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Exhibit 10.2
[CONFORMED COPY]
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Orbital Sciences Corporation
Third Amendment
Dated as of July 31, 1996
To
Note Agreement
Dated as of June 1, 1995
Re: $20,000,000 10.50% Senior Notes,
Due June 14, 2001
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THIRD AMENDMENT TO NOTE AGREEMENT
This Third Amendment to Note Agreement dated as of July 31, 1996 (the
or this "Third Amendment"), is entered into between Orbital Sciences
Corporation, a Delaware corporation (the "Company"), and The Northwestern
Mutual Life Insurance Company (the "Purchaser").
RECITALS:
A. The Company and the Purchaser have heretofore entered into the
Note Agreement dated as of June 1, 1995, the First Amendment to Note Agreement
dated as of June 30, 1995 and the Second Amendment to Note Agreement dated as
of March 15, 1996 (as amended, the "Note Agreement").
B. An Event of Default under the Note Agreement has occurred as a
result of the Company's default in the observance of the covenant contained in
Section 5.9 of the Note Agreement for the period from January 1, 1996 to and
including June 30, 1996.
C. On or about August 1, 1996, the Company anticipates that
ORBCOMM Global, L.P., a Delaware partnership ("ORBCOMM Partnership"), and
ORBCOMM Global Capital Corp., a Delaware corporation ("ORBCOMM Capital";
together with ORBCOMM Partnership, the "Issuers"), will consummate the issuance
of $170,000,000 aggregate principal amount of the Issuers' 14% Senior Notes
(the "ORBCOMM Notes") and that ORBCOMM (as defined in the Note Agreement) and
certain other subsidiaries of the Issuers will guarantee such ORBCOMM Notes
upon the terms and conditions contemplated by that certain Preliminary Offering
Memorandum dated July 11, 1996 (the "ORBCOMM Notes Offering Memorandum"). The
transactions contemplated by the ORBCOMM Notes Offering Memorandum are
hereinafter referred to as the "ORBCOMM Notes Issuance".
D. The consummation of the ORBCOMM Notes Issuance would be
prohibited by the terms of the Note Agreement and in consequence thereof, the
Company has requested the Purchaser to amend the application of certain terms
of the Note Agreement in order to permit consummation of the ORBCOMM Notes
Issuance and to further amend the Note Agreement, upon terms and conditions
acceptable to the Purchaser, for the purpose of amending such of the terms of
the Note Agreement as would be necessary in order to permit the existence of
the ORBCOMM Notes and the guarantees thereof on an ongoing basis.
E. The Company and the Purchaser now desire to amend, effective
on and as of the opening of business on August 2, 1996 (the "Effective Date"),
certain of the terms of the Note Agreement in order to permit the issuance and
existence of the ORBCOMM Notes on an ongoing basis within the limitations of
the Note Agreement and to waive the existing Event of Default.
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F. In consideration of the Purchaser's agreeing to amend the Note
Agreement as set forth herein, the Company has agreed to increase the interest
rate on the Notes outstanding under the Note Agreement.
G. Capitalized terms used herein shall have the respective
meanings ascribed thereto in the Note Agreement unless herein defined or the
context shall otherwise require.
H. All requirements of law have been fully complied with and all
other acts and things necessary to make this Third Amendment a valid, legal and
binding instrument according to its terms for the purposes herein expressed
have been done or performed.
Now, therefore, the Company and the Purchaser, in consideration of
good and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, do hereby agree as follows:
Section 1. Amendment.
Section 1.1. From and after the Effective Date, the Note
Agreement shall be and is hereby amended as follows:
(i) the references to "10.50%" throughout the
Note Agreement, including each of the exhibits thereto, shall
be changed to "11.50%"; provided that, the reference to
"10.50%" in the definition of "Make-Whole Amount" contained in
Section 8.1 of the Note Agreement shall not be changed by this
Amendment;
(ii) the references to "12.50%" throughout the
Note Agreement, including each of the exhibits thereto, shall
be changed to "13.50%"; and
(iii) the references to "ORBCOMM Development"
throughout the Note Agreement shall be changed to "ORBCOMM
Partnership".
Section 1.2. Section 5.8 of the Note Agreement shall be and is
hereby amended in its entirety to read as follows:
"Section 5.8. Fixed Charges Coverage Ratio. The Company
will at all times keep and maintain the Fixed Charges Coverage Ratio
from June 30, 1996 and thereafter at not less than 1.65 to 1.00."
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Section 1.3. Section 5.9 of the Note Agreement shall be and is
hereby amended in its entirety to read as follows:
"Section 5.9. 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:
Ratio of Consolidated
During the Period Priority Funded Debt to
Consolidated Tangible Net
Worth
July 1, 1996 through
September 30, 1996 .30 to 1.00
October 1, 1996 through
December 31, 1996 .25 to 1.00
January 1, 1997 through
March 31, 1997 .20 to 1.00
April 1, 1997 and thereafter .15 to 1.00"
Section 1.4. Section 5.15 of the Note Agreement shall be and is
hereby amended in its entirety to read as follows:
"Section 5.15. 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; provided
that notwithstanding the foregoing, ORBCOMM and ORBCOMM USA
may guarantee the Non-Recourse ORBCOMM Debt upon the terms and
conditions contemplated by this Agreement."
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Section 1.5. Section 8.1 of the Note Agreement shall be and is
hereby amended as follows:
(a) The definition of "Indebtedness" shall be and is
hereby amended in its entirety to read as follows:
"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; provided that, the
foregoing shall not include the Non-Recourse ORBCOMM Debt."
(b) The definition of "Reinvestment Rate" contained
within the definition of "Make Whole Amount" shall be and is hereby
amended in its entirety to read as follows:
""Reinvestment Rate" shall mean (1) the sum of 1.50%, 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 Section 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 1.50%, 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 Section 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
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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.":
(c) The following definition of "Non-Recourse ORBCOMM
Debt" shall be added thereto in alphabetical order:
"Non-Recourse ORBCOMM Debt" shall mean Indebtedness
evidenced by the guarantee of ORBCOMM and ORBCOMM USA of the
Indebtedness for borrowed money of ORBCOMM Partnership and
ORBCOMM Capital not to exceed $170,00,0000 in aggregate
principal amount, the proceeds of which shall be used to
finance the design, development, construction, integration,
testing and operation of the satellite-based two-way data and
messaging communications of ORBCOMM Partnership, provided that
recourse for payment of such Indebtedness for borrowed money
is expressly limited to the assets and revenues of ORBCOMM,
ORBCOMM USA, ORBCOMM Partnership, ORBCOMM Capital and the
subsidiaries thereof, and provided, further, that with respect
to such Indebtedness for borrowed money neither the Company
nor any other Subsidiary (other than ORBCOMM and ORBCOMM USA),
nor any of the property or assets of the Company or any
Subsidiary (other than ORBCOMM and ORBCOMM USA) is directly or
indirectly liable in any manner whatsoever for the payment
thereof."
(d) The definition of "ORBCOMM Development" shall be and
is hereby deleted therefrom and the following definition of "ORBCOMM
Partnership" shall be added thereto in alphabetical order:
"ORBCOMM Partnership" shall mean ORBCOMM Global,
L.P., a Delaware limited partnership.
(e) The following definition of "ORBCOMM Capital" shall
be added thereto in alphabetical order:
"ORBCOMM Capital" shall mean ORBCOMM Global Capital
Corp., a Delaware corporation.
(f) The following definition of "ORBCOMM USA" shall be
added hereto in alphabetical order:
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"ORBCOMM USA" shall mean ORBCOMM USA, L.P., a
Delaware limited partnership.
Section 2. Waiver.
Section 2.1. Upon and by virtue of this Third Amendment becoming
effective on the Effective Date, the failure of the Company to comply with the
provisions of Section 5.9 (Priority Funded Debt Ratio) of the Note Agreement
for the period from and including January 1, 1996 through and including June
30, 1996, which failure constitutes an Event of Default under the Note
Agreements, shall be deemed to have been waived by the Purchaser. The Company
understands and agrees that the waiver contained in this Section 2.1 pertains
only to the matters and to the extent herein described and not to any other
actions of the Company under, or matters arising in connection with, the Note
Agreement or to any rights which the Purchaser has arising by virtue of any
such other actions or matters.
Section 3. Representations and Warranties of the Company.
Section 3.1. To induce the Purchaser to execute and deliver this
Third Amendment, the Company represents and warrants to the Purchaser (which
representations shall survive the execution and delivery of this Third
Amendment) that:
(a) this Third Amendment has been duly authorized,
executed and delivered by it and this Third Amendment constitutes the
legal, valid and binding obligation, contract and agreement of the
Company enforceable against it in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws or equitable principles relating to or
limiting creditors' rights generally;
(b) the Note Agreement, as amended by this Third
Amendment, constitutes the legal, valid and binding obligations,
contracts and agreements of the Company enforceable against it in
accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws or
equitable principles relating to or limiting creditors' rights
generally;
(c) the execution, delivery and performance by the
Company of this Third Amendment (i) has been duly authorized by all
requisite corporate action and, if required, shareholder action, (ii)
does not require the consent or approval of any governmental or
regulatory body or agency, and (iii) will not (A) violate (1) any
provision of law, statute, rule or regulation or its certificate of
incorporation or bylaws, (2) any order of any court or any rule,
regulation or order of any other agency or government binding upon it,
or (3) any provision of any material indenture, agreement or other
instrument to which it is a party or by which its properties or assets
are or may be bound, or (B) result in a breach or constitute (alone or
with due notice or lapse of time or both) a default under any
indenture, agreement or other instrument referred to in clause
(iii)(A)(3) of this Section 3.1(C); and
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(d) as of the date hereof and after giving effect to this
Third Amendment, no Default or Event of Default has occurred which is
continuing.
Section 4. Conditions to Effectiveness of Third Amendment.
Section 4.1. This Third Amendment shall not become effective
until, and shall become effective when, each and every one of the following
conditions shall have been satisfied:
(a) executed counterparts of this Third Amendment, duly
executed by the Company and the Purchaser, shall have been delivered
to the Purchaser;
(b) the Purchaser shall have received a new Note in the
form of Exhibit A hereto duly executed by the appropriate officer of
the Company which reflects the amendment to the interest rate set
forth in Section 1.1 hereof;
(c) the representations and warranties of the Company set
forth in Section 2 hereof shall be true and correct on and with
respect to the date hereof; and
(d) that certain Indenture dated as of August 7, 1996
between ORBCOMM Global, L.P. and ORBCOMM Global Capital Corp., as
issuers, Orbital Communications Corporation, Teleglobe Mobile
Partners, ORBCOMM USA, L.P. and ORBCOMM International Partners, L.P.,
as guarantors, and Marine Midland Bank, N.A., as trustee, shall be in
form and substance satisfactory to you and your special counsel and
you shall have received a true, correct and complete copy thereof.
Upon receipt of all of the foregoing, this Third Amendment shall on the
Effective Date become effective.
Section 5. Miscellaneous.
Section 5.1. Except as modified and expressly amended by this
Third Amendment, the Note Agreement is in all respects ratified, confirmed and
approved and all of the terms, provisions and conditions thereof shall be and
remain in full force and effect.
Section 5.2. The Company agrees to pay all reasonable fees and
expenses of the Purchaser and its special counsel in connection with the
preparation of this Third Amendment.
Section 5.3. Any and all notices, requests, certificates and
other instruments executed and delivered after the execution and delivery of
this Third Amendment may refer to the Note Agreement without making specific
reference to this Third Amendment but nevertheless all such references shall
include this Third Amendment unless the context otherwise requires.
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Section 5.4. This Third Amendment shall be governed by and
construed in accordance with the laws of the State of Illinois.
Section 5.5. This Third Amendment may be executed and delivered
in any number of counterparts, each of such counterparts constituting an
original, but all together only one Third Amendment.
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In Witness Whereof, the Company and the Purchaser have caused this
instrument to be executed, all as of the day and year first above written.
Orbital Sciences Corporation
By /s/ Jeffrey V. Pirone
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Vice President
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Accepted and Agreed to:
The Northwestern Mutual Life
Insurance Company
By /s/ Steven Swanson
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Vice President
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ORBITAL SCIENCES CORPORATION
11.50% Senior Note
Due June 14, 2001
No. R-2 June 14, 1996
$20,000,000
Orbital Sciences Corporation, a Delaware corporation (the "Company"),
for value received, hereby promises to pay to
The Northwestern Mutual Life Insurance Company
or registered assigns
on the fourteenth day of June, 2001
the principal amount of
Twenty Million Dollars ($20,000,000)
and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at
the rate of 11.50% per annum from the date hereof until maturity, payable
semiannually on the fourteenth of June and December in each year (commencing on
December 14, 1995) and at maturity. The Company agrees to pay 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 rate Overdue Rate after the due date,
whether by acceleration or otherwise, until paid. "Overdue Rate" shall mean
the lesser of (a) the maximum interest rate permitted by law and (b) the
greater of (1) 13.50% 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%.
Both the principal hereof and interest hereon are payable at the
principal office of the Company in Dulles, Virginia in coin or currency of the
United States of America which at the time of payment shall be legal tender for
the payment of public and private debts. If any amount of principal, premium,
if any, or interest on or in respect of this Note becomes due and payable on
any date which is not a Business Day, such amount shall be payable on the
immediately preceding Business Day. "Business Day" means 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.
EXHIBIT A
(to Third Amendment)
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This Note is one of the 11.50% Senior Notes due June 14, 2001 (the
"Notes") of the Company in the aggregate principal amount of $20,000,000 issued
or to be issued under and pursuant to the terms and provisions of the Note
Agreement dated as of June 1, 1995 as amended by the First Amendment dated as
of June 1, 1995, the Second Amendment dated as of March 15, 1996, and the Third
Amendment dated as of July 31, 1996 (collectively, the "Note Agreement"),
entered into by the Company with the original Purchaser therein referred to and
this Note and the holder hereof are entitled equally and ratably with the
holders of all other Notes outstanding under the Note Agreement to all the
benefits provided for thereby or referred to therein. Reference is hereby made
to the Note Agreement for a statement of such rights and benefits.
This Note and the other Notes outstanding under the Note Agreement may
be declared due prior to their expressed maturity date and certain prepayments
are required to be made thereon, all in the events, on the terms and in the
manner and amounts as provided in the Note Agreement.
The Notes are not subject to prepayment or redemption at the option of
the Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in the
Note Agreement.
This Note is registered on the books of the Company and is
transferable only by surrender thereof at the principal office of the Company
duly endorsed or accompanied by a written instrument of transfer duly executed
by the registered holder of this Note or its attorney duly authorized in
writing. Payment of or on account of principal, premium, if any, and interest
on this Note shall be made only to or upon the order in writing of the
registered holder.
This Note and said Note Agreement are governed by and construed in
accordance with the laws of Illinois, including all matters of construction,
validity and performance.
Orbital Sciences Corporation
By
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Its
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