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Exhibit 10.04
FORM OF
1997 SUBSCRIPTION AGREEMENT
Dated as of May [ ], 1997
by and between
IRIDIUM WORLD COMMUNICATIONS LTD.
and
IRIDIUM LLC
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This 1997 SUBSCRIPTION AGREEMENT (this "Agreement") is dated as of May
[ ], 1997 and is by and between IRIDIUM WORLD COMMUNICATIONS LTD., a company
organized under the laws of Bermuda (the "Company"), and IRIDIUM LLC
("Iridium"), a limited liability company organized under the laws of the State
of Delaware.
WHEREAS, the Company intends to consummate an underwritten initial
public offering (the "Offering") of 10,000,000 shares of its Class A Common
Stock, par value $.01 per share (the "Class A Common Stock") (11,500,000 shares
if the Underwriters' over-allotment options are exercised in full) and to use
the proceeds of the Offering to purchase an equivalent number of Class 1
Membership Interests ("Class 1 Interests") in Iridium as described in the
registration statement on Form S-1 (File No. 333-23419) filed with the U.S.
Securities and Exchange Commission, as amended (the "Registration Statement").
WHEREAS, upon consummation of the Offering, Iridium intends to issue
and sell to the Company 10,000,000 Class 1 Interests (11,500,000 Class 1
Interests if the Underwriters' over-allotment options are exercised in full) at
a purchase price per Class 1 Interest equal to the per share public offering
price of the Class A Common Stock less the per share underwriting discount.
WHEREAS, Iridium owns all 1,200,000 currently outstanding shares of
Class A Common Stock (the "Outstanding Shares") and intends to surrender the
Outstanding Shares to the Company in connection with the consummation of the
Offerings and the Company intends to cancel the Outstanding Shares upon
surrender by Iridium.
NOW, THEREFORE, the parties hereto, intending to be bound, hereby
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Reference to Registration Statement. Capitalized terms
used but not defined herein shall have the meanings assigned to such terms in
the Registration Statement.
Section 1.2. Certain Definitions. As used in this Agreement the
following terms have the following respective meanings:
"Agreement" means this 1997 Subscription Agreement.
"Class A Common Stock" means the Class A Common Stock, par value $.01
per share, of the Company.
"Class 1 Interests" means the Class 1 Membership Interests of Iridium
LLC.
"Firm Interests" has the meaning assigned to the term in Section 2.1
of this Agreement.
"Firm Shares" means the shares of Class A Common Stock purchased by
the Underwriters pursuant to the Purchase Agreements without giving effect to
the exercise of over-allotment options.
"Iridium Bermuda" means the Company as such term is used in the LLC
Agreement referenced herein.
"LLC Agreement" means the Limited Liability Company Agreement of
Iridium LLC dated as of July 29, 1996, as amended.
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"Offering" means the initial public offering by the Company of its
Class A Common Stock as described in the Registration Statement.
"Option Interests" has the meaning assigned to the term in Section 2.2
of this Agreement.
"Option Shares" means the shares of Class A Common Stock purchased by
the Underwriters pursuant to the over-allotment options granted in the Purchase
Agreements.
"Registration Statement" means the Company's registration statement on
Form S-1 (File No. 333-23419) filed with the U.S. Securities and Exchange
Commission, as amended.
ARTICLE II
PURCHASE OF CLASS 1 INTERESTS
BY THE COMPANY
Section 2.1. Firm Interests. Subject to the terms and conditions set
forth herein, Iridium agrees to create, issue and sell 10,000,000 Class 1
Interests to the Company (the "Firm Interests") and the Company agrees to
purchase the Firm Interests at a price per Firm Interest equal to the per share
price paid by the Underwriters for the 10,000,000 Firm Shares of Class A Common
Stock purchased by the Underwriters pursuant to the Purchase Agreements.
Section 2.2. Over-Allotment Interests. Subject to terms and
conditions set forth herein, Iridium agrees to create, issue and sell up to
1,500,000 Class 1 Interests to the Company (the "Option Interests") and the
Company agrees to purchase an aggregate number of Option Interests that is
equal to the number of Option Shares of Class A Common Stock purchased by the
Underwriters pursuant to the Purchase Agreements at a price per Option Interest
equal to the price paid by the Underwriters for the Option Shares of Class A
Common Stock purchased by the Underwriters pursuant to the Purchase Agreements.
ARTICLE III
DELIVERY AND PAYMENT FOR INTERESTS
Section 3.1. Delivery of and Payment for Firm Interests. Delivery of
certificates for the Firm Interests shall be made at the time and location of
the delivery of the Firm Shares under the Purchase Agreements against payment
of the purchase price therefor in immediately available funds.
Section 3.2. Delivery of and Payment for Option Interests. Delivery
of certificates for the Option Interests shall be made at the time and location
of the delivery of the Option Shares under the Purchase Agreements against
payment of the purchase price therefor in immediately available funds.
Section 3.3. Delivery and Cancellation of Outstanding Shares.
Iridium hereby agrees that in addition to its other obligations under this
Agreement, upon payment by the Company of the purchase price for the Firm
Shares pursuant to Section 3.1 above, Iridium shall deliver the Outstanding
Shares to the Company and shall relinquish any rights in or claims on the
Outstanding Shares. The Company hereby agrees that upon delivery of the
Outstanding Shares by Iridium, the Company shall retire and cancel such
Outstanding Shares.
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ARTICLE IV
ADMISSION OF THE COMPANY TO IRIDIUM LLC
Section 4.1. Admission of the Company. The Company wishes to be
admitted as a Class 1 Member in Iridium and agrees to be bound by all of the
applicable provisions of the Limited Liability Company Agreement of Iridium
LLC, dated as of July 29, 1996, as amended (the "LLC Agreement"). Prior to the
first issuance of any Class 1 Interests hereunder, the Company will execute and
deliver a counterpart of the LLC Agreement in substantially the form set forth
in Annex A hereto. This Agreement constitutes the Company's written request
that Iridium's Members' Interest Register be amended to reflect the Company's
admission as a Member and Iridium agrees that its Members' Interest Register
will be so amended, and the Company will be admitted as a Member in Iridium,
on the date of the issuance of the Firm Interests hereunder.
Section 4.2. Rights of the Company. The Class 1 Interests issued
hereunder shall be entitled to all of the rights of Class 1 Interests under the
LLC Agreement, including the rights of "Iridium Bermuda" described thereunder.
ARTICLE V
EXPENSES OF THE OFFERING
Iridium shall promptly pay, or reimburse the Company for the payment
of, all expenses incurred by the Company in connection with the Offering and
the transactions contemplated by this Agreement.
ARTICLE VI
CONDITIONS OF THE PARTIES' OBLIGATIONS
Section 6.1. Firm Interests. The respective obligations of the
parties with respect to the Firm Interests are subject to the performance by
the Underwriters of their obligations to purchase the 10,000,000 Firm Shares
under the Purchase Agreements.
Section 6.2. Option Interests. The respective obligations of the
parties with respect to the Option Interests, if any, are subject to the
performance by the Underwriters of their obligations, if any, to purchase
Option Shares under the Purchase Agreements.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.1 Representations and Warranties of Iridium. Iridium hereby
represents and warrants that it has duly and validly executed and delivered
this Agreement and that the Firm Interests and the Option Interests, if any,
when issued against payment therefore by the Company pursuant to Article III,
will be duly and validly authorized and issued and fully-paid and
non-assessable.
Section 7.2 Representations and Warranties of the Company. The
Company hereby represents and warrants that it has duly and validly executed
and delivered this Agreement and will duly and validly execute the LLC
Agreement pursuant to Article IV.
ARTICLE VIII
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INDEMNIFICATION AND CONTRIBUTION
Section 8.1. Indemnification by Iridium. Iridium will indemnify and
hold harmless the Company and each of its officers, directors and employees
(each an "indemnified party") against any losses, claims, damages or
liabilities to which such indemnified party may become subject, under the
Securities Act or otherwise, that directly or indirectly, arise out of or are
related to, the transactions contemplated by this Agreement, and will reimburse
such indemnified party for any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim, as such losses, damages, liabilities or expenses are incurred;
provided, however, that Iridium shall not be liable in any such case to any
indemnified party to the extent that any such loss, claim, damage or liability
arises out of or is based upon an intentional act or omission of the
indemnified party which was contrary to any written instruction or request of
Iridium or which amounted to willful misconduct on the part of the indemnified
party.
Section 8.2. Proceedings. Promptly after receipt by an indemnified
party of notice of the commencement of any action, suit or proceeding as to
which a claim in respect thereof is to be made against Iridium under Section
8.1, the indemnified party shall notify Iridium in writing of the commencement
thereof, but the omission so to notify Iridium shall not relieve Iridium from
any liability which it may have to any indemnified party otherwise than under
such section. In case any such action shall be brought against any indemnified
party and it shall notify Iridium of the commencement thereof, Iridium shall be
entitled to participate therein and, to the extent that it shall wish, to
assume the defense thereof, with counsel satisfactory to such indemnified party
(which shall not, except with the consent of the indemnified party, be counsel
to Iridium), and, after notice from Iridium to such indemnified party of its
election so to assume the defense thereof, Iridium shall not be liable to such
indemnified party under such subsection for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation. Iridium shall not, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action 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. No indemnified party shall effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution has been or may be sought hereunder without the prior written
consent of Iridium.
Section 8.3. Contribution. In order to provide for just and
equitable contribution in circumstances in which the indemnity agreement
provided for in Section 8.1 is for any reason held to be unenforceable although
applicable in accordance with its terms, Iridium shall contribute to the
losses, liabilities, claims, damages and expenses of the type contemplated by
such indemnity agreement incurred by any indemnified party in such proportion
as shall be appropriate to reflect (i) the relative benefits received, directly
or indirectly, by Iridium on the one hand and the indemnified party on the
other hand, from (a) the sale of the Firm Shares and the Option Shares, if any,
and (b) the sale of the Firm Interests and the Option Interests, if any, and
(ii) the relative fault of Iridium on the one hand and the indemnified party on
the other, with respect to the acts or omissions which resulted in such loss,
liability, claim, damage or expense, or action in respect thereof, as well as
any other relevant equitable considerations. Iridium and the Company agree
that it would not be just and equitable if contribution pursuant to this
Section 8.3 were to be determined by pro rata allocation or by any other method
of allocation which does not take into account the relevant equitable
considerations. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from Iridium if Iridium was not guilty of such fraudulent
misrepresentation.
The indemnity and contribution obligations in this Article VIII are
solely obligations of Iridium and no recourse may be had thereunder against any
member, director, officer, employee or agent of Iridium.
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ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1. Governing Law. This Agreement is governed by, and shall
be construed in accordance with, the laws of the State of New York without
regard to principles of conflicts of laws.
Section 9.2. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 9.3. Entire Agreement. This Agreement constitutes the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior understandings among such parties with respect to such
subject matter.
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IN WITNESS WHEREOF, the parties have hereunto signed their names in
the space provided below.
IRIDIUM WORLD COMMUNICATIONS LTD.
By:
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Name:
Title:
IRIDIUM LLC
By:
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Name:
Title:
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ANNEX A
TO 1997 SUBSCRIPTION AGREEMENT
FORM OF COUNTERPART TO LLC AGREEMENT
The undersigned agrees to be bound by the Limited Liability Company
Agreement of Iridium LLC, dated as of July 29, 1996, as amended, to which this
signature page is attached.
IN WITNESS WHEREOF, the undersigned has hereunto set its hand as of
this day of May, 1997.
MEMBER
IRIDIUM WORLD COMMUNICATIONS LTD.
By:
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Name:
Title:
