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Exhibit 10.2
FORM OF
INTEREST EXCHANGE AGREEMENT
Dated as of May [ ], 1997
Between
IRIDIUM WORLD COMMUNICATIONS LTD.
And
IRIDIUM LLC
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II
EXCHANGE RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.01 General Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.02 Notice Required for Exercise
of Exchange Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.03 Iridium Board Authorization
Required for Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.04 Exchange; Allocation of Iridium
Board Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.05 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.06 Distributions with Respect to
Class 1 Membership Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.07 Adjustment of Exchange Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.08 Restricted Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 2.09 Sale by Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 2.10 Company Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE III
EXCHANGE DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE IV
REGISTRATION RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE V
PROCEDURE FOR REGISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.01 Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.02 Registration of Additional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 5.03 Deferral Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 5.04 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 5.05 Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 00
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ARTICLE VI
RULE 144 INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE VII
EQUAL TREATMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE VIII
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 8.01 Indemnification by Iridium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 8.02 Indemnification by Registering Holders . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 8.03 Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 8.04 Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE IX
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 9.01 Representations and Warranties
of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 9.02 Representations, Warranties and
Agreements of the Holders and
the Registering Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE X
EFFECTIVENESS OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE XI
ASSIGNABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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TABLE OF CONTENTS (CONT'D)
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ARTICLE XII
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 2.01 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 2.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 2.03 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.04 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.05 Governing Law; Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.06 Amendments to the Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.07 Jurisdiction and Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . 32
Annexes
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Annex A Letter of Representations
Annex B Restricted Securities Certificate
Annex C Notice of Exchange Authorization
Annex D Registration Notice
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INTEREST EXCHANGE AGREEMENT
INTEREST EXCHANGE AGREEMENT, dated as of May , 1997, between IRIDIUM
WORLD COMMUNICATIONS LTD. (the "Company"), a company organized under the laws
of Bermuda, and IRIDIUM LLC ("Iridium"), a limited liability company organized
under the laws of the State of Delaware.
The parties hereto agree as follows:
I. Definitions and Other Provisions of General Applicability.
Section 1.01. Definitions. As used in this Agreement, the following
terms have the following respective meanings:
"Agreement" means this Interest Exchange Agreement.
"Business Day" means a day other than a Saturday, Sunday, national or New
York State holiday or other day on which commercial banks in New York City are
authorized or required by law to close.
"Class A Common Stock" means Class A Common Stock, par value $.01 per
share, of the Company.
"Class B Common Stock" means Class B Common Stock, par value $.01 per
share, of the Company.
"Class A Holder" means a person that is the record owner of Class A Common
Stock received by that person upon the exchange of Class 1 Membership Interests
pursuant to this Agreement.
"Class 1 Membership Interests" means Class 1 Membership Interests of
Iridium.
"Closing" shall have the meaning assigned thereto in Section 2.05.
"Closing Price" means, for each Trading Day, the last reported sale price
regular way or, in case no such reported sale takes place on such day, the
average of the reported closing bid and asked prices regular way, in either
case on the principal national securities exchange on which the Class A Common
Stock is listed or admitted to trading, or, if the Class A Common Stock is not
so listed or admitted to trading on a national securities exchange, on the
NASDAQ National Market System or, if the Class A Common Stock is not quoted on
the NASDAQ National Market System, the average
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of the closing bid and asked prices in the over-the-counter market as furnished
by any New York Stock Exchange member firm selected from time to time by
Iridium for that purpose or, if the Class A Common Stock is not traded in the
over-the-counter market, the fair market value per share of the Class A Common
Stock as determined by the Iridium Board (whose determination shall be
conclusive).
"Commission" means the Securities and Exchange Commission, or any other
federal agency at the time admin-istering the Exchange Act or the Securities
Act, whichever is the relevant statute for the particular purpose.
"Common Stock" means the Class A Common Stock, the Class B Common Stock and
any stock of any class of the Company which has no preference in respect of
dividends or amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Company and which is not subject
to redemption by the Company. However, shares issuable on exchange of Class 1
Membership Interests, and subject to the rights of Holders granted in Article
IV, shall include only shares of the class designated as Class A Common Stock
of the Company on the date hereof, or shares of any class or classes resulting
from any reclassification thereof and which have no preferences in respect of
dividends or amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Company and which are not subject
to redemption by the Company; provided that, if at any time there shall be more
than one such resulting class, the shares of each such class then so issuable
and registerable shall be substantially in the proportion which the total
number of shares of such class resulting from all such reclassification bears
to the total number of shares of all such classes resulting from all such
reclassification.
"Company" shall have the meaning set forth in the preamble and shall also
include the Company's successors.
"Company Board" means the Board of Directors of the Company.
"Deemed Outstanding Class A Shares" means all shares of Class A Common
Stock actually outstanding and the aggregate number of shares of Class A Common
Stock issuable under this Agreement in exchange for Class 1 Membership
Interests at the then applicable Exchange Rate, assuming for this purpose that
the Class 1 Membership Interests are then exchangeable.
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"Exchange Act" means the Securities Exchange Act of 1934, or any successor
thereto, as the same shall be amended from time to time.
"Exchange Date" has the meaning assigned thereto in Article III.
"Exchange Notice" has the meaning assigned thereto in Section 2.02.
"Exchange Rate" has the meaning assigned thereto in Section 2.01.
"Exchange Window Period" means the period commencing on the date of
commencement by Iridium of a Notice Distribution and ending on the tenth day
following such date.
"Exchanging Holder" has the meaning assigned thereto in Section 2.02.
"Final Required Transfer Date" has the meaning assigned thereto in Section
2.03.
"Gateway Authorization Agreement" has the meaning assigned thereto in
Article XII of the LLC Agreement.
"Holder" means any person that is the record owner of Class 1 Membership
Interests.
"Indemnified Person" means, with respect to indemnification by Iridium, the
Company and each of its directors and officers, each Registering Holder, such
Holder's directors and officers, and each other person (including each
underwriter) who participated in the offering of Registrable Securities and
each other person, if any, who controls the Company or such Registering Holder
or such participant within the meaning of the Securities Act, and with respect
to indemnification by a Registering Holder, the Company, Iridium, each of their
officers and directors and each person, if any, who controls any of them within
the meaning of the Securities Act.
"Iridium" shall have the meaning set forth in the preamble and shall also
include Iridium's successors.
"Iridium Board" means the Board of Directors of Iridium.
"Iridium Director" means any person authorized to act as director of
Iridium pursuant to the LLC Agreement.
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"LLC Agreement" means the Limited Liability Company Agreement of Iridium
LLC, as it may be amended from time to time.
"Majority Holders" means persons holding shares of Class A Common Stock and
Class 1 Membership Interests which represent (either directly or prospectively
upon exchange of Class 1 Membership Interests under this Agreement) a majority
of the Deemed Outstanding Class A Shares.
"managing underwriter or underwriters" means the person or persons selected
by Holders in an offering pursuant to Section 5.01 to manage an underwritten
offering of Class A Common Stock.
"Notice Distribution" has the meaning assigned thereto in Section 2.02.
"Noticed Interests" has the meaning assigned thereto in Section 2.03.
"Other Holder" has the meaning assigned thereto in Section 6.01 of the LLC
Agreement.
"person" means a natural person, partnership (whether general or limited),
limited liability company, trust, estate, association, corporation, custodian,
nominee or any other individual or entity in its own or any representative
capacity.
"Process Agent" has the meaning assigned thereto in Section 12.07.
"Registering Holders" has the meaning assigned thereto in Section
5.01(a)(i).
"Registrable Securities" means Class A Common Stock acquired by a Class A
Holder upon exchange of Class 1 Membership Interests pursuant to this Agreement
which have not previously been registered for sale pursuant to this Agreement;
provided, that, if U.S. nationally recognized securities counsel to the
Company delivers to the Company a written legal opinion to the effect that any
particular securities may be disposed of by the Holder thereof in the manner
proposed by such Holder without registration under the Securities Act, such
securities shall not be Registrable Securities.
"Registration Notice" has the meaning assigned thereto in Article IV.
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"Sale Notice" has the meaning assigned thereto in Section 6.01 of the LLC
Agreement.
"Securities Act" means the Securities Act of 1933, or any successor
thereto, as the same shall be amended from time to time.
"shelf registration statement" shall mean a "shelf" registration statement
of the Company pursuant to the provisions of Section 5.01 hereof which covers
Class A Common Stock on an appropriate form under Rule 415 under the Securities
Act, or any similar rule that may be adopted by the Commission and all
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Suspension Notice" has the meaning assigned thereto in Section 5.01(b).
"Trading Day" means each Monday, Tuesday, Wednesday, Thursday and Friday,
other than any day on which securities are not traded on the applicable
exchange or in the applicable market.
"underwriter" means any underwriter of an underwritten offering of Common
Stock pursuant to Section 5.01.
Section 1.02. Interpretation. The following provisions shall govern
the interpretation of this Agreement:
(a) The singular form of any word used herein, including the terms
defined in Section 1.01, include the plural, and vice versa, unless the context
otherwise requires. The use herein of a pronoun of any gender shall include
correlative words of the other gender.
(b) Unless otherwise expressly indicated, all references herein to
"Articles", "Sections" and other subdivisions hereof are to the corresponding
Articles, Sections or subdivisions of this Agreement; and the words "herein",
"hereof", "hereunder" and other words of similar import refer to this Agreement
as a whole and not to any particular Article, Section or subdivision hereof.
(c) The headings or titles of the several Articles and Sections
hereof, and any table of contents appended to copies hereof, shall be solely
for convenience
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of reference and shall not affect the meaning, construction or effect of this
Agreement.
(d) Each reference herein to any agreement, instrument or other
document shall mean such agreement, instrument or document as from time to time
amended, modified or supplemented in accordance with the terms hereof and
thereof. The term "including" shall be construed to mean "including but not
limited to".
II. Exchange Rights.
Section 2.01. General Rights. Subject to the restrictions on
transfer contained in the LLC Agreement and the authorization of the Iridium
Board pursuant to Section 2.03, each Class 1 Membership Interest shall be
exchangeable, at any time on or after the Exchange Date (as defined in Article
III), at the option of the Holder thereof for one*/ fully paid and
non-assessable share of Class A Common Stock, subject to adjustment as provided
in Section 2.07. The number of shares of Class A Common Stock to be delivered
by the Company pursuant to this Article II in exchange for one Class 1
Membership Interest is hereinafter referred to as the "Exchange Rate".
Section 2.02. Notice Required for Exercise of Exchange Right. In
order to exercise the right of exchange, a Holder shall provide written notice
(an "Exchange Notice") to the Company and Iridium of its intent to (i) exercise
its rights under this Article II and setting forth the number of Class 1
Membership Interests to be exchanged by such Holder, (ii) exercise or not
exercise its right pursuant to Articles IV and V hereof to have registered
pursuant thereto the Class A Common Stock received for Class 1 Membership
Interests and (iii) engage or not engage in any distribution of the Class A
Common Stock. A Holder's obligation to provide an Exchange Notice shall be in
addition to any other notices such Holder is required to provide, under the LLC
Agreement or otherwise, including any Sale Notice required under Section 6.01
of the LLC Agreement. Upon receipt of such Exchange Notice, Iridium shall send
to the other Holders a copy of such notice (the "Notice Distribution"). Such
other Holders shall then have the right during the Exchange Window Period to
elect their rights to exchange.
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*/ Assuming subdivision of the Class 1 Membership Interests in anticipation of
the IPO such that there is a one-to-one relationship between the
post-subdivision per interest price of the Class 1 Interests and the per
share price of the Class A Common Stock.
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(Each Holder furnishing an Exchange Notice during the Exchange Window Period is
referred to herein as an "Exchanging Holder".) The receipt of additional
Exchange Notices during the Exchange Window Period shall not require another
Notice Distribution by Iridium. No Exchange Notice may be given by any Member
(and, if given by any Member shall not be effective) during the six month
period following the expiration of the Exchange Window Period. No holder may
furnish any notice under this Section 2.02 or otherwise participate in any
exchange hereunder unless such Holder and its affiliates is in full compliance
with the LLC Agreement and any Gateway Authorization Agreement to which it is a
party.
Section 2.03. Iridium Board Authorization Required for Exchange.
(a) At the next annual or regular meeting of the Iridium Board following the
date (the "Final Required Transfer Date") that is thirty days after the date of
expiration of the Exchange Window Period, the Iridium Board shall determine
whether to authorize the exchange of the Class 1 Interests requested to be
exchanged pursuant to the Exchange Notices received during such Exchange Window
Period which have not been transferred to Iridium or Other Holders pursuant to
the LLC Agreement (the "Noticed Interests"); provided that the Iridium Board
may determine whether to authorize the exchange of the Noticed Interests at any
special meeting of the Iridium Board held after the Final Required Transfer
Date and prior to the next annual or regular meeting following the Final
Required Transfer Date. Authorization of the exchange of the Noticed Interests
pursuant to this Section 2.03(a) shall require the affirmative vote of Iridium
Directors representing at least 66 2/3% of the Iridium Directors on the Iridium
Board.
(b) In the event the Iridium Board does not authorize the exchange of the
Noticed Interests pursuant to Section 2.03(a), the Iridium Board may, in its
sole discretion, authorize the exchange of a number of Class 1 Interests less
than the number of Noticed Interests; provided that such authorization of the
exchange of a lesser number of Class 1 Interests than the number of Noticed
Interests shall require the affirmative vote of Iridium Directors representing
at least 66 2/3% of the Iridium Directors on the Iridium Board.
(c) If Iridium grants its authorization, notice in the form of Annex C
shall be given to each Exchanging Holder and each such Exchanging Holder shall
have 10 business days to countersign and return such notice. Any Exchanging
Holder that fails to so countersign and return its notice shall
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lose its exchange rights with respect to that Exchange Window Period.
Section 2.04. Exchange; Allocation of Iridium Board Authorization.
Within ten days following authorization of exchange by the Iridium Board
pursuant to Section 2.03, the Company shall issue and deliver to the Exchanging
Holders shares of Class A Common Stock in an amount equal to the number of
Noticed Interests; provided, however, that if by operation of Section 2.03 the
number of Noticed Interests exceeds the number Class 1 Interests authorized for
exchange by the Iridium Board, the right to exchange Class 1 Membership
Interests shall be pro rated among the Exchanging Holders, based on the number
of Class 1 Membership Interests proposed to be exchanged in each Exchanging
Holders' Exchange Notice to the Company.
Section 2.05. Closing. The closing of the transactions contemplated
by this Article II shall take place at such specific time and place as shall be
mutually agreed upon by the Company, Iridium and the Exchanging Holders
involved (the "Closing"). At the Closing, the Exchanging Holders shall
relinquish to the Company certificates representing such Class 1 Membership
Interests as are to be exchanged accompanied by such instruments of transfer as
shall reasonably be required by the Company and Iridium, and the Company shall
deliver to such Exchanging Holders shares of Class A Common Stock in an amount
determined pursuant to Section 2.04, registered in the name of such Exchanging
Holders. The Company shall present to Iridium such Class 1 Membership
Interests for transfer and Iridium shall deliver replacement certificates
representing the number of Class 1 Membership Interests transferred to the
Company in the name of the Company or its designee and Iridium shall make
corresponding notations in its books and records. In addition, each Exchanging
Holder shall deliver to the Company and Iridium a letter of representation
substantially in the form of Annex A attached hereto and such other
certificates and documents as may reasonably be requested by the Company or
Iridium (including, without limitation, evidence of receipt of all required
approvals and consents and compliance with all applicable securities and tax
laws).
No fractional interest in a share of Class A Common Stock shall be
issued by the Company upon the exchange of Class 1 Membership Interests. Any
fractional interest in a share of Class A Common Stock resulting from the
exchange of any Class 1 Membership Interests shall be paid by Iridium in cash
(computed to the nearest cent) based on the Closing Price of the Class A Common
Stock on the last
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Trading Day prior to the date on which such Class 1 Membership Interests are
surrendered for exchange in the manner set forth above.
The Exchanging Holder will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of Class A Common Stock on exchange of Class 1 Membership Interests
pursuant hereto; and the Company may withhold delivery until such charge is
paid or offset against the number of shares to be delivered.
Section 2.06. Distributions With Respect to Class 1 Membership
Interests. Any payment or distribution (for purposes of this Section 2.07, a
"distribution") received by an Exchanging Holder with respect to Class 1
Membership Interests exchanged pursuant to this Article II by such Exchanging
Holder allocable to any period after the Closing shall be forwarded immediately
by the Exchanging Holder to the Company. Iridium is hereby instructed to and
agrees to pay or cause to be paid such portions of any distribution owed to the
Company directly to the Company on behalf of such Exchanging Holder and
thereafter shall be discharged of any obligation to such Exchanging Holder with
respect to such portion of such distribution.
Section 2.07. Adjustment of Exchange Rate. The Exchange Rate shall
be adjusted from time to time as follows:
(a) In case the Company shall pay or make a dividend or other
distribution on any class of capital stock of the Company in Class A Common
Stock, the Exchange Rate in effect at the opening of business on the day
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be increased by multiplying
such Exchange Rate by a fraction the numerator of which shall be the sum of the
number of shares of Class A Common Stock outstanding at the close of business
on the date fixed for such determination and the total number of shares
constituting such dividend or other distribution and the denominator of which
shall be such number of shares of Class A Common Stock outstanding at the close
of business on the date fixed for such determination, such increase to become
effective immediately after the opening of business on the day following the
date fixed for such determination. For the purposes of this subsection (a),
the number of shares of Class A Common Stock at any time outstanding shall not
include shares held in the treasury of the Company.
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(b) In case Iridium shall pay or make a dividend or other
distribution on any class of Iridium Interests in Class 1 Interests, the
Exchange Rate in effect at the opening of business on the day following the
date fixed for the termination of Iridium members entitled to receive such
dividend or other distribution shall be decreased by multiplying such Exchange
Rate by a fraction the denominator of which shall be the sum of the number of
Class 1 Interests outstanding at the close of business on the date fixed for
such determination and the total number of Class 1 Interests constituting such
dividend or other distribution and the numerator of which shall be such number
o Class 1 Interests outstanding at the close of business on the date fixed for
such determination, such decrease to become effective immediately after the
opening of business on the day following the date fixed for such determination.
For the purposes of this subsection (b), the number of Class 1 Interests at any
time outstanding shall not include shares held in the treasury of Iridium.
(c) In case the Company shall issue rights or warrants to all
holders of any class of Common Stock entitling them to subscribe for, purchase
or acquire shares of Class A Common Stock at a price per share less than the
current market price per share (determined as provided in subsection (k) below)
of the Class A Common Stock on the date fixed for the determination of
stockholders entitled to receive such rights or warrants, the Exchange Rate in
effect at the opening of business on the day following the date fixed for such
determination shall be increased by multiplying such Exchange Rate by a
fraction the numerator of which shall be the number of shares of Class A Common
Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Class A Common Stock so offered for
subscription, purchase or acquisition, and the denominator of which shall be
the number of shares of Class A Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares of
Class A Common Stock which the aggregate of the offering price of the total
number of shares of Class A Common Stock so offered for subscription, purchase
or acquisition would purchase at such current market price, such increase to
become effective immediately after the opening of business on the day following
the date fixed for such determination. For the purposes of this subsection
(c), the number of shares of Class A Common Stock at any time outstanding shall
not include shares held in the treasury of the Company. The Company agrees not
to pay any dividend or make any distribution on shares of Common Stock held in
its treasury.
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(d) In case Iridium shall issue rights or warrants to all holders
of Class 1 Interests entitling them to subscribe for, purchase or acquire Class
1 Interests at a price per Class 1 Interest less than the current market price
per share (determined as provided in subsection (k) below) of the Class A
Common Stock multiplied by the Exchange Rate on the date fixed for the
determination of Class 1 Interest holders entitled to receive such rights or
warrants, the Exchange Rate in effect at the opening of business on the day
following the date fixed for such determination shall be decreased by
multiplying such Exchange Rate by a fraction the denominator of which shall be
the number of Class 1 Interests outstanding at the close of business on the
date fixed for such determination plus the number of Class 1 Interests so
offered for subscription, purchase or acquisition, and the numerator of which
shall be the number of Class 1 Interests outstanding at the close of business
on the date fixed for such determination plus the number of Class 1 Interests
which the aggregate of the offering price of the total number of Class 1
Interests so offered for subscription, purchase of acquisition would purchase
at a price per Class 1 Interest equal to the market price per Share of Class A
Common Stock multiplied by the Exchange Rate, such increase to become effective
immediately after the opening of business on the day following the date fixed
for such determination. For the purposes of this subsection (d), the number of
Class 1 Interests at any time outstanding shall not include shares held in the
treasury of Iridium. Iridium agrees not to pay any dividend or make any
distribution on Class 1 Interests held in its treasury.
(e) In case the outstanding shares of Class A Common Stock shall
be subdivided into a greater number of shares of Class A Common Stock, the
Exchange Rate in effect at the opening of business on the day following the day
upon which such subdivision becomes effective shall be proportionately
increased, and, conversely, in case the outstanding shares of Class A Common
Stock shall each be combined into a smaller number of shares of Class A Common
Stock, the Exchange Rate in effect at the opening of business on the day
following the day upon which such combination becomes effective shall be
proportionately reduced, such reduction or increase, as the case may be, to
become effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.
(f) In case the outstanding Class 1 Interests shall be subdivided
into a greater number of Class 1 Interests, the Exchange Rate in effect at the
opening of business on the day following the day upon which such
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subdivision becomes effective shall be proportionately decreased, and,
conversely, in case the outstanding Class 1 Interests shall each be combined
into a smaller number of Class 1 Interests, the Exchange Rate in effect at the
opening of business on the day following the day upon which such combination
becomes effective shall be proportionately increased, such increase or
reduction, as the case may be, to become effective immediately after the
opening of business on the day following the day upon which such subdivision or
combination becomes effective.
(g) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Class A Common Stock evidences of its
indebtedness or assets (including securities but excluding (A) any rights or
warrants referred to in subsection (c) above, (B) any dividend or distribution
referred to in subsection (a) above, and (C) any dividend or distribution paid
in cash out of current or accumulated earnings), then in each case, the
Exchange Rate in effect at the opening of business on the day following the
date fixed for the determination of holders of Class A Common Stock entitled to
receive such distribution shall be adjusted by multiplying such Exchange Rate
by a fraction of which the numerator shall be the current market price per
share (determined as provided in subsection (k) below) of the Class A Common
Stock on such date of determination (or, if earlier, on the date on which the
Class A Common Stock goes "ex-dividend" in respect of such distribution) less
the then Fair Market Value as determined by the Company Board (whose
determination shall be conclusive) of the portion of the assets or evidences of
indebtedness so distributed (and for which an adjustment to the Exchange Rate
has not previously been made pursuant to the terms of this Article V)
applicable to one share of Class A Common Stock, and the denominator shall be
such current market price per share of the Class A Common Stock, such
adjustment to become effective immediately after the opening of business on the
day following such date of determination.
(h) In case Iridium shall, by dividend or otherwise, distribute to
all holders of its Class 1 Interests evidence of its indebtedness or assets
(including securities but excluding (A) any rights or warrants referred to in
subsection (d) above, (B) any dividend of distribution referred to in
subsection (b) above, and (C) any dividend or distribution paid in cash out of
current or accumulated earnings), then in each case, the Exchange Rate in
effect at the opening of business on the day following the date fixed for the
determination of holders of Class 1 Interests entitled to receive such
distribution shall be adjusted by multiplying such Exchange Rate by a fraction
of which the
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denominator shall be the current market price per share (determined as provided
in subsection (k) below) of the Class A Common Stock on such date of
determination multiplied by the Exchange Rate (or, if earlier, on the date on
which the Class 1 Interests go "ex-dividend" in respect of such distribution)
less the then Fair Market Value as determined by the Iridium Board (whose
determination shall be conclusive) of the portion of the assets or evidences of
indebtedness so distributed (and for which an adjustment to the Exchange Rate
has not previously been made pursuant to the terms of this Article V)
applicable to one Class 1 Interest, and the numerator shall be such current
market price per share of the Class A Common Stock multiplied by the Exchange
Rate, such adjustment to become effective immediately after the opening of
business on the day following such date of determination.
(i) The reclassification or change of Class A Common Stock into
securities including securities other than Class A Common Stock (other than any
reclassification upon a consolidation or merger to which subsection (n) below
applies) shall be deemed to involve (A) a distribution of such securities other
than Class A Common Stock to all holders of Class A Common Stock (and the
effective date of such reclassification shall be deemed to be "the date fixed
for the determination of holders of Class A Common Stock entitled to receive
such distribution" within the meaning of subsection (g) above), and (B) a
subdivision or combination, as the case may be, of the number of shares of
Class A Common Stock outstanding immediately prior to such reclassification
into the number of shares of Class A Common Stock outstanding immediately
thereafter (and the effective date of such reclassification shall be deemed to
be "the day upon which such subdivision becomes effective" or "the day upon
which such combination becomes effective," as the case may be, and "the day
upon which such subdivision or combination becomes effective" within the
meaning of subsection (e) above).
(j) The reclassification or change of Class 1 Interests into
interests or securities including Iridium Interests other than Class 1
Interests shall be deemed to involve (A) a distribution of such interests or
securities other than Class 1 Interests to all holders of Class 1 Interests
(and the effective date of such reclassification shall be deemed to be "the
date fixed for the determination of holders of Class 1 Interests entitled to
receive such distribution" within the meaning of subsection (h) above), and (B)
a subdivision or combination, as the case may be, of the number of shares of
Class 1 Interests outstanding immediately prior to such reclassification into
the number
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of Class 1 Interests outstanding immediately thereafter (and the effective date
of such reclassification shall be deemed to be "the day upon which such
subdivision becomes effective" or "the day upon which such subdivision becomes
effective," as the case may be, and "the day upon which such subdivision or
combination become effective" within the meaning of subsection (f) above).
(k) For the purpose of any computation under subsection (c), (d),
(g) or (h) above, the current market price per share of Class A Common Stock on
any day shall be deemed to be the average of the Closing Prices of the Class A
Common Stock for the 20 consecutive Trading Days selected by the Company Board
commencing no more than 30 Trading Days before and ending no later than the
second Trading Day before the day in question; provided, that, in the case of
subsection (3), if the period between the date of the public announcement of
the dividend or distribution and the date for the determination of holders of
Class A Common Stock entitled to receive such dividend or distribution (or, if
earlier, the date on which the Common Stock goes "ex-dividend" in respect of
such dividend or distribution) shall be less than 20 Trading Days, the period
shall be such lesser number of Trading Days but, in any event, not less than
five Trading Days.
(l) No adjustment in the Exchange Rate shall be required unless
such adjustment would require an increase or decrease of at least 1% in such
rate; provided, however, that any adjustments which by reason of this clause
(l) are not required to be made shall be carried forward and taken into account
in any subsequent adjustment and provided, further, that adjustments shall be
required and made in accordance with the provisions of this Article V (other
than this clause (l)) not later than such time as may be required in order to
preserve the tax free nature of a distribution to the holders of shares of
Common Stock. Anything in this clause (l) to the contrary notwithstanding, the
Company shall be entitled, at its option, to make such increases in the
Exchange Rate, in addition to those required by this Article V, as it in its
discretion shall determine to be advisable in order that any stock dividend,
subdivision or combination of shares, distribution of capital stock or rights
or warrants to purchase stock or securities, or distribution of evidences of
indebtedness or assets (other than cash dividends or distributions paid from
current or accumulated earnings) or other event shall be a tax free
distribution to holders for United States federal income tax purposes. All
calculations under this clause (h) shall be made to the nearest cent.
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(m) Iridium shall notify the Company of any event requiring an
adjustment in the Exchange Rate pursuant to subsection (b), (d), (f), (h) or
(j), and whenever the Exchange Rate is adjusted as herein provided, the Company
shall notify Iridium which notice shall include the Exchange Rate after such
adjustment and shall set forth a brief statement of the facts requiring such
adjustment and the manner of computing the same.
(n) In case of any consolidation of the Company with, or merger of
the Company into, any other entity, any merger of another entity into the
Company (other than a merger which does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Class A Common
Stock) or any sale or transfer of all or substantially all of the assets of the
Company, Iridium shall have the right thereafter to exchange Class 1 Membership
only into the kind and amount of securities, cash and other property receivable
upon such consolidation, merger, sale or transfer by a holder of the number of
shares of Class A Common Stock into which such Class 1 Interests might have
been exchanged immediately prior to such consolidation, merger, sale or
transfer, assuming such holder of Class A Common Stock is not the entity with
which the Company consolidated or into which the Company merged or which merged
into the Company or to which such sale or transfer was made, as the case may be
(a "constituent person"), or an affiliate of a constituent person and failed to
exercise its rights of election, if any, as to the kind or amount of
securities, cash or other property receivable upon such consolidation, merger,
sale or transfer (provided that if the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, sale or transfer is
not the same for each share of Class A Common Stock held immediately prior to
such consolidation, merger, sale or transfer by others than a constituent
entity or an affiliate thereof and in respect of which such rights of election
shall not have been exercised ("non-electing share"), then for the purpose of
this subsection (n) the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer by each
non-electing share shall be deemed to be the kind and amount so receivable per
share by a plurality of the non-electing shares. If necessary, appropriate
adjustment shall be made in the application of the provisions set forth herein
with respect to the rights and interests thereafter of Iridium, so that the
provisions set forth herein shall thereafter be applicable, as nearly as may
reasonably be practicable, to any shares of stock or other securities or
property thereafter deliverable on the exchange of the Class 1 Interests. Any
adjustment under this subsection (j)
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shall be evidenced by a certificate of the Company and a notice of such
adjustment filed and mailed in the manner set forth in subsection (i). The
above provisions shall similarly apply to successive consolidations, mergers,
sales or transfers.
In case (x) the Company shall take any action that would result in an
adjustment to the Exchange Rate; or (y) of any consolidation or merger to which
the Company is a party and for which approval of any shareholders of the
Company is required, or of the sale or transfer of all or substantially all of
the assets of the Company; or (z) of the voluntary or involuntary dissolution,
liquidation or winding-up of the Company; then the Company shall provide to
Iridium, at least 15 days prior to the applicable record or effective date
hereinafter specified, a notice stating (A) the date on which a record is to be
taken for the purpose of such actions, or, if the record is not to be taken,
the date as of which the holders of Common Stock or Class A Common Stock, as
the case may be, of record are to be determined, or (B) the date on which such
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up
is expected to become effective, and the date as of which it is expected that
holders of Class A Common Stock of record shall be entitled to exchange their
shares of Class A Common Stock for securities, cash or other property
deliverable upon such consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up. Neither the failure to give such notice nor any
defect therein shall affect the legality or validity of the proceedings
described in clauses (x) through (z) above.
Section 2.08. Restricted Securities. Any Class A Common Stock
issued by the Company to any Holder prior to the effectiveness of a
registration statement filed with the Commission pursuant to Article IV below
shall be "restricted securities" and any Holder receiving such "restricted
securities" by execution and delivery of an Exchange Notice shall be deemed to
have agreed that at the time of issuance of such securities such Holder shall
execute and deliver a certificate in the form of Annex B attached hereto. The
certificates evidencing such "restricted securities" shall bear a restrictive
legend to the effect that the shares of Class A Common Stock represented
thereby have not been registered under the Securities Act, and may not be sold
except pursuant to an effective registration statement under the Securities Act
or pursuant to an applicable exemption from the registration requirements
thereof.
Section 2.09. Sale by Holder. Each Holder, by execution and delivery of an
Exchange Notice, shall be
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deemed to have agreed that it will not, directly or indirectly, transfer, sell,
assign, pledge, hypothecate, encumber or otherwise dispose of, to any person,
in one or a series of transactions, any Class A Common Stock received pursuant
to this Agreement, except pursuant to an effective registration statement or an
applicable exemption from the registration requirements of the Securities Act.
Section 2.10. Company Covenants. The Company covenants that (a) all shares
of Class A Common Stock which may be issued upon exchange of Class 1 Membership
Interests will, upon issue, be duly and validly issued, fully paid and
non-assessable, free of all liens and charges and not subject to any preemptive
rights and (b) it will at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued shares
of Class A Common Stock, for the purpose of effecting exchange of Class 1
Membership Interests, the full number of shares of Class A Common Stock
deliverable upon the exchange of all outstanding Class 1 Membership Interests
not theretofore converted.
III. Exchange Date.
The rights of Holders pursuant to Article II shall not be exercisable
by any Holder until the 90th day (the "Exchange Date") after the first fiscal
quarter in which Iridium has achieved positive earnings before interest, taxes,
depreciation and amortization, as determined in accordance with U.S. generally
accepted accounting principles.
IV. Registration Rights.
At any time from and after the Exchange Date, the Company shall, after
a written request (a "Registration Request") from Class A Holders requesting
registration under the Securities Act of Registrable Securities representing
not less than 2% of the Deemed Outstanding Class A Shares, promptly notify all
Class A Holders in writing of the receipt of such request and each such Class A
Holder may elect (by written notice (a "Registration Notice") to the Company
within 14 days after receipt by such Class A Holder of the aforementioned
notice from Iridium or the Company, as the case may be), to join in the
Registration Request and to have the Registrable Securities specified in its
notice included in such registration pursuant to this Article. The
Registration Notice to the Company must be in the form of Annex D hereto and
must be executed by the Class A Holder. Thereupon the Company will (a) file as
soon as reasonably practicable a registration statement providing for the sale
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by the Class A Holders of the Registrable Securities specified in the
Registration Request, (b) use its reasonable best efforts to have such
registration statement declared effective and remain continuously effective for
a period of not less than six months or, if earlier, until the date on which
all Registrable Securities covered by such registration have been disposed by
Class A Holders either pursuant to the registration statement or otherwise. In
addition, if requested by Iridium, the Company will include in such
registration statement any other Registerable Securities specified by Iridium
or, if another registration is not in process under this Article IV, the
Company will (a) file as soon as reasonably practicable a registration
statement providing for the sale by Class A Holders of the specified
Registerable Securities, (b) use its best reasonable efforts to have such
registration statement declared effective and remain continuously effective for
a period of not less than [SIX] months or, if earlier, until the date on which
all Registerable Securities covered by such registration statement have been
disposed of by Class A Holders either pursuant to the registration statement or
otherwise. The Company further agrees that if permitted by the rules and
regulations of the Commission, the registration contemplated by this Article IV
shall be a shelf registration.
V. Procedure for Registration
Section 5.01. Registration Statement. (a) In connection with the
obligations of the Company under Article IV, the Company shall:
(i) prepare and file with the Commission, a registration statement
with respect to the Class A Common Stock on any form which may be utilized
by the Company and which shall permit the disposition of Class A Common
Stock in accordance with the intended method or methods thereof, as
specified in writing to the Company by Holders and Class A Holders whose
Registerable Securities are covered by such registration statement
("Registering Holders") and use its reasonable best efforts to cause such
registration statement to become effective as soon as practicable
thereafter;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to maintain the effectiveness of
such registration statement for the period required by Article IV and to
comply with the
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provisions of the Securities Act with respect to the sale or other
disposition of the Class A Common Stock covered by such registration
statement;
(iii) for a reasonable period prior to the filing of such
registration statement, and throughout the period required by Article IV
upon reasonable notice, make available for inspection by a representative
of the Registering Holders, any underwriter participating in any
distribution pursuant to the registration statement, and any attorney or
accountant designated by the Registering Holders, at a reasonable time and
in a reasonable manner, financial and other information and books and
records of the Company and Iridium, and cause the officers, directors and
employees of the Company and Iridium to respond to such inquiries and
supply information reasonably requested by any such representative,
underwriter, attorney or accountant in the course of conducting a
reasonable investigation within the meaning of Section 11 of the Securities
Act; provided, however, that such representatives, attorneys or accountants
shall be acceptable to the Company and Iridium in their respective
judgments reasonably exercised and shall agree to enter into written
confidentiality agreements acceptable to the Company and Iridium regarding
any records, information or documents that are designated by the Company or
Iridium as confidential unless such records, information or documents are
available to the public or disclosure of such records, information or
documents is required by court or administrative order after the exhaustion
of appeals therefrom and to use such information obtained pursuant to this
provision only in connection with the transaction for which such
information was obtained, and not for any other purpose;
(iv) promptly notify the Registering Holders, and the managing
underwriter or underwriters, if any, thereof and confirm such advice in
writing, (A) when such registration statement or supplement or
post-effective amendment has been declared or becomes effective, (B) of the
issuance by the Commission of any stop order suspending the effectiveness
of such registration statement or the initiation or threatening of any
proceedings for that purpose, (C) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Class A Common Stock for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, or (D) of the happening of
any event during the period such registration statement is effective which
makes any
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statement made in such registration statement or the related prospectus
untrue in any material respect or which requires the making of any changes
in such registration statement or prospectus in order to make the
statements therein not misleading;
(v) upon the occurrence of any event contemplated by Section
5.01(a)(iv)(D) hereof, use its reasonable best efforts to prepare a
supplement or post-effective amendment to such registration statement or
the related prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of the Class A Common Stock, such prospectus will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(vi) use its reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of such registration statement or any
post-effective amendment thereto at the earliest practicable date;
(vii) provide copies of any prospectus, any amendment to the
registration statement or amendment or supplement to any prospectus or any
document which is to be incorporated by reference into such registration
statement or any prospectus after initial filing of such registration
statement, a reasonable time prior to the filing of any such prospectus,
amendment, supplement or document, to the Registering Holders and
underwriters, if any, and make the representatives of the Company and
Iridium available on a reasonable basis if reasonably requested by the
Registering Holders; provided that the requirements of this paragraph shall
not apply to the Company's Annual Report on Form 10-K, its Quarterly
Reports on Form 10-Q, its current reports on Form 8-K or any other
documents filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act (the "Exchange Act Documents"); and further provided that the
Company shall promptly notify Registering Holders of the filing of any
Exchange Act Documents except for such Exchange Act Documents specifically
related to the offering of other securities and not to the Registrable
Securities;
(viii) furnish to each Registering Holder and to each underwriter and
selling agent, if any, at the
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expense of the Registering Holders as many copies of the prospectus,
including each preliminary prospectus, and any amendment or supplement
thereto and such other documents as such Registering Holder or managing
underwriter may reasonably request, in order to facilitate the public sale
or other disposition of the Class A Common Stock;
(ix) use its reasonable best efforts to (A) register or qualify the
Class A Common Stock to be included in such registration statement under
such securities laws or blue sky laws of such jurisdictions as any
Registering Holders and each placement or sales agent, if any, therefor and
each underwriter, if any, thereof shall reasonably request in writing on a
timely basis, (B) take any and all other actions as may be reasonably
necessary or advisable to enable each such holder, agent, if any, and each
underwriter, if any, to consummate the disposition in such jurisdictions of
Class A Common Stock; provided that neither the Company nor Iridium shall
be required for any such purpose to (1) qualify as a foreign corporation or
foreign limited liability company in any jurisdiction wherein it would not
otherwise be required to qualify but for the requirements of this paragraph
5.01(a)(ix), (2) file a general consent to service of process in any such
jurisdiction, (3) subject itself to taxation in any jurisdiction where it
is not already subject to taxation or (4) make any changes to its
Memorandum of Association or Bye-Laws or the LLC Agreement, as the case may
be, or any agreement between it and its shareholders or members, as the
case may be;
(x) use its reasonable best efforts to obtain the consent or approval
of each governmental agency or authority, whether federal, state or local,
in the U.S. or Bermuda which may be required to effect the registration or
the offering or sale in connection therewith or to enable the Exchanging
Holder(s) to offer, or to consummate the disposition of, their Class A
Common Stock;
(xi) furnish to each Registering Holder, without charge, at least one
conformed copy of such registration statement and any post-effective
amendment thereto (without documents incorporated therein by reference or
exhibits thereto, unless requested);
(xii) cooperate with the Registering Holders and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates
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representing the Class A Common Stock to be sold, which shall not bear any
restrictive legends; and, in the case of an underwritten offering, enable
such Class A Common Stock to be in such denominations and registered in
such names as the managing underwriters may request at least two Business
Days prior to any sale of the Class A Common Stock; and
(xiii) enter into and deliver all such customary agreements
(including underwriting or purchase agreements), documents and take such
other actions (including causing the delivery of opinions of counsel and
"comfort" letters of independent certified public accountants) as are
reasonably requested of the Company or Iridium to expedite or facilitate
the disposition of the Class A Common Stock.
(b) Iridium hereby agrees to provide the Company with all assistance
reasonably necessary for the Company to comply with its obligations under
Section 5.01(a).
(c) Each Registering Holder, by execution and delivery of a
Registration Notice, shall be deemed to have agreed that, upon receipt of any
(i) notice from the Company of the happening of any event of the kind described
in Section 5.01(a)(iv)(B), (C) or (D), (ii) notice from the Company that it is
in possession of material information that has not been disclosed to the public
and the Company reasonably deems it to be advisable not to disclose such
information in a registration statement or prospectus or (iii) notice from the
Company that it is in the process of a registered offering of securities and
the Company reasonably deems it to be advisable to have Registering Holders
temporarily discontinue disposition of Class A Common Stock pursuant to the
registration statement (in each case, such notice being hereinafter referred to
as a "Suspension Notice"), such Registering Holder will forthwith discontinue
disposition of Class A Common Stock pursuant to any registration statement and
shall not be entitled to the benefits provided under Article VIII hereof with
respect to any sales made by it in contravention of this subsection, until such
Registering Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 5.01(a)(v) or a notice in accordance with
Section 5.01(a)(vi) hereof that any order suspending the effectiveness of the
registration statement has been withdrawn, or, in the case of (ii) or (iii)
above, until further notice from the Company that disposition of Registrable
Securities may resume. Any Suspension Notice must be based upon a good faith
determination of the Company Board that such Suspension Notice is necessary.
In the case
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of a Suspension Notice, if so directed by the Company, each Registering Holder
by execution and delivery of a Registration Notice, shall be deemed to have
agreed to deliver to the Company (at the expense of Iridium) all copies in its
possession, other than permanent file copies then in such Registering Holder's
possession, of the prospectus covering such Class A Common Stock which is
current at the time of receipt of such notice. If the Company shall give any
such notice to suspend the disposition of Class A Common Stock pursuant to any
registration statement, the Company shall extend the period during which such
registration statement shall be maintained effective pursuant to this Agreement
by the number of days during the period from and including the date of the
giving of such notice to and including the date when the Registering Holders
shall have received copies of the supplemented or amended prospectus necessary
to resume such dispositions or received notice that any order suspending
dispositions of the Class A Common Stock has been withdrawn.
(d) By execution and delivery of a Registration Notice, each
Registering Holder shall be deemed to have agreed that the Company may require
such Registering Holder to (i) furnish in writing to the Company such
information regarding such Registering Holder and such Registering Holder's
intended method of distribution of its Class A Common Stock as the Company may
from time to time reasonably request in writing, but only to the extent that
such information is required in order to comply with the Securities Act and
(ii) enter into and deliver all such customary agreements (including
underwriting or purchase agreements) and documents (including legal opinions)
as are reasonably requested of such Registering Holder to expedite or
facilitate the disposition of its Class A Common Stock. Each such Registering
Holder, by execution and delivery of a Registration Notice, shall be deemed to
have agreed to notify the Company as promptly as practicable of any inaccuracy
or change in information previously furnished by such Registering Holder to the
Company or of the occurrence of any event in either case as a result of which
any prospectus relating to such registration contains or would contain an
untrue statement of a material fact regarding such Registering Holder or such
Registering Holder's intended method of distribution of its Class A Common
Stock or omits to state any material fact regarding such Registering Holder or
such Registering Holder's intended method of distribution of its Class A Common
Stock required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing, and promptly to
furnish to the Company any additional information required to correct and
update any
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previously furnished information or required so that such prospectus shall not
contain, with respect to such Registering Holder or the distribution of its
Class A Common Stock, an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing. Each such
Registering Holder, by execution and delivery of a Registration Notice, shall
be deemed to have agreed to comply with the provisions of the Securities Act
and the Exchange Act applicable to such Registering Holder with respect to the
disposition by such Registering Holder of Class A Common Stock covered by such
registration statement in accordance with the intended methods of disposition
by such Registering Holder set forth in such registration statement.
Section 5.02. Registration of Additional Shares. The registration
statement filed pursuant to this Article V, may, in addition to the shares of
Class A Common Stock subject to registration rights set forth in Article IV
above, include other securities for sale for the Company's own account or for
the account of any other person.
Section 5.03. Deferral Period. Notwithstanding the foregoing, if the
Company shall furnish to the Registering Holders a certificate (the "Company
Certificate") signed by the Chief Executive Officer of the Company stating
that, in the good faith judgment of the Company Board, acting reasonably and in
the best interest of the Company, it would be seriously detrimental to the
Company and its shareholders for such registration statement to be filed or for
the Registering Holders to sell Class A Common Stock acquired pursuant to this
Agreement under any such effective registration statement and it is therefore
necessary to defer the filing of the registration statement or suspend the
ability of the Registering Holders to sell Class A Common Stock acquired
pursuant to this Agreement under an effective registration statement, each
Registering Holder, by execution and delivery of a Registration Notice, hereby
agrees that the filing of the registration statement shall be deferred, or the
ability of such Registered Holder to sell Class A Common Stock acquired
pursuant to this Agreement under an effective registration statement shall be
suspended, for a period of not more than an aggregate of 120 days from the date
of the Company Certificate; provided however, that the Company may not utilize
this right more than one time in any twelve-month period and the 120-day period
shall be reduced by any period of time in the prior six months covered by a
Suspension Notice as to such Registering Holders under Section 5.01(b). Upon
any
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delivery of a Company Certificate pursuant to this Section 5.03, each
Registering Holder, by execution and delivery of a Registration Notice, shall
be deemed to have agreed that it shall not dispose of its Class A Common Stock
covered by the registration statement during the above-stated 120-day period
other than pursuant to the limitations applicable to "restricted securities"
within the meaning of Rule 144 under the Securities Act and that any sale by
such Registering Holder or its designee of such Class A Common Stock during
this period shall be made only to a person who has agreed to comply with the
provisions of this Section 5.03 for the balance of the 120-day period.
Section 5.04. Expenses. By execution and delivery of a Registration
Notice, each Registering Holder shall be deemed to have agreed that (i) all
registration expenses incurred in connection with any registration,
qualification or compliance pursuant to this Article V, including without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company and of the Company's accountants, blue
sky fees and expenses and the expenses of any special audits incident to or
required by any such registration, shall be borne by Registering Holder pro
rata on the basis of the number of shares of Class A Common Stock of such
Registering Holder included in such registration and (ii) such Registering
Holder shall pay its own selling expenses. Selling expenses shall mean all
costs and commissions applicable to the sale of the Class A Common Stock and
all fees and disbursements of counsel and other professionals. To the extent
that the Company registers for primary offering additional securities pursuant
to Section 5.02, Iridium shall bear the Company's pro rata share of the above
referenced registration expenses and the Company's own selling expenses.
Section 5.05. Listing. The Company shall use its reasonable best
efforts to list all Class A Common Stock covered by a registration statement
filed pursuant to this Article V on each securities exchange or automated
quotation system on which any of the Class A Common Stock is then listed unless
the Company and Iridium agree not to have the Company do so.
VI. Rule 144 Information.
With a view to making available to the Holders and Class A Holders the
benefits of Rule 144 under the Securities Act ("Rule 144") and any other rule
or regulation of the Commission that may at any time permit a Class A Holder to
sell restricted securities or securities subject
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to Rule 145 under the Securities Act of the Company to the public without
registration, the Company agrees to: (i) make and keep public information
available, as required by Rule 144; (ii) use its reasonable best efforts to
file with the Commission in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act; and
(iii) furnish to any Class A Holder forthwith upon request (A) a written
statement by the Company that it has complied with the reporting requirements
of Rule 144, the Securities Act and the Exchange Act, (B) a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company and (C) such other information as may be
reasonably requested in availing any Class A Holder of any rule or regulation
of the Commission which permits the selling of any Class A Common Stock without
registration.
VII. Equal Treatment.
Nothing contained in this Agreement shall prohibit the Company from
offering, following the Exchange Date, to purchase Class 1 Membership Interests
held by a Holder for cash or any other consideration, or to exchange additional
shares of its Class A Common Stock for Class 1 Membership Interests, all on
such terms and conditions as the Company and such Holder may agree.
VIII. Indemnification.
Section 8.01. Indemnification by Iridium. Iridium will indemnify and
hold harmless each Indemnified Person against any losses, claims, damages or
liabilities, joint or several, to which such Indemnified Person may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, the registration statement or the
prospectus, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Indemnified Person for any legal or other
expenses reasonably incurred by such Indemnified Person in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that Iridium shall not be liable in any such case
to the extent that any such loss, claim, damage or liability arises out of or
is based upon (i) in the case of indemnification of the Company or its officers
and directors, an intentional act or
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omission of the Company of any such officers, directors or any employee of the
Company which was contrary to any written instruction or request of Iridium or
which amounted to willful misconduct on the part of such officer, director,
employee or agent of the Company who is not also an employee of Iridium, and
(ii) in the case of a party other than the Company or its officers and
directors, an untrue statement or alleged untrue statement or omission or
alleged omission made in any preliminary prospectus, the registration statement
or the prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such
Indemnified Person expressly for use therein.
Section 8.02. Indemnification by Registering Holders. Each
Registering Holder, by execution and delivery of a Registration Notice, shall
be deemed to have agreed that it will indemnify and hold harmless each
Indemnified Person against any losses, claims, damages or liabilities to which
such Indemnified Person may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus, the registration statement or the prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any preliminary
prospectus, the registration statement or the prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such Registering Holder expressly for use therein;
and will reimburse each Indemnified Person for any legal or other expenses
reasonably incurred by such Indemnified Person in connection with investigating
or defending any such action or claim as such expenses are incurred.
Section 8.03. Proceedings. Promptly after receipt by an Indemnified
Person of notice of the commencement of any action, suit or proceeding as to
which a claim in respect thereof is to be made under this Article VIII the
Indemnified Person shall notify the party against whom the Indemnified Person
intends to assert a claim for indemnification (an "Indemnifying Person") in
writing of the commencement thereof, but the omission so to notify the
Indemnifying Person shall not relieve the Indemnifying Person from any
liability which it may have to
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any Indemnified Person otherwise than under this Article. In case any such
action shall be brought against any Indemnified Person and it shall notify the
Indemnifying Person of the commencement thereof, the Indemnifying Person 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
Person (which shall not, except with the consent of the Indemnified Person, be
counsel to the Indemnifying Person), and, after notice from the Indemnifying
Person to such Indemnified Person of its election so to assume the defense
thereof, the Indemnifying Person shall not be liable to such Indemnified Person
under such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such Indemnified Person, in
connection with the defense thereof other than reasonable costs of
investigation. The Indemnifying Person shall not, without the written consent
of the Indemnified Person, 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 Person is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of such Indemnified Person 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 such Indemnified Person. No Indemnified Person 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 the Indemnifying Person. By execution and delivery of
a Registration Notice, each Registering Holder shall be deemed to have agreed
to the provisions of this Section 8.03.
Section 8.04. Contribution. In order to provide for just and
equitable contribution in circumstances in which the indemnity agreement
provided for in this Article VIII is for any reason held to be unenforceable by
an Indemnified Person although applicable in accordance with its terms, the
Indemnified Person on the one hand and the Indemnifying Person on the other
hand shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by such indemnity agreement incurred by the
Indemnified Person; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from
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any person who was not guilty of such fraudulent misrepresentation. As between
the Indemnifying Person and each Indemnified Person, such parties shall
contribute to the aggregate losses, liabilities, claims, damages and expenses
of the nature contemplated by such indemnity agreement in such proportion as
shall be appropriate to reflect (i) the relative benefits received by the
Indemnifying Person on the one hand and the Indemnified Person on the other
hand, from the offering of the Class A Common Stock included in such offering,
and (ii) the relative fault of the Indemnifying Person on the one hand and the
Indemnified Person on the other, with respect to the statements 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. It is
agreed that it would not be just and equitable if contribution pursuant to this
Article VIII 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. For purposes of this Article VIII, each person, if any, who
controls a party covered by the indemnity provisions of this Article VIII
within the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as such party. By execution and delivery of a
Registration Notice, each Registering Holder shall be deemed to have agreed to
the foregoing contribution provisions.
IX. Representations and Warranties.
Section 9.01. Representations and Warranties of the Company. Each of
the Company and Iridium represents and warrants to each of the Holders as
follows:
(a) The execution, delivery and performance of this Agreement by the
Company or Iridium, as the case may be, have been duly authorized by all
requisite corporate or limited liability company action and will not violate
any provisions of law, any order of any court or other agency of government,
its organizational documents or any provision of any indenture, agreement or
other instrument to which it or any of its properties or assets is bound,
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any such indenture, agreement or other instrument
or result in the creation or imposition of any lien, charge or encumbrance of
any nature whatsoever upon any of the properties or assets of the Company or
Iridium, as the case may be.
(b) This Agreement has been duly executed and delivered by the Company or
Iridium, as the case may be, and
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constitutes the legal, valid and binding obligation of the Company or Iridium,
as the case may be, enforceable in accordance with its terms.
Section 9.02. Representations, Warranties and Agreements of the
Holders and the Registering Holders. Each of the Holders by execution and
delivery of an Exchange Notice, and each Registering Holder by execution and
delivery of a Registration Notice, shall be deemed to represent, warrant to and
agree with each of the Company and Iridium as follows:
(a) The performance of this Agreement by such Holder or Registering Holder
have been duly authorized by all requisite corporate, partnership or similar
action and will not violate any provisions of law (assuming compliance by the
Company and Iridium with all applicable federal or state securities laws), any
order of any court or other agency of government, the organizational documents
of the Holder or Registering Holder or any provision of any indenture,
agreement or other instrument to which it or any of its properties or assets is
bound, conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any such indenture, agreement or other
instrument or result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the properties or assets of
the Member.
(b) This Agreement constitutes the legal, valid and binding obligation of
the Holder or Registering Holder, enforceable in accordance with its terms.
X. Effectiveness of Agreement.
This Agreement shall become effective only upon the first date on
which the Company purchases Class 1 Membership Interests from Iridium.
XI. Assignability.
Each of the Holders by execution and delivery of an Exchange Notice,
and each Registering Holder by execution and delivery of a Registration Notice,
shall be deemed to have agreed that, without the prior written consent of
Iridium, the interest exchange and registration rights of a Holder or Class A
Holder set forth in this Agreement shall not be assignable, in whole or in
part, to any transferee of such Holder's Class 1 Membership Interests, or such
Class A Holder's restricted securities.
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XII. Miscellaneous.
Section 12.01. Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of each of the
parties; provided that this Agreement may not be assigned by any party hereto
other than in compliance with the terms hereof.
Section 12.02. Notices. All notices and other communications
provided for in this Agreement shall be in writing, shall be in the English
language and shall be sufficiently given if made (i) by hand delivery or by
telecopier and (ii) by reputable express courier service (charges prepaid) or
by registered or certified mail (postage prepaid and return receipt requested)
(a) if to the Company, at the following address:
Iridium World Communications Ltd.
Xxxxxxxxx Xxxxx
0 Xxxxxx Xxxxxx
Xxxxxxxx XX CX
Bermuda
Attention:
------------------------
Phone:
------------------------
Facsimile:
------------------------
or if to Iridium, at the following address:
Iridium, LLC
0000 X Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
X.X.X.
Attention: General Counsel
Phone: (000) 000-0000
Facsimile: (000) 000-0000
or at such other address as the Company or Iridium shall have furnished in
writing one to the other (notice of any change from the Company to Iridium
being binding upon any Holder), (b) if to any Holder, at the address maintained
by Iridium on its books and records for such purpose (which Iridium agrees to
make available to the Company at its request) and (c) if to a Class A Holder,
at the address maintained by the Company on its books and records for such
purpose. All such notices and other communications shall be deemed to have
been duly given and delivered: when delivered by hand, if personally delivered;
when receipt acknowledged, if delivered by telecopier; five Business Days after
being deposited with a reputable express courier service (charges
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prepaid); and seven Business Days after being deposited in the mail, postage
prepaid, if delivered by United States or Bermuda mail (registered or certified
mail, return receipt requested). Each of the Holders by execution and delivery
of an Exchange Notice, and each Registering Holder by execution and delivery of
a Registration Notice, shall be deemed to have agreed to the foregoing notice
provisions.
Section 12.03. Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original and all of
which together shall be considered one and the same agreement.
Section 12.04. Entire Agreement. This Agreement constitutes the
entire understanding of the parties hereto with respect to the subject matter
hereof and supersedes all prior understanding among such parties.
Section 12.05. Governing Law; Severability. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE DOMESTIC LAWS OF
THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF
LAW PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER
JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION
OTHER THAN THE STATE OF DELAWARE. If it shall be determined by a court of
competent jurisdiction that any provision or wording of this Agreement shall be
invalid or unenforceable under applicable law, such invalidity or
unenforceability shall not invalidate this entire Agreement. In that case,
this Agreement shall be construed so as to limit any term or provision so as to
make it enforceable or valid within the requirements of any applicable law,
and, in the event such term or provision cannot be so limited, this Agreement
shall be construed to omit such invalid or unenforceable provisions.
Section 12.06. Amendments to the Agreement. This Agreement may not
be changed or amended or the observance of any provisions waived without the
written consent of each of the Company and Iridium. No consent to any such
amendment by the Holders or the Class A Holders shall be required.
Section 12.07. Jurisdiction and Service of Process. Any suit, action
or proceeding against any party with respect to this Agreement may be brought
in a court of the United States sitting in the State of Delaware or, if
jurisdiction is lacking in such a court, in a court of record in the State of
Delaware, and each party hereto, each Holder by execution and delivery of an
Exchange Notice, and each Registering Holder by execution and delivery of a
Registration Notice, (i) irrevocably waives, to the fullest
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extent permitted by law, any objection that it may have, whether now or in the
future, to the laying of venue in, or to the jurisdiction of, any and each of
such courts for the purpose of any such suit, action, proceeding or judgment
and further waives any claim that any such suit, action, proceeding or judgment
has been brought in an inconvenient forum, submits to such jurisdiction, (ii)
agrees that service of all writs, process and summonses in any such suit,
action or proceeding brought in the State of Delaware may be made upon The
Corporation Trust Company, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, or
such alternate process agent in the United States designated with respect to
the party in a writing delivered to LLC (the "Process Agent"), (iii)
irrevocably appoints the Process Agent in its name, place and stead to receive
and forward such service of any and all such writs, process and summonses, (iv)
agrees that the failure of the Process Agent to give any notice of any such
service of process to such party shall not impair or affect the validity of
such service or of any judgment based thereon, (v) agrees to appoint a
substitute process agent, if the Process Agent is no longer able to so act for
any reason whatsoever, which substitute process agent shall thereafter be
deemed to be the Process Agent hereunder and to give notice of such appointment
to LLC and (vi) if the party is a government, irrevocably waives any and all
claims of immunity in connection with the execution, performance and
enforcement of this Agreement and others in any way related to this Agreement,
including, without limitation, with respect to service of process, submission
to jurisdiction, attachment and execution on property.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
IRIDIUM WORLD COMMUNICATIONS LTD
By:
-----------------------------
Name:
Title:
IRIDIUM LLC
By:
-----------------------------
Name:
Title:
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ANNEX A
[LETTER OF REPRESENTATIONS]
39
ANNEX B
[RESTRICTED SECURITIES CERTIFICATION]
40
ANNEX C
NOTICE OF EXCHANGE AUTHORIZATION
The Board of Directors of Iridium LLC ("Iridium") has authorized an
exchange of Class 1 Interests into shares of Class A Common Stock of Iridium
World Communications Ltd. ("IWCL") pursuant to the Interest Exchange Agreement,
dated as of May __, 1997, between Iridium and IWCL (the "Interest Exchange
Agreement"). A copy of the Interest Exchange Agreement is attached to this
Notice. By executing a copy of this Notice, the undersigned agrees, on behalf
of itself and its registered assigns, to be bound by the provisions of the
Interest Exchange Agreement applicable to "holders" and "Class A Holders" and,
if the undersigned or its successors or assigns elect to participate in any
registration of Class A Common Stock under the Interest Exchange Agreement, the
provisions of the Interest Exchange Agreement applicable to the undersigned as
a Registering Holder.
IRIDIUM LLC
By:
------------------------- -----------------------
Date Secretary
Agreed to and accepted:
-------------------------
Name of Holder of Class 1
Interests
By:
---------------------
Title:
------------------
41
ANNEX D
REGISTRATION NOTICE
The undersigned holder of Class 1 Membership Interests of Iridium LLC
or shares of Class A Common Stock of Iridium World Communications Ltd. ("IWCL")
hereby notifies IWCL pursuant to the Interest Exchange Agreement, dated as of
May __, 1997, between Iridium, LLC and IWCL (the "Interest Exchange Agreement")
that it wishes to have registered with the Securities and Exchange Commission
the specified number of shares of Class A Common Stock which are either
currently owned by the undersigned or issuable upon exchange of Class 1
Membership Interests currently owned by the undersigned and which have been
approved for exchange within the next 60 days pursuant to the terms of the
Interest Exchange Agreement. A copy of the Interest Exchange Agreement is
attached to this Notice. By executing a copy of this Registration Notice, the
undersigned agrees, on behalf of itself and its registered assigns, to be bound
by the provisions of the Interest Exchange Agreement applicable to Registering
Holders or to "holders" or "Class A Holders" that have requested registration
of Registerable Securities under the Interest Exchange Agreement.
---------------------
Name of Holder of Class 1 Interests
By:
---------------------
Title:
-------------------
Number of Securities to be Registered:
_________________ shares of Class A Common Stock, of which _____________
are issuable upon exchange of Class 1 Membership Interests
