1
==============================================================================
EXHIBIT 1.1
DRAFT 4/30/97
IRIDIUM WORLD COMMUNICATIONS LTD.
(a Bermuda company)
8,000,000 Shares of Class A Common Stock
U.S. PURCHASE AGREEMENT
Dated: ________, 1997
==============================================================================
2
TABLE OF CONTENTS
PAGE
----
U.S. PURCHASE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Representations and Warranties by the Company and Iridium . . . . . . . . . . . . . . . . 4
(i) Compliance with Registration Requirements . . . . . . . . . . . . . . . . . . . 4
(ii) Independent Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(iii) Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(iv) No Material Adverse Change in Business . . . . . . . . . . . . . . . . . . . . . 5
(v) Good Standing of the Company and Iridium . . . . . . . . . . . . . . . . . . . . 6
(vi) No Significant Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(vii) Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(viii) Authorization of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(ix) Authorization and Description of Securities . . . . . . . . . . . . . . . . . . 7
(x) Absence of Defaults and Conflicts . . . . . . . . . . . . . . . . . . . . . . . 8
(xi) Absence of Labor Dispute . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(xii) Absence of Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(xiii) Accuracy of Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(xiv) Possession of Intellectual Property . . . . . . . . . . . . . . . . . . . . . . 9
(xv) Absence of Further Requirements . . . . . . . . . . . . . . . . . . . . . . . . 9
(xvi) Possession of Licenses and Permits . . . . . . . . . . . . . . . . . . . . . . . 10
(xvii) Title to Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(xviii) Compliance with Cuba Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(xix) Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(xx) Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(xxi) Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(xxii) Principal Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(xxiii) Governance Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(xxiv) FCC License . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(xxv) Forward Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(xxvi) Certain Descriptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(xxvii) Accounting Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(xxxviii) Insurance Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(b) Officer's Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing . . . . . . . . . . . . . . . . . . . . . 14
(a) Initial Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(b) Option Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(c) Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(d) Denominations; Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3. Covenants of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(a) Compliance with Securities Regulations and Commission Requests . . . . . . . . . . . . . . 15
-i-
3
(b) Filing of Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(c) Delivery of Registration Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(d) Delivery of Prospectuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(e) Continued Compliance with Securities Laws . . . . . . . . . . . . . . . . . . . . . . . . 16
(f) Blue Sky Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(g) Rule 158 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(h) Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(i) Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(j) Restriction on Sale of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(k) Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(l) Compliance with NASD Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(m) Compliance with Rule 463 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(n) Exchange Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4. Covenants of Iridium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(a) Exchange Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(b) Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 5. Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(a) Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(b) Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 6. Conditions of U.S. Underwriters' Obligations . . . . . . . . . . . . . . . . . . . . . . . 20
(a) Effectiveness of Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . 20
(b) Letter and Opinion of Counsel for the Company and Iridium . . . . . . . . . . . . . . . . 20
(c) Opinion of Bermuda Counsel for the Company . . . . . . . . . . . . . . . . . . . . . . . . 20
(d) Opinion of Regulatory Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(e) Opinion of Assistant Secretary of the Company and General Counsel of Iridium . . . . . . . 20
(f) Opinion of Counsel for U.S. Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . 20
(g) Opinion of Regulatory Counsel for the U.S. Underwriters . . . . . . . . . . . . . . . . . 21
(h) Officer's Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(i) Accountant's Comfort Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(j) Bring-down Comfort Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(k) Approval of Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(l) No Objection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(m) Motorola Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(n) Purchase of Initial International Securities . . . . . . . . . . . . . . . . . . . . . . . 22
(o) Conditions to Purchase of U.S. Option Securities . . . . . . . . . . . . . . . . . . . . . 22
(p) Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(q) Additional Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(r) Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(s) Lock-up Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 7. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(a) Indemnification of U.S. Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(b) Indemnification of Company, Iridium, Directors and Officers . . . . . . . . . . . . . . . 25
(c) Actions against Parties; Notification . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(d) Settlement without Consent if Failure to Reimburse . . . . . . . . . . . . . . . . . . . . 26
-ii-
4
(e) Indemnification for Reserved Securities . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 8. Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 9. Representations, Warranties and Agreements to Survive Delivery . . . . . . . . . . . . . . 28
SECTION 10. Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(a) Termination; General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(b) Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 11. Default by One or More of the U.S. Underwriters . . . . . . . . . . . . . . . . . . . . . 29
SECTION 12. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 13. Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 14 Governing Law and Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 15 Effect of Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SCHEDULES
SCHEDULE A - LIST OF UNDERWRITERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SCH A-1
SCHEDULE B - PRICING INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SCH B-1
EXHIBITS
EXHIBIT A-1 - FORM OF OPINION OF COMPANY'S AND
IRIDIUM'S COUNSEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
EXHIBIT A-2 - FORM OF OPINION OF COMPANY'S
BERMUDA COUNSEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-4
EXHIBIT A-3 - FORM OF OPINION OF REGULATORY COUNSEL . . . . . . . . . . . . . . . . . . . . . A-7
EXHIBIT A-4 - FORM OF OPINION OF ASSISTANT
SECRETARY AND GENERAL COUNSEL . . . . . . . . . . . . . . . . . . . . . . . . . A-8
EXHIBIT B- FORM OF OPINION OF COUNSEL TO U.S.
UNDERWRITERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
EXHIBIT C- FORM OF MOTOROLA CERTIFICATE . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
EXHIBIT D- FORM OF LOCK-UP AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1
-iii-
5
Draft of April 30, 1997
IRIDIUM WORLD COMMUNICATIONS LTD.
(a Bermuda company)
8,000,000 Shares of Class A Common Stock
(Par Value $.01 Per Share)
U.S. PURCHASE AGREEMENT
________, 1997
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
Xxxxxxx, Sachs & Co.
as U.S. Representatives of the several U.S. Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Each of Iridium World Communications Ltd., a Bermuda company (the
"Company"), and Iridium LLC, a Delaware limited liability company ("Iridium"),
confirms its agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated ("Xxxxxxx Xxxxx") and each of the other U.S. Underwriters
named in Schedule A hereto (collectively, the "U.S. Underwriters," which term
shall also include any underwriter substituted as hereinafter provided in
Section 11 hereof), for whom Xxxxxxx Lynch, Donaldson, Lufkin & Xxxxxxxx
Securities Corporation and Xxxxxxx, Sachs & Co. are acting as representatives
(in such capacity, the "U.S. Representatives"), with respect to the issue and
sale by the Company and the purchase by the U.S. Underwriters, acting severally
and not jointly, of the respective numbers of shares of Class A Common Stock,
par value $.01 per share, of the Company ("Class A Common Stock") set forth in
said Schedule A, and with respect to the grant by the Company to the U.S.
Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of 1,200,000 additional shares
of Class A Common Stock to cover over-allotments, if any. The aforesaid
8,000,000 shares of Class A Common Stock (the "Initial U.S. Securities") to
-1-
6
be purchased by the U.S. Underwriters and all or any part of the 1,200,000
shares of Class A Common Stock subject to the option described in Section 2(b)
hereof (the "U.S. Option Securities") are hereinafter called, collectively, the
"U.S. Securities."
It is understood that each of the Company and Iridium is concurrently
entering into an agreement dated the date hereof (the "International Purchase
Agreement") providing for the offering by the Company of an aggregate of
2,000,000 shares of Class A Common Stock (the "Initial International
Securities") through arrangements with certain underwriters outside the United
States and Canada (the "International Managers") for which Xxxxxxx Xxxxx
International, Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation and Xxxxxxx
Sachs International are acting as lead managers (the "Lead Managers") and the
grant by the Company to the International Managers, acting severally and not
jointly, of an option to purchase all or any part of each International
Manager's pro rata portion of up to 300,000 additional shares of Class A Common
Stock solely to cover overallotments, if any (the "International Option
Securities" and, together with the U.S. Option Securities, the "Option
Securities"). The Initial International Securities and the International Option
Securities are hereinafter called, collectively the "International Securities."
It is understood that the Company is not obligated to sell and the U.S.
Underwriters are not obligated to purchase, any Initial U.S. Securities unless
all of the Initial International Securities are contemporaneously purchased by
the International Managers.
The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters," the Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities," and the U.S. Securities, and the International Securities
are hereinafter collectively called the "Securities."
The Underwriters are concurrently entering into an Intersyndicate
Agreement of even date herewith (the "Intersyndicate Agreement") providing for
the coordination of certain transactions among the Underwriters under the
direction of Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated (in such capacity, the "Global Coordinator").
The Company understands that the U.S. Underwriters propose to make a
public offering of the U.S. Securities as soon as the U.S. Representatives deem
advisable after this Agreement has been executed and delivered.
The Company and the U.S. Underwriters agree that up to 1,000,000 shares
of the Initial U.S. Securities to be purchased by the U.S. Underwriters (the
"Reserved Securities") shall be reserved for sale by the Underwriters to certain
eligible employees of, and persons having business relationships with, the
Company or Iridium, as part of the distribution of the Securities by the
Underwriters, subject to the terms of this Agreement, the applicable rules,
regulations and interpretations of the National Association of Securities
Dealers, Inc. and all other applicable laws, rules and regulations. To the
extent that such Reserved Securities are not orally confirmed for purchase by
such eligible employees of, and persons having business relationships with, the
Company or Iridium by the end of the first business day after the date of this
Agreement, such Reserved Securities may be offered to the public as part of the
public offering contemplated hereby.
-2-
7
The Company and Iridium have entered into (i) an Interest Exchange
Agreement (the "Exchange Agreement"), (ii) a 1997 Subscription Agreement (the
"1997 Subscription Agreement"), (iii) a Share Issuance Agreement (the "Share
Issuance Agreement") and (iv) a Management Services Agreement (the "Management
Services Agreement" and, collectively with the Exchange Agreement, the 1997
Subscription Agreement, the Share Issuance Agreement and the LLC Agreement (as
defined below), the "Governance Agreements"). On or prior to the Closing Time
(as defined below), (A) pursuant to an amendment to the LLC Agreement, each
Class 1 Membership Interest in Iridium (each a "Class 1 Interest") shall be
subdivided into ___ Interests and each warrant and option to purchase Class 1
Interests, and the conversion price of each limited liability company interest
in Iridium that is or may become convertible into or exchangeable for Class 1
Interests, shall be adjusted accordingly, (B) Iridium shall issue and sell to
the Company and the Company shall purchase from Iridium Class 1 Interests under
the 1997 Subscription Agreement with the proceeds from the issuance and sale of
the Securities as contemplated by this Agreement, the International Purchase
Agreement and the Registration Statement (defined below) and (C) the Company
shall be admitted as a member of Iridium (collectively, the "Transactions").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-23419) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). Two
forms of prospectus are to be used in connection with the offering and sale of
the Securities: one relating to the U.S. Securities (the "Form of U.S.
Prospectus") and one relating to the International Securities (the "Form of
International Prospectus"). The Form of International Prospectus is identical to
the Form of U.S. Prospectus, except for the front cover and back cover pages and
the information under the captions "Underwriting" and "Tax Considerations." The
information included in any such prospectus or in any such Term Sheet, as the
case may be, that was omitted from such registration statement at the time it
became effective but that is deemed to be part of such registration statement at
the time it became effective (a) pursuant to paragraph (b) of Rule 430A is
referred to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule
434 is referred to as "Rule 434 Information." Each Form of U.S. Prospectus and
Form of International Prospectus used before such registration statement became
effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, is herein called a
"preliminary prospectus." Such registration statement, including the exhibits
thereto and schedules thereto at the time it became effective and including the
Rule 430A Information and the Rule 434 Information, as applicable, is herein
called the "Registration Statement." Any registration statement filed pursuant
to Rule 462(b) of the 1933 Act Regulations is herein referred to as the "Rule
462(b) Registration Statement," and after such filing the term "Registration
Statement" shall include the
-3-
8
Rule 462(b) Registration Statement. The final Form of U.S. Prospectus and the
final Form of International Prospectus in the forms first furnished to the
Underwriters for use in connection with the offering of the Securities are
herein called the "U.S. Prospectus" and the "International Prospectus,"
respectively, and collectively, the "Prospectuses." If Rule 434 is relied on,
the terms "U.S. Prospectus" and "International Prospectus" shall refer to the
preliminary U.S. Prospectus dated _____, 1997 and preliminary International
Prospectus dated ____, 1997, respectively, each together with the applicable
Term Sheet and all references in this Agreement to the date of such Prospectuses
shall mean the date of the applicable Term Sheet. For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectus, the U.S. Prospectus, the International Prospectus or any Term Sheet
or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("XXXXX").
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company and Iridium. Each of
the Company and Iridium jointly and severally represents and warrants to each
U.S. Underwriter as of the date hereof, as of the Closing Time referred to in
Section 2(c) hereof, and as of each Date of Delivery (if any) referred to in
Section 2(b), hereof and agrees with each U.S. Underwriter, as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company or Iridium, are contemplated by the
Commission, and any request on the part of the Commission for
additional information has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any U.S. Option
Securities are purchased, at the Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement and any
post-effective amendments and supplements thereto complied and will
comply in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, [and the Prospectuses, any preliminary prospectuses and any
supplement thereto or prospectus wrapper prepared in connection
therewith, at their respective times of issuance and at the Closing
Time, complied and will comply in all material respects with any
applicable laws or regulations of foreign jurisdictions in which the
Prospectuses and such preliminary prospectuses, as amended or
supplemented, if applicable, are distributed in connection with the
offer and sale of Reserved Securities.] Neither of the Prospectuses nor
any amendments or supplements thereto (including any prospectus
wrapper), at the time the
-4-
9
Prospectuses or any amendments or supplements thereto were issued and
at the Closing Time (and, if any U.S. Option Securities are purchased,
at the Date of Delivery), included or will include an untrue statement
of a material fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Rule 434
is used, the Company will comply with the requirements of Rule 434 and
the Prospectuses shall not be "materially different," as such term is
used in Rule 434, from the prospectuses included in the Registration
Statement at the time it became effective.
Each preliminary prospectus and the prospectuses filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectuses
delivered to the Underwriters for use in connection with this offering
was identical in all material respects to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T. The representations
and warranties in this subsection (a)(i) shall not apply to statements
in or omissions from the Registration Statement or the U.S. Prospectus
made in reliance upon and in conformity with information furnished to
the Company in writing by any U.S. Underwriter through the U.S.
Representatives expressly for use in the Registration Statement or the
U.S. Prospectus.
(ii) Independent Accountants. The accountants who certified
the financial statement and the consolidated financial statements
included in the Registration Statement are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statements. The financial statement and the
consolidated financial statements included in the Registration
Statement and the Prospectuses, together with the related notes,
present fairly the financial position of the Company, Iridium,
Iridium's predecessor and their respective consolidated subsidiaries at
the dates indicated and the statement of operations, stockholders'
equity, members' equity and cash flows of the Company, Iridium,
Iridium's predecessor and their respective consolidated subsidiaries
for the periods specified; said financial statement and the
consolidated financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved, except, in the case
of the interim financial statements, for the absence of complete
footnote disclosure and customary year-end adjustments. The selected
financial data included in the Prospectuses present fairly the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statement and the consolidated
financial statements included in the Registration Statement.
(iv) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectuses, except for the matters disclosed in the
Registration Statement, (A) there has been no material
-5-
10
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company or
Iridium, whether or not arising in the ordinary course of business (a
"Material Adverse Effect"), (B) there have been no transactions entered
into by the Company or Iridium, other than those in the ordinary course
of business, which are material with respect to the Company or Iridium,
and (C) except for quarterly, in-kind dividends on the Series A Class 2
Interests in Iridium (the "Series A Interests") in amounts per Series A
Interest that are consistent with the terms of the Series A Interests
and the Limited Liability Company Agreement of Iridium LLC, dated as of
July 29, 1996, as amended as of the date hereof (the "LLC Agreement"),
there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock, or Iridium on
any class or series of its limited liability company interests (its
"Interests").
(v) Good Standing of the Company and Iridium. The Company has
been duly incorporated and is validly existing as an exempted company
in good standing under the laws of Bermuda and has all requisite power
and authority to conduct its business as described in the Prospectuses
and to enter into and perform its obligations under this Agreement; and
the Company has been duly qualified as a foreign company to transact
business and is in good standing in each other jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.
Iridium has been duly formed and is an existing limited
liability company in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectuses and to enter into and perform its
obligations under this Agreement; and Iridium has been duly qualified
as a foreign limited liability company to transact business and is in
good standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or to
be in good standing would not result in a Material Adverse Effect.
(vi) No Significant Subsidiary. Neither the Company nor
Iridium has any "significant subsidiary" as such term is defined in
Rule 1-02 of Regulation S-X.
(vii) Capitalization. The authorized, issued and outstanding
shares of capital stock of the Company are as set forth in the
Prospectuses in the column entitled "Actual" under the caption
"Capitalization--The Company." The shares of issued and outstanding
capital stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable; none of the outstanding
shares of capital stock of the Company was issued in violation of the
preemptive or other similar rights of any securityholder of the
Company.
-6-
11
The authorized, issued and outstanding Interests of Iridium
are as set forth in the Prospectuses in the column entitled "Actual"
under the caption "Capitalization--Iridium." The issued and outstanding
Interests of Iridium have been duly authorized and validly issued and
are fully paid and non-assessable (except as disclosed in the
Registration Statement under the caption "Description of Iridium LLC
Limited Liability Company Agreement--Limitations on Liability"); none
of the outstanding Interests of Iridium was issued in violation of the
preemptive or other similar rights of any member of Iridium. Pursuant
to the LLC Agreement, and in accordance with the Delaware Limited
Liability Company Act (the "Delaware Act"), the Company has waived the
limitation on liability contained in the Delaware Act, provided that
the Company has no liability to any person, including Iridium, for any
debt, obligation or liability of Iridium until all of the assets and
capital of Iridium have first been exhausted in satisfaction thereof.
(viii) Authorization of Agreement. This Agreement and the
International Purchase Agreement have been duly authorized, executed
and delivered by each of the Company and Iridium.
(ix) Authorization and Description of Securities. The
Securities to be purchased by the U.S. Underwriters and the
International Managers from the Company have been duly authorized for
issuance and sale to the U.S. Underwriters pursuant to this Agreement
and the International Managers pursuant to the International Purchase
Agreement, respectively, and, when issued and delivered by the Company
pursuant to this Agreement and the International Purchase Agreement,
respectively, against payment of the consideration set forth herein and
in the International Purchase Agreement, respectively, will be validly
issued, fully paid and non-assessable; the Class A Common Stock will
conform in all material respects to the descriptions thereof contained
in the Prospectuses; upon full consideration of the consideration
therefor no holder of the Securities will be subject to personal
liability by reason of being such a holder; and the issuance of the
Securities is not subject to the preemptive or other similar rights of
any securityholder of the Company.
The Class 1 Interests to be purchased by the Company from
Iridium have been duly authorized for issuance and sale to the Company
pursuant to the 1997 Subscription Agreement and, when issued and
delivered by Iridium pursuant to the 1997 Subscription Agreement
against payment of the consideration set forth therein, will be validly
issued, and (except as set forth in Section 2.09 of the LLC Agreement)
fully paid and non-assessable; the Class 1 Interests will conform in
all material respects to the descriptions thereof contained in the
Prospectuses and such descriptions conform to the rights set forth in
the instruments defining the same (except as disclosed in the
Prospectuses under the caption "Description of Iridium LLC Limited
Liability Company Agreement--Limitations on Liability"); except as
described in the Prospectuses under the caption "Description of Iridium
LLC Limited Liability Company Agreement--Limitations on Liability," no
holder of the Class 1 Interests will be subject to personal liability
by reason of being such a holder; and the issuance of the Class 1
Interests pursuant to the 1997 Subscription Agreement is not subject to
the preemptive or other similar rights of any member of Iridium.
Pursuant to the LLC Agreement, and in
-7-
12
accordance with the Delaware Act, the Company has waived the limitation
on liability contained in the Delaware Act, provided that the Company
has no liability to any person, including Iridium, for any debt,
obligation or liability of Iridium until all of the assets and capital
of Iridium have first been exhausted in satisfaction thereof.
(x) Absence of Defaults and Conflicts. Neither the Company nor
Iridium is in violation of its memorandum of association, bye-laws,
certificate of formation or limited liability company agreement or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or other agreement
(including the Governance Agreements) or instrument to which the
Company or Iridium is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company or
Iridium is subject (collectively, "Agreements and Instruments") except
for such defaults that would not result in a Material Adverse Effect;
and the execution, delivery and performance of this Agreement and the
International Purchase Agreement and the consummation of the
transactions contemplated in this Agreement, the International Purchase
Agreement, the Governance Agreements and in the Registration Statement
(including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the
Prospectuses under the caption "Use of Proceeds") and by the
Transactions and compliance by each of the Company and Iridium with its
obligations under this Agreement, the International Purchase Agreement
and the Governance Agreements have been duly authorized by all
necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with
or constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or
Iridium pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the memorandum of
association, bye-laws, certificate of formation or limited liability
company agreement of the Company or Iridium or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or Iridium or any of their assets,
properties or operations. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or Iridium.
(xi) Absence of Labor Dispute. No labor dispute with the
employees of the Company or Iridium exists or, to the knowledge of the
Company or Iridium, is imminent, and, except as described in the
Registration Statement, neither the Company nor Iridium is aware of any
existing or imminent labor disturbance by the employees of any of its
-8-
13
principal suppliers (including Motorola, Inc. or its subsidiaries
(Motorola, Inc., together with such subsidiaries, "Motorola"),
manufacturers, customers or contractors, which, in either case, may
reasonably be expected to result in a Material Adverse Effect.]
(xii) Absence of Proceedings. Except for matters which are
described in the Registration Statement, there is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company or Iridium, threatened, against or
affecting the Company or Iridium, which is required to be disclosed in
the Registration Statement, or which might reasonably be expected to
result in a Material Adverse Effect, or which might reasonably be
expected to materially and adversely affect the properties or assets
thereof or the consummation of the transactions contemplated in this
Agreement and the International Purchase Agreement or the Transactions
or the performance by, if determined adversely to the Company or
Iridium of its obligations hereunder or thereunder; all pending legal
or governmental proceedings to which the Company or Iridium is a party
or of which any of their respective property or assets is the subject
which are not described in the Registration Statement, including
ordinary routine litigation incidental to the business, would not
reasonably be expected to result in a Material Adverse Effect.
(xiii) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectuses or to be filed as exhibits thereto which
have not been described and filed as required.
(xiv) Possession of Intellectual Property. Except as described
in the Registration Statement or as would not have a Material Adverse
Effect, Iridium owns or possesses or reasonably believes it can acquire
on reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures, but excluding any required regulatory licenses or
approvals), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property"), or that
it can contract on reasonable terms with third parties who can acquire
the Intellectual Property, necessary to carry on the business now
operated or proposed to be operated by Iridium, and neither the
Company nor Iridium, has received any notice or is otherwise aware of
any infringement of or conflict with asserted rights of others with
respect to any Intellectual Property or of any facts or circumstances
which would render any Intellectual Property invalid or inadequate to
protect the interest of the Company or Iridium and which infringement
or conflict (if the subject of any unfavorable decision, ruling or
finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect.
(xv) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company or
Iridium of its obligations hereunder, in connection with the offering,
issuance or sale of the Securities under this Agreement and the
International Purchase
-9-
14
Agreement or the consummation of the transactions contemplated by this
Agreement and the International Purchase Agreement or by the
Transactions, except (i) such as have been already obtained or as may
be required under the 1933 Act or the 1933 Act Regulations and foreign
or state securities or blue sky laws and (ii) such as have been
obtained under the laws and regulations of jurisdictions outside the
United States in which the Reserved Securities are offered.
(xvi) Possession of Licenses and Permits. Except as disclosed
in the Registration Statement or as would not have a Material Adverse
Effect, (i) Iridium possesses such permits, licenses, approvals,
consents and other authorizations (collectively, "Governmental
Licenses") issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies necessary to conduct the business now
operated by Iridium and (ii) Iridium is in compliance with the current
terms and conditions of all such Governmental Licenses, except where
the failure so to comply would not, singly or in the aggregate, have a
Material Adverse Effect; all of the Governmental Licenses are valid and
in full force and effect, except where the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to
be in full force and effect would not have a Material Adverse Effect;
and neither the Company nor Iridium has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect. This representation does not extend to
Governmental Licenses required for Iridium to conduct its business as
proposed to be conducted, most of which have not been obtained.
(xvii) Title to Property. The Company owns no real property.
Iridium has good and marketable title to all real property it owns; and
the Company and Iridium have good title to all other properties owned
by them, in each case, free and clear of all mortgages, pledges, liens,
security interests, claims, restrictions or encumbrances of any kind
except such as (a) are described in the Registration Statement or (b)
would not, singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect; and all of the leases and subleases material
to the business of the Company and Iridium, considered as one
enterprise, and under which the Company and Iridium holds properties
described in the Prospectuses, are in full force and effect, and
neither the Company nor Iridium has any notice of any material claim of
any sort that has been asserted by anyone adverse to the rights of the
Company or Iridium under any of the leases or subleases mentioned
above, or affecting or questioning the rights of the Company or Iridium
to the continued possession of the leased or subleased premises under
any such lease or sublease, except such as would not reasonably be
expected to have a Material Adverse Effect.
(xviii) Compliance with Cuba Act. The Company has complied
with, and is and will be in compliance with, the provisions of that
certain Florida act relating to disclosure of doing business with Cuba,
codified as Section 517.075 of the Florida statutes, and the rules and
regulations thereunder (collectively, the "Cuba Act") or is exempt
therefrom.
-10-
15
(xix) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectuses will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xx) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor Iridium is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) Iridium has all permits, authorizations and approvals
required under any applicable Environmental Laws and is in compliance
with its requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against
Iridium and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or
Iridium relating to Hazardous Materials or any Environmental Laws.
(xxi) Registration Rights. There are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or, except as set
forth in the Registration Statement, otherwise registered by the
Company under the 1933 Act.
(xxii) Principal Agreements. Except as disclosed in the
Registration Statement and except as would not reasonably be expected
to have a Material Adverse Effect, to the best of the Company's and
Iridium's knowledge, none of the parties to (i) the Gateway
Authorization Agreements (as defined in the Prospectuses), (ii) the
Space System Contract (as defined in the Prospectuses), (iii) the
Operations and Maintenance Contract (as defined in the Prospectuses),
(iv) the Iridium Business Support System Contract with Xxxxxxxx
Consulting (the "IBSS Contract"), (v) the Terrestrial Network
Development Contract (as defined in the Prospectus), and (vi) the
Support Agreement between Iridium and Motorola (the "Support
Agreement") (collectively, the foregoing are herein called the
"Principal Agreements"), is in breach of, or in default in the
performance or observance of, any material obligation, term, covenant
or condition contained therein. Each of the Principal Agreements that
the Company has delivered to the U.S. Underwriters is a true
-11-
16
and correct copy, and there have been no additional amendments,
alterations, modifications or waivers thereto or in the exhibits or
schedules thereto. Iridium has duly and validly authorized, executed
and delivered each of the Principal Agreements to which it is a party
and, to the best of the Company's and Iridium's knowledge, the other
parties to each of the Principal Agreements have duly and validly
authorized, executed and delivered each of the Principal Agreements
and, assuming such authorization, execution and delivery by such other
parties, each of the Principal Agreements is a legally valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(xxiii) Governance Agreements. Neither the Company nor
Iridium, nor to the best knowledge of the Company and Iridium, any
other party to any of the Governance Agreements, is in breach of, or in
default in the performance or observance of, any material obligation,
term, covenant or condition contained in any of the Governance
Agreements. Each of the Governance Agreements that the Company has
delivered to the U.S. Underwriters is a true and correct copy, and
there have been no additional amendments, alterations, modifications or
waivers thereto or in the exhibits or schedules thereto. Each of the
Company and Iridium has duly and validly authorized, executed and
delivered each of the Governance Agreements and, to the best of the
Company's and Iridium's knowledge, the other parties to each of the
Governance Agreements have duly and validly authorized, executed and
delivered each of the Governance Agreements and, assuming such
authorization, execution and delivery by such other parties, each of
the Governance Agreements is a legally valid and binding agreement of
the Company and Iridium, enforceable against the Company and Iridium in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; provided that no representation or warranty is made with
respect to any provision of such agreement purporting to require
indemnification of, or contribution to, the liability losses, damages
or claims of any person to the extent that such provision may be
limited by applicable laws.
(xxiv) FCC License. The Federal Communications Commission (the
"FCC") has authorized Motorola 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
Order and Authorization (DA 95-128), released January 31, 1995.
(xxv) Forward Looking Statements. The statements (including
the assumptions described therein) included in the Registration
Statement and the Prospectuses relating to Iridium's operations,
expected markets, size of expected addressable markets for mobile
satellite services, expected technical capabilities, expected funding
needs, expected financing sources, expected pricing, expected launch
schedule, expected commercial operations schedule, the estimate of the
last year in which Iridium will have negative cash
-12-
17
flow and a net increase in year-end borrowings and expected future
regulatory approvals as well as information concerning expected
characteristics of competing systems and expected actions of third
parties such as equipment suppliers, gateway operators, service
providers and roaming partners were made by the Company with a
reasonable basis and reflect the Company's good faith estimate of the
matters described therein.
(xxvi) Certain Descriptions. The statements set forth in the
Prospectuses under the captions "Governance of the Company and
Relationship with Iridium," "Description of Capital Stock" and
"Description of Iridium LLC Limited Liability Company Agreement,"
insofar as they purport to constitute a summary of the terms of the
Class A Common Stock and the Interests, as the case may be, and to
describe the provisions of the laws and documents referred to therein,
and under the captions "Risk Factors--Risks Associated with Licensing
and Spectrum Allocation," "Risk Factors--Risks Associated with
Principal Supply Contracts," "Principal Contracts for the Development
of the Iridium System," "Certain Relationships and Related
Transactions," "Tax Considerations" and "Underwriting," insofar as they
purport to describe the provisions of the laws and documents referred
to therein, are accurate, complete and fair in all material respects.
(xxvii) Accounting Controls. The Company and Iridium maintain
a system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance
with management's general or specific authorization; (B) transactions
are recorded as necessary to permit preparation of financial statements
in conformity with generally accepted accounting principles and to
maintain accountability for assets; (C) access to assets is permitted
only in accordance with management's general or specific authorization;
and (D) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxviii) Insurance Matters. Except as set forth in the
Registration Statement, Iridium carries or will have the benefit of
insurance in such amounts and covering such risks as it reasonably
believes is adequate for the conduct of its business and the value of
its properties and as is customary for companies engaging in similar
businesses in similar industries.
(b) Officer's Certificates. Any certificate signed by any officer of
the Company or Iridium delivered to the Global Coordinator, the U.S.
Representatives or to counsel for the U.S. Underwriters shall be deemed a
representation and warranty by the Company and Iridium to each U.S. Underwriter
as to the matters covered thereby, but no personal liability therefor shall
attach to the officer providing any such certificate.
-13-
18
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each U.S. Underwriter, severally and not
jointly, and each U.S. Underwriter, severally and not jointly, agrees to
purchase from the Company, at the price per share set forth in Schedule B, the
number of Initial U.S. Securities set forth in Schedule A opposite the name of
such U.S. Underwriter, plus any additional number of Initial U.S. Securities
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 11 hereof.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the U.S. Underwriters,
severally and not jointly, to purchase up to an additional 1,200,000 shares of
Class A Common Stock at the price per share set forth in Schedule B, less an
amount per share equal to any dividends or distributions declared by the Company
and payable on the Initial U.S. Securities but not payable on the U.S. Option
Securities. The option hereby granted will expire 30 days after the date hereof
and may be exercised in whole or in part from time to time only for the purpose
of covering over-allotments which may be made in connection with the offering
and distribution of the Initial U.S. Securities upon notice by the Global
Coordinator to the Company and Iridium setting forth the number of U.S. Option
Securities as to which the several U.S. Underwriters are then exercising the
option and the time and date of payment and delivery for such U.S. Option
Securities. Any such time and date of delivery for the U.S. Option Securities (a
"Date of Delivery") shall be determined by the Global Coordinator, but shall not
be later than seven full business days after the exercise of said option, nor in
any event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the U.S. Option Securities, each of the
U.S. Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of U.S. Option Securities then being purchased
which the number of Initial U.S. Securities set forth in Schedule A opposite the
name of such U.S. Underwriter bears to the total number of Initial U.S.
Securities, subject in each case to such adjustments as the Global Coordinator
in its discretion shall make to eliminate any sales or purchases of fractional
shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Xxxxxxxx & Xxxxxxxx, 0000 Xxxxxxxxxxxx Xxxxxx, XX, Xxxxxxxxxx, XX, 00000 or at
such other place as shall be agreed upon by the Global Coordinator and the
Company, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs
after 4:30 P.M. (Eastern time) on any given day) business day after the date
hereof (unless postponed in accordance with the provisions of Section 11), or
such other time not later than ten business days after such date as shall be
agreed upon by the Global Coordinator and the Company (such time and date of
payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the U.S. Option Securities
are purchased by the U.S. Underwriters, payment of the purchase price for, and
delivery of certificates for, such U.S. Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be
-14-
19
agreed upon by the Global Coordinator and the Company, on each Date of Delivery
as specified in the notice from the Global Coordinator to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the U.S. Representatives for the respective accounts of the U.S. Underwriters of
certificates for the U.S. Securities to be purchased by them. It is understood
that each U.S. Underwriter has authorized the U.S. Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Initial U.S. Securities and the U.S. Option Securities, if any,
which it has agreed to purchase. Xxxxxxx Xxxxx, individually and not as
representative of the U.S. Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Initial U.S. Securities or the U.S.
Option Securities, if any, to be purchased by any U.S. Underwriter whose funds
have not been received by the Closing Time or the relevant Date of Delivery, as
the case may be, but such payment shall not relieve such U.S. Underwriter from
its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial U.S.
Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. Representatives may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
U.S. Securities and the U.S. Option Securities, if any, will be made available
for examination and packaging by the U.S. Representatives in The City of New
York not later than 10:00 A.M. (Eastern time) on the business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
U.S. Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
or Rule 434, as applicable, and will notify the Global Coordinator immediately,
and confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectuses or any amended Prospectuses shall have been filed, (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectuses or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The Company will
promptly effect the filings necessary pursuant to Rule 424(b) and will take such
steps as it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
-15-
20
(b) Filing of Amendments. The Company will give the Global Coordinator
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectuses,
will furnish the Global Coordinator with copies of any such documents a
reasonable amount of time prior to such proposed filing or use, as the case may
be, and will not file or use any such document to which the Global Coordinator
or counsel for the U.S. Underwriters shall object promptly after it receives
copies thereof.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the U.S. Representatives and counsel for the U.S. Underwriters,
without charge, signed copies of the Registration Statement as originally filed
and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the U.S. Representatives,
without charge, a conformed copy of the Registration Statement as originally
filed and of each amendment thereto (without exhibits) for each of the U.S.
Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the U.S. Underwriters will be identical in all material
respects to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. Subject to paragraph (e), the Company has
delivered to each U.S. Underwriter, without charge, as many copies of each
preliminary prospectus as such U.S. Underwriter reasonably requested, and the
Company hereby consents to the use of such copies for purposes permitted by the
1933 Act. The Company will furnish to each U.S. Underwriter, without charge
during the period when the U.S. Prospectus is required to be delivered under the
1933 Act or the Securities Exchange Act of 1934 (the "1934 Act"), such number of
copies of the U.S. Prospectus (as amended or supplemented) as such U.S.
Underwriter may reasonably request. The U.S. Prospectus and any amendments or
supplements thereto furnished to the U.S. Underwriters will be identical in all
material respects to the electronically transmitted copies thereof filed with
the Commission pursuant to XXXXX, except to the extent permitted by Regulation
S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the completion of
the distribution of the Securities as contemplated in this Agreement, the
International Purchase Agreement and in the Prospectuses. If at any time during
the nine month period immediately following the time of issue of the U.S.
Prospectus a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel for
the U.S. Underwriters or for the Company, to amend the Registration Statement or
amend or supplement any Prospectus in order that the Prospectuses will not
include any untrue statements of a material fact or omit to state a material
fact necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a purchaser,
or if it shall be necessary, in the opinion of such counsel, at any such time to
amend the Registration Statement or amend or supplement any Prospectus in order
to comply with the requirements of the 1933 Act or the 1933
-16-
21
Act Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectuses comply with such requirements, and the Company will furnish to the
U.S. Underwriters such number of copies of such amendment or supplement as the
U.S. Underwriters may reasonably request. In case any U.S. Underwriter is
required to deliver a prospectus in connection with the sale of U.S. Securities
at any time nine months or more after the time of issue of the U.S. Prospectus,
upon request of the U.S. Underwriters but at the expense of such U.S.
Underwriters, the Company agrees to prepare and deliver to such U.S.
Underwriters as many copies as the U.S. Underwriters may request of an amended
or supplemented U.S. Prospectus complying with Section 10(a)(3) of the 1933 Act.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the U.S. Underwriters, to qualify the Securities for offering
and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Global Coordinator may designate and
to maintain such qualifications in effect for a period of not less than one year
from the later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation or other governmental fees
and charges in respect of doing business in any jurisdiction in which it is not
otherwise so subject. In each jurisdiction in which the Securities have been so
qualified, the Company will file such statements and reports as may be required
by the laws of such jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of the Registration
Statement and any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectuses
under "Use of Proceeds." The Company shall take such steps as shall be necessary
to ensure that the Company shall not become an "investment company" within the
meaning of such term under the 1940 Act and the rules and regulations
thereunder; provided that the Company is not able to control the occurrence of a
"Company Change in Control" or "Reduction in Interest" as such terms are defined
in the LLC Agreement.
(i) Listing. The Company will use its best efforts to effect and
maintain the quotation of the Securities on the Nasdaq National Market and will
file with the Nasdaq National Market all documents and notices required by the
Nasdaq National Market of companies that have securities that are traded in the
over-the-counter market and quotations for which are reported by the Nasdaq
National Market.
-17-
22
(j) Restriction on Sale of Securities. During a period of 180 days from
the date of the Prospectuses, the Company will not, without the prior written
consent of the Global Coordinator, (i) directly or indirectly, offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of any share of Class A Common Stock or any
securities convertible into or exercisable or exchangeable for Class A Common
Stock or file any registration statement under the 1933 Act with respect to any
of the foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Class A Common Stock, whether any such
swap or transaction described in clause (i) or (ii) above is to be settled by
delivery of Class A Common Stock or such other securities, in cash or otherwise.
The foregoing sentence shall not apply to the Securities to be sold hereunder or
under the International Purchase Agreement, the Company's Global Ownership
Program or the Iridium LLC Share Option Plan, each as described in the
Prospectuses.
(k) Reporting Requirements. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant to the
1934 Act within the time periods required by the 1934 Act and the rules and
regulations of the Commission thereunder.
(l) Compliance with NASD Rules. The Company hereby agrees that it will
ensure that the Reserved Securities will be restricted as required by the
National Association of Securities Dealers, Inc. (the "NASD") or the NASD rules
from sale, transfer, assignment, pledge or hypothecation for a period of three
months following the date of this Agreement. The Underwriters will notify the
Company as to which persons will need to be so restricted. At the request of the
Underwriters, the Company will direct the transfer agent to place a stop
transfer restriction upon such securities for such period of time. Should the
Company release, or seek to release, from such restrictions any of the Reserved
Securities, the Company agrees to reimburse the Underwriters for any reasonable
expenses (including, without limitation, legal expenses) they incur in
connection with such release.
(m) Compliance with Rule 463. The Company will file with the
Commission such reports on Form SR as may be required pursuant to Rule 463 of
the 1933 Act Regulations.
(n) Exchange Agreement. During a period of 180 days from the date of
the Prospectuses, the Company will not enter into any amendment to, or waive the
application of any provision of, the Exchange Agreement or take any action that
would have any effect similar to the foregoing, in each case if the effect
thereof is to permit exchanges of Class 1 Interests for Class A Stock during
such 180-day period.
SECTION 4. Covenants of Iridium. Iridium covenants and agrees with
each U.S. Underwriter as follows:
(a) Exchange Agreement. During a period of 180 days from the date of
the Prospectuses, Iridium will not enter into any amendment to, or waive the
application of any
-18-
23
provision of, the Exchange Agreement or take any action that would have any
effect similar to the foregoing.
(b) Use of Proceeds. Iridium shall apply the proceeds of the sale
of its Class 1 Interests to the Company substantially as set forth in the
Prospectuses.
SECTION 5. Payment of Expenses.
(a) Expenses. Iridium will pay all expenses incident to the performance
of the obligations of Iridium and the Company under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the Underwriters and the
transfer of the Securities between the U.S. Underwriters and the International
Managers, (iv) the fees and disbursements of the Company's and Iridium's
counsel, accountants and other advisors, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectuses and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the Underwriters of copies of the Blue
Sky Survey and any supplement thereto, (viii) the fees and expenses of any
transfer agent or registrar for the Securities, (ix) the filing fees incident
to, and the reasonable fees and disbursements of counsel to the Underwriters in
connection with, the review by the National Association of Securities Dealers,
Inc. (the "NASD") of the terms of the sale of the Securities, (x) the fees and
expenses incurred in connection with the inclusion of the Securities in the
Nasdaq National Market and (xi) all costs and expenses of the Underwriters,
including the fees and disbursements of counsel for the Underwriters, in
connection with matters related to the Reserved Securities which are designated
by Iridium for sale to employees and others having a business relationship with
Iridium. It is understood, however, that except as provided in this Section,
Section 7 and Section 8, the U.S. Underwriters will pay all of their own costs
and expenses, including the fees and expenses of their counsel, transfer taxes
on resale of any of the securities and any advertising expenses connected with
any offers they make.
(b) Termination of Agreement. If this Agreement is terminated by the
U.S. Representatives in accordance with the provisions of Section 6 or Section
10(a)(i) hereof, Iridium shall reimburse the U.S. Underwriters for all of their
reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the U.S. Underwriters.
-19-
24
SECTION 6. Conditions of U.S. Underwriters' Obligations. The
obligations of the several U.S. Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Company and Iridium
contained in Section 1 hereof or in certificates of any officer of the Company
or Iridium delivered pursuant to the provisions hereof, to the performance by
the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the U.S. Underwriters. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely upon Rule 434,
a Term Sheet shall have been filed with the Commission in accordance with Rule
424(b).
(b) Letter and Opinion of Counsel for the Company and Iridium. At
Closing Time, the U.S. Representatives shall have received the favorable opinion
and letter, dated as of Closing Time, of Xxxxxxxx & Xxxxxxxx, counsel for the
Company and Iridium, in form and substance satisfactory to counsel for the U.S.
Underwriters, together with signed or reproduced copies of such letters for each
of the other U.S. Underwriters to the effect set forth in Exhibit A-1 hereto.
(c) Opinion of Bermuda Counsel for the Company. At Closing Time, the
U.S. Representatives shall have received the favorable opinion, dated as of
Closing Time, of Xxxxxxx Xxxx & Xxxxxxx, Bermuda counsel for the Company, in
form and substance satisfactory to counsel for the U.S. Underwriters, together
with signed or reproduced copies of such letter for each of the other U.S.
Underwriters to the effect set forth in Exhibit A-2 hereto.
(d) Opinion of Regulatory Counsel. At Closing Time, the U.S.
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Steptoe & Xxxxxxx LLP, regulatory counsel, in form and substance
satisfactory to counsel for the U.S. Underwriters, together with signed or
reproduced copies of such letter for each of the other U.S. Underwriters to the
effect set forth in Exhibit A-3 hereto.
(e) Opinion of Assistant Secretary of the Company and General Counsel
of Iridium. At Closing Time, the U.S. Representatives shall have received the
favorable opinion, dated as of Closing Time, of F. Xxxxxx Xxxxxx, Esq.,
Assistant Secretary of the Company and General Counsel of Iridium, in form and
substance satisfactory to counsel for the U.S. Underwriters, together with
signed or reproduced copies of such letter for each of the other U.S.
Underwriters to the effect set forth in Exhibit A-4 hereto.
(f) Opinion of Counsel for U.S. Underwriters. At Closing Time, the U.S.
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Fried,
-20-
25
Frank, Harris, Xxxxxxx & Xxxxxxxx, counsel for the U.S. Underwriters, together
with signed or reproduced copies of such letter for each of the other U.S.
Underwriters with respect to the matters set forth in clauses (i), (iv) and (v)
of Exhibit A-1 hereto and to the effect set forth in Exhibit B hereto. In giving
such opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York and the federal law of
the United States and the General Corporation Law of the State of Delaware, upon
the opinions of counsel satisfactory to the U.S. Representatives. Such counsel
may also state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Company and Iridium and certificates of public officials.
(g) Opinion of Regulatory Counsel for the U.S. Underwriters. At
Closing Time, the U.S. Representatives shall have received the favorable
opinion, dated as of Closing Time, of Goldberg, Godles, Wiener & Xxxxxx,
Regulatory Counsel for the U.S. Underwriters together with signed or reproduced
copies of such letter for each of the other U.S. Underwriters to such effect as
the U.S. Underwriters may reasonably request.
(h) Officers' Certificates. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectuses, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company or Iridium, whether or not arising in the ordinary
course of business, and the U.S. Representatives shall have received a
certificate of the President or a Vice President of each of the Company and
Iridium and of the chief financial or chief accounting officer of each of the
Company and Iridium, dated as of Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) the representations and warranties in
Section 1(a) hereof are true and correct with the same force and effect as
though expressly made at and as of Closing Time, (iii) the Company or Iridium,
as the case may be, has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to Closing Time,
and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or are contemplated by the Commission.
(i) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the U.S. Representatives shall have received from KPMG Peat Marwick
LLP a letter dated such date, in form and substance satisfactory to the U.S.
Representatives, together with signed or reproduced copies of such letter for
each of the other U.S. Underwriters containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectuses.
(j) Bring-down Comfort Letter. At Closing Time, the U.S.
Representatives shall have received from KPMG Peat Marwick LLP a letter, dated
as of Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (i) of this Section (updated to include
the final Prospectuses), except that the specified date referred to shall be a
date not more than three business days prior to Closing Time.
-21-
26
(k) Approval of Listing. At Closing Time, the Securities shall have
been approved for inclusion in the Nasdaq National Market, subject only to
official notice of issuance.
(l) No Objection. At or prior to Closing Time, the NASD shall have
confirmed that it has not raised any objection with respect to the fairness and
reasonableness of the underwriting terms and arrangements.
(m) Motorola Certificate. At Closing Time, the U.S. Representatives
shall have received a certificate, dated as of Closing Time, of the President or
a Vice President of Motorola, Inc., in form and substance satisfactory to
counsel for the U.S. Underwriters, as to the accuracy of the statements
attributed to Motorola in the Prospectuses, and to such other matters relating
to Motorola as counsel for the U.S. Underwriters may reasonably request (a draft
of such certificate is attached as Exhibit C hereto).
(n) Purchase of Initial International Securities. Contemporaneously
with the purchase by the U.S. Underwriters of the Initial U.S. Securities under
this Agreement, the International Managers shall have purchased the Initial
International Securities under the International Purchase Agreement.
(o) Conditions to Purchase of U.S. Option Securities. In the event that
the U.S. Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the U.S. Option Securities, the representations
and warranties of the Company and Iridium contained herein and the statements in
any certificates furnished by the Company or Iridium hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of Delivery, the
U.S. Representatives shall have received:
(i) Officers' Certificates. A certificate, dated such
Date of Delivery, of the President or a Vice
President of each of the Company and Iridium and of
the chief financial or chief accounting officer of
each of the Company and Iridium confirming that the
certificate or certificates delivered at Closing
Time pursuant to Section 6(h) hereof remain true and
correct as of such Date of Delivery.
(ii) Opinion of Counsel for the Company and Iridium. The
favorable opinion of each of Xxxxxxxx & Xxxxxxxx,
counsel for the Company and Iridium, Xxxxxxx Xxxx &
Xxxxxxx, Bermuda counsel for the Company, Steptoe &
Xxxxxxx LLP, regulatory counsel, and F. Xxxxxx
Xxxxxx, Assistant Secretary of the Company and
General Counsel of Iridium, each in form and
substance satisfactory to counsel for the U.S.
Underwriters, dated such Date of Delivery, relating
to the U.S. Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as
the opinions required by Sections 6(b), 6(c), 6(d)
and 6(e) hereof, respectively.
(iii) Opinion of Counsel for U.S. Underwriters. The
favorable opinion of each of Fried, Frank, Harris,
Xxxxxxx & Xxxxxxxx, counsel for the U.S.
Underwriters, and Goldberg, Godles, Wiener & Xxxxxx,
regulatory counsel
-22-
27
for the U.S. Underwriters, each dated such Date of
Delivery, relating to the U.S. Option Securities to
be purchased on such Date of Delivery and otherwise
to the same effect as the opinions required by
Sections 6(f) and 6(g) hereof, respectively.
(iv) Bring-down Comfort Letter. A letter from KPMG Peat
Marwick LLP, in form and substance satisfactory to
the U.S. Representatives and dated such Date of
Delivery, substantially in the same form and
substance as the letter furnished to the U.S.
Representatives pursuant to Section 6(j) hereof,
except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date
not more than five days prior to such Date of
Delivery.
(v) Motorola Certificate. A certificate, dated such Date
of Delivery, of the president or a Vice President of
Motorola, Inc. confirming that the certificate
delivered at Closing Time pursuant to 6(m) hereof
remains true and correct as of such Date of Delivery.
(p) Transactions. At or prior to Closing Time, the Transactions
shall have been duly and validly effected and all corporate proceedings and
legal matters incident to the Transactions shall be satisfactory to counsel for
the U.S. Underwriters.
(q) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the U.S. Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them to
pass upon the issuance and sale of the Securities as herein contemplated, or in
order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained.
(r) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of U.S. Option
Securities on a Date of Delivery which is after Closing Time, the obligations of
the several U.S. Underwriters to purchase the relevant Option Securities, may be
terminated by the U.S. Representatives by notice to the Company at any time at
or prior to Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party except as
provided in Section 5 and except that Sections 1, 7, 8 and 9 shall survive any
such termination and remain in full force and effect.
(s) Lock-up Agreements. At the date of this Agreement, the U.S.
Representatives shall have received an agreement substantially in the form of
Exhibit D hereto signed by each of the persons who are purchasing Reserved
Securities.
-23-
28
SECTION 7. Indemnification.
(a) Indemnification of U.S. Underwriters. Each of the Company
and Iridium jointly and severally agrees to indemnify and hold harmless each
U.S. Underwriter and each person, if any, who controls any U.S. Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectuses (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of (A) the violation of
any applicable laws or regulations of foreign jurisdictions where
Reserved Securities have been offered and (B) any untrue statement or
alleged untrue statement of a material fact included in the supplement
or prospectus wrapper material distributed in [Insert Applicable
Jurisdictions(s)] in connection with the reservation and sale of the
Reserved Securities to eligible employees and other having business
relationships with Iridium or the omission or alleged omission
therefrom of a material fact necessary to make the statements therein,
when considered in conjunction with the Prospectuses or preliminary
prospectuses, not misleading; (iii) against any and all loss,
liability, claim, damage and expense whatsoever, as incurred, to the
extent of the aggregate amount paid in settlement of any litigation, or
any investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission or in connection with any violation of the nature referred to
in Section 7(a)(ii)(A) hereof; provided that (subject to Section 7(d)
below) any such settlement is effected with the written consent of the
Company and Iridium; and
(iii) against any and all expense whatsoever, as incurred
(including subject to Section 7(c) hereof, the reasonable fees and
disbursements of counsel chosen by Xxxxxxx Xxxxx), reasonably incurred
in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission or in connection with any violation of the nature referred to
in Section 7(a)(ii)(A) hereof, to the extent that any such expense is
not paid under (i), or (ii) or (iii) above;
-24-
29
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
U.S. Underwriter through the U.S. Representatives expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the U.S. Prospectus (or any amendment or supplement thereto); and
provided, further, that whether Iridium or the Company will be liable to an
Underwriter with respect to any preliminary prospectus to the extent that
Iridium or the Company shall sustain the burden of proving that any such loss,
liability, claim, damage or expense resulted from the fact that such Underwriter
in contravention of a requirement of this Agreement or applicable law, sold
Securities to a person to whom such Underwriter failed to send or give, at or
prior to Closing Time, a copy of the U.S. Prospectus as then amended or
supplemented if the Company has previously furnished copies thereof
(sufficiently in advance of Closing Time to allow for distribution by Closing
Time) to the Underwriter and the loss, liability, claim, damage or expense of
such Underwriter resulted from an untrue statement or omission or alleged untrue
statement or omission of a material fact contained in or omitted from the
preliminary prospectus which was corrected in the U.S. Prospectus as, if
applicable, amended or supplemented prior to Closing Time.
(b) Indemnification of Company, Iridium, Directors and Officers. Each
U.S. Underwriter severally agrees to indemnify and hold harmless the Company and
Iridium, their directors, each of their officers who signed the Registration
Statement, and each person, if any, who controls the Company or Iridium within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto),
including the Rule 430A Information and the Rule 434 Information, if applicable,
or any preliminary U.S. prospectus or the U.S. Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by such U.S. Underwriter through the U.S.
Representatives expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the U.S. Prospectus (or any
amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 7(a) above,
counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx, and, in
the case of parties indemnified pursuant to Section 7(b) above, counsel to the
indemnified parties shall be selected by the Company and Iridium. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the
-25-
30
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 7 or Section 8 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 7(a)(ii) or Section 7(a)(iii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
(e) Indemnification for Reserved Securities. In connection with the
offer and sale of the Reserved Securities, each of the Company and Iridium
jointly and severally agrees, promptly upon a request in writing, to indemnify
and hold harmless the Underwriters from and against any and all losses,
liabilities, claims, damages and expenses incurred by them as a result of the
failure of eligible employees and others having business relationships with
Iridium to pay for and accept delivery of Reserved Securities which, by the end
of the first business day following the date of this Agreement, were subject to
a properly confirmed agreement to purchase.
-26-
31
SECTION 8. Contribution. If the indemnification provided for in Section
7 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and Iridium
on the one hand and the U.S. Underwriters on the other hand from the offering of
the Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and Iridium on the one hand and
of the U.S. Underwriters on the other hand in connection with the statements or
omissions, or in connection with any violation of the nature referred to in
Section 7(a)(ii)(A) hereof, which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and Iridium on the one
hand and the U.S. Underwriters on the other hand in connection with the offering
of the U.S. Securities pursuant to this Agreement shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of the
U.S. Securities pursuant to this Agreement (before deducting expenses) received
by the Company and the total underwriting discount received by the U.S.
Underwriters, in each case as set forth on the cover of the U.S. Prospectus, or,
if Rule 434 is used, the corresponding location on the Term Sheet, bear to the
aggregate initial public offering price of the U.S. Securities as set forth on
such cover.
The relative fault of the Company and Iridium on the one hand and the
U.S. Underwriters on the other hand shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company and Iridium or by the U.S. Underwriters and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission or any violation of the nature
referred to in Section 7(a)(ii)(A) hereof.
The Company, Iridium and the U.S. Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 8 were determined
by pro rata allocation (even if the U.S. Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 8. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 8 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 8, no U.S. Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the U.S. Securities underwritten by it and distributed to
the public were offered to the public exceeds the
-27-
32
amount of any damages which such U.S. Underwriter has otherwise been required to
pay by reason of any such untrue or alleged untrue statement or omission or
alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, each person, if any, who controls a
U.S. Underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as such U.S.
Underwriter, and each director of the Company or Iridium, each officer of the
Company or Iridium who signed the Registration Statement, and each person, if
any, who controls the Company or Iridium within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company. The U.S. Underwriters' respective obligations to
contribute pursuant to this Section 8 are several in proportion to the number of
Initial U.S. Securities set forth opposite their respective names in Schedule A
hereto and not joint.
SECTION 9. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or Iridium submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any U.S. Underwriter or controlling
person, or by or on behalf of the Company or Iridium, and shall survive delivery
of the Securities to the U.S. Underwriters.
SECTION 10. Termination of Agreement.
(a) Termination; General. The U.S. Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the U.S. Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and Iridium
considered as one enterprise, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse change in the
financial markets in the United States or the international financial markets,
any outbreak of hostilities or escalation thereof or other calamity or crisis or
any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the U.S.
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the Nasdaq
National Market or Bermuda, or if trading generally on the American Stock
Exchange or the New York Stock Exchange or in the Nasdaq National Market has
been suspended or materially limited, or minimum or maximum prices for trading
have been fixed, or maximum ranges for prices have been required, by any of said
exchanges or by such system or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other governmental authority, or
(iv) if a banking moratorium has been declared by either Federal or New York
authorities.
-28-
33
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 5 hereof, and provided further that Sections
1, 7, 8 and 9 shall survive such termination and remain in full force and
effect.
SECTION 11. Default by One or More of the U.S. Underwriters. If one or
more of the U.S. Underwriters shall fail at Closing Time or a Date of Delivery
to purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the U.S. Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting U.S. Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the U.S.
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of U.S. Securities to be purchased on such date, each of
the non-defaulting U.S. Underwriters shall be obligated, severally and
not jointly, to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting U.S. Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of U.S. Securities to be purchased on such date, this Agreement
or, with respect to any Date of Delivery which occurs after the Closing
Time, the obligation of the U.S. Underwriters to purchase and of the
Company to sell the Option Securities to be purchased and sold on such
Date of Delivery shall terminate without liability on the part of any
non-defaulting U.S. Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
U.S. Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
U.S. Underwriters to purchase and the Company to sell the relevant U.S. Option
Securities, as the case may be, either the U.S. Representatives or the Company
shall have the right to postpone Closing Time or the relevant Date of Delivery,
as the case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "U.S. Underwriter" includes
any person substituted for a U.S. Underwriter under this Section 11.
SECTION 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the U.S.
Underwriters shall be directed to the U.S. Representatives at North Tower, World
Financial Center, New York, New York 10281-1201, attention of __________;
notices to the Company shall be directed to it at Xxxxxxxxx Xxxxx, 0 Xxxxxx
Xxxxxx, Xxxxxxxx XX 11, Bermuda, attention of the Secretary (with a copy to
Iridium);
-29-
34
and notices to Iridium shall be directed to it at 0000X Xxxxxx, X.X., Xxxxxxxxxx
X.X. 00000, attention of General Counsel.
SECTION 13. Parties. This Agreement shall each inure to the benefit of
and be binding upon the U.S. Underwriters, the Company and Iridium and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the U.S. Underwriters, the Company and Iridium and their respective
successors and the controlling persons and officers and directors referred to in
Sections 7 and 8 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the U.S.
Underwriters, the Company and Iridium and their respective successors, and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any U.S. Underwriter shall be deemed to be a
successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
-30-
35
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the U.S. Underwriters, the Company and Iridium in accordance with its
terms.
Very truly yours,
IRIDIUM WORLD COMMUNICATIONS LTD.
By
-----------------------------
Name:
Title:
IRIDIUM LLC
By
-----------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX, SACHS & CO.
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:
------------------------------------------
Authorized Signatory
For themselves and as U.S. Representatives of the
other U.S. Underwriters named in Schedule A hereto.
-31-
36
SCHEDULE A
Number of
Initial U.S.
Name of U.S. Underwriter Securities
------------------------ ----------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated.............................
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation.......................
Xxxxxxx, Sachs & Co..................................
Total..................................................
-1-
37
SCHEDULE B
IRIDIUM WORLD COMMUNICATIONS LTD.
8,000,000 Shares of Class A Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share for the
Securities, determined as provided in said Section 2, shall be $__________.
2. The purchase price per share for the U.S. Securities to be
paid by the several U.S. Underwriters shall be $__________, being an amount
equal to the initial public offering price set forth above less $__________ per
share; provided that the purchase price per share for any U.S. Option Securities
purchased upon the exercise of the over-allotment option described in Section
2(b) shall be reduced by an amount per share equal to any dividends or
distributions declared by the Company and payable on the Initial U.S. Securities
but not payable on the U.S. Option Securities.
-1-
38
Exhibit A-1
FORM OF OPINION OF COMPANY'S AND IRIDIUM'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 6(b)
(i) Iridium has been duly formed and is an existing limited
liability company in good standing under the laws of the State of
Delaware, with all requisite limited liability company power and
authority to own its properties and to conduct its business as
described in the Prospectuses and to enter into and perform its
obligations under the U.S. Purchase Agreement, the International
Purchase Agreement and the 1997 Governance Agreements.
(ii) Iridium has been duly qualified as a foreign limited
liability company to transact business and is in good standing under
the laws of each jurisdiction set forth in an officer's certificate
delivered to you on the Closing Date specifying the jurisdictions in
which Iridium owns or leases properties or conducts any business (such
counsel shall have no responsibility for the matters set forth in such
officer's certificate and such counsel shall be entitled to rely in
respect of the opinion in this clause upon opinions of local counsel
and in respect of matters of fact upon certificates of officers of
Iridium, provided that such counsel shall state that nothing has come
to such counsel's attention to lead such counsel to believe that both
the U.S. Underwriters and they are not justified in relying upon such
opinions and certificates).
(iii) Iridium has an authorized capitalization as set forth in
the Prospectuses in the column entitled "Actual" under the caption
"Capitalization--Iridium" and all outstanding limited liability company
interests of Iridium have been duly authorized and validly issued and
are fully paid and non-assessable; none of the outstanding limited
liability company interests of Iridium was issued in violation of the
preemptive or other similar rights of any securityholder of Iridium.
(iv) The U.S. Purchase Agreement and the International
Purchase Agreement have been duly authorized, executed and delivered
by Iridium.
(v) All regulatory consents, authorizations, approvals and
filings required to be obtained or made by the Company or Iridium under
the Federal laws of the United States, the laws of the State of New
York and the Limited Liability Company Act of the State of Delaware for
the issuance, sale and delivery of the Securities by the Company to the
Underwriters have been obtained or made; provided, however, that, for
purposes of this clause (v), such counsel shall express no opinion with
respect to Federal or state communications laws.
(vi) The execution, delivery and performance of the U.S.
Purchase Agreement, the International Purchase Agreement, the 1997
Subscription Agreement and the consummation of the transactions herein
and therein contemplated (including the issuance and sale of the
Securities, and the use of the proceeds from the sale of the Securities
as
A-1
39
described in the Prospectuses under the caption "Use Of Proceeds")
do not and will not (i) violate, conflict with or result in a breach or
violation of any of the terms or provisions of, or consitute a default
under, the Principal Agreements nor will such action result in any
violation of the provisions of the certificate of formation or limited
liability company agreement of Iridium or (ii) violate any Federal law
of the United States or the laws of the State of New York or the
Limited Liability Company Act of the State of Delaware, in each case
applicable to Iridium; provided, however, that, for purposes of this
paragraph (vi), such counsel shall express no opinion with respect to
Federal or state securities laws, other antifraud laws, fraudulent
transfer laws or communications laws; provided, further, that such
counsel shall express no opinion as to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights or
with respect to any provision of such agreements purporting to require
indemnification of, or contribution to, the losses, damages, claims,
expenses or liability of any person.
(vii) The Company is not, and upon the issuance and sale of
the Securities as contemplated in the Purchase Agreements and the
application of the net proceeds therefrom as described in the
Prospectuses will not be, an "investment company" as such term is
defined in the 1940 Act.
Such counsel shall also furnish you with a letter to the
effect that as counsel to the Company and Iridium, they reviewed the
Registration Statement and the Prospectuses, participated in
discussions with representatives of the Underwriters, the Company,
Iridium and their accountants, Motorola and the Company's Bermuda
counsel and advised the Company and Iridium as to the requirements of
the 1933 Act and the applicable rules and regulations thereunder;
between the effectiveness of the registration statement and Closing
Time, such counsel participated in further discussions with
representatives of the Underwriters, the Company, Iridium and their
accountants, and Motorola, in which the contents of certain portions of
the Prospectuses and related matters were discussed, and reviewed
certain documents filed by the Company with the Commission,
certificates of certain officers of the Company, an opinion addressed
to the Underwriters from Steptoe & Xxxxxxx and a letter from the
Company's and Iridium's independent accountants; on the basis of the
information that such counsel gained in the course of the performance
of the services referred to above, considered in the light of such
counsel's understanding of the applicable law and the experience such
counsel has gained through their practice under the 1933 Act, such
counsel will confirm to you that in such counsel's opinion, the
Registration Statement, as of its effective date, and the Prospectuses,
as of the date of the Prospectuses, appeared on their face to be
appropriately responsive in all material respects to the requirements
of the 1933 Act and the 1933 Act Regulations; further, nothing that
came to such counsel's attention in the course of such review has
caused such counsel to believe that the Registration Statement, as of
its effective date, and the Prospectuses, as of such effective date,
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading; or that the Prospectuses, as of
the date of the Prospectuses contained any untrue statement of a
material fact or omitted to state any material fact necessary in order
to make the statements therein, in light of the circumstances under
which they were made not misleading; also, nothing that has come to
such counsel's attention in the course of the procedures described in
the second clause of this paragraph has caused such counsel to believe
that the Prospectuses, as of the Closing Time, contained any untrue
statement of a
A-2
40
material fact or omitted to state any material fact necessary in order
to make the statements therein in the light of the circumstances under
which they were made, not misleading; in addition, such counsel shall
state that such counsel does not know of any litigation or any
governmental proceeding instituted or threatened against the Company or
Iridium that would be required to be disclosed in the Prospectuses and
is not so disclosed and that such counsel does not know of any
documents that would be required to be filed as exhibits to the
Registration Statement and are not so filed or of any documents that
are required to be summarized in the Prospectuses and are not so
summarized; such counsel shall state that the limitations inherent in
the independent verification of factual matters and the character of
determinations involved in the registration process are such, however,
that such counsel does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectuses except for those made under
the captions "Risk Factors-Risks Associated with Principal Supply
Contracts," "Risk Factors - Risk of Loss of Management Rights Upon
Change of Control," "Risk Factors Risks Related to the Investment
Company Act of 1940," "Risk Factors - Tax Consequences Related to
Passive Foreign Investment Companies," "Principal Contracts for the
Development of the Iridium System," "Governance of the Company and
Relationship with Iridium," "Description of Iridium LLC Limited
Liability Company Agreement" and "Tax Considerations,", in the
Prospectuses insofar as they relate to provisions of law or documents
therein described; also, such counsel need express no opinion or belief
as to (i) the financial statements or other financial data contained in
the Registration Statement or the Prospectuses and (ii) the description
of statutes, regulations, proceedings or matters referred to in Section
6(d) of the Purchase Agreement.
In rendering such opinion and letter, such counsel shall state
that they express no opinion as to the laws of any jurisdiction other
than the Federal laws of the United States, the laws of the State of
New York and the Limited Liability Company Act of the State of
Delaware. In rendering such opinion, such counsel may (A) rely as to
matters involving the application of the laws of Bermuda, upon the
opinion of Xxxxxxx Xxxx & Xxxxxxx, Bermuda counsel to the Company
(which opinion shall be dated and furnished to the U.S. Representatives
at Closing Time, shall be satisfactory in form and substance to counsel
for the U.S. Underwriters and shall expressly state that the U.S.
Underwriters may rely on such opinion as if it were addressed to them),
provided that Xxxxxxxx & Xxxxxxxx shall state in their opinion that
they believe that they and the U.S. Underwriters are justified in
relying upon such opinion, and (B) rely as to matters of fact (but not
as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public
officials.
A-3
41
Exhibit A-2
FORM OF OPINION OF COMPANY'S BERMUDA
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 6(c)
(i) The Company has been duly organized as an exempted
company and is validly existing as an exempted company in good standing
under the laws of Bermuda.
(ii) The Company has all requisite power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectuses and to enter into and perform its
obligations under the U.S. Purchase Agreement, the International
Purchase Agreement and the Governance Agreements.
(iii) The Company is duly qualified as a foreign company to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectuses in the column entitled
"Actual" under the caption "Capitalization--The Company;" the shares of
issued and outstanding capital stock have been duly authorized and
validly issued and are fully paid and non-assessable; and none of the
outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any
securityholder of the Company.
(v) The Securities to be purchased by the U.S. Underwriters
and the International Managers from the Company have been duly
authorized for issuance and sale to the Underwriters pursuant to the
U.S. Purchase Agreement and the International Purchase Agreement,
respectively, and, when issued and delivered by the Company pursuant to
the U.S. Purchase Agreement and the International Purchase Agreement,
respectively, against payment of the consideration set forth in the
U.S. Purchase Agreement and the International Purchase Agreement, will
be validly issued and fully paid and non-assessable and no holder of
the Securities is or will be subject to personal liability by reason of
being such a holder.
(vi) The issuance of the Securities is not subject to the
preemptive or other similar rights of any securityholder of the
Company.
(vii) The U.S. Purchase Agreement, the International Purchase
Agreement and each of the Governance Agreements have been duly
authorized, executed and delivered by the Company.
A-4
42
(viii) The form of certificate used to evidence the Common
Stock complies in all material respects with all applicable statutory
requirements and with any applicable requirements of the Memorandum of
Association and Bye-Laws of the Company.
(ix) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to
which the Company or any subsidiary is a party, or to which the
property of the Company or any subsidiary is subject under Bermuda law,
before or brought by any Bermuda court or governmental agency or body,
which might reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation
of the transactions contemplated in the U.S. Purchase Agreement, the
International Purchase Agreement and the 1997 Subscription Agreement or
the performance by the Company of its obligations thereunder or the
consummation of the Transactions.
(x) The information in the Prospectuses under "Risk
Factors--Risks Associated with Incorporation under Bermuda Law" and
"Description of Capital Stock," and in the Registration Statement under
Item 14, to the extent that it constitutes matters of law, summaries of
legal matters, the Company's Memorandum of Association and Bye-Laws or
legal proceedings, or legal conclusions, has been reviewed by us and is
correct in all material respects.
(xi) To the best of our knowledge, the Company is not in
violation of its Memorandum of Association or Bye-Laws and no default
by the Company exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument that is described or referred to in the
Registration Statement or the Prospectuses or filed as an exhibit to
the Registration Statement.
(xii) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any Bermuda
court or governmental authority or agency, is necessary or required in
connection with the due authorization, execution and delivery of the
U.S. Purchase Agreement, the International Purchase Agreement and the
Governance Agreements or for the offering, issuance, sale or delivery
of the Securities.
(xiii) The execution, delivery and performance of the U.S.
Purchase Agreement and the International Purchase Agreement and the
consummation of the transactions contemplated in the U.S. Purchase
Agreement, the International Purchase Agreement, the 1997 Subscription
Agreement and in the Registration Statement (including the issuance and
sale of the Securities, and the use of the proceeds from the sale of
the Securities as described in the Prospectuses under the caption "Use
Of Proceeds") and compliance by the Company with its obligations under
the U.S. Purchase Agreement, the International Purchase Agreement and
the 1997 Subscription Agreement do not and will not, whether with or
without the giving of notice or lapse of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined in
Section 1(a)(x) of the Purchase
A-5
43
Agreements) under or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company
pursuant to any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or any other agreement or instrument,
known to us, to which the Company is a party or by which it or may be
bound, or to which any of the property or assets of the Company is
subject (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not have a Material Adverse Effect),
nor will such action result in any violation of the provisions of the
Memorandum of Association or Bye-Laws of the Company, or any applicable
Bermuda law, statute, rule, regulation, judgment, order, writ or
decree, known to us, of any Bermuda instrumentality or court, having
jurisdiction over the Company or any subsidiary or any of their
respective properties, assets or operations.
(xiv) To the best of our knowledge, there are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise
registered by the Company under the 1933 Act.
(xv) There is no restriction upon the voting or transfer of
any Securities pursuant to (A) the law of Bermuda, (B) the Company's
Memorandum of Association or Bye-Laws, in each case as amended, or (C)
any agreement or other instrument of which we have knowledge, except as
described in the Prospectuses.
In rendering such opinion, such counsel may rely as to matters
of fact (but not as to legal conclusions), to the extent they deem
proper, on certificates of responsible officers of the Company and
public officials. Such opinion shall not state that it is to be
governed or qualified by, or that it is otherwise subject to, any
treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA
Section of Business Law (1991).
A-6
44
Exhibit A-3
FORM OF OPINION OF REGULATORY COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 6(d)
(i) The information in the Prospectuses under "Risk
Factors--Risks Associated with Licensing and Spectrum Allocation" and
"Regulation of Iridium," accurately summarize in all material respects
the status of all material FCC licenses, permits, approvals and other
FCC authorizations granted to Motorola with respect to the provision of
satellite services via the IRIDIUM System in the United States as
described therein.
(ii) To the best of such counsel's knowledge, Motorola: (a) is
in substantial compliance with the Communications Act of 1934, as
amended, and the rules and regulations of the FCC promulgated
thereunder as they relate to the FCC licenses, permits, approvals and
authorizations referred to in clause (i) above, and (b) has made all
material filings, reports, applications and submissions required
thereunder as they relate to the FCC licenses, permits, approvals and
authorizations referred to in clause (i) above, except as indicated in
the Registration Statement, which filings, reports, applications and
submissions, to the best of such counsel's knowledge, are true,
complete and correct in all material respects.
(iii) No consent, approval, authorization or order of the FCC
is required to be obtained by Motorola in connection with the
authorization, issuance, sale or delivery of the Securities by Iridium.
(iv) Nothing has come to such counsel's attention that has
caused such counsel to believe that the descriptions relating to the
allocation of spectrum in the United States and the licensing of the
Iridium System in the United States contained under the captions
"Regulation" and "Risk Factors--Risks Associated with Licensing and
Spectrum Allocation" of the Registration Statement, contain any untrue
statements of a material fact or omit to state a material fact
necessary to make such descriptions not misleading.
(v) The FCC's International Bureau has authorized Motorola to
construct a mobile satellite system capable of operating in the
1616-1626.5 MHz frequency bands, consistent with the technical
specifications set forth in its application, the FCC's rules and the
conditions set forth in the FCC's Order and Authorization (DA 95-128),
released January 31, 1995.
A-7
45
Exhibit A-4
FORM OF OPINION OF ASSISTANT SECRETARY
OF THE COMPANY AND GENERAL COUNSEL OF IRIDIUM
TO BE DELIVERED PURSUANT TO
SECTION 6(e)
(i) Except as described in the Prospectuses, the Company has
not granted any outstanding options, warrants or commitments with
respect to any shares of the capital stock of the Company, whether
issued or unissued; except as described in the Prospectuses, Iridium
has not granted any warrants, rights or options with respect to the
limited liability company interests of Iridium.
(ii) The Governance Agreements have been duly authorized,
executed and delivered by Iridium.
(iii) To the best of my knowledge, Iridium is not in violation
of its Certificate of Formation or Limited Liability Company Agreement
and no default by Iridium exists in the due performance or observance
of any material obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument that is described or referred to in the
Registration Statement or the Prospectuses or filed or incorporated by
reference as an exhibit to the Registration Statement.
(iv) The execution, delivery and performance of the U.S.
Purchase Agreement, the International Purchase Agreement, the 1997
Subscription Agreement and the consummation of the transactions herein
and therein contemplated (including the issuance and sale of the
Securities, and the use of the proceeds from the sale of the Securities
as described in the Prospectuses under the caption "Use Of Proceeds")
do not and will not, whether with or without the giving of notice or
lapse of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined in Section 1(a)(x) of the
Purchase Agreements) under any contract, indenture, mortgage, deed of
trust, loan or credit agreement, any other agreement or instrument,
known to such counsel, to which the Company or Iridium is a party or by
which it or any of them may be bound, or to which any of the property
or assets of the Company or Iridium is subject (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not have a Material Adverse Effect).
(v) Except as described in the Registration Statement, there
are no persons with registration rights or other similar rights to have
any securities registered pursuant to the Registration Statement or
otherwise registered by Iridium under the 1933 Act.
(vi) Iridium has duly and validly authorized, executed and
delivered each of the Principal Agreements to which it is a party and,
assuming due authorization,
A-8
46
execution and delivery by the other parties to the Principal
Agreements, each of the Principal Agreements is a legally valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(vii) Each of the Company and Iridium has duly and validly
authorized, executed and delivered each of the Governance Agreements
and, assuming due authorization, execution and delivery by the other
parties to the Governance Agreements, each of the Governance Agreements
is a legally valid and binding agreement of the Company and Iridium,
enforceable against the Company and Iridium in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(viii) Except as disclosed in the Registration Statement, to
the best of my knowledge, there is not pending or threatened any
action, suit, proceeding, inquiry or investigation, to which the
Company or Iridium is a party, or to which the property of the Company
or Iridium is subject, before or brought by any court or governmental
agency or body, domestic or foreign, which might reasonably be expected
to result in a Material Adverse Effect, or which might reasonably be
expected to materially and adversely affect the properties or assets
thereof or the consummation of the transactions contemplated in the
U.S. Purchase Agreement, the International Purchase Agreement or the
1997 Subscription Agreement or the performance by the Company or
Iridium of their obligations thereunder or the consummation of the
Transactions.
In rendering such opinion, such counsel shall state that such
counsel expresses no opinion as to the laws of any jurisdiction other
than the Federal laws of the United States and the General Corporation
Law of the State of Delaware. In rendering such opinion, such counsel
may rely (A) as to matters involving the application of the laws of
Bermuda, upon the opinion of Xxxxxxx Xxxx & Xxxxxxx, Bermuda counsel to
the Company (which opinion shall be dated and furnished to the U.S.
Representatives at Closing Time, shall be satisfactory in form and
substance to counsel for the U.S. Underwriters and shall expressly
state that the U.S. Underwriters may rely on such opinion as if it were
addressed to them), provided that such counsel shall state in his
opinion that he believes that he and the U.S. Underwriters are
justified in relying upon such opinion, and (B), as to matters of fact
(but not as to legal conclusions), to the extent he deems proper, on
certificates of responsible officers of the Company and public
officials.
A-9
47
Exhibit B
Nothing has come to our attention that would lead us to
believe that the Registration Statement or any amendment thereto,
including the Rule 430A Information and Rule 434 Information (if
applicable), (except for financial statements and schedules and other
financial data included therein or omitted therefrom, as to which we
need make no statement), at the time such Registration Statement or any
such amendment became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or
that the Prospectuses or any amendment or supplement thereto (except
for financial statements and schedules and other financial data
included therein or omitted therefrom, as to which we need make no
statement), at the time the Prospectuses were issued, at the time any
such amended or supplemented prospectus was issued or at Closing Time,
included or includes an untrue statement of a material fact or omitted
or omits 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.
B-1
48
Exhibit D
____________ , 1997
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
Xxxxxxx, Sachs & Co.
as U.S. Representative(s) of the several
U.S. Underwriters to be named in the
within-mentioned U.S. Purchase Agreement
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated(1)
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: Proposed Public Offering by Iridium World Communications Ltd.
Dear Sirs:
The undersigned, a stockholder of Iridium World Communications Ltd, a
Bermuda company (the "Company"), understands that Xxxxxxx Xxxxx & Co., Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx"), Dondaldson, Lufkin
& Xxxxxxxx Securities Corporation and Xxxxxxx, Sachs & Co. propose to enter into
a U.S. Purchase Agreement (the "U.S. Purchase Agreement") with the Company
providing for the public offering of shares (the "Securities") of the Company's
Class A common stock, par value $.01 per share (the "Class A Common Stock"). In
recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned agrees with each underwriter to be named in the U.S. Purchase
Agreement that, during a period of 180 days from the date of the U.S. Purchase
Agreement, the undersigned will not, without the prior written consent of
Xxxxxxx Xxxxx, directly or indirectly, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant for the sale of, or otherwise
dispose of or transfer any shares of the Company's Class A Common Stock or any
securities convertible into or exchangeable or exercisable for Class A Common
Stock, whether now owned or hereafter acquired by the undersigned or with
respect to which the undersigned has or hereafter acquires the power of
disposition, or file any registration statement under the Securities Act of
1933, as amended, with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the Class
A Common Stock,
D-1
49
whether any such swap or transaction is to be settled by delivery of Class A
Common Stock or other securities, in cash or otherwise.
Very truly yours,
Signature:
-------------------------
Print Name:
------------------------
D-2
