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                                                                      EXHIBIT 99

CERTAIN FACTORS WHICH MAY AFFECT IRIDIUM

       The following risk factors should be carefully considered by prospective
investors in IWCL or Iridium.

RISK OF ERROR IN FORWARD LOOKING STATEMENTS

    MANY OF THE STATEMENTS IN THIS REPORT ARE FORWARD LOOKING AND ACTUAL RESULTS
    MAY BE MATERIALLY DIFFERENT FROM THOSE EXPRESSED OR IMPLIED BY THESE
    STATEMENTS.

    IN PARTICULAR, YOU SHOULD RECOGNIZE THAT STATEMENTS ABOUT THE FOLLOWING
    TOPICS ARE FORWARD LOOKING: 

  - IRIDIUM'S ESTIMATE OF THE LAST YEAR IN WHICH IT PROJECTS A NEGATIVE CASH
    FLOW;

  - IRIDIUM'S ESTIMATES OF THE AMOUNT OF ITS FUNDING NEEDS;

  - IRIDIUM'S EXPECTATIONS ABOUT ITS ABILITY TO OBTAIN ADDITIONAL FINANCING;

  - IRIDIUM'S EXPECTATIONS ABOUT ITS ABILITY TO GENERATE REVENUES FROM
    COMMERCIAL OPERATIONS; AND

  - IRIDIUM'S EXPECTATIONS ABOUT HOW MUCH REVENUE IT WILL GENERATE FROM
    COMMERCIAL OPERATIONS.


    THE FORWARD LOOKING STATEMENTS ARE BASED ON A NUMBER OF ASSUMPTIONS AND ONE
    OR MORE OF THESE ASSUMPTIONS IS LIKELY TO BE INCORRECT.

Iridium is transitioning from a development stage company to an operating
company and has no meaningful operating history. Accordingly, many statements
made by Iridium, including those contained in this report, are forward looking.
Examples of these forward looking statements include the statements concerning
Iridium's:

  - operations;

  - prospects;
   
  - markets;

  - technical capabilities;
   
  - funding needs;

  - financing sources;
 
  - expected revenues;
  
  - regulatory activities (including its ability to obtain or maintain the right
    to operate virtually anywhere in the world);
 
  - pricing;
   
  - commercial operations schedule;

  - expectations regarding characteristics of competing systems; 

  - expectations regarding actions of third parties such as equipment 
    suppliers, gateway operators, service providers and roaming partners; and

  - Year 2000 readiness and compliance plans.

Forward looking statements are inherently predictive and speculative and we
cannot assure you that our forward looking statements will prove to be correct.
Actual results and developments are likely to be different, and may be
materially different, from those expressed or implied by these statements. You
should carefully review the other risk factors set forth below for a discussion
of some of the factors which could result in any forward looking statement
proving to be inaccurate.

In particular, you should recognize that forward looking statements are based on
a number of assumptions. For example, many of the statements made by Iridium,
inlcuding those in this report, assume that Iridium will transition smoothly
from a development stage company to an operating company, and assume among other
things, that:


- there will be a sufficient number of customers and usage of the Iridium
  System to generate revenues in the amounts, and at the times, anticipated
  by Iridium, including the amount of revenue anticipated from the
  commencement of commercial operations to year-end 1999;

- the Iridium System will provide service acceptable to the market and will
  meet all systems specifications set forth in its development contracts and
  will have service characteristics across Iridium's various service
  offerings that are at least as favorable as those that Iridium expects;

- there will be no increased costs under the development and maintenance
  contracts for the Iridium System;


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- Motorola and Kyocera will manufacture and distribute a sufficient number
  of portable, hand-held phones and pagers for use with the Iridium System on
  a timely basis, and Iridium will not incur any significant additional
  expenses as a result of any need to place orders for, or subsidize the sale
  of, any Iridium phones and pagers; 

- there will be a sufficient number of operational gateways to maintain the
  service quality and system capacity Iridium expects;

- Iridium's satellite navigation and communications software and its business
  support systems software have been effectively integrated into Iridium's
  operations and will function as expected under the various service demands
  the Iridium System experiences;

- Iridium will contract with a sufficient number of service providers and
  cellular roaming partners to ensure effective marketing and distribution of
  its services; 

- the operation of the Iridium System will not be impaired by the loss of
  satellites or the need to put replacement satellites in orbit and Iridium
  will not be required to bear the costs of satellite replacement;

- in the various jurisdictions in which Iridium operates or expects to
  operate, there will be no material change in legislation or regulations or
  the administration thereof that will have an adverse effect on the business
  of Iridium;

- there will be no material adverse changes in any of Iridium's existing
  material contracts or the ability of Iridium's various contractors to perform
  their obligations;

- Iridium, its gateways, its service providers and other companies doing
  business with Iridium will obtain timely regulatory approvals in sufficient
  countries to permit Iridium to operate on the virtually worldwide basis it
  expects; and

- the capacity of the Iridium System, as affected by, among other things,
  spectrum allocation and customer usage patterns, will meet or exceed
  Iridium's expectations.

You should understand that one or more of these assumptions is likely to be
incorrect.

Iridium does not intend to publish updates or revisions of its forward
looking statements or of this discussion of factors that could cause actual
results to be materially different from those expressed or implied in the
forward looking statements.

IRIDIUM IS TRANSITIONING FROM A DEVELOPMENT STAGE COMPANY TO
AN OPERATING COMPANY; IRIDIUM HAS NO MEANINGFUL REVENUES OR HISTORY OF
OPERATIONS; IRIDIUM'S FUTURE REVENUES MAY NOT COVER ITS EXPENSES

        IRIDUM IS A START-UP COMPANY WITH SUBSTANTIAL DEBT AND NO MEANINGFUL
        OPERATING HISTORY OR SIGNIFICANT REVENUES.
                     
Iridium is in the initial stages of transitioning from a development stage
company to an operating company. It is extremely important to Iridium's success
that it effects this transition smoothly. This will require Iridium to complete
successfully a number of complex tasks for the operation of Iridium's system
while simultaneously attracting customers and ensuring that they are satisfied
with Iridium Services. Iridium has no meaningful operating history on which
investors can evaluate its performance and has no significant revenues. In
addition, the services Iridium offers and intends to offer are new and there is
no operational service that provides a


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direct comparison. Further, Iridium has accumulated significant losses in the
development and construction of the Iridium System and expects to continue to
accumulate significant losses until sometime in late 1999.

Iridium has incurred significant indebtedness to fund the development and
construction of the Iridium System. Until Iridium has substantial revenues from
operations, it will rely on additional indebtedness to pay its expenses and to
make payments on its indebtedness. We cannot give you any assurance about: 

- Whether or when Iridium will have sufficient revenues to satisfy its
  funding requirements, including servicing and repaying its outstanding
  indebtedness.

- Whether Iridium will ever be profitable.

RISK OF HIGHLY LEVERAGED CAPITAL STRUCTURE

  IRIDIUM HAS ALREADY BORROWED APPROXIMATELY $2.4 BILLION AS OF NOVEMBER 1, 1998
  AND NEEDS TO BORROW A SUBSTANTIAL AMOUNT OF ADDITIONAL FUNDS PRIOR TO THE TIME
  IT EXPECTS TO ACHIEVE POSITIVE CASH FLOW. IRIDIUM IS NOT CURRENTLY GENERATING
  ANY MEANINGFUL REVENUES TO FUND ITS OPERATIONS OR REPAY ITS INDEBTEDNESS.

Iridium is a highly leveraged company and it expects to incur substantial
additional indebtedness, including indebtedness that is secured by its assets.
Iridium currently is not generating any meaningful revenues to fund its
operations or repay its indebtedness. The amount of debt needed to finance the
Iridium System could be increased by one or more factors outside Iridium's
control, including: 

- the inability to generate revenues in the amount and within the time frame
  Iridium expects;

- cost increases for the construction or operation of the Iridium System; and

- increases in applicable interest rates.

Iridium's current and future debt service requirements could have important
consequences on its business including: 

- limiting Iridium's ability to obtain additional financing;

- reducing the amount of funds available for operations because a substantial
  portion of Iridium's cash flow from operations will be dedicated to the
  payment of principal and interest on its indebtedness; and

- increasing Iridium's sensitivity to adverse economic conditions.

In addition, Iridium's management is not able to make decisions freely about
certain business matters because Iridium's guaranteed bank facility, the secured
bank facility and the indentures relating to Senior Notes include certain
covenants that, among other things, restrict the ability of Iridium and its
subsidiaries to: 

- dispose of assets;

- incur additional indebtedness;

- incur or guarantee obligations;

- prepay other indebtedness or amend other debt instruments;

- pay dividends;

- create liens on assets;

- make investments, loans or advances;

- make acquisitions;

- engage in mergers or consolidations;

- change the business conducted by Iridium; or


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- engage in certain transactions with affiliates and otherwise will restrict
  certain corporate activities. 

In addition, any future debt instruments to which Iridium becomes a party
may contain similar and additional covenants.

SIGNIFICANT ADDITIONAL
FUNDING NEEDS

  IRIDIUM NEEDS TO REFINANCE ITS $1.0 BILLION SENIOR SECURED CREDIT FACILITY BY
  DECEMBER 31, 1998 AND ESTIMATES IT WILL NEED TO BORROW AN ADDITIONAL $700
  MILLION TO OPERATE THROUGH THE TIME IT EXPECTS TO ACHIEVE POSITIVE CASH FLOW.

  IRIDIUM'S ESTIMATED FUNDING NEEDS MAY INCREASE, PERHAPS SUBSTANTIALLY, FOR A
  NUMBER OF REASONS, INCLUDING IF IRIDIUM IS UNABLE TO GENERATE REVENUES IN THE
  AMOUNT AND WITHIN THE TIME FRAME IT EXPECTS, OR IF IRIDIUM HAS UNEXPECTED COST
  INCREASES.


Iridium anticipates that its total cash funding requirements for the
development, construction and commercial operation of the Iridium System will be
approximately $5.5 billion (net of assumed revenues from commercial operations)
through year-end 1999. Based on its estimated cash funding requirements and its
schedule for refinancing its existing $1.0 billion senior secured bank facility,
which currently matures on December 31, 1998, Iridium estimates that it will
need to refinance its existing $1.0 billion senior secured bank facility and to
arrange approximately $700 million in additional funding in the near future.

There can be no assurance that Iridium will be able to find banks or any other
lender that will be willing to lend to Iridium on terms it will accept or that
Iridium will be able to satisfy its funding needs. In addition, Iridium's
estimated funding requirements do not reflect any contingency amounts and may
increase, perhaps substantially, in the event Iridium is unable to generate
revenues in the amount and within the time frame it expects, or if Iridium has
unexpected cost increases.

RISK OF LOW SERVICE DEMAND BECAUSE OF PRICING, SERVICE QUALITY, EQUIPMENT
CHARACTERISTICS, COMPETITION AND OTHER MARKET FACTORS

  MANY MARKET FACTORS, INCLUDING PRICING, COULD PREVENT IRIDIUM FROM GENERATING
  REVENUE IN THE AMOUNT AND WITHIN THE TIME FRAME IT EXPECTS.

The Iridium System is not intended to provide communications services that
compete with landline and land-based wireless services. Instead, the Iridium
System is designed to complement such services. Iridium World Satellite Services
will be priced significantly higher than most land-based phone and paging
services, and Iridium customers are not expected to discontinue their use of
land-based wireless services.

Iridium's estimates of its funding needs assume there will be substantial demand
for Iridium services shortly after Iridium commences commercial operations and
that Iridium will be able to charge a premium over the cost of a land-based call
for its satellite services because such services provide global mobility.
Iridium currently expects that its wholesale usage fees for international
Iridium World Satellite Services calls between two countries will result in
suggested retail roaming prices that, in aggregate, are approximately 25% to 30%
above the retail prices for land-based voice calling options that traveling
customers could use for a similar call between the same two countries (e.g.,
international calling card and international cellular roaming rates). If demand
for Iridium services is not significant or if the market will not support such a
global mobility premium, Iridium may be unable to generate sufficient revenues.
In addition to pricing, a number of other market factors, including service


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quality, equipment characteristics and competition, could adversely affect
demand for Iridium services.

  THE PRICE OF IRIDIUM'S PHONES AND PAGERS MAY ADVERSELY AFFECT CUSTOMER DEMAND
  FOR IRIDIUM'S SERVICES.

Motorola's multi-mode phone generally has an initial retail price of at least
$3,000 and Motorola's alphanumeric pager generally has an initial retail price
of at least $500. Iridium expects the initial prices for Kyocera phones and
pagers to be similar to Motorola's prices. These prices substantially exceed
current prices for cellular phones and pagers.

  IRIDIUM DOES NOT CONTROL ITS RETAIL PRICES AND IF THEY ARE SET TOO HIGH DEMAND
  FOR IRIDIUM'S SERVICES MAY BE ADVERSELY AFFECTED. PRICES IN THE
  TELECOMMUNICATIONS INDUSTRY HAVE BEEN DROPPING, WHICH MAY ADVERSELY AFFECT
  IRIDIUM'S ABILITY TO GENERATE REVENUES.

Under Iridium's pricing strategy it will set wholesale prices for its services
and service providers will control the price to the customer. Service providers
may price Iridium services at a level that is too high, thereby reducing total
demand without an offsetting increase in per minute revenue to Iridium.
Moreover, competition may force Iridium and its service providers to lower
retail prices. In addition, pricing for telecommunication services, including
long distance rates, has trended downward in recent years. This downward trend
may make it difficult for Iridium to hold or raise its wholesale prices.

The Iridium System does not afford the same voice quality, signal strength and
degree of building penetration in areas that mature land-based wireless voice or
paging systems serve. This difference in service quality could adversely affect
demand for Iridium services.

  THE LARGE SIZE OF IRIDIUM'S PHONES AND PAGERS MAY ADVERSELY AFFECT CUSTOMER
  DEMAND FOR IRIDIUM SERVICES.

The Kyocera and Motorola telephones are larger and heavier than today's
pocket-sized cellular phones and have a significantly longer and thicker
antenna. Motorola's pager is slightly larger than today's standard alphanumeric
belt-worn pagers. The large size of Iridium's phones and pagers may adversely
affect customer demand for Iridium services.

In addition, competition, including competition from other satellite systems and
from the extension of land-based telecommunications systems to areas that are
currently not serviced by landline or land-based wireless phone or paging
systems, could reduce demand that might otherwise exist in such areas for
Iridium services. 

FACTORS AFFECTING CUSTOMER ACCEPTANCE OF SATELLITE-BASED SERVICE

  THE USE OF SATELLITES IN THE IRIDIUM SYSTEM EXPANDS COVERAGE BUT CREATES
  CERTAIN SERVICE LIMITATIONS THAT CUSTOMERS MAY NOT BE WILLING TO ACCEPT.

Iridium's ability to generate sufficient operating revenues will depend upon
customer satisfaction with Iridium services. Iridium believes that customer
satisfaction will depend on a variety of factors, including: 

- price;

- the technical capabilities of Iridium's equipment;

- the quality of the services Iridium offers, including voice quality, call
  completion rates and dropped call rates; and

- the extent, availability and price of alternative telecommunications services.

Satellite-based communications over the Iridium System will experience
degradation in service quality in certain places and will be completely
unavailable in some places. In particular:


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- Satellite-based services will be adversely affected in places where
  obstructions, such as buildings and other natural and man-made obstacles, are
  positioned between a satellite and the user.

- These adverse effects on satellite calls will increase as the obstacles
  become larger and more densely spaced.

- In densely packed urban areas or inside buildings with steel construction
  and metal coated glass common in many urban high rise buildings (including, in
  particular, in most hotels and professional buildings), Iridium expects that
  only extremely limited satellite voice service, or no satellite voice service,
  will be available.

- Use of an Iridium phone in a moving automobile for a satellite call will
  make the effect of obstructions temporary but more pronounced because the
  structure of automobiles will tend to obstruct the satellite signal.

- The actual limitations on satellite-based services will vary, sometimes
  significantly, as conditions change and as the satellites move across the sky.

The Iridium satellite paging service also will experience degradation in certain
places. Iridium expects that these limitations on satellite-based services will
be more significant than current limitations on service experienced by customers
of land-based wireless ("cellular") systems and traditional paging systems.

For Iridium to succeed, its customers must accept:

- the service limitations described above;

- higher prices for Iridium's satellite services than the current prices for
  cellular and paging services; and

- heavier hand-held phones and larger pagers than those currently used for
  most commercial service.

Iridium's customers may not accept these limitations. These limitations could
result in significantly lower sales or lower usage of Iridium's services than
Iridium anticipates.

The Iridium System has not been designed to provide high-speed data and
facsimile transmission capability. As a result, Iridium expects that the appeal
of its facsimile and data services (which will not be available until mid-1999)
will be limited.

Also, the Iridium System will lack the operational capacity to provide service
to large numbers of customers in concentrated areas. 

RISKS RELATING TO LOW DEMAND FOR PAGERS AND PHONES; POTENTIAL NEED FOR
SUBSIDIES

  IRIDIUM HAS COMMITTED TO PURCHASE UP TO APPROXIMATELY $400 MILLION OF PHONES
  AND PAGERS FROM THE MANUFACTURERS IF THE GATEWAYS DO NOT BUY THEM. IRIDIUM
  MAY HAVE TO SUBSIDIZE THE PRICE OF PHONES AND PAGERS TO CUSTOMERS TO
  STIMULATE DEMAND FOR ITS SERVICES.

In an effort to ensure that sufficient quantities of hand-held phones and pagers
are available for early distribution, Iridium has entered into a standby
equipment purchase commitment with Motorola and expects to enter into a
similar commitment with Kyocera. These standby commitments would require
Iridium to purchase an aggregate of up to approximately $400 million of phones
and pagers from Kyocera and Motorola, but only, in the case of the Motorola
commitment, if such equipment is not


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purchased by and shipped to gateway operators or service providers prior to
January 1, 1999. The Kyocera commitment is expected to provide a similar
trigger using a date of February 8, 1999.

    
In addition, there is a risk that sufficient demand for Iridium services will
not materialize in a timely manner unless Iridium, its gateway operators or
service providers subsidize the cost of Iridium phones. Neither Iridium nor, to
Iridium's knowledge, its gateway owners and service providers currently plan to
provide any such subsidies. The costs associated with those subsidies, including
Iridium's portion of those costs, could be significant. Iridium's current
projected funding needs do not reflect any costs associated with its standby
equipment purchase commitments or any subsidization.

POTENTIAL UNDERSUPPLY OF TELEPHONES AND PAGERS

  INSUFFICIENT SUPPLY OF IRIDIUM TELEPHONES AND PAGERS COULD HARM IRIDIUM.

The Iridium telephones and pagers are an essential part of the Iridium System.
Motorola and Kyocera have started manufacture of the telephones and Motorola has
delivered telephones for commercial use. Kyocera has delivered telephones for
customer trials but software development issues have delayed production.
Motorola's or Kyocera's inability to manufacture enough telephones and pagers to
meet demand could constrain Iridium's commercial operations and adversely affect
its generation of meaningful revenues. In addition, if enough telephones and
pagers are not available to supply those people who want to become Iridium
customers, those people could develop a negative impression of Iridium and
decide not to become Iridium customers.

RELIANCE ON MOTOROLA, GATEWAY OWNERS AND OTHER THIRD PARTIES.

  IRIDIUM RELIES EXTENSIVELY ON THIRD PARTIES TO PERFORM FUNCTIONS CRITICAL TO
  ITS OPERATIONS, INCLUDING THE OPERATION OF THE IRIDIUM SYSTEM AND THE
  DISTRIBUTION AND MARKETING OF IRIDIUM WORLD SERVICES.

Operation of the Iridium System. Iridium relies extensively on third parties to
perform functions critical to its operations. Iridium does not independently
have and does not intend to acquire, except by contracting with other parties,
the ability to: 

- develop or produce the components of the Iridium System;

- launch additional or replacement satellites; or

- operate and maintain the Iridium system. 

Currently, Iridium relies on Motorola to provide these critical functions under
various contracts.

Gateway Operators. Iridium is dependent on the activities of its gateway
operators for its success. Iridium has obtained commitments from its investors
who are gateway operators that they will use their reasonable best efforts to
perform certain critical functions including:

- obtaining the necessary licenses, if any, from the jurisdictions in their
  gateway territories;

- constructing and operating their gateways;

- connecting the Iridium System to public earth-based telephone systems; 

- marketing Iridium Services;

- selecting, or acting as, service providers; and

- managing relationships with Iridium's customers either directly or through
  service providers.

Distribution and Marketing of Iridium Services. Iridium's success also will
depend upon the motivation and ability of its service providers to generate
demand for Iridium Services, phones and pagers on a timely basis. Service
providers will be responsible for the sales of Iridium Services and of Iridium
subscriber equipment to consumers. The service providers will be, or
will be selected by, Iridium's gateway operators. Iridium's business plan
assumes the service providers will make substantial sales of Iridium phones as
Iridium transitions from a development stage company to an operating company.
However, demand for Iridium services may not be generated on a timely basis and
there can be no assurance that service providers will effectively market and
distribute Iridium services or that gateway operators will effectively
coordinate the marketing and distribution efforts in their territories. If
Iridium services are not timely marketed and distributed on a coordinated basis
there would be a material adverse effect on Iridium.

TECHNOLOGY IMPLEMENTATION RISKS

  INTEGRATING THE IRIDIUM SYSTEM'S VARIOUS TECHNOLOGIES, INCLUDING SOFTWARE
  AND COMMUNICATIONS HARDWARE, IS A COMPLEX TASK AND FUTURE OPERATIONS COULD
  REVEAL SERIOUS PROBLEMS.

For the Iridium System to operate properly, Motorola, Iridium and their
respective subcontractors must make a number of sophisticated and diverse
technologies work together -- a complex task that no one has attempted before.
This task is further complicated by the following facts: 

- the Iridium System is expected to operate 24 hours a day;

- most of the Iridium System's hardware is in space; and

- system-wide testing, maintenance and repair may adversely affect Iridium's
  ability to provide the service quality it anticipates.

Iridium believes that the development and implementation of the software for the
Iridium System has been one of the largest and most complex software creation
and integration tasks ever undertaken in the telecommunications industry. The
Iridium System software, including the software that controls the satellites and
the on-the-ground business support systems necessary for customer billing, has
not been subject to the demands of commercial operations at the levels Iridium
will need to achieve to be successful. This software will have to be
reprogrammed if errors are revealed.

In addition, the integration of each of Iridium's roaming partners into
Iridium's telecommunications and business systems requires substantial
programing and testing. For Iridium to provide roaming capabilities that match
its expectations it will have to successfully integrate approximately 130
roaming partners into its systems. There can be no assurance that Iridium will
be able to complete this task in a timely manner or at all.

POTENTIAL FOR DELAYED OR IMPAIRED OPERATIONS

  IF IRIDIUM'S TRANSITION FROM A DEVELOPMENT STAGE COMPANY TO A COMPANY WITH
  SUBSTANTIAL COMMERCIAL OPERATIONS IS DELAYED OR ITS ABILITY TO PROVIDE THE
  SERVICE QUALITY IT EXPECTS IS IMPAIRED, ITS ABILITY TO GENERATE REVENUES AND
  ITS COMPETITIVE POSITION COULD BE MATERIALLY HARMED.

The Iridium System is the first satellite-based personal communications system.
However, other companies are attempting to develop satellite-based systems to
compete with Iridium. Part of Iridium's competitive strategy depends on its
commencing substantial commercial operations


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well before any of its competitors. If Iridium's transition from a development
stage company to an operating company is delayed or its ability to provide the
service quality it expects is impaired, there likely would be: 

- harm to the competitive advantage Iridium expects to achieve under its
  current strategy;

- delay in Iridium's generation of revenue; and

- a significant effect on Iridium's ability to repay its indebtedness.

A significant delay in Iridium's transition to commercial operations could
occur if:

- significant errors in the design and implementation of the Iridium System
  are discovered during commercial operations;

- commercial operations reveal that significant improvements in service
  quality are needed if Iridium services are to generate the demand Iridium
  expects; or

- a significant number of satellites fail to operate for any reason. (See
  "Risks Related to the Satellites", below.)

LIMITED SATELLITE-BASED SERVICE CAPACITY

  IF IRIDIUM EXPERIENCES UNEXPECTED CUSTOMER USAGE PATTERNS OR ITS AVAILABLE
  SPECTRUM IS FULLY UTILIZED, THE ABILITY OF CUSTOMERS TO PLACE OR RECEIVE
  CALLS MAY BE ADVERSELY AFFECTED.

Iridium's ability to supply satellite-based service depends upon the capacity of
the Iridium System. Various factors, including customer usage patterns, will
have a significant effect on the Iridium System's capacity for a particular
geographic area and on a system-wide basis. The most important factors include:

- customer usage patterns; and

- the amount of spectrum (the frequencies at which Iridium is allowed to
  operate the Iridium System).

Iridium could experience unexpected customer usage patterns that could exceed
the capacity of the Iridium System at one or more gateways -- similar to the
overload of regional circuits on an earth-based system. If Iridium faces
significant capacity issues, its ability to increase its available spectrum
(which can be thought of as similar to adding more "lines" to an earth-based
system) is subject to significant regulatory hurdles. If adverse usage patterns
occur or other significant constraints are placed on the Iridium System, Iridium
may not be able to acquire additional spectrum and customers may have difficulty
in placing or receiving calls on the system, which would materially and
adversely affect Iridium.

RISKS RELATED TO THE SATELLITES

  THE RISK OF SATELLITE LOSS OR DAMAGE IS SIGNIFICANT, AND THE EFFECT OF
  SATELLITE LOSSES OR DAMAGE COULD BE SUBSTANTIAL.

A significant portion of Iridium's tangible assets are low earth orbit
satellites and the related earth-based control facilities. Maintaining this
equipment is a complex and costly undertaking which has not been attempted
previously on a commercial basis. In particular, the risk of satellite loss is
significant.

The loss or failure of one or more satellites, including temporary losses, that
for whatever reason are not promptly corrected or replaced, could cause: 

- gaps in service availability;


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- significantly degraded service quality;

- increased costs; and

- losses of revenue for the period that service is interrupted or impaired.

Accordingly, the loss or failure of any satellite or satellites could materially
and adversely affect Iridium. A satellite can be lost or fail for a variety of
reasons, including: 

- colliding with something, including space debris, another man-made object or
  space phenomena such as comets or meteors;

- mechanical anomalies or malfunctions; and

- failure of the rocket, by explosion or otherwise, that was to place the
  satellite in orbit.

Space debris and other in-space risks. Iridium's satellites operate in low earth
orbit and, as a result, face a higher risk of damage from space debris than
satellites that operate farther away from the earth. Because objects in low
earth orbit are moving at different speeds, the Iridium satellites can be more
readily hit by space debris -- which can include sand, pebbles, dust and rocks
shed by comets, as well as the remains of man-made objects floating in space.
Even a very small piece of space debris can do great damage to a satellite.

One potential area of risk includes meteor showers and storms. In November 1998
and November 1999, the Leonid meteor storm is expected to dramatically increase
the amount of space debris in Earth's orbit and could pose a risk to Iridium's
satellites. Although smaller meteor showers occur annually, the Leonid meteor
storm reoccurs every 33 years. The last storm occurred in 1966, when commercial
space programs were just beginning and few, if any, satellites were in the sky.
Therefore, there is no relevant experience to base an assessment of the damage,
if any, that the storm might cause to low earth orbit satellites, but such
damage could be significant.

Mechanical Anomalies and Malfunctions. During the deployment of the Iridium
System, Iridium experienced anomalies in several of its satellites. Those
anomalies, which in some cases included control problems and the satellite's
failure to function as expected, caused those satellites to be excluded from
Iridium's constellation. You should note that: 

- anomalies such as occurred with respect to those satellites, or other
  anomalies with comparable effects, could occur in the future;

- such anomalies could have a significant adverse effect on Iridium;

- from time to time certain events could occur that may cause Iridium or
  Motorola to conclude that one or more malfunctioning satellites should not be
  included in the Iridium System, and the unavailability of such satellite could
  have an adverse effect on the operation of the Iridium System; and

- Motorola has absorbed the financial consequences of all satellite losses to
  date.


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Launch-related risks. Iridium expects that it will need to launch additional
satellites from time to time to maintain the Iridium System. Accordingly, a
launch failure could have a material adverse effect on Iridium. Satellites are
launched on launch vehicles, or rockets. Launches of satellites can fail
because:

- a rocket crashes, aborts or explodes (which recently happened to one of
  Iridium's competitors); and

- satellites are damaged as they are loaded into the rocket, during the launch,
  or as they leave the rocket.

In addition, launches can be delayed for many reasons, including poor weather
conditions, other launch failures or government actions. Placing multiple
satellites in each Iridium launch vehicle significantly increases the risk that
a launch failure will have a material and adverse effect.

Life Expectancy of the Satellites; Financial Effect of Loss of Satellites.
Iridium's business plan currently assumes that each of the satellites will have
a useful life of five years from its launch date. Iridium's satellites may not,
however, remain in operation for the full five years that Iridium expects. If
the satellites do not remain in operations for the full five years, Iridium's
operations, including its ability to provide service and generate revenues,
could be materially harmed and its costs of operating will likely increase.

Iridium has entered into an Operations and Maintenance Contract with Motorola
which provides for the operation and maintenance of Iridium's space assets for
Iridium's first five years of operation. Iridium has the option to extend the
Operations and Maintenance Contract for an additional two years. Under the
Operations and Maintenance Contract, Motorola will bear the risk of satellite
malfunction, but Iridium will bear the risk of damage to satellites by the acts
of third parties, including the degradation or complete loss of any satellite
due to contact with space debris. 

COMPETITION RISKS

  IRIDIUM FACES DIRECT COMPETITION FROM A VARIETY OF OPERATING AND PLANNED
  SATELLITE SYSTEMS AND LAND-BASED SERVICES.

The telecommunications industry is highly competitive. The uncertainties and
risks created by this competition are intensified by the continuous
technological advances that characterize the industry, regulatory developments
which affect competition and alliances between industry participants. While no
single wireless communications system other than Iridium serves the global 
mobile personal communications market today, Iridium anticipates that more than
one system or a collaboration of systems will serve this market in the future.

Iridium believes that its most likely direct competition will come from the
following planned low or mid-earth orbit satellite-based systems:

- ICO Global Communications (Holdings) Limited;

- Globalstar (backed by Loral/Qualcomm Partnership, L.P.);

- Ellipso; and

- Constellation.


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Iridium also expects to face competition from regional geostationary
satellite-based systems, including Asia Pacific Mobile Telecommunications
Satellite, Afro-Asian Satellite and PT Asia Cellular Satellite ("ACeS") and from
the existing Inmarsat geostationary global satellite system.

While Iridium believes that no competition will be able to offer virtually
worldwide satellite paging prior to the year 2000, Iridium World Page Service
will face competition from existing satellite- and land-based paging services,
some of which have an established customer base that may be reluctant to switch
services. In addition, certain paging services offer two-way paging capability
which Iridium does not offer.

Other Competitors. Iridium expects to offer Iridium World Cellular Service
across a variety of countries where different cellular standards have made
roaming difficult in the past. However, certain services currently provide
roaming services among a number of countries, including those that use
incompatible cellular standards. For example, GlobalRoam and Cellcard provide
roaming between some North American networks and some European and other
networks. The availability of such international near-global roaming services
is likely to increase. These services will compete directly with Iridium World
Cellular Service and with Iridium's satellite-based phone services. Two other
proposed systems, ICO and Globalstar, and at least one regional geostationary
satellite, ACeS, have indicated that they may also offer some form of dual-mode
satellite/cellular service, which may include roaming capabilities (enabling
roaming across different cellular standards) similar to those Iridium expects
to offer.

In addition, it is expected that GSM-based wireless service (a form of wireless
used mostly in Europe) will continue to expand its reach (including further into
North America), permitting broader roaming capability across incompatible
cellular standards with a single phone.There is a risk that one or more regional
mobile satellite services could enter into agreements to provide intersystem
roaming which could be global or nearly global in scope. Iridium will also
compete for travel customers with businesses that provide short-term rentals of
wireless phones capable of operating in specific countries or regions. These
businesses often have rental locations at airports, hotels and other locations
and will also deliver phones. 

COMPETITION FOR SERVICE PROVIDERS AND SPECTRUM ALLOCATION

  IRIDIUM WILL FACE COMPETITION FROM OTHER SERVICES FOR LOCAL SERVICE
  PROVIDERS.

In addition to competing for customers for its service, Iridium also expects to
compete with various other communications services for local service providers.
A failure to effectively compete with these services could materially and
adversely affect Iridium's ability to effectively market and distribute its
services and equipment.

Furthermore, ICO could have an advantage in obtaining spectrum allocations and
local operating approvals in a number of countries because it is affiliated with
Inmarsat, an international satellite organization, and investors in ICO and
Inmarsat include many state-owned telecommunications companies and the
regulatory authorities in their countries.


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RISKS ASSOCIATED WITH LICENSING

  IRIDIUM CANNOT YET OFFER COMMERCIAL SERVICE IN EVERY COUNTRY.

The Iridium System's operation is subject to United States and international
regulation. This regulation is pervasive and largely outside Iridium's control.
Iridium, Motorola and the various gateway owners have made substantial progress
in receiving the authorizations necessary to operate the Iridium System, but a
significant number of regulatory authorizations have not yet been obtained,
including:

- in two countries, Saudi Arabia and India, in which a gateway will be located,
  an authorization to operate the gateway, including necessary radio spectrum
  assignments for the links between the gateway and the Iridium satellites;

- in certain countries in which Iridium expects its customers will want to use
  Iridium's services, the authority to offer Iridium's services and operate
  Iridium phones and pagers, and unless Iridium receives such authorizations,
  service in those countries will be limited or will not exist at all. 



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RISKS ASSOCIATED WITH PRINCIPAL SUPPLY CONTRACTS.

  IRIDIUM'S MAJOR CONTRACTS RELATING TO THE IRIDIUM SYSTEM ARE OF LIMITED
  DURATION, AND MOTOROLA'S LIABILITY UNDER THEM IS SIGNIFICANTLY LIMITED.

Iridium has three principal supply contracts:

- The Space System Contract with Motorola for the design, development,
  construction and delivery in orbit of the Iridium System's space segment;

- The Operations and Maintenance Contract with Motorola which runs for five
  years from the date Iridium commenced commercial operations and covers the
  operation of the space segment of the Iridium System, including monitoring,
  upgrading and replacing the hardware and software necessary to maintain
  specified performance levels; and

- The Terrestrial Network Development Contract with Motorola for the design and
  development of the gateway hardware and software.

These contracts are of limited duration and Motorola's liability under them is
significantly limited. The contracts provide that if Motorola has any liability
to Iridium under the Space System Contract, the Operations and Maintenance
Contract, the Terrestrial Network Development Contract or any other contract
between Iridium and Motorola in connection with the Iridium System, that
liability may be limited to $100 million in the aggregate in virtually all
circumstances. In addition, under the Space System Contract, Motorola is not
required to refund amounts Iridium previously paid to it. Subject to certain
exceptions, Iridium bears the risk, including additional costs, if any,
resulting from excusable delays under the Space System Contract, as well as
certain of the risks of loss for satellites in orbit. The Operations and
Maintenance Contracts and the Terrestrial Network Development Contract have
similar provisions regarding excusable delays, waivers and limitations on
liability. 

CONFLICTS OF INTEREST WITH MOTOROLA

  BECAUSE OF MOTOROLA'S VARYING ROLES WITH RESPECT TO IRIDIUM, THERE ARE A
  NUMBER OF SIGNIFICANT CONFLICTS OF INTEREST BETWEEN IRIDIUM AND MOTOROLA.

Motorola has and will have various conflicts of interest with Iridium.
Motorola is:

- the creator and developer of the concept of the Iridium System;

- responsible for the design, construction, operation and maintenance of the
  Iridium System;

- a founding member of, and the largest single investor in, Iridium LLC; 

- a gateway owner;

- Iridium LLC's largest Class 1 Membership Interest holder (and potentially the
  largest Class A Common Stock holder because Class 1 Membership Interests are
  exchangeable for Class A Common Stock);

- a holder of warrants to acquire additional membership interests in Iridium
  LLC; and

- the guarantor of some of Iridium's borrowings.

Motorola's Influence on Iridium. Motorola does not by itself control the Iridium
Board of Directors and it is not permitted to participate in Iridium's decisions
or other actions concerning the Space System Contract, Operations and
Maintenance Contract or the Terrestrial Network Development Contract. However,
Motorola could in certain situations exercise significant influence over Iridium
because:

- Motorola currently has the right to appoint 5 of the 27 members of the Iridium
  Board and its representation could increase if it provides further financial
  support to Iridium; and


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- Motorola could have control over Iridium similar to that of a creditor through
  its position as a guarantor of some of Iridium's borrowings and as a creditor
  under various material contracts.

Motorola's Contractual Relations with Iridium. Motorola and Iridium entered into
the Space System Contract, the Operations and Maintenance Contract and the
Terrestrial Network Development Contract after extensive negotiations. The
predecessor of Iridium under those contracts, however, was a wholly owned
subsidiary of Motorola at the time the Space System Contract and Operations and
Maintenance Contract were negotiated and therefore these negotiations were not
conducted on an arm's-length basis. Moreover, although these agreements provide
for specific prices, Motorola's obligations and liabilities are subject to
certain limitations which allocate various risks to Iridium and may have the
effect of increasing the price paid by Iridium. Iridium's payment obligations
under these agreements are expected to comprise most of Iridium's expenses.

CONFLICTS OF INTEREST WITH GATEWAY OWNERS

  IRIDIUM HAS CERTAIN CONFLICTS OF INTEREST WITH ITS GATEWAY OWNERS AND SERVICE
  PROVIDERS.

The Iridium Board of Directors consists of representatives of certain of the
world's leading telecommunications companies. Almost all of the members of the
Iridium Board have been appointed by investors in Iridium who also are gateway
owners and service providers. Because Iridium will be a supplier to the gateways
and the service providers, the interests of Iridium are expected to conflict in
certain respects with the interests of the gateway owners and the service
providers. For example, this conflict of interest will be relevant in setting
the wholesale prices that Iridium will charge for satellite airtime and other
Iridium services.

RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS AND DEVELOPING MARKETS

  CERTAIN RISKS RELATED TO THE DOMESTIC AND INTERNATIONAL POLICIES AND 
  ECONOMIES OF THE VARIOUS COUNTRIES IN WHICH IRIDIUM OPERATES COULD 
  ADVERSELY AFFECT IRIDIUM.


Iridium expects its telecommunications services to be available in almost every
country. As a result, Iridium and its gateway operators and service providers
will be subject to risks related to each country's domestic and international
policies and risks related to economic conditions in many regions of the world,
such as:


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<PAGE>   15

- changes in domestic and foreign government regulations and telecommunications
  standards;

- licensing requirements, tariffs or taxes and other trade barriers;

- price, wage and exchange controls;

- political, social and economic instability;

- inflation; and

- interest rate and currency fluctuations. 

Iridium, its gateway operators or service providers could be adversely affected
on a country-specific, regional  or system-wide basis by these factors.  

DEPENDENCE ON KEY MANAGEMENT AND QUALIFIED PERSONNEL

  IRIDIUM RELIES ON KEY EMPLOYEES WITH WHOM IT DOES NOT HAVE EMPLOYMENT
  AGREEMENTS.

Iridium's success will be dependent upon the efforts of its management team and
its ability to attract and retain qualified management and personnel in the
future. Iridium has no employment contract with any employee and is subject to
the possibility of loss of one or more key employees at any time. Iridium must
also rely upon several employees of Motorola who play a key role in the
performance of Motorola's obligations under the Space System Contract, the
Operations and Maintenance Contract and the Terrestrial Network Development
Contract. Iridium has no control over the relationship between Motorola and its
employees. The loss of one or more of these key employees could adversely affect
Iridium. In addition, Iridium's success will be dependent in part upon gateway
operators having qualified personnel at the various gateways to: 

- oversee the construction and operation of the gateway; and

- execute significant aspects of Iridium's licensing, marketing and distribution
  efforts.

RISKS ASSOCIATED WITH GROWTH

  THE IRIDIUM SYSTEM CANNOT CURRENTLY GROW ABOVE CERTAIN LIMITS.

If significant and rapid growth in demand for Iridium World Services is achieved
it would require Iridium and its gateways to make additions to personnel and
management information systems to manage that growth while continuing to meet
customer service expectations. In addition, because Iridium's assigned spectrum
(frequency band) and satellite infrastructure characteristics have inherent
capacity limitations, growth above certain levels would not be possible with the
current Iridium System.


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