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EXHIBIT 10.3
April 12, 2001
MDA Holdings Corporation
21700 Atlantic Boulevard
Dulles, Virginia 20166
Attention: Legal Dept.
Fax 703-406-5572
Dear Sirs:
RE: MACDONALD, DETTWILER AND ASSOCIATES LTD. ("MDA")
CAI Capital Partners and Company II, L.P., CAI Capital Partners and Company
II-C, L.P., CAI Partners and Company II, L.P. (collectively, the "CAI
Entities"), 597858 B.C. Ltd. ("BC"), and the Ontario Teachers' Pension Plan
Board (the "Institutional Investor" and, collectively with the CAI Entities and
BC, the "Purchasers") understand that MDA Holdings Corporation ("Holdco" or the
"Seller"), a wholly-owned subsidiary of Orbital Sciences Corporation
("Orbital"), owns 18,000,000 common shares of MacDonald, Dettwiler & Associates
Ltd. ("MDA" or the "Corporation"). The Purchasers wish to purchase 12,350,000 of
such common shares (the "Purchased Shares") and obtain additional rights in
respect of the balance of 5,650,000 of such common shares (the "Remaining
Shares" and, together with the Purchased Shares, the "Shares").
1. SALE OF THE PURCHASED SHARES.
(a) Subject to the terms and conditions hereof, the Purchasers agree
to purchase from the Seller and the Seller agrees to sell to the
Purchasers the Purchased Shares for a purchase price of Cdn.
$14.00 per share, or Cdn. $172.9 million in the aggregate,
before deducting all fees to the Purchasers and expenses of the
Purchasers payable by Holdco pursuant hereto, and on and subject
to the following terms and conditions. The Purchased Shares are
proposed to be purchased in the following respective amounts:
CAI Capital Partners and Company II, L.P.: 783,696 shares; CAI
Capital Partners and Company II-C, L.P.: 96,242 shares; CAI
Partners and Company II, L.P.: 470,062 shares; BC: 1,000,000
shares; and the Institutional Investor: 10,000,000 shares;
provided that such amounts may be re-allocated by giving written
notice to the Seller at least two business days before the
Closing without changing the total if so agreed among the CAI
Entities, BC and the Institutional Investor. In no event will
the Seller be obliged to
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complete the Closing if less than all of the Purchased Shares
are proposed to be purchased, however.
(b) Subject to the terms and conditions hereof, the purchase price
will be paid and satisfied by a wire transfer of immediately
available funds in accordance with wire instructions to be
provided in writing by the Seller to each of the Purchasers no
less than two (2) business days prior to Closing. All dollar
amounts referred to in this letter agreement are in Canadian
dollars. Despite the foregoing, at the written request of the
Seller made no less than two (2) business days prior to
Closing, the Purchasers shall pay the U.S. dollar equivalent
(based on a rate of exchange available either on the Closing
date or the one or two prior business days, as determined by
each of the Purchasers) of any amount otherwise payable, net
of any foreign exchange costs actually incurred by them.
(c) At Closing, the Seller shall pay to the CAI Entities and BC a
sourcing and structuring fee of Cdn. $3.458 million
(representing 2.0% of the purchase price), with one-half of
such amount payable to each of them, and shall pay or
reimburse the Purchasers for their reasonable fees and
expenses incurred in connection herewith (for greater
certainty including those referred to in section 4.2), up to
an aggregate amount of Cdn. $500,000.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER.
The Seller represents, warrants and covenants as follows to the
Purchasers now and as at the Closing:
(a) The Seller is and will at Closing be the legal and beneficial
owner of the Purchased Shares, which will at Closing be
delivered to the Purchasers free and clear of any and all
adverse claims, security interests or encumbrances whatsoever.
At the date hereof, the Purchased Shares are subject to the
Shareholders' Agreement (as defined herein), the Amended and
Restated Secondary Option Agreement, the Reverse Option
Agreement, the Pledge and Custodial Agreement, and an
underwriting agreement and resale restrictions agreement
entered into at the time of the initial public offering of MDA
(the "Underwriters' Covenants"). A waiver and release of the
Underwriters' Covenants in respect of both the Purchased
Shares and the Remaining Shares will be obtained by the Seller
prior to Closing.
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(b) The Seller has all power and authority necessary to execute
and deliver this letter agreement and to perform and complete
its obligations hereunder, and such actions will not violate
its articles or by-laws, any applicable laws, or any agreement
by which it, Orbital or the Shares are bound, except to the
extent set forth in section 2(a) or as contemplated by the
following sentence. If the consent of Orbital's lenders is
required hereunder, the Seller will obtain such consent prior
to Closing.
(c) Immediately following the Closing, the Seller (i) will be
solvent, (ii) will not be engaged in a business or a
transaction, or about to be engaged in a business or a
transaction, for which any property remaining with the Seller
would be an unreasonably small capital, and (iii) has not
incurred, and does not intend to incur, or believe that it
would incur, debts that would be beyond the Seller's ability
to pay as such debts matured.
(d) Orbital and the Seller have complied with and will continue to
comply with sections 2.4 and 2.5 of the Amended and Restated
Shareholders' Agreement (the "Shareholders' Agreement") dated
as of June 29, 2000 among the CAI Entities, BC, Orbital and
Holdco, and the Seller has complied with and will continue to
comply with its charter documents (including for at least 2
years after Closing). For greater certainty, this provision
shall survive the consummation of the transactions
contemplated hereby.
(e) To the best knowledge of the Seller and Orbital, after due
enquiry, neither the Seller nor Orbital is aware of any
material fact or material change with respect to MDA or its
shares that has not been disclosed publicly by MDA or
disclosed to all of the Purchasers in writing by the Seller
(or, in the case of the CAI Entities and BC only, disclosed to
their nominees in their capacities as directors of MDA), and
neither the Seller nor Orbital is aware of any
misrepresentation in any of the Corporation's public
disclosure documents filed on SEDAR.
(f) No person has any agreement, right or privilege for the
purchase, acquisition or transfer from the Seller of any of
the Purchased Shares or any of the Remaining Shares or any
interest therein except (i) the Purchasers pursuant hereto,
and (ii) pursuant to the Shareholders' Agreement (as defined
herein), the Amended and Restated Secondary Option Agreement,
the Reverse Option Agreement and the Pledge and Custodial
Agreement. The Seller has the right to sell the Purchased
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Shares and the Remaining Shares to the Purchasers except that,
as at the date hereof, the Shares are also subject to the
Underwriters' Covenants.
(g) The Seller is a non-resident of Canada within the meaning of
the Income Tax Act (Canada) and, for greater certainty, its
address in the records of the Corporation is not in Canada.
(h) The Seller is acting as principal hereunder.
(i) The Seller has held the Purchased Shares since at least July
31, 2000.
(j) Neither the Seller nor any affiliate of or person acting
jointly or in concert with the Seller has purchased or sold
any common shares of MDA or entered into any derivative or
similar transactions with respect thereto at any time since
July 31, 2000.
(k) This letter agreement is a legal, valid and binding obligation
of the Seller enforceable against the Seller in accordance
with its terms, subject however to limitations with respect to
the enforcement of remedies, to bankruptcy, reorganization,
insolvency, moratorium and other laws relating to or affecting
creditors' rights generally and subject to the availability of
equitable remedies such as specific performance and
injunctions.
(l) The Seller's and Orbital's agreement with any and all
prospective purchasers of the Shares other than the Purchasers
has been terminated in accordance with its terms.
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.
Each of the Purchasers represents and warrants as follows to the
Seller now and as at the Closing (for greater certainty, with each Purchaser
warranting as to itself only, severally and not jointly or jointly and
severally):
(a) Such Purchaser has all power and authority necessary to
execute and deliver this agreement and to perform and complete
its obligations hereunder, and such actions will not violate
its articles or by-laws, any applicable laws, or any agreement
by which it is bound.
(b) This letter agreement is a legal, valid and binding obligation
of such Purchaser enforceable against such Purchaser in
accordance with its terms, subject however to limitations with
respect to the enforcement
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of remedies, to bankruptcy, reorganization, insolvency,
moratorium and other laws relating to or affecting creditors'
rights generally and subject to the availability of equitable
remedies such as specific performance and injunctions.
(c) Other than CAI Partners and Company II, L.P., which is a "WTO
investor", such Purchaser is not a "non-Canadian" for purposes
of the Investment Canada Act (Canada).
4. COVENANTS.
4.1 The Seller covenants and agrees with the Purchasers that it will do or
cause to be done, in addition to its covenants pursuant to section 2,
the following:
(a) The Seller shall use all reasonable efforts to satisfy all
requirements and conditions contained in this letter agreement
in order to complete the transactions contemplated hereby and
to comply with, satisfy and fulfil promptly all legal and
regulatory requirements applicable to the Seller with respect
to the consummation of the transactions contemplated hereby.
Despite the foregoing, the Seller shall not be required to
execute any additional agreements referred to in section 7(c)
which are not satisfactory to it, acting reasonably (without
prejudice to the Purchasers' rights under section 5).
(b) The Seller shall cause two of its three nominees to the board
of directors of the Corporation to resign at such time and in
such manner (which may include voting for their successors) as
is requested by the Purchasers at or following Closing, and
shall cause its remaining nominee to resign at such time as it
no longer holds at least 5% of the outstanding common shares
of MDA, and shall use its reasonable efforts to cause its
remaining nominee to support the appointment in their stead of
such individuals as the Purchasers shall identify in writing
to the Seller. For greater certainty, this provision shall
survive the consummation of the transactions contemplated
hereby.
(c) In the period prior to the Closing, the Seller shall consult
with the Purchasers prior to exercising any voting rights
attached to the Purchased Shares. In the event that the
Seller and the Purchasers, each acting reasonably, do not
agree as to how the voting rights are to be exercised on a
matter which, in the opinion of the Purchasers, acting
reasonably, is material to the value of the Purchasers'
current investment or proposed investment in the Corporation,
the Purchasers
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may terminate this letter agreement, which shall, without
prejudice to any other remedy of any Purchaser hereunder or
for breach of any other obligation of the Seller hereunder,
and subject to the requirement that the Seller reimburse all
of the Purchasers' reasonable fees and expenses incurred in
connection herewith (which obligation shall survive any
termination of this letter agreement), shall be the exclusive
remedy of the Purchasers hereunder for a breach of this
section 4.1(c) by the Seller. Notwithstanding the foregoing
terms of this section 4.1(c), the Purchasers acknowledge that
at all times prior to the Closing the Seller shall retain sole
decision-making authority with respect to the exercise of the
voting rights attached to the Shares.
(d) Until the Closing, the Seller will co-operate with the
Purchasers and MDA in making all requisite regulatory filings
and seeking all regulatory and third party consents.
(e) Without the express prior written consent of the Purchasers,
the Seller and its affiliates shall maintain in strict
confidence and not use for any purpose whatsoever any
non-public information of which they are aware at the date
hereof or of which they subsequently become aware relating to
MDA, except as required by law and following prior written
notice and consultation with MDA and the Purchasers. The
foregoing shall not apply to disclosures pursuant to a
reasonable written confidentiality agreement for the purpose
of seeking offers for the Remaining Shares subsequent to June
30, 2001. The following information shall not be considered
non-public information: (i) information that is or becomes
publicly available through no fault of the Seller or its
affiliates; (ii) information that was known by the Seller or
Orbital (other than on a confidential basis) prior to the
receipt of such information from MDA; or (iii) information
that becomes available to the Seller or Orbital on a
non-confidential basis from MDA (following Closing) or from a
source other than MDA which source, to the knowledge of the
Seller or Orbital, is not bound by a confidentiality
obligation with MDA or otherwise prohibited from disclosing
such information by a contractual, legal or fiduciary
obligation. For greater certainty, this provision shall
survive the consummation of the transactions contemplated
hereby and any termination of this letter agreement.
(f) The Seller and its affiliates agree to use all reasonable
efforts to satisfy all terms and conditions hereof, and also
to co-operate in full with any reasonable request made by the
Purchasers in connection with this
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transaction and/or the Remaining Shares, including without
limitation in connection with the Remaining Shares by
assisting in the process of obtaining financing for the
purchase of the Remaining Shares, participating in any
prospectus process, assisting with access for due diligence
purposes, and signing any requested underwriting or
indemnification agreements on terms not materially more
adverse to them than those applicable in the IPO, provided
that the Seller shall be reimbursed by the CAI Entities and/or
BC or otherwise for all commissions payable by it related
thereto and all reasonable expenses (not to exceed US
$100,000) incurred by it in connection therewith. For greater
certainty, this provision shall survive the consummation of
the transactions contemplated hereby.
(g) If the Seller dividends or distributes any of the net proceeds
hereof to Orbital, then Orbital (which is a party to this
agreement solely for the purposes of this section 4(g)) will
ensure that it forthwith repays to MDA the amount of U.S.
$3,889,810 (or the reasonable Canadian dollar equivalent
thereof) (or such other amount as is acceptable to the
Purchasers, acting reasonably, based upon the letter agreement
between Orbital and MDA dated January 16, 2001) on behalf of
certain of Orbital's or its subsidiaries' (other than
Orbimage's) liabilities to MDA, which amount is net of amounts
owed to Orbital by MDA.
(h) Until the Closing or the termination of this letter agreement,
whichever occurs first, the Seller shall not enter into any
other agreement in respect of the Shares and shall refrain
from any purchases of or offers to purchase additional shares
of MDA, any material transactions with MDA, and any proxy
solicitations of MDA shareholders, in each case without the
express prior written consent of the Purchasers.
(i) Until the Closing or termination of this letter agreement,
whichever occurs first, the Seller and its affiliates shall
co-ordinate all public announcements or statements and filings
in respect of the transactions contemplated by this letter
agreement with the Purchasers and shall consult with the
Purchasers in respect thereof and make any changes reasonably
requested by them.
(j) The Seller shall use its reasonable efforts to cause MDA to be
included in any release obtained by Orbital or the Seller in
respect of Orbcomm, provided that MDA cooperates and agrees to
subrogate its claims against Orbcomm. For greater certainty,
this provision shall survive the consummation of the
transactions contemplated hereby.
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4.2 The Purchasers (for greater certainty, each severally as to itself and
not jointly or jointly and severally with the other Purchasers)
covenant and agree with the Seller that they will use all reasonable
efforts to satisfy all requirements and conditions applicable to them
contained in this letter agreement in order to complete the
transactions contemplated hereby and to comply with, satisfy and
fulfil promptly all legal and regulatory requirements applicable to
them with respect to the consummation of the transactions contemplated
hereby. Without limiting the generality of the foregoing, the
Purchasers (for greater certainty, each severally as to itself and not
jointly or jointly and severally with the other Purchasers) agree that
they shall as soon as practicable make and diligently prosecute:
(a) if necessary, an application to the Commissioner of Competition
for an advance ruling certificate under section 102 of the
Competition Act (Canada) and/or a pre-notification filing under
Part IX of the Competition Act (Canada) with respect to the
purchase by the Purchasers of the Purchased Shares (and, if
considered appropriate, the Remaining Shares); and
(b) if necessary, a Hart-Scott-Rodino Antitrust Improvements Act of
1976 filing with respect to the purchase by the Purchasers of
the Purchased Shares (and, if considered appropriate, the
Remaining Shares).
The Purchasers shall pay the filing fees in respect thereof, subject
to reimbursement as provided herein by the Seller. Despite the
foregoing, the CAI Entities and BC shall not be required to execute
any additional agreements referred to in section 7(c) which are not
satisfactory to them, acting reasonably (without prejudice to their
rights under section 5), and provided that if the Seller refuses to
sign any agreements contemplated by section 7(c), it shall be required
to reimburse the Purchasers their reasonable fees and expenses
incurred in connection herewith (which obligation shall survive any
termination of this letter agreement).
5. CONDITIONS OF CLOSING IN FAVOUR OF THE PURCHASERS.
The obligations of the Purchasers to purchase the Purchased Shares
under this letter agreement are subject to the following conditions for the
exclusive benefit of the Purchasers to be fulfilled and/or performed prior to
the Closing:
(a) The representations and warranties of the Seller contained in
this letter agreement shall be true and correct in all
respects as of the date of this letter agreement and shall
also be true and correct in all respects on
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and as of the Closing with the same force and effect as if
made on and as of such date.
(b) The Seller shall have performed or complied in all respects
with all covenants to be performed or complied with by the
Seller in this letter agreement at or prior to the Closing.
(c) The Corporation shall have confirmed at Closing to the
satisfaction of the Purchasers, acting reasonably: (i) the
absence of any consents (other than those that have been
obtained on terms satisfactory to the Purchasers, acting
reasonably) that are required under the terms of any
agreements to which MDA or its subsidiaries are a party or
bound in order to avoid default, termination or other adverse
effects (including without limitation under the Landamerica,
Radarsat II, BC Online and UK agreements, to the extent
required); and (ii) the absence of any material fact or
material change with respect to MDA or its shares that has not
been disclosed publicly by MDA.
(d) The Purchasers shall be satisfied that MDA and its
subsidiaries and their respective assets and operations have
insurance in place or are covered by insurance to the extent
deemed necessary by the Purchasers (following consultation
with MDA) and that all amounts paid or to be paid by MDA or
its subsidiaries to Orbital until Closing on account of
premiums or contributions on all insurance policies, employee
benefit plans, 401K plans and similar plans maintained at the
date hereof by Orbital on behalf of MDA and its subsidiaries
have been paid or made in full.
(e) The Purchasers shall have received a certificate dated the
Closing in form and on terms satisfactory to the Purchasers,
acting reasonably, signed by two senior officers of the Seller
on behalf of the Seller, to the effect that the conditions
precedent specified in sections 5(a) and 5(b) have been
complied with.
(f) If a filing under the Competition Act (Canada) is required,
the Commissioner of Competition (the "Commissioner") appointed
under the Competition Act (Canada) (the "Act") shall have
issued an advance ruling certificate under section 102 of the
Act in respect of the transactions contemplated hereby; (ii)
the Commissioner shall have advised the Purchasers that he
does not intend at the current time to apply to the
Competition Tribunal for an order under section 92 of the Act
in respect of such transactions; or (iii) the applicable
waiting
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period under section 123 of the Act shall have expired without
the Commissioner having notified the Purchasers that he
intends to apply to the Competition Tribunal for an order
under section 92 of the Act in respect of such transactions;
and no proceedings shall have been taken or threatened under
the merger provisions of Part VIII or under section 45 of the
Act in respect of such transactions.
(g) If a filing under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 is required in the United States, any applicable
pre-merger filing requirements under that Act shall have been
fulfilled, any waiting period requirements under that Act
shall have expired or been terminated, and there shall be no
pending or threatened actions or proceedings to restrain the
transactions contemplated hereby or asserting its illegality.
(h) Other than any court or regulatory proceedings referred to in
section 9(e) to the extent that they shall oblige the parties
hereto to adjust the purchase price, no action or proceeding
which is outstanding and not resolved shall have been taken
before or by any domestic or foreign court, governmental
authority or other regulatory authority, no order, decision or
ruling shall have been made by any such court, governmental
authority or other regulatory authority, and no law or
regulation shall have been passed since the date hereof which
in any of the foregoing cases would have the effect of:
(i) ceasing trading or prohibiting the purchase or resale
by the Purchasers of any of the Purchased Shares;
(ii) imposing on the Purchasers material burdensome
obligations, restrictions, limitations or conditions on
their ownership of or exercise of rights of ownership
over the Purchased Shares which could reasonably be
expected to have a materially adverse effect on the
value of the Purchased Shares; or
(iii) requiring the Purchasers to make an offer to purchase
any additional common shares of MDA held by other
shareholders;
it being acknowledged and agreed that the Purchased Shares are
not at the date hereof freely tradeable.
(i) There shall not exist any prohibition at law against the
Purchasers acquiring the Purchased Shares, and the Seller shall
have obtained any necessary consents from its lenders and
pursuant to the Underwriters'
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Covenants to complete the transactions contemplated herein,
including in section 7(c).
(j) MDA shall not have suffered an adverse material change in its
business subsequent to the date hereof (or an undisclosed
adverse material change in its business prior to the date
hereof).
(k) The arrangements set forth in section 7(c) hereof shall have
been executed, delivered and completed to the satisfaction of
the Purchasers, acting reasonably.
(l) The Seller shall have received a fairness opinion from an
independent advisor in form and substance satisfactory to the
Purchasers, acting reasonably.
(m) The Purchasers shall have received a legal opinion from the
Seller's counsel in form and substance satisfactory to the
Purchasers, acting reasonably, with respect to the due
authorization and execution of all agreements entered into in
connection with the transactions contemplated herein.
(n) The Institutional Investor shall have been provided by the
Corporation with two demand and unlimited piggy-back
registration rights on terms substantially similar to those
currently granted to the CAI Entities and BC, which shall be
confirmed on substantially the same terms to reflect necessary
changes and the grant of one further additional demand
registration right to the Purchasers in aggregate.
(o) The Purchasers shall be satisfied that Orbital shall have
withdrawn its request to MDA to seek the release of Orbital's
guarantee of MDA's obligations to the Canadian Space Agency.
In the event that any of such conditions shall not have been satisfied
or waived on or prior to the Closing, the Purchasers or any of them may in
their discretion terminate the agreement to purchase the Purchased Shares by
notice in writing to the Seller, without any party having any further
obligation hereunder (except that the Seller shall be required to reimburse
the Purchasers their reasonable fees and expenses incurred in connection
herewith, which obligation shall survive any termination of this letter
agreement), but without prejudice to liability for any prior breach hereunder,
and, for greater certainty, the terms of the Shareholders' Agreement, the
Amended and Restated Secondary Option Agreement, the Reverse Option Agreement,
the Pledge and Custodial Agreement, the Exchange and Registration Rights
Agreement and any other agreements among the CAI Entities,
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BC, the Seller and/or Orbital shall remain in full force and effect,
unaffected thereby.
6. CONDITIONS OF CLOSING IN FAVOUR OF THE SELLER.
The obligations of the Seller under this agreement are subject to the
following conditions for the exclusive benefit of the Seller to be fulfilled
and/or performed prior to the Closing:
(a) The representations and warranties of the Purchasers contained
in this letter agreement shall be true and correct in all
respects as of the date of this letter agreement and shall also
be true and correct in all respects on and as of the Closing,
with the same force and effect as if made on and as of such
date.
(b) The Purchasers shall have performed or complied in all respects
with all covenants to be performed or complied with by the
Purchasers in this letter agreement at or prior to the Closing.
(c) There shall not exist any prohibition at law against the Seller
selling the Purchased Shares to the Purchasers.
(d) The Seller shall have obtained any necessary consents from its
lenders and pursuant to the Underwriters' Covenants to complete
the transactions contemplated herein, including in section
7(c).
(e) The Seller shall have received certificates dated the Closing
in form and on terms satisfactory to the Seller, acting
reasonably, from the Purchasers to the effect that the
conditions precedent specified in sections 6(a) and 6(b) have
been complied with.
(f) If a filing under the Competition Act (Canada) is required, the
Commissioner of Competition (the "Commissioner") appointed
under the Competition Act (Canada) (the "Act") shall have
issued an advance ruling certificate under section 102 of the
Act in respect of the transactions contemplated hereby; (ii)
the Commissioner shall have advised the Purchasers that he does
not intend at the current time to apply to the Competition
Tribunal for an order under section 92 of the Act in respect of
such transactions; or (iii) the applicable waiting period under
section 123 of the Act shall have expired without the
Commissioner having notified the Purchasers that he intends to
apply to the Competition Tribunal for an order under section 92
of the Act in respect of such transactions; and no proceedings
shall have been taken
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or threatened under the merger provisions of Part VIII or under
section 45 of the Act in respect of such transactions.
(g) If a filing under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 is required in the United States, any applicable
pre-merger filing requirements under that Act shall have been
fulfilled, any waiting period requirements under that Act shall
have expired or been terminated, and there shall be no pending
or threatened actions or proceedings to restrain the
transactions contemplated hereby or asserting its illegality.
In the event that any of such conditions shall not have been satisfied
or waived on or prior to the Closing, the Seller may in its discretion
terminate the agreement to sell the Purchased Shares by notice in writing to
the Purchasers, without any party having any further obligation hereunder, but
without prejudice to liability for any prior breach hereunder, and, for
greater certainty, the terms of the Shareholders' Agreement, the Amended and
Restated Secondary Option Agreement, the Reverse Option Agreement, the Pledge
and Custodial Agreement, the Exchange and Registration Rights Agreement and
any other agreements among the CAI Entities, BC, the Seller and/or Orbital
shall remain in full force and effect, unaffected thereby. Despite the
foregoing, in the event that the condition in section 6(d) is not satisfied or
waived, and the Seller terminates this letter agreement, then the Seller shall
be required to reimburse the Purchasers their reasonable fees and expenses
incurred in connection herewith, which obligation shall survive any
termination of this letter agreement.
7. CLOSING ARRANGEMENTS; TERMINATION.
(a) The closing of the purchase and sale of the Purchased Shares
shall take place at 10:00 a.m. (Toronto time) at the offices of
Hogan & Hartson LLP in New York on the second business day
following the date on which the Purchasers shall have notified
the Seller that all of the conditions referred to in sections
5(c)(i), (d), (f), (g) and (i) hereof have been satisfied or
waived, or at such other time and date as may be mutually
agreed upon between either of the Purchasers and the Seller
(the "Closing"). Subject to the following sentence, the
Purchasers or the Seller may terminate this letter agreement if
the Closing does not occur on or before May 31, 2001 and in
such event, for greater certainty, the terms of the
Shareholders' Agreement, the Amended and Restated Secondary
Option Agreement, the Reverse Option Agreement, the Pledge and
Custodial Agreement, the Exchange and Registration Rights
Agreement and any other agreements among the CAI Entities,
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BC, the Seller and/or Orbital shall remain in full force and
effect, unaffected thereby. The Purchasers shall use their
reasonable efforts to seek to satisfy such conditions to enable
a closing as close to April 13, 2001 as is reasonably possible.
(b) At the Closing, the Seller agrees to deliver to the Purchasers
definitive certificates representing the Purchased Shares duly
endorsed for transfer (with signatures guaranteed and other
documents required by MDA's transfer agent to process such a
transfer) in the names of the Purchasers or as they may direct,
against payment by the Purchasers of the purchase price for the
relevant Purchased Shares.
(c) Contemporaneously with the Closing of the purchase and sale of
the Purchased Shares, the Seller shall enter into binding
agreements on terms and conditions (including as to
representations, warranties and covenants) satisfactory to the
CAI Entities and BC, acting reasonably, whereby the Seller
grants them (pro rata to their shareholdings in MDA on the date
hereof and prior to the transactions contemplated herein, or in
such other proportions as they shall determine), an irrevocable
and transferable option (the "Option"), in whole or in part, to
elect to purchase the Remaining Shares at any time on or before
May 31, 2001 (which may be extended by them for financing or
regulatory reasons until June 30, 2001) at Cdn. $14.25 per
share (subject to a 2% sourcing and structuring fee, a price
adjustment provision as in section 9(e) hereof and subject to
the requirement of the CAI Entities and BC to share as to 50%
with the Seller all net proceeds from the sale of the Option or
the Remaining Shares by them to any third party in excess of
Cdn. $14.25 per share). The shares would be pledged with and
held by a commercial bank or broker in the U.S. in a manner
similar to that today, for purposes of assuring the Option and
the following rights. In addition, the CAI Entities and BC
would have an irrevocable and transferable right of first
refusal (exerciseable for a period of 30 days) on any sale of
any of the Remaining Shares by the Seller on or prior to June
30, 2002 to the extent that the Option is not exercised, and
the right to receive 50% of the net proceeds in excess of Cdn.
$15.00 per share in the event of any sale of any of the
Remaining Shares by the Seller to any third party on or prior
to such date to the extent that the right of first refusal is
not exercised, in each case in accordance with the same
pro-ration mechanism.
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8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties of each party made herein, in any
certificate or other document delivered by it or on its behalf pursuant to the
provisions hereof or otherwise with respect to this letter agreement and the
transactions contemplated hereby shall survive the Closing of the purchase and
sale of the Purchased Shares and, notwithstanding such Closing, nor any
investigation made by or on behalf of such party, shall continue in full force
and effect without any limitation as to time (except that the representations
and warranties of the Seller in sections 2(e) and 2(l) shall only survive for
a period of 18 months following Closing if no claim in writing is made in
respect thereof prior to such time).
9. GENERAL PROVISIONS.
(a) Any notice, direction or other instrument required or permitted to be
given or made hereunder shall be made in writing and shall be
sufficiently given or made if delivered in person to the address set
forth below or if telecopied or sent by other means of recorded
electronic communication and confirmed by delivery as soon as
practicable thereafter.
Notices to the Seller shall be addressed as follows:
MDA Holdings Corporation
c/o Orbital Sciences Corporation
21700 Atlantic Boulevard
Dulles, Virginia USA 20166-6801
Attention: Legal Department
Telephone: (703) 406-5000
Facsimile: (703) 406-5572
with a copy (which shall not constitute notice) to:
Hogan & Hartson LLP
555 Thirteen Street, NW
Washington, DC USA 20004
Attention: Gordon Wilson
Telephone: (202) 537-5627
Facsimile: (202) 537-5910
Notices to the CAI Entities shall be addressed as follows:
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c/o CAI Managers & Co., L.P.
767 Fifth Avenue, 5th Floor
New York, New York
10153
Attention: Manfred Yu
Telephone: 212-319-3023
Facsimile: 212-319-0232
with a copy (which shall not constitute notice) to: Simon
Romano and Roberta Carano, Stikeman Elliott, Suite 5300,
Commerce Court West, Toronto, Ontario M5L 1B9, Telephone
416-869-5500, Fax: 416-947-0866.
Notices to BC shall be addressed as follows:
Randall Mullan
c/o McCullough O'Connor Irwin
1100 - 888 Dunsmuir Street
Vancouver, British Columbia Canada
V6C 3K4
Attention: Jonathan McCullough
Telephone: 604-687-7077
Facsimile: 604-687-7099
Notices to the Institutional Investor shall be addressed as
follows:
Ontario Teachers' Pension Plan Board
5650 Yonge Street
Toronto, Ontario, Canada M2M 4H5
Attention: Roy Graydon
Telephone: 416-730-6167
Facsimile: 416-730-5143
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with a copy (which shall not constitute notice) to: Jonathan
Lampe and Francesca Guolo, Goodmans, Suite 2400, 250 Yonge
Street, Toronto, Ontario M5B 2M6, Telephone 416-979-2211, Fax:
416-979-1234.
Any notice, direction or other communication so given or so
made shall be deemed to have been given or made and to have
been received on the day of delivery, if delivered, or on the
day of sending if sent by telecopier or other means of recorded
electronic communication (provided such day of delivery or
sending is a business day and if not then on the first business
day thereafter). Any party may change its address for notice by
notice given to the other parties in the manner aforesaid.
(b) Except as expressly provided herein, all costs and expenses
incurred in connection with this letter agreement and the
transactions contemplated hereby shall be paid by the party
incurring such expenses. The Seller covenants and agrees to
indemnify and save harmless the Purchasers from and against any
claims whatsoever for any commissions or remuneration payable
or alleged to be payable to any broker, agent or other
intermediary who has acted for the Seller or Orbital in
connection with the sale of the Purchased Shares or the
Remaining Shares. For greater certainty, this provision shall
survive the consummation of the transactions contemplated
hereby and any termination of the letter agreement.
(c) This letter agreement shall be construed, interpreted and
enforced in accordance with the laws of the Province of Ontario
and the federal laws of Canada applicable therein (without
regard to conflicts of law principles). Any disputes arising
under this letter agreement shall be subject to the
non-exclusive jurisdiction of the courts of the Province of
Ontario, and each party irrevocably attorns to the courts of
such jurisdiction.
(d) Time shall be of the essence of this letter agreement.
(e) The parties acknowledge and agree that it is intended that the
price per share for the Purchased Shares does not exceed 115%
of the "market price" of the Common Shares determined in
accordance with the regulations under the Securities Act
(Ontario) and that any recalculation of "market price" would be
inappropriate in the circumstances. However, the parties agree
that if any regulatory authority or court of competent
jurisdiction decides at any time to
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recalculate the "market price" and as a result determines that
the price per share exceeds such 115% of the "market price",
the price per share will be reduced to that price which is
either (a) determined by such court or regulatory authority to
be 115% of the "market price", or (b) the price which the
parties, acting in good faith, believe to be 115% of the
"market price". If necessary, the Seller agrees to refund such
amount to the Purchasers as is required to comply with the
foregoing. For greater certainty, this provision shall survive
the consummation of the transactions contemplated hereby.
(f) This agreement is without prejudice to the offer (the "ROFO")
dated March 14, 2001 by the CAI Entities and BC pursuant to the
terms of section 5.1 of the Shareholders' Agreement. Upon
Closing, the Shareholders' Agreement, the Amended and Restated
Secondary Option Agreement, the Reverse Option Agreement, the
Pledge and Custodial Agreement and the Exchange and
Registration Rights Agreement shall terminate, and the ROFO
shall be of no force and effect. If Closing does not occur for
any reason whatsoever, the ROFO shall remain in full force and
effect (in accordance with its terms), as, for greater
certainty, shall the Shareholders' Agreement, the Amended and
Restated Secondary Option Agreement, the Reverse Option
Agreement, the Pledge and Custodial Agreement and the Exchange
and Registration Rights Agreement. For greater certainty, this
provision shall survive the consummation of the transactions
contemplated hereby and any termination of this letter
agreement.
(g) Each of the parties to any agreement resulting herefrom shall
execute all further documents and do all further acts and
things as may be necessary for the purpose of implementing the
terms of such agreement.
(h) The covenants contained herein shall, to the extent applicable,
survive any purchase and sale in accordance herewith.
(i) The obligations of the Purchasers hereunder are several, and
not joint nor joint and several.
(j) The Seller acknowledges that the purchase price and the price
of the Option has been determined at arms' length, that the
purchase price and the price of the Option represent reasonably
equivalent value for the Shares, and that the purchase price
and the price of the Option are fair and reasonable in the
circumstances, and the Seller waives any
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right to claim that the purchase price or the Option price is
not at arms' length, adequate and fair. For greater certainty,
this provision shall survive the consummation of the
transactions contemplated hereby.
(k) This letter agreement constitutes the entire agreement among
the parties hereto pertaining to the subject matter hereof, and
supersedes all prior agreements, understandings, negotiations
and discussions, whether oral or written, of the parties with
respect thereto, except as set forth in section 9(f) hereof.
Despite the foregoing, the Purchasers acknowledge their intent
to enter into agreements among themselves concerning certain
matters. No supplement, modification or termination of this
letter agreement shall be binding unless executed in writing by
each of the parties hereto.
(l) Except as otherwise provided herein, no party may assign this
letter agreement without the prior written consent of the other
parties hereto. The Purchasers may assign their rights under
this letter agreement to any other person or entity in whole or
in part without the prior written consent of the Seller,
provided that such assignment shall not result in the
applicability of additional regulatory approvals which would
reasonably be expected to materially delay the Closing. The
Seller may not assign any of its rights or obligations under
this letter agreement to any other person or entity in whole or
in part without the prior written consent of the Purchasers,
which may be unreasonably withheld. This letter agreement shall
enure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns.
(m) Each of the parties recognizes and acknowledges that a breach
by a party of any covenants or other commitments contained in
this letter agreement will cause the other parties to sustain
injury for which they would not have an adequate remedy at law
for money damages. Therefore, each of the parties agrees that
in the event of any such breach, the aggrieved party or parties
shall be entitled to the remedy of specific performance of such
covenants or commitments and preliminary and permanent
injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity, and
the parties further agree to waive any requirement for the
securing or posting of any bond in connection with the
obtaining of any such injunctive or other equitable relief.
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(n) The Seller shall indemnify and save harmless the Purchasers of
and from all losses whatsoever (including without limitation
expenses, costs, damages, penalties, fines, charges, claims,
demands, liabilities, interest, and any and all legal fees and
disbursements) suffered by, imposed upon or asserted against
the Purchasers (or against any of their directors, officers,
employees, agents, representatives or shareholders) in respect
of, as a result of, connected with or arising out of, under or
pursuant to any inaccuracy in any representation or warranty
provided by the Seller herein. If for any reason the above
indemnity shall be unenforceable, the Seller shall contribute
to the losses incurred in such amount as is appropriate to
reflect all equitable considerations. For greater certainty,
this provision shall survive the consummation of the
transactions contemplated hereby and any termination of this
letter agreement.
(o) For the purpose of this letter agreement, the terms:
(i) "material fact", "material change", "misrepresentation"
and "subsidiary" are defined to have the definitions
thereof under the Securities Act (Ontario);
(ii) "business day" shall mean any day on which banks in the
cities of Toronto, Vancouver and New York are open for
business; and
(iii) references to "Shares", "Purchased Shares" or "Remaining
Shares" include any shares into which the foregoing may
be reclassified, sub-divided, consolidated or converted
and any rights and benefits arising therefrom, including
any dividends or distributions of securities or property
which may be declared in respect thereof.
(p) This letter agreement may be executed in one or more
counterparts which together shall be deemed to constitute one
valid and binding agreement, and delivery of the counterparts
may be effected by means of a telecopier transmission.
(q) BC acknowledges and agrees that it is proposing to acquire its
portion of the Purchased Shares and if applicable the Remaining
Shares as bare trustee and agent for an investor, the identity
of which has been disclosed to the other parties hereto, and
that it will not hold such Shares for the benefit of any other
person or entity without the prior
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written consent of the other parties, such consent not to be
unreasonably withheld. BC shall at all times be controlled by
such investor.
---------------------
If you wish to accept this offer, please confirm your acceptance by signing
and returning this offer or a counterpart thereof to the CAI Entities, BC and
the Institutional Investor prior to 5:00 p.m. (Toronto time) on April 13,
2001, failing which it shall be null and void. For greater certainty, this
offer is without prejudice to the ROFO.
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We hope that you will accept this offer and that the result will be a mutually
satisfactory transaction.
-------------------
Yours very truly,
CAI CAPITAL PARTNERS AND COMPANY II, L.P.
By: ______________________________________
(an authorized signatory of its general partner)
CAI CAPITAL PARTNERS AND COMPANY II-C, L.P.
By: ______________________________________
(an authorized signatory of its general partner)
CAI PARTNERS AND COMPANY II, L.P.
By: ______________________________________
(an authorized signatory of its general partner)
597858 B.C. LTD.
By: ______________________________________
(an authorized signatory)
THE ONTARIO TEACHERS' PENSION PLAN BOARD
By: ______________________________________
(an authorized signatory)
Accepted and agreed to at _______________this ____ day of _______________,
2001.
MDA HOLDINGS CORPORATION
By: ________________________
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By: _________________________
ORBITAL SCIENCES CORPORATION (SOLELY FOR THE PURPOSES OF SECTION 4.1(g) ABOVE)
By: ________________________
By: _________________________
cc. Peter Restler, Manfred Yu, Randall Mullan, Jonathan McCullough,
Jonathan Lampe