1
EXHIBIT 10.20
IRIDIUM LLC
IRIDIUM CAPITAL CORPORATION
300,000 Units Consisting of $300,000,000 13% Senior Notes due 2005, Series A
and Warrants to Purchase Shares of Class A Common Stock of
Iridium World Communications Ltd.
$500,000,000 14% Senior Notes due 2005, Series B
PURCHASE AGREEMENT
July 11, 1997
CHASE SECURITIES INC.
▇▇▇▇▇▇▇ LYNCH, ▇▇▇▇▇▇, ▇▇▇▇▇▇
AND ▇▇▇▇▇ INCORPORATED
c/o Chase Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Iridium LLC, a Delaware limited liability company ("Iridium"),
and Iridium Capital Corporation, a Delaware corporation and a wholly owned
subsidiary of Iridium ("Capital" and, together with Iridium, the "Note
Issuers"), propose to issue and sell 300,000 units (the "Units") each
consisting of $1,000 principal amount of 13% Senior Notes due 2005, Series A
(the "Series A Notes") and one warrant (each, a "Warrant" and, collectively,
the "Warrants"), which represents the right to purchase 5.2 shares (each, a
"Warrant Share" and, collectively, the "Warrant Shares") of Class A Common
Stock, $0.01 par value per share (the "Class A Common Stock"), of Iridium World
Communications Ltd., a Bermuda company ("IWCL") and $500,000,000 aggregate
principal amount of 14% Senior Notes due 2005, Series B (the "Series B Notes"
and, together with the Series A Notes, the "Notes") . The Notes will be
guaranteed (the "Guarantees") on a senior unsecured basis by Iridium Roaming
LLC and Iridium IP LLC (collectively, the "Guarantor Subsidiaries" and,
together with IWCL and the Note Issuers, the "Issuers"). The Units, the Notes,
the Warrants and the Guarantees are collectively referred to herein as the
"Securities"). The Series A Notes will be issued pursuant to an Indenture to
be dated as of July 16, 1997 (the "Series A Note Indenture") among the Note
Issuers, the Guarantor Subsidiaries and State Street Bank and Trust Company, as
trustee (the "Series A Note Trustee"). The Series B Notes will be issued
pursuant to an Indenture to be dated as of July 16, 1997 (the "Series B Note
Indenture" and, together with the Series A Note Indenture, the "Indentures")
among the Note Issuers, the Guarantor Subsidiaries and State Street Bank and
Trust Company, as trustee (the "Series B Note Trustee" and, together with the
Series A Note Trustee, the "Trustees"). The Warrants are to be issued under a
warrant agreement to be dated as of July 16,
2
1997 between IWCL and State Street Bank and Trust Company, as warrant agent (in
such capacity, the "Warrant Agent"). The Units will be issued under a unit
agreement dated as of July 16, 1997 (the "Unit Agreement") among the Issuers,
the Series A Note Trustee, the Warrant Agent, and State Street Bank and Trust
Company, as unit agent (in such capacity, the "Unit Agent"). The Issuers
hereby confirm their agreement with Chase Securities Inc. ("CSI") and ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ and ▇▇▇▇▇ Incorporated (together with CSI, the "Initial
Purchasers") concerning the purchase of the Units and Series B Notes from the
Note Issuers by the several Initial Purchasers.
The Units and Series B Notes will be offered and sold to the
Initial Purchasers without being registered under the Securities Act of 1933,
as amended (the "Securities Act"), in reliance upon an exemption therefrom.
The Issuers have prepared a preliminary offering memorandum dated June 19,
1997, as supplemented by a supplement dated June 19, 1997 (collectively, the
"Preliminary Offering Memorandum") and will prepare an offering memorandum
dated the date hereof (the "Offering Memorandum") setting forth information
concerning the Issuers and the Securities. Copies of the Preliminary Offering
Memorandum have been, and copies of the Offering Memorandum will be, delivered
by the Issuers to the Initial Purchasers pursuant to the terms of this
Agreement. Any references herein to the Preliminary Offering Memorandum and
the Offering Memorandum shall be deemed to include all amendments and
supplements thereto, unless otherwise noted. The Issuers hereby confirm that
they have authorized the use of the Preliminary Offering Memorandum and the
Offering Memorandum in connection with the offering and resale of the Units and
Series B Notes by the Initial Purchasers in accordance with Section 2.
Holders of the Notes (including the Initial Purchasers and
their direct and indirect transferees) will be entitled to the benefits of an
Exchange and Registration Rights Agreement, substantially in the form attached
hereto as Annex A (the "Registration Rights Agreement"), pursuant to which the
Note Issuers and the Guarantor Subsidiaries will agree to file with the
Securities and Exchange Commission (the "Commission") (i) a registration
statement under the Securities Act (the "Exchange Offer Registration
Statement") registering an issue of two series of senior notes of the Note
Issuers (the "Exchange Notes") which are identical in all material respects to
the Series A Notes and Series B Notes, respectively (except that neither issue
of Exchange Notes will contain terms with respect to transfer restrictions),
and (ii) under certain circumstances, a shelf registration statement pursuant
to Rule 415 under the Securities Act (the "Shelf Registration Statement").
IWCL and Iridium have entered into (i) an interest exchange
agreement dated June 9, 1997, as amended (the "Exchange Agreement"), (ii) a
share issuance agreement dated as of June 9, 1997, as amended (the "Share
Issuance Agreement") and (iii) a management services agreement dated as of June
9, 1997, as amended (the "Management Services Agreement" and, collectively with
the Exchange Agreement, the Share Issuance Agreement and the Limited Liability
Company Agreement of Iridium, dated as of July 29, 1996, as amended (the "LLC
Agreement"), the "Governance Agreements").
2
3
Pursuant to the Share Issuance Agreement, IWCL will use the
net proceeds it receives from the sale of the Warrants to purchase warrants
(the "LLC Interest Warrants") from Iridium having the same tenor and terms as
the Warrants and, upon the exercise of any Warrant, IWCL will exercise a LLC
Interest Warrant and pursuant to such exercise will purchase from Iridium, and
Iridium will sell to IWCL, a number of Class 1 Membership Interests in Iridium
(the "Class 1 Interests") equal to the number of Warrant Shares issuable upon
such exercise for a purchase price equal to the exercise price of such Warrant
(subject in each case to the adjustments provided in the Share Issuance
Agreement and the LLC Interest Warrants). The Class 1 Interests to be
purchased by IWCL from Iridium pursuant to the LLC Interest Warrants are
referred to herein as the "LLC Warrant Interests".
Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Offering Memorandum.
1. Representations, Warranties and Agreements of the Issuers.
Each of the Issuers, jointly and severally, represent and warrant to, and agree
with, the several Initial Purchasers on and as of the date hereof and the
Closing Date (as defined in Section 3) that:
(a) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its respective date, did not, and on the
Closing Date the Offering Memorandum will not, contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided that the Issuers make no representation or
warranty as to information contained in or omitted from the
Preliminary Offering Memorandum or the Offering Memorandum in reliance
upon and in conformity with written information relating to the
Initial Purchasers furnished to Iridium by or on behalf of any Initial
Purchaser specifically for use therein (the "Initial Purchasers'
Information").
(b) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its respective date, contains all of the
information that, if requested by a prospective purchaser of the
Securities, would be required to be provided to such prospective
purchaser pursuant to Rule 144A(d)(4) under the Securities Act.
(c) Assuming the accuracy of the representations and
warranties of the Initial Purchasers contained in Section 2 and their
compliance with the agreements set forth therein, it is not necessary,
in connection with the issuance and sale of the Units and Series B
Notes to the Initial Purchasers and the offer, resale and delivery of
the Units and Series B Notes by the Initial Purchasers in the manner
contemplated by this Agreement and the Offering Memorandum, to
register the Securities under the Securities Act or to qualify the
Indentures under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act").
(d) Each of Iridium, Iridium Roaming LLC and Iridium IP LLC
has been duly formed and is validly existing as a limited liability
company in good standing under the
3
4
laws of the State of Delaware, is duly qualified to do business and is
in good standing as a foreign corporation in each jurisdiction in
which its respective ownership or lease of property or the conduct of
its businesses requires such qualification, and has all power and
authority necessary to own or hold its properties and to conduct the
businesses in which it is engaged, except where the failure to so
qualify or have such power or authority would not have a material
adverse effect on the condition (financial or otherwise), or in the
earnings, business affairs or business prospects of Iridium or IWCL,
whether or not arising in the ordinary course of business (a "Material
Adverse Effect"). Iridium's only subsidiaries are Capital, Iridium
Roaming LLC and Iridium IP LLC.
(e) IWCL has been duly incorporated and is validly existing
as an exempted company in good standing under the laws of Bermuda, is
duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which its respective ownership or
lease of property or the conduct of its businesses requires such
qualification, and has all power and authority necessary to own or
hold its properties and to conduct the businesses in which it is
engaged, except where the failure to so qualify or have such power or
authority would not, singularly or in the aggregate, have a Material
Adverse Effect.
(f) Capital has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the state
of Delaware, is duly qualified to do business and is in good standing
as foreign corporation in each jurisdiction in which its ownership or
lease of property or the conduct of its businesses requires such
qualification, and has all power and authority necessary to own or
hold its properties and to conduct the businesses in which it is
engaged, except where the failure to so qualify or have such power or
authority would not, singularly or in the aggregate, have a Material
Adverse Effect. IWCL and Capital have no subsidiaries.
(g) Iridium and IWCL have an authorized capitalization as set
forth in the Offering Memorandum under the heading "Capitalization";
all of the outstanding shares of capital stock of IWCL and all of the
outstanding limited liability company interests of Iridium have been
duly and validly authorized and issued and are fully paid and
non-assessable (except as disclosed in the Offering Memorandum under
the caption "Description of Iridium LLC Limited Liability Company
Agreement - Limitations on Liability" and "Description of Iridium LLC
Limited Liability Company Agreement - Capital Contributions; Reserve
Capital Call" and as provided under Section 607 of the Delaware
Limited Liability Company Act (the "Delaware Act")) and were not
issued in violation of any preemptive or similar rights; and the
capital stock of IWCL and limited liability company interests of
Iridium conform in all material respects to the description thereof
contained in the Offering Memorandum. All of the limited liability
company interests of Iridium owned by IWCL are owned free and clear of
any lien, charge, encumbrance, security interest, restriction upon
voting or transfer or any other claim of any third party (except as
set forth in Section 2.09 of the LLC Agreement and Section 607 of the
Delaware Act, as disclosed in the Offering Memorandum and pursuant to
the Global Ownership Program). All of the outstanding shares of
capital stock or limited
4
5
liability company interests, as the case may be, of Capital and the
Guarantor Subsidiaries have been duly and validly authorized and
issued, are fully paid and non-assessable and are owned directly by
Iridium, free and clear of any lien, charge, encumbrance, security
interest, restriction upon voting or transfer or any other claim of
any third party.
(h) The Issuers have full right, power and authority to
execute and deliver this Agreement, the Indentures, the Registration
Rights Agreement, the Securities, the Exchange Notes, the Private
Exchange Notes (as defined in the Registration Rights Agreement), if
any, the Warrant Agreement, the Warrant Shares, the Unit Agreement,
the Share Issuance Agreement, the LLC Interest Warrants and the LLC
Warrant Interests (collectively, the "Transaction Documents") to the
extent a party thereto and to perform their obligations hereunder and
thereunder.
(i) This Agreement has been duly authorized, executed and
delivered by the Issuers.
(j) The Registration Rights Agreement has been duly
authorized by the Note Issuers and the Guarantor Subsidiaries and,
when duly executed and delivered in accordance with its terms by each
of the parties thereto, will constitute a valid and legally binding
agreement of the Note Issuers and the Guarantor Subsidiaries
enforceable against the Note Issuers and the Guarantor Subsidiaries in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, fraudulent transfer, reorganization and other laws of
general applicability relating to or affecting creditors' rights and
to general equity principles; provided that no representation or
warranty is made with respect to any provision of such agreement
purporting to require indemnification of, or contribution to, the
liability, losses, damages or claims of any person to the extent that
such provision may be limited by applicable law.
(k) Each Indenture has been duly authorized by the Note
Issuers and the Guarantor Subsidiaries and, when duly executed and
delivered in accordance with its terms by each of the parties thereto,
will constitute a valid and legally binding agreement of the Note
Issuers and the Guarantor Subsidiaries enforceable against the Note
Issuers and the Guarantor Subsidiaries in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, fraudulent
transfer, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles. On the Closing Date, each Indenture will conform in all
material respects to the requirements of the Trust Indenture Act and
the rules and regulations of the Commission applicable to an indenture
which is qualified thereunder.
(l) The Notes, the Exchange Notes, the Private Exchange
Notes, if any, and the Guarantees have been duly authorized by the
Note Issuers and the Guarantor Subsidiaries and, when the Notes, the
Exchange Notes and Private Exchange Notes, if any, and the Guarantees
have been duly executed, authenticated, issued and delivered as
provided in the Indenture and paid for as provided herein, will be
duly and validly issued and outstanding and will constitute valid and
legally binding obligations of the Note Issuers
5
6
and the Guarantor Subsidiaries, as the case may be, entitled to the
benefits of the applicable Indenture and enforceable against the Note
Issuers and the Guarantor Subsidiaries, as the case may be, in
accordance with their terms, subject, as to enforcement, to
bankruptcy, insolvency, fraudulent transfer, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
(m) The Warrant Agreement has been duly authorized by IWCL
and the Share Issuance Agreement has been duly authorized by IWCL and
Iridium and, when each is duly executed and delivered in accordance
with its terms by each of the parties hereto, will constitute a valid
and legally binding agreement of IWCL (in the case of the Warrant
Agreement) or of IWCL and Iridium (in the case of the Share Issuance
Agreement) as the case may be enforceable against IWCL and Iridium in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, fraudulent transfer, reorganization and other laws of
general applicability relating to or affecting creditors' rights and
to general equity principles.
(n) The Warrants have been duly authorized by IWCL for
issuance, and when executed by IWCL and countersigned by the Warrant
Agent in accordance with the provisions of the Warrant Agreement, and
delivered and paid for in accordance with the terms hereof, will have
been duly executed, issued and delivered and will be entitled to the
benefits of the Warrant Agreement and will constitute valid and
binding obligations of IWCL enforceable against IWCL in accordance
with the terms of such Warrants, subject, as to enforcement, to
bankruptcy, insolvency, fraudulent transfer, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
(o) The Warrant Shares, when authenticated and issued in
accordance with the terms and conditions contained in the Warrant
Agreement upon exercise of the Warrants and payment of the applicable
exercise price, will be duly authorized, validly issued, fully paid
and non-assessable, will not be subject to any preemptive or similar
rights, and will be free and clear of all liens, encumbrances,
equities and claims or restrictions on transferability (other than
those, if any, imposed by Bermuda law, the Securities Act, the
securities or "Blue Sky" laws of certain jurisdictions as described in
the Offering Memorandum) or voting and upon full payment of the
consideration therefor, no holder of Warrants or Warrant Shares will
be subject to personal liability by reason of being such a holder.
The Warrant Shares have been duly reserved for issuance in accordance
with the terms of the Warrants and the Warrant Agreement.
(p) The Unit Agreement has been duly authorized by the
Issuers and, when duly executed and delivered in accordance with its
terms by each of the parties thereto, will constitute a valid and
legally binding agreement of the Issuers enforceable against the
Issuers in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, fraudulent transfer, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles. The Units, when
6
7
duly executed, authenticated, issued and delivered as provided in the
Unit Agreement, will be duly and validly issued and outstanding and
will constitute valid and binding obligations of the Issuers entitled
to the benefits of the Unit Agreement and enforceable against the
Issuers in accordance with their terms, subject, as to enforcement, to
bankruptcy, insolvency, fraudulent transfer, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
(q) The LLC Interest Warrants and LLC Warrant Interests have
been duly authorized for issuance and sale to IWCL pursuant to the
Share Issuance Agreement (in the case of the LLC Interest Warrants) or
the LLC Interest Warrants (in the case of the LLC Warrant Interests)
and, when issued and delivered by Iridium pursuant to the Share
Issuance Agreement (in the case of the LLC Interest Warrants) or the
LLC Interest Warrants (in the case of the LLC Warrant Interests)
against payment of the consideration set forth therein, will be
validly issued, and (except as set forth in Section 2.09 of the LLC
Agreement and Section 607 of the Delaware Act) the LLC Warrant
Interests will be fully paid and non-assessable; the LLC Interest
Warrants and Class 1 Interests will conform in all material respects
to the descriptions thereof contained in the Offering Memorandum and
such descriptions conform to the rights set forth in the instruments
defining the same (except as disclosed in the Offering Memorandum
under the caption "Description of Iridium LLC Limited Liability
Company Agreement--Limitations on Liability" and "Description of
Iridium LLC Limited Liability Company Agreement - Capital
Contributions; Reserve Capital Call" and as provided under Section 607
of the Delaware Act) and will be free and clear of any lien, charge,
encumbrance, security interest, restriction upon voting or transfer or
any other claim of any third party; except as described in the
Offering Memorandum under the caption "Description of Iridium LLC
Limited Liability Company Agreement--Limitations on Liability," no
holder of the LLC Interest Warrants and the LLC Warrant Interests will
be subject to personal liability by reason of being such a holder; and
the issuance of the LLC Interest Warrants pursuant to the Share
Issuance Agreement and the LLC Warrant Interests pursuant to the LLC
Interest Warrants is not subject to the preemptive or other similar
rights of any member of Iridium. Pursuant to the LLC Agreement, and
in accordance with the Delaware Act, IWCL has waived the limitation on
liability contained in the Delaware Act, provided that IWCL has no
liability to any person, including Iridium, for any debt, obligation
or liability of Iridium until all of the assets and capital of Iridium
have first been exhausted in satisfaction thereof.
(r) Each of the Transaction Documents described in the
Offering Memorandum and the Governance Agreements conforms in all
material respects to the description thereof contained in the Offering
Memorandum. The Issuers make no representation or warranty as to
whether this Agreement conforms to the description thereof contained
in the Offering Memorandum.
(s) The execution, delivery and performance by each of the
Issuers of each of the Transaction Documents to which it is a party,
the issuance, authentication, sale and delivery of the Securities, the
Exchange Notes, the Private Exchange Notes, if any, the
7
8
Warrants, the Warrant Shares, the LLC Interest Warrants and the LLC
Warrant Interests, and compliance by the Issuers with the terms
thereof and the consummation of the transactions contemplated by the
Transaction Documents and the Governance Agreements will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Issuers
pursuant to, any material indenture, mortgage, deed of trust, loan
agreement or other material agreement (including the Governance
Agreements) or instrument to which the Issuers are a party or by which
the Issuers are bound or to which any of the property or assets of the
Issuers are subject (except for such conflicts, breaches or defaults
or liens, charges or encumbrances that would not reasonably be
expected to materially and adversely affect the properties or assets
thereof or the consummation of the transactions contemplated by this
Agreement or the Transaction Documents), nor will such actions result
in any violation of the provisions of the charter, memorandum of
association, bye-laws, by-laws, certificate of formation or limited
liability company agreement of the Issuers or any statute or any
judgment, order, decree, rule or regulation of any court or arbitrator
or governmental agency or body having jurisdiction over the Issuers or
any of their properties or assets; and no consent, approval,
authorization or order of, or filing or registration with, any such
court or arbitrator or governmental agency or body under any such
statute, judgment, order, decree, rule or regulation is required for
the execution, delivery and performance by the Issuers of each of the
Transaction Documents, the issuance, authentication, sale and delivery
of the Securities, the Exchange Notes, the Private Exchange Notes, if
any, the Warrants, the Warrant Shares, the LLC Interest Warrants and
the Class 1 Interests, and compliance by the Issuers with the terms
thereof and the consummation of the transactions contemplated by the
Transaction Documents, except for such consents, approvals,
authorizations, filings, registrations or qualifications (i) which
shall have been obtained or made prior to the Closing Date and (ii) as
may be required to be obtained or made under the Securities Act and
applicable state securities laws as provided in the Registration
Rights Agreement, the Warrant Agreement and the Share Issuance
Agreement. As used herein, a "Repayment Event" means any event or
conditions which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment
of all or a portion of such indebtedness by IWCL or Iridium.
(t) The accountants who certified the financial statement and
the consolidated financial statements included in the Offering
Memorandum are independent public accountants within the meaning of
the Securities Act and the regulations thereunder. The financial
statement and the consolidated financial statements included in the
Offering Memorandum, together with the related notes, present fairly
the financial position of IWCL, Iridium, Iridium's predecessor and
their respective consolidated subsidiaries at the dates indicated and
the statement of operations, stockholders' equity, members' equity and
cash flows of IWCL, Iridium, Iridium's predecessor and their
respective consolidated subsidiaries for the periods specified; said
financial statement and the consolidated financial statements have
been prepared in conformity with generally accepted
8
9
accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved, except, in the case of the interim
financial statements, for the absence of complete footnote disclosure
and customary year-end adjustments. The selected financial data
included in the Offering Memorandum present fairly the information
shown therein and have been compiled on a basis consistent with that
of the audited financial statement and the consolidated financial
statements included in the Offering Memorandum.
(u) Except for matters which are described in the Offering
Memorandum, there is no action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency or
body, domestic or foreign, now pending, or, to the knowledge of IWCL
or Iridium, threatened, against or affecting IWCL or Iridium, which
would be required to be disclosed in a registration statement with
respect to the Securities on Form S-1, or which might reasonably be
expected to result in a Material Adverse Effect, or which might
reasonably be expected to materially and adversely affect the
properties or assets thereof or the consummation of the transactions
contemplated in this Agreement or the Transaction Documents or the
performance by, if determined adversely to IWCL or Iridium, of its
obligations hereunder or thereunder; all pending legal or governmental
proceedings to which IWCL or Iridium is a party or of which any of
their respective property or assets is the subject which are not
described in the Offering Memorandum, including ordinary routine
litigation incidental to the business, would not reasonably be
expected to result in a Material Adverse Effect.
(v) No action has been taken and no statute, rule, regulation
or order has been enacted, adopted or issued by any governmental
agency or body which prevents the issuance of the Securities, the
Exchange Notes, the Private Exchange Notes, if any, the Warrants, the
Warrant Shares, the LLC Interest Warrants or the LLC Warrant Interests
pursuant to the Transaction Documents, or suspends the sale of the
Securities, the Exchange Notes, the Private Exchange Notes, if any,
the Warrants, the Warrant Shares, the LLC Interest Warrants or the
Class 1 Interests, in any jurisdiction; no injunction, restraining
order or order of any nature by any federal or state court of
competent jurisdiction has been issued with respect to the Issuers
which would prevent or suspend the issuance or sale of the Securities,
the Exchange Notes, the Private Exchange Notes, if any, the Warrants,
the Warrant Shares, the LLC Interest Warrants or the Class 1
Interests, or the use of the Preliminary Offering Memorandum or the
Offering Memorandum in any jurisdiction; and the Issuers have complied
with any and all requests by any securities authority in any
jurisdiction for additional information to be included in the Offering
Memorandum.
(w) None of the Issuers is (i) in violation of its charter,
memorandum of association, bye-laws, by-laws, certificate of formation
or limited liability company agreement, as the case may be, (ii) in
default in any material respect, and no event has occurred which, with
notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition
contained in any material indenture, mortgage, deed of trust, loan
agreement or other material agreement (including the Governance
Agreements) or instrument to which it is a party or by which it
9
10
is bound or to which any of its property or assets is subject or (iii)
in violation in any material respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its
property or assets may be subject, except for any default or violation
that would not result in a Material Adverse Effect.
(x) Except as disclosed in the Offering Memorandum or as
would not have a Material Adverse Effect, (i) Iridium possesses such
permits, licenses, approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the appropriate
federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by Iridium and (ii)
Iridium is in compliance with the current terms and conditions of all
such Governmental Licenses, except where the failure so to comply
would not, singly or in the aggregate, have a Material Adverse Effect;
all of the Governmental Licenses are valid and in full force and
effect, except where the invalidity of such Governmental Licenses or
the failure of such Governmental Licenses to be in full force and
effect would not have a Material Adverse Effect; and neither IWCL nor
Iridium has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect. This
representation does not extend to Governmental Licenses required for
Iridium to conduct its business as proposed to be conducted, most of
which have not been obtained.
(y) Each of the Issuers believes that it is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Offering
Memorandum, will not be, an "investment company" or an entity
"controlled" by a company registered as an "investment company", as
such terms are defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act").
(z) Iridium and IWCL maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance
with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(aa) Iridium has insurance as required by Section 4.17 of the
Indentures.
(bb) Except as described in the Offering Memorandum or as
would not have a Material Adverse Effect, Iridium owns or possesses or
reasonably believes it can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures, but excluding any
required regulatory
10
11
licenses or approvals), trademarks, service marks, trade names or
other intellectual property (collectively, "Intellectual Property"),
or that it can contract on reasonable terms with third parties who can
acquire the Intellectual Property necessary to carry on the business
now operated by Iridium or described in the Offering Memorandum, and
neither IWCL nor Iridium has received any notice or is otherwise aware
of any infringement of or conflict with asserted rights of others with
respect to any Intellectual Property or of any facts or circumstances
which would render any Intellectual Property invalid or inadequate to
protect the interest of IWCL or Iridium and which infringement or
conflict (if the subject of any unfavorable decision, ruling or
finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect.
(cc) IWCL owns no real property. Iridium has good and
marketable title to all real property it owns; and IWCL and Iridium
have good title to all other properties owned by them, in each case,
free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a)
are described in the Offering Memorandum or (b) would not, singly or
in the aggregate, reasonably be expected to have a Material Adverse
Effect; and all of the leases and subleases material to the business
of IWCL and Iridium, considered as one enterprise, and under which
IWCL and Iridium hold properties described in the Offering Memorandum,
are in full force and effect, and neither IWCL nor Iridium has any
notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of IWCL or Iridium under any of the
leases or subleases mentioned above, or affecting or questioning the
rights of IWCL or Iridium to the continued possession of the leased or
subleased premises under any such lease or sublease, except such as
would not reasonably be expected to have a Material Adverse Effect.
(dd) No labor dispute with the employees of any of the
Issuers exists or, to the knowledge of the Issuers, is imminent.
(ee) No "prohibited transaction" (as defined in Section 406
of the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder
("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as
amended from time to time (the "Code")) or "accumulated funding
deficiency" (as defined in Section 302 of ERISA) or any of the events
set forth in Section 4043(b) of ERISA (other than events with respect
to which the 30-day notice requirement under Section 4043 of ERISA has
been waived) has occurred with respect to any employee benefit plan of
any of the Issuers which could reasonably be expected to have a
Material Adverse Effect; each such employee benefit plan (other than a
multiemployer plan) is in compliance in all material respects with
applicable law, including ERISA and the Code; the Issuers have not
incurred and do not expect to incur liability under Title IV of ERISA
with respect to the termination of, or withdrawal from, any pension
plan for which any of the Issuers would have any liability; and each
such pension plan (other than a multiemployer plan) that is intended
to be qualified under Section 401(a) of the Code is so qualified in
all material respects and nothing has occurred, whether by action or
by failure to act, which could reasonably be expected to cause the
loss of such qualification.
11
12
(ff) Except as described in the Offering Memorandum and
except as would not, singly or in the aggregate, result in a Material
Adverse Effect, (A) neither IWCL nor Iridium is in violation of any
federal, state, local or foreign statute, law, rule, regulation,
ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) Iridium has all permits, authorizations and approvals
required under any applicable Environmental Laws and is in compliance
with its requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against
Iridium and (D) there are no events or circumstances that might
reasonably be expected or form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting IWCL or Iridium
relating to Hazardous Materials or any Environmental Laws.
(gg) Except as disclosed in the Offering Memorandum and
except as would not reasonably be expected to have a Material Adverse
Effect, to the best of the Issuers' knowledge, none of the parties to
(i) the Gateway Authorization Agreements, (ii) the Space System
Contract, (iii) the Operations and Maintenance Contract, (iv) the
Iridium Business Support System Contract with ▇▇▇▇▇▇▇▇ Consulting, (v)
the Terrestrial Network Development Contract, (vi) the Support
Agreement between Iridium and Motorola, (vii) the Amended and Restated
Agreement Regarding Guarantee and (viii) the Motorola MOU
(collectively, the foregoing are herein called the "Principal
Agreements"), is in breach of, or in default in the performance or
observance of, any material obligation, term, covenant or condition
contained therein. Each of the Principal Agreements that Iridium has
delivered to the Initial Purchasers is a true and correct copy, and
there have been no additional amendments, alterations, modifications
or waivers thereto or in the exhibits or schedules thereto. Iridium
has duly and validly authorized, executed and delivered each of the
Principal Agreements to which it is a party and, to the best of the
Issuers' knowledge, the other parties to each of the Principal
Agreements have duly and validly executed and delivered each of the
Principal Agreements and, assuming due and valid authorization,
execution and delivery by such other parties, each of the Principal
Agreements is a valid and legally binding agreement of Iridium,
enforceable against Iridium in accordance with its terms subject, as
to enforcement, to bankruptcy, insolvency, fraudulent transfer,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; provided
that no representation or warranty is made with respect to any
provision of any Principal Agreement purporting to require
indemnification of, or contribution to, the liability
12
13
losses, damages or claims of any person to the extent that such
provision may be limited by applicable laws.
(hh) Neither IWCL nor Iridium, nor to the best knowledge of
the Issuers, any other party to any of the Governance Agreements, is
in breach of, or in default in the performance or observance of, any
material obligation, term, covenant or condition contained in any of
the Governance Agreements. Each of the Governance Agreements that
Iridium has delivered to the Initial Purchasers is a true and correct
copy, and there have been no additional amendments, alterations,
modifications or waivers thereto or in the exhibits or schedules
thereto. Each of IWCL and Iridium has duly and validly authorized,
executed and delivered each of the Governance Agreements to which it
is a party and, to the best of the Issuers' knowledge, the other
parties to each of the Governance Agreements have duly and validly
executed and delivered each of the Governance Agreements and, assuming
due and valid authorization, execution and delivery by such other
parties, each of the Governance Agreements to which IWCL or Iridium is
a party is a valid and legally binding agreement of IWCL and Iridium,
enforceable against IWCL and Iridium as applicable in accordance with
its terms, subject, as to enforcement, to bankruptcy, insolvency,
fraudulent transfer, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles; provided that no representation or warranty
is made with respect to any provision of such agreement purporting to
require indemnification of, or contribution to, the liability losses,
damages or claims of any person to the extent that such provision may
be limited by applicable laws.
(ii) The Federal Communications Commission (the "FCC") has
authorized Motorola, Inc. (Motorola, Inc., together with its
subsidiaries, "Motorola") to construct a mobile satellite system
capable of operating in the 1616 to 1626.5 MHz frequency bands,
consistent with the technical specifications set forth in its
application, the FCC's rules and the conditions set forth in the FCC's
Orders and Authorization (DA 95-131), released January 31, 1995, DA
95-372, released February 28, 1995, FCC 96-279, released June 27,
1996, DA 96-1789, released October 30, 1996.
(jj) None of the Issuers is a party to any contract,
agreement or understanding with any person that would give rise to a
valid claim against the Initial Purchasers for a brokerage commission,
finder's fee or like payment in connection with the offering and sale
of the Securities.
(kk) The Securities satisfy the eligibility requirements of
Rule 144A(d)(3) under the Securities Act.
(ll) None of the Issuers, any of its affiliates or any person
acting on its or their behalf has engaged or will engage in any
directed selling efforts (as such term is defined in Regulation S
under the Securities Act ("Regulation S")), and all such persons have
complied and will comply with the offering restrictions requirement of
Regulation S to the extent applicable. No representation is herein
made with respect to any Initial
13
14
Purchaser, any affiliate thereof or any person acting on its behalf,
or with respect to any obligation thereof.
(mm) None of the Issuers or any of its affiliates has,
directly or through any agent, sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of, any security (as
such term is defined in the Securities Act), which is or will be
integrated with the sale of the Securities in a manner that would
require registration of the Securities under the Securities Act.
(nn) None of the Issuers or any of its affiliates or any
other person acting on its or their behalf has engaged, in connection
with the offering of the Units or Series B Notes, in any form of
general solicitation or general advertising within the meaning of Rule
502(c) under the Securities Act. No representation is herein made
with respect to any Initial Purchaser, any affiliate thereof or any
person acting on its behalf, or with respect to any obligation
thereof.
(oo) There are no securities of the Issuers registered under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
or listed on a national securities exchange or quoted in a U.S.
automated inter-dealer quotation system, other than the Class A Common
Stock of IWCL. The Class 1 Interests of Iridium may be required to be
registered under the Exchange Act.
(pp) The Issuers have not taken and will not take, directly
or indirectly, any action prohibited of them by Regulation M under the
Exchange Act in connection with the offering of the Units and Series B
Notes.
(qq) The statements (including the assumptions described
therein) included in the Offering Memorandum relating to Iridium's
operations, expected markets, size of expected addressable markets for
mobile satellite services, expected technical capabilities, expected
funding needs, expected financing sources, expected pricing, expected
launch schedule, expected commercial operations schedule, the estimate
of the last year in which Iridium will have negative cash flow and a
net increase in year-end borrowings and expected future regulatory
approvals as well as information concerning expected characteristics
of competing systems and expected actions of third parties such as
equipment suppliers, gateway operators, service providers and roaming
partners were made by Iridium with a reasonable basis and reflect
Iridium's good faith estimate of the matters described therein.
(rr) The Issuers have complied with, and are and will be in
compliance with, the provisions of that certain Florida act relating
to disclosure of doing business with Cuba, codified as Section 517.075
of the Florida statutes, and the rules and regulations thereunder or
is exempt therefrom.
(ss) Since the respective dates as of which information is
given in the Offering Memorandum, except as otherwise stated therein,
(i) there has been no material adverse
14
15
change in the condition (financial or otherwise), or in the earnings,
business affairs or business prospects of any of the Issuers, whether
or not arising in the ordinary course of business, (ii) the Issuers
have not incurred any liability or obligation, direct or contingent,
other than in the ordinary course of business which is material with
respect to IWCL or Iridium, (iii) the Issuers have not entered into
any transaction, other than in the ordinary course of business which
is material with respect to IWCL or Iridium, and (iv) there has not
been any change in the capital stock, membership interests or
long-term debt of the Issuers other than fluctuations in revolving
credit agreements, or any dividend or distribution of any kind
declared, paid or made by the Issuers on any class of their capital
stock or membership interests. Launch delays shall not be covered by
this representation.
(tt) Each of Iridium and IWCL is a "reporting issuer" as
defined in Rule 902(l) under the Securities Act.
2. Purchase and Resale of the Securities. (a) On the basis
of the representations, warranties and agreements contained herein, and subject
to the terms and conditions set forth herein, the Issuers agree to issue and
sell to each of the Initial Purchasers, severally and not jointly, and each of
the Initial Purchasers, severally and not jointly, agree to purchase from the
Issuers, the number of Units and principal amount of Series B Notes set forth
opposite the name of such Initial Purchaser on Schedule 1 hereto at a purchase
price of $975.98 per Unit ($57.04 to be allocated to the purchase of the
Warrants included therein) and 95.429% of the principal amount of the Series B
Notes. The Note Issuers shall not be obligated to deliver any of the Units or
Series B Notes except upon payment for all of the Units and Series B Notes to
be purchased as provided herein.
(b) The Initial Purchasers have advised the Issuers that they
propose to offer the Units and Series B Notes for resale upon the terms and
subject to the conditions set forth herein and in the Offering Memorandum.
Each Initial Purchaser, severally and not jointly, represents and warrants to,
and agrees with, the Issuers that (i) it is purchasing the Units and Series B
Notes pursuant to a private sale exempt from registration under the Securities
Act, (ii) neither it nor any of its affiliates or any person acting on its or
their behalf has solicited offers for, or offered or sold, and no such person
will solicit offers for, or offer or sell, the Securities by means of any form
of general solicitation or general advertising within the meaning of Rule
502(c) of Regulation D under the Securities Act ("Regulation D") or in any
manner involving a public offering within the meaning of Section 4(2) of the
Securities Act and no such person has engaged, and no such person will engage,
in any directed selling efforts within the meaning of Rule 902 under the
Securities Act in connection with any of the Securities, and all such persons
have and will comply with the offering restrictions and requirements of
Regulation S, (iii) it has solicited and will solicit offers for the Securities
only from, and has offered or sold and will offer, sell or deliver the
Securities, as part of its initial offering, only (A) to persons whom it
reasonably believes to be qualified institutional buyers ("Qualified
Institutional Buyers") as defined in Rule 144A under the Securities Act, or if
any such person is buying for one or more institutional accounts for which such
person is acting as fiduciary or agent, only when such person has represented
to it that each such account is a Qualified Institutional Buyer to whom notice
has been given that such sale or delivery is being made in reliance on Rule
144A and in
15
16
each case, in transactions in accordance with Rule 144A and (B) in transactions
outside the United States to persons who are not U.S. Persons (as defined in
Rule 902 under the Securities Act) and to whom the Initial Purchasers
reasonably believe offers and sales of the Securities may be made in reliance
on Rule 903 under the Securities Act in transactions meeting the requirements
of Regulation S, and (iv) that it is a Qualified Institutional Buyer. Each
Initial Purchaser, severally and not jointly, agrees that, prior to or
simultaneously with the confirmation of sale by such Initial Purchaser to any
purchaser of any of the Securities purchased by such Initial Purchaser pursuant
hereto, such Initial Purchaser shall furnish to that purchaser a copy of the
Offering Memorandum (and any amendment or supplement thereto that the Issuers
shall have furnished to such Initial Purchaser prior to the date of such
confirmation of sale). In addition to the foregoing, each Initial Purchaser
acknowledges and agrees that the Issuers and, for purposes of the opinions to
be delivered to the Initial Purchasers pursuant to Sections 5(d) and (h),
counsel for the Issuers and for the Initial Purchasers, respectively, may rely
upon the accuracy of the representations and warranties of the Initial
Purchasers and their compliance with their agreements contained in this Section
2, and each Initial Purchaser hereby consents to such reliance. Chase
Securities Inc. will advise Iridium of the completion of the distribution of
the Securities pursuant to Regulation S. Each Initial Purchaser severally
agrees that, at or prior to confirmation of sale of Securities (other than a
sale pursuant to Rule 144A), it will have sent to each distributor, dealer or
person receiving a selling concession, fee or other remuneration that purchases
Securities from it during the restricted period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933 (the "Securities Act") and may not be
offered and sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their distribution at any time
or (ii) otherwise until 40 days after the later of the commencement of
the offering and the closing date, except in either case in accordance
with Regulation S (or Rule 144A if available) under the Securities
Act. Terms used above have the meaning given to them by Regulation S."
Each Initial Purchaser severally represents that it has not entered into and
agrees that it will not enter into any contractual arrangement with respect to
the distribution or delivery of the Securities, except with its affiliates or
with the prior written consent of Iridium.
(c) Each Initial Purchaser, severally and not jointly, agrees
that (i) it has not offered or sold, and will not offer or sell, in the United
Kingdom by means of any document, any Units or Series B Notes offered hereby,
other than to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995 (the
"Regulations"), (ii) it has complied and will comply with all applicable
provisions of the Financial Services Act 1986 and the Regulations with respect
to anything done by it in relation to the Units in, from or otherwise involving
the United Kingdom, and (iii) it has only issued or passed on and will only
issue or pass on to any person in the United Kingdom any document received by
it in connection with the issuance of the Units and Series B
16
17
Notes if that person is of a kind described in Article 11(3) of the Financial
Services Act 1986 (Investment Advertisements) (Exemptions) Order 1995 or is a
person to whom the document may otherwise lawfully be issued or passed on.
(d) The Issuers acknowledge and agree that, subject to the
restrictions herein, the Initial Purchasers may sell Securities to any
affiliate of an Initial Purchaser and that any such affiliate may sell
Securities purchased by it to an Initial Purchaser.
3. Delivery of and Payment for the Securities. (a) Delivery
of the Units (including the Series A Notes and Warrants covered thereby) and
Series B Notes and payment for the Units and Series B Notes shall be made at
the offices of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, Washington, D.C., or at such
other place as shall be agreed upon by the Initial Purchasers and the Issuers,
at 10:00 A.M., New York City time, on July 16, 1997, or at such other time or
date, not later than seven full business days thereafter, as shall be agreed
upon by the Initial Purchasers and the Issuers (such date and time of payment
and delivery being referred to herein as the "Closing Date").
(b) On the Closing Date, payment of the purchase price for
the Units and Series B Notes shall be made to the Issuers by wire or book-entry
transfer of immediately available funds to such account or accounts as the
Issuers shall specify prior to the Closing Date or by such other means as the
parties hereto shall agree prior to the Closing Date against delivery to the
Initial Purchasers of the certificates evidencing the Units, Notes and
Warrants. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligations
of the Initial Purchasers hereunder. Upon delivery, the Units, Notes and
Warrants sold to Qualified Institutional Buyers and pursuant to Regulation S
shall be in global form, registered in the name of DTC (as hereinafter defined)
or its nominee and in such denominations as CSI on behalf of the Initial
Purchasers shall have requested in writing not less than two full business days
prior to the Closing Date. The Issuers agree to make one or more global
certificates evidencing the Units (including the Series A Notes and Warrants)
and the Series B Notes available for inspection by CSI on behalf of the Initial
Purchasers in New York, New York or Washington, D.C. at least 24 hours prior to
the Closing Date.
4. Further Agreements of the Issuers. Except in the case of
clauses (e), (k) and (l) for the shorter of (i) the six month period
immediately following the date of the Offering Memorandum and (ii) the period
from the date of the Offering Memorandum to the date the first Exchange Notes
are issued, each of the Issuers agrees with each of the several Initial
Purchasers:
(a) to advise the Initial Purchasers promptly and, if
requested, confirm such advice in writing, of the happening of any
event which makes any statement of a material fact made in the
Offering Memorandum untrue or which requires the making of any
additions to or changes in the Offering Memorandum (as amended or
supplemented from time to time) in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; to advise the Initial Purchasers promptly of any order
preventing or suspending the use of the Offering Memorandum, of any
suspension of the qualification of the Securities for offering or sale
in any jurisdiction and
17
18
of the initiation or threatening of any proceeding for any such
purpose; and to use its reasonable efforts to prevent the issuance of
any such order preventing or suspending the use of the Offering
Memorandum or suspending any such qualification and, if any such
suspension is issued, to obtain the lifting thereof at the earliest
possible time;
(b) to furnish promptly to each of the Initial Purchasers and
counsel for the Initial Purchasers, without charge, as many copies of
the Offering Memorandum (and any amendments or supplements thereto) as
may be reasonably requested;
(c) prior to making any amendment or supplement to the
Offering Memorandum, to furnish a copy thereof to each of the Initial
Purchasers and counsel for the Initial Purchasers and not to effect
any such amendment or supplement to which the Initial Purchasers shall
reasonably object by notice to the Issuers after a reasonable period
to review;
(d) if, at any time prior to completion of the resale of the
Units and Series B Notes by the Initial Purchasers, any event shall
occur or condition exist as a result of which it is necessary, in the
opinion of counsel for the Initial Purchasers or counsel for the
Issuers, to amend or supplement the Offering Memorandum in order that
the Offering Memorandum will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances
existing at the time it is delivered to a purchaser, not misleading,
or if it is necessary to amend or supplement the Offering Memorandum
to comply with applicable law, to promptly prepare such amendment or
supplement as may be necessary to correct such untrue statement or
omission or so that the Offering Memorandum, as so amended or
supplemented, will comply with applicable law;
(e) for so long as the Securities are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, to furnish to holders of the Securities and
prospective purchasers of the Securities designated by such holders,
upon request of such holders or such prospective purchasers, the
information required to be delivered pursuant to Rule 144A(d)(4) under
the Securities Act, unless Iridium and IWCL are then subject to and in
compliance with Section 13 or 15(d) of the Exchange Act (the foregoing
agreement being for the benefit of the holders from time to time of
the Securities and prospective purchasers of the Securities designated
by such holders);
(f) to promptly take from time to time such actions as the
Initial Purchasers may reasonably request, in cooperation with the
Initial Purchasers, to qualify the Securities for offering and sale
under the securities or Blue Sky laws of such jurisdictions as the
Initial Purchasers may designate and to continue such qualifications
in effect for so long as required for the resale of the Securities;
and to arrange for the determination of the eligibility for investment
of the Securities under the laws of such jurisdictions as the Initial
Purchasers may reasonably request; provided that no Issuer shall be
obligated to qualify as a foreign corporation or dealer in any
jurisdiction in which it is not so qualified, to subject itself to
taxation or other governmental fees and charges in respect of
18
19
any jurisdiction to which it is not otherwise subject or to file a
general consent to service of process in any jurisdiction;
(g) to reasonably assist the Initial Purchasers in arranging
for the Securities to be designated Private Offerings, Resales and
Trading through Automated Linkages ("PORTAL") Market securities in
accordance with the rules and regulations adopted by the National
Association of Securities Dealers, Inc. ("NASD") relating to trading
in the PORTAL Market and for the Securities to be eligible for
clearance and settlement through The Depository Trust Company ("DTC"),
the Euroclear System and Cedel Bank, societe anonyme;
(h) not to, and to cause its affiliates not to, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of
any security (as such term is defined in the Securities Act) which
could be integrated with the sale of the Securities in a manner which
would require registration of the Securities under the Securities Act;
(i) except following the effectiveness of a registration
statement with respect to the Securities, Exchange Notes or the
Private Exchange Notes, if any, not to, and to cause its affiliates
not to, and not to authorize or knowingly permit any person acting on
their behalf to, solicit any offer to buy or offer to sell the
Securities by means of any form of general solicitation or general
advertising within the meaning of Regulation D, by means of any
directed selling efforts (as defined in Rule 902 under the Securities
Act) in connection with the Securities or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities
Act; and not to offer, sell, contract to sell or otherwise dispose of,
directly or indirectly, any securities under circumstances where such
offer, sale, contract or disposition would cause the exemption
afforded by Section 4(2) of the Securities Act to cease to be
applicable to the offering and sale of the Securities to the Initial
Purchasers as contemplated by this Agreement and the Offering
Memorandum nothing in this clause (j) shall apply to any action or
inaction by an Initial Purchaser or any affiliate thereof;
(j) for a period of 45 days from the date of the Offering
Memorandum, not to, directly or indirectly, offer for sale, sell,
contract to sell, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of, directly or indirectly,
or file a registration statement for, or announce any offer, sale,
contract for sale of or other disposition of any debt or equity
securities or membership interests issued or guaranteed by any of the
Issuers or any of their subsidiaries (other than the Securities,
Exchange Notes and the Private Exchange Notes, if any, or pursuant to
the Registration Rights Agreement, the Global Ownership Program or the
Iridium Option Plan), without the prior written consent of the Initial
Purchasers;
(k) during the period from the Closing Date until two years
after the Closing Date or the effectiveness of a registration
statement with respect to the Securities, without the prior written
consent of the Initial Purchasers, not to, and to use reasonable
efforts not
19
20
permit any of its affiliates (as defined in Rule 144 under the
Securities Act) which it controls to, resell any of the Securities
that have been reacquired by them, except for Securities purchased by
the Issuers or any of their affiliates and resold in a transaction
registered under the Securities Act;
(l) in connection with the offering of the Units and Series B
Notes, until CSI on behalf of the Initial Purchasers shall have
notified the Issuers of the completion of the resale of the
Securities, not to, and to cause its affiliated purchasers (as defined
in Regulation M under the Exchange Act) not to, either alone or with
one or more other persons, bid for or purchase, for any account in
which it or any of its affiliated purchasers has a beneficial
interest, any Securities, or attempt to induce any person to purchase
any Securities; and not to, and to cause its affiliated purchasers not
to, make bids or purchase for the purpose of creating actual, or
apparent, active trading in or of raising the price of the Securities;
(m) to furnish to each of the Initial Purchasers on or prior
to the Closing Date hereof a copy of the independent accountants'
report included in the Offering Memorandum signed by the accountants
rendering such report;
(n) to apply the net proceeds from the sale of the Securities
and Warrant Shares as set forth in the Offering Memorandum under the
heading "Use of Proceeds"; and
(o) to use its best efforts to maintain the quotation of the
Class A Common Stock on the Nasdaq National Market and will file with
the Nasdaq National Market all documents and notices required by the
Nasdaq National Market of companies that have securities that are
traded in the over-the-counter market and quotations for which are
reported by the Nasdaq National Market.
5. Conditions of Initial Purchasers' Obligations. The
respective obligations of the several Initial Purchasers hereunder are subject
to the accuracy, on and as of the date hereof and the Closing Date, of the
representations and warranties of the Issuers contained herein, to the accuracy
of the statements of the Issuers and their officers made in any certificates
delivered pursuant hereto, to the performance by the Issuers of their
obligations hereunder, and to each of the following additional terms and
conditions:
(a) The Offering Memorandum (and any amendments or
supplements thereto) shall have been printed and copies distributed to
the Initial Purchasers as promptly as practicable on or following the
date of this Agreement or at such other date and time as to which the
Initial Purchasers may agree; and no stop order suspending the sale of
the Securities in any jurisdiction shall have been issued and no
proceeding for that purpose shall have been commenced or shall be
pending or threatened.
(b) None of the Initial Purchasers shall have discovered and
disclosed to Iridium on or prior to the Closing Date that the Offering
Memorandum, as amended or supplemented, contains an untrue statement
of a fact which, in the opinion of counsel for
20
21
the Initial Purchasers specified herein, is material or omits to state
any fact which, in the opinion of such counsel, is material and is
required to be stated therein or is necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(c) All corporate proceedings and other legal matters
incident to the authorization, form and validity of each of the
Transaction Documents and the transactions contemplated thereby, shall
be satisfactory in all material respects to the Initial Purchasers,
and the Issuers shall have furnished to the Initial Purchasers all
documents and information that they or their counsel may reasonably
request to enable them to pass upon such matters.
(d) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ shall have furnished to the Initial
Purchasers their written opinion and letter, as counsel to the
Issuers, addressed to the Initial Purchasers and dated the Closing
Date, in form and substance reasonably satisfactory to the Initial
Purchasers, substantially to the effect set forth in Annex B hereto.
(e) ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇ shall have furnished to the
Initial Purchasers their written opinion, as counsel to IWCL,
addressed to the Initial Purchasers and dated the Closing Date, in
form and substance reasonably satisfactory to the Initial Purchasers,
substantially to the effect set forth in Annex C hereto.
(f) Steptoe & ▇▇▇▇▇▇▇ LLP shall have furnished to the Initial
Purchasers their written opinion, as regulatory counsel for Motorola
Satellite Communications as FCC license holder, addressed to the
Initial Purchasers and dated the Closing Date, in form and substance
reasonably satisfactory to the Initial Purchasers, substantially to
the effect set forth in Annex D hereto.
(g) ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq. shall have furnished to the
Initial Purchasers his written opinion, as Assistant Secretary of IWCL
and General Counsel of Iridium, addressed to the Initial Purchasers
and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, substantially to the effect
set forth in Annex E hereto.
(h) The Initial Purchasers shall have received from Milbank,
Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel for the Initial Purchasers, such
opinion or opinions, dated the Closing Date, with respect to such
matters as the Initial Purchasers may reasonably require, and the
Issuers shall have furnished to such counsel such documents and
information as they reasonably request for the purpose of enabling
them to pass upon such matters.
(i) The Initial Purchasers shall have received from Goldberg,
▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, regulatory counsel for the Initial
Purchasers, such opinion or opinions, dated the Closing Date, with
respect to such matters as the Initial Purchasers may reasonably
require, and the Issuers shall have furnished to such counsel such
documents and
21
22
information as they reasonably request for the purpose of enabling
them to pass upon such matters.
(j) The Issuers shall have furnished to the Initial
Purchasers a letter (the "Initial Letter") of KPMG Peat Marwick LLP,
addressed to the Initial Purchasers and dated the date hereof,
containing statements and information of the type ordinarily included
in accountants "comfort letters" with respect to the financial
statements and certain financial information contained in the Offering
Memorandum.
(k) The Issuers shall have furnished to the Initial
Purchasers a letter (the "Bring-Down Letter") of KPMG Peat Marwick
LLP, addressed to the Initial Purchasers and dated the Closing Date
(i) confirming that they are independent public accountants with
respect to the Issuers within the meaning of Rule 101 of the Code of
Professional Conduct of the AICPA and its interpretations and rulings
thereunder, (ii) stating, as of the date of the Bring-Down Letter (or,
with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given
in the Offering Memorandum, as of a date not more than three business
days prior to the date of the Bring-Down Letter), that the conclusions
and findings of such accountants with respect to the financial
information and other matters covered by the Initial Letter are
accurate and (iii) confirming in all material respects the conclusions
and findings set forth in the Initial Letter.
(l) As of the Closing Date, there shall not have been, since
the date hereof or since the respective dates as of which information
is given in the Offering Memorandum, any material adverse change in
the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of IWCL or Iridium, whether or not
arising in the ordinary course of business, and the Initial Purchasers
shall have received a certificate of the President or a Vice President
(or in the case of IWCL, the Assistant Secretary) of each of IWCL and
Iridium and of the chief financial or chief accounting officer of each
of IWCL and Iridium, dated as of Closing Date, to the effect that (i)
there has been no such material adverse change, (ii) the
representations and warranties in Section 1 hereof are true and
correct with the same force and effect as though expressly made at and
as of Closing Date, and (iii) each of the Issuers, as the case may be,
has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to Closing Date pursuant
hereto. Launch delays shall not be covered by this condition.
(m) The Initial Purchasers shall have received a certificate,
dated the Closing Date, of the President or Vice President of
Motorola, in form and substance satisfactory to counsel for the
Initial Purchasers, as to the accuracy of the statements attributed to
Motorola in the Offering Memorandum, and to such other matters
relating to Motorola as counsel for the Initial Purchasers may
reasonably request, substantially to the effect set forth in Annex F
hereto.
(n) The Initial Purchasers shall have received a counterpart
of the Registration Rights Agreement, the Warrant Agreement, the Unit
Agreement and the Share Issuance
22
23
Agreement which shall have been executed and delivered by a duly
authorized officer of the applicable Issuer or Issuers party thereto.
(o) Each of the Indentures shall have been duly executed and
delivered by the Note Issuers, the Guarantor Subsidiaries and the
applicable Trustee, and the Units, Notes and Warrants shall have been
duly executed and delivered by the Issuers and duly authenticated by
the Unit Agent, the applicable Trustee and the Warrant Agent.
(p) The Units, Notes and Warrants shall have been approved by
the NASD for trading in the PORTAL Market.
(q) If any event shall have occurred that requires the
Issuers under Section 4(d) to prepare an amendment or supplement to
the Offering Memorandum, such amendment or supplement shall have been
prepared, the Initial Purchasers shall have been given a reasonable
opportunity to comment thereon, and copies thereof shall have been
delivered to the Initial Purchasers reasonably in advance of the
Closing Date.
(r) There shall not have occurred any invalidation of Rule
144A or Regulation S under the Securities Act by any court or any
withdrawal or proposed withdrawal of any rule or regulation under the
Securities Act or the Exchange Act by the Commission or any amendment
or proposed amendment thereof by the Commission which in the judgment
of the Initial Purchasers would materially impair the ability of the
Initial Purchasers to purchase, hold or effect resales of the
Securities as contemplated hereby.
(s) Subsequent to the execution and delivery of this
Agreement or, if earlier, the dates as of which information is given
in the Offering Memorandum (exclusive of any amendment or supplement
thereto), there shall not have been any material adverse change in the
condition (financial or otherwise), or in the earnings, business
affairs or business prospects of Iridium or IWCL, whether or not
arising in the ordinary course of business, the effect of which, in
any such case described above, is, in the judgment of the Initial
Purchasers, so material and adverse as to make it impracticable or
inadvisable to proceed with the sale or delivery of the Securities on
the terms and in the manner contemplated by this Agreement and the
Offering Memorandum (exclusive of any amendment or supplement
thereto).
(t) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date,
prevent the issuance or sale of the Securities, the Exchange Notes,
the Private Exchange Notes, if any, the Warrant Shares, the LLC
Interest Warrants or the LLC Warrant Interests as contemplated by the
Offering Memorandum; and no injunction, restraining order or order of
any other nature by any federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would
prevent the issuance or sale as contemplated by the Offering
Memorandum of the Securities, the Exchange Notes, the Private Exchange
Notes, if any, the Warrants, the LLC Interest Warrants or the LLC
Warrant Interests.
23
24
(u) Subsequent to the execution and delivery of this
Agreement (i) no downgrading shall have occurred in the rating
accorded the Securities by ▇▇▇▇▇'▇ Investors Service Inc. or Standard
and Poor's Ratings Group and (ii) no such organization shall have
publicly announced that it has under surveillance or review (other
than an announcement with positive implications of a possible
upgrading), its rating of the Securities.
(v) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following: (i)
trading in securities generally on the New York Stock Exchange, the
American Stock Exchange, the Nasdaq National Market System or the
over-the-counter market shall have been suspended or materially
limited, or minimum prices shall have been established on any such
exchange or market by the Commission, the Nasdaq National Market or
Bermuda, by any such exchange or by any other regulatory body or
governmental authority having jurisdiction, or trading in any
securities of the Issuers on any exchange or in the over-the-counter
market shall have been suspended or (ii) any moratorium on commercial
banking activities shall have been declared by federal or New York
state authorities or (iii) an outbreak or escalation of hostilities or
a declaration by the United States of a national emergency or war or a
material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such) the effect of which, in
the case of this clause (iii), is, in the judgment of the Initial
Purchasers, so material and adverse as to make it impracticable to
market the Securities or to enforce contracts for the sale of the
Securities on the terms and in the manner contemplated by this
Agreement and in the Offering Memorandum.
(w) Motorola shall have released the security interests and
other liens on the assets of Iridium granted in favor of Motorola that
secure Iridium's obligations to Motorola under the Agreement Regarding
Guarantee.
6. Termination. The obligations of the Initial Purchasers
hereunder may be terminated by the Initial Purchasers by notice given to and
received by Issuers prior to delivery of and payment for the Units and Series B
Notes if, prior to that time, any of the events described in Section 5(r), (s),
(t), (u) or (v) shall have occurred and be continuing.
7. Defaulting Initial Purchasers. (a) If, on the Closing
Date, an Initial Purchaser defaults in the performance of its obligations under
this Agreement, the non-defaulting Initial Purchaser may make arrangements for
the purchase of the Units or Series B Notes which such defaulting Initial
Purchaser agreed but failed to purchase by other persons satisfactory to the
Issuers and the non-defaulting Initial Purchaser, but if no such arrangements
are made within 24 hours after such default, this Agreement shall terminate
without liability on the part of the non-defaulting Initial Purchaser or the
Issuers, except that the Issuers will continue to be liable for the payment of
expenses to the extent set forth in Sections 8 and 12 and except that the
provisions of Sections 9 and 10 shall not terminate and shall remain in effect.
As used in this Agreement, the term "Initial Purchasers" includes, for all
purposes of this Agreement unless the
24
25
context otherwise requires, any party not listed in Schedule 1 hereto that,
pursuant to this Section 7, purchases Securities which a defaulting Initial
Purchaser agreed but failed to purchase.
(b) Nothing contained herein shall relieve a defaulting
Initial Purchaser of any liability it may have to the Issuers or the
non-defaulting Initial Purchaser for damages caused by its default. If other
persons are obligated or agree to purchase the Units or Series B Notes of a
defaulting Initial Purchaser, either the non-defaulting Initial Purchaser or
the Note Issuers may postpone the Closing Date for up to seven full business
days in order to effect any changes that in the opinion of counsel for the Note
Issuers or counsel for the Initial Purchasers may be necessary in the Offering
Memorandum or in any other document or arrangement, and the Note Issuers agree
to promptly prepare any amendment or supplement to the Offering Memorandum that
effects any such changes.
8. Reimbursement of Initial Purchasers' Expenses. If this
Agreement shall have been terminated pursuant to Section 6 or due to the
failure of the Issuers to fulfill a condition stated in Section 5, the Issuers
shall reimburse the Initial Purchasers for such out-of-pocket expenses
(including reasonable fees and disbursements of counsel) as shall have been
reasonably incurred by the Initial Purchasers in connection with this Agreement
and the proposed purchase and resale of the Units and Series B Notes. If this
Agreement is terminated pursuant to Section 7 by reason of the default of one
or both of the Initial Purchasers, the Issuers shall not be obligated to
reimburse any Initial Purchaser on account of such expenses.
9. Indemnification. (a) The Issuers shall, jointly and
severally, indemnify and hold harmless each Initial Purchaser and its
affiliates, and each person, if any, who controls any Initial Purchaser within
the meaning of the Securities Act or the Exchange Act (collectively referred to
for purposes of this Section 9(a) and Section 10 as an Initial Purchaser), from
and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, without limitation, any loss, claim,
damage, liability or action relating to purchases and sales of the Securities
and the Warrant Shares), to which that Initial Purchaser may become subject,
whether commenced or threatened, under the Securities Act, the Exchange Act,
any other federal or state statutory law or regulation, at common law or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Offering Memorandum or the Offering
Memorandum or in any amendment or supplement thereto or in any information
provided to the holders of the Securities pursuant to Rule 144A(d)(4) under the
Securities Act or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and shall reimburse each Initial Purchaser promptly upon
demand for any legal or other expenses reasonably incurred by that Initial
Purchaser in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Issuers shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with any Initial Purchasers' Information; and
provided, further, that with respect to any such
25
26
untrue statement in or omission from the Preliminary Offering Memorandum, the
indemnity agreement contained in this Section 9(a) shall not inure to the
benefit of any such Initial Purchaser to the extent that any such loss, claim,
damage, liability or action of or with respect to such Initial Purchaser
results from the fact that both (A) to the extent required by applicable law or
this Agreement, a copy of the Offering Memorandum was not sent or given to such
person at or prior to the written confirmation of the sale of such Units or
Series B Notes to such person and (B) the untrue statement in or omission from
the Preliminary Offering Memorandum was corrected in the Offering Memorandum
(unless, in either case, such failure to deliver the Offering Memorandum was a
result of non-compliance by the any of the Issuers with Section 4(b)).
(b) Each Initial Purchaser, severally and not jointly, shall
indemnify and hold harmless the Issuers and their respective affiliates, and
each person, if any, who controls the Issuers within the meaning of the
Securities Act or the Exchange Act (collectively referred to for purposes of
this Section 9(b) and Section 10 as the Issuers), from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Issuers may become subject, whether commenced or threatened, under
the Securities Act, the Exchange Act, any other federal or state statutory law
or regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement
or alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with any Initial Purchasers' Information,
and shall reimburse the Issuers for any legal or other expenses reasonably
incurred by the Issuers in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action
as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party pursuant to Section 9(a) or 9(b), notify the
indemnifying party in writing of the claim or the commencement of that action;
provided, however, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have under this Section 9 except to
the extent that it has been materially prejudiced by such failure; and,
provided, further, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 9. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying
party thereof, the indemnifying party shall be entitled to participate therein
and, to the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying
party to the indemnified party of its election to assume the defense of such
claim or action, the indemnifying party shall not be liable to the indemnified
party under this Section 9 for any legal or other expenses subsequently
26
27
incurred by the indemnified party in connection with the defense thereof;
provided, however, that an indemnified party shall have the right to employ its
own counsel in any such action, but the fees, expenses and other charges of
such counsel for the indemnified party will be at the expense of such
indemnified party unless (1) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded (based upon advice of independent counsel to the
indemnified party) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available
to the indemnifying party, (3) a conflict or potential conflict exists (based
upon advice of independent counsel to the indemnified party) between the
indemnified party and the indemnifying party (in which case the indemnifying
party will not have the right to direct the defense of such action on behalf of
the indemnified party) or (4) the indemnifying party has not in fact employed
counsel reasonably satisfactory to the indemnified party to assume the defense
of such action within a reasonable time after receiving notice of the
commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm of attorneys (in addition to any
local counsel) at any one time for all such indemnified party or parties. Each
indemnified party, as a condition of the indemnity agreements contained in
Sections 9(a) and 9(b), shall use all reasonable efforts to cooperate with the
indemnifying party in the defense of any such action or claim. No indemnifying
party shall be liable for any settlement of any action effected without its
written consent. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
10. Contribution. If the indemnification provided for in
Section 9 is unavailable or insufficient to hold harmless an indemnified party
under Section 9(a) or 9(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable
by such indemnified party as a result of such loss, claim, damage or liability,
or action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Issuers on the one hand and the
Initial Purchasers on the other from the offering of the Securities or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Issuers on
the one hand and the Initial Purchasers on the other with respect to the
statements or omissions that resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Issuers on the one hand
and the Initial Purchasers on the other with respect to such offering shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Securities purchased under this Agreement (before deducting expenses)
received by or on behalf of the Issuers without duplication, on the one hand,
and the total discounts and commissions received by the Initial Purchasers with
respect to the Securities purchased under this Agreement, on the other, bear to
27
28
the total gross proceeds from the sale of the Securities under this Agreement,
in each case as set forth in the table on the cover page of the Offering
Memorandum. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to the
Issuers or information supplied by the Issuers on the one hand or to any
Initial Purchasers' Information on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Issuers and the Initial
Purchasers agree that it would not be just and equitable if contributions
pursuant to this Section 10 were to be determined by pro rata allocation (even
if the Initial Purchasers were treated as one entity for such purpose) or by
any other method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 10 shall be deemed
to include, for purposes of this Section 10, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending or preparing to defend any such action or claim. Notwithstanding
the provisions of this Section 10, no Initial Purchaser shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities purchased by it and resold to investors were offered to
investors exceeds the amount of any damages which such Initial Purchaser has
otherwise paid or become liable to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Initial Purchasers'
obligations to contribute as provided in this Section 10 are several in
proportion to their respective purchase obligations and not joint.
11. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Initial Purchasers, the
Issuers and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except as
provided in Sections 9 and 10 with respect to affiliates and controlling
persons of the Issuers and the Initial Purchasers and in Section 4(e) with
respect to holders and prospective purchasers of the Securities. Nothing in
this Agreement is intended or shall be construed to give any person, other than
the persons referred to in this Section 11, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision
contained herein.
12. Expenses. The Issuers agree with the Initial Purchasers
to pay (a) the costs incident to the authorization, issuance, sale, preparation
and delivery of the Securities and any taxes payable in that connection; (b)
the costs incident to the preparation, printing and distribution of the
Preliminary Offering Memorandum, the Offering Memorandum and any amendments or
supplements thereto; (c) the costs of reproducing and distributing each of the
Transaction Documents; (d) the costs incident to the preparation, printing and
delivery of the certificates evidencing the Securities, including stamp duties
and transfer taxes, if any, payable upon issuance of the Securities; (e) the
fees and expenses of the Issuers' counsel and independent accountants; (f) the
fees and expenses of qualifying the Securities under the securities laws of the
several jurisdictions as provided in Section 4(h) and of preparing, printing
and distributing Blue
28
29
Sky Memoranda (including related fees and expenses of counsel for the Initial
Purchasers); (g) any fees charged by rating agencies for rating the Securities;
(h) the fees and expenses of the Trustees and any paying agents (including
related fees and expenses of any counsel to such parties); and (i) all expenses
and application fees incurred in connection with the application for the
inclusion of the Securities on the PORTAL Market and the approval of the
Securities for book-entry transfer by DTC. Except as provided in this Section
12 and Section 8, the Initial Purchasers shall pay their own costs and
expenses.
13. Survival. The respective indemnities, rights of
contribution, representations, warranties and agreements of the Issuers and the
Initial Purchasers contained in this Agreement or made by or on behalf of the
Issuers or the Initial Purchasers pursuant to this Agreement or any certificate
delivered pursuant hereto shall survive the delivery of and payment for the
Securities and shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made by or
on behalf of any of them or any of their respective affiliates, officers,
directors, employees, representatives, agents or controlling persons.
14. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent
by mail or telecopy transmission to Chase Securities Inc., ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(telecopier no.: (▇▇▇) ▇▇▇-▇▇▇▇);
(b) if to the Note Issuers or Guarantor Subsidiaries, shall be
delivered or sent by mail or telecopy transmission to c/o Iridium LLC
at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention: General
Counsel (telecopier no.: 202-408-3761); or
(c) if to IWCL, shall be delivered or sent by mail or telecopy
transmission to Clarendon House, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ of the Secretary (with a copy to Iridium);
provided that any notice to an Initial Purchaser or Issuer pursuant to Section
9(c) shall also be delivered or sent by mail to such Initial Purchaser or
Issuer at its address set forth on the signature page hereof. Any such
statements, requests, notices or agreements shall take effect at the time of
receipt thereof. The Issuers shall be entitled to act and rely upon any
request, consent, notice or agreement given or made on behalf of the Initial
Purchasers by CSI.
15. Definition of Terms. For purposes of this Agreement, (a)
the term "business day" means any day on which the New York Stock Exchange,
Inc. is open for trading, (b) the term "subsidiary" has the meaning set forth
in the "Description of Notes" section of the Offering Memorandum and (c) except
where otherwise expressly provided, the term "affiliate" has the meaning set
forth in Rule 405 under the Securities Act.
16. Initial Purchasers' Information. The parties hereto
acknowledge and agree that, for all purposes of this Agreement, the Initial
Purchasers' Information consists solely of the
29
30
following information in the Preliminary Offering Memorandum and the Offering
Memorandum: (i) the last paragraph on the front cover page concerning the terms
of the offering by the Initial Purchasers; (ii) the legend on the inside front
cover page concerning over-allotment and trading activities by the Initial
Purchasers; and (iii) the statements concerning the Initial Purchasers
contained in the third, fourth, fifth, tenth and eleventh paragraph and the
second sentence of the sixth paragraph under the heading "Plan of
Distribution".
17. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
18. Counterparts. This Agreement may be executed in one or
more counterparts (which may include counterparts delivered by telecopier) and,
if executed in more than one counterpart, the executed counterparts shall each
be deemed to be an original, but all such counterparts shall together
constitute one and the same instrument.
19. Amendments. No amendment or waiver of any provision of
this Agreement, nor any consent or approval to any departure therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
parties hereto.
20. Headings. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
30
31
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us a counterpart hereof, whereupon
this instrument will become a binding agreement between the Issuers and the
several Initial Purchasers in accordance with its terms.
Very truly yours,
IRIDIUM LLC
By
------------------------------
Name:
Title:
IRIDIUM CAPITAL CORPORATION
By
------------------------------
Name:
Title:
IRIDIUM WORLD COMMUNICATIONS LTD.
By
------------------------------
Name:
Title:
IRIDIUM ROAMING LLC
By
------------------------------
Name:
Title:
IRIDIUM IP LLC
By
------------------------------
Name:
Title:
31
32
Accepted:
CHASE SECURITIES INC.
By
------------------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10081
Attention: Legal Department
▇▇▇▇▇▇▇ LYNCH, ▇▇▇▇▇▇, ▇▇▇▇▇▇
AND ▇▇▇▇▇ INCORPORATED
By
------------------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇. ▇▇▇▇ ▇▇▇▇▇▇▇
32
33
SCHEDULE 1
Initial Purchasers Number of Units
------------------ ---------------
Chase Securities Inc. 200,100
▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇
and ▇▇▇▇▇ Incorporated 99,900
---------------
Total 300,000
Initial Purchasers Principal Amount of Series B Notes
------------------ ----------------------------------
Chase Securities Inc. $333,500,000
▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇
and ▇▇▇▇▇ Incorporated 166,500,000
---------------
Total $500,000,000
33
34
ANNEX A
Iridium LLC
Iridium Capital Corporation
$300,000,000 13% Senior Notes due 2005, Series A
and
$500,000,000 14% Senior Notes due 2005, Series B
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
Dated as of July 16, 1997
CHASE SECURITIES INC.
▇▇▇▇▇▇▇ LYNCH, ▇▇▇▇▇▇, ▇▇▇▇▇▇
AND ▇▇▇▇▇ INCORPORATED
c/o Chase Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Iridium LLC, a Delaware limited liability company ("Iridium"),
and Iridium Capital Corporation, a Delaware corporation ("Capital" and,
together with Iridium, the "Issuers"), propose, jointly and severally, to issue
and sell to Chase Securities Inc. ("CSI") and ▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ and
▇▇▇▇▇ Incorporated (together with CSI, the "Initial Purchasers"), upon the
terms and subject to the conditions set forth in a purchase agreement dated
July 11, 1997 (the "Purchase Agreement"), (i) 300,000 Units, consisting of
$300,000,000 aggregate principal amount of Series A Notes and 300,000 Warrants,
and (ii) $500,000,000 aggregate principal amount of Series B Notes. The Series
A Notes and Series B Notes are collectively referred to herein as the "Notes".
The Notes will be fully guaranteed on an unsecured, senior basis by Iridium
Roaming LLC and Iridium IP LLC (collectively, the "Guarantor Subsidiaries").
Capitalized terms used but not defined herein shall have the meanings given to
such terms in the Purchase Agreement.
As an inducement to the Initial Purchasers to enter into the
Purchase Agreement and in satisfaction of a condition to the obligations of the
Initial Purchasers thereunder, the Issuers agree with the Initial Purchasers,
for the benefit of the holders (including the Initial Purchasers) of the Notes,
the Exchange Notes (as defined herein) and the Private Exchange Notes (as
defined herein) (collectively, the "Holders"), as follows:
1. Registered Exchange Offer. The Issuers and the Guarantor
Subsidiaries shall, at their cost and expense, (i) prepare and, not later than
15 days following the date of original
35
issuance of the Notes (the "Issue Date"), file with the Commission a
registration statement (the "Exchange Offer Registration Statement") on Form
S-1 or Form S-4 under the Securities Act, if use of such form is then
available, with respect to a proposed offer to the Holders (the "Registered
Exchange Offer") to issue and deliver to the Holders, in exchange for the
Series A Notes or the Series B Notes, as the case may be, a like aggregate
principal amount of debt securities of the Issuers that are identical in all
material respects to the Series A Notes or the Series B Notes, as the case may
be (the debt securities issued in exchange for the Series A Notes and the debt
securities issued in exchange for the Series B Notes are collectively referred
to herein as the "Exchange Notes"), except the Exchange Notes shall not contain
terms with respect to transfer restrictions, (ii) use their reasonable efforts
to cause the Exchange Offer Registration Statement to become effective under
the Securities Act no later than 52 days after the Issue Date and the
Registered Exchange Offer to be consummated no later than 82 days after the
Issue Date (or if the 52nd day or 82nd day is not a business day, the first
business day thereafter) and (iii) use their reasonable efforts to keep the
Exchange Offer Registration Statement effective for not less than 20 business
days (or longer, if required by applicable law or otherwise extended by the
Issuers at their option) after the date on which notice of the Registered
Exchange Offer is mailed to the Holders (such period being called the "Exchange
Offer Registration Period"). The Exchange Notes will be issued under the
Indentures or indentures (the "Exchange Notes Indentures") each among the
Issuers, the Guarantor Subsidiaries and the applicable Trustee or such other
bank or trust company, as trustee (the "Exchange Notes Trustees"), such
indentures to be identical in all material respects to the Indentures, except
the Exchange Notes shall not contain terms with respect to transfer
restrictions (as described above). If the Issuers and the Guarantor
Subsidiaries effect the Registered Exchange Offer, the Issuers and the
Guarantor Subsidiaries will be entitled to close the Registered Exchange Offer
20 business days after the commencement thereof; provided, however, that the
Issuers have accepted all the Notes theretofore validly tendered in accordance
with the terms of the Registered Exchange Offer.
As soon as practicable after the effectiveness of the Exchange
Offer Registration Statement, unless the Registered Exchange Offer would not be
permitted by applicable law or the Commission's policy, the Issuers and the
Guarantor Subsidiaries shall commence the Registered Exchange Offer, it being
the objective of such Registered Exchange Offer to enable each Holder electing
to exchange Notes for Exchange Notes that correspond to the Notes originally
held by such Holder (assuming that such Holder (a) is not an affiliate (as
defined in Rule 144 under the Securities Act) of the Issuers, the Guarantor
Subsidiaries or an Exchanging Dealer (as defined herein) not complying with the
requirements of the next sentence, (b) is not an Initial Purchaser holding
Notes that have, or that are reasonably likely to have, the status of an unsold
allotment in an initial distribution, (c) will acquire the Exchange Notes in
the ordinary course of such Holder's business and (d) has no arrangements or
understandings with any person to participate in the distribution of the
Exchange Notes (within the meaning of the Securities Act), and to transfer such
Exchange Notes from and after their receipt without any limitations or
restrictions on transfer under the Securities Act and without material
restrictions on transfer under the securities laws of no less than two-thirds
of the several states of the United States. The Issuers, the Guarantor
Subsidiaries, the Initial Purchasers and each Exchanging Dealer acknowledge
that, pursuant to interpretations by the Commission's staff of Section 5 of the
Securities Act and in the absence of an applicable exemption therefrom, (a)
each Holder that is a broker-dealer electing to
2
36
exchange Notes, acquired for its own account as a result of market-making
activities or other trading activities, for Exchange Notes (an "Exchanging
Dealer"), is required to deliver a prospectus containing substantially the
information set forth (i) in Annex A hereto on the cover of the prospectus
forming part of the Exchange Offer Registration Statement, (ii) in Annex B
hereto in the forepart of the Exchange Offer Registration Statement and in the
"Exchange Offer Procedures" section and the "Purpose of the Exchange Offer"
section of the prospectus forming a part of the Exchange Offer Registration
Statement, (iii) in Annex C hereto in the "Plan of Distribution" section of
such prospectus forming part of the Exchange Offer Registration Statement and
(iv) in Annex D hereto in the letter of transmittal delivered pursuant to the
Registered Exchange Offer, in connection with a sale of any such Exchange Notes
received by such Exchanging Dealer pursuant to the Registered Exchange Offer
and (b) an Initial Purchaser that elects to sell Exchange Notes acquired in
exchange for Notes constituting any portion of an unsold allotment is required
to deliver a prospectus containing the information required by Items 507 or 508
of Regulation S-K under the Securities Act, as applicable, in connection with
such sale.
If, prior to the consummation of the Registered Exchange
Offer, any Holder holds any Notes acquired by it that have, or that are
reasonably likely to be determined to have, the status of an unsold allotment
in an initial distribution, or any Holder is not entitled to participate in the
Registered Exchange Offer, the Note Issuers shall, upon the request of any such
Holder, simultaneously with the delivery of the Exchange Notes in the
Registered Exchange Offer, issue and deliver to any such Holder, in exchange
for the Notes held by such Holder (the "Private Exchange"), a like aggregate
principal amount of debt securities of the Note Issuers (the "Private Exchange
Notes") that are identical in all material respects to the Exchange Notes that
correspond to the Notes originally held by such Holder, except for the transfer
restrictions relating to such Private Exchange Notes. The Private Exchange
Notes will be issued under the same indenture as the related Exchange Notes,
and the Issuers shall use their reasonable efforts to cause the Private
Exchange Notes to bear the same CUSIP number as the Exchange Securities.
In connection with the Registered Exchange Offer, the Issuers
shall:
(a) mail, or cause to be mailed, to each Holder a copy of
the prospectus forming part of the Exchange Offer Registration
Statement, together with an appropriate letter of transmittal and
related documents;
(b) utilize the services of a depositary for the
Registered Exchange Offer with an address in the Borough of Manhattan,
The City of New York;
(c) permit Holders to withdraw tendered Notes at any time
prior to the close of business, New York City time, on the last
business day on which the Registered Exchange Offer shall remain open;
and
(d) otherwise comply in all respects with all laws that
are applicable to the Registered Exchange Offer.
3
37
As soon as practicable after the close of the Registered
Exchange Offer and any Private Exchange, as the case may be, the Issuers shall:
(a) accept for exchange all Notes validly tendered and
not validly withdrawn pursuant to the Registered Exchange Offer;
(b) deliver, or cause to be delivered, to the Trustee for
cancellation all Notes so accepted for exchange; and
(c) cause the Trustee or the Exchange Notes Trustee, as
the case may be, to authenticate and deliver to each Holder, Exchange
Notes or Private Exchange Notes, as the case may be, that correspond
to the Notes originally held by such Holder equal in principal amount
to the Notes of such Holder so accepted for exchange therefor.
The Issuers shall use their reasonable efforts to keep the
Exchange Offer Registration Statement effective and to amend and supplement the
prospectus contained therein, as may be necessary, in the opinion of counsel
for the Exchanging Dealers or for the Issuers, in order to permit such
prospectus to be used by all persons subject to the prospectus delivery
requirements of the Securities Act for such period of time as such persons must
comply with such requirements in order to resell Exchange Notes; provided that
(i) in the case where such prospectus and any amendment or supplement thereto
must be delivered by an Exchanging Dealer, such period shall be the lesser of
180 days and the date on which all Exchanging Dealers have sold all Exchange
Notes held by them and (ii) the Issuers shall make such prospectus and any
amendment or supplement thereto available to any broker-dealer for use in
connection with any resale of any Exchange Notes for a period of not less than
90 days after the consummation of the Registered Exchange Offer.
The Indentures or the Exchange Notes Indentures, as the case
may be, shall provide that the Series A Notes, the related Exchange Notes and
the related Private Exchange Notes, if any, or the Series B Notes, the related
Exchange Notes or the related Private Exchange Notes, as the case may be, shall
vote and consent together on all matters as one class and that none of the
Series A Notes, the related Exchange Notes or the related Private Exchange
Notes or the Series B Notes, the related Exchange Notes or the related Private
Exchange Notes, as the case may be, will have the right to vote or consent as a
separate class on any matter.
Interest on each Exchange Note and Private Exchange Note
issued pursuant to the Registered Exchange Offer and Private Exchange will
accrue interest from the last interest payment date on which interest was paid
on the Notes surrendered in exchange therefor or, if no interest has been paid
on the Notes, from the Issue Date.
Each Holder participating in the Registered Exchange Offer
shall be required to represent to the Issuers that at the time of the
consummation of the Registered Exchange Offer (i) any Exchange Notes received
by such Holder will be acquired in the ordinary course of business, (ii) such
Holder will have no arrangements or understanding with any person to
participate in the distribution of the Notes or the Exchange Notes (within the
meaning of the Securities Act), (iii)
4
38
such Holder is not an affiliate (as defined in Rule 405 under the Securities
Act) of the Issuers or the Guarantor Subsidiaries or, if such Holder is such an
affiliate, such Holder will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent applicable, (iv) if
such Holder is not a broker-dealer, that it is not engaged in, and does not
intend to engage in, the distribution of the Exchange Notes, and (v) if such
Holder is a broker-dealer, that it will receive Exchange Notes for its own
account in exchange for Notes that were acquired as a result of market-making
activities or other trading activities and that it will deliver a prospectus in
connection with any resale of such Exchange Notes.
Notwithstanding any other provisions hereof, the Issuers and
the Guarantor Subsidiaries will use their reasonable efforts to ensure that (i)
any Exchange Offer Registration Statement and any amendment thereto and any
prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations of the
Commission thereunder, (ii) any Exchange Offer Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(iii) any prospectus forming part of any Exchange Offer Registration Statement,
and any supplement to such prospectus, does not, as of the date of such
prospectus or supplement, as the case may be, include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that in no such case shall the Issuers
be responsible for information concerning any Initial Purchaser of the Notes,
provided in writing by any Initial Purchaser to the Issuers, included in the
Exchange Offer Registration Statement, the prospectus contained therein, or any
amendment or supplement thereto, as the case may be.
2. Shelf Registration. If (i) because of any change in law
or applicable interpretations thereof by the Commission's staff the Issuers
determine upon the advice of their outside counsel that they are not permitted
to effect the Registered Exchange Offer as contemplated by Section 1 hereof,
(ii) any Notes validly tendered pursuant to the Registered Exchange Offer are
not exchanged for Exchange Notes within 30 days after the commencement of the
Registered Exchange Offer, (iii) any Initial Purchaser so requests within 90
days after the consummation of the Registered Exchange Offer with respect to
Notes or Private Exchange Notes which are not eligible to be exchanged for
Exchange Notes in the Registered Exchange Offer and are held by it following
the consummation of the Registered Exchange Offer, (iv) any applicable law or
interpretations do not permit any Holder to participate in the Registered
Exchange Offer, (v) any Holder that participates in the Registered Exchange
Offer notifies Iridium within 20 business days after the consummation of the
Registered Exchange Offer that it did not receive freely transferable Exchange
Notes in exchange for validly tendered Notes, or (vi) the Issuers so elect,
then the following provisions shall apply:
(a) The Issuers and the Guarantor Subsidiaries shall use
their reasonable efforts to file as promptly as practicable (but in no event
later than the later of (i) 150 days after the Issue Date and (ii) 60 days
after so required or requested pursuant to this Section 2) with the Commission,
and thereafter use their reasonable efforts to cause to be declared effective
under
5
39
the Securities Act on or prior to 60 days after such filing is made, a shelf
registration statement on an appropriate form under the Securities Act relating
to the offer and sale of the Transfer Restricted Notes (as defined below) by
the Holders thereof from time to time in accordance with the methods of
distribution set forth in such registration statement (hereafter, a "Shelf
Registration Statement" and, together with any Exchange Offer Registration
Statement, a "Registration Statement"); provided, however, that no Holder
(other than an Initial Purchaser) shall be entitled to have the Notes held by
it covered by such Shelf Registration Statement unless such Holder agrees in
writing to be bound by all the provisions of this Agreement applicable to such
Holder (including certain indemnification obligations).
(b) The Issuers and the Guarantor Subsidiaries shall use
their reasonable efforts to keep the Shelf Registration Statement continuously
effective in order to permit the prospectus forming part thereof to be used by
Holders of Transfer Restricted Notes for a period ending on the earlier of (i)
two years from the Issue Date or such shorter period that will terminate when
all the Transfer Restricted Notes covered by the Shelf Registration Statement
have been sold pursuant thereto or for a period of one year in the event the
Shelf Registration Statement is requested by the Initial Purchasers pursuant to
Section 2(iii) and (ii) the date on which the Notes become eligible for resale
pursuant to Rule 144 under the Securities Act (in any such case, such period
being called the "Shelf Registration Period").
(c) Notwithstanding any other provisions hereof, the
Issuers and the Guarantor Subsidiaries will use their reasonable efforts to
ensure that (i) any Shelf Registration Statement and any amendment thereto and
any prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations of the
Commission thereunder, (ii) any Shelf Registration Statement and any amendment
thereto (in either case, other than with respect to information included
therein in reliance upon or in conformity with written information furnished to
the Issuers by or on behalf of any Holder specifically for use therein (the
"Holders' Information")), as of its effective date, does not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(iii) any prospectus forming part of any Shelf Registration Statement, and any
amendment or supplement to such prospectus (in either case, other than with
respect to Holders' Information), does not, as of its date, include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
3. Liquidated Damages. (a) The parties hereto agree that
the Holders of Transfer Restricted Notes, which are Series A Notes, will suffer
damages if the Issuers and the Guarantor Subsidiaries fail to fulfill their
obligations described under Section 1 or Section 2, as applicable, and that it
would not be feasible to ascertain the extent of such damages. Accordingly, if
(i) an Exchange Offer Registration Statement covering the Series A Notes is not
filed with the Commission on or prior to 15 days after the Issue Date or a
Shelf Registration Statement covering the Series A Notes is not filed with the
Commission on or prior to the later of (x) 150 days after the Issue Date and
(y) 60 days after the date such filing is requested or required to be made
pursuant to Section 2, (ii) an Exchange Offer Registration Statement covering
the Series A
6
40
Notes is not declared effective within 52 days after the Issue Date (or if the
52nd day is not a business day, the first business day thereafter) or a Shelf
Registration Statement covering the Series A Notes is not declared effective
within 60 days after such filing is made (each such date, a "Series A Note
Effectiveness Target Date"), (iii) the Registered Exchange Offer covering the
Series A Notes is not consummated within 30 days after the relevant Series A
Effectiveness Target Date, or (iv) a Shelf Registration Statement or an
Exchange Offer Registration Statement covering the Series Notes, as the case
may be, is filed and declared effective within the period ending on the Series
A Note Effectiveness Target Date but shall thereafter cease to be effective (at
any time that the Issuers are obligated to maintain the effectiveness thereof)
or useable without being succeeded within 30 days by an additional Registration
Statement covering the Series A Notes filed and declared effective (each such
event referred to in clauses (i) through (iv), a "Series A Note Registration
Default"), the Issuers and the Guarantor Subsidiaries will be obligated to pay
liquidated damages to each Holder of Transfer Restricted Notes, during the
first 15-day period immediately following the occurrence of one or more of such
Series A Note Registration Defaults, in an amount equal to $0.05 per week per
$1,000 principal amount of Transfer Restricted Notes held by such Holder until
(i) the applicable Registration Statement covering the Series A Notes is filed,
(ii) an Exchange Offer Registration Statement covering the Series A Notes is
declared effective and the Registered Exchange Offer covering the Series A
Notes is consummated, (iii) a Shelf Registration Statement covering the Series
A Notes is declared effective or (iv) the applicable Registration Statement
covering the Series A Notes again becomes effective, as the case may be. The
liquidated damages will increase by an additional $.10 per week per $1,000
principal amount of Transfer Restricted Notes, which are Series A Notes, held
by each Holder during each subsequent 30-day period until the date on which all
such Registration Defaults have been cured, up to a maximum amount of
Liquidated Damages of $.50 per week per $1,000 amount of Series A Notes.
Following the cure of all Registration Defaults, the accrual of liquidated
damages will cease. As used herein, the term "Transfer Restricted Notes" means
(i) each Note until the date on which such Note has been exchanged for a freely
transferable corresponding Exchange Note in the Registered Exchange Offer, (ii)
each Note or Private Exchange Note until the date on which it has been
effectively registered under the Securities Act and disposed of in accordance
with the Shelf Registration Statement or (iii) each Note or Private Exchange
Note until the date on which it is distributed to the public pursuant to Rule
144 under the Securities Act or is saleable pursuant to Rule 144(k) under the
Securities Act. Notwithstanding anything to the contrary in this Section 3,
the Issuers and the Guarantor Subsidiaries shall not be required to pay
liquidated damages to a Holder of Transfer Restricted Notes (i) if such Holder
failed to comply with its obligations to make the representations set forth in
the second to last paragraph of Section 1 or failed to provide the information
required to be provided by it, if any, pursuant to Section 4(n) or (ii) if a
holder of such Transfer Restricted Notes was, at any time while the Registered
Exchange Offer was pending, eligible to exchange, and did not validly tender,
such Transfer Restricted Notes for freely transferable corresponding Exchange
Notes in such Exchange Offer.
(b) The parties hereto agree that the Holders of Transfer
Restricted Notes, which are Series B Notes, will suffer damages if the Issuers
and the Guarantor Subsidiaries fail to fulfill their obligations described
under Section 1 or Section 2, as applicable, and that it would not be feasible
to ascertain the extent of such damages. Accordingly, if (i) an Exchange Offer
7
41
Registration Statement covering the Series B Notes is not filed with the
Commission on or prior to 15 days after the Issue Date or a Shelf Registration
Statement covering the Series B Notes is not filed with the Commission on or
prior to the later of (x) 150 days after the Issue Date and (y) 60 days after
the date such filing is requested or required to be made pursuant to Section 2,
(ii) an Exchange Offer Registration Statement covering the Series B Notes is
not declared effective within 52 days after the Issue Date (or if the 52nd day
is not a business day, the first business day thereafter) or a Shelf
Registration Statement covering the Series B Notes is not declared effective
within 60 days after such filing is made (each such date, an "Series B Note
Effectiveness Target Date"), (iii) the Registered Exchange Offer covering the
Series B Notes is not consummated within 30 days after the relevant Series B
Note Effectiveness Target Date, or (iv) a Shelf Registration Statement or an
Exchange Offer Registration Statement covering the Series B Notes, as the case
may be, is filed and declared effective within the period ending on the Series
B Note Effectiveness Target Date but shall thereafter cease to be effective (at
any time that the Issuers are obligated to maintain the effectiveness thereof)
or useable without being succeeded within 30 days by an additional Registration
Statement covering the Series B Notes filed and declared effective (each such
event referred to in clauses (i) through (iv), a "Series B Note Registration
Default"), the Issuers and the Guarantor Subsidiaries will be obligated to pay
liquidated damages to each Holder of Transfer Restricted Notes, during the
first 15-day period immediately following the occurrence of one or more of such
Series B Note Registration Defaults, in an amount equal to $0.05 per week per
$1,000 principal amount of Transfer Restricted Notes held by such Holder until
(i) the applicable Registration Statement covering the Series B Notes is filed,
(ii) an Exchange Offer Registration Statement covering the Series B Notes is
declared effective and the Registered Exchange Offer covering the Series B
Notes is consummated, (iii) a Shelf Registration Statement covering the Series
B Notes is declared effective or (iv) the applicable Registration Statement
covering the Series B Notes again becomes effective, as the case may be. The
liquidated damages will increase by an additional $.10 per week per $1,000
principal amount of Transfer Restricted Notes, which are Series B Notes, held
by each Holder during each subsequent 30-day period until the date on which all
such Registration Defaults have been cured, up to a maximum amount of
Liquidated Damages of $.50 per week per $1,000 amount of Series B Notes.
Following the cure of all Registration Defaults, the accrual of liquidated
damages will cease.
(c) A Series A Note Registration Default or Series B Note
Registration Default referred to in Sections 3(a)(iv) and 3(b)(iv),
respectively, shall be deemed not to have occurred and be continuing in
relation to the applicable Shelf Registration Statement or the related
prospectus if (i) such Registration Default has occurred solely as a result of
(x) the filing of a post-effective amendment to such Shelf Registration
Statement to incorporate annual audited or, if required by the rules and
regulations under the Securities Act, quarterly unaudited financial information
with respect to the Issuers where such post-effective amendment is not yet
effective and needs to be declared effective to permit Holders to use the
related prospectus or (y) for a period not to exceed an aggregate of 45 days in
any calendar year, other material events or developments with respect to the
Issuers that would need to be described in such Shelf Registration Statement or
the related prospectus and (ii) in the case of clause (y), the Issuers are
proceeding promptly and in good faith to amend or supplement such Shelf
Registration Statement and related prospectus to describe such events;
provided, however, that in no event
8
42
shall the Issuers be required to disclose the business purpose for such
suspension if the Issuers determine in good faith that such business purpose
must remain confidential. Notwithstanding the foregoing, the Issuers shall not
be required to pay Liquidated Damages with respect to the Notes of Holder if
the failure arises from the Issuers' failure to file, or cause to become
effective, a Shelf Registration Statement within the time periods specified in
this Section 3 by reason of the failure of such Holder to provide such
information as (i) the Issuers may reasonably request, with reasonable prior
written notice, for use in the Shelf Registration Statement or any prospectus
included therein to the extent the Issuers reasonably determine that such
information is required to be included therein by applicable law, (ii) the NASD
or the Commission may request in connection with such Shelf Registration
Statement or (iii) is required to comply with the agreements of such Holder as
contained in Section 4(n) to the extent compliance thereof is necessary for the
Shelf Registration Statement to be declared effective.
(d) The Issuers shall notify the Trustee and the Paying
Agent under the applicable Indenture immediately upon the happening of each and
every Registration Default relating to the Notes issued thereunder. The
Issuers and the Guarantor Subsidiaries shall pay the liquidated damages due on
the Transfer Restricted Notes by depositing with the applicable Paying Agent
(which may not be either of the Issuers for these purposes), in trust, for the
benefit of the Holders thereof, prior to 10:00 a.m., New York City time, on the
next interest payment date specified by the applicable Indenture and the
applicable Notes, sums sufficient to pay the liquidated damages then due. The
Liquidated Damages due shall be payable on each interest payment date specified
by the applicable Indenture and the applicable Notes to the record holder
entitled to receive the interest payment to be made on such date. Each
obligation to pay liquidated damages shall be deemed to accrue from and
including the date of the applicable Registration Default.
(e) The parties hereto agree that the liquidated damages
provided for in this Section 3 constitute a reasonable estimate of and are
intended to constitute the sole damages that will be suffered by Holders of
Transfer Restricted Notes by reason of the failure of (i) the Shelf
Registration Statement or the Exchange Offer Registration Statement to be
filed, (ii) the Shelf Registration Statement to remain effective or (iii) the
Exchange Offer Registration Statement to be declared effective and remain
effective and the Registered Exchange Offer to be consummated, in each case to
the extent required by this Agreement.
4. Registration Procedures. In connection with any
Registration Statement, the following provisions shall apply:
(a) The Issuers shall (i) furnish to each Initial
Purchaser, prior to the effectiveness thereof with the Commission, a copy of
the Registration Statement and each amendment thereof and each supplement, if
any, to the prospectus included therein and shall use their reasonable efforts
to reflect in each such document, when so filed with the Commission, such
comments as any Initial Purchaser may reasonably propose within three business
days after being sent a draft thereof; (ii) include the information set forth
in Annex A hereto on the cover, in Annex B hereto on the forepart of the
Registration Statement and in the "Exchange Offer Procedures" section and the
"Purpose of the Exchange Offer" section and in Annex C hereto in
9
43
the "Plan of Distribution" section of the prospectus forming a part of the
Exchange Offer Registration Statement, and include the information set forth in
Annex D hereto in the Letter of Transmittal delivered pursuant to the
Registered Exchange Offer; (iii) if requested by any Initial Purchaser, include
the information required by Items 507 or 508 of Regulation S-K, as applicable,
in the prospectus forming a part of the Exchange Offer Registration Statement;
and (iv) in the case of a Shelf Registration Statement, include the names of
the Holders who propose to sell Notes pursuant to such Shelf Registration
Statement as selling securityholders.
(b) The Issuers shall advise each Initial Purchaser, each
Exchanging Dealer and the Holders (if applicable) and, if requested by any such
person, confirm such advice in writing (which advice pursuant to clauses
(ii)-(v) hereof shall be accompanied by an instruction to suspend the use of
the prospectus until the requisite changes have been made):
(i) when any Registration Statement and any amendment
thereto has been filed with the Commission and when such Registration
Statement or any post-effective amendment thereto has become
effective;
(ii) of any request by the Commission for amendments or
supplements to any Registration Statement or the prospectus included
therein or for additional information; (provided, however, that with
respect to any requests prior to the effectiveness of the Registration
Statement, the Issuers shall be required to give written notice only
to the Initial Purchasers and their counsel).
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of any Registration Statement or the
initiation of any proceedings for that purpose;
(iv) of the receipt by the Issuers of any notification
with respect to the suspension of the qualification of the Notes, the
Exchange Notes or the Private Exchange Notes for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose; and
(v) of the happening of any event that requires the
making of any changes in any Registration Statement or the prospectus
included therein in order that the statements therein are not
misleading and do not omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(c) The Issuers and the Guarantor Subsidiaries will make
every reasonable effort to obtain the withdrawal at the earliest possible time
of any order suspending the effectiveness of any Registration Statement.
(d) The Issuers will furnish to each Holder of Transfer
Restricted Notes included within the coverage of any Shelf Registration
Statement, without charge, at least one conformed copy of such Shelf
Registration Statement and any post-effective amendment
10
44
thereto, including financial statements and schedules and, if any such Holder
so requests in writing, all exhibits thereto (including those, if any,
incorporated by reference).
(e) The Issuers will, during the Shelf Registration
Period, promptly deliver to each Holder of Transfer Restricted Notes included
within the coverage of any Shelf Registration Statement, without charge, as
many copies of the prospectus (including each preliminary prospectus) included
in such Shelf Registration Statement and any amendment or supplement thereto as
such Holder may reasonably request; and the Issuers consent, subject to the
provisions of this Agreement, to the use of such prospectus or any amendment or
supplement thereto by each of the selling Holders of Transfer Restricted Notes
in connection with the offer and sale of the Transfer Restricted Notes covered
by such prospectus or any amendment or supplement thereto during the Shelf
Registration Period.
(f) The Issuers will furnish to each Initial Purchaser
and each Exchanging Dealer, and to any other Holder who so requests, without
charge, at least one conformed copy of the Exchange Offer Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules and, if any Initial Purchaser or Exchanging Dealer or
any such Holder so requests in writing, all exhibits thereto (including those,
if any, incorporated by reference).
(g) The Issuers will, during the Exchange Offer
Registration Period or the Shelf Registration Period, as applicable, as
promptly as practicable deliver to each Initial Purchaser, each Exchanging
Dealer and such other persons that are required to deliver a prospectus
following the Registered Exchange Offer, without charge, as many copies of the
final prospectus included in the Exchange Offer Registration Statement or the
Shelf Registration Statement and any amendment or supplement thereto as such
Initial Purchaser, Exchanging Dealer or other persons may reasonably request;
and the Issuers consent, subject to the provisions of this Agreement, to the
use of such prospectus or any amendment or supplement thereto by any such
Initial Purchaser, Exchanging Dealer or other persons required to deliver a
prospectus during and following the Exchange Offer Registration Period or Shelf
Registration Period in each case in the form most recently provided to each
such person by the Issuers.
(h) Prior to the effective date of any Registration
Statement, the Issuers and the Guarantor Subsidiaries will use their reasonable
efforts to register or qualify, or cooperate with the Holders of Notes,
Exchange Notes or Private Exchange Notes included therein and their respective
counsel in connection with the registration or qualification of, such Notes,
Exchange Notes or Private Exchange Notes for offer and sale under the
securities or blue sky laws of such jurisdictions as any such Holder reasonably
requests in writing and do any and all other acts or things necessary or
advisable to enable the offer and sale in such jurisdictions of the Notes,
Exchange Notes or Private Exchange Notes covered by such Registration
Statement; provided that neither Issuer will be required to qualify to do
business in any jurisdiction where it is not then so qualified, to subject
itself to taxation or other governmental fees or charges in respect of any
jurisdiction in which it is not otherwise subject or to take any action which
would subject it to general service of process or to taxation in any such
jurisdiction where it is not then so subject.
11
45
(i) The Issuers and the Guarantor Subsidiaries will
cooperate with the Holders of Notes, Exchange Notes or Private Exchange Notes
to facilitate the timely preparation and delivery of certificates representing
Notes, Exchange Notes or Private Exchange Notes to be sold pursuant to any
Registration Statement free of any restrictive legends and in such
denominations and registered in such names as the Holders thereof may request
in writing prior to sales of Notes, Exchange Notes or Private Exchange Notes
pursuant to such Registration Statement.
(j) If any event contemplated by Section 4(b)(ii) through
(v) occurs during the period for which the Issuers are required to maintain an
effective Registration Statement, as promptly as practicable the Issuers and
the Guarantor Subsidiaries will prepare and file with the Commission a
post-effective amendment to the Registration Statement or a supplement to the
related prospectus or file any other required document so that, as thereafter
delivered to holders of the Notes or purchasers of the Exchange Notes or
Private Exchange Notes from a Holder, the prospectus will not include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading (except, in each case, for an untrue
statement of material fact or omission of a material fact made in reliance upon
and in conformity with written information furnished to the Issuers by or on
behalf of the Holders specifically for use therein).
(k) Not later than the effective date of the applicable
Registration Statement, the Issuers will provide a CUSIP number for the Notes,
the Exchange Notes or Private Exchange Notes, as the case may be, and provide
the applicable trustee with printed certificates for the Notes, the Exchange
Notes or the Private Exchange Notes, as the case may be, in a form eligible for
deposit with The Depository Trust Company.
(l) The Issuers and the Guarantor Subsidiaries will
comply with all applicable rules and regulations of the Commission to the
extent and so long as they are applicable to the Registered Exchange Offer, the
Private Exchange or the registration effected pursuant to a Shelf Registration
Statement and will make generally available to their securityholders as soon as
practicable after the effective date of the applicable Registration Statement
an earning statement satisfying the provisions of Section 11(a) of the
Securities Act; provided that in no event shall such earning statement be
delivered later than 45 days after the end of a 12-month period (or 90 days, if
such period is a fiscal year) beginning with the first month of Iridium's first
fiscal quarter commencing after the effective date of the applicable
Registration Statement, which statement shall cover such 12-month period.
(m) The Issuers and the Guarantor Subsidiaries will cause
the Indentures or the Exchange Note Indentures, as the case may be, to be
qualified under the Trust Indenture Act as required by applicable law in a
timely manner.
(n) The Issuers and the Guarantor Subsidiaries may
require each Holder of Transfer Restricted Securities to be registered pursuant
to any Shelf Registration Statement to furnish to the Issuers such information
concerning the Holder and the distribution of such Transfer Restricted Notes as
the Issuers may from time to time reasonably require for inclusion in such
Shelf Registration Statement, and the Issuers may exclude from such
registration the
12
46
Transfer Restricted Notes of any Holder that fails to furnish such information
within a reasonable time after receiving such request. Each such Holder agrees
to notify the Issuers as promptly as practicable of any inaccuracy or change in
information previously furnished by such Holder to the Issuers or of the
occurrence of any event, in either case, as a result of which any prospectus
relating to such registration contains or would contain an untrue statement of
a material fact regarding such Holder or such Holder's intended method of
distribution of such Transfer Restricted Notes, or omits to state a material
fact regarding such Holder or such ▇▇▇▇▇▇'s intended method of distribution of
such Transfer Restricted Notes, required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances then
existing, and promptly to furnish to the Issuers any additional information
required to correct and update any previously furnished information or required
so that such prospectus shall not contain, with respect to such Holder or the
distribution of such Transfer Restricted Notes, an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing. Each such Holder shall comply with the provisions
of the Securities Act applicable to such Holder with respect to the disposition
by such Holder of Transfer Restricted Notes, covered by such registration
statement in accordance with the intended methods of disposition by such Holder
set forth in such registration statement.
(o) In the case of a Shelf Registration Statement, each
Holder of Transfer Restricted Notes to be registered pursuant thereto agrees by
acquisition of such Transfer Restricted Notes that, upon receipt of any notice
from the Issuers pursuant to Section 4(b)(ii) through (v), such Holder will
discontinue disposition of such Transfer Restricted Notes until such ▇▇▇▇▇▇'s
receipt of copies of the supplemental or amended prospectus contemplated by
Section 4(j) or until advised in writing (the "Advice") by the Issuers that the
use of the applicable prospectus may be resumed. If the Issuers shall give any
notice under Section 4(b)(ii) through (v) during the period that the Issuers
are required to maintain an effective Registration Statement (the
"Effectiveness Period"), such Effectiveness Period shall be extended by the
number of days during such period from and including the date of the giving of
such notice to and including the date when each seller of Transfer Restricted
Notes covered by such Registration Statement shall have received (x) the copies
of the supplemental or amended prospectus contemplated by Section 4(j) (if an
amended or supplemental prospectus is required) or (y) the Advice (if no
amended or supplemental prospectus is required).
(p) In the case of a Shelf Registration Statement, the
Issuers and the Guarantor Subsidiaries shall enter into such customary
agreements (including, if requested, an underwriting agreement in customary
form) and take all such other action, if any, as Holders of a majority in
aggregate principal amount of the Notes, Exchange Notes and Private Exchange
Notes of both series being sold, taken as a single class, or the managing
underwriters (if any) shall reasonably request in order to facilitate any
disposition of Notes, Exchange Notes or Private Exchange Notes pursuant to such
Shelf Registration Statement; provided, however, that the Issuers shall not be
required to enter into such agreement more than once with respect to all the
Notes and may delay entering into such agreement until the consummation of any
underwritten public offering which such Issuers shall have then undertaken.
13
47
(q) In the case of a Shelf Registration Statement, the
Issuers and the Guarantor Subsidiaries shall (i) make reasonably available for
inspection by a representative of, and Special Counsel (as defined below)
acting for, Holders of a majority in aggregate principal amount of the Notes,
Exchange Notes and Private Exchange Notes of both series being sold, taken as a
single class, and any underwriter participating in any disposition of Notes,
Exchange Notes or Private Exchange Notes pursuant to such Shelf Registration
Statement, all relevant financial and other records, pertinent corporate
documents and properties of the Issuers and the Guarantor Subsidiaries and
their subsidiaries and (ii) use their reasonable efforts to have their
officers, directors, employees, accountants and counsel supply all relevant
information reasonably requested by such representative, Special Counsel or any
such underwriter (an "Inspector") in connection with such Shelf Registration
Statement, in each case, as is customary for similar due diligence
investigations.
(r) In the case of a Shelf Registration Statement, the
Issuers and the Guarantor Subsidiaries shall, if requested in writing by
Holders of a majority in aggregate principal amount of the Notes, Exchange
Notes and Private Exchange Notes of both series being sold, taken as a single
class, their Special Counsel or the managing underwriters (if any) in
connection with such Shelf Registration Statement, use their reasonable efforts
to cause (i) their counsel to deliver an opinion relating to the Shelf
Registration Statement and the Notes, Exchange Notes or Private Exchange Notes,
as applicable, in customary form, (ii) their officers to execute and deliver
all customary documents and certificates requested by Holders of a majority in
aggregate principal amount of the Notes, Exchange Notes and Private Exchange
Notes of both series being sold, taken as a single class, their Special Counsel
or the managing underwriters (if any) and (iii) their independent public
accountants to provide a comfort letter or letters in customary form, subject
to receipt of appropriate documentation as contemplated, and only if permitted,
by Statement of Auditing Standards No. 72.
5. Registration Expenses. The Issuers and the Guarantor
Subsidiaries will bear all expenses incurred in connection with the performance
of their obligations under Sections 1, 2, 3 and 4 and the Issuers and the
Guarantor Subsidiaries will reimburse the Initial Purchasers and the Holders
for the reasonable fees and disbursements of one firm of attorneys chosen by
the Holders of a majority in aggregate principal amount of the Notes, the
Exchange Notes and the Private Exchange Notes of both series to be sold, taken
as a single class, pursuant to each Registration Statement (the "Special
Counsel") acting for the Initial Purchasers or Holders in connection with the
Registered Exchange Offer or a Shelf Registration, if applicable, it being
understood that the Issuers and the Guarantor Subsidiaries shall not be
responsible for the fees and disbursements of more than one counsel employed at
any one time.
6. Indemnification. (a) In the event of a Shelf
Registration Statement or in connection with any prospectus delivery pursuant
to an Exchange Offer Registration Statement by an Initial Purchaser or
Exchanging Dealer, as applicable, the Issuers and the Guarantor Subsidiaries
shall, jointly and severally, indemnify and hold harmless each Holder
(including, without limitation, any such Initial Purchaser or Exchanging
Dealer) and its affiliates, and each person, if any, who controls such Holder
within the meaning of the Securities Act or the Exchange Act (collectively
referred to for purposes of this Section 6 and Section 7 as a Holder)
14
48
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, without limitation, any loss, claim,
damage, liability or action relating to purchases and sales of Notes, Exchange
Notes or Private Exchange Notes), to which that Holder may become subject,
whether commenced or threatened, under the Securities Act, the Exchange Act,
any other federal or state statutory law or regulation, at common law or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any such Registration Statement or any prospectus
forming part thereof or in any amendment or supplement thereto or (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and
shall reimburse each Holder promptly upon demand for any legal or other
expenses reasonably incurred by that Holder in connection with investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Issuers and the Guarantor Subsidiaries shall not be liable in any such case to
the extent that any such loss, claim, damage, liability or action arises out
of, or is based upon, an untrue statement or alleged untrue statement in or
omission or alleged omission from any of such documents in reliance upon and in
conformity with any Holders' Information; and provided, further, that with
respect to any such untrue statement in or omission from any related
preliminary prospectus, the indemnity agreement contained in this Section 6(a)
shall not inure to the benefit of any Holder to the extent that such loss,
claim, damage, liability or action of or with respect to such Holder results
from the fact that both (A) a copy of the final prospectus was not sent or
given to such person at or prior to the written confirmation of the sale of
such Notes, Exchange Notes or Private Exchange Notes to such person and (B) the
untrue statement in or omission from the related preliminary prospectus was
corrected in the final prospectus unless, in either case, such failure to
deliver the final prospectus was a result of non-compliance by the Issuers and
the Guarantor Subsidiaries with Section 4(d), 4(e), 4(f) or 4(g).
(b) In the event of a Shelf Registration Statement, each
Holder shall indemnify and hold harmless the Issuers, the Guarantor
Subsidiaries, their affiliates, their respective officers, directors,
employees, representatives and agents, and each person, if any, who controls
any Issuer and the Guarantor Subsidiaries within the meaning of the Securities
Act or the Exchange Act (collectively referred to for purposes of this Section
6(b) and Section 7 as the Issuers), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Issuers may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement
or alleged untrue statement of a material fact contained in any such
Registration Statement or any prospectus forming part thereof or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with any Holders'
Information furnished to the Issuers by such ▇▇▇▇▇▇, and shall reimburse the
Issuers for any legal or other expenses reasonably
15
49
incurred by the Issuers in connection with investigating or defending or
preparing to defend against or appearing as a third party witness in connection
with any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that no such Holder shall be liable for any
indemnity claims hereunder in excess of the amount of net proceeds received by
such Holder from the sale of Notes, Exchange Notes or Private Exchange Notes
pursuant to such Shelf Registration Statement.
(c) Promptly after receipt by an indemnified party under
this Section 6 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party pursuant to Section 6(a) or 6(b), notify the
indemnifying party in writing of the claim or the commencement of that action;
provided, however, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have under this Section 6 except to
the extent that it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure; and provided, further, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 6. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of
its election to assume the defense of such claim or action, the indemnifying
party shall not be liable to the indemnified party under this Section 6 for any
legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than the reasonable costs of
investigation; provided, however, that an indemnified party shall have the
right to employ its own counsel in any such action, but the fees, expenses and
other charges of such counsel for the indemnified party will be at the expense
of such indemnified party unless (1) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying party, (2)
the indemnified party has reasonably concluded (based upon advice of counsel to
the indemnified party) that there may be legal defenses available to it or
other indemnified parties that are different from or in addition to those
available to the indemnifying party, (3) a conflict or potential conflict
exists (based upon advice of counsel to the indemnified party) between the
indemnified party and the indemnifying party (in which case the indemnifying
party will not have the right to direct the defense of such action on behalf of
the indemnified party) or (4) the indemnifying party has not in fact employed
counsel reasonably satisfactory to the indemnified party to assume the defense
of such action within a reasonable time after receiving notice of the
commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm of attorneys (in addition to any
local counsel) at any one time for all such indemnified party or parties. Each
indemnified party, as a condition of the indemnity agreements contained in
Sections 6(a) and 6(b), shall use all reasonable efforts to cooperate with the
indemnifying party in the defense of any such action or claim. No indemnifying
party shall be liable for any settlement of any such action effected without
its written consent. No
16
50
indemnifying party shall, without the prior written consent of the indemnified
party (which consent shall not be unreasonably withheld), effect any settlement
of any pending or threatened proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
7. Contribution. If the indemnification provided for in
Section 6 is unavailable or insufficient to hold harmless an indemnified party
under Section 6(a) or 6(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable
by such indemnified party as a result of such loss, claim, damage or liability,
or action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Issuers from the offering and
sale of the Notes, on the one hand, and a Holder with respect to the sale by
such Holder of Notes, Exchange Notes or Private Exchange Notes, on the other,
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault
of the Issuers on the one hand and such Holder on the other with respect to the
statements or omissions that resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Issuers on the one hand
and a Holder on the other with respect to such offering and such sale shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Units (before deducting expenses) received by or on behalf of the
Issuers without duplication as set forth in the table on the cover of the
Offering Memorandum, on the one hand, bear to the total proceeds received by
such Holder with respect to its sale of Notes, Exchange Notes or Private
Exchange Notes, on the other. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to the Issuers or information supplied by the Issuers on
the one hand or to any Holders' Information supplied by such Holder on the
other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The parties hereto agree that it would not be just and equitable if
contributions pursuant to this Section 7 were to be determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 7 shall be deemed
to include, for purposes of this Section 7, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending or preparing to defend any such action or claim. Notwithstanding
the provisions of this Section 7, an indemnifying party that is a Holder of
Notes, Exchange Notes or the Private Exchange Notes shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Notes, Exchange Notes or the Private Exchange Notes sold by such
indemnifying party to any purchaser exceeds the amount of any damages which
such indemnifying party has otherwise paid or become liable to pay by reason of
any untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the
17
51
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
8. Rules 144 and 144A. The Issuers and the Guarantor
Subsidiaries shall use their reasonable efforts to file the reports required to
be filed by them under the Securities Act and the Exchange Act in a timely
manner and, if at any time the Issuers and the Guarantor Subsidiaries are not
required to file such reports, they will, upon the written request of any
Holder of Transfer Restricted Notes, make publicly available other information
so long as necessary to permit sales of such ▇▇▇▇▇▇'s securities pursuant to
Rules 144 and 144A. The Issuers and the Guarantor Subsidiaries covenant that
they will take such further action as any Holder of Transfer Restricted Notes
may reasonably request, all to the extent required from time to time to enable
such Holder to sell Transfer Restricted Notes without registration under the
Securities Act within the limitation of the exemptions provided by Rules 144
and 144A (including, without limitation, the requirements of Rule 144A(d)(4)).
Upon the written request of any Holder of Transfer Restricted Notes, the
Issuers shall deliver to such Holder a written statement as to whether they
have complied with such requirements. Notwithstanding the foregoing, nothing in
this Section 8 shall be deemed to require the Issuers to register any of their
securities pursuant to the Exchange Act.
9. Underwritten Registrations. If any of the Transfer
Restricted Notes covered by any Shelf Registration Statement are to be sold in
an underwritten offering, the investment banker or investment bankers and
manager or managers that will administer the offering will be selected by the
Holders of a majority in aggregate principal amount of such Transfer Restricted
Notes included in such offering, subject to the approval of the Issuers (which
approval shall not be unreasonably withheld or delayed), and such Holders shall
be responsible for all underwriting commissions and discounts in connection
therewith; provided, however, that the Issuers shall not be obligated to
arrange for more than one underwritten offering during the period that such
Shelf Registration Statement is required to be effective pursuant to this
Agreement).
No person may participate in any underwritten registration
hereunder unless such person (i) agrees to sell such person's Transfer
Restricted Notes on the basis reasonably provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, lock-up
agreements, powers of attorney, indemnities, underwriting agreements and other
documents reasonably required under the terms of such underwriting
arrangements.
10. Miscellaneous. (a) Amendments and Waivers. The
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Issuers have obtained the written consent of Holders of a majority
in aggregate principal amount of the Notes, Exchange Notes and Private Exchange
Notes of both series, taken as a single class. Notwithstanding the foregoing,
a waiver or consent to depart from the provisions hereof with respect to a
matter that relates exclusively to the rights of Holders whose Notes, Exchange
Notes and Private Exchange Notes are being sold pursuant to a Registration
Statement and that does not directly or indirectly affect the rights of other
Holders may be given by Holders of a majority in aggregate principal
18
52
amount of the Notes, the Exchange Notes and Private Exchange Notes of both
series being sold by such Holders pursuant to such Registration Statement.
(b) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
first-class mail, telecopier or air courier guaranteeing next-day delivery:
(1) if to a Holder, at the most current address given by
such Holder to Iridium in accordance with the provisions of this
Section 10(b), which address initially is, with respect to each
Holder, the address of such Holder maintained by the Registrar under
the applicable Indenture, with a copy in like manner to Chase
Securities Inc. and ▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ and ▇▇▇▇▇
Incorporated;
(2) if to an Initial Purchaser, initially at its address set
forth in the Purchase Agreement; and
(3) if to any Issuer or a Guarantor Subsidiary, initially at
the address of the Issuer set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; one business
day after being delivered to a next-day air courier; five business days after
being deposited in the mail; and when receipt is acknowledged by the
recipient's telecopier machine, if sent by telecopier.
(c) Successors And Assigns. This Agreement shall be
binding upon the Issuers and their successors and assigns.
(d) Counterparts. This Agreement may be executed in any
number of counterparts (which may be delivered in original form or by
telecopier) and by the parties hereto 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.
(e) Definition of Terms. For purposes of this Agreement,
(a) the term "business day" means any day on which the Commission and the New
York Stock Exchange, Inc. is open for trading, (b) the term "subsidiary" has
the meaning set forth in Rule 405 under the Securities Act and (c) except where
otherwise expressly provided, the term "affiliate" has the meaning set forth in
Rule 405 under the Securities Act.
(f) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York without
regard to principles of conflicts of laws.
19
53
(h) No Piggyback on Registrations. Neither the Issuers
nor any of their security holders (other than the Holders of Transfer
Restricted Notes in such capacity) shall have the right to include any
securities of the Issuers in any Shelf Registration or Registered Exchange
Offer other than Transfer Restricted Notes.
(i) Severability. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law. If any term,
provision, covenant or restriction of this Agreement or the application thereof
is held by a court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall
in no way be affected, impaired or invalidated thereby.
20
54
Please confirm that the foregoing correctly sets forth the
agreement among the Issuers and the Initial Purchasers.
Very truly yours,
IRIDIUM LLC
By /s/ ▇▇▇ ▇▇▇▇▇
--------------------------
Name: ▇▇▇ ▇▇▇▇▇
Title: Vice President - Treasurer
and acting Chief Financial
Officer
IRIDIUM CAPITAL CORPORATION
By /s/ ▇▇▇ ▇▇▇▇▇
--------------------------
Name: ▇▇▇ ▇▇▇▇▇
Title: Chief Financial Officer
IRIDIUM ROAMING LLC
By /s/ ▇▇▇ ▇▇▇▇▇
--------------------------
Name: ▇▇▇ ▇▇▇▇▇
Title: acting chief financial
officer
IRIDIUM IP LLC
By /s/ ▇▇▇ ▇▇▇▇▇
--------------------------
Name: ▇▇▇ ▇▇▇▇▇
Title: acting chief financial
officer
Accepted:
CHASE SECURITIES INC.
By
----------------------------
Authorized Signatory
21
55
▇▇▇▇▇▇▇ LYNCH, ▇▇▇▇▇▇, ▇▇▇▇▇▇
AND ▇▇▇▇▇ INCORPORATED
By
----------------------------
Authorized Signatory
22
56
ANNEX A TO EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
Each broker-dealer that receives Exchange Notes for its own
account pursuant to the Registered Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Notes. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of Exchange Notes received in exchange
for Notes where such Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities. The Issuers and the
Guarantor Subsidiaries have agreed that, for a period of 180 days after the
Expiration Date (as defined herein), they will make this Prospectus available
to any broker-dealer for use in connection with any such resale. See "Plan of
Distribution".
57
ANNEX B TO EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
Each broker-dealer that receives Exchange Notes for its own
account in exchange for Notes, where such Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Notes. See "Plan of Distribution."
2
58
ANNEX C TO EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own
account pursuant to the Registered Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Notes.
This Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of Exchange Notes received
in exchange for Notes where such Notes were acquired as a result of
market-making activities or other trading activities. The Issuers and the
Guarantor Subsidiaries have agreed that, for a period of 180 days after the
Expiration Date, they will make this prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resale. In
addition, until ___________________, 1998, all dealers effecting transactions
in the Exchange Notes may be required to deliver a prospectus.(1)
None of the Issuers or the Guarantor Subsidiaries will receive
any proceeds from any sale of Exchange Notes by broker-dealers. Exchange Notes
received by broker-dealers for their own account pursuant to the Registered
Exchange Offer may be sold from time to time in one or more transactions in the
over-the-counter market, in negotiated transactions, through the writing of
options on the Exchange Notes or a combination of such methods of resale, at
market prices prevailing at the time of resale, at prices related to such
prevailing market prices or at negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer or the purchasers of any such Exchange Notes. Any broker-dealer
that resells Exchange Notes that were received by it for its own account
pursuant to the Registered Exchange Offer and any broker or dealer that
participates in a distribution of such Exchange Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of Exchange Notes and any commission or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. The Letter of Transmittal states that, by acknowledging that it will
deliver and by delivering a prospectus, a broker-dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date, the
Issuers and the Guarantor Subsidiaries will promptly send additional copies of
this Prospectus and any amendment or supplement to this Prospectus to any
broker-dealer that requests such documents in the Letter of Transmittal. The
Issuers and the Guarantor Subsidiaries have agreed to pay all expenses incident
to the Registered Exchange Offer (including the expenses of one counsel for the
Holders of the Notes) other than commissions or concessions of any
broker-dealers and will indemnify the Holders of the Notes (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
--------------------
(1) In addition, the legend required by Item 502(e) of Regulation S-K will
appear on the back cover page of the Registered Exchange Offer prospectus.
3
59
ANNEX D TO EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name:
-------------------------------------------
Address:
-------------------------------------------
-------------------------------------------
If the undersigned is not a broker-dealer, the undersigned represents that it
is not engaged in, and does not intend to engage in, a distribution of Exchange
Notes. If the undersigned is a broker-dealer that will receive Exchange Notes
for its own account in exchange for Notes that were acquired as a result of
market-making activities or other trading activities, it acknowledges that it
will deliver a prospectus in connection with any resale of such Exchange Notes;
however, by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act.
4