of holders
entitled to receive such rights or warrants had not been so fixed.
No adjustment shall be made under this subsection (b) if the application of
the formula stated above in this subsection (b) would result in a value of E'
that is lower than the value of E.
(c) Adjustment for Other Distributions.
If the Company distributes to all holders of its Common Interests any of its
assets, debt securities or any rights, options or warrants to purchase debt
securities, assets or other interests in or securities of the Company
(including securities or cash, but excluding (1) distributions of Class 1
Membership Interests or interests referred to in subsection (a) and
distributions of rights, warrants or options referred to in subsection (b) and
(2) cash dividends or other cash distributions that are paid out of current or
accumulated earnings), the Exercise Rate shall be adjusted in accordance with
the formula:
E' = E x M
-----
M-F
where:
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E' = the adjusted Exercise Rate.
E = the current Exercise Rate.
M = the Current Market Value per Common Interest on the record date for
the determination of holders entitled to receive the distribution.
F = the fair market value (as determined by the Board of Directors whose
determination shall be conclusive) of the assets, securities,
interests, rights or warrants applicable to one Common Interest as of
the Time of Determination for the determination of holders entitled to
receive the distribution.
The adjustment shall be made successively whenever any such distribution is
made and shall become effective immediately after the record date for the
determination of holders entitled to receive the distribution.
The Company shall give the Warrant holders at least 10 days notice of a
record date for any dividend payment or other distribution on the Common
Interests.
(d) Current Market Value; Time of Determination.
"Current Market Value" per Common Interest or any other interest or security
at any date means, on any date of determination the average of the Closing
Prices of the Common Interests (or such interest or security) for the 20
consecutive Business Days selected by the Board of Directors commencing no more
than 30 Business Days before and ending no later than the day before the day in
question; provided that, in the case of clause (c), if the period between the
date of the public announcement of the dividend or distribution and the date
for the determination of holders of Common Interests (or such interest or
security) entitled to receive such dividend or distribution (or, if earlier,
the date on which the Common Interests (or such interest or security) go
"ex-dividend" in respect of such dividend or distribution) shall be less than
20 Business Days, the period shall be such lesser number of Business Days but,
in any event, not less than five Business Days.
"Closing Price" means, for each Business Day, the last reported sale price
regular way on the principal national securities exchange on which the Common
Interests (or such other interest or security) are listed or admitted for
trading, or, if the Common Interests (or such other interest or security) are
not so listed or admitted for trading on a national securities exchange, on the
NASDAQ National Market System or, if the Common Interests (or such other
interest or security) are not quoted on the NASDAQ National Market System, the
average of the closing bid and asked prices in the over-the-counter market as
furnished by any New York Stock Exchange member firm selected from time to time
by the Company for that purpose or, if the Common Interests (or such other
interest or security) are not traded in the over-the-counter market, the Fair
Market Value per Common Interest (or such other interest or security) as
determined by the Board of Directors whose determination shall be conclusive.
"Time of Determination") means the time and date of the earlier of (i) the
determination of holders entitled to receive rights, warrants, or options or a
distribution, in each case, to which subsection (b) or
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(c) applies and (ii) the time ("Ex-Dividend Time") immediately prior to the
commencement of "ex-dividend" trading for such rights, warrants or distribution
on such national or regional exchange or market on which the Common Interests
are then listed or quoted.
(e) When De Minimis Adjustment May Be Deferred.
No adjustment in the Exercise Rate need be made unless the adjustment would
require an increase or decrease of at least 1% in the Exercise Rate; provided,
however, that any adjustments that are not made shall be carried forward and
taken into account in any subsequent adjustment.
All calculations under this Section 8 shall be made to the nearest cent or
to the nearest 1/100th of a interest, as the case may be.
(f) When No Adjustment Required.
To the extent the Warrants become convertible into cash pursuant to
subsection (j), no adjustment need be made thereafter as to the cash. Interest
will not accrue on the cash.
(g) Notice of Adjustment.
Whenever the Exercise Rate is adjusted, the Company shall provide the
notices required by Section 11 hereof.
(h) Voluntary Increase or Reduction.
The Company from time to time may increase the Exercise Rate by any amount
for any period of time if the period is at least 20 days and if the increase or
decrease, as the case may be, is irrevocable during the period.
Whenever the Exercise Rate is increased the Company shall mail to registered
Warrant holders a notice of the increase or decrease, as the case may be. The
Company shall mail the notice at least 15 days before the date the increased
Exercise Rate, takes effect. The Notice shall state the increased Exercise
Rate, and the period it will be in effect.
An increase in the Exercise Rate, does not change or adjust the Exercise
Rate, as the case may be, otherwise in effect, or as used for calculations, for
purposes of subsections (a), (b), and (c) of this Section 8.
(i) Notice of Certain Transactions.
If: (1) the Company takes any action that would require an adjustment in the
Exercise Rate pursuant to subsections (a), (b) or (c) of this Section 8 or (2)
the Company takes any action that would require a Supplemental Agreement
pursuant to subsection (j) of this Section 11, the Company shall mail to
registered Warrant holders a notice stating the proposed record date for a
dividend or distribution or the expected effective date of a subdivision,
combination, reclassification, consolidation, merger,
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transfer, lease, liquidation or dissolution. The Company shall mail the notice
at least 20 days before such date. Failure to mail the notice or any defect in
it shall not affect the validity of the transaction.
(j) Consolidation, Merger or Reorganization of the Company.
If the Company consolidates or mergers with or into, or transfers or leases
all or substantially all its assets to, any person, upon consummation of such
transaction the Warrants shall automatically become exercisable for the kind
and amount of securities, interests, cash or other assets which the holder of a
Warrant would have owned immediately after the consolidation, merger, transfer
or lease if the holder had exercised the Warrant immediately before the
effective date of the transaction and assuming such holder, as a holder of
Common Interests of the Company, failed to exercise its rights of election, if
any, as to the kind or amount of securities, interests, cash and other assets
receivable upon such consolidation, merger, transfer or lease (provided that if
the kind or amount of securities, interests, cash and other assets receivable
upon such consolidation, merger, sale, transfer or lease is not the same for
each Common Interest of the Company held immediately prior to such
consolidation, merger, transfer or lease by other than a constituent person or
an affiliate thereof and in respect of which such rights of election shall have
not been exercised ("non-electing interest"), then for the purpose of this
Section 8 the kind and amount of securities, cash and other assets receivable
upon such consolidation, merger, sale or transfer by each non-electing interest
shall be deemed to be the kind and amount so receivable per interest by a
plurality of the non-electing interests). Concurrently with the consummation of
such transaction, the entity formed by or surviving any such consolidation or
merger if other than the Company, or the person to which such sale or
conveyance shall have been made, shall enter into a Supplemental Agreement (as
defined in Section 13 so providing and further providing for adjustments in the
future which shall be as nearly equivalent as may be practical to the
adjustments provided for in this Section 8.
If the issuer of securities deliverable upon exercise of Warrants under the
Supplemental Agreement is an affiliate of the formed, surviving, transferee or
lessee corporation, that issuer shall join in the Supplemental Agreement.
Notwithstanding the first paragraph of this subsection (j), in the case of
any merger, reverse stock split, or other transaction in which the publicly
held Common Interests, if any, shall be converted into the right to receive a
consideration consisting solely of cash, (A) the Warrants shall terminate and
(B) each holder of a Warrant, without having to take any other action than the
surrendering of such Warrant to the Company, shall receive an amount equal to
the amount (if any) by which the price per interest payable to, or which would
be received by, any public holder of Common Interests in connection with such
transaction exceeds the Exercise Price effective at that time.
If this subsection (j) applies, subsections (a), (b) and (c) of this Section
8 shall not apply.
(k) When Issuance or Payment May Be Deferred.
In any case in which this Section 8 shall require that an adjustment in the
Exercise Rate be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event (i) issuing to
the holder of any Warrant exercised after such record date the Warrant Shares
and other interests in the Company, if any, issuable upon such exercise over
and above the
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Warrant Shares and other interests in the Company, if any, issuable upon such
exercise on the basis of the Exercise Rate and (ii) paying to such holder any
amount in cash in lieu of a fractional interest pursuant to Section 10 hereof;
provided, however, that the Company shall deliver to such holder a due ▇▇▇▇ or
other appropriate instrument evidencing such holder's right to receive such
additional Warrant Shares, other capital stock and cash upon the occurrence of
the event requiring such adjustment.
(l) Form of Warrants.
Irrespective of any adjustments in the Exercise Rate or kind of interests or
other assets purchasable upon the exercise of the Warrants, Warrant
Certificates theretofore or thereafter issued may continue to express the same
price and number and kind of interests or other assets as are stated in the
Warrant Certificates as initially issued.
SECTION 9. NO DILUTION OR IMPAIRMENT. If any event shall occur as to which
the provisions of Section 8 are not strictly applicable but the failure to make
any adjustment would adversely affect the purchase rights represented by the
Warrants in a way that is contrary to the manifest and essential intent and
principles of Section 8, then, in each such case, the Company shall appoint an
investment banking firm of recognized national standing, or any other financial
expert that does not (or whose directors, officers, employees, affiliates or
stockholders do not) have a direct or material indirect financial interest in
the Company, who has not been, and, at the time it is called upon to give
independent financial advice to the Company, is not (and none of its managers,
officers, employees, affiliates or stockholders are) a promoter, manager or
officer of the Company, which shall give their opinion upon the adjustment, if
any, on a basis consistent with the manifest and essential intent and
principles established in Section 8, necessary to preserve, without dilution,
the purchase rights, represented by the Warrant. Upon receipt of such opinion,
the Company will promptly mail a copy thereof to the Warrant Agent and the
Warrant holders and shall make the adjustment described therein.
SECTION 10. FRACTIONAL INTERESTS. The Company shall not be required to
issue fractional Common Interests on the exercise of Warrants, although it may
do so in its sole discretion. If more than one Warrant shall be presented for
exercise in full at the same time by the same holder, the number of full
Warrant Shares which shall be issuable upon the exercise thereof shall be
computed on the basis of the aggregate number of Common Interests purchasable
on exercise of the Warrants so presented. If any fraction of a Common Interest
would, except for the provisions of this Section 10, be issuable upon the
exercise of any such Warrants (or specified portion thereof), the Company shall
pay to the Warrant holder an amount in cash equal to the Current Market Value
per Common Interest, as determined on the day immediately preceding the date
the Warrant is presented for exercise, multiplied by such fraction, computed to
the nearest whole cent.
SECTION 11. NOTICES TO WARRANT HOLDERS; RIGHTS OF WARRANT HOLDERS. Upon
any adjustment of the Exercise Rate pursuant to Section 8, the Company shall
promptly thereafter cause to be given to each of the registered holders of the
Warrant certificates at his or her address appearing on the Warrant register
written notice of such adjustments by first-class mail, postage prepaid. Where
appropriate, such notice may be given in advance and included as a part of the
notice required to be mailed under the other provisions of this Section 11.
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In case:
(a) the Company shall authorize the issuance to all holders of Common
Interests of rights, options or warrants to subscribe for or purchase Common
Interests or of any other subscription rights or warrants and other than
issuances in exchange for equivalent consideration; or
(b) the Company shall authorize the distribution to all holders of
Common Interests of evidences of its indebtedness or assets (other than cash
dividends or cash distributions payable out of consolidated earnings or
earned surplus or dividends payable in Common Interests or distributions
referred to in subsection (a) or Section 8 hereof) and other than
distributions in exchange for equivalent consideration; or
(c) of any consolidation or merger to which the Company is a party and
for which approval of any holders of shares of or interests in the Company
is required, or of the conveyance or transfer of the properties and assets
of the Company substantially as an entirety, or of any reclassification or
change of Common Interests issuable upon exercise of the Warrants (other
than as a result of a subdivision or combination), or a tender offer or
exchange offer by the Company for Common Interests; or
(d) of the voluntary or involuntary dissolution, liquidation or winding
up of the Company; or
(e) the Company proposes to take any action (other than actions of the
character described in Section 8(a)) which would require an adjustment of
the Exercise Rate pursuant to Section 8;
then the Company shall cause to be given to each of the registered holders of
the Warrant Certificates at the address appearing on the Warrant register, at
least 20 days (or 10 days in any case specified in clauses (a) or (b) above)
prior to the applicable record date hereinafter specified, or promptly in the
case of events for which there is no record date, by first-class mail, postage
prepaid, a written notice stating (i) the date as of which the holders of
record of Common Interests to be entitled to receive any such rights, options,
warrants or distributions are to be determined, or (ii) the initial or record
expiration date set forth in any tender offer or exchange offer for Common
Interests, or (iii) the date on which any such consolidation, merger,
conveyance, transfer, reclassification, dissolution, liquidation, or winding up
is expected to become effective or consummated, and the date as of which it is
expected that holders of record of Common Interests shall be entitled to
exchange such interests for securities or other property, if any, deliverable
upon such consolidation, merger, conveyance, transfer, reclassification,
dissolution, liquidation or winding up. The failure to give the notice required
by this Section 11 or any defect therein shall not affect the legality or
validity of any issuance, right, option, warrant, distribution, tender offer,
exchange offer, consolidation, merger, conveyance, transfer, reclassification,
dissolution, liquidation or winding up, or the vote upon any action.
Nothing contained in this Warrant Certificate shall be construed as
conferring upon the holder hereof the right to vote or to consent or to receive
notice of meetings of Members or the election of directors of the Company or
any other matter, or any other rights of Members of the Company, including any
right to receive dividends. In addition, the holders of Warrant Certificates
shall have no preemptive rights and shall not be entitled to share in the
assets of the Company in the event of the liquidation,
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186
dissolution or winding up of the Company's affairs in respect of Common
Interests issuable upon exercise hereof.
SECTION 12. NOTICES TO THE COMPANY. Any notice or demand authorized by
this Warrant Certificate to be given or made by the holder of any Warrant
Certificate to the Company shall be sufficiently given or made when deposited
in the mail, first class or registered, postage prepaid, addressed, as follows:
Iridium, Inc.
▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇ - ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: F. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇
;or to such other addressee or at such other address or location as may be
notified by the Company to the holders of Warrant Certificates from time to
time.
SECTION 13. SUPPLEMENTS AND AMENDMENTS. The Company by entering into a
supplemental agreement (a "Supplemental Agreement") signed by the Company may
amend the terms of this Warrant Certificate; provided that any amendment which
would adversely affect the interests of the holders of Warrants must be
approved by holders of a majority of the then outstanding Warrants. A copy of
any Supplemental Agreement shall be mailed by the Company to each Warrant
holder within 30 days of its effective date. The consent of each Warrant holder
affected shall be required for any amendment pursuant to which the Exercise
Rate would be decreased (other than in connection with a waiver of any
provisions of Section 8 or 10 hereof).
SECTION 14. GOVERNING LAW. This Warrant Certificate and the Warrants shall
be governed and construed in accordance with the laws of the State of New York.
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IN WITNESS WHEREOF, Iridium LLC has caused this Warrant Certificate to be
signed by a duly authorized officer of the Company and has caused its seal to
be affixed hereunto or imprinted hereon.
Dated: IRIDIUM LLC
By:
---------------------------
Name:
Title:
Attested by: (seal)
--------------------------
Name: F. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: General Counsel
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Form of Election to Purchase
(To Be Executed Upon Exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right, represented
by this Warrant Certificate, to receive __________ Class 1 Membership Interests
("Common Shares") and hereby tenders payment for such Common Shares to the
order of Iridium LLC in the amount of $_____ in accordance with the terms
hereof.
The undersigned requests that a certificate for such Common Shares be
registered in the name of __________________, whose address is
_____________________________________ and that such Common Shares be delivered
to _____________________________________________ whose address is
__________________________________________.
If said number of Common Shares is less than all of the Common Shares
purchasable hereunder, the undersigned requests that a new Warrant Certificate
representing the remaining balance of such Common Shares be registered in the
name of _________________________, whose address is
____________________________, and that such Warrant Certificate be delivered to
__________________________, whose address is _______________________
_______________.
(1)
----------------------
(Signature)
Date:
-------------------------
Signature Guaranteed by:
---------------------------
Name:
Title: (1)
(1) The signature must correspond with the name as written upon the face of
the within Warrant Certificate in every particular, without alteration or
enlargement or any change whatsoever, and, at the option of the Company,
must be guaranteed by an "eligible guarantor institution" which meets the
requirements of the Company (which requirements may include membership or
participation in STAMP or such other "signature guaranty program" as may
be determined by the Company in addition to, or in substitution for,
STAMP).
2-B-13
189
EXHIBIT 3-A
Amendments to Motorola Warrant
MOTOROLA WARRANT
Date of Issuance: July 29, 1993 Certificate No. W-1
For value received, Iridium LLC, a Delaware limited liability company
(the "Company"), hereby grants to Motorola, Inc., a Delaware corporation
("Motorola") the right to purchase from the Company membership interests
denominated as Series M Class 2 Interests ("Series M Class 2 Interests")
representing 2.5% of the Class 1 Interests Deemed Outstanding at the Exercise
Time (as hereinafter defined) at a price per interest of $1,000 (as adjusted
from time to time in accordance herewith, the "Exercise Price"). Certain
capitalized terms used herein are defined in Section 5 hereof. The amount and
kind of interests and securities purchasable pursuant to the rights granted
hereunder and the purchase price for such Interests and securities are subject
to adjustment pursuant to the provisions contained in this Warrant.
This Warrant is subject to the following provisions:
Section 1. Exercise of Warrant.
1A. Exercise Period. Motorola may exercise, in whole but
not in part, the purchase rights represented by this Warrant at any time and
from time to time during the period commencing on the third anniversary of the
Closing Date through and including July 29, 2006 (the "Exercise Period"). The
Company shall give Motorola written notice of the expiration of the Exercise
Period at least 60 days but not more than 90 days prior to the expiration of
the Exercise Period.
1B. Exercise Procedure.
(i) This Warrant shall be deemed to have been exercised
when the Company has received all of the following items (the "Exercise Time"):
(a) a completed Exercise Agreement, as described in
paragraph 1C below, executed by Motorola;
(b) this Warrant; and
(c) a check payable to the Company in an amount equal to
the product of the Exercise Price multiplied by the number of Series M
Class 2 Interests being purchased upon such exercise (the "Aggregate
Exercise Price").
(ii) Certificates for Series M Class 2 Interests purchased
upon exercise of this Warrant shall be delivered by the Company to Motorola
within five business days after the date of the Exercise Time.
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190
(iii) The Series M Class 2 Interests issuable upon the
exercise of this Warrant shall be deemed to have been issued to Motorola at the
Exercise Time, and Motorola shall be deemed for all purposes to have become the
record holder of such Series M Class 2 Interests at the Exercise Time.
(iv) The issuance of certificates for Series M Class 2
Interests upon exercise of this Warrant shall be made without charge to
Motorola for any issuance tax in respect thereof or other cost incurred by the
Company in connection with such exercise and the related issuance of Series M
Class 2 Interests. Each Series M Class 2 Interest issuable upon exercise of
this Warrant shall, upon payment of the Exercise Price therefor, be fully paid
and nonassessable and free from all liens and charges with respect to the
issuance thereof.
(v) The Company shall not close its books against the
transfer of this Warrant or of any Series M Class 2 Interest issued or issuable
upon the exercise of this Warrant in any manner which interferes with the
timely exercise of this Warrant.
(vi) The Company shall assist and cooperate with Motorola in
making any governmental filings or obtaining any governmental approvals prior
to or in connection with any exercise of this Warrant (including, without
limitation, making any filings required to be made by the Company).
(vii) Notwithstanding any other provision hereof, if an
exercise of this Warrant is to be made in connection with a public offering or
sale of the Company, the exercise of this Warrant may, at the election of
Motorola, be conditioned upon the consummation of the public offering or sale
of the Company in which case such exercise shall not be deemed to be effective
until the consummation of such transaction.
(viii) The Company shall at all times reserve and keep
available out of its authorized but unissued Series M Class 2 Interests solely
for the purpose of issuance upon the exercise of this Warrant, such number of
Series M Class 2 Interests issuable upon the exercise of this Warrant. All
Series M Class 2 Interests which are so issuable shall, when issued, be duly
and validly issued and free from all taxes, liens and charges. The Company
shall take all such actions as may be necessary to assure that all such Series
M Class 2 Interests may be so issued without violation of any applicable law or
governmental regulation or any requirements of any domestic securities exchange
upon which Series M Class 2 Interests may be listed (except for official notice
of issuance which shall be immediately delivered by the Company upon each such
issuance).
1C. Exercise Agreement. Upon any exercise of this
Warrant, the Exercise Agreement shall be substantially in the form set forth in
Exhibit 1 hereto. Such Exercise Agreement shall be dated the actual date of
execution thereof.
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191
Section 2. Adjustment of Exercise Price. In order to
prevent dilution of the rights granted under this Warrant, the Exercise Price
shall be subject to adjustment from time to time as provided in this Section 2.
2A. Subdivision or Combination of Series M Class 2
Interests. If the Company at any time subdivides (by any stock split, stock
dividend, recapitalization or otherwise) one or more classes of its outstanding
Series M Class 2 Interests into a greater number of interests, the Exercise
Price in effect immediately prior to such subdivision shall be proportionately
reduced. If the Company at any time combines (by reverse stock split or
otherwise) one or more classes of its outstanding Series M Class 2 Interests
into a smaller number of interests, the Exercise Price in effect immediately
prior to such combination shall be proportionately increased.
2B. Reorganization, Reclassification, Consolidation,
Merger or Sale. Any recapitalization, reorganization, reclassification,
consolidation, merger, sale of all or substantially all of the Company's assets
to another Person or other transaction which is effected in such a way that
holders of Series M Class 2 Interests are entitled to receive (either directly
or upon subsequent liquidation) stock, securities or assets with respect to or
in exchange for Series M Class 2 Interests are referred to herein as an
"Organic Change." Prior to the consummation of any Organic Change, the Company
shall make appropriate provision (in form and substance satisfactory to
Motorola) to insure that Motorola shall thereafter have the right to acquire
and receive in lieu of or addition to (as the case may be) the Series M Class 2
Interests immediately theretofore acquirable and receivable upon the exercise
of this Warrant, such interests, interests of stock, securities or assets as
may be issued or payable with respect to or in exchange for the number of
Series M Class 2 Interests immediately theretofore acquirable and receivable
upon exercise of this Warrant had such Organic Change not taken place. In any
such case, the Company shall make appropriate provision (in form and substance
satisfactory to Motorola) with respect to Motorola's rights and interests to
insure that the provisions of this Section 2 and Sections 3 and 4 hereof shall
thereafter be applicable to this Warrant. The Company shall not effect any
such consolidation, merger or sale, unless prior to the consummation thereof,
the successor entity (if other than the Company) resulting from such
consolidation or merger or the entity purchasing such assets assumes by written
instrument (in form and substance satisfactory to Motorola) the obligation to
deliver to each such holder such interests, interests of stock, securities or
assets as, in accordance with the foregoing provisions, such holder may be
entitled to acquire.
2C. Certain Events. If any event occurs of the type
contemplated by the provisions of this Section 2 but not expressly provided for
by such provisions, then the Company's board of directors shall make an
appropriate adjustment in the Exercise Price so as to protect the rights of
Motorola as the holder of this Warrant; provided that no such adjustment shall
increase the Exercise Price as otherwise determined pursuant to this Section 2.
2D. Notices.
(i) Immediately upon any adjustment of the Exercise
Price, the Company shall give written notice thereof to Motorola, setting forth
in reasonable detail and certifying the calculation of such adjustment.
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192
(ii) The Company shall give written notice to Motorola at
least 20 days prior to the date on which the Company closes its books or takes
a record (A) with respect to any dividend or distribution upon the Series M
Class 2 Interests or the Class 1 Interests, (B) with respect to any pro rata
subscription offer to holders of Series M Class 2 Interests or Class 1
Interests or (C) for determining rights to vote with respect to any Organic
Change, dissolution or liquidation.
(iii) The Company shall also give written notice to Motorola
at least 20 days prior to the date on which any Organic Change, dissolution or
liquidation shall take place.
Section 3. Liquidating Dividends. If the Company declares or
pays a dividend or distribution upon the Series M Class 2 Interests or Class 1
Interests payable otherwise than in cash out of earnings or earned surplus
(determined in accordance with generally accepted accounting principles,
consistently applied) except for a stock dividend or distribution payable in
Class 1 Interests (a "Liquidating Dividend"), then the Company shall pay to
Motorola at the time of payment thereof the Liquidating Dividend which would
have been paid to Motorola on the Series M Class 2 Interests or Class 1
Interests, as the case may be, had this Warrant been fully exercised
immediately prior to the date on which a record is taken for such Liquidating
Dividend, or, if no record is taken, the date as of which the record holders of
Series M Class 2 Interests or Class 1 Interests, as the case may be, entitled
to such dividends or distributions are to be determined.
Section 4. Purchase Rights. If at any time the Company
grants, issues or sells any options, convertible securities or rights to
purchase interests, stock, warrants, securities or other property pro rata to
the record holders of any class of Interests (the "Purchase Rights"), then
Motorola shall be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which Motorola could have
acquired if Motorola had held the number of Series M Class 2 Interests
acquirable upon complete exercise of this Warrant immediately before the date
on which a record is taken for the grant, issuance or sale of such Purchase
Rights, or, if no such record is taken, the date as of which the record holders
of Series M Class 2 Interests are to be determined for the grant, issue or sale
of such Purchase Rights.
Section 5. Definitions. The following terms have meanings
set forth below:
"Closing Date" means July 29, 1993.
"Class 1 Interests" means, collectively, the membership
interests in the Company denominated as Class 1 Interests, and any other class
of membership interests in the Company hereafter authorized which is not
limited to a fixed sum or percentage in respect to the rights of holders
thereof to participate in dividends or distributions or in the distribution of
assets upon any liquidation, dissolution or winding up of the
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193
Company. The Series A, Series B, Series C and Series M Class 2 Interests are
not Class 1 Interests.
"Class 1 Interests Deemed Outstanding" means, at any given
time, the number of Class 1 Interests actually outstanding at such time, plus
the number of Class 1 Interests for which the Company has received commitments
to purchase, regardless of whether there are any unfulfilled conditions
precedent to such commitments, plus the number of Class 1 Interests issuable
upon exercise of any rights or options to subscribe for or to purchase Class 1
Interests or any interests, stock or other securities convertible into or
exchangeable for Class 1 Interests regardless of whether such rights or options
are actually exercisable at such time, plus the number of Class 1 Interests
issuable upon conversion or exchange of any interests or securities
convertible into or exchangeable for Class 1 Interests regardless of whether
such interests or securities are actually convertible or exchangeable at such
time, but excluding any Class 1 Interests issuable upon exercise of this
Warrant.
"Person" means an individual, a partnership, a joint venture,
a corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.
"Series M Class 2 Interests Interests" means the membership
interests in the Company denominated as Series M Class 2 Interests.
Section 6. No Voting Rights; Limitations of Liability. This
Warrant shall not entitle Motorola to any voting rights or other rights as a
member in the Company. No provision hereof, in the absence of affirmative
action by Motorola to purchase Series M Class 2 Interests, and no enumeration
herein of the rights or privileges of Motorola shall give rise to any liability
of Motorola for the Exercise Price of Series M Class 2 Interests acquirable by
exercise hereof or as a member in the Company.
Section 7. Warrant Not Transferable. This Warrant is not
transferable, in whole or in part.
Section 8. Replacement. Upon receipt of evidence reasonably
satisfactory to the Company (an affidavit of Motorola shall be satisfactory) of
the ownership and the loss, theft, destruction or mutilation of any certificate
evidencing this Warrant, and in the case of any such loss, theft or
destruction, upon receipt of a Motorola indemnity agreement reasonably
satisfactory to the Company, or, in the case of any such mutilation upon
surrender of such certificate, the Company shall (at its expense) execute and
deliver in lieu of such certificate a new certificate of like kind representing
the same rights represented by such lost, stolen, destroyed or mutilated
certificate and dated the date of such lost, stolen, destroyed or mutilated
certificate.
Section 9. Notices. Except as otherwise expressly provided
herein, all notices referred to in this Warrant shall be in writing and shall
be delivered personally, sent by reputable express courier service (charges
prepaid) or sent by registered or certified mail, return receipt requested,
postage prepaid and shall be deemed to have been given when so delivered, sent
or deposited in the
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U.S. Mail (i) to the Company, at its principal executive offices and (ii) to
Motorola, at such holder's address as it appears in the records of the Company
(unless otherwise indicated by Motorola).
Section 10. Amendment and Waiver. Except as otherwise
provided herein, the provisions of the Warrants may be amended and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company has obtained the written
consent of Motorola.
Section 11. Descriptive Headings; Governing Law. The
descriptive headings of the several Sections and paragraphs of this Warrant are
inserted for convenience only and do not constitute a part of this Warrant.
The construction, validity and interpretation of this Warrant shall be governed
by the internal law, and not the conflicts law, of the State of Delaware.
* * * * *
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed and attested by its duly authorized officers under its seal and to be
dated the Date of Issuance hereof.
IRIDIUM LLC
By:
------------------------
Its:
------------------------
[SEAL]
Attest:
---------------------------
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195
EXHIBIT 1
EXERCISE AGREEMENT
To: Dated:
The undersigned, pursuant to the provisions set forth in the
attached Warrant (Certificate No. W-1), hereby agrees to subscribe for the
purchase of all of the Series M Class 2 Interests covered by such Warrant and
makes payment herewith in full therefor at the price per interest provided by
such Warrant.
MOTOROLA, INC.
By:
------------------------------
Its:
-----------------------------
EXHIBIT 1
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196
EXHIBIT 3-B
Form of Motorola Warrant
MOTOROLA WARRANT
Date of Issuance: July 29, 1993 Certificate No. W-1
For value received, Iridium LLC, a Delaware limited liability
company (the "Company"), hereby grants to Motorola, Inc., a Delaware
corporation ("Motorola") the right to purchase from the Company membership
interests denominated as Series M Class 2 Interests ("Series M Class 2
Interests") representing 2.5% of the Class 1 Interests Deemed Outstanding at
the Exercise Time (as hereinafter defined) at a price per interest of $1,000
(as adjusted from time to time in accordance herewith, the "Exercise Price").
Certain capitalized terms used herein are defined in Section 5 hereof. The
amount and kind of interests and securities purchasable pursuant to the rights
granted hereunder and the purchase price for such interests and securities are
subject to adjustment pursuant to the provisions contained in this Warrant.
This Warrant is subject to the following provisions:
Section 1. Exercise of Warrant.
1A. Exercise Period. Motorola may exercise, in whole but
not in part, the purchase rights represented by this Warrant at any time and
from time to time during the period commencing on the third anniversary of the
Closing Date through and including July 29, 2006 (the "Exercise Period"). The
Company shall give Motorola written notice of the expiration of the Exercise
Period at least 60 days but not more than 90 days prior to the expiration of
the Exercise Period.
1B. Exercise Procedure.
(i) This Warrant shall be deemed to have been exercised
when the Company has received all of the following items (the "Exercise Time"):
(a) a completed Exercise Agreement, as described in
paragraph 1C below, executed by Motorola;
(b) this Warrant; and
(c) a check payable to the Company in an amount equal to
the product of the Exercise Price multiplied by the number of Series M
Class 2 Interests being purchased upon such exercise (the "Aggregate
Exercise Price").
(ii) Certificates for Series M Class 2 Interests purchased
upon exercise of this Warrant shall be delivered by the Company to Motorola
within five business days after the date of the Exercise Time.
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197
(iii) The Series M Class 2 Interests issuable upon the
exercise of this Warrant shall be deemed to have been issued to Motorola at the
Exercise Time, and Motorola shall be deemed for all purposes to have become the
record holder of such Series M Class 2 Interests at the Exercise Time.
(iv) The issuance of certificates for Series M Class 2
Interests upon exercise of this Warrant shall be made without charge to
Motorola for any issuance tax in respect thereof or other cost incurred by the
Company in connection with such exercise and the related issuance of Series M
Class 2 Interests. Each Series M Class 2 Interest issuable upon exercise of
this Warrant shall, upon payment of the Exercise Price therefor, be fully paid
and nonassessable and free from all liens and charges with respect to the
issuance thereof.
(v) The Company shall not close its books against the
transfer of this Warrant or of any Series M Class 2 Interest issued or issuable
upon the exercise of this Warrant in any manner which interferes with the
timely exercise of this Warrant.
(vi) The Company shall assist and cooperate with Motorola in
making any governmental filings or obtaining any governmental approvals prior
to or in connection with any exercise of this Warrant (including, without
limitation, making any filings required to be made by the Company).
(vii) Notwithstanding any other provision hereof, if an
exercise of this Warrant is to be made in connection with a public offering or
sale of the Company, the exercise of this Warrant may, at the election of
Motorola, be conditioned upon the consummation of the public offering or sale
of the Company in which case such exercise shall not be deemed to be effective
until the consummation of such transaction.
(viii) The Company shall at all times reserve and keep
available out of its authorized but unissued Series M Class 2 Interests solely
for the purpose of issuance upon the exercise of this Warrant, such number of
Series M Class 2 Interests issuable upon the exercise of this Warrant. All
Series M Class 2 Interests which are so issuable shall, when issued, be duly
and validly issued and free from all taxes, liens and charges. The Company
shall take all such actions as may be necessary to assure that all such Series
M Class 2 Interests may be so issued without violation of any applicable law or
governmental regulation or any requirements of any domestic securities exchange
upon which Series M Class 2 Interests may be listed (except for official notice
of issuance which shall be immediately delivered by the Company upon each such
issuance).
1C. Exercise Agreement. Upon any exercise of this
Warrant, the Exercise Agreement shall be substantially in the form set forth in
Exhibit 1 hereto. Such Exercise Agreement shall be dated the actual date of
execution thereof.
Section 2. Adjustment of Exercise Price. In order to
prevent dilution of the rights granted under this Warrant, the Exercise Price
shall be subject to adjustment from time to time as provided in this Section 2.
2A. Subdivision or Combination of Series M Class 2
Interests. If the Company at any time subdivides (by any stock split, stock
dividend, recapitalization or otherwise) one or more
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198
classes of its outstanding Series M Class 2 Interests into a greater number of
interests, the Exercise Price in effect immediately prior to such subdivision
shall be proportionately reduced. If the Company at any time combines (by
reverse stock split or otherwise) one or more classes of its outstanding Series
M Class 2 Interests into a smaller number of interests, the Exercise Price in
effect immediately prior to such combination shall be proportionately
increased.
2B. Reorganization, Reclassification, Consolidation,
Merger or Sale. Any recapitalization, reorganization, reclassification,
consolidation, merger, sale of all or substantially all of the Company's assets
to another Person or other transaction which is effected in such a way that
holders of Series M Class 2 Interests are entitled to receive (either directly
or upon subsequent liquidation) stock, securities or assets with respect to or
in exchange for Series M Class 2 Interests are referred to herein as an
"Organic Change." Prior to the consummation of any Organic Change, the Company
shall make appropriate provision (in form and substance satisfactory to
Motorola) to insure that Motorola shall thereafter have the right to acquire
and receive in lieu of or addition to (as the case may be) the Series M Class 2
Interests immediately theretofore acquirable and receivable upon the exercise
of this Warrant, such interests, interests of stock, securities or assets as
may be issued or payable with respect to or in exchange for the number of
Series M Class 2 Interests immediately theretofore acquirable and receivable
upon exercise of this Warrant had such Organic Change not taken place. In any
such case, the Company shall make appropriate provision (in form and substance
satisfactory to Motorola) with respect to Motorola's rights and interests to
insure that the provisions of this Section 2 and Sections 3 and 4 hereof shall
thereafter be applicable to this Warrant. The Company shall not effect any
such consolidation, merger or sale, unless prior to the consummation thereof,
the successor entity (if other than the Company) resulting from such
consolidation or merger or the entity purchasing such assets assumes by written
instrument (in form and substance satisfactory to Motorola) the obligation to
deliver to each such holder such interests, interests of stock, securities or
assets as, in accordance with the foregoing provisions, such holder may be
entitled to acquire.
2C. Certain Events. If any event occurs of the type
contemplated by the provisions of this Section 2 but not expressly provided for
by such provisions, then the Company's board of directors shall make an
appropriate adjustment in the Exercise Price so as to protect the rights of
Motorola as the holder of this Warrant; provided that no such adjustment shall
increase the Exercise Price as otherwise determined pursuant to this Section 2.
2D. Notices.
(i) Immediately upon any adjustment of the Exercise
Price, the Company shall give written notice thereof to Motorola, setting forth
in reasonable detail and certifying the calculation of such adjustment.
(ii) The Company shall give written notice to Motorola at
least 20 days prior to the date on which the Company closes its books or takes
a record (A) with respect to any dividend or distribution upon the Series M
Class 2 Interests or the Class 1 Interests, (B) with respect to any pro rata
subscription offer to holders of Series M Class 2 Interests or Class 1
Interests or (C) for determining rights to vote with respect to any Organic
Change, dissolution or liquidation.
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199
(iii) The Company shall also give written notice to Motorola
at least 20 days prior to the date on which any Organic Change, dissolution or
liquidation shall take place.
Section 3. Liquidating Dividends. If the Company declares or
pays a dividend or distribution upon the Series M Class 2 Interests or Class 1
Interests payable otherwise than in cash out of earnings or earned surplus
(determined in accordance with generally accepted accounting principles,
consistently applied) except for a stock dividend or distribution payable in
Class 1 Interests (a "Liquidating Dividend"), then the Company shall pay to
Motorola at the time of payment thereof the Liquidating Dividend which would
have been paid to Motorola on the Series M Class 2 Interests or Class 1
Interests, as the case may be, had this Warrant been fully exercised
immediately prior to the date on which a record is taken for such Liquidating
Dividend, or, if no record is taken, the date as of which the record holders of
Series M Class 2 Interests or Class 1 Interests, as the case may be, entitled
to such dividends or distributions are to be determined.
Section 4. Purchase Rights. If at any time the Company
grants, issues or sells any options, convertible securities or rights to
purchase interests, stock, warrants, securities or other property pro rata to
the record holders of any class of Interests (the "Purchase Rights"), then
Motorola shall be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which Motorola could have
acquired if Motorola had held the number of Series M Class 2 Interests
acquirable upon complete exercise of this Warrant immediately before the date
on which a record is taken for the grant, issuance or sale of such Purchase
Rights, or, if no such record is taken, the date as of which the record holders
of Series M Class 2 are to be determined for the grant, issue or sale of such
Purchase Rights.
Section 5. Definitions. The following terms have meanings
set forth below:
"Closing Date" means July 29, 1993.
"Class 1 Interests" means, collectively, the membership
interests in the Company denominated as Class 1 Interests, and any other class
of membership interests in the Company hereafter authorized which is not
limited to a fixed sum or percentage in respect to the rights of holders
thereof to participate in dividends or distributions or in the distribution of
assets upon any liquidation, dissolution or winding up of the Company. The
Series M, Series A, Series B, Series C and Series M Class 2 Interests are not
Clas 1 Interests.
"Class 1 Interests Deemed Outstanding" means, at any given
time, the number of Class 1 Interests actually outstanding at such time, plus
the number of Class 1 Interests for which the Company has received commitments
to purchase, regardless of whether there are any unfulfilled conditions
precedent to such commitments, plus the number of Class 1 Interests issuable
upon exercise of any rights or options to subscribe for or to purchase Class 1
Interests or any interests, stock or other securities convertible into or
exchangeable for Class 1 Interests regardless of whether such rights or options
are actually exercisable at such time, plus the number of Class 1 Interests
issuable upon conversion or exchange of any interests or securities convertible
into or exchangeable for Class 1 Interests regardless of whether such interests
or securities are actually convertible or exchangeable at such time, but
excluding any Class 1 Interests issuable upon exercise of this Warrant.
3-B-4
200
"Person" means an individual, a partnership, a joint venture,
a corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.
"Series M Class 2 Interests" means the membership interests in
the Company denominated as Series M Class 2 Interests.
Section 6. No Voting Rights; Limitations of Liability. This
Warrant shall not entitle Motorola to any voting rights or other rights as a
member in the Company. No provision hereof, in the absence of affirmative
action by Motorola to purchase Series M Class 2 Interests, and no enumeration
herein of the rights or privileges of Motorola shall give rise to any liability
of Motorola for the Exercise Price of Series M Class 2 Interests acquirable by
exercise hereof or as a member in the Company.
Section 7. Warrant Not Transferable. This Warrant is not
transferable, in whole or in part.
Section 8. Replacement. Upon receipt of evidence reasonably
satisfactory to the Company (an affidavit of Motorola shall be satisfactory) of
the ownership and the loss, theft, destruction or mutilation of any certificate
evidencing this Warrant, and in the case of any such loss, theft or
destruction, upon receipt of a Motorola indemnity agreement reasonably
satisfactory to the Company, or, in the case of any such mutilation upon
surrender of such certificate, the Company shall (at its expense) execute and
deliver in lieu of such certificate a new certificate of like kind representing
the same rights represented by such lost, stolen, destroyed or mutilated
certificate and dated the date of such lost, stolen, destroyed or mutilated
certificate.
Section 9. Notices. Except as otherwise expressly provided
herein, all notices referred to in this Warrant shall be in writing and shall
be delivered personally, sent by reputable express courier service (charges
prepaid) or sent by registered or certified mail, return receipt requested,
postage prepaid and shall be deemed to have been given when so delivered, sent
or deposited in the U.S. Mail (i) to the Company, at its principal executive
offices and (ii) to Motorola, at such holder's address as it appears in the
records of the Company (unless otherwise indicated by Motorola).
Section 10. Amendment and Waiver. Except as otherwise
provided herein, the provisions of the Warrants may be amended and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company has obtained the written
consent of Motorola.
Section 11. Descriptive Headings; Governing Law. The
descriptive headings of the several Sections and paragraphs of this Warrant are
inserted for convenience only and do not constitute a part of this Warrant.
The construction, validity and interpretation of this Warrant shall be governed
by the internal law, and not the conflicts law, of the State of Delaware.
* * * * *
3-B-5
201
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed and attested by its duly authorized officers under its seal and to be
dated the Date of Issuance hereof.
IRIDIUM LLC
By:
------------------------
Its:
-----------------------
[SEAL]
Attest:
--------------------------
3-B-6
202
EXHIBIT 1
EXERCISE AGREEMENT
To: Dated:
The undersigned, pursuant to the provisions set forth in the
attached Warrant (Certificate No. W-1), hereby agrees to subscribe for the
purchase of all of the Series M Class 2 Interests covered by such Warrant and
makes payment herewith in full therefor at the price per interest provided by
such Warrant.
MOTOROLA, INC.
By:
------------------------
Its:
-----------------------
3-B-7
203
TABLE OF CONTENTS
Page
ARTICLE I
GENERAL PROVISIONS
Section 1.01 Formation and Name .................................................... 1
Section 1.02 Place of Business and Office:
Registered Agent ...................................................... 2
Section 1.03 Purpose of LLC ........................................................ 2
Section 1.04 Fiscal Year ........................................................... 2
Section 1.05 Directors: Number, Appointment, ......................................
Removal, Qualifications, Etc. ......................................... 2
Section 1.06 Members .............................................................. 3
Section 1.07 Liability of Members and Directors ................................... 7
Section 1.08 Certain Duties and Liabilities of
Members and Directors ................................................. 8
Section 1.09 Reliance by Third Parties ............................................. 9
Section 1.10 Organizational Expenses ............................................... 9
Section 1.11 Seal of LLC ........................................................... 9
Section 1.12 Ratification and Authorization
of Certain Actions .................................................... 9
ARTICLE II
MANAGEMENT AND OPERATIONS OF LLC
Section 2.01 Power and Authority of Members ........................................ 9
Section 2.02 Power and Authority of Directors....................................... 9
Section 2.03 Directors: Meetings, Committees, and Delegation....................... 10
Section 2.04 Compensation of the Directors ......................................... 15
Section 2.05 Officers .............................................................. 15
Section 2.06 Interested Directors .................................................. 19
Section 2.07 Books and Records ..................................................... 20
Section 2.08 Indemnification ....................................................... 20
ARTICLE III
CAPITAL CONTRIBUTIONS, ALLOCATIONS AND DISTRIBUTIONS
Section 3.01 Form of Contribution .................................................. 24
Section 3.02 Contributions by the Class 1 Members ................................. 24
Section 3.03 Contributions with Respect to
the Class 2 Members ................................................... 25
Section 3.04 Allocation of Distributions ........................................... 25
Section 3.05 Allocation of Tax Items ............................................... 25
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Section 3.06 Withholding ........................................................... 26
Section 3.07 Distributions ........................................................ 26
Section 3.08 Limitations on Distributions .......................................... 27
Section 3.09 Interests as Personal Property ........................................ 28
Section 3.10 Tax Matters Partner ................................................... 28
ARTICLE IV
INTERESTS AND OTHER SECURITIES
Section 4.01 Class 1 Interests and Class 2
Interests ............................................................. 30
Section 4.02 Reserve Capital Call .................................................. 32
Section 4.03 Class 1 Interests ..................................................... 33
Section 4.04 Series M Class 2 Interests ............................................ 34
Section 4.05 Series A Class 2 Interests ............................................ 44
Section 4.06 Series B Class 2 Interests ............................................ 62
Section 4.07 Series C Class 2 Interests ............................................ 63
Section 4.08 Issuance of Interests Upon the
Admission of Additional Members ....................................... 65
Section 4.09 Fractional Interests .................................................. 65
Section 4.10 Certificates for Interests ............................................ 65
ARTICLE V
DISSOLUTION AND WINDING-UP
Section 5.01 Dissolution ........................................................... 66
Section 5.02 Resignation of Members ................................................ 67
Section 5.03 Winding-Up ........................................................... 67
ARTICLE VI
TRANSFERS
Section 6.01 Notice to LLC and to Other Holders .................................... 68
Section 6.02 Right to Reject Transfer; First Refusal Rights ........................ 68
Section 6.03 No Transfers Above 45% ............................................... 70
Section 6.04 Obligations of Transferees and
Transferors ........................................................... 70
Section 6.05 Certain Motorola Transfer Restrictions ................................ 70
Section 6.06 Inapplicability of Article ............................................ 71
Section 6.07 Substituted Members ................................................... 71
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Page
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ARTICLE VII
ADMISSION OF ADDITIONAL MEMBERS
Section 7.01 Admission of Additional Members ....................................... 72
Section 7.02 Preemptive Rights .................................................... 72
ARTICLE VIII
GATEWAY RIGHTS AND SPECTRUM ACCESS OBLIGATIONS
Section 8.01 Gateway Rights and Service Provider
Rights ................................................................ 74
Section 8.02 Obligations Relating to Spectrum
Access ............................................................... 76
ARTICLE IX
AMENDMENT AND TERMINATION OF VARIOUS AGREEMENTS
Section 9.01 Termination of Stock Purchase
Agreements ............................................................ 77
Section 9.02 Amendments to Outstanding Notes and Warrants .......................... 77
Section 9.03 Amendments to Gateway Authorization ...................................
Agreements ............................................................ 77
Section 9.04 Amendments to Contracts with Motorola ................................. 77
Section 9.05 Amendments to Motorola Warrant ....................................... 78
ARTICLE X
MERGER AND APPRAISAL RIGHTS; SALE OF ASSETS
Section 10.01 Authority.............................................................. 78
Section 10.02 Procedure for Merger or Consolidation ................................. 78
Section 10.03 Approval by Class 1 Members of ........................................
Merger or Consolidation ............................................... 79
Section 10.04 Certificate of Merger or Consolidation ................................ 80
Section 10.05 Effect of Merger or Consolidation ..................................... 80
Section 10.06 Appraisal Rights ...................................................... 81
Section 10.07 Sale of Substantially All Assets ..................................... 85
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Page
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ARTICLE XI
MISCELLANEOUS
Section 11.01 Amendments to the Agreement ........................................... 85
Section 11.02 Governing Law; Severability ........................................... 87
Section 11.03 Remedies .............................................................. 88
Section 11.04 Jurisdiction and Service of Process;
Arbitration ........................................................... 90
Section 11.05 Power of Attorney and
Other Authorizations ................................................. 91
Section 11.06 Actions of Members .................................................... 91
Section 11.07 Notices ............................................................... 92
Section 11.08 Counterparts .......................................................... 92
ARTICLE XII
CERTAIN DEFINITIONS
ANNEX A DIRECTORS ............................................................. A-1
ANNEX B INTERESTS ............................................................. B-1
ANNEX C PURCHASER ACKNOWLEDGEMENTS AND AGREEMENTS ............................. C-1
ANNEX D RESERVE CAPITAL CALL COMMITMENTS ...................................... ▇-▇
▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ALLOCATION
SCHEDULE .............................................................. E-1
EXHIBIT 1-A Amendments to Outstanding Notes ....................................... 1-A-1
EXHIBIT 1-B Form of Note .......................................................... 1-B-1
EXHIBIT 2-A Amendments to Outstanding Warrants .................................... 2-A-1
EXHIBIT 2-B Form of Warrant ....................................................... 2-B-1
EXHIBIT 3-A Amendments to Motorola Warrant ........................................ 3-A-1
EXHIBIT 3-B Form of Motorola Warrant .............................................. 3-B-1
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