Orbital Sciences Corporation
Note Agreement
Dated as of June 1, 1995
Re: $20,000,000 10.50% Senior Notes
Due June 14, 2001
Table of Contents
(Not a part of the Agreement)
Section 1.Description of Notes and Commitment 1
Section 1.1. Description of Notes 1
Section 1.2. Commitment, Closing Date 1
Section 2.Prepayment of Notes 2
Section 2.1. Required Prepayments 2
Section 2.2. Optional Prepayment with Premium 2
Section 2.3. Prepayment of Notes upon Change of Control2
Section 2.4. Notice of Optional Prepayments 4
Section 2.5. Application of Prepayments 4
Section 2.6. Direct Payment 4
Section 3.Representations 5
Section 3.1. Representations of the Company 5
Section 3.2. Representations of the Purchaser 5
Section 4.Closing Conditions 5
Section 4.1. Conditions 5
Section 4.2. Waiver of Conditions 6
Section 5.Company Covenants 7
Section 5.1. Corporate Existence, Etc 7
Section 5.2. Insurance 7
Section 5.3. Taxes, Claims for Labor and Materials; Compliance with
Laws 7
Section 5.4. Maintenance, Etc 8
Section 5.5. Nature of Business 8
Section 5.6. Consolidated Tangible Net Worth 8
Section 5.7. Consolidated Funded Debt Maintenance Ratio8
Section 5.8. Fixed Charges Coverage Ratio 8
Section 5.9. Priority Funded Debt Ratio 9
Section 5.10.Limitation on Liens 9
Section 5.11.Restricted Investments 10
Section 5.12.Restricted Payments 11
Section 5.13.Mergers, Consolidations and Sales of Assets 12
Section 5.14.Repurchase of Notes 16
Section 5.15.Transactions with Affiliates 16
Section 5.16.Termination of Pension Plans 16
Section 5.17.Reports and Rights of Inspection 17
Section 6.Events of Default and Remedies Therefor 20
Section 6.1. Events of Default 20
Section 6.2. Notice to Holders 21
Section 6.3. Acceleration of Maturities 22
Section 6.4. Rescission of Acceleration 22
Section 7.Amendments, Waivers and Consents 23
Section 7.1. Consent Required 23
Section 7.2. Solicitation of Holders 23
Section 7.3. Effect of Amendment or Waiver 23
Section 8.Interpretation of Agreement; Definitions 23
Section 8.1. Definitions 23
Section 8.2. Accounting Principles 37
Section 8.3. Directly or Indirectly 37
Section 9.Miscellaneous 37
Section 9.1. Registered Notes 37
Section 9.2. Exchange of Notes 37
Section 9.3. Loss, Theft, Etc. of Notes 38
Section 9.4. Expenses, Stamp Tax Indemnity 38
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative 38
Section 9.6. Notices 39
Section 9.7. Successors and Assigns 39
Section 9.8. Survival of Covenants and Representations39
Section 9.9. Severability 39
Section 9.10.Governing Law 39
Section 9.11.Captions 39
Signature 40
Attachments to Note Agreement:
Schedule I Name and Address of Purchaser and Amount of Commitment
Schedule II Funded Debt; Liens Securing Funded Debt (including
Capitalized Leases); and Subsidiaries as of the Closing
Date
Schedule III Use of Proceeds
Exhibit A Form of 10.50% Senior Note due June 14, 2001
Exhibit B Representations and Warranties of the Company
Exhibit C Description of Special Counsel's Closing Opinion
Exhibit D Description of Closing Opinion of Counsel to the Company
Orbital Sciences Corporation
21700 Atlantic Boulevard
Dulles, Virginia 20166
Note Agreement
Re: $20,000,000 10.50% Senior Notes
Due June 14, 2001
Dated as of
June 1, 1995
To the Purchaser named in Schedule I"
hereto which is a signatory of this
Agreement
Ladies and Gentlemen:
The undersigned, Orbital Sciences Corporation, a Delaware
corporation (the "Company"), agrees with you as follows:
Section1.Description of Notes and Commitment.
Section1.1.Description of Notes. The Company will authorize the issue
and sale of $20,000,000 aggregate principal amount of its 10.50% Senior
Notes (the "Notes") to be dated the date of issue, to bear interest from
such date at the rate of 10.50% per annum, payable semiannually on the
fourteenth day of June and December in each year (commencing December 14,
1995) and at maturity and to bear interest on overdue principal
(including any overdue required or optional prepayment of principal) and
premium, if any, and (to the extent legally enforceable) on any overdue
installment of interest at the Overdue Rate after the date due, whether
by acceleration or otherwise, until paid, to be expressed to mature on
June 14, 2001, and to be substantially in the form attached hereto as
Exhibit A. Interest on the Notes shall be computed on the basis of a 360-
day year of twelve 30-day months. The Notes are not subject to
prepayment or redemption at the option of the Company prior to their
expressed maturity date except on the terms and conditions and in the
amounts and with the premium, if any, set forth in 2 of this Agreement.
The term "Notes" as used herein shall include each Note delivered
pursuant to this Agreement. You are hereinafter sometimes referred to as
the "Purchaser". The terms which are capitalized herein shall have the
meanings set forth in 8.1 unless otherwise defined herein.
Section1.2.Commitment, Closing Date. Subject to the terms and conditions
hereof and on the basis of the representations and warranties hereinafter
set forth, the Company agrees to issue and sell to you, and you agree to
purchase from the Company, Notes in the principal amount set forth
opposite your name on Schedule I hereto at a price of 100% of the
principal amount thereof on the Closing Date hereafter mentioned.
Delivery of the Notes will be made at the offices of Chapman and
Cutler, 111 West Monroe Street, Chicago, Illinois 60603, against payment
therefor in Federal Reserve or other funds current and immediately
available at the principal office of Chapman and Cutler, 111 West Monroe
Street, Chicago, Illinois 60603, in the amount of the purchase price at
10:00 A.M., Chicago time, on June 14, 1995 or such later date as shall
mutually be agreed upon by the Company and the Purchaser (the "Closing
Date"). The Notes delivered to you on the Closing Date will be delivered
to you in the form of a single registered Note in the form attached
hereto as Exhibit A for the full amount of your purchase (unless
different denominations are specified by you), registered in your name or
in the name of such nominee, as may be specified in Schedule I attached
hereto.
Section2.Prepayment of Notes.
Section2.1.Required Prepayments. In addition to paying the entire
outstanding principal amount and the interest due on the Notes on the
maturity date thereof, the Company agrees that on June 14, 1999 and June
14, 2000, it will prepay and apply and there shall become due and payable
on the principal indebtedness evidenced by the Notes an amount equal to
the lesser of (a) $6,666,667 or (b) the principal amount of the Notes
then outstanding. The entire remaining principal amount of the Notes
shall become due and payable on June 14, 2001. No premium shall be
payable in connection with any required prepayment made pursuant to this
2.1.
In the event that the Company shall prepay less than all of the
Notes pursuant to 2.2 or 2.3 hereof, the amounts of the prepayments
required by this 2.1 shall be reduced by an amount which is the same
percentage of such required prepayment as the percentage that the
principal amount of Notes prepaid pursuant to 2.2 or 2.3 is of the
aggregate principal amount of outstanding Notes immediately prior to such
prepayment.
Section2.2.Optional Prepayment with Premium. In addition to the payments
required by 2.1, upon compliance with 2.4, the Company shall have the
privilege, on any date on which interest is payable pursuant to 1.1, of
prepaying the outstanding Notes, either in whole or in part (but if in
part then in a minimum principal amount of $2,000,000), by payment of the
principal amount of the Notes, or portion thereof to be prepaid, and
accrued interest thereon to the date of such prepayment, together with a
premium equal to the Make-Whole Amount, determined as of two Business
Days prior to the date of such prepayment pursuant to this 2.2.
Section2.3.Prepayment of Notes upon Change of Control. (a) In the event
that the Company shall have knowledge of any proposed Change of Control,
the Company will give written notice of such fact in the manner provided
in 9.6 hereof to the holders of the Notes describing the facts and
circumstances of such proposed Change of Control and estimating the date
on which the Company expects that such Change of Control will occur. In
the event that any Change of Control shall occur, the Company will give
written notice (the "Company Notice") of such fact in the manner provided
in 9.6 hereof to the holders of the Notes. The Company Notice shall be
delivered promptly upon receipt of such knowledge by the Company and in
any event no later than three Business Days following the occurrence of
any Change of Control. The Company Notice shall (1) describe the facts
and circumstances of such Change of Control in reasonable detail, (2)
make reference to this 2.3 and the right of the holders of the Notes to
require prepayment of the Notes on the terms and conditions provided for
in this 2.3, (3) offer in writing to prepay the outstanding Notes,
together with accrued interest to the date of prepayment, and a premium
equal to the then applicable Make-Whole Amount, and (4) specify a date
for such prepayment (the "Change of Control Prepayment Date"), which
Change of Control Prepayment Date shall be not more than 90 days nor less
than 30 days following the date of such Company Notice. Each holder of
the then outstanding Notes shall have the right to accept such offer and
require prepayment of the Notes held by such holder in full by written
notice to the Company (a "Noteholder Notice") given not later than 20
days after receipt of the Company Notice. The Company shall on the
Change of Control Prepayment Date prepay in full all of the Notes held by
holders which have so accepted such offer of prepayment. The prepayment
price of the Notes payable upon the occurrence of any Change of Control
shall be an amount equal to 100% of the outstanding principal amount of
the Notes so to be prepaid and accrued interest thereon to the date of
such prepayment, together with a premium equal to the then applicable
Make-Whole Amount, determined as of two Business Days prior to the date
of such prepayment pursuant to this 2.3(a).
(b) (1) Without limiting the foregoing, notwithstanding any failure
on the part of the Company to give the Company Notice herein required as
a result of the occurrence of a Change of Control, each holder of the
Notes shall have the right by delivery of written notice to the Company
to require the Company to prepay, and the Company will prepay, such
holder's Notes in full, together with accrued interest thereon to the
date of prepayment, and a premium equal to the then applicable Make-Whole
Amount. Notice of any required prepayment pursuant to this 2.3(b)(1)
shall be delivered by any holder of the Notes which was entitled to, but
did not receive, such Company Notice to the Company after such holder has
actual knowledge of such Change of Control. On the date (the "Change of
Control Delayed Prepayment Date") designated in such holder's notice
(which shall be not more than 90 days nor less than 30 days following the
date of such holder's notice), the Company shall prepay in full all of
the Notes held by such holder, together with accrued interest thereon to
the date of prepayment, and a premium equal to the then applicable Make-
Whole Amount. If the holder of any Note gives any notice pursuant to
this 2.3(b)(1), the Company shall give a Company Notice within three
Business Days of receipt of such notice and identify the Change of
Control Delayed Prepayment Date to all other holders of the Notes and
each of such other holders shall then and thereupon have the right to
accept the Company's offer to prepay the Notes held by such holder in
full and require prepayment of such Notes by delivery of a Noteholder
Notice within 20 days following receipt of such Company Notice; provided
only that any date for prepayment of such holder's Notes shall be the
Change of Control Delayed Prepayment Date. On the Change of Control
Delayed Prepayment Date, the Company shall prepay in full the Notes of
each holder thereof which has accepted such offer of prepayment at a
prepayment price equal to 100% of the outstanding principal amount of the
Notes so to be prepaid and accrued interest thereon to the date of such
prepayment, together with a premium equal to the then applicable Make-
Whole Amount, determined as of two Business Days prior to the date of
such prepayment pursuant to this 2.3(b)(1).
(2) Compliance with the provisions of this 2.3(b) shall not be
deemed to constitute a waiver of, or consent to, any Default or Event of
Default caused by any violation of the provisions of 2.3(a).
Section2.4.Notice of Optional Prepayments. The Company will give notice
of any prepayment of the Notes pursuant to 2.2 to each holder thereof
not less than 30 days nor more than 60 days before the date fixed for
such optional prepayment specifying (a) such date, (b) the principal
amount of the holder's Notes to be prepaid on such date, (c) that a
premium may be payable, (d) the date when such premium will be
calculated, (e) the estimated premium, together with a reasonably
detailed computation of such estimated premium, and (f) the accrued
interest applicable to the prepayment. Such notice of prepayment shall
also certify all facts, if any, which have given rise to the Company's
right or obligation to make any such prepayment. Notice of prepayment
having been so given, the aggregate principal amount of the Notes
specified in such notice, together with accrued interest thereon and the
premium, if any, payable with respect thereto shall become due and
payable on the prepayment date specified in said notice. Two Business
Days prior to the prepayment date specified in such notice, the Company
shall provide each holder of a Note written notice of the premium, if
any, payable in connection with such prepayment and, whether or not any
premium is payable, a reasonably detailed computation of the Make-Whole
Amount.
Section2.5.Application of Prepayments. All partial prepayments made
pursuant to 2.1 or 2.2 shall be applied on all outstanding Notes
ratably in accordance with the unpaid principal amounts thereof. All
partial prepayments made pursuant to 2.3 shall be applied only to the
Notes of the holders who have elected to participate in such prepayment.
Section2.6.Direct Payment. Notwithstanding anything to the contrary
contained in this Agreement or the Notes, in the case of any Note owned
by you or your nominee or owned by any subsequent Institutional Holder
which has given written notice to the Company requesting that the
provisions of this 2.6 shall apply, the Company will punctually pay when
due the principal thereof, interest thereon and premium, if any, due with
respect to said principal, without any presentment thereof, directly to
you, to your nominee or to such subsequent Institutional Holder at your
address or your nominee's address set forth in Schedule I hereto or such
other address as you, your nominee or such subsequent Institutional
Holder may from time to time designate in writing to the Company or, if a
bank account with a United States bank is designated for you or your
nominee on Schedule I hereto or in any written notice to the Company from
you, from your nominee or from any such subsequent Institutional Holder,
the Company will make such payments in immediately available funds to
such bank account, no later than 11:00 a.m. Chicago, Illinois time on the
date due, marked for attention as indicated, or in such other manner or
to such other account in any United States bank as you, your nominee or
any such subsequent Institutional Holder may from time to time direct in
writing. If for any reason whatsoever the Company does not make any such
payment by such 11:00 a.m. transmittal time, such payment shall be deemed
to have been made on the next following Business Day and such payment
shall bear interest at the Overdue Rate.
Section3.Representations.
Section3.1.Representations of the Company. The Company represents and
warrants that all representations and warranties set forth in Exhibit B
are true and correct as of the date hereof and are incorporated herein by
reference with the same force and effect as though herein set forth in
full.
Section3.2.Representations of the Purchaser. (a) You represent, and in
entering into this Agreement the Company understands, that you are
acquiring the Notes for the purpose of investment and not with a view to
the distribution thereof, and that you have no present intention of
selling, negotiating or otherwise disposing of the Notes; it being
understood, however, that the disposition of your property shall at all
times be and remain within your control.
(b) You further represent that either: (1) you are acquiring the
Notes with assets from your general account and not with the assets of
any separate account in which any employee benefit plan has any interest;
(2) no part of the funds to be used by you to purchase the Notes
constitutes assets allocated to any separate account maintained by you
such that the application of such funds constitutes a prohibited
transaction under Section 406 of ERISA; or (3) all or a part of such
funds constitute assets of one or more separate accounts, trusts or a
commingled pension trust maintained by you, and you have disclosed to the
Company the names of such employee benefit plans whose assets in such
separate account or accounts or pension trusts exceed 10% of the total
assets or are expected to exceed 10% of the total assets of such account
or accounts or trusts as of the date of such purchase and the Company has
advised you in writing (and in making the representations set forth in
this clause (3) you are relying on such advice) that the Company is not a
party-in-interest nor are the Notes employer securities with respect to
the particular employee benefit plan disclosed to the Company by you as
aforesaid (for the purpose of this clause (3), all employee benefit plans
maintained by the same employer or employee organization are deemed to be
a single plan). As used in this 3.2(b), the terms "separate account",
"party-in-interest", "employer securities" and "employee benefit plan"
shall have the respective meanings assigned to them in ERISA.
Section4.Closing Conditions.
Section4.1.Conditions. Your obligation to purchase the Notes on the
Closing Date shall be subject to the performance by the Company of its
agreements hereunder which by the terms hereof are to be performed at or
prior to the time of delivery of the Notes and to the following further
conditions precedent:
(a) Closing Certificate. You shall have received a
certificate dated the Closing Date, signed by the President or a
Vice President of the Company, the truth and accuracy of which shall
be a condition to your obligation to purchase the Notes proposed to
be sold to you and to the effect that (1) the representations and
warranties of the Company set forth in Exhibit B hereto are true and
correct on and with respect to the Closing Date, (2) the Company has
performed all of its obligations hereunder which are to be performed
on or prior to the Closing Date, and (3) no Default or Event of
Default has occurred and is continuing.
(b) Legal Opinions. You shall have received from Chapman and
Cutler, who are acting as your special counsel in this transaction,
and from Ropes & Gray, counsel for the Company, their respective
opinions dated the Closing Date, in form and substance satisfactory
to you, and covering the matters set forth in Exhibits C and D,
respectively, hereto.
(c) Company's Existence and Authority. On or prior to the
Closing Date, you shall have received, in form and substance
reasonably satisfactory to you and your special counsel, such
documents and evidence with respect to the Company as you may
reasonably request in order to establish the existence and good
standing of the Company and the authorization of the transactions
contemplated by this Agreement.
(d) Private Placement Number. On or prior to the Closing
Date, special counsel to the Purchaser shall have duly made the
appropriate filings with Standard & Poor's CUSIP Service Bureau, as
agent for the National Association of Insurance Commissioners, in
order to obtain a private placement number for the Notes.
(e) Funding Instructions. At least three Business Days prior
to the Closing Date, you shall have received written instructions
executed by a Responsible Officer of the Company directing the
manner of the payment of funds and setting forth (1) the name and
address of the transferee bank, (2) such transferee bank's ABA
number, (3) the account name and number into which the purchase
price for the Notes is to be deposited, and (4) the name and
telephone number of the account representative responsible for
verifying receipt of such funds.
(f) Special Counsel Fees. Concurrently with the delivery of
the Notes to you on the Closing Date, the charges and disbursements
of Chapman and Cutler, your special counsel, shall have been paid by
the Company.
(g) Legality of Investment. The Notes to be purchased by you
shall be a legal investment for you under the laws of each
jurisdiction to which you may be subject (without resort to any so-
called "basket provisions" to such laws).
(h) Satisfactory Proceedings. All proceedings taken in
connection with the transactions contemplated by this Agreement, and
all documents necessary to the consummation thereof, shall be
satisfactory in form and substance to you and your special counsel,
and you shall have received a copy (executed or certified as may be
appropriate) of all legal documents or proceedings taken in
connection with the consummation of said transactions.
Section4.2.Waiver of Conditions. If on the Closing Date the Company
fails to tender to you the Notes to be issued to you on such date or if
the conditions specified in 4.1 have not been fulfilled, you may
thereupon elect to be relieved of all further obligations under this
Agreement. Without limiting the foregoing, if the conditions specified
in 4.1 have not been fulfilled, you may waive compliance by the Company
with any such condition to such extent as you may in your sole discretion
determine. Nothing in this 4.2 shall operate to relieve the Company of
any of its obligations hereunder or to waive any of your rights against
the Company.
Section5.Company Covenants.
From and after the Closing Date and continuing so long as any amount
remains unpaid on any Note:
Section5.1.Corporate Existence, Etc. The Company will preserve and keep
in full force and effect, and will cause each Subsidiary to preserve and
keep in full force and effect, its corporate existence and all licenses
and permits necessary to the proper conduct of its business, provided
that the foregoing shall not prevent any transaction permitted by 5.13.
Section5.2.Insurance. The Company will maintain, and will cause each
Subsidiary to maintain, insurance coverage by financially sound and
reputable insurers and of the character usually maintained by
corporations of established reputation engaged in the same or a similar
business and owning and operating similar properties and in such forms
and amounts and against such risks as a Responsible Officer of the
Company or the relevant Subsidiary shall have determined in such
officer's reasonable opinion to be necessary or advisable in the conduct
of the Company's or such Subsidiary's business, as the case may be.
Section5.3.Taxes, Claims for Labor and Materials; Compliance with Laws.
(a) The Company will promptly pay and discharge, and will cause each
Subsidiary promptly to pay and discharge, all lawful taxes, assessments
and governmental charges or levies imposed upon the Company or such
Subsidiary, respectively, or upon or in respect of all or any part of the
property or business of the Company or such Subsidiary, all trade
accounts payable in accordance with usual and customary business terms,
and all claims for work, labor or materials, which if unpaid might become
a Lien upon any property of the Company or such Subsidiary; provided the
Company or such Subsidiary shall not be required to pay any such tax,
assessment, charge, levy, account payable or claim if (1) the validity,
applicability or amount thereof is being contested in good faith by
appropriate actions or proceedings so long as such actions or proceedings
will prevent the forfeiture or sale of any property of the Company or
such Subsidiary or any material interference with the use thereof by the
Company or such Subsidiary during the pendency of such proceedings, and
(2) the Company or such Subsidiary shall set aside on its books, adequate
reserves to the extent required in accordance with GAAP.
(b) The Company will promptly comply and will cause each Subsidiary
to promptly comply with all laws, ordinances or governmental rules and
regulations to which it is subject, including, without limitation, the
Occupational Safety and Health Act of 1970, as amended, ERISA and all
Environmental Laws, the violation of which could reasonably be expected
to materially and adversely affect the properties, business, prospects,
profits or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole or would result in any Lien not permitted
under 5.10, except where the necessity of compliance therewith is being
contested in good faith by appropriate actions or proceedings, but only
so long as the continued violation of any such law, ordinance or
governmental rule or regulation would not subject the Company or any
Subsidiary to further penalties.
Section5.4.Maintenance, Etc. The Company will maintain, preserve and
keep, and will cause each Subsidiary to maintain, preserve and keep, its
properties which are used or useful in the conduct of its business
(whether owned in fee or a leasehold interest) in good repair and working
order.
Section5.5.Nature of Business. Neither the Company nor any Subsidiary
will engage in any business if, as a result, the general nature of the
business, taken on a consolidated basis, which would then be engaged in
by the Company and its Subsidiaries would be substantially changed from
the general nature of the business engaged in by the Company and its
Subsidiaries on the date of this Agreement.
Section5.6.Consolidated Tangible Net Worth. The Company will at all
times keep and maintain Consolidated Tangible Net Worth at an amount not
less than (a) $100,000,000 plus (b) 50% of Consolidated Net Income
computed on a cumulative basis for each of the elapsed fiscal quarters
ending after March 31, 1995; provided that notwithstanding that
Consolidated Net Income for any such elapsed fiscal quarter may be a
deficit figure, no reduction as a result thereof shall be made in the sum
to be maintained pursuant hereto.
Section5.7.Consolidated Funded Debt Maintenance Ratio. The Company will
not at any time permit the ratio of Consolidated Funded Debt (excluding
Non-Recourse ORBIMAGE Debt) to Consolidated Total Capitalization to
exceed:
Ratio of Consolidated
Funded Debt to
During the Period Consolidated Total
Capitalization
Closing Date through .45 to 1.00
December 30, 1995
December 31, 1995 and .40 to 1.00
thereafter
Section5.8.Fixed Charges Coverage Ratio. The Company will at all times
keep and maintain the Fixed Charges Coverage Ratio at not less than:
During the Period Minimum Ratio Level
Closing Date through 1.25 to 1.00
March 31, 1996
April 1, 1996 and 1.50 to 1.00
thereafter
Section5.9.Priority Funded Debt Ratio. The Company will not at any time
permit the ratio of Consolidated Priority Funded Debt to Consolidated
Tangible Net Worth to exceed:
Percentage of
During the Period Consolidated Tangible
Net Worth
Closing Date through
December 30, 1995 .40 to 1.00
December 31, 1995 through
December 30, 1996 .30 to 1.00
December 31, 1996 and
thereafter .20 to 1.00
Section5.10.Limitation on Liens. The Company will not, and will not
permit any Subsidiary to, create or incur, or suffer to be incurred or to
exist, any Lien on its or their property or assets, whether now owned or
hereafter acquired, or upon any income or profits therefrom, or transfer
any property for the purpose of subjecting the same to the payment of
obligations in priority to the payment of its or their general creditors,
or acquire or agree to acquire, or permit any Subsidiary to acquire, any
property or assets upon conditional sales agreements or other title
retention devices, except:
(a) Liens for property taxes and assessments or governmental
charges or levies and Liens securing claims or demands of mechanics
and materialmen, provided that payment thereof is not at the time
required by 5.3;
(b) Liens of or resulting from any judgment or award, the time
for the appeal or petition for rehearing of which shall not have
expired, or in respect of which the Company or a Subsidiary shall at
any time in good faith be prosecuting an appeal or proceeding for a
review, in respect of which a stay of execution pending such appeal
or proceeding for review shall have been secured, and for which the
Company or the relevant Subsidiary shall have set aside on its
books, adequate reserves to the extent required in accordance with
GAAP;
(c) Liens incidental to the conduct of business or the
ownership of properties and assets (including Liens in connection
with worker's compensation, unemployment insurance and other like
laws, warehousemen's and attorneys' liens and statutory landlords'
liens) and Liens to secure the performance of bids, tenders or trade
contracts, or to secure statutory obligations, surety or appeal
bonds or other Liens of like general nature, in any such case
incurred in the ordinary course of business and not in connection
with the borrowing of money, provided in each case, the obligation
secured is not overdue or, if overdue, is being contested in good
faith by appropriate actions or proceedings;
(d) survey exceptions or encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and
other similar purposes, or zoning or other restrictions as to the
use of real properties, which are necessary for the conduct of the
activities of the Company and its Subsidiaries or which customarily
exist on properties of corporations used in a manner consistent with
the current and intended used by the Company of its properties and
which do not in any event materially impair their use in the
operation of the business of the Company and its Subsidiaries;
(e) Liens consisting of stockholder agreements, voting trust
agreements, buy-back agreements and similar arrangements entered
into by the Company or any Subsidiary in connection with its
investment or participation in joint ventures, provided that such
agreements or arrangements are made solely with other participants
in the subject joint venture and the Liens resulting from such
agreements or arrangements shall relate solely to voting of venture
interests, control over venture property and dispositions of venture
participations or interests;
(f) Liens securing Indebtedness of the Company or any
Subsidiary maturing within one year from the date of issuance
thereof, provided that (1) such Liens are released promptly upon the
maturity of such Indebtedness, (2) all Indebtedness secured by such
Liens is outstanding pursuant to a single credit facility, may not
be renewed, extended, refunded or replaced by other short-term
Indebtedness secured by any Lien for a period of 30 days following
the maturity, expiration or termination thereof, and (4) at the time
of any renewal, extension, refunding or replacement of such short-
term Indebtedness, whether with other short-term Indebtedness or
Funded Debt, no Default or Event of Default would exist;
(g) Liens securing Indebtedness of a Subsidiary to the Company
or to another Wholly-owned Subsidiary; and
(h) Liens existing as of the Closing Date and described on
Schedule II hereto, and Liens created, issued or incurred after the
Closing Date given to secure Indebtedness of the Company or any
Subsidiary maintained within the limitations set forth in 5.9
hereof, provided that at the time such Lien is created, issued or
incurred no Default or Event of Default under 6.1(a) through (d),
(f) or (g) (arising, in the case of 6.1(d), by reason of the
failure of the Company to observe or perform any covenant contained
in 5.6 through 5.9) shall have occurred and be continuing.
Section5.11.Restricted Investments. (a) Neither the Company nor any of
its Subsidiaries will declare, make or authorize any Restricted
Investment, unless, immediately after giving effect to the proposed
Restricted Investment, the aggregate amount of Restricted Investments
then held by the Company and its Subsidiaries (valued immediately after
the making of such Restricted Investment as provided in the definition
thereof) would not exceed 50% of an amount equal to the excess of (1)
actual Consolidated Tangible Net Worth at the time the Company or any
Subsidiary proposes to make any such Restricted Investment, over (2)
minimum Consolidated Tangible Net Worth then required by 5.6.
(b) For the purposes of making computations under paragraph (a) of
this 5.11, (1) the amount of any Restricted Investment to be made in
property or assets of the Company or a Subsidiary shall be deemed to be
the greater of the book value or fair market value (as determined in good
faith by the Company's Board of Directors) of such property or assets as
of the date the Investment is committed to and (2) the value of existing
Restricted Investments shall be taken at the original cost thereof,
without allowance for any subsequent write-offs or appreciation or
depreciation therein, but less any amount repaid or recovered in cash on
account of capital or principal.
Any entity which becomes a Subsidiary after the date of this
Agreement shall be deemed to have made, on the 90th day following the
date on which it became a Subsidiary, all Restricted Investments of such
corporation existing on such 90th day after it becomes a Subsidiary.
(c) Neither the Company nor any Subsidiary will make any Restricted
Investment if after giving effect to the proposed Restricted Investment a
Default or an Event of Default would exist.
Section5.12.Restricted Payments. (a) The Company will not except as
hereinafter provided:
(1) Declare or pay any dividends, either in cash or property,
on any shares of its capital stock of any class (except dividends or
other distributions payable solely in shares of common stock of the
Company);
(2) Directly or indirectly, or through any Subsidiary or
through any Affiliate of the Company, purchase, redeem or retire any
shares of its capital stock of any class or any warrants, rights or
options to purchase or acquire any shares of its capital stock
(other than in exchange for or out of the net cash proceeds to the
Company from the substantially concurrent issue or sale of shares of
common stock of the Company or warrants, rights or options to
purchase or acquire any shares of its common stock); or
(3) Make any other payment or distribution, either directly or
indirectly or through any Subsidiary, in respect of its capital
stock;
(such declarations or payments of dividends, purchases, redemptions or
retirements of capital stock and warrants, rights or options and all such
other payments or distributions being herein collectively called
"Restricted Payments"), if after giving effect thereto the aggregate
amount of Restricted Payments made during the period from and after the
Closing Date to and including the date of the making of the Restricted
Payment in question would exceed the sum of (i) during any quarterly
fiscal period in which the Fixed Charges Coverage Ratio is less than 2.25
to 1.00, 25% of Consolidated Net Income (or if such Consolidated Net
Income is a deficit figure, then minus 100% of such deficit) for such
quarterly fiscal period, plus (ii) during any quarterly fiscal period in
which the Fixed Charges Coverage Ratio is equal to or more than 2.25 to
1.00, 50% of Consolidated Net Income (or if such Consolidated Net Income
is a deficit figure, then minus 100% of such deficit) for such quarterly
fiscal period, computed on a cumulative basis for the entire period from
the Closing Date to and including the date of the making of the
Restricted Payment in question.
(b) The Company will not declare any dividend which constitutes a
Restricted Payment payable more than 60 days after the date of
declaration thereof.
(c) For the purposes of this 5.12, the amount of any Restricted
Payment declared, paid or distributed in property shall be deemed to be
the greater of the book value or fair market value (as determined in good
faith by the Board of Directors of the Company) of such property at the
time of the making of the Restricted Payment in question.
(d) The Company will not authorize or make a Restricted Payment if
after giving effect to the proposed Restricted Payment a Default or Event
of Default would exist.
Section5.13.Mergers, Consolidations and Sales of Assets. (a) The Company
will not, and will not permit any Subsidiary to, consolidate with or be a
party to a merger with any other Person, or sell, lease or otherwise
dispose of all or substantially all of its assets (except any sale or
disposition of all or substantially all of the assets, or any stock sale
or disposition, pursuant to 5.13(b) and 5.13(c), respectively);
provided that:
(1) any Subsidiary may merge or consolidate with or into the
Company or any Wholly-owned Subsidiary so long as in any merger or
consolidation involving the Company, the Company shall be the
surviving or continuing corporation;
(2) any Subsidiary may merge or consolidate with or into any
other corporation so long as such Subsidiary shall be the surviving
or continuing corporation and the Company's percentage ownership of
such surviving or continuing corporation shall be equal to or
greater than the Company's percentage ownership of such Subsidiary
immediately prior to such merger or consolidation;
(3) any Wholly-owned Subsidiary which is formed by the Company
or any other Subsidiary for the purpose of acquiring all of the
outstanding capital stock of another corporation may merge with such
corporation;
(4) the Company may consolidate or merge with or into any
other corporation or partnership if (i) the corporation or
partnership which results from such consolidation or merger (the
"surviving entity") is organized under the laws of any state of the
United States, the District of Columbia or under the laws of Canada
or any Province thereof, (ii) the due and punctual payment of the
principal of and premium, if any, and interest on all of the Notes,
according to their tenor, and the due and punctual performance and
observation of all of the covenants in the Notes and this Agreement
to be performed or observed by the Company are expressly assumed in
writing by the surviving entity and the surviving entity shall
furnish to the holders of the Notes an opinion of counsel reasonably
satisfactory to such holders to the effect that the instrument of
assumption has been duly authorized, executed and delivered and
constitutes the legal, valid and binding contract and agreement of
the surviving entity enforceable in accordance with its terms,
except as enforcement of such terms may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting
the enforcement of creditors' rights generally and by general
equitable principles, and (iii) at the time of such consolidation or
merger and immediately after giving effect thereto, no Default or
Event of Default would exist; provided that if the surviving entity
is a partnership or a Canadian corporation, the Company will enter
into such amendments to this Agreement and the Notes as may be
required by the holders of the Notes in order to provide the holders
of the Notes with the practical benefits of this Agreement after
giving effect to such consolidation or merger and otherwise in form
and substance satisfactory to the holders of at least 66-2/3% of the
principal amount of the Notes at the time outstanding;
(5) the Company may sell or otherwise dispose of all or
substantially all of its assets to any Person for consideration
which represents the fair market value of such assets (as determined
in good faith by the Board of Directors of the Company) at the time
of such sale or other disposition if (i) the acquiring Person is a
corporation or partnership organized under the laws of any state of
the United States, the District of Columbia or under the laws of
Canada or any Province thereof, (ii) the due and punctual payment of
the principal of and premium, if any, and interest on all the Notes,
according to their tenor, and the due and punctual performance and
observance of all of the covenants in the Notes and in this
Agreement to be performed or observed by the Company are expressly
assumed in writing by the acquiring Person and the acquiring Person
shall furnish to the holders of the Notes an opinion of counsel
reasonably satisfactory to such holders to the effect that the
instrument of assumption has been duly authorized, executed and
delivered and constitutes the legal, valid and binding contract and
agreement of such acquiring corporation enforceable in accordance
with its terms, except as enforcement of such terms may be limited
by bankruptcy, insolvency, reorganization, moratorium and similar
laws affecting the enforcement of creditors' rights generally and by
general equitable principles, and (iii) at the time of such sale or
disposition and immediately after giving effect thereto, no Default
or Event of Default would exist; provided that if the acquiring
Person is a partnership or a Canadian corporation, the Company will
enter into such amendments to this Agreement and the Notes as may be
required by the holders of the Notes in order provide the holders of
the Notes with the practical benefits of this Agreement after giving
effect to such consolidation or merger and otherwise in form and
substance satisfactory to the holders of at least 66-2/3% of the
principal amount of the Notes at the time outstanding;
(b) The Company will not, and will not permit any Subsidiary to,
sell, lease, transfer, abandon or otherwise dispose of assets (except in
the ordinary course of business for fair market value and except as
provided in 5.11 (including the disposal of Restricted Investments of a
Subsidiary within 90 days after it becomes a Subsidiary), 5.12 or
5.13(a)(5)); provided that the foregoing restrictions do not apply to:
(1) the sale, lease, transfer or other disposition of assets
of the Company or a Subsidiary to the Company or a Wholly-owned
Subsidiary; or
(2) the sale of assets for cash or other property to a Person
or Persons other than an Affiliate if all of the following
conditions are met:
(i) such assets (valued at net book value) do not,
together with all other assets of the Company and its
Subsidiaries previously disposed of during the immediately
preceding 12 calendar months (other than in the ordinary course
of business), exceed 10% of Consolidated Tangible Assets, and
such assets (valued at net book value) do not, together with
all other assets of the Company and its Subsidiaries previously
disposed of during the period from the date of this Agreement
to and including the date of the sale of such assets (other
than in the ordinary course of business), exceed 20% of
Consolidated Tangible Assets, in each such case determined as
of the end of the immediately preceding fiscal year;
(ii) in the opinion of the Company's Board of Directors,
the sale is for fair value and is in the best interests of the
Company; and
(iii) immediately after the consummation of the transaction
and after giving effect thereto, no Default or Event of Default
would exist;
provided, however, that for purposes of the foregoing calculation,
there shall not be included that portion of the proceeds from the
disposition of any assets which were or are (y) invested in
Investments of the character described in clauses (e), (f), (g), (h)
or (i) of the definition of Restricted Investments contained in
8.1, and (z) applied within 12 months of the date of sale of such
assets to either (A) the acquisition of assets (including stock of
an entity which subsequently becomes a Subsidiary) useful and
intended to be used in the operation of the business of the Company
and its Subsidiaries as described in 5.5 (including any Investment
permitted by 5.11) and having a fair market value (as determined in
good faith (1) by a Responsible Officer in the case of any
acquisition of assets having a fair market value of $1,500,000 or
less, and (2) by the Board of Directors of the Company in the case
of any acquisition of assets having a fair market value greater than
$1,500,000) at least equal to the net proceeds of the assets so
disposed of or (B) the prepayment at any applicable prepayment
premium, on a pro rata basis, of the Notes. It is understood and
agreed by the Company that any such proceeds paid and applied to the
prepayment of the Notes as hereinabove provided shall be prepaid as
and to the extent provided in 2.2.
Computations pursuant to this 5.13(b) shall include dispositions
made pursuant to 5.13(c) and computations pursuant to 5.13(c) shall
include dispositions made pursuant to this 5.13(b).
(c) The Company will not, and will not permit any Subsidiary to,
sell, pledge or otherwise dispose of any shares of the stock (including
as "stock" for the purposes of this 5.13(c) any options or warrants to
purchase stock or other Securities exchangeable for or convertible into
stock) of a Subsidiary (said stock, options, warrants and other
Securities herein called "Subsidiary Stock") or any Indebtedness of any
Subsidiary, nor will any Subsidiary issue, sell, pledge or otherwise
dispose of any shares of its own Subsidiary Stock, provided that the
foregoing restrictions do not apply to:
(1) the issue of directors' qualifying shares; or
(2) the issue of Subsidiary Stock to the Company; or
(3) the issue or grant of any right, option or warrant to
purchase capital stock of a Subsidiary or other Securities
exchangeable for or convertible into capital stock of such
Subsidiary to any employee or employees of such Subsidiary, provided
that after giving effect to the exercise of such right, option or
warrant or other convertible Security, such holders of rights,
options or warrants do not hold in the aggregate more than 10% of
the outstanding capital stock of such Subsidiary; or
(4) the sale or other disposition of shares of stock of
ORBCOMM, provided that if, after giving effect to any such sale or
other disposition, the Company owns less than 20% of the Voting
Stock of ORBCOMM, then all proceeds from the sale of such stock
shall be applied in the manner required by the proviso to clause (4)
of this 5.13(c); or
(5) the sale or other disposition at any one time to a Person
(other than directly or indirectly to an Affiliate) of all or any
part of the Investment of the Company and its other Subsidiaries in
any Subsidiary if all of the following conditions are met:
(i) the assets (valued at net book value) of such
Subsidiary to be so disposed of do not, together with all other
assets of the Company and its Subsidiaries previously disposed
of during the immediately preceding 12 calendar months (other
than in the ordinary course of business), exceed 10% of
Consolidated Tangible Assets, and such assets (valued at net
book value) of such Subsidiary do not, together with all other
assets of the Company and its Subsidiaries previously disposed
of during the period from the date of this Agreement to and
including the date of the sale of such assets (other than in
the ordinary course of business), exceed 20% of Consolidated
Tangible Assets, in each such case determined as of the end of
the immediately preceding fiscal year;
(ii) in the case of the sale or other disposition of less
than all of the Investment of the Company and its other
Subsidiaries in such Subsidiary, after giving effect thereto,
the Company and its other Subsidiaries will own and control not
less than 51% of the Voting Stock of the Subsidiary of which
such part has been so sold or otherwise disposed of;
(iii) in the opinion of the Company's Board of Directors,
the sale is for fair value and is in the best interests of the
Company; and
(iv) immediately after the consummation of the transaction
and after giving effect thereto, no Default or Event of Default
would exist;
provided, however, that for purposes of the foregoing calculation,
there shall not be included that portion of the proceeds from the
disposition of any assets which were or are (y) invested in
Investments of the character described in clauses (e), (f), (g), (h)
or (i) of the definition of Restricted Investments contained in
8.1, and (z) applied within 12 months of the date of sale of such
assets to either (A) the acquisition of assets (including stock of
an entity which subsequently becomes a Subsidiary) useful and
intended to be used in the operation of the business of the Company
and its Subsidiaries as described in 5.5 (including any Investment
permitted by 5.11) and having a fair market value (as determined in
good faith (1) by a Responsible Officer in the case of any
acquisition of assets having a fair market value of $1,500,000 or
less, and (2) by the Board of Directors of the Company in the case
of any acquisition of assets having a fair market value greater than
$1,500,000) at least equal to the net proceeds of the assets so
disposed of or (B) the prepayment at any applicable prepayment
premium, on a pro rata basis, of the Notes. It is understood and
agreed by the Company that any such proceeds paid and applied to the
prepayment of the Notes as hereinabove provided shall be prepaid as
and to the extent provided 2.2.
Computations pursuant to this 5.13(c) shall include dispositions
made pursuant to 5.13(b) and computations pursuant to 5.13(b) shall
include dispositions made pursuant to this 5.13(c).
Section5.14.Repurchase of Notes. Except as provided in 2.2 or 2.3,
neither the Company nor any Subsidiary or Affiliate, directly or
indirectly, may repurchase or make any offer to repurchase any Notes.
Section5.15.Transactions with Affiliates. The Company will not, and will
not permit any Subsidiary to, enter into or be a party to any transaction
or arrangement with any Affiliate (including, without limitation, the
purchase from, sale to or exchange of property with, or the rendering of
any service by or for, any Affiliate), except in the ordinary course of
and pursuant to the reasonable requirements of the Company's or such
Subsidiary's business and upon fair and reasonable terms no less
favorable to the Company or such Subsidiary than would obtain in a
comparable arm's-length transaction with a Person other than an
Affiliate.
Section5.16.Termination of Pension Plans. The Company will not and will
not permit any Subsidiary to withdraw from any Multiemployer Plan or
permit any employee benefit plan maintained by it to be terminated if
such withdrawal or termination could reasonably be expected to result in
withdrawal liability (as described in Part 1 of Subtitle E of Title IV of
ERISA) or the imposition of a Lien on any property of the Company or any
Subsidiary pursuant to Section 4068 of ERISA.
Section5.17.Reports and Rights of Inspection. The Company will keep, and
will cause each Subsidiary to keep, proper books of record and account in
which full and correct entries will be made of all dealings or
transactions of, or in relation to, the business and affairs of the
Company or such Subsidiary, in accordance with GAAP consistently applied
(except for changes disclosed in the financial statements furnished to
you pursuant to this 5.17 and concurred in by the independent public
accountants referred to in 5.17(b)), and will furnish to you so long as
you are the holder of any Note and to each other Institutional Holder of
the then outstanding Notes (in duplicate if so specified below or
otherwise requested):
(a) Quarterly Statements. As soon as available and in any
event within 60 days after the end of each quarterly fiscal period
(except the last) of each fiscal year, copies of:
(1) a consolidated balance sheet of the Company and its
Subsidiaries as of the close of such quarterly fiscal period,
setting forth in comparative form the consolidated figures for
the fiscal year then most recently ended,
(2) consolidated statements of earnings and operations of
the Company and its Subsidiaries for such quarterly fiscal
period and for the portion of the fiscal year ending at the end
of such quarterly fiscal period, setting forth in comparative
form the consolidated figures for the corresponding periods of
the preceding fiscal year, and
(3) a consolidated statement of cash flows of the Company
and its Subsidiaries for the portion of the fiscal year ending
at the end of such quarterly fiscal period, setting forth in
comparative form the consolidated figures for the corresponding
period of the preceding fiscal year,
all in reasonable detail and certified as complete and correct
(subject to year-end adjustments) by an authorized financial officer
of the Company;
(b) Annual Statements. As soon as available and in any event
within 90 days after the close of each fiscal year of the Company,
copies of:
(1) a consolidated balance sheet of the Company and its
Subsidiaries as of the close of such fiscal year, and
(2) consolidated statements of earnings, stockholders'
equity and cash flows of the Company and its Subsidiaries for
such fiscal year,
in each case setting forth in comparative form the consolidated
figures for the preceding fiscal year, all in reasonable detail and
accompanied by a report thereon of a firm of independent public
accountants of recognized national standing selected by the Company
to the effect that the consolidated financial statements present
fairly, in all material respects, the consolidated financial
position of the Company and its Subsidiaries as of the end of the
fiscal year being reported on and the consolidated results of their
operations and cash flows for said year in conformity with GAAP and
that the examination of such accountants in connection with such
financial statements has been conducted in accordance with generally
accepted auditing standards and included such tests of the
accounting records and such other auditing procedures as said
accountants believe provide a reasonable basis for their report;
(c) Audit Reports. Promptly upon receipt thereof, one copy of
each interim or special audit made by independent accountants of the
books of the Company or any Subsidiary and any management letter
received from such accountants;
(d) SEC and Other Reports. Promptly upon their becoming
available, one copy of each financial statement, report, notice or
proxy statement sent by the Company to its creditors and
stockholders generally and of each regular or periodic report, and
any definitive registration statement or prospectus filed by the
Company or any Subsidiary with any securities exchange or the
Securities and Exchange Commission or any successor agency, and
copies of any orders in any proceedings to which the Company or any
of its Subsidiaries is a party, issued by any governmental agency,
Federal or state, having jurisdiction over the Company or any of its
Subsidiaries;
(e) ERISA Reports. Promptly upon the occurrence thereof,
written notice of (1) a Reportable Event with respect to any Plan
(in which event, such notice shall be given when the Reportable
Event is required to be reported to the PBGC); (2) the institution
of any steps by the Company, any ERISA Affiliate, the PBGC or any
other Person to terminate any Plan pursuant to Sections 4041(c) or
4042 of ERISA; (3) the institution of any steps by the Company or
any ERISA Affiliate to withdraw from any Multiemployer Plan; (4) a
non-exempt "prohibited transaction" within the meaning of Section
406 of ERISA in connection with any Plan (in which event, such
notice shall be given when either Form 5330 or Form 5500 is filed
with the Internal Revenue Service or the Department of Labor,
respectively, with respect to such prohibited transaction); (5) any
material increase in the contingent liability of the Company or any
Subsidiary with respect to any post-retirement welfare liability; or
(6) the taking of any action by, or the threatening of the taking of
any action by, the Internal Revenue Service, the Department of Labor
or the PBGC with respect to any of the foregoing;
(f) Officer's Certificates. Within the periods provided in
paragraphs (a) and (b) above, a certificate of the chief financial
officer of the Company stating that such officer has reviewed the
provisions of this Agreement and setting forth: (1) the information
and, if applicable, computations (in sufficient detail) required in
order to establish whether the Company was in compliance with the
requirements of 5.6 through 5.13 at the end of the period covered
by the financial statements then being furnished, and (2) whether
there existed as of the date of such financial statements and
whether, to the best of such officer's knowledge, there exists on
the date of the certificate or existed at any time during the period
covered by such financial statements any Default or Event of Default
and, if any such condition or event exists on the date of the
certificate, specifying the nature and period of existence thereof
and the action the Company is taking and proposes to take with
respect thereto;
(g) Accountant's Certificates. Within the period provided in
paragraph (b) above, a certificate of the accountants who render an
opinion with respect to such financial statements, stating that they
have reviewed this Agreement and stating further whether, in making
their audit, such accountants have become aware of any Default or
Event of Default under any of the terms or provisions of this
Agreement insofar as any such terms or provisions pertain to or
involve accounting matters or determinations, and if any such
condition or event then exists, specifying the nature and period of
existence thereof;
(h) Requested Information. With reasonable promptness, such
other data and information (other than confidential data or
information of a technical or scientific nature which does not
relate directly to the business, financial condition, assets or
properties of the Company or any Subsidiary or to the ability of the
Company to perform its obligations hereunder or under the Notes) as
you or any such Institutional Holder may reasonably request.
Without limiting the foregoing, the Company will permit you, so long as
you are the holder of any Note, and each Institutional Holder of the then
outstanding Notes (or such Persons as either you or such Institutional
Holder may designate), to visit and inspect, under the Company's guidance
and subject to any restrictions relating to access to proprietary
information or as may otherwise be imposed by any of the Company's
contracts with third-parties, any of the properties of the Company or any
Subsidiary, to examine all of their books of account and records, to make
copies and extracts therefrom and to discuss their respective affairs,
finances and accounts with their respective officers, employees, and
independent public accountants (and by this provision the Company
authorizes said accountants to discuss with you the finances and affairs
of the Company and its Subsidiaries), all upon reasonable notice and at
such reasonable times and as often as may be reasonably requested. Any
visitation or inspection shall be at the sole expense of you or such
Institutional Holder, unless a Default or Event of Default shall have
occurred and be continuing or the holder of any Note or of any other
evidence of Indebtedness of the Company or any Subsidiary gives any
written notice or takes any other action with respect to a claimed
default, in which case, the Company shall reimburse you or such
Institutional Holder for the reasonable out-of-pocket expenses of any
such visitation or inspection, provided, however, that any visitation or
inspection made by you or any other Institutional Holder of the Notes in
connection with any claimed Default or Event of Default hereunder which
the Company demonstrates does not, in fact, exist, shall be at the sole
expense of you or such Institutional Holder.
The Purchaser and each other holder of the Notes agrees that it will
keep confidential in accordance with its internal policies and procedures
in effect from time to time any written information with respect to the
Company or its Subsidiaries which is furnished pursuant to this Agreement
and which is designated by the Company or its Subsidiaries to such holder
in writing as confidential, provided that you may disclose any such
information (a) as has become generally available to the public (other
than as a consequence of such holder's actions) or to such holder on a
non-confidential basis from a source other than the Company or its
Subsidiaries or as was known to such holder on a non-confidential basis
prior to its disclosure by the Company or its Subsidiaries, (b) as may be
required or appropriate in any report, statement or testimony submitted
to any municipal, state or Federal regulatory body having or claiming to
have jurisdiction over you or to the National Association of Insurance
Commissioners or similar organizations or their successors, (c) as may be
required or appropriate in response to any summons or subpoena or in
connection with any litigation, (d) to the extent that such holder
reasonably believes it appropriate in order to protect its investment in
the Notes or in order to comply with any law, order, regulation or ruling
applicable to you, (e) to your officers, trustees, directors, employees,
auditors or counsel or to rating agencies or another holder of the Notes,
(f) to Persons which are parties to similar confidentiality agreements,
or (g) to any prospective transferee which is an Institutional Holder in
connection with any contemplated transfer of any of the Notes by you.
Section6.Events of Default and Remedies Therefor.
Section6.1.Events of Default. Any one or more of the following shall
constitute an "Event of Default" as such term is used herein:
(a) Default shall occur in the payment of interest on any Note
when the same shall have become due and such default shall continue
for more than five Business Days; or
(b) Default shall occur in the making of any required
prepayment on any of the Notes as provided in 2.1; or
(c) Default shall occur in the making of any other payment of
the principal of any Note or premium, if any, thereon at the
expressed or any accelerated maturity date or at any date fixed for
prepayment; or
(d) Default shall occur in the observance or performance of
any covenant or agreement contained in 5.6 through 5.9 or 5.11
through 5.13; or
(e) Default shall occur in the observance or performance of
any other provision of this Agreement which is not remedied within
30 days after the earlier of (1) the day on which a Responsible
Officer of the Company first obtains knowledge of such default, or
(2) the day on which written notice thereof is given to the Company
by the holder of any Note; or
(f) Default shall be made in the payment when due (whether by
lapse of time, by declaration, by call for redemption or otherwise)
of the principal of or interest on any Indebtedness for borrowed
money (other than the Notes) of the Company or any Subsidiary
aggregating in excess of $5,000,000 in principal amount outstanding
and such default shall continue beyond the period of grace, if any,
allowed with respect thereto; or
(g) Default or the happening of any event shall occur under
any indenture, agreement or other instrument under which any
Indebtedness for borrowed money (other than the Notes) of the
Company or any Subsidiary aggregating in excess of $5,000,000 in
principal amount outstanding and such default or event is not waived
or cured within applicable cure periods and shall continue for a
period of time sufficient to permit the acceleration of the maturity
of any Indebtedness for borrowed money of the Company or any
Subsidiary outstanding thereunder; or
(h) Any representation or warranty made by the Company herein,
or made by the Company in any statement or certificate furnished by
the Company in connection with the consummation of the issuance and
delivery of the Notes or furnished by the Company pursuant hereto,
is untrue in any material respect as of the date of the issuance or
making thereof; or
(i) Final judgment or judgments for the payment of money
aggregating in excess of $1,000,000 is or are outstanding against
the Company or any Subsidiary or against any property or assets of
either and such judgments have remained unpaid, unvacated, unbonded
or unstayed by appeal or otherwise for a period of 60 days from the
date of its entry; or
(j) A custodian, liquidator, trustee or receiver is appointed
for the Company or any Subsidiary or for the major part of the
property of either and is not discharged within 90 days after such
appointment; or
(k) The Company or any Subsidiary becomes insolvent or
bankrupt, is generally not paying its debts as they become due or
makes an assignment for the benefit of creditors, or the Company or
any Subsidiary applies for or consents to the appointment of a
custodian, liquidator, trustee or receiver for the Company or such
Subsidiary or for the major part of the property of either; or
(l) Bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any bankruptcy or
similar law or laws for the relief of debtors, are instituted by or
against the Company or any Subsidiary and, if instituted against the
Company or any Subsidiary, are consented to or are not dismissed
within 90 days after such institution.
Section6.2.Notice to Holders. When any Event of Default described in the
foregoing 6.1 has occurred, or if the holder of any Note or of any other
evidence of Indebtedness for borrowed money of the Company gives any
notice or takes any other action with respect to a claimed default, the
Company agrees to give notice within three Business Days of such event to
all holders of the Notes then outstanding.
Section6.3.Acceleration of Maturities. When any Event of Default
described in paragraph (a), (b) or (c) of 6.1 has happened and is
continuing, any holder of any Note may, by notice in writing sent to the
Company in the manner provided in 9.6, declare the entire principal and
all interest accrued on such Note to be, and such Note shall thereupon
become forthwith due and payable, without any presentment, demand,
protest or other notice of any kind, all of which are hereby expressly
waived. When any Event of Default described in paragraphs (a) through
(i), inclusive, of said 6.1 has happened and is continuing, the holder
or holders of 66-2/3% or more of the principal amount of the Notes at the
time outstanding may, by notice in writing to the Company in the manner
provided in 9.6, declare the entire principal and all interest accrued
on all Notes to be, and all Notes shall thereupon become, forthwith due
and payable, without any presentment, demand, protest or other notice of
any kind, all of which are hereby expressly waived. When any Event of
Default described in paragraph (j), (k) or (l) of 6.1 has occurred, then
all outstanding Notes shall immediately become due and payable without
presentment, demand or notice of any kind. Upon the Notes becoming due
and payable as a result of any Event of Default as aforesaid, the Company
will forthwith pay to the holders of the Notes so due and payable the
entire principal and interest accrued on such Notes and, to the extent
not prohibited by applicable law, an amount as liquidated damages for the
loss of the bargain evidenced hereby (and not as a penalty) equal to the
Make-Whole Amount, determined as of the date on which the Notes shall so
become due and payable. No course of dealing on the part of the holder
or holders of any Notes nor any delay or failure on the part of any
holder of Notes to exercise any right shall operate as a waiver of such
right or otherwise prejudice such holder's rights, powers and remedies.
The Company further agrees, to the extent permitted by law, to pay to the
holder or holders of the Notes all costs and expenses incurred by them in
the collection of any Notes upon any default hereunder or thereon,
including reasonable compensation to such holder's or holders' attorneys
for all services rendered in connection therewith.
Section6.4.Rescission of Acceleration. The provisions of 6.3 are
subject to the condition that if the principal of and accrued interest on
all or any outstanding Notes have been declared immediately due and
payable by reason of the occurrence of any Event of Default described in
paragraphs (a) through (i), inclusive, of 6.1, the holders of 66-2/3% in
aggregate principal amount of the Notes then outstanding may, by written
instrument filed with the Company, rescind and annul such declaration and
the consequences thereof, provided that at the time such declaration is
annulled and rescinded:
(a) no judgment or decree has been entered for the payment of
any monies due pursuant to the Notes or this Agreement;
(b) all arrears of interest upon all the Notes and all other
sums payable under the Notes and under this Agreement (except any
principal, interest or premium on the Notes which has become due and
payable solely by reason of such declaration under 6.3) shall have
been duly paid; and
(c) each and every other Default and Event of Default shall
have been made good, cured or waived pursuant to 7.1;
and provided further, that no such rescission and annulment shall extend
to or affect any subsequent Default or Event of Default or impair any
right consequent thereto.
Section7.Amendments, Waivers and Consents.
Section7.1.Consent Required. Any term, covenant, agreement or condition
of this Agreement may, with the consent of the Company, be amended or
compliance therewith may be waived (either generally or in a particular
instance and either retroactively or prospectively), if the Company shall
have obtained the consent in writing of the holders of at least 66-2/3%
in aggregate principal amount of outstanding Notes; provided that without
the written consent of the holders of all of the Notes then outstanding,
no such amendment or waiver shall be effective (a) which will change the
time of payment (including any prepayment required by 2.1) of the
principal of or the interest on any Note or change the principal amount
thereof or change the rate of interest thereon, or (b) which will change
any of the provisions with respect to optional prepayments, or (c) which
will change the percentage of holders of the Notes required to consent to
any such amendment or waiver of any of the provisions of this 7 or 6.
Section7.2.Solicitation of Holders. So long as there are any Notes
outstanding, the Company will not solicit, request or negotiate for or
with respect to any proposed waiver or amendment of any of the provisions
of this Agreement or the Notes unless each holder of Notes (irrespective
of the amount of Notes then owned by it) shall be informed thereof by the
Company and shall be afforded the opportunity of considering the same and
shall be supplied by the Company with sufficient information to enable it
to make an informed decision with respect thereto. The Company will not,
directly or indirectly, pay or cause to be paid any remuneration, whether
by way of supplemental or additional interest, fee or otherwise, to any
holder of Notes as consideration for or as an inducement to entering into
by any holder of Notes of any waiver or amendment of any of the terms and
provisions of this Agreement or the Notes unless such remuneration is
concurrently offered, on the same terms, ratably to the holders of all
Notes then outstanding. Promptly and in any event within 30 days of the
date of execution and delivery of any such waiver or amendment, the
Company shall provide a true, correct and complete copy thereof to each
of the holders of the Notes.
Section7.3.Effect of Amendment or Waiver. Any such amendment or waiver
shall apply equally to all of the holders of the Notes and shall be
binding upon them, upon each future holder of any Note and upon the
Company, whether or not such Note shall have been marked to indicate such
amendment or waiver. No such amendment or waiver shall extend to or
affect any obligation not expressly amended or waived or impair any right
consequent thereon.
Section8.Interpretation of Agreement; Definitions.
Section8.1.Definitions. Unless the context otherwise requires, the terms
hereinafter set forth when used herein shall have the following meanings
and the following definitions shall be equally applicable to both the
singular and plural forms of any of the terms herein defined:
"Acquiring Person" shall mean a "person" or "group of persons"
within the meaning of Section 13(d) and 14(d) of the Securities and
Exchange Act of 1934, as amended.
"Adjusted Consolidated Operating Earnings" for any period shall mean
the sum of (a) Consolidated Operating Earnings, plus (b) Rentals (other
than Rentals on Capitalized Leases) payable during such period by the
Company and its Subsidiaries.
"Affiliate" shall mean any Person (other than a Wholly-owned
Subsidiary and any holder of the Notes) (a) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is
under common control with, the Company, (b) which beneficially owns or
holds 10% or more of any class of the Voting Stock of the Company or (c)
10% or more of the Voting Stock (or in the case of a Person which is not
a corporation, 10% or more of the equity interest) of which is
beneficially owned or held by the Company or a Subsidiary. The term
"control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of Voting Stock, by contract or otherwise.
"American Space Lines" shall mean the joint venture between the
Company and Rockwell International Corporation to develop, construct,
operate and market the X-34 small reusable launch vehicles, an Affiliate
of the Company.
"Bank Credit Agreement" shall mean the Amended and Restated Credit
and Reimbursement Agreement dated as of September 27, 1994 among the
Banks named therein, Morgan Guaranty Trust Company of New York, as
Administrative Agent, and J.P. Morgan Delaware, as Collateral Agent,
including any extensions, renewals or replacements thereof.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which banks in Dulles, Virginia or New York, New York are
required by law to close or are customarily closed.
"Capitalized Lease" shall mean any lease the obligation for Rentals
with respect to which is required to be capitalized on a consolidated
balance sheet of the lessee and its subsidiaries in accordance with GAAP.
"Capitalized Rentals" of any Person shall mean as of the date of any
determination thereof the amount at which the aggregate Rentals due and
to become due under all Capitalized Leases under which such Person is a
lessee would be reflected as a liability on a consolidated balance sheet
of such Person.
"Change of Control" shall mean the earliest to occur of: (1) the
date the Company enters into a binding written agreement with an
Acquiring Person to permit such Acquiring Person to acquire, directly or
indirectly, beneficial ownership of 30% or more of the total Voting Stock
of the Company then outstanding, or (2) the date a tender offer or
exchange offer results in an Acquiring Person, directly or indirectly,
beneficially owning 30% or more of the total Voting Stock of the Company
then outstanding, or (3) the date an Acquiring Person becomes, directly
or indirectly, the beneficial owner of 30% or more of the total Voting
Stock of the Company then outstanding, or (4) the date of a merger
between the Company and any other Person, a consolidation of the Company
with any other Person or an acquisition of any other Person by the
Company, if immediately after such event, the Acquiring Person shall hold
30% or more of the total Voting Stock of the Company outstanding
immediately after giving effect to such merger, consolidation or
acquisition, or, if the Company shall not be the surviving entity, of the
surviving, resulting or continuing corporation, or (5) during any period
of 12 consecutive calendar months, the date on which individuals who
served as Directors on the Company's Board of Directors on the first day
of such period shall cease to constitute a majority of the Board of
Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the regulations from time to time promulgated thereunder.
"Company" shall mean Orbital Sciences Corporation, a Delaware
corporation, and any Person who succeeds to all, or substantially all, of
the assets and business of Orbital Sciences Corporation.
"Consolidated Fixed Charges" for any period shall mean on a
consolidated basis the sum of (a) all Rentals (other than Rentals on
Capitalized Leases) payable during such period by the Company and its
Subsidiaries, and (b) all Interest Expense (including the interest
component of Rentals on Capitalized Leases) of the Company and its
Subsidiaries. For purposes of any determination of Consolidated Fixed
Charges pursuant to 5.8, the Company shall include "consolidated fixed
charges" relating to Funded Debt (determined in a manner consistent with
the definition of "Consolidated Fixed Charges" contained in this
Agreement), on a pro forma basis, which were incurred in the immediately
preceding four fiscal quarter period by any business entity to be or
actually acquired by the Company or any of its Subsidiaries, and
concurrently with such determination, the Company shall have furnished to
the holders of the Notes audited financial statements (if the Company is
required pursuant to Regulation S-X to prepare audited financial
statements in connection with such acquisition or otherwise to the extent
available) and other financial information with respect to such business
entity demonstrating to the reasonable satisfaction of such holders the
basis for the inclusion and computations of such "consolidated fixed
charges".
"Consolidated Funded Debt" shall mean all Funded Debt of the Company
and its Subsidiaries, determined on a consolidated basis eliminating
intercompany items.
"Consolidated Net Income" for any period shall mean the gross
revenues of the Company and its Subsidiaries for such period less all
expenses and other proper charges (including taxes on income), determined
on a consolidated basis after eliminating earnings or losses attributable
to outstanding Minority Interests, but excluding in any event:
(a) any gains or losses on the sale or other disposition of
Investments or fixed or capital assets, and any taxes on such
excluded gains and any tax deductions or credits on account of any
such excluded losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Subsidiary accrued prior to
the date it became a Subsidiary, except for Subsidiaries acquired
using the pooling of interests accounting method;
(d) net earnings and losses of any company (other than a
Subsidiary), substantially all the assets of which have been
acquired in any manner by the Company or any Subsidiary, realized by
such company prior to the date of such acquisition, except for
Subsidiaries acquired using the pooling of interests accounting
method;
(e) net earnings and losses of any company (other than a
Subsidiary) with which the Company or a Subsidiary shall have
consolidated or amalgamated or which shall have merged into or with
the Company or a Subsidiary prior to the date of such consolidation,
amalgamation or merger, except for Subsidiaries acquired using the
pooling of interests accounting method;
(f) the Company's proportionate share of earnings or losses of
any business entity (other than a Subsidiary or ORBCOMM Development
or American Space Lines) in which the Company or any Subsidiary has
an ownership interest unless such net earnings shall have actually
been received by the Company or such Subsidiary in the form of cash
distributions;
(g) any portion of the net earnings of any Subsidiary which
for any reason is unavailable for payment of dividends to the
Company or any other Subsidiary, provided that for a period of not
more than 60 days following the Closing Date, the Company shall be
permitted to include the net earnings of Magellan Corporation which
are otherwise unavailable for payment of dividends to the Company by
reason of restrictions contained in the Loan and Security Agreement
dated as of December 2, 1990, as amended, between Silicon Valley
Bank and Magellan Corporation;
(h) earnings resulting from any reappraisal, revaluation or
write-up of assets;
(i) any deferred or other credit representing any excess of
the equity in any Subsidiary at the date of acquisition thereof over
the amount invested in such Subsidiary;
(j) any gain arising from the acquisition of any Securities of
the Company or any Subsidiary;
(k) any creation or reversal of any contingency reserve,
except reserves established in connection with the application of
long term contract accounting in accordance with GAAP; and
(l) any other extraordinary gain, as determined in accordance
with GAAP.
"Consolidated Operating Earnings" for any period shall mean the sum
of (a) Consolidated Net Income during such period (excluding (1) earnings
(losses) of ORBIMAGE generated by assets which have been sold or
otherwise encumbered in connection with the issuance of Non-Recourse
ORBIMAGE Debt and (2) "equity in earnings (losses) of affiliates"
attributable to ORBCOMM Development and American Space Lines as set forth
on the Company's consolidated financial statements for such period), plus
(b) (to the extent deducted in determining Consolidated Net Income) (1)
all provisions for any Federal, state or other income taxes made by the
Company and its Subsidiaries during such period, (2) Interest Expense
(excluding the capitalized portion thereof) of the Company and its
Subsidiaries during such period, and (3) all provisions for amortization
of goodwill and debt issuance costs made by the Company and its
Subsidiaries during such period and (4) in the event the Convertible
Subordinated Debentures are prepaid prior to their expressed maturity
(other than upon the occurrence of a default thereunder), all one-time
costs and prepaid interest expenses incurred in connection with such
prepayment. For purposes of any determination of Consolidated Operating
Earnings pursuant to 5.8 and 5.12, the Company may include
"consolidated operating earnings" (determined in a manner consistent with
the definition of "Consolidated Operating Earnings" contained in this
Agreement), on a pro forma basis, which were earned in the immediately
preceding four fiscal quarter period by any business entity to be or
actually acquired by the Company or any of its Subsidiaries, provided
that concurrently with such determination, the Company shall have
furnished to the holders of the Notes audited financial statements (if
the Company is required pursuant to Regulation S-X to prepare audited
financial statements in connection with such acquisition) and other
financial information with respect to such business entity demonstrating
to the reasonable satisfaction of such holders the basis for the
inclusion and computations of such "consolidated operating earnings".
"Consolidated Priority Funded Debt" shall mean the sum of (a)
Consolidated Secured Funded Debt plus (b) all Funded Debt of the
Company's Subsidiaries, plus (c) all preferred stock of Subsidiaries held
by Persons other than the Company or any Wholly-owned Subsidiary.
"Consolidated Secured Funded Debt" shall mean all Funded Debt of the
Company and its Subsidiaries which is secured by a mortgage, trust deed,
deed of trust, deed to secure debt, security agreement, pledge,
conditional sale or other title retention agreement or other like
agreement granting or conveying a Lien upon property or assets of the
Company or any of its Subsidiaries (other than Non-Recourse ORBIMAGE
Debt).
"Consolidated Tangible Assets" shall mean as of the date of any
determination thereof the total amount of all assets of the Company and
its Subsidiaries (less depreciation, depletion and other properly
deductible valuation reserves) after deducting (a) all assets of ORBIMAGE
and any subsidiary of ORBIMAGE securing Non-Recourse ORBIMAGE Debt, and
(b) goodwill, patents, trade names, trade marks, copyrights, franchises,
experimental expense, organization expense, unamortized debt discount and
expense, deferred assets other than prepaid insurance and prepaid taxes,
the excess of cost of shares acquired over book value of related assets
and such other assets as are properly classified as "intangible assets"
in accordance with GAAP.
"Consolidated Tangible Net Worth" shall mean as of the date of any
determination thereof the arithmetic sum of:
(a) the amount of the capital stock accounts (net of treasury
stock, at cost), plus (or minus in the case of a deficit) the
surplus and retained earnings of the Company and its Subsidiaries,
in each case, on a consolidated basis,
Minus
(b) the net book value, after deducting any reserves
applicable thereto, of all items of the following character which
are included in the assets of the Company and its Subsidiaries, to
wit:
(1) the incremental increase in an asset resulting from
any reappraisal, revaluation or write-up of assets (other than
write-ups of assets of a going-concern business made within
twelve months after the acquisition of such business); and
(2) (i) unamortized debt discount and expense and (ii)
goodwill, patents, patent applications, permits, trademarks,
trade names, copyrights, licenses, franchises, experimental
expense, organizational expense, research and development
expense and such other assets as are properly classified as
"intangible assets" in accordance with GAAP;
all determined in accordance with GAAP. For purposes of any computation
of actual Consolidated Tangible Net Worth pursuant to clause (1) of
5.11(a), there shall in any event be excluded an amount (not to exceed
$75,000,000) equal to the sum of the aggregate net proceeds derived by
the Company from the sale of any of its common stock to any Person other
than an Affiliate or a Wholly-Owned Subsidiary plus the increase in the
book value of the capital stock accounts of the Company arising from the
actual conversion of any of the Convertible Subordinated Debentures
pursuant to the Convertible Subordinated Debenture Indenture.
"Consolidated Total Capitalization" shall mean, as of the date of
any determination thereof, the sum of (a) Consolidated Funded Debt
(excluding Non-Recourse ORBIMAGE Debt) plus (b) the amount of the capital
stock accounts (net of treasury stock, at cost) plus (or minus in the
case of a deficit) the surplus and retained earnings of the Company and
its Subsidiaries as determined in accordance with GAAP, plus (c) the
aggregate unpaid principal amount of the Convertible Subordinated
Debentures.
"Convertible Subordinated Debentures" shall mean the Company's
6-3/4% Subordinated Convertible Debentures due March, 2003 issued and
outstanding pursuant to the Convertible Subordinated Debenture Indenture.
"Convertible Subordinated Debenture Indenture" shall mean that
certain Indenture dated as of February 25, 1993 between the Company and
Security Trust Company, N.A.
"Default" shall mean any event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or both,
constitute an Event of Default.
"Environmental Law" shall mean any international, federal, state or
local statute, law, regulation, order, consent decree, judgment, permit,
license, code, covenant, deed restriction, common law, treaty,
convention, ordinance or other requirement relating to public health,
safety or the environment, including, without limitation, those relating
to releases, discharges or emissions to air, water, land or groundwater,
to the withdrawal or use of groundwater, to the use and handling of
polychlorinated biphenyls or asbestos, to the disposal, treatment,
storage or management of hazardous or solid waste, or Hazardous
Substances or crude oil, or any fraction thereof, or to exposure to toxic
or hazardous materials, to the handling, transportation, discharge or
release of gaseous or liquid Hazardous Substances and any regulation,
order, notice or demand issued pursuant to such law, statute or
ordinance, in each case applicable to the property of the Company and its
Subsidiaries or the operation, construction or modification of any
thereof, including without limitation, the following: the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986, the
Solid Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act of 1976 and the Hazardous and Solid Waste Amendments of
1984, the Hazardous Materials Transportation Act, as amended, the Federal
Water Pollution Control Act, as amended by the Clean Water Act of 1976,
the Safe Drinking Water Control Act, the Clean Air Act of 1966, as
amended, the Toxic Substances Control Act of 1976, the Emergency Planning
and Community Right-to-Know Act of 1986, the National Environmental
Policy Act of 1975, the Oil Pollution Act of 1990 and any similar or
implementing state law, and any state statute and any further amendments
to these laws providing for financial responsibility for cleanup or other
actions with respect to the release or threatened release of Hazardous
Substances or crude oil, or any fraction thereof, and all rules,
regulations, guidance documents and publications promulgated thereunder.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, together
with the regulations thereunder, in each case as in effect from time to
time. References to sections of ERISA shall be construed to also refer
to any successor sections.
"ERISA Affiliate" shall mean any corporation, trade or business that
is, along with the Company, a member of a controlled group of
corporations or a controlled group of trades or businesses, as described
in section 414(b) and 414(c), respectively, of the Code or Section 4001
of ERISA.
"Event of Default" shall have the meaning set forth in 6.1.
"Fairchild" shall mean Fairchild Space and Defense Corporation, a
Delaware corporation, and Subsidiary of the Company.
"Fixed Charges Coverage Ratio" shall mean the ratio of Adjusted
Consolidated Operating Earnings for the immediately preceding four fiscal
quarter period to Consolidated Fixed Charges for such four fiscal quarter
period.
"Funded Debt" of any Person shall mean (a) all Indebtedness of such
Person for borrowed money or which has been incurred in connection with
the acquisition of assets in each case having a final maturity of one or
more than one year from the date of origin thereof (or which is renewable
or extendible at the option of the obligor for a period or periods more
than one year from the date of origin), including all payments in respect
thereof that are required to be made within one year from the date of any
determination of Funded Debt, whether or not the obligation to make such
payments shall constitute a current liability of the obligor under GAAP,
(b) all Capitalized Rentals of such Person, and (c) all Guaranties by
such Person of Funded Debt of others. "Funded Debt" shall in any event
include Indebtedness outstanding under and pursuant to the Bank Credit
Agreement.
"GAAP" shall mean generally accepted accounting principles at the
time.
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments
for deposit or collection) of such Person guaranteeing, or in effect
guaranteeing, any Indebtedness, dividend or other obligation of any other
Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, all obligations incurred
through an agreement, contingent or otherwise, by such Person: (a) to
purchase such Indebtedness or obligation or any property or assets
constituting security therefor, (b) to advance or supply funds (1) for
the purchase or payment of such Indebtedness or obligation, or (2) to
maintain working capital or any balance sheet or income statement
condition or otherwise to advance or make available funds for the
purchase or payment of such Indebtedness or obligation, (c) to lease
property or to purchase Securities or other property or services
primarily for the purpose of assuring the owner of such Indebtedness or
obligation of the ability of the primary obligor to make payment of the
Indebtedness or obligation, or (d) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purposes of all computations made under this Agreement,
a Guaranty in respect of any Indebtedness for borrowed money shall be
deemed to be Indebtedness equal to the outstanding principal amount of
such Indebtedness for borrowed money which has been guaranteed, and a
Guaranty in respect of any other obligation or liability or any dividend
shall be deemed to be Indebtedness equal to the maximum aggregate amount
of such obligation, liability or dividend.
"Hazardous Substance" shall mean any hazardous or toxic material,
substance or waste, pollutant or contaminant which is regulated under any
statute, law, ordinance, rule or regulation of any local, state, regional
or federal authority having jurisdiction over the property of the Company
and its Subsidiaries or its use, including but not limited to any
material, substance or waste which is: (a) defined as a hazardous
substance under Section 311 of the Federal Water Pollution Control Act,
as amended; (b) regulated as a hazardous waste under Section 1004 or
Section 3001 of the Federal Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act, as amended; (c) defined as a
hazardous substance under Section 101 of the Comprehensive Environmental
Response, Compensation and Liability Act, as amended; or (d) defined or
regulated as a hazardous substance or hazardous waste under any rules or
regulations promulgated under any of the foregoing statutes.
"Indebtedness" of any Person shall mean and include all obligations
of such Person which in accordance with GAAP shall be classified upon a
balance sheet of such Person as liabilities of such Person, and in any
event shall include all (a) obligations of such Person for borrowed money
or which have been incurred in connection with the acquisition of
property or assets, (b) obligations secured by any Lien upon property or
assets owned by such Person, even though such Person has not assumed or
become liable for the payment of such obligations, (c) obligations
created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person,
notwithstanding the fact that the rights and remedies of the seller,
lender or lessor under such agreement in the event of default are limited
to repossession or sale of property, (d) Capitalized Rentals and (e)
Guaranties of obligations of others of the character referred to in this
definition.
"Institutional Holder" shall mean any of the following Persons: (a)
any bank, savings and loan association, savings institution, trust
company or national banking association, acting for its own account or in
a fiduciary capacity, (b) any charitable foundation, (c) any insurance
company, (d) any fraternal benefit society, (e) any pension, retirement
or profit-sharing trust or fund within the meaning of Title I of ERISA or
for which any bank, trust company, national banking association or
investment adviser registered under the Investment Advisers Act of 1940,
as amended, is acting as trustee or agent, (f) any investment company or
business development company, as defined in the Investment Company Act of
1940, as amended, (g) any investment adviser registered under the
Investment Advisers Act of 1940, as amended, (h) any government, any
public employees' pension or retirement system, or any other government
agency supervising the investment of public funds, (i) any other entity
all of the equity owners of which are Institutional Holders or (j) any
other Person which may be within the definition of "qualified
institutional buyer" as such term is used in Rule 144A, as from time to
time in effect, promulgated under the Securities Act of 1933, as amended.
"Interest Expense" for any period shall mean all interest (whether
or not capitalized) and all amortization of debt discount and expense on
any particular Indebtedness (including, without limitation,
payment-in-kind, zero coupon and other like Securities) for which such
calculations are being made; provided that, for purposes of any
calculation of Interest Expense of the Company pursuant to 5.8, in the
event the Convertible Subordinated Debentures are prepaid prior to their
expressed maturity (other than upon the occurrence of a default
thereunder), all one-time costs and prepaid interest expenses incurred by
the Company in connection with any such prepayment shall be excluded from
such calculation for the period in which such costs and expenses are
paid. Computations of Interest Expense on a pro forma basis for
Indebtedness having a variable interest rate shall be calculated at the
rate in effect on the date of any determination.
"Investments" shall mean all investments, in cash or by delivery of
property, made directly or indirectly in any Person, whether by
acquisition of shares of capital stock, Indebtedness or other obligations
or Securities or by loan, advance, capital contribution or otherwise;
provided that "Investments" shall not in any event mean or include
routine investments in property or assets to be used or consumed in the
ordinary course of business.
"Lien" shall mean any interest in property securing an obligation
owed to, or a claim by, a Person other than the owner of the property,
whether such interest is based on the common law, statute or contract,
and including but not limited to the security interest lien arising from
a mortgage, encumbrance, pledge, conditional sale or trust receipt or a
lease, consignment or bailment for security purposes. The term "Lien"
shall include reservations, exceptions, encroachments, easements, rights-
of-way, covenants, conditions, restrictions, leases and other title
exceptions and encumbrances (including, with respect to stock,
stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements) affecting property. For the purposes of this
Agreement, the Company or a Subsidiary shall be deemed to be the owner of
any property which it has acquired or holds subject to a conditional sale
agreement, Capitalized Lease or other arrangement pursuant to which title
to the property has been retained by or vested in some other Person for
security purposes and such retention or vesting shall constitute a Lien.
"Make-Whole Amount" shall mean in connection with any prepayment or
acceleration of the Notes the excess, if any, of (a) the aggregate
present value as of the date of such prepayment or payment of each dollar
of principal being prepaid or paid (taking into account the application
of such prepayment and payments required by 2.1) and the amount of
interest (exclusive of interest accrued to the date of prepayment or
payment) that would have been payable in respect of such dollar if such
prepayment or payment had not been made, determined by discounting such
amounts at the Reinvestment Rate from the respective dates on which they
would have been payable, over (b) 100% of the principal amount of the
outstanding Notes being prepaid or paid. If the Reinvestment Rate is
equal to or higher than 10.50%, the Make-Whole Amount shall be zero. For
purposes of any determination of the Make-Whole Amount:
"Reinvestment Rate" shall mean (1) the sum of 0.50%, plus the
yield reported on page "USD" of the Bloomberg Financial Markets
Services Screen (or, if not available, any other nationally
recognized trading screen reporting on-line intraday trading in the
United States government Securities) at 11:00 A.M. (New York, New
York time) for the United States government Securities having a
maturity (rounded to the nearest month) corresponding to the
remaining Weighted Average Life to Maturity of the principal of the
Notes being prepaid or paid (taking into account the application of
such prepayment and payments required by 2.1) or (2) in the event
that no nationally recognized trading screen reporting on-line
intraday trading in the United States government Securities is
available, Reinvestment Rate shall mean the sum of 0.50%, plus the
arithmetic mean of the yields for the two columns under the heading
"Week Ending" published in the Statistical Release under the caption
"Treasury Constant Maturities" for the maturity (rounded to the
nearest month) corresponding to the Weighted Average Life to
Maturity of the principal of the Notes being prepaid or paid (taking
into account the application of such prepayment payments required by
2.1). If no maturity exactly corresponds to such Weighted Average
Life to Maturity, yields for the two published maturities most
closely corresponding to such Weighted Average Life to Maturity
shall be calculated pursuant to the immediately preceding sentence
and the Reinvestment Rate shall be interpolated or extrapolated from
such yields on a straight-line basis, rounding in each of such
relevant periods to the nearest month. For the purposes of
calculating the "Reinvestment Rate", the most recent Statistical
Release published prior to the date of determination of the Make-
Whole Amount shall be used.
"Statistical Release" shall mean the then most recently
published statistical release designated "H.15(519)" or any
successor publication which is published weekly by the Federal
Reserve System and which establishes yields on actively traded U.S.
Government Securities adjusted to constant maturities or, if such
statistical release is not published at the time of any
determination hereunder, then such other reasonably comparable index
which shall be designated by the holders of 66-2/3% in aggregate
principal amount of the outstanding Notes.
"Weighted Average Life to Maturity" of the principal amount of
the Notes being prepaid or paid shall mean, as of the time of any
determination thereof, the number of years obtained by dividing the
then Remaining Dollar-Years of such principal by the aggregate
amount of such principal. The term "Remaining Dollar-Years" of such
principal shall mean the amount obtained by (1) multiplying the
amount of principal that would have become due on each scheduled
payment date if such prepayment or payment had not been made by the
number of years (calculated to the nearest one-twelfth) which will
elapse between the date of determination and such scheduled payment
date, and (2) totalling the products obtained in (1).
"Minority Interests" shall mean any shares of stock or other equity
or ownership interests of any class of a Subsidiary (other than
directors' qualifying shares as required by law) that are not owned by
the Company and/or one or more of its Subsidiaries. Minority Interests
shall be valued by valuing Minority Interests constituting preferred
stock at the voluntary or involuntary liquidating value of such preferred
stock, whichever is greater, and by valuing Minority Interests
constituting common stock at the book value of capital and surplus
applicable thereto adjusted, if necessary, to reflect any changes from
the book value of such common stock required by the foregoing method of
valuing Minority Interests in preferred stock.
"Multiemployer Plan" shall have the same meaning as in ERISA.
"Non-Recourse ORBIMAGE Debt" shall mean Indebtedness for borrowed
money of ORBIMAGE not to exceed $75,000,000 in aggregate principal amount
created in connection with up to three separate financing transactions
pursuant to which ORBIMAGE (or any subsidiary of ORBIMAGE created for the
purpose of participating in such transaction) shall incur such
Indebtedness in order to finance the construction of ORBIMAGES's remote
sensing system, provided that recourse for payment of such Indebtedness
for borrowed money is expressly limited to the revenues generated by
purchase contracts entered into by ORBIMAGE with customers purchasing
satellite-based remote sensing data and related services (the "Contract
Revenues"), and provided, further, that with respect to such Indebtedness
for borrowed money neither the Company, ORBIMAGE or any other Subsidiary,
nor any of the property or assets of the Company, ORBIMAGE or any other
Subsidiary, other than the Contract Revenues, is directly or indirectly
liable in any manner whatsoever for the payment thereof.
"ORBCOMM" shall mean Orbital Communications Corporation, a Delaware
corporation and Subsidiary of the Company.
"ORBCOMM Development" shall mean ORBCOMM Development, L.P., a
Delaware limited partnership and Affiliate of the Company.
"ORBIMAGE" shall mean Orbital Imaging Corporation, a Delaware
corporation and Subsidiary of the Company.
"Overdue Rate" shall mean the lesser of (a) the maximum interest
rate permitted by law and (b) the greater of (1) 12.50% per annum and (2)
the rate which Morgan Guaranty Trust Company of New York, New York City,
New York, announces from time to time as its prime lending rate as in
effect from time to time, plus 2%.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, partnership, limited liability
company, corporation, trust or unincorporated organization, and a
government or agency or political subdivision thereof.
"Plan" shall mean a "pension plan," as such term is defined in
ERISA, which is qualified under the Code and is established or maintained
by the Company or any ERISA Affiliate or as to which the Company or any
ERISA Affiliate contributed or is a member or otherwise may have any
liability.
"Purchaser" shall have the meaning set forth in 1.1.
"Regulation S-X" shall mean Regulation S-X promulgated under the
Securities Exchange Act of 1934, as amended.
"Rentals" shall mean and include as of the date of any determination
thereof all fixed payments (including as such all payments which the
lessee is obligated to make to the lessor on termination of the lease or
surrender of the property) payable by the Company or a Subsidiary, as
lessee or sublessee under a lease of real or personal property, net of
sublease income, but shall be exclusive of any amounts required to be
paid by the Company or a Subsidiary (whether or not designated as rents
or additional rents) on account of maintenance, repairs, insurance, taxes
and similar charges. Fixed rents under any so-called "percentage leases"
shall be computed solely on the basis of the minimum rents, if any,
required to be paid by the lessee regardless of sales volume or gross
revenues.
"Reportable Event" shall have the same meaning as in Section 4043 of
ERISA, other than a Reportable Event as to which the provision of 30
days' notice to the PBGC is waived under applicable regulations;
provided, however, that Reportable Events described in Sections
4043(c)(1) and 4043(c)(5) of ERISA shall constitute Reportable Events
regardless of the issuance of any waiver of the reporting requirement by
the PBGC.
"Responsible Officer" shall mean the Chairman of the Board, the
President, any Senior Vice President, the Treasurer, the Chief Executive
Officer or the Chief Financial Officer of the Company.
"Restricted Investments" shall mean all Investments, other than:
(a) Investments by the Company and its Subsidiaries, in
addition to Investments set forth on Schedule II, in and to
Subsidiaries, including any Investment in a corporation or
partnership (including the secondary purchase of Securities of such
corporation or partnership) which, after giving effect to such
Investment, will become a Subsidiary;
(b) Investments of the Company and its Subsidiaries existing
as of the Closing Date and described on Schedule II hereto;
(c) receivables arising from the sale of goods and services in
the ordinary course of business of the Company and its Subsidiaries;
(d) Investments made by the Company after the Closing Date in
connection with (i) the development and growth of the business of
ORBCOMM Development, and (ii) the formation and development of the
business of American Space Lines, provided that the aggregate amount
of such additional Investments shall not exceed $75,000,000 in the
aggregate;
(e) Investments in commercial paper of corporations organized
under the laws of the United States or any state thereof maturing in
360 days or less from the date of issuance which, at the time of
acquisition by the Company or any Subsidiary, is accorded a rating
of "A-1" or better by Standard & Poor's Ratings Group or "P-1" by
Moody's Investors Service, Inc.;
(f) Investments in direct obligations of the United States of
America or any agency or instrumentality of the United States of
America, the payment or guarantee of which constitutes a full faith
and credit obligation of the United States of America, in either
case, maturing within twelve months from the date of acquisition
thereof;
(g) Investments in certificates of deposit and time deposits
maturing within one year from the date of issuance thereof, either
(1) issued by a bank or trust company organized under the laws of
the United States or any state thereof, having capital, surplus and
undivided profits aggregating at least $100,000,000, provided that
at the time of acquisition thereof by the Company or a Subsidiary,
the senior unsecured long-term debt of such bank or trust company or
of the holding company of such bank or trust company is rated "A-"
or better by Standard & Poor's Ratings Group, Fitch Investors
Service, Inc. or Duff & Phelps Credit Rating Co., or "A3" or better
by Moody's Investors Service, Inc. or (2) issued by any bank or
trust company organized under the laws of the United States or any
state thereof to the extent that such Investments are fully insured
by the Federal Depository Insurance Corporation;
(h) Investments in readily-marketable obligations of
indebtedness of any State of the United States or any municipality
organized under the laws of any State of the United States or any
political subdivision thereof which, at the time of acquisition by
the Company or any Subsidiary, are accorded a rating of "AA" or
better by Standard & Poor's Ratings Group, Fitch Investors Service,
Inc. or Duff & Phelps Credit Rating Co., or "Aa" or better by
Moody's Investors Service, Inc. or an equivalent rating by another
nationally recognized credit rating agency of similar standard which
in any such case mature no later than one year after the date of
acquisition thereof; and
(i) Investments in repurchase agreements with respect to any
Securities described in clauses (e), (f), (g) or (h) of this
definition entered into with a depository institution or trust
company acting as principal described in clause (g) of this
definition if such repurchase agreements are by their terms to be
performed by the repurchase obligor and such repurchase agreements
are deposited with a bank or trust company of the type described in
clause (g) of this definition.
"Security" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
The term "subsidiary" shall mean as to any particular parent
corporation any corporation or partnership of which more than 50% (by
number of votes) of the Voting Stock or partnership interests shall be
beneficially owned, directly or indirectly, by such parent corporation
and which is required to be consolidated in accordance with GAAP. The
term "Subsidiary" shall mean a subsidiary of the Company.
"Voting Stock" shall mean Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies,
entitled to elect a majority of the corporate directors (or Persons
performing similar functions).
"Wholly-owned" when used in connection with any Subsidiary shall
mean a Subsidiary of which all of the issued and outstanding shares of
stock (except shares required as directors' qualifying shares) and all
Indebtedness for borrowed money shall be owned by the Company and/or one
or more of its Wholly-owned Subsidiaries, provided, however, that so long
as the Company shall own 90% or more of the Voting Stock of ORBCOMM,
ORBCOMM shall be deemed to be a Wholly-Owned Subsidiary for all purposes
of this Agreement.
Section8.2.Accounting Principles. Where the character or amount of any
asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is
required to be made for the purposes of this Agreement, the same shall be
done in accordance with GAAP, to the extent applicable, except where the
requirements of this Agreement are, by their terms, inconsistent with
GAAP.
Section8.3.Directly or Indirectly. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether the
action in question is taken directly or indirectly by such Person.
Section9.Miscellaneous.
Section9.1.Registered Notes. The Company shall cause to be kept at its
principal office a register for the registration and transfer of the
Notes, and the Company will register or transfer or cause to be
registered or transferred, as hereinafter provided, any Note issued
pursuant to this Agreement.
At any time and from time to time the holder of any Note which has
been duly registered as hereinabove provided may transfer such Note upon
surrender thereof at the principal office of the Company duly endorsed or
accompanied by a written instrument of transfer duly executed by the
holder of such Note or its attorney duly authorized in writing.
The Person in whose name any Note shall be registered shall be
deemed and treated as the owner and holder thereof for all purposes of
this Agreement. Payment of or on account of the principal, premium, if
any, and interest on any Note shall be made to or upon the written order
of such holder.
Section9.2.Exchange of Notes. At any time and from time to time, upon
not less than five days' notice to that effect given by the holder of any
Note initially delivered or of any Note substituted therefor pursuant to
9.1, this 9.2 or 9.3, and, upon surrender of such Note at its office,
the Company will deliver in exchange therefor, without expense to such
holder, except as set forth below, a Note for the same aggregate
principal amount as the then unpaid principal amount of the Note so
surrendered, or Notes in the denomination of $1,000,000 (or such lesser
amount as shall constitute 100% of the Notes of such holder) or any
amount in excess thereof as such holder shall specify, dated as of the
date to which interest has been paid on the Note so surrendered or, if
such surrender is prior to the payment of any interest thereon, then
dated as of the date of issue, registered in the name of such Person or
Persons as may be designated by such holder, and otherwise of the same
form and tenor as the Notes so surrendered for exchange. The Company may
require the payment of a sum sufficient to cover any stamp tax or
governmental charge imposed upon such exchange or transfer.
Section9.3.Loss, Theft, Etc. of Notes. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction
of any Note, and in the case of any such loss, theft or destruction upon
delivery of a bond of indemnity in such form and amount as shall be
reasonably satisfactory to the Company, or in the event of such
mutilation upon surrender and cancellation of the Note, the Company will
make and deliver without expense to the holder thereof, a new Note, of
like tenor, in lieu of such lost, stolen, destroyed or mutilated Note.
If the Purchaser or any subsequent Institutional Holder is the owner of
any such lost, stolen or destroyed Note, then the affidavit of an
authorized officer of such owner, setting forth the fact of loss, theft
or destruction and of its ownership of such Note at the time of such
loss, theft or destruction shall be accepted as satisfactory evidence
thereof and no further indemnity shall be required as a condition to the
execution and delivery of a new Note other than the written agreement of
such owner to indemnify the Company.
Section9.4.Expenses, Stamp Tax Indemnity. Whether or not the
transactions herein contemplated shall be consummated, the Company agrees
to pay directly all of your out-of-pocket expenses in connection with the
preparation, execution and delivery of this Agreement and the
transactions contemplated hereby, including but not limited to the
charges and disbursements of Chapman and Cutler, your special counsel,
duplicating and printing costs and charges for shipping the Notes,
adequately insured to you at your home office or at such other place as
you may designate, and all such expenses relating to any amendments,
waivers or consents requested or agreed to by the Company pursuant to the
provisions hereof (whether or not the same are actually executed and
delivered), including, without limitation, any amendments, waivers, or
consents resulting from any work-out, renegotiation or restructuring
relating to the performance by the Company of its obligations under this
Agreement and the Notes. The Company also agrees to pay, within five
Business Days of receipt thereof, supplemental statements of Chapman and
Cutler for disbursements unposted or not incurred as of the Closing Date.
The Company further agrees that it will pay and save you harmless against
any and all liability with respect to stamp and other taxes, if any,
which may be payable or which may be determined to be payable in
connection with the execution and delivery of this Agreement or the
Notes, whether or not any Notes are then outstanding. The Company agrees
to protect and indemnify you against any liability for any and all
brokerage fees and commissions payable or claimed to be payable to any
Person in connection with the transactions contemplated by this
Agreement. Without limiting the foregoing, the Company agrees to pay the
cost of obtaining the private placement number for the Notes and
authorizes the submission of such information as may be required by
Standard & Poor's CUSIP Service Bureau for the purpose of obtaining such
number.
Section9.5.Powers and Rights Not Waived; Remedies Cumulative. No delay
or failure on the part of the holder of any Note in the exercise of any
power or right shall operate as a waiver thereof; nor shall any single or
partial exercise of the same preclude any other or further exercise
thereof, or the exercise of any other power or right, and the rights and
remedies of the holder of any Note are cumulative to, and are not
exclusive of, any rights or remedies any such holder would otherwise
have.
Section9.6.Notices. All communications provided for hereunder shall be
in writing and, if to you, delivered or mailed prepaid by registered or
certified mail or overnight air courier, or by facsimile communication,
in each case addressed to you at your address appearing on Schedule I to
this Agreement or such other address as you or the subsequent holder of
any Note initially issued to you may designate to the Company in writing,
and if to the Company, delivered or mailed by registered or certified
mail or overnight air courier, or by facsimile communication, to the
Company at 21700 Atlantic Boulevard, Dulles, Virginia 20166, Attention:
Chief Financial Officer, or to such other address as the Company may in
writing designate to you or to a subsequent holder of the Note initially
issued to you; provided, however, that a notice to you by overnight air
courier shall only be effective if delivered to you at a street address
designated for such purpose in Schedule I, and a notice to you by
facsimile communication shall only be effective if confirmed by
transmission of a copy thereof by prepaid overnight air courier, or, in
either case, as you or a subsequent holder of any Note initially issued
to you may designate to the Company in writing.
Section9.7.Successors and Assigns. This Agreement shall be binding upon
the Company and its successors and assigns and shall inure to your
benefit and to the benefit of your successors and assigns, including each
successive holder or holders of any Notes.
Section9.8.Survival of Covenants and Representations. All covenants,
representations and warranties made by the Company herein and in any
certificates delivered pursuant hereto, whether or not in connection with
the Closing Date, shall survive the closing and the delivery of this
Agreement and the Notes.
Section9.9.Severability. Should any part of this Agreement for any
reason be declared invalid or unenforceable, such decision shall not
affect the validity or enforceability of any remaining portion, which
remaining portion shall remain in force and effect as if this Agreement
had been executed with the invalid or unenforceable portion thereof
eliminated and it is hereby declared the intention of the parties hereto
that they would have executed the remaining portion of this Agreement
without including therein any such part, parts or portion which may, for
any reason, be hereafter declared invalid or unenforceable.
Section9.10.Governing Law. This Agreement and the Notes issued and sold
hereunder shall be governed by and construed in accordance with Illinois
law, including all matters of construction, validity and performance.
Section9.11.Captions. The descriptive headings of the various Sections
or parts of this Agreement are for convenience only and shall not affect
the meaning or construction of any of the provisions hereof.
The execution hereof by you shall constitute a contract between us
for the uses and purposes hereinabove set forth, and this Agreement may
be executed in any number of counterparts, each executed counterpart
constituting an original but all together only one agreement.
Orbital Sciences Corporation
By /s/ Carlton B. Crenshaw
Its Sr. Vice President/Finance
and Administration and Treasurer
Accepted as of June 14, 1995.
The Northwestern Mutual Life
Insurance Company
By /s/ A. Kipp Koester
Its Vice President
Exhibit B
Representations and Warranties
The Company represents and warrants to you as follows:
1. Subsidiaries. Schedule II attached to the Agreement states the
name of each of the Company's Subsidiaries, its jurisdiction of
incorporation, the percentage of its Voting Stock owned by the Company
and/or its Subsidiaries and the foreign jurisdictions in which such
Subsidiary is qualified to do business. The Company and each Subsidiary
has good and marketable title to all of the equity interests it purports
to own of each Subsidiary, free and clear in each case of any Lien except
as disclosed on Annex 1 hereto. All shares of stock of Subsidiaries
which are corporations have been duly issued and are fully paid and non-
assessable.
2. Corporate Organization and Authority. The Company, and each
Subsidiary,
(a) is a corporation or a limited partnership duly organized,
validly existing and in good standing under the laws of its
jurisdiction of incorporation;
(b) has all requisite power and authority and all material
licenses and permits to own and operate its properties and to carry
on its business as now conducted; and
(c) is duly licensed or qualified and is in good standing as a
foreign corporation or limited partnership in each of the
jurisdictions noted on Schedule II to the Agreement, which Schedule
II contains a listing of all jurisdictions wherein the nature of the
business transacted by it or the nature of the property owned or
leased by it requires such licensing or qualification, except where
the failure to be so licensed or qualified could not reasonably be
expected to have a material adverse effect on the Company.
3. Business and Property. You have heretofore been furnished with
a copy of the undated Private Placement Memorandum (the "Memorandum")
prepared by GECC Capital Markets Group, Inc. which generally sets forth
the business conducted and proposed to be conducted by the Company and
its Subsidiaries and the principal properties of the Company and its
Subsidiaries.
4. Financial Statements. (a) The consolidated balance sheets of
the Company and its Subsidiaries as of December 31 in each of the years
1990 to 1994, both inclusive, and the related consolidated statements of
income, stockholders' equity and cash flows for the fiscal years ended on
said dates, each accompanied by a report thereon containing an opinion
unqualified as to scope limitations imposed by the Company and otherwise
without qualification except as therein noted, by KPMG Peat Marwick, have
been prepared in accordance with GAAP consistently applied except as
therein noted, are correct and complete and present fairly the financial
position of the Company and its consolidated Subsidiaries at such dates
and the results of their operations and cash flows for each of such
periods. The unaudited consolidated balance sheets of the Company and
its consolidated Subsidiaries as of March 31, 1995, and the unaudited
statements of income and cash flows for the three-month period ended on
said date prepared by the Company have been prepared in accordance with
GAAP consistently applied, are correct and complete and present fairly
the financial position of the Company and its consolidated Subsidiaries
as of said date and their consolidated results of operations and changes
in their financial position or cash flows for such period, except that no
notes are included in such interim financial statements and such interim
financial statements are subject to normal recurring adjustments which
would be made in the course of an audit and which would not be material.
(b) Since December 31, 1994, there has been no change in the
condition, financial or otherwise, of the Company and its consolidated
Subsidiaries, taken as a whole, as shown on the consolidated balance
sheet as of such date except changes in the ordinary course of business,
none of which individually or in the aggregate has been materially
adverse.
The Company notes that for the three months ended March 31, 1995,
total cash used in operating and investing activities was $15,600,000.
While the magnitude of such cash usage is material, such cash usage has
not had a material adverse effect on the properties, business prospects,
profits or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole.
5. Indebtedness. Schedule II attached to the Agreement correctly
describes all Funded Debt, Liens securing Funded Debt and Capitalized
Leases of the Company and its Subsidiaries outstanding on the Closing
Date.
6. Full Disclosure. The financial statements referred to in
paragraph 4 hereof, the Agreement, the Memorandum and each other written
statement furnished by the Company to you in connection with the
negotiation of the sale of the Notes, taken collectively, do not contain
any untrue statement of a material fact or omit a material fact necessary
to make the statements contained therein or herein not misleading. There
is no fact known to any Responsible Officer to the Company or its
Subsidiaries which the Company has not disclosed to you in writing which
materially affects adversely nor, so far as the Company can now foresee,
will materially affect adversely the properties, business, prospects,
profits or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole.
7. Pending Litigation. There are no proceedings pending or, to
the knowledge of the Company, threatened against or affecting the Company
or any Subsidiary in any court or before any governmental authority or
arbitration board or tribunal in which there is a possibility of an
adverse decision which could reasonably be expected to materially and
adversely affect the properties, business, profits, results of operations
or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole.
8. Title to Properties. The Company and each Subsidiary has good
and marketable title in fee simple (or its equivalent under applicable
law) to all material parcels of real property and has good title to all
the other material items of property it purports to own, including that
reflected in the most recent balance sheet referred to in paragraph 4
hereof, except as sold or otherwise disposed of in the ordinary course of
business and except for Liens permitted by the Agreement.
9. Patents and Trademarks. The Company and each Subsidiary owns
or possesses all the patents, trademarks, trade names, service marks,
copyrights, trade secrets, other intellectual property, licenses and
rights with respect to the foregoing necessary for the conduct of its
business, without any known conflict with the rights of others which
could reasonably be expected to materially and adversely affect the
Company's and its Subsidiaries ability to conduct their respective
businesses.
10. Sale Is Legal and Authorized. The sale of the Notes and
compliance by the Company with all of the provisions of the Agreement and
the Notes_
(a) are within the corporate powers of the Company;
(b) will not violate any provisions of any applicable law or
any order of any court or governmental authority or agency having
jurisdiction over the Company or its properties and will not
conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute a default under, the
Certificate of Incorporation or By-laws of the Company or any
indenture or other agreement or instrument to which the Company is a
party or by which it may be bound or result in the imposition of any
Liens on any property or asset of the Company; and
(c) have been duly authorized by proper corporate action on
the part of the Company (no action by the stockholders of the
Company being required by law, by the Certificate of Incorporation
or By-laws of the Company or otherwise), executed and delivered by
the Company and the Agreement and the Notes constitute the legal,
valid and binding obligations, contracts and agreements of the
Company enforceable in accordance with their respective terms.
11. No Defaults. No Default or Event of Default has occurred and
is continuing. The Company is not in default in the payment of principal
or interest on any Indebtedness for borrowed money and is not in default
under any instrument or instruments or agreements under and subject to
which any Indebtedness for borrowed money has been issued and no event
has occurred and is continuing under the provisions of any such
instrument or agreement which with the lapse of time or the giving of
notice, or both, would constitute an event of default thereunder.
12. Governmental Consent. No approval, consent or withholding of
objection on the part of any regulatory body, state, Federal or local, is
necessary in connection with the execution and delivery by the Company of
the Agreement or the issuance, sale or delivery of the Notes or
compliance by the Company with any of the provisions of the Agreement or
the Notes.
13. Taxes. All United States Federal income tax returns and other
material tax returns required to be filed by the Company or any
Subsidiary in any jurisdiction have, in fact, been filed, and all taxes,
assessments, fees and other governmental charges upon the Company or any
Subsidiary or upon any of their respective properties, income or
franchises, which are shown to be due and payable in such returns have
been paid. For all taxable years ending on or before December 31, 1990,
the Federal income tax liability of the Company and its Subsidiaries has
been satisfied and (a) the period of limitations on assessment of
additional Federal income tax has expired, (b) the Company and its
Subsidiaries have entered into an agreement with the Internal Revenue
Service closing conclusively the total tax liability for the taxable year
or (c) the Company is carrying forward a net operating loss from the
taxable year. The Company does not know of any proposed additional tax
assessment against it for which adequate provision has not been made on
its accounts, and no material controversy in respect of additional
Federal or state income taxes due since said date is pending or to the
knowledge of the Company threatened. The provisions for taxes on the
books of the Company and each Subsidiary are in the reasonable opinion of
the Chief Financial Officer of the Company adequate for all open years,
and for its current fiscal period.
14. Use of Proceeds. The net proceeds from the sale of the Notes
will be used to repay borrowing under the Bank Credit Agreement for
capital expenditures, and for other corporate purposes. None of the
transactions contemplated in the Agreement (including, without limitation
thereof, the use of proceeds from the issuance of the Notes) will violate
or result in a violation of Section 7 of the Securities Exchange Act of
1934, as amended, or any regulation issued pursuant thereto, including,
without limitation, Regulations G, T and X of the Board of Governors of
the Federal Reserve System, 12 C.F.R., Chapter II. Neither the Company
nor any Subsidiary owns or intends to carry or purchase any "margin
stock" within the meaning of said Regulation G. None of the proceeds
from the sale of the Notes will be used to purchase, or refinance any
borrowing the proceeds of which were used to purchase, any "security"
within the meaning of the Securities Exchange Act of 1934, as amended.
15. Private Offering. Neither the Company, directly or indirectly,
nor any agent on its behalf has offered or will offer the Notes or any
similar Security to or has solicited or will solicit an offer to acquire
the Notes or any similar Security from or has otherwise approached or
negotiated or will approach or negotiate in respect of the Notes or any
similar Security with any Person other than the Purchaser and not more
than fifty other institutional investors, each of whom was offered a
portion of the Notes at private sale for investment. Neither the
Company, directly or indirectly, nor any agent on its behalf has offered
or will offer the Notes or any similar Security to or has solicited or
will solicit an offer to acquire the Notes or any similar Security from
any Person so as to bring the issuance and sale of the Notes within the
provisions of Section 5 of the Securities Act of 1933, as amended.
16. ERISA. Assuming the accuracy of the representations set forth
in 3.2(b) of the Agreement, the consummation of the transactions
provided for in the Agreement and compliance by the Company with the
provisions thereof and the Notes issued thereunder will not involve any
prohibited transaction within the meaning of ERISA or Section 4975 of the
Code. Each Plan complies in all material respects with all applicable
statutes and governmental rules and regulations, and (a) no Reportable
Event has occurred and is continuing with respect to any Plan, (b)
neither the Company nor any ERISA Affiliate has withdrawn from any
Multiemployer Plan or instituted steps to do so, and (c) no steps have
been instituted to terminate any Plan pursuant to Sections 4041(c) or
4042 of ERISA. No condition exists or event or transaction has occurred
in connection with any Plan which could result in the incurrence by the
Company or any ERISA Affiliate of any material liability, fine or
penalty. No Plan maintained by the Company or any ERISA Affiliate, nor
any trust created thereunder, has incurred any "accumulated funding
deficiency" as defined in Section 302 of ERISA nor does the present value
of all benefits vested under all Plans exceed, as of the last annual
valuation date, the value of the assets of the Plans allocable to such
vested benefits. Neither the Company nor any ERISA Affiliate has any
contingent liability with respect to any post-retirement "welfare benefit
plan" (as such term is defined in ERISA) except as has been disclosed to
the Purchaser.
17. Compliance with Law. (a) Neither the Company nor any
Subsidiary (1) is in violation of any law, ordinance, franchise,
governmental rule or regulation to which it is subject; or (2) has failed
to obtain any license, permit, franchise or other governmental
authorization necessary to the ownership of its property or to the
conduct of its business, which violation or failure to obtain would
materially affect adversely the business, profits, properties, results of
operation or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole, or impair the ability of the Company to
perform its obligations contained in the Agreement or the Notes. Neither
the Company nor any Subsidiary is in default with respect to any order of
any court or governmental authority or arbitration board or tribunal
having jurisdiction over the Company or any Subsidiary.
(b) Without limiting the provisions of clause (a) of this paragraph
17, the Company is in compliance with all applicable Environmental Laws,
the failure to comply with which would materially affect adversely the
properties, business, profits, properties, results of operation or
condition (financial or otherwise) of the Company and its Subsidiaries
taken as a whole or the ability of the Company to perform its obligations
under the Agreement or the Notes.
18. Investment Company Act. The Company is not, and is not
directly or indirectly controlled by or acting on behalf of any Person
which is, required to register as an "investment company" under the
Investment Company Act of 1940, as amended.
19. Foreign Assets Control Regulations, etc. Neither the Company
nor any Affiliate of the Company is, by reason of being a "national" of a
"designated foreign country" or a "specially designated national" within
the meaning of the Regulations of the Office of Foreign Assets Control,
United States Treasury Department (31 C.F.R., Subtitle B, Chapter V), or
for any other reason, subject to any restriction or prohibition under, or
is in violation of, any Federal statute or Presidential Executive Order,
or any rules or regulations of any department, agency or administrative
body promulgated under any such statute or order, concerning trade or
other relations with any foreign country or any citizen or national
thereof or the ownership or operation of any property.