<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED
SEPTEMBER 30, 1999
ORBITAL IMAGING CORPORATION
(COMMISSION FILE NO. 333-49583)
DELAWARE 54-1660268
(STATE OF INCORPORATION) (IRS IDENTIFICATION NUMBER)
21700 ATLANTIC BOULEVARD
DULLES, VIRGINIA 20166 (703) 406-5000
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (TELEPHONE NUMBER)
Indicate by check mark whether the registrant has (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. X Yes No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: 25,214,000 shares of common
stock outstanding as of November 10, 1999.
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PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ORBITAL IMAGING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED; IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
ASSETS
DECEMBER 31, SEPTEMBER 30,
1998 1999
---- ----
<S> <C> <C>
Current assets:
Cash and cash equivalents.................................................. $ 25,082 $ 21,751
Available-for-sale securities, at fair value............................... 34,401 35,796
Restricted held-to-maturity securities, at amortized cost.................. 16,724 12,810
Receivables and other current assets, net.................................. 3,199 5,123
---------- ----------
Total current assets.................................................. 79,406 75,480
Restricted held-to-maturity securities, at amortized cost........................ 7,813 -
Property, plant and equipment, at cost, less accumulated
depreciation of $7,360 and $9,888, respectively............................ 15,956 30,938
Satellites and related rights, at cost, less accumulated
depreciation and amortization of $22,367 and
$28,821, respectively...................................................... 196,598 239,064
Other assets..................................................................... 8,196 10,610
---------- ----------
Total assets............................................................... $ 307,969 $ 356,092
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses...................................... $ 16,879 $ 5,919
Current portion of deferred revenue........................................ 8,522 9,530
Deferred tax liabilities................................................... 580 -
---------- ----------
Total current liabilities............................................. 25,981 15,449
Senior notes..................................................................... 141,620 213,340
Deferred revenue, net of current portion......................................... 23,698 17,425
Deferred tax liabilities......................................................... 3,190 951
Capitalized lease obligation, net of current portion............................. 108 -
---------- ----------
Total liabilities.......................................................... 194,597 247,165
Preferred stock subject to repurchase, par value $0.01; 10,000,000 shares
authorized; Series A 12% cumulative convertible, 2,000,000 shares
authorized, 687,576 and 728,832 shares issued and outstanding, respectively
(liquidation
value of $70,133 and $76,527, respectively).................................. 64,954 71,349
Stockholders' equity:
Common stock, par value $0.01; 75,000,000 shares authorized;
25,214,000 shares issued and outstanding.............................. 252 252
Additional paid-in-capital................................................. 87,541 87,794
Accumulated deficit........................................................ (39,375) (50,468)
---------- ----------
Total stockholders' equity................................................. 48,418 37,578
---------- ----------
Total...................................................................... $ 307,969 $ 356,092
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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ORBITAL IMAGING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED; IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------- -------------------------------
1998 1999 1998 1999
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues..................................................$ 3,209 $ 6,410 $ 8,547 $ 13,135
Direct expenses........................................... 3,505 5,830 11,597 14,183
----------- --------- ----------- ---------
Gross profit (loss)....................................... (296) 580 (3,050) (1,048)
Selling, general and administrative expenses.............. 2,007 3,467 5,235 8,187
----------- --------- ----------- ---------
Loss from operations...................................... (2,303) (2,887) (8,285) (9,235)
Interest income (expense), net of interest expense
of $2,156, $688, $4,157 and $1,686, respectively....... (149) 580 1,151 1,718
------------ --------- ----------- ---------
Loss before benefit for income taxes...................... (2,452) (2,307) (7,134) (7,517)
Benefit for income taxes.................................. (322) (865) (3,492) (2,819)
----------- --------- ----------- ---------
Net loss..................................................$ (2,130) $ (1,442) $ (3,642) $ (4,698)
============ ========= ============ =========
Loss per common share - basic and assuming dilution.......$ (0.16) $ (0.14) $ (0.35) $ (0.44)
Loss available to common stockholders.....................$ (4,076) $ (3,628) $ (8,942) $ (11,093)
Weighted average shares outstanding:
Basic.................................................25,214,000 25,214,000 25,214,000 25,214,000
Assuming dilution.....................................42,661,580 44,957,889 40,989,938 44,525,215
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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ORBITAL IMAGING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED; IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
1998 1999
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.............................................................. $ (3,642) $ (4,698)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation, amortization and other....................... 9,714 10,057
Deferred tax benefit....................................... (3,492) (2,819)
Changes in assets and liabilities:
Increase in receivables and other current assets........... (655) (1,827)
(Increase) decrease in other assets........................ (315) 101
Increase (decrease) in accounts payable and accrued expenses 22,275 (10,960)
Decrease in deferred revenue............................... (3,152) (5,265)
----------- -----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES................... 20,733 (15,411)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures.................................................. (89,702) (65,917)
Purchases of restricted held-to-maturity securities................... (32,184) (7,306)
Purchases of available-for-sale securities............................ (94,968) (34,020)
Maturities of restricted held-to-maturity securities.................. 7,568 19,691
Maturities of available-for-sale securities........................... 52,472 25,800
Sales of available-for-sale securities................................ 26,842 5,878
Payment for business acquisition (5,000) -
----------- ----------
NET CASH USED IN INVESTING ACTIVITIES................................. (134,972) (55,875)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of long-term obligations................... 136,152 68,062
Repayment of capitalized lease obligation............................. - (108)
Net proceeds from issuance of common stock warrants................... 8,690 -
Net proceeds from issuance of preferred stock subject to repurchase... 21,274 -
---------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES............................. 166,116 67,954
---------- ----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.......................... 51,877 (3,332)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD............................. 10,883 25,083
---------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD................................... $ 62,760 $ 21,751
========== ==========
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid............................................................ $ 9,009 $ 8,735
========== ==========
Non-cash item:
Capitalized compensatory stock options................................... $ - $ 253
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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ORBITAL IMAGING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED; IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
-------------- PAID-IN ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT TOTAL
------ ------ ------- ------- -----
<S> <C> <C> <C> <C> <C>
BALANCE AS OF DECEMBER 31, 1997........... 25,214,000 $ 252 $ 75,285 $ (26,532) $ 49,005
Issuance of common stock warrants.... - - 8,690 - 8,690
Preferred stock dividends paid in
shares.............................. - - - (2,847) (2,847)
Accrual of preferred stock dividends. - - - (3,243) (3,243)
Net loss............................. - - - (3,642) (3,642)
----------- ----- --------- --------- ---------
BALANCE AS OF SEPTEMBER 30, 1998.......... 25,214,000 $ 252 $ 83,975 $ (36,264) $ 47,963
=========== ===== ========= ========= =========
BALANCE AS OF DECEMBER 31, 1998........... 25,214,000 $ 252 $ 87,541 $ (39,375) $ 48,418
Issuance of stock options............ - - 253 - 253
Preferred stock dividends paid in
shares.............................. - - - (2,751) (2,751)
Accrual of preferred stock dividends. - - - (3,644) (3,644)
Net loss............................. - - - (4,698) (4,698)
----------- ----- --------- --------- ---------
BALANCE AS OF SEPTEMBER 30, 1999.......... 25,214,000 $ 252 $ 87,794 $ (50,468) $ 37,578
=========== ===== ========= ========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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ORBITAL IMAGING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1999
(UNAUDITED)
(1) BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited interim condensed
consolidated financial statements reflect all adjustments, consisting of normal
recurring adjustments, considered necessary for a fair presentation of the
information. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted following the instructions, rules and
regulations prescribed by the Securities and Exchange Commission ("SEC").
Although management believes that the disclosures provided are adequate to make
the information presented not misleading, you should read these unaudited
interim condensed consolidated financial statements in conjunction with the
audited financial statements and associated footnotes for the year ended
December 31, 1998, which are included in Orbital Imaging Corporation's Form 10-K
filed with the SEC. Operating results for the nine months ended September 30,
1999 are not necessarily indicative of the results that may be expected for the
full year.
We will refer to Orbital Imaging Corporation as "ORBIMAGE."
ORBIMAGE's current auditors, PricewaterhouseCoopers LLP, have identified an
issue regarding whether the Series A Preferred Stock sold on February 25, 1998
was deemed to have a beneficial conversion feature as a result of the difference
in the conversion price of the preferred stock and conversion price of warrants
issued concurrently with such preferred stock. The difference between the
conversion prices of the preferred stock and the warrants may be construed as a
deemed dividend to the holders of the preferred stock, and as a result, the
Company's basic and diluted net loss per common share for the year ended
December 31, 1998, which was reported as $(.51), would be estimated to be
$(1.09). This continues to be a matter of discussion among the Company and its
outside auditors. The prior years were audited by ORBIMAGE's former auditors,
KPMG LLP. KPMG LLP has not responded with respect to these questions and the
effect of a change, if any, to ORBIMAGE's financial statements has not yet been
determined.
(2) SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The condensed consolidated financial statements include the accounts of
ORBIMAGE and its wholly owned subsidiary. All material intercompany transactions
and accounts have been eliminated in consolidation.
Revenue Recognition
ORBIMAGE's principal source of revenue is the sale of satellite imagery to
customers, value-added resellers and distributors. Such sales often require
ORBIMAGE to provide imagery over the term of a multi-year sales contract.
Accordingly, ORBIMAGE recognizes revenues on imagery contracts on a
straight-line basis over the delivery term of the contract. Deferred revenue
represents receipts in advance of the delivery of imagery.
ORBIMAGE recognizes revenue on the contracts to construct OrbView-3 and
OrbView-4 distributor ground stations using the percentage-of-completion method
of accounting. Revenue on these contracts is recognized based on costs incurred
in relation to total estimated costs. To the extent that estimated costs of
completion are adjusted, revenue and profit recognized from a particular
contract will be affected in the period of the adjustment. Anticipated contract
losses are recognized as they become known.
Cash and Cash Equivalents
ORBIMAGE considers all highly liquid investments with original maturities
of three months or less to be cash equivalents.
Stock-Based Compensation
To the extent that ORBIMAGE grants stock options to non-employee
consultants or advisors, ORBIMAGE records costs equal to the fair value of the
options granted as of the measurement date as determined using a Black-Scholes
model. ORBIMAGE capitalizes the cost of stock options granted to non-employee
consultants or advisors working on the construction of satellites. The
capitalized costs are recorded as part of the historical cost of the satellites
and will be amortized over the asset's useful life when placed in service. No
compensation expense has been recognized in connection with stock option grants
to employees in the accompanying statements of operations.
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Income Taxes
ORBIMAGE has recorded its interim income tax benefit based on estimates of
the effective tax rate expected to be applicable for the full fiscal year.
Estimated effective rates recorded during interim periods may be periodically
revised, if necessary, to reflect current estimates.
Reclassifications
Certain reclassifications have been made to the 1998 financial statements
to conform to the 1999 financial statement presentation. Preferred stock and
additional paid-in capital totaling $7,000 and $65 million, respectively, as of
December 31, 1998 were reclassified from stockholders' equity to preferred stock
subject to repurchase.
(3) INTEREST CAPITALIZATION
ORBIMAGE capitalizes interest costs in connection with the construction of
satellites and related ground segments and systems. The capitalized interest is
recorded as part of the historical cost of the asset to which it relates and
will be amortized over the asset's useful life when placed in service.
Capitalized interest totaled $2.7 million and $6.5 million for the three months
ended September 30, 1998 and 1999, respectively, and $6.9 million and $16.6
million for the nine months ended September 30, 1998 and 1999, respectively.
(4) RELATED PARTY TRANSACTIONS
Orbital Sciences Corporation ("Orbital") is ORBIMAGE's majority
stockholder. ORBIMAGE incurred and capitalized costs of approximately $44.5
million and $16.8 million for the three months ended September 30, 1998 and
1999, respectively, and $81.3 million and $44.4 million for the nine months
ended September 30, 1998 and 1999, respectively, under contracts with Orbital
for the purchase of various satellites, licenses and ground systems. ORBIMAGE
incurred and expensed costs of approximately $0.6 million and $0.6 million for
the three months ended September 30, 1998 and 1999, respectively, and $1.8
million and $1.7 million for the nine months ended September 30, 1998 and 1999,
respectively, under an administrative services agreement with Orbital.
(5) COMPREHENSIVE INCOME (LOSS)
For the nine months ended September 30, 1998 and 1999, there were no
material differences between net loss as reported and comprehensive income
(loss).
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(6) LOSS PER COMMON SHARE
The computations of basic and diluted loss per common share for the three
months and nine months ended September 30, 1998 and 1999 were as follows (in
thousands, except share data):
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
------------------ -----------------
SEPTEMBER 30, SEPTEMBER 30,
------------- -------------
1998 1999 1998 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Numerator for basic and diluted loss per common share:
Net loss............................................... $ (2,130) $ (1,442) $ (3,642) $ (4,698)
Preferred stock dividends.............................. (1,946) (2,186) (5,300) (6,395)
------------- ------------- ------------- -------------
Loss available to common stockholders..................... $ (4,076) $ (3,628) $ (8,942) $ (11,093)
============= ============= ============= =============
Denominator for basic loss per common
share -- weighted average shares....................... 25,214,000 25,214,000 25,214,000 25,214,000
Effect of dilutive securities:
Preferred stock........................................ 15,555,228 17,477,986 14,156,984 17,043,105
Warrants............................................... 1,312,746 1,312,746 1,048,273 1,312,746
Stock options.......................................... 579,606 953,157 570,681 955,364
------------- ------------- ------------- -------------
Denominator for diluted loss per common share -- adjusted
weighted average shares assuming dilution.............. 42,661,580 44,957,889 40,989,938 44,525,215
============= ============= ============= =============
Loss per common share -- basic and diluted................ $(0.16) $(0.14) $(0.35) $(0.44)
====== ====== ====== ======
</TABLE>
(7) SENIOR NOTES
On April 22, 1999, ORBIMAGE completed a debt offering raising net proceeds
of approximately $68.1 million. Out of the net proceeds of the offering,
ORBIMAGE purchased approximately $7.4 million of U.S. Treasury securities to
fund the interest payments on the senior notes through March 1, 2000.
(8) PREFERRED STOCK SUBJECT TO REPURCHASE
The activity in the preferred stock subject to repurchase was as follows for
the nine months ended September 30, 1998 and 1999 (dollars in thousands):
<TABLE>
<CAPTION>
SHARES AMOUNT
------ ------
<S> <C> <C>
BALANCE AS OF DECEMBER 31, 1997....................... 392,887 $ 36,355
Shares issued in private offering, net............. 227,295 21,275
Preferred stock dividends paid in shares........... 28,471 2,057
Accrual of preferred stock dividends............... - 3,243
------------ ------------
BALANCE AS OF SEPTEMBER 30, 1998...................... 648,653 $ 62,930
============ ============
BALANCE AS OF DECEMBER 31, 1998....................... 687,576 $ 64,954
Preferred stock dividends paid in shares........... 41,256 2,751
Accrual of preferred stock dividends............... - 3,644
------------ ------------
BALANCE AS OF SEPTEMBER 30, 1999...................... 728,832 $ 71,349
============ ============
</TABLE>
(9) STOCK OPTION PLAN
Effective April 26, 1999 and September 13, 1999, ORBIMAGE granted 774,323
and 15,500 options to purchase shares of common stock, respectively, to
employees, directors and consultants. The stock options were granted with an
exercise price of $6.25 and generally vest in one-third increments over a
three-year period.
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(10) SEGMENT INFORMATION
In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
Disclosures about Segments of an Enterprise and Related Information, which
establishes reporting standards for a company's operating segments and related
disclosures about its products, services, geographic areas and major customers.
ORBIMAGE adopted SFAS No. 131 effective January 1, 1998. SFAS No. 131 requires
comparative segment information; however, ORBIMAGE operated as a single segment
for the nine months ended September 30, 1998 and 1999.
ORBIMAGE recognized revenues related to contracts with the National
Aeronautics and Space Administration of approximately $2.4 million and $2.4
million, for the three months ended September 30, 1998 and 1999, respectively,
and $7.2 million and $7.1 million for the nine months ended September 30, 1998
and 1999, respectively, representing approximately 75%, 38%, 84% and 54%,
respectively, of total revenues recognized during those periods.
(11) SUBSEQUENT EVENTS
On October 26, 1999, ORBIMAGE entered into a stock purchase agreement with
Orbital, which provides for Orbital to purchase up to 2,500,000 shares of common
stock for a price of $10 per share in minimum $5 million increments whenever
ORBIMAGE's aggregate balance of cash, cash equivalents and available-for-sale
securities falls below $10 million. Orbital's commitment to purchase common
shares is subject to obtaining a third party consent. If Orbital does not
receive the necessary consent prior to December 31, 1999, Orbital has agreed to
defer invoicing ORBIMAGE for the first $25 million incurred on or after January
1, 2000 under (a) the OrbView satellite procurement agreement and (b) the
license agreement among ORBIMAGE, Orbital and Orbital's wholly owned Canadian
subsidiary, MacDonald, Dettwiler and Associates, Ltd. ("MDA") granting ORBIMAGE
exclusive worldwide rights to market and sell imagery from the RadarSat-2
satellite (the "RadarSat-2 License"), until: 1) the required third party consent
is obtained; or 2) twelve months following the commencement of commercial
operations of either OrbView-3 or OrbView-4, whichever occurs first.
On October 26, 1999, ORBIMAGE, Orbital and MDA amended the RadarSat-2
License, pursuant to which amendment ORBIMAGE agreed to pay in October 1999 a
$15 million payment that would have otherwise been due in 2000.
On November 1, 1999, ORBIMAGE declared a preferred stock dividend of 43,729
shares payable in kind.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
Orbital Imaging Corporation ("ORBIMAGE") operates and is further developing
a fleet of satellites that collect, process and distribute digital imagery of
the Earth's surface, atmosphere and weather conditions. ORBIMAGE has entered
into a procurement agreement with Orbital Sciences Corporation ("Orbital") to
purchase the OrbView-1, OrbView-3 and OrbView-4 satellites, including launch
services, and the U.S. ground system necessary to operate the satellites and to
collect, process and distribute imagery. Under the procurement agreement,
ORBIMAGE also acquired a license to operate and control the OrbView-2 satellite
(the "OrbView-2 License"). Under a license agreement with Orbital and its wholly
owned Canadian subsidiary, MacDonald, Dettwiler and Associates, Ltd. ("MDA"),
ORBIMAGE has acquired the exclusive worldwide rights to market and sell imagery
from the RadarSat-2 satellite (the "RadarSat-2 License") and has in turn granted
these rights to MDA. MDA will own and operate RadarSat-2 and provide operations,
data reception, processing, archiving, marketing and distribution services to
ORBIMAGE. RadarSat International, Inc. ("RSI"), a wholly-owned subsidiary of
MDA, has also appointed ORBIMAGE as a non-exclusive distributor of RadarSat-1
satellite imagery in the United States. Orbital also provides certain
administrative services to ORBIMAGE such as accounting, tax, human resources and
benefit-related services.
ORBIMAGE expects OrbView-3 to be operational in the third quarter of 2000,
OrbView-4 to be operational in the first quarter of 2001 and RadarSat-2 to be
operational in the second quarter of 2002.
Business Acquisition. In April 1998, ORBIMAGE acquired substantially all of
the assets of TRIFID Corporation ("TRIFID") for $5.0 million. TRIFID provides
sophisticated image processing software, geographic information database and
production systems, imaging sensor design and related engineering services to
both governmental and commercial customers. The acquisition provides ORBIMAGE
with the technical personnel and production capability required to generate
high-resolution imagery and derived products.
Revenues. ORBIMAGE's principal source of revenue is the sale of satellite
imagery to customers, value-added resellers and distributors and sales of ground
stations to distributors. ORBIMAGE has entered into several long-term sales
contracts to provide imagery products and, in certain circumstances, receives
contractual payments in advance of product delivery. ORBIMAGE initially records
deferred revenue for the total amount of the advance payments under these
contracts and recognizes revenue over the contractual delivery period. ORBIMAGE
recognizes revenue on the contracts to construct OrbView-3 and OrbView-4
distributor ground stations using the percentage-of-completion method of
accounting. As of September 30, 1999, ORBIMAGE had approximately $27.0 million
of deferred revenue related primarily to advance payments for OrbView-2 imagery.
System Depreciation. ORBIMAGE depreciates its satellites over the design
life of each satellite. ORBIMAGE is amortizing the cost of the OrbView-2 License
over the design life of the OrbView-2 satellite. ORBIMAGE intends to amortize
the cost of OrbView-3, OrbView-4 and the RadarSat-2 License over the design
lives of the satellites, estimated to be five, five and seven years,
respectively. ORBIMAGE depreciates the ground systems used to operate the
satellites and collect, process and distribute imagery over the estimated lives
of the assets, generally eight years. Depreciation begins when the satellites
and ground systems are placed in service.
Interest Expense. In April 1999, ORBIMAGE issued $75 million in principal
amount of 11 5/8% senior notes due 2005 (the "1999 Offering"). In February 1998,
ORBIMAGE issued $150 million of units (the "1998 Offering"), each unit
consisting of $1,000 principal amount of 11 5/8% senior notes due 2005 and one
warrant to purchase 8.75164 shares of ORBIMAGE common stock. Interest on the
senior notes, together with amortization of debt discount, is capitalized as the
historical costs of assets under construction, when appropriate. ORBIMAGE
expects to capitalize a significant portion of its interest expense through 2001
as it completes construction of the OrbView-3 and OrbView-4 satellites and makes
payments due under the RadarSat-2 License.
RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND
1999
Revenues. Revenues were $3.2 million and $6.4 million for the three months
ended September 30, 1998 and
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1999, respectively, and $8.5 million and $13.1 million for the nine months ended
September 30, 1998 and 1999, respectively. The increase in 1999 revenues was due
to work completed on the construction of OrbView-3 and OrbView-4 distributor
ground stations, the acquisition of TRIFID and increased sales of OrbView-2 and
aerial imagery products.
Direct Expenses. Direct expenses include the costs of operating and
depreciating the OrbView-1 satellite, the OrbView-2 License, the related ground
systems and the costs of constructing the OrbView-3 and OrbView-4 distributor
ground stations. Direct satellite operating costs primarily consist of labor
expenses. Direct expenses were $3.5 million and $5.8 million for the three
months ended September 30, 1998 and 1999, respectively, and $11.6 million and
$14.2 million for the nine months ended September 30, 1998 and 1999,
respectively. For the three and nine months ended September 30, 1999, direct
expenses from the construction of the OrbView-3 and OrbView-4 distributor ground
stations totaled $1.6 million. There were no such direct expenses in 1998.
ORBIMAGE expects direct expenses to increase when OrbView-3, OrbView-4 and
RadarSat-2 are placed in operation.
Selling, General and Administrative Expenses. Selling, general and
administrative ("SG&A") expenses include the costs of marketing, advertising,
promotion and other selling expenses, as well as the costs of the finance,
administrative and general management functions of ORBIMAGE. SG&A expenses were
$2.0 million and $3.5 million for the three months ended September 30, 1998 and
1999, respectively, and $5.2 million and $8.2 million for the nine months ended
September 30, 1998 and 1999, respectively. The increase in SG&A expenses in 1999
was primarily attributable to the increase in salaries and related benefits as
ORBIMAGE expanded its operations. Additionally, for the nine months ended
September 30, 1999, $0.8 million of the increase in SG&A expenses related to the
acquisition of TRIFID.
Interest Income and Interest Expense. Interest income reflects interest
earnings on investments made primarily with proceeds from ORBIMAGE's financing
activities. Interest expense reflects interest incurred on the senior notes, net
of applicable capitalized interest. Interest income (expense) was $(0.1) million
and $0.6 million for the three months ended September 30, 1998 and 1999,
respectively, which is net of interest expense of $2.2 million and $0.7 million,
respectively. Interest income was $1.2 million and $3.4 million for the nine
months ended September 30, 1998 and 1999, respectively, which is net of interest
expense of approximately $4.2 million and $1.7 million, respectively.
Capitalized interest in connection with the construction of satellites and the
related ground system totaled $2.7 million and $6.5 million for the three months
ended September 30, 1998 and 1999, respectively, and $6.9 million and $16.6
million for the nine months ended September 30, 1998 and 1999, respectively. The
1999 periods also include the capitalization of interest in connection with the
RadarSat-2 License. The capitalized interest is recorded as part of the
historical cost of the assets to which it relates and will be amortized over the
assets' useful lives when placed in service.
Benefit for Income Taxes. ORBIMAGE recorded income tax benefits of $0.3
million and $0.9 million for the three months ended September 30, 1998 and 1999,
respectively, and $3.5 million and $2.8 million for the nine months ended
September 30, 1998 and 1999, respectively. The tax benefits result from net
operating losses generated during the period in addition to decreases in
deferred tax liabilities for depreciation of satellite assets, which had been
previously deducted for tax purposes.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1999, ORBIMAGE had approximately $57.5 million of cash,
cash equivalents and available-for-sale securities. In October 1999, ORBIMAGE
paid Orbital a $15 million installment in connection with the license fee for
the RadarSat-2 License.
On October 26, 1999, ORBIMAGE entered into a stock purchase agreement with
Orbital, which provides for Orbital to purchase up to 2,500,000 shares of common
stock for a price of $10 per share (the "Orbital Investment") in minimum $5
million increments whenever ORBIMAGE's aggregate balance of cash, cash
equivalents and available-for-sale securities falls below $10 million. Orbital's
commitment to purchase common shares is subject to obtaining a third party
consent. If Orbital does not receive the necessary consent prior to December 31,
1999, Orbital has agreed to defer invoicing ORBIMAGE for the first $25 million
incurred on or after January 1, 2000 under the procurement agreement and the
RadarSat-2 License until: 1) the required third party consent is obtained; or 2)
twelve months following the commencement of commercial operations of either
OrbView-3 or OrbView-4, whichever
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occurs first.
On April 22, 1999, ORBIMAGE completed the 1999 Offering, raising net
proceeds of approximately $68.1 million. On February 25, 1998, ORBIMAGE
completed the 1998 Offering, raising net proceeds of $144.6 million. The total
effective interest rate on the senior notes, including the debt discount, is
approximately 13.7%. Out of the net proceeds of the two offerings, ORBIMAGE
purchased approximately $39.0 million of U.S. Treasury securities to fund the
interest payments on the senior notes through March 1, 2000. As of September 30,
1999, restricted held-to-maturity securities totaled $12.8 million.
Operating activities provided cash of approximately $20.7 million and used
cash of $15.4 million during the nine months ended September 30, 1998 and 1999,
respectively. The decrease in operating cash flow from 1998 to 1999 is primarily
attributable to decreases in accounts payable and accrued expenses, and deferred
revenue of $11.0 million and $5.3 million, respectively.
Investing activities used cash of approximately $135.0 million and provided
cash of $55.9 million for the nine months ended September 30, 1998 and 1999,
respectively. The increase in the cash provided by investing activities from
1998 to 1999 is attributable primarily to the purchase of the pledged securities
and the net maturities (net of purchases) of available-for-sale securities,
partially offset by increased capital expenditures. After completion of the 1998
Offering and the 1999 Offering, ORBIMAGE invested the proceeds from the
offerings in various short- and long-term investments, consisting primarily of
commercial paper and U.S. Treasury securities.
Capital expenditures related primarily to the construction of OrbView-3 and
OrbView-4 for the nine months ended September 30, 1998 and 1999 were
approximately $89.7 million and $65.9 million, respectively. Capital
expenditures during the nine months ended September 30, 1999 also included a $15
million payment for the RadarSat-2 License. The total cost of the OrbView-1,
OrbView-3 and OrbView-4 satellites, the OrbView-2 License, the RadarSat-2
License and the related U.S. ground systems, is estimated to be approximately
$345 million, which amount does not include approximately $31 million to be
funded by the U.S. Air Force through a contract with Orbital or $140 million to
be funded by the Canadian Space Agency ("CSA") through a contract with MDA. Of
this amount, as of September 30, 1999, ORBIMAGE had incurred costs of
approximately $268.8 million, excluding insurance.
Through the first quarter of 2001, when OrbView-4 is expected to be
operational, we expect to incur additional capital expenditures of approximately
$51.2 million for the OrbView-3 and OrbView-4 satellites and the RadarSat-2
License. Of this amount, approximately $21.2 million will be used for the
OrbView-3 and OrbView-4 satellites and $30 million will be used for the
RadarSat-2 License. In total, ORBIMAGE's cost for the RadarSat-2 License will be
approximately $60 million. We expect to make installment payments on the
RadarSat-2 License through the operational date of RadarSat-2, which we expect
to be in the second quarter of 2002. ORBIMAGE expects to fund future capital
expenditures as well as negative cash flows from operating activities using the
net proceeds of the 1999 Offering, together with available cash, cash
equivalents and securities, and the proceeds from the Orbital Investment.
ORBIMAGE does not expect to generate net positive cash flow from operations
sufficient to fund both operations and capital expenditures before the first
quarter of 2001, when both OrbView-3 and OrbView-4 are expected to be
operational. While ORBIMAGE believes it has sufficient resources to meet its
requirements through the first quarter of 2001, additional funding may be
necessary in the event of further OrbView-3 or OrbView-4 launch delays, cost
increases or unanticipated expenses. We cannot assure you that additional
capital will be available, if needed, on favorable terms or on a timely basis,
if at all. ORBIMAGE has incurred losses since its inception, and management
believes that it will continue to do so at least through 2001. ORBIMAGE's
ability to become profitable and generate positive cash flow is dependent on the
continued expansion of commercial services, adequate customer acceptance of
ORBIMAGE's products and services and numerous other factors. We cannot assure
you that the market will accept our products and services.
"YEAR 2000" COMPLIANCE
The year 2000 presents potential concerns for computer hardware and
software applications. The consequences of this may include systems failures and
business process interruption. The problem may exist for many kinds of
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software and hardware, including mainframes, minicomputers, PCs and embedded
systems.
ORBIMAGE has completed an assessment of the potential Year 2000 issues for
various financial, technical and operational computer-related systems. This
assessment consisted of reviewing software code and hardware system components
to determine whether a system failure or miscalculations causing disruption of
operations could occur as a result of the system's inability to distinguish
between the year 2000 and the year 1900. ORBIMAGE intends to correct any Year
2000 issues, or develop alternative "work-around" procedures that address the
problem, by December 1999. ORBIMAGE has also inquired of its primary vendor,
Orbital, whether products and services provided by Orbital may be adversely
affected by the Year 2000 issue. Orbital has informed ORBIMAGE that it has
identified no material Year 2000 issues affecting its provision of products and
administrative services. Orbital has substantially completed its plan to prepare
for Year 2000 issues, including renovation work and validation testing with
respect to critical systems, and intends to achieve a goal of Year 2000
readiness by December 1999.
Our largest customers are U.S. government agencies. If these agencies'
systems are not Year 2000 compliant, payments they owe us could be delayed. A
significant delay in payments could have a material impact on ORBIMAGE's
financial results.
ORBIMAGE does not currently anticipate that addressing Year 2000 problems
for its internal systems will have a material impact on its operations or
financial results. ORBIMAGE has spent approximately $0.1 million on Year 2000
compliance and does not anticipate incurring substantial costs above that
amount. There can be, however, no assurance that costs associated with
addressing Year 2000 issues will not be greater than anticipated, or that Year
2000 problems will be identified on a timely basis and that corrective actions
undertaken by ORBIMAGE or its primary vendor will be completed before any Year
2000 problems occur. All costs, including the cost of internal personnel,
outside consultants, systems replacements and other equipment, have been and
will continue to be expensed as incurred, except for long-lived assets, which
will be capitalized in accordance with ORBIMAGE's capitalization policies.
ORBIMAGE has developed contingency plans if it appears that it or its key
supplier will not be Year 2000 compliant and the noncompliance is expected to
have a material adverse impact on ORBIMAGE's operations.
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OUTLOOK: ISSUES AND UNCERTAINTIES
The Private Securities Litigation Reform Act of 1995 (the "Act") provides a
safe harbor, in some circumstances, for forward-looking statements made by or on
behalf of ORBIMAGE. ORBIMAGE and its representatives may from time-to-time make
written or verbal forward-looking statements, including statements contained in
ORBIMAGE's filings with the Securities and Exchange Commission. All statements
that address operating performance, events, or developments that ORBIMAGE
expects or anticipates will occur in the future, including statements relating
to ORBIMAGE's sales and earnings growth, capital expenditures or statements
expressing general optimism about future operating results, are forward-looking
statements within the meaning of the Act. The forward-looking statements are and
will be based on management's then-current views and assumptions regarding
future events and operating performance. The following are some of the factors
that could cause actual results to differ materially from information contained
in ORBIMAGE's forward-looking statements.
LIMITED HISTORY OF OPERATIONS AND NET LOSSES -- GIVEN OUR LIMITED OPERATING
HISTORY AND NET LOSSES, OUR FUTURE PROSPECTS ARE UNCERTAIN.
Limited operating and financial data. We did not begin preliminary service
until 1995, when we launched OrbView-1. We have a history of net losses from
operations and have generated only limited revenues from the operations of
OrbView-1 and OrbView-2 and our image processing business.
Our business plan depends upon:
- the timely construction and deployment of OrbView-3, OrbView-4 and
RadarSat-2 and development of the related ground systems; and
- our ability to develop a customer base, distribution channels and
value-added enhancements for our imagery products and services.
Given ORBIMAGE's limited operating history, and in light of the risks,
expenses, difficulties and delays encountered in a high technology, highly
regulated industry, we cannot assure you that OrbView-3, OrbView-4 or RadarSat-2
will be constructed and deployed in accordance with our schedule or that we will
be able to develop a sufficiently large revenue-generating customer base to
compete successfully in the remote imaging industry.
Expectation of continued losses. Our business strategy requires significant
capital expenditures. We will incur a substantial portion of these expenditures
before we generate significant revenues. Combined with our operating expenses,
these capital expenditures cause negative cash flow until we establish an
adequate revenue-generating customer base. We had an accumulated deficit of
approximately $50.5 million through September 30, 1999. We expect losses to
continue through 2000, and we do not expect to generate net positive cash flow
from operations sufficient to fund both operations and capital expenditures
until both OrbView-3 and OrbView-4 are operational, currently expected to be in
the first quarter of 2001. We cannot assure you that the OrbView satellites will
become operational on this timetable, or at all, or that we will achieve or
sustain any positive cash flow or profitability thereafter.
POTENTIAL ADDITIONAL CAPITAL REQUIREMENTS -- OUR INABILITY TO FUND POTENTIAL
ADDITIONAL CAPITAL REQUIREMENTS COULD DELAY SATELLITE CONSTRUCTION AND
DEPLOYMENT.
We believe that the net proceeds of the 1999 Offering, together with cash
on hand, expected cash flows from operations, advance payments from customers,
and the proceeds from the Orbital Investment will be sufficient to fund our
operations through the first quarter of 2001. We cannot assure you that we will
generate sufficient cash from operations to pay for our anticipated capital
expenditures, or that these expenditures will fall within our estimates. If we
do not generate sufficient cash flow by the first quarter of 2001, or if our
capital expenditures exceed our estimates, we would need additional capital.
In October 1999, we entered into a stock purchase agreement with Orbital,
which provides for Orbital to purchase up to 2,500,000 shares of common stock
for a price of $10 per share. Orbital's investment is subject to obtaining a
third party consent. There can be no assurance that Orbital will be able to
obtain such third party consent
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or that Orbital will be able to fulfill its purchase commitment. Orbital's
inability to fulfill its purchase commitment could have a material effect on
ORBIMAGE's financial condition and results of operations.
A significant portion of our capital requirements are related to
developing, constructing and launching the OrbView satellites, constructing and
activating the related U.S. ground systems and acquiring the RadarSat-2 License.
While most of these costs are currently fixed under agreements with Orbital, we
cannot assure you that these costs will not increase over time. For example, in
December 1998, we agreed to cost increases of $17 million under our procurement
agreement with Orbital. We will pay for launch and on-orbit insurance and
technological assistance for OrbView-3, OrbView-4 and RadarSat-2 on a cost-plus
or cost-reimbursable basis. Many factors outside our control influence the costs
of these and other items and services, and we may need to raise more capital if
any of these costs increase materially.
We may also need to raise additional capital if, for example:
- significant delays occur in deploying OrbView-3, OrbView-4 or
RadarSat-2;
- we do not enter into agreements with customers, value-added resellers
or distributors for high-resolution imagery in the time frames or on
the terms that we anticipate;
- our estimated net operating deficit increases because we incur
significant unanticipated expenses, such as costs for resolving
satellite operational difficulties;
- we have to modify all or part of OrbView-3 and OrbView-4 or ground
system designs to meet changed or unanticipated market, regulatory or
technical requirements;
- We decide to increase our value-added product development costs; or
- we decide to further expand our fleet of satellites or to acquire
additional imagery distribution rights through licensing arrangements
or otherwise.
If these or other events occur, we cannot assure you that we could raise
additional capital on favorable terms, on a timely basis or at all. A
substantial shortfall in funding would delay or prevent deployment of OrbView-3,
OrbView-4 or RadarSat-2.
SCHEDULE DELAYS - ADDITIONAL DELAYS IN THE COMMERCIAL OPERATION OF OUR
SATELLITES COULD ADVERSELY AFFECT OUR BUSINESS.
We have previously experienced delays in the launch dates of OrbView-3 and
OrbView-4. We have recently experienced additional delays in the production
schedules of OrbView-3, OrbView-4 and RadarSat-2, which have resulted in the
delay in the operational dates of OrbView-3, and OrbView-4 and RadarSat-2 to the
third quarter of 2000, first quarter of 2001 and the second quarter of 2002,
respectively. We previously encountered significant delays in the design,
production and testing of the OrbView-2 satellite that was launched in August
1997.
We could experience additional delays in the commercial operation of
OrbView-3, OrbView-4 and/or RadarSat-2 from a variety of causes, including:
- delays in designing, constructing, integrating or testing the
satellites, satellite components and related ground systems;
- delayed or unsuccessful launches;
- subcontractor or manufacturer delays;
- delays in receiving, or restrictions on, the licenses necessary to
construct and operate the satellite systems, including delays in
obtaining, or restrictions on, Orbital's export license for the
RadarSat-2 satellite bus and/or technical data and defense services
relating thereto;
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- delays under our procurement agreement with Orbital, or delays under
the CSA Contract, including delays by CSA in procuring a launch
vehicle on a timely basis for RadarSat-2; or
- other events beyond our control.
The perceived and actual timing of satellite launches may affect
competition in the remote imaging industry. Additional delays in the deployment
of OrbView-3, OrbView-4 or RadarSat-2 could increase pre-launch operating costs,
delay revenues, result in revocation of our FCC licenses and negatively affect
our marketing efforts. The perception of potential delays also could affect our
marketing efforts. We cannot assure you that any of these satellites will be
launched or deployed on a timely basis.
LAUNCH FAILURES -- A LAUNCH VEHICLE FAILURE WOULD ADVERSELY AFFECT OUR ABILITY
TO DELIVER IMAGERY PRODUCTS AND SERVICES.
Satellite launches are subject to significant risks, including partial or
complete launch vehicle failure. Launch vehicle failure may cause disabling
damage to or loss of a satellite or may result in a failure to deliver the
satellite to its proper orbit. We have contracted with Orbital to launch
OrbView-3 on a Pegasus launch vehicle, which has flown 27 missions and has a
success rate of approximately 90%. However, there are several additional Pegasus
launches planned before OrbView-3's scheduled launch, and the failure of any one
of those launch vehicles could result in delayed deployment of OrbView-3. The
Pegasus is launched from beneath Orbital's modified Lockheed L-1011 aircraft. If
Orbital's L-1011 aircraft is unavailable, we could experience significant
delays. Orbital would have to acquire and modify a new carrier aircraft or we
would have to arrange to deploy OrbView-3 using an alternative launch vehicle.
We cannot assure you that Orbital could obtain another aircraft and properly
modify the aircraft or that we could obtain alternate launch services on a
timely basis, or at all. We have contracted with Orbital to launch OrbView-4 on
its Taurus launch vehicle, which has flown three missions to date, all of which
were successful. We expect CSA to provide a launch vehicle for RadarSat-2, which
has not yet been identified. We cannot assure you that OrbView-3, OrbView-4 or
RadarSat-2 will be successfully launched. A launch failure of OrbView-3,
OrbView-4 or RadarSat-2 or the failure of CSA to provide a launch vehicle for
RadarSat-2 could negatively affect our business, financial condition, results of
operations, our ability to deliver our products and services and service our
debt.
MARKET ACCEPTANCE -- WE CANNOT ASSURE YOU THAT THE MARKET WILL ACCEPT OUR
PRODUCTS AND SERVICES.
Our success depends on existing markets accepting our imagery products and
services and our ability to develop new markets. Our business plan is based on
the assumption that we will generate significant future revenues from sales of
high-resolution imagery produced by OrbView-3, OrbView-4 and RadarSat-2 to
existing markets and new markets. High-resolution satellite imagery has only
very recently become commercially available. Consequently, it is difficult to
predict accurately the ultimate size of the market and the market acceptance of
products and services based on this type of imagery. Our strategy to target
certain markets for our satellite imagery relies on a number of assumptions,
some or all of which may be incorrect. Actual markets could vary materially from
the potential markets that we have identified.
We cannot accurately predict whether our products and services will achieve
market acceptance or whether the market will demand our products and services on
terms we find acceptable. Market acceptance depends on a number of factors,
including the spatial and spectral quality, scope, timeliness, sophistication
and price of our imagery products and services and the availability of
substitute products and services. Lack of significant market acceptance of our
products and services, particularly our high-resolution imagery products and
services, delays in acceptance, or failure of certain markets to develop would
negatively affect our business, financial condition and results of operations.
TECHNOLOGICAL AND IMPLEMENTATION RISKS -- WE CANNOT ASSURE YOU THAT OUR
SATELLITES WILL OPERATE AS DESIGNED.
The designs for OrbView-3 and OrbView-4 are complete, and the design for
RadarSat-2 is in progress. These satellites' designs may require modifications
to achieve the desired performance criteria, which could result in delays in
satellite deployment. Each of these satellites will employ advanced technologies
and sensors that will be subject to severe environmental stresses during launch
or in space that could affect the satellites' performance.
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Employing advanced technologies is further complicated by the fact that the
satellites will be in space. Hardware component problems in space could require
premature satellite replacement, with attendant costs and revenue losses. In
addition, human operators may execute improper implementation commands that
negatively impact a satellite's performance.
We cannot assure you that OrbView-3, OrbView-4 or RadarSat-2 will operate
successfully in space, or that each of these satellites will perform or continue
operating throughout their expected design lives. Even if these satellites are
launched and operated properly, minor technical flaws in the satellites' sensors
could significantly degrade their performance, which could materially affect our
ability to market our products successfully.
We have not procured a spare high-resolution OrbView satellite, nor do we
maintain an inventory of long lead-time parts for these satellites. If either
OrbView-3 or OrbView-4 were to fail prematurely, we could experience significant
delays while procuring the necessary spares or replacement parts to replace or
repair the satellite. Procurement delays would negatively affect our business,
results of operations and financial condition. In addition, we would be required
to allocate, earlier than expected, additional capital expenditures to replace a
satellite. We cannot assure you that we would have on hand, or be able to obtain
in a timely manner, the necessary funds to cover accelerated replacement and
repair costs of a satellite if it fails prematurely.
We do not presently have plans to construct and launch a replacement
satellite for OrbView-2 if it fails prematurely. Similarly, there is no
provision for a replacement RadarSat-2 satellite in the event of a premature
failure. Permanent loss of OrbView-2 or RadarSat-2 could adversely affect our
operations and financial condition.
LIMITED LIFE OF SATELLITES -- SATELLITES HAVE LIMITED DESIGN LIVES AND ARE
EXPENSIVE TO REPLACE.
Satellites have limited useful lives. We determine a satellite's useful
life, or its design life, using a complex calculation involving the
probabilities of failure of the satellite's components from design or
manufacturing defects, environmental stresses or other causes. The design lives
of our satellites are as follows:
<TABLE>
<CAPTION>
SATELLITE EXPECTED DESIGN LIFE
--------- --------------------
<S> <C>
OrbView-1 3 years (launched in April 1995), although it
continues to operate
OrbView-2 7 1/2 years (launched in August 1997)
OrbView-3 5 years
OrbView-4 5 years
RadarSat-2 7 years
</TABLE>
The expected design lives of these satellites are affected by a number of
factors, including the quality of construction, the expected gradual
environmental degradation of solar panels, the durability of various satellite
components and the orbits in which the satellites are placed. Random failure of
satellite components could cause damage to or loss of a satellite before the end
of its design life. In rare cases, electrostatic storms or collisions with other
objects could damage our satellites. We cannot assure you that each satellite
will remain in operation for its expected design life. We expect the performance
of each satellite to decline gradually near the end of its design life.
We anticipate using funds generated from operations to develop follow-on
high-resolution satellites. If we do not generate sufficient funds from
operations, and if we are unable to obtain financing from outside sources, we
will not be able to deploy follow-on satellites to replace OrbView-3 or
OrbView-4 at the end of their expected design lives. We cannot assure you that
we will be able to raise additional capital, on favorable terms or on a timely
basis, if at all, to develop follow-on high-resolution satellites.
INSURANCE -- LIMITED INSURANCE MAY NOT COVER ALL RISKS OF LOSS.
We maintain or expect to maintain the following insurance policies:
- OrbView-1. OrbView-1 is not insured.
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- OrbView-2. We have a renewable on-orbit insurance policy for OrbView-2
to cover losses up to $12 million for its current operational year. We
have not yet determined the amounts and types of coverage, if any, we
will purchase for OrbView-2 in the future.
- OrbView-3 and OrbView-4. The senior note indentures require us to
maintain launch, on-orbit checkout and on-orbit operations insurance
for OrbView-3 and OrbView-4. This insurance may not be sufficient to
cover the cost of a replacement high-resolution satellite.
- RadarSat-2. We will purchase up to $60 million of insurance coverage
for the RadarSat-2 License against launch or on-orbit failure of the
RadarSat-2 satellite. This insurance would allow us to recover our
initial capital investment in the RadarSat-2 License, but would not be
sufficient to cover additional business losses or the cost of a
replacement radar satellite.
We may find it difficult to insure certain risks, such as partial
degradation of functionality of a satellite. Insurance market conditions or
factors outside our control at the time we buy the required insurance, such as
failure of a satellite using similar components or a similar launch vehicle,
could cause premiums to be significantly higher than current estimates. These
factors could cause other terms to be significantly less favorable than those
currently available, may result in limits on amounts of coverage that we can
obtain or may prevent us from obtaining insurance at all. Furthermore, we cannot
assure you that proceeds from insurance we are able to purchase will be
sufficient to replace a satellite due to cost increases and other factors beyond
our control.
COMPETITION -- WE MAY BE UNABLE TO REPAY THE SENIOR NOTES IF WE DO NOT
SUCCESSFULLY COMPETE IN THE REMOTE IMAGING INDUSTRY.
Our products and services will compete with satellite and aircraft-based
imagery and related products and services offered by a range of private and
government providers. Certain of these entities may have greater financial,
personnel and other resources than we have. Our major potential competitors for
high-resolution satellite imagery include:
Space Imaging EOSAT, which launched its one-meter high-resolution
satellite in September 1999.
- EarthWatch, which has announced plans to launch its one-meter
high-resolution satellite in early 2000; and
- West Indian Space, Ltd., which has announced plans to launch and
operate the Earth Remote Observation System constellation of
high-resolution commercial imaging satellites.
The U.S. government and foreign governments also may develop, construct,
launch and operate remote imaging satellites that generate imagery competitive
with our products and services. In addition, the U.S. government will probably
continue to rely on government-owned and operated systems for certain highly
classified satellite-based high-resolution imagery.
We believe we will have a competitive advantage because we expect to have
sufficient pricing flexibility to be a low-price commercial provider within our
targeted markets and applications due to the relatively lower cost of our
satellite systems as compared to those of our competitors. But the low marginal
cost of producing satellite imagery once a satellite is operating could cause
adverse pricing pressure, decreased profits or even losses. Our competitors or
potential competitors with greater resources than ours could in the future offer
satellite-based imagery or other products having more attractive features than
our products. New technologies, even if not ultimately successful, could
negatively affect our marketing efforts. More importantly, if competitors
develop and launch satellites with more advanced capabilities and technologies
than ours, this competition could harm our business.
DEPENDENCE ON SUPPLIER -- DEPENDENCE ON ONE PRIMARY SUPPLIER COULD RESULT IN
DELAYS IF THE SUPPLIER FAILS TO PERFORM, AND OUR RECOURSE AGAINST THE SUPPLIER
IS LIMITED.
We depend on one primary supplier, Orbital:
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- to design, develop and launch OrbView-3 and OrbView-4 and to construct
the U.S. ground system for these satellites;
- through its wholly owned subsidiary, MDA, to construct the OrbView-3
and 4 distributor ground system;
- to design, develop and construct the RadarSat-2 satellite bus and,
through its wholly owned subsidiary, MDA, design, develop and
construct the Canadian ground system, integrate and operate
RadarSat-2, and receive, process, and archive RadarSat-2 imagery.
We also rely on the OrbView-2 License from Orbital to market the OrbView-2
imagery, and will rely on MDA to market the RadarSat-2 imagery pursuant to a
sublicense of our exclusive marketing rights under the RadarSat-2 License. We
expect to continue to rely on third parties, including Orbital and MDA, to
design, construct or launch satellites for us and to modify the existing ground
systems to accommodate these satellites. Orbital's obligations to provide
design, construction and launch services for the OrbView satellites are
governed by a procurement agreement between Orbital and us. If Orbital fails to
perform its obligations adequately under the procurement agreement, we would be
forced to delay deployment of OrbView-3 and/or OrbView-4 until we located an
alternative provider. Orbital's liability to us for claims under the procurement
agreement is limited to $10 million. In addition, if MDA fails to perform its
obligations under the OrbView-3 and 4 distributor ground system agreement, it
could have a material adverse effect on ORBIMAGE's business. We also rely on
Orbital and MDA to design and construct the RadarSat-2 satellite. Neither
Orbital nor MDA is liable to us for any costs or other damages arising from
schedule delays in the operation of OrbView-3, OrbView-4 or RadarSat-2.
Under a services agreement with Orbital, Orbital has agreed to provide us
with various administrative and operational functions on a cost reimbursable or
cost-plus fee basis. These functions include on-orbit mission operations and
anomaly resolution for OrbView-2, OrbView-3 and OrbView-4. If Orbital fails to
perform its obligations under the services agreement, we may not be able to
operate these satellites properly. The services agreement terminates for each
OrbView satellite three years after the launch of each satellite. We cannot
assure you that we will be able to renew the services agreement on favorable
terms, or at all. In addition, a material adverse change in Orbital or its
financial condition or the condition of one of its subcontractors could
adversely affect Orbital's ability to perform under the procurement agreement or
the services agreement. We have not identified any alternate providers. In any
case, we can provide no assurance that an alternate provider would be available
or, if available, would be available on terms favorable to us or to Orbital.
DEPENDENCE ON DISTRIBUTOR -- DEPENDENCE ON A SINGLE DISTRIBUTOR FOR RADARSAT-2
IMAGERY COULD RESULT IN MARKETING AND DISTRIBUTION DELAYS IF THE DISTRIBUTOR
FAILS TO PERFORM.
As of December 31, 1998, we acquired the RadarSat-2 License from MDA and
granted MDA an exclusive unrestricted worldwide sublicense, including the right
to sublicense with our prior consent, to market and sell RadarSat-2 imagery. MDA
will perform all RadarSat-2 marketing operations, subject to our supervision and
approval. MDA's failure to successfully market RadarSat-2 imagery would have a
material adverse effect on our ability to distribute and sell radar imagery,
which would materially adversely affect our business.
POTENTIAL CONFLICTS OF INTEREST WITH ORBITAL -- WE RELY ON ORBITAL FOR CERTAIN
OPERATIONS AND SERVICES THAT ARE CRITICAL TO OUR BUSINESS. ORBITAL'S INTERESTS
MAY CONFLICT WITH OURS.
Orbital owns approximately 54% of our outstanding voting stock on a fully
diluted basis, and has agreed to acquire up to an additional 2,500,000 shares of
common stock. Certain of our executive officers and directors are also employees
and/or directors of Orbital. These relationships may produce conflicts on
matters involving both ORBIMAGE and Orbital.
Although we have adopted policies we believe will prevent a conflict from
arising, these policies cannot ensure that a conflict will not arise.
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We have several agreements with Orbital, including a procurement agreement
relating to OrbView-1, OrbView-3, OrbView-4 and the related ground system, the
OrbView-2 License, the RadarSat-2 License, a services agreement and a
non-compete agreement, each of which is material to our business. We also have
an agreement with Orbital's wholly owned subsidiary, MDA, pursuant to which MDA
will provide the OrbView-3 and 4 distributor ground system. Orbital's interests
as an equity holder in our business may at times conflict with our interests
under these agreements, and may conflict with the interests of the senior
noteholders. Our recourse against Orbital is limited in the event of breaches by
Orbital under the procurement agreement and the RadarSat-2 License.
Orbital provides certain products and services to our direct competitors.
Under our non-compete agreement with Orbital, which terminates on the earlier of
June 30, 2003, the first anniversary of an initial public offering of our common
stock or the occurrence of certain other events, Orbital cannot sell turn-key
satellite optical imaging systems (i.e., satellite, sensors, launch vehicles and
ground system) to anyone other than to ORBIMAGE. Orbital can, however, sell
radar systems and components of optical systems to our current or future
customers or competitors. For example, MDA has a contract to provide certain
ground system work to EarthWatch relating to its planned one-meter satellite
system. As a result of an acquisition, Orbital holds approximately a 4% equity
interest in EarthWatch. We expect to compete directly with EarthWatch. MDA also
owns 100% of the capital stock of RSI, a company that markets imagery from the
RadarSat-1 satellite. RSI has appointed ORBIMAGE as a non-exclusive distributor
of RadarSat-1 imagery in the United States. Although RadarSat-2 uses more
advanced imaging technology than the technology employed by RadarSat-1, these
two satellites have certain overlapping capabilities, making RSI a potential
competitor.
GOVERNMENT REGULATION -- FAILURE TO OBTAIN REGULATORY APPROVALS COULD RESULT IN
SERVICE INTERRUPTIONS.
Domestic. Our business generally requires licenses from the U.S. Department
of Commerce ("DoC") and the U.S. Federal Communications Commission ("FCC"). Our
operation of OrbView-1 does not require these licenses because the only customer
for OrbView-1 imagery is the U.S. government. Our DoC licenses to operate
OrbView-2, OrbView-3 and OrbView-4 expire in 2004. We cannot assure you that the
DoC will renew these licenses when they expire. If the DoC does not renew these
licenses our business would be materially adversely affected.
The DoC license for OrbView-4 hyperspectral imagery restricts the
resolution of the OrbView-4 hyperspectral imagery sold commercially and
restricts our ability to process and distribute imagery outside of the United
States. These resolution restrictions and other limitations may affect our
ability to market and sell hyperspectral imagery, and accordingly could have an
adverse effect on our financial condition and results of operations. ORBIMAGE
has appealed for a relaxation of the terms of the OrbView-4 hyperspectral
license. We cannot assure you that we will prevail in our appeal.
The DoC has informed ORBIMAGE that Orbital must obtain a DoC license for
the RadarSat-2 satellite by virtue of its 100% ownership of MDA. Additionally,
the DoC has informed ORBIMAGE that it is not required to obtain a DoC license to
function as a RadarSat-2 distributor. If Orbital cannot obtain the DoC license
on acceptable terms, our financial condition and results of operations would be
materially adversely affected.
The DoC licenses provide that the U.S. government can interrupt service
during periods of national emergency. Actual or threatened interruptions could
adversely affect our ability to market our products abroad. In addition, the DoC
has the right to review and approve our agreements with international customers
for high-resolution optical imagery. These reviews could delay or prohibit us
from executing these agreements. Canada does not currently have licensing
requirements similar to the DoC's requirements, but has proposed legislation
which would regulate the ownership and operation of remote sensing satellites.
Currently, the Canadian government can interrupt RadarSat-2 service during
certain periods of national emergency.
We currently operate OrbView-2 under Orbital's renewal application for an
experimental FCC license. We cannot assure you that the FCC will grant any
future renewals. If the FCC does not renew this license, we would not be able to
operate the OrbView-2 satellite in the United States.
Our application with the FCC for a license to launch and operate OrbView-3
and OrbView-4 was granted in February 1999 and our applications to operate the
associated ground systems were granted in May 1999. These licenses will expire
in 10 years, but may be revoked for failure to comply with their terms or
failure to meet certain
20
<PAGE> 21
construction and launch milestones.
International. All satellite systems operating internationally must follow
general international regulations and the specific laws of the countries in
which satellite imagery is downlinked.
The CSA has agreed to coordinate with the International Telecommunication
Union to secure the necessary authorizations to operate RadarSat-2 in Canada and
the FCC is undertaking the ITU coordination process on behalf of Orbview-3 and
OrbView-4. The CSA's or the FCC's failure to obtain the necessary coordination
in a timely manner could have a material adverse effect on our business,
financial condition and results of operations.
Our customers or distributors are responsible for obtaining local
regulatory approval from the governments in the countries in which they do
business to receive imagery directly from OrbView-2, OrbView-3, OrbView-4 and
RadarSat-2. If these regional distributors are not successful in obtaining the
necessary approvals, we will not be able to distribute real time OrbView or
RadarSat-2 imagery in those regions. Our inability to offer real time service in
a significant number of foreign countries could negatively affect our business.
In addition, regulatory provisions in countries where we wish to operate may
impose unduly burdensome restrictions on our operations. Our business may also
be adversely affected if the national authorities where we plan to operate adopt
treaties, regulations or legislation unfavorable to foreign companies.
Launch license. Commercial U.S. space launches require licenses from the
U.S. Department of Transportation ("DoT"). Under our procurement agreement with
Orbital, Orbital must ensure that the appropriate DoT commercial launch licenses
are in place for the OrbView-3 and OrbView-4 launches. We cannot assure you that
Orbital will continue to be successful in its efforts to obtain the necessary
licenses or regulatory approvals. Orbital's inability to secure necessary
licenses or approvals could delay launches. Delays could harm our business,
financial condition and results of operations and our ability to service our
debt.
Export License. In connection with certain distributor agreements, we
expect to supply our international customers with ground stations that enable
these customers to downlink data directly from OrbView-3 and OrbView-4.
Exporting these ground stations may require that we obtain an export license
from the DoC or the U.S. Department of State. Orbital also requires an export
license from the State Department in connection with the export of the
RadarSat-2 satellite bus that Orbital will construct in the U.S. and deliver to
MDA in Canada. The United States and Canadian governments are in discussions
regarding possible restrictions on the grant of Orbital's U.S. export license
for the RadarSat-2 satellite bus and/or technical data and defense services
relating thereto. If the DoC or the State Department does not issue these export
licenses, or if these licenses are significantly delayed, or if restrictions are
imposed on these licenses, our financial condition and results of operations
could be materially adversely affected.
RISKS ASSOCIATED WITH DISTRIBUTORS AND RESELLERS -- FOREIGN DISTRIBUTORS AND
VALUE-ADDED RESELLERS MAY NOT EXPAND COMMERCIAL MARKETS.
We will rely on foreign regional distributors to market and sell
internationally a significant portion of our imagery from OrbView-3, OrbView-4
and RadarSat-2. We expect our existing and future foreign regional distributors
to act on behalf of, or contract directly with, foreign governments to sell
imagery for national security and related purposes. These regional distributors
may not have the skill or experience to develop regional commercial markets for
our products and services. If we fail to enter into regional distribution
agreements on a timely basis or if our foreign regional distributors fail to
market and sell our imagery products and services successfully, these failures
would negatively impact our business, financial condition and results of
operations, and our ability to service our debt.
We intend to rely on value-added resellers to develop, market and sell our
products and services to address certain target markets. If our value-added
resellers fail to develop, market and sell OrbView products and services
successfully, this failure would negatively affect our business, financial
condition and results of operations, and our ability to service our debt.
RISK ASSOCIATED WITH INTERNATIONAL OPERATIONS -- OUR INTERNATIONAL BUSINESS
EXPOSES US TO RISKS RELATING TO INCREASED REGULATION AND POLITICAL OR ECONOMIC
INSTABILITY IN FOREIGN MARKETS.
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<PAGE> 22
We expect to derive substantial revenues from international sales of
products and services. International operations are subject to certain risks,
such as:
- changes in domestic and foreign governmental regulations and licensing
requirements;
- deterioration of once-friendly relations between the United States and
a particular foreign country;
- increases in tariffs and taxes and other trade barriers; and
- changes in political and economic stability, including fluctuations in
the value of foreign currencies, which may make payment in U.S.
dollars more expensive for foreign customers.
These risks are beyond our control and could have a material adverse effect
on our business.
GOVERNMENT CONTRACTS -- WE DEPEND ON CONTRACTS WITH GOVERNMENT AGENCIES FOR A
SUBSTANTIAL PORTION OF OUR REVENUES. GOVERNMENT AGENCIES CAN TERMINATE THEIR
CONTRACTS AT ANY TIME.
Revenues from government contracts accounted for approximately 95%, 94% and
71% of our revenues for 1997, 1998 and for the nine months ended September 30,
1999, respectively. As of September 30, 1999, contracts with U.S. government
agencies constituted approximately 26% of our backlog. Government agencies may
terminate or suspend their contracts at any time, with or without cause, or may
change their policies, priorities or funding levels by reducing agency or
program budgets or by imposing budgetary constraints. If a government agency
terminates or suspends any of its contracts with Orbital or ORBIMAGE, or changes
its policies, priorities, or funding levels, these actions would have a material
adverse effect on our business, financial condition and results of operations.
Specifically, if the Air Force terminates or suspends its contract with Orbital
and we wish to proceed with our hyperspectral program, we would incur the
remaining cost of upgrading OrbView-4 with hyperspectral capability. Similarly,
if the CSA terminates the CSA contract and we wish to proceed with our own radar
program, we would have to incur the cost of constructing, deploying and
operating our own radar satellite system.
CHANGE OF CONTROL -- THE HOLDERS OF SERIES A PREFERRED STOCK COULD TAKE CONTROL
OF OUR BOARD OF DIRECTORS UPON THE OCCURRENCE OF CERTAIN EVENTS.
We are a party to a stockholders' agreement with the holders of our Series
A preferred stock. This stockholders' agreement and our charter contain
provisions relating to the election of directors.
Our charter permits the Series A holders to designate additional members to
the board of directors and thus gain control of the board of directors if:
- we fail to pay timely dividends or to repurchase the Series A
preferred stock in some circumstances; or
- Orbital does not start the integration and testing of the OrbView-4
spacecraft by November 15, 1999. We may extend this date by 30 days
under some circumstances.
If the Series A holders designated these additional directors, the Series A
directors would control our management and policies and could make decisions
affecting the control of ORBIMAGE. These additional directors would serve until
the event giving rise to their appointment has been resolved. Even without the
appointment of these additional directors, the Series A holders have de facto
control over certain corporate actions enumerated in the stockholders'
agreement, because these actions require the approval of at least one of the
Series A directors. These actions include the merger, consolidation, liquidation
or sale of all or substantially all of our assets, the issuance of equity
securities in certain circumstances, and the incurrence of certain indebtedness
of more than $500,000.
FINANCING CHANGE OF CONTROL OFFER -- WE MAY NOT HAVE THE ABILITY TO RAISE THE
FUNDS NECESSARY TO FINANCE THE CHANGE OF CONTROL OFFER REQUIRED BY THE SENIOR
NOTE INDENTURES.
22
<PAGE> 23
Upon the occurrence of certain change of control events, we will be
required to offer to repurchase all outstanding senior notes at a price equal to
101% of the principal amount and to offer to repurchase all of the outstanding
Series A preferred stock, subject to the senior rights of the senior note
holders. It is possible that we will not have sufficient funds at the time of
the change of control to make the required repurchases. If we are not able to
make the required repurchases, we would be in default under the senior note
indentures.
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<PAGE> 24
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As of September 30, 1999, ORBIMAGE had senior notes outstanding of $213.3
million with a fair value of $153.0 million as estimated by quoted market
prices. The senior notes mature on March 1, 2005. Interest on the senior notes
accrues at a rate of 11.625% per annum and is payable semi-annually in arrears
on March 1 and September 1. ORBIMAGE purchased U.S. Treasury securities in an
amount sufficient to pay the interest on the senior notes through March 1, 2000.
As of September 30, 1999, held-to-maturity securities restricted for the
payment of interest on the senior notes totaled $12.8 million. ORBIMAGE does not
have any derivative financial instruments as of September 30, 1999, and believes
that the interest rate risk associated with its senior notes and the market risk
associated with its securities are not material to the results of operations of
ORBIMAGE. The available-for-sale securities, totaling $35.8 million as of
September 30, 1999, subject ORBIMAGE's financial position to interest rate risk,
which is not considered to be material.
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<PAGE> 25
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - A complete listing of exhibits required is given in the
Exhibit Index that precedes the exhibits filed with this report.
(b) Reports on Form 8-K
On July 26, 1999, ORBIMAGE filed Form 8-K to announce the appointment of its
accountants.
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<PAGE> 26
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ORBITAL IMAGING CORPORATION
DATED: November 15, 1999 By: /s/ Gilbert D. Rye
------------------
Gilbert D. Rye, President
and Chief Operating Officer
DATED: November 15, 1999 By: /s/ Armand D. Mancini
---------------------
Armand D. Mancini, Vice President
and Principal Financial Officer
26
<PAGE> 27
EXHIBIT INDEX
The following exhibits are filed as part of this report.
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------------------- ---------------------------------------------------------------------------------
<S> <C>
3.1+ Second Amended and Restated Certificate of Incorporation of ORBIMAGE.
3.2+ Bylaws of ORBIMAGE.
4.2+++ Specimen certificate of 11 5/8% Series D Senior Notes due 2005.
4.3+ Indenture dated as of February 25, 1998, by and
between ORBIMAGE and Marine Midland Bank, n/k/a HSBC
Bank USA, as trustee, for the 11 5/8% Senior Notes
due 2005 of ORBIMAGE.
4.4++ Amended and Restated Stockholders' Agreement dated as
of February 25, 1998, by and among ORBIMAGE, Orbital
and the holders of Series A preferred stock named therein.
4.5+++ Indenture dated as of April 22, 1999 by and between
ORBIMAGE and HSBC Bank USA, f/k/a Marine Midland
Bank, as trustee, for the 11 5/8% Senior Notes due
2005 of ORBIMAGE.
4.6+++ Registration Rights Agreement dated as of April 22, 1999, by and among
ORBIMAGE, Bear Stearns & Co. and Merrill Lynch & Co. as the initial purchasers.
4.7+++ Pledge Agreement dated as of April 22, 1999 by and between HSBC Bank USA, f/k/a
Marine Midland Bank, as collateral agent.
4.8(b) Amended and Restated Orbital Imaging Corporation 1996 Stock Option Plan as
amended and restated through August 18, 1999.
4.9(b) Stock Purchase Agreement dated as of October 26, 1999 by and between ORBIMAGE
and Orbital.
10.2+** Amended and Restated Procurement Agreement dated February 26, 1998 by and
between ORBIMAGE and Orbital.
10.3+ Amended and Restated Administrative Services Agreement dated December 31, 1997
by and between ORBIMAGE and Orbital.
10.4+ Non-Competition and Teaming Agreement dated as of May 8, 1997 by and between
ORBIMAGE and Orbital.
10.5+ OrbView-2 License Agreement dated as of May 8, 1997 by and between ORBIMAGE and
Orbital.
10.6+** Distributor License Agreement dated as of January 31,
1997, as amended from time to time, by and between ORBIMAGE
and Samsung Aerospace Industries, Ltd.
10.7+ Form of Indemnification Agreement between ORBIMAGE and its directors and
officers.
10.10* RadarSat-2 Master Agreement dated as of December 31, 1998 by and among Orbital,
MDA and ORBIMAGE.
10.11* Hyperspectral Imaging Data Agreement dated December 31, 1998
</TABLE>
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<PAGE> 28
<TABLE>
<S> <C>
by and between Orbital and ORBIMAGE.
10.12* Amendment No. 1 to Amended and Restated ORBIMAGE System Procurement Agreement
dated as of December 31, 1998 by and between Orbital and ORBIMAGE.
10.14+++ Amendment No. 1 dated as of April 1, 1999 to the RadarSat-2 Master Agreement
dated as of December 31, 1998 by and among Orbital, MDA and ORBIMAGE.
10.15(a)** ORBIMAGE Distribution Agreement dated March 18, 1999 by and between ORBIMAGE
and NTT Data Corporation.
10.16(a)** ORBIMAGE Distribution Agreement dated February 8, 1999 by and between ORBIMAGE
and Geographic Information Services and Technology Transfer NetCorp, Inc.
10.17(a)** Amendment No. 1 dated as of March 17, 1999 to the Distribution Agreement dated
February 8, 1999 by and among ORBIMAGE and Geographic Information Services and
Technology Transfer NetCorp, Inc.
10.18(a)** ORBIMAGE Ground Station Contract No. OGS-99-02-01 dated as of May 26, 1999 by
and between ORBIMAGE and MDA.
10.19(b)*** OGS Order and Amendment No. 1 to ORBIMAGE Ground Stations Contract No.
OGS-99-02-01 dated August 10, 1999 by and between ORBIMAGE and MDA.
10.20(b)*** OGS Order and Amendment No. 2 to ORBIMAGE Ground Stations Contract No.
OGS-99-02-01 dated September 30, 1999 by and between ORBIMAGE and MDA.
10.21(b)*** Amendment No. 3 to ORBIMAGE Ground Stations Contract No. OGS-99-02-01 dated
October 6, 1999 by and between ORBIMAGE and MDA.
10.22(b)*** ORBIMAGE Ground Station Contract Contract Number: OGS-IMI-C-01-301 dated July
26, 1999 by and between ORBIMAGE and Image Measurements, Inc.
10.23(b)*** ORBIMAGE Distribution Agreement dated as of August 4, 1999 by and between
ORBIMAGE and Spot Image.
10.24(b)*** ORBIMAGE Ground Station Contract (Contract Number: OGS-SPOT-C-01-300) dated as
of August 4, 1999 by and between ORBIMAGE and Spot Image.
10.25(b)*** VAR Agreement dated as of August 4, 1999 between ORBIMAGE and Spot Image
Corporation.
10.26(b) Amendment No. 2 to RadarSat-2 Master Agreement dated as of October 26, 1999
among ORBIMAGE, Orbital and MDA.
10.27(b)*** Amendment No. 2 to Amended and Restated ORBIMAGE System Procurement Agreement
dated as of September 15, 1999 between Orbital and ORBIMAGE.
</TABLE>
28
<PAGE> 29
<TABLE>
<S> <C>
10.28(b)*** Data License and Distribution Agreement dated November 3, 1999 between RadarSat
International, Inc. and ORBIMAGE.
11 Statement re computation of loss per common share (included in the notes to
condensed consolidated financial statements).
27(b) Financial Data Schedule.
</TABLE>
+ Incorporated by reference to the identically numbered exhibit to
ORBIMAGE's registration statement on Form S-4, as amended (Reg. No.
333-49583).
++ Incorporated by reference to Exhibit 4.9 to ORBIMAGE's registration
statement on Form S-4, as amended (Reg. No. 333-49583).
+++ Incorporated by reference to the identically numbered exhibit to
ORBIMAGE's quarterly report on Form 10-Q for the three months ended March
31, 1999 (Commission file No. 333-49583).
* Incorporated by reference to the identically numbered exhibit to
ORBIMAGE's registration statement on Form S-1, as amended (Reg. No.
333-67697).
** Confidential treatment was granted pursuant to Rule 406 under the
Securities Act of 1933, in connection with ORBIMAGE's registration
statement on Form S-4, as amended (Reg. No. 333-49583). Certain portions
of the exhibit have been omitted. The omitted portions of such exhibits
have been separately filed with the Commission.
*** Confidential treatment has been requested pursuant to Rule 406 under the
Securities Act of 1933. Certain portions of the exhibit have been
omitted. The omitted portions of such exhibit have been separately filed
with the Commission.
(a) Incorporated by reference to the identically numbered exhibit to
ORBIMAGE's registration statement on Form S-4, as amended (Registration
No. 333-80035).
(b) Filed herewith.
29
<PAGE> 1
EXHIBIT 4.8
AMENDED AND RESTATED
ORBITAL IMAGING CORPORATION 1996 STOCK OPTION PLAN
(as amended)
ARTICLE I
PURPOSE OF PLAN
The purpose of this 1996 Stock Option Plan is to promote the growth and
profitability of Orbital Imaging Corporation by providing, through the ownership
of Shares, incentives to attract and retain highly talented persons to provide
managerial and administrative services to the Company or other entities in which
the Company has a significant interest and to motivate such persons to use their
best effort on behalf of the Company.
ARTICLE II
DEFINITIONS
For the purposes of this Plan, the following terms shall have the
meanings set forth in this Article II:
2.1. Accrued Installment. The term "Accrued Installment" shall
mean any vested installment of an Option.
2.2. Board. The term "Board" shall mean the Board of Directors
of the Company.
2.3. Committee. The term "Committee" shall mean a committee
appointed by the Board pursuant to Section 3.3 and consisting of at
least two members.
2.4. Company. The term "Company" shall mean Orbital Imaging
Corporation, a Delaware corporation, or any successor thereof.
2.5. Director. The term "Director" shall mean a member of the
Board, or a member of the board of directors of any Participating
Company.
2.6. Effective Date. The term "Effective Date" shall mean
November 15, 1996, the date of adoption by the Board.
2.7 Eligible Person. The term "Eligible Person" shall mean any
employee, officer, director, consultant or advisor of any Participating Company,
but shall not include any Director of any Participating Company who is not also
an employee, officer, director, consultant or advisor of a Participating
Company.
2.8. Entitled Holder. The term "Entitled Holder" shall mean any
Optionee or any transferee thereof described in clause (ii) or (iii)
of Section 6.7(a).
<PAGE> 2
2.9. Exchange Act. The term "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended from time to time.
2.10. Fair Market Value. The term "Fair Market Value" shall mean
the closing sale price of a Share on the national securities exchange on which
Shares are then principally traded or, if that measure of price is not
available, on a composite index of such exchanges or, if that measure of price
is not available, in a national market system for securities on the date in
question. In the event that there are no sales of Shares on any such exchange or
market on such date, the fair market value of a Share shall be deemed to be the
closing sales price on the next preceding day on which Shares were sold on any
such exchange or market. In the event that such Shares are not listed on any
such market or exchange on such date, a valuation of the fair market value of a
Share shall be made by the Board, which may in its discretion seek advice from
an independent appraiser or other appropriate financial professional selected by
the Board in its sole discretion and reasonably believed to be competent to make
such determination; provided, however, that at any time when at least a majority
of the voting power of the Company's capital stock is beneficially owned by
Orbital, any such determination of Fair Market Value shall only be effective
upon the approval of the Audit and Finance Committee of the Board of Directors
of Orbital, which approval shall not be unreasonably withheld. Any determination
of Fair Market Value made in accordance with this Section 2.10 shall be
conclusive and binding on the Company and all Optionees and/or holders of
Shares.
2.11. I.R.C. The term "I.R.C." shall mean the Internal Revenue Code
of 1986, as amended from time to time.
2.12. Incentive Stock Option. The term "Incentive Stock Option"
shall mean any Option intended to satisfy the requirements under I.R.C. Section
422(b) as an incentive stock option.
2.13. Nonstatutory Stock Option. The term "Nonstatutory Stock
Option" shall mean any Option not intended to qualify as an Incentive Stock
Option.
2.14. Option. The term "Option" shall mean an option to acquire
Shares granted under the Plan.
2.15. Option Shares. The term "Option Shares" shall mean, at any
time, all shares acquired upon exercise of Options and then held by Optionees.
2.16. Optionee. The term "Optionee" shall mean an Eligible Person
who has been granted Options.
2.17. Orbital. The term "Orbital" shall mean Orbital Sciences
Corporation, a Delaware corporation, or any successor thereof.
2.18. Orbital Common Stock. The term "Orbital Common Stock" shall
mean the common stock, $0.01 par value per share, of Orbital.
2
<PAGE> 3
2.19. Parent Corporation. The term "Parent Corporation" shall mean
a "parent corporation" as defined in I.R.C. Section 424(e) and any partnership
or other entity that, if it were a corporation, would be a "parent corporation"
as defined in I.R.C. Section 424(e).
2.20. Participating Company. The term "Participating Company" shall
mean the Company, any Parent Corporation of the Company, any Subsidiary
Corporation of the Company or its Parent Corporation, and Orbital Sciences
Corporation.
2.21. Person. The term "person" shall mean an individual,
corporation, partnership, association or other person or entity, or any group of
two or more of the foregoing that have agreed to act together.
2.22. Plan. The term "Plan" shall mean this 1996 Stock Option Plan.
2.23. Restricted Shareholder. The term "Restricted Shareholder"
shall mean an Optionee granted an Incentive Stock Option who, at the time the
Incentive Stock Option is granted, owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company,
with stock ownership determined in accordance with the attribution rules of
I.R.C. Section 424(d).
2.24. Securities Act. The term "Securities Act" shall mean the
Securities Act of 1933, as amended from time to time.
2.25. Shares. The term "Shares" shall mean shares of the Company's
authorized Common Stock, $0.01 par value, and may be unissued shares or treasury
shares or shares purchased for purposes of the Plan.
2.26. Subsidiary Corporation. The term "Subsidiary Corporation"
shall mean a "subsidiary corporation" as defined in I.R.C. Section 424(f) and
any partnership or other entity that, if it were a corporation, would be a
"subsidiary corporation" as defined in I.R.C. Section 424(f).
2.27. Terminating Transaction. The term "Terminating Transaction"
shall mean any of the following events: (a) the dissolution or liquidation of
the Company; (b) a reorganization, merger or consolidation of the Company with
one or more other corporations as a result of which the Company goes out of
existence or becomes a subsidiary of a corporation other than a corporation that
was a Participating Company immediately prior to such event (which shall be
deemed to have occurred only if such a corporation shall own, directly or
indirectly, eighty percent (80%) or more of the aggregate voting power of all
outstanding equity securities of the Company); (c) a sale of all or
substantially all of the Company's assets to a person or persons other than a
corporation that was a Participating Company immediately prior to such event; or
(d) a sale to one person (or two or more persons acting in concert), other than
to a corporation that was a Participating Company immediately prior to such
event, of equity securities of the Company representing eighty percent (80%) or
more of the aggregate voting power of all outstanding equity securities of the
Company.
3
<PAGE> 4
2.28. Termination Date. The term "Termination Date" shall mean the
tenth anniversary of the Effective Date or, if earlier, the tenth anniversary of
the date the Plan is adopted by the Board.
ARTICLE III
ADMINISTRATION OF PLAN
3.1. Administration by Board. Subject to Section 3.3, the Plan
shall be administered by the Board, which shall have authority to do everything
necessary or appropriate to administer the Plan. The Board shall have full and
absolute power and authority in its sole discretion to (a) determine which
Eligible Persons shall receive Options; (b) determine the time when Options
shall be granted; (c) determine the terms and conditions, not inconsistent with
the provisions of this Plan, of any Option granted hereunder, including whether
such Option is an Incentive Stock Option or a Nonstatutory Stock Option (except
that Incentive Stock Options may not be granted to any Eligible Person that is
not an employee or officer of the Company, any Parent Corporation of the Company
or any Subsidiary Corporation of the Company or its Parent Corporation); (d)
determine the number of Shares that may be issued upon exercise of the Options;
and (e) interpret the provisions of this Plan and of any Option. At any time
when at least a majority of the voting power of the Company's capital stock is
beneficially owned by Orbital, prior to each grant of an Option and each other
action taken with respect to the Plan (other than a determination of Fair Market
Value) the Board shall consult with the Human Resources and Nominating Committee
of Orbital's Board of Directors (except to the extent otherwise authorized by
such Human Resources and Nominating Committee) with respect to such intended
grant or other action.
3.2. Binding Authority. All decisions, determinations,
interpretations or other actions by the Board shall be final, conclusive and
binding on all Eligible Persons, Optionees, Participating Companies and any
successors-in-interest to such parties.
3.3. Administration by Committee. The Board may appoint a
Committee to administer the Plan and exercise all of the powers, authority and
discretion of the Board under the Plan, other than the power and authority to
amend and terminate the Plan under Section 7.1. The Committee shall report to
the Board the names of Eligible Persons granted Options, the number of Shares
covered by each Option, and the terms and conditions of each such Option.
ARTICLE IV
NUMBER OF SHARES AVAILABLE FOR GRANT
Subject to the following provisions of this Article IV, the maximum
aggregate number of Shares that may be optioned and sold under the Plan is
4,800,000. In the event that Options granted under the Plan shall, for any
reason, terminate, lapse, be forfeited or expire without being exercised, the
Shares subject to such unexercised Options shall again be available for the
granting of Options hereunder. In the event that Shares that were previously
issued by the Company, upon exercise of an Option, are reacquired by the Company
as part of the consideration received (in accordance with
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Section 6.5 hereof) upon the subsequent exercise of an Option or pursuant to
Sections 8.3 and 8.4 hereof, such reacquired Shares shall again be available for
the granting of Options hereunder.
ARTICLE V
TERM OF PLAN
The Plan shall become effective upon adoption by the Board, subject to
approval of the Plan on or before the first anniversary of the Effective Date by
the holders of a majority of the outstanding Shares. No option granted prior to
such approval shall be exercisable prior to such approval. The Plan shall remain
in full force and effect until the later of the Termination Date or the date on
which no Options are outstanding; provided, however, that no Option may be
granted hereunder after the Termination Date.
ARTICLE VI
OPTION TERMS
6.1. Form of Option Agreement. Any Option granted under the Plan
shall be evidenced by an agreement ("Option Agreement") in the form attached
hereto as Exhibit A for an Incentive Stock Option) or Exhibit B (for a
Nonstatutory Stock Option) or in such other form as the Board, in its
discretion, may, from time to time, approve. Any Option Agreement shall contain
such terms and conditions as the Board may deem necessary or appropriate and
that are not inconsistent with the provisions of the Plan.
6.2. Option Exercise Price. The option exercise price for Shares
to be issued under this Plan shall be determined by the Board in its sole
discretion, but in no event shall the option exercise price be less than the
Fair Market Value in the case of an Incentive Stock Option or less than
eighty-five percent (85%) of the Fair Market Value in the case of a Nonstatutory
Stock Option (or one hundred and ten percent (110%) of the Fair Market Value in
the case of an Option granted to a Restricted Shareholder).
6.3. Vesting and Exercise of Options. Subject to the limitations
set forth herein and/or in any applicable Option Agreement entered into
hereunder, Options shall vest and be exercisable in accordance with the rules
set forth in this Section 6.3:
(a) General. Subject to the other provisions of this
Section 6.3, Options shall vest and become exercisable at such time and in such
installments as the Board shall provide in each individual Option Agreement.
Unless otherwise provided in this Section 6.3, in Section 6.4 or in the Option
Agreement pursuant to which an Option is granted, an Option may be exercised
when Accrued Installments accrue as provided in such Option Agreement and at any
time thereafter until, and including, the day before the Option Termination
Date.
(b) Termination of Options. All installments of an Option
shall expire and terminate on such date as the Board shall determine ("Option
Termination Date"), which in no event
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shall be later than ten (10) years from the date such Option was granted (five
(5) years in the case of an Incentive Stock Option granted to a Restricted
Shareholder).
(c) Termination of Employment Other than by Death,
Retirement or Disability. In the event the employment of an Optionee with a
Participating Company is terminated for any reason (other than death,
disability, retirement on or after reaching age 60), any installments under an
Option held by such Optionee that have not accrued as of the employment
termination date shall expire and become unexercisable as of the employment
termination date. All Accrued Installments as of the employment termination date
shall expire and become unexercisable as of the earlier of (i) three (3) months
following the employment termination date; or (ii) the original Option
Termination Date. For purposes of Options granted prior to September 13, 1999,
an Optionee who is an employee or officer of any Participating Company shall not
be deemed to have incurred a termination of his employment so long as such
Optionee is an officer or employee of any Participating Company. For purposes of
Options granted on or after September 13, 1999, an Optionee who is an employee
or officer of any Participating Company shall not be deemed to have incurred a
termination of his employment so long as such Optionee is either (x) an employee
or officer of the Company, any Parent Corporation of the Company or any
Subsidiary Corporation of the Company; or (y) an officer or employee of Orbital
or any Subsidiary Corporation of Orbital, pursuant to a transfer of employment
from the Company to Orbital or any Subsidiary Corporation of Orbital, which
transfer has been specifically approved in writing by the Company.
(d) Leave of Absence. An approved leave of absence shall
not constitute a termination of employment under the Plan. An approved leave of
absence shall mean an absence approved pursuant to the policy of a Participating
Company for military leave, sick leave, or other bona fide leave, not to exceed
ninety (90) days or, if longer, as long as the employee's right to re-employment
is guaranteed by contract, statute or the policy of a Participating Company.
(e) Death, Disability or Retirement of Optionee. In the
event that the employment of an Optionee with a Participating Company is
terminated by reason of death, disability, or retirement on or after reaching
age sixty (60), any unexercised Accrued Installments of Options granted
hereunder to such Optionee shall expire and become unexercisable as of the
earlier of (i) the applicable Option Termination Date; or (ii) the first
anniversary of the date of termination of employment of such Optionee by reason
of the Optionee's death, disability or retirement. Any such Accrued Installments
of a deceased Optionee may be exercised prior to their expiration only by the
person or persons to whom the Optionee's Option rights pass by will or the laws
of descent and distribution. Any Option installments under such a deceased,
disabled or retired Optionee's Option that have not accrued as of the date of
the employee's termination of employment due to death, disability or retirement
shall expire and become unexercisable as of the employment termination date.
6.4. Exercise of Options. An Option may be exercised as to all or
any portion of the Shares covered by an Accrued Installment of the Option, from
time to time during the applicable option period, except that an Option shall
not be exercisable with respect to fractions of a Share. Options may be
exercised, in whole or in part, by giving written notice of exercise to the
Company, which notice shall specify the number of Shares to be purchased and
shall be accompanied by
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payment in full of the purchase price in accordance with Section 6.5. An Option
shall be deemed exercised when such written notice of exercise and payment have
been received by the Company. No Shares shall be issued until full payment has
been made and the Optionee has satisfied such other conditions as may be
required by this Plan, as may be required by applicable laws, rules or
regulations, or as may be adopted or imposed by the Board. Until the issuance of
stock certificates, no right to vote or receive dividends or any other rights as
a stockholder shall exist with respect to Shares subject to an Option
notwithstanding the exercise of the Option. No adjustment will be made for a
dividend or other rights for which the record date is prior to the date the
stock certificate is issued, except as provided in Section 6.8(a).
6.5. Payment of Option Exercise Price. The entire option exercise
price shall be paid at the time the Option is exercised by check or such other
means as is deemed acceptable by the Board. Notwithstanding the foregoing, in
the discretion of the Board (which, in the case of an Incentive Stock Option,
shall be exercised only at the time of grant), an Optionee may elect to pay for
all or some of the Optionee's Shares with Shares (or, at any time when at least
a majority of the voting power of the Company's capital stock is owned by
Orbital, shares of Orbital Common Stock), subject to all restrictions and
limitations of applicable laws, rules and regulations and subject to the
satisfaction of any conditions the Board may impose, including, but not limited
to, the making of such representations and warranties and the providing of such
other assurances that the Board may require with respect to the Optionee's title
to the Shares used for payment of the exercise price. Such payment shall be made
by delivery of certificates representing Shares (or Orbital Common Stock), duly
endorsed or with a duly signed stock power attached, such Shares (or Orbital
Common Stock) to be valued at the Fair Market Value of such Shares (or Orbital
Common Stock) on the day immediately preceding the day notice of exercise is
received by the Company.
6.6. Options Not Transferable. Options granted under this Plan may
not be sold, pledged, hypothecated, assigned, encumbered, gifted or otherwise
transferred or alienated in any manner, whether voluntarily, by operation of
law, pursuant to judicial process or otherwise, other than by will or the laws
of descent and distribution or pursuant to a qualified domestic relations order,
as defined under the I.R.C., and may be exercised during the lifetime of an
Optionee only by such Optionee. The person to whom the Option is granted may, by
delivering written notice to the Company in a form satisfactory to the Company,
designate a third party who, in the event of the death of the Optionee, shall
thereafter be entitled to exercise the Option.
6.7. Restrictions on Issuance or Transfer of Shares.
(a) Until such time as the Shares are registered under the
Exchange Act, no Shares issuable upon exercise of an Option shall be sold,
assigned, encumbered, pledged, hypothecated, given away or in any other manner
disposed of or transferred, whether voluntarily, by operation of law, pursuant
to judicial process or otherwise, except (i) to the Company pursuant to Section
8.4 hereof, (ii) pursuant to a qualified domestic relations order, as defined
under the I.R.C., or (iii) upon the death of the holder thereof, Shares may be
transferred and distributed by will or other instrument taking effect at death
or by the laws of descent and distribution to such holder's estate, executors,
administrators and personal representatives, and then to such holder's heirs,
legatees or distributees, provided that no such transfer shall be effective
until the recipient has delivered to the
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Company a written acknowledgment in form and substance reasonably satisfactory
to the Company that such Shares are subject to the restrictions on disposition
or transfer set forth in this Section 6.7(a). Any attempted transfer of Shares
not in accordance with this Section 6.7(a) shall be null and void, and the
Company shall not in any way give effect to any such disposition or transfer.
(b) The Company shall use all reasonable efforts to obtain
all required permits, authorizations and approvals necessary for the lawful
issuance and sale of Shares hereunder. However, no Shares shall be issued or
delivered upon exercise of an Option unless there shall have been compliance
with all applicable requirements of the Securities Act, all applicable listing
or quotation requirements of any national securities exchange or market on which
Shares are then listed or quoted, and any other requirement of law or of any
regulatory body having jurisdiction over such issuance and delivery. The
inability of the Company to obtain any required permits, authorizations or
approvals necessary for the lawful issuance and sale of any Shares hereunder on
terms deemed reasonable by the Board shall relieve the Company, the Board and
any Committee of any liability in respect of the non-issuance or sale of such
Shares for so long as such requisite permits, authorizations or approvals shall
not have been obtained.
(c) As a condition to the granting or exercise of any
Option, the Board may require the person receiving or exercising such Option to
make any representation and/or warranty to the Company as may be required under
any applicable law or regulation, including, but not limited to, a
representation that the Option and/or Shares are being acquired only for
investment and without any present intention to sell or distribute such Option
and/or Shares, if such a representation is required under the Securities Act or
any other applicable law, rule or regulation.
(d) The exercise of Options under the Plan is conditioned on
approval of the Plan by the vote or written consent of a majority of the holders
of outstanding Shares of the Company's Common Stock within twelve (12) months of
the adoption of the Plan. In the event such stockholder approval is not obtained
within such time period, any Options granted hereunder shall be void.
6.8. Option Adjustments.
(a) If the outstanding Shares are increased, decreased,
changed into or exchanged for a different number or kind of shares of the
Company through reorganization, recapitalization, reclassification, stock
dividend, stock split or reverse stock split or other similar transaction, the
Board shall make a proportionate adjustment in the number or kind of shares and
the per-share option price thereof that may be issued in the aggregate and to
individual Optionees upon exercise of Options granted under the Plan; provided,
however, that no such adjustment need be made if, upon the advice of counsel,
the Board determines that such adjustment may result in the receipt of federally
taxable income to holders of Options granted hereunder or the holders of Shares
or other classes of the Company's securities.
(b) Upon the occurrence of a Terminating Transaction, as of
the effective date of such Terminating Transaction, the Plan and any then
outstanding Options not exercised prior to the effectiveness of such Terminating
Transaction (whether or not vested) shall terminate unless (i)
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provision then is made in writing in connection with such transaction for the
continuance of the Plan and for the assumption of such Options, or for the
substitution for such Options of new options covering the securities of any
successor or survivor corporation in the Terminating Transaction or an affiliate
thereof, with such adjustments as the Board deems appropriate with respect to
the number and kind of securities and the per-share exercise price under such
substituted options, in which event the Plan and such outstanding Options shall
continue or be replaced, as the case may be, in the manner and under the terms
so provided; or (ii) the Board then otherwise provides in writing for such
adjustments as it deems appropriate in the terms and conditions of the then
outstanding Options (whether or not vested), including, without limitation, (A)
accelerating the vesting of outstanding Options and/or (B) providing for the
cancellation of Options and their automatic conversion into the right to receive
the securities or other properties which a holder of Shares underlying such
Options would have been entitled to receive upon the consummation of such
Terminating Transaction had such Shares been issued and outstanding (net of the
appropriate option exercise prices). If, pursuant to the foregoing provisions of
this paragraph (b), the Plan and the Options shall terminate by reason of the
occurrence of a Terminating Transaction without provision for any of the
action(s) described in clause (i) and/or (ii) hereof, then any Optionee holding
outstanding Options shall have the right, at such time immediately prior to the
consummation of the Terminating Transaction as the Board shall designate, to
exercise such Optionee's Options to the full extent not theretofore exercised,
including any installments which have not yet become Accrued Installments.
(c) Except to the extent required in order to retain the
qualification of an Option as an Incentive Stock Option under I.R.C. Section
422, to the maximum extent possible, any adjustments authorized under this
Section 6.8 with respect to any outstanding Options shall be made by means of
appropriate adjustments to the number of Shares (or other securities) and the
option exercise price therefor under the unexercised portions of such
outstanding Options, but without changing the aggregate exercise price
applicable to said unexercised portions. In all cases, the nature and extent of
adjustments under this Section 6.8 shall be determined by the Board in its sole
discretion, and any such determination as to what adjustments shall be made, and
the extent thereof, shall be final and binding. No fractional shares of stock
shall be issued under the Plan pursuant to any such adjustment.
6.9. Taxes. The Board shall make such provisions and take such
steps as it deems necessary or appropriate for the withholding of any federal,
state, local and other tax required by law to be withheld with respect to the
grant or exercise of an Option, or with respect to the disposition of Shares
acquired pursuant to the exercise of an Option, including, but without
limitation, the deduction of the amount of any such withholding tax from any
compensation or other amounts payable to an Optionee by any Participating
Company, or requiring an Optionee (or the Optionee's beneficiary or legal
representative), as a condition of granting or exercising an Option, to pay any
member of the Participating Companies any amount required to be withheld, or to
execute such other documents as the Board deems necessary or desirable in
connection with the satisfaction of any applicable withholding obligation;
provided, however, that the Optionee may elect, at such time and in such manner
as the Board may prescribe, to satisfy such withholding obligation by (i)
delivering to the Company Shares owned by such individual having a Fair Market
Value equal to such withholding obligation, or (ii) requesting that the Company
withhold from the Shares to be
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delivered upon the exercise a number of Shares having a Fair Market Value equal
to such withholding obligation.
6.10. Legends on Options and Stock Certificates. Each Option
Agreement and each certificate representing Shares acquired upon exercise of an
Option shall be endorsed with all legends, if any, required by applicable
federal and state securities laws to be placed on the Option Agreement and/or
the certificate, as well as legends setting forth the restrictions contained in
Section 6.7 hereof. The determination of which legends, if any, shall be placed
upon Stock Option Agreements and/or said Shares shall be made by the Board in
its sole discretion, and such decision shall be final and binding.
6.11. Employment Rights. Neither the adoption of the Plan nor the
grant of Options will confer upon any person any right to continued employment
with any Participating Company or affect in any way the right of any
Participating Company to terminate an employment relationship at any time.
Except as specifically provided by the Board in any particular case, the loss of
existing or potential profit in connection with Options granted under the Plan
will not constitute an element of damages in the event of termination of an
employment relationship.
ARTICLE VII
AMENDMENT OR TERMINATION OF PLAN
7.1. Board Authority. The Board may amend, alter and/or terminate
the Plan at any time; provided, however, that no change shall be effective
unless approved by the stockholders of the Company if such change would cause
the Option Plan to fail to meet the qualification requirements for Incentive
Stock Option Plans as set forth in the Internal Revenue Code.
7.2. Limitation on Board Authority. The Board may amend the terms
of any Option previously granted, prospectively or retroactively, and may amend
the Plan in accordance with the provisions of Section 7.1; provided, however,
that unless required by applicable law, rule or regulation, no amendment of the
Plan or of any Option Agreement shall affect, in a material and adverse manner,
Options granted prior to the date of any such amendment without the written
consent of any Optionee holding any such affected Options.
7.3. Substitution of Options. In the Board's discretion, the Board
may, with an Optionee's written consent, substitute Nonstatutory Stock Options
for outstanding Incentive Stock Options, and any such substitution shall not
constitute a new Option grant for the purposes of the Plan, and shall not
require a revaluation of the Option exercise price for the substituted Option.
Any such substitution may be implemented by an amendment to the applicable
Option Agreement or in such other manner as the Board in its discretion may
determine.
ARTICLE VIII
PURCHASE OF OPTION SHARES
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8.1. General. Until such time as the Shares are registered under
the Exchange Act, the Company may, at its option and in its sole discretion,
offer to purchase any or all Option Shares (the "Payable Shares") at a price per
share equal to the Fair Market Value of a Share.
8.2. Valuation. If the Company decides to exercise the purchase
right, it shall cause the Fair Market Value of the Shares to be determined as of
the purchase offer date designated by the Board (the "Purchase Offer Date") in
accordance with Section 2.10 and shall notify each holder of Payable Shares of
such Fair Market Value.
8.3. Request for Repurchase. Within thirty (30) days after receipt
of the notice given under Section 8.2, each such holder of Shares may request
the Company to purchase all or any portion of his or her Payable Shares at a
price per share equal to such Fair Market Value by submitting to the Company an
irrevocable written notice of such request (except that such notice may be
revoked as specifically provided in Section 8.4). Within ninety (90) days after
the Purchase Offer Date the Company shall notify each requesting holder of
Payable Shares whether the Company will purchase all or a portion of the Payable
Shares requested to be so purchased on a closing date not more than fifteen (15)
days after the giving of such Company notice.
8.4. Purchase of Payable Shares. The closing for any purchase of
Payable Shares pursuant to Section 8.3 shall occur on the specified closing date
at the offices of the Company at 11:00 a.m. local time, or at such other time
and place as the parties to such sale may mutually agree. At the closing, the
Optionee shall deliver to the Company a certificate or certificates representing
the Payable Shares to be purchased by the Company, duly endorsed for transfer,
free and clear of any lien or encumbrance, in exchange for payment of the
purchase price (i) by check, (ii) by delivery of certificates representing
shares of Orbital Common Stock that have a Fair Market Value (determined in the
manner provided in Section 2.10) as of the business day preceding the closing
equal to the purchase price of the Shares and that are freely tradable (i.e.,
not "restricted securities" within the meaning of Rule 144 under the Securities
Act), with payment by check for any amount that would otherwise be paid by a
fractional share, (iii) by delivery of a subordinated promissory note of the
Company in the principal amount of the purchase price of the Payable Shares,
bearing interest at a fixed rate equal to the then applicable prime rate (as
published in The Wall Street Journal) plus three percent (3.0%), providing for
quarterly payments of interest and payment of the full principal amount on the
first anniversary of the date of issuance, and containing provisions as approved
by the Board in its sole discretion providing for the subordination of such
notes to such indebtedness, whether then existing or thereafter created, of the
Company as is specified by the Board, including without limitation indebtedness
for money borrowed or similar indebtedness, or (iv) any combination of the
foregoing; provided, however, that no part of the purchase price for the Payable
Shares may be paid by subordinated promissory note unless the Board determines
in good faith that payment in cash or Orbital Common Stock would adversely
affect the financial condition or liquidity of the Company or adversely affect
Orbital (including without limitation because of a pending or contemplated
offering or other transaction); and provided, further, that if any portion of
the purchase price for the Payable Shares is to be paid by subordinated
promissory note the Optionee may revoke his or her request that the Payable
Shares be purchased in which case the Payable Shares shall remain held by the
Optionee unaffected by the original request. Any payment in Orbital
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Common Stock shall be subject to all applicable federal and state securities
laws restrictions and any other applicable legal restrictions.
ARTICLE IX
GENERAL PROVISIONS
9.1. Availability of the Plan. A copy of the Plan shall be
delivered to the Secretary of the Company and shall be shown by the Secretary to
any Eligible Person making reasonable inquiry concerning the Plan.
9.2. Notice. Any notice or other communication required or
permitted to be given pursuant to the Plan or under any Option Agreement must be
in writing and may be given by mail and, if given by mail, shall be determined
to have been given and received five (5) days after such letter containing such
notice, properly addressed with postage prepaid, is deposited in the United
States mails and, if given otherwise than by mail, shall be deemed to have been
given when delivered to and received by the party to whom addressed. Notice
shall be given to Eligible Persons at their most recent addresses shown in the
Company's records. Notice to the Company shall be addressed to the Company at
the address of the Company's principal executive offices, to the attention of
the Secretary of the Company.
9.3. Title and Headings. Titles and headings of sections of the
Plan are for convenience of reference only and shall not affect the construction
of any provision of the Plan.
9.4. Governing Law. The Plan shall be governed by, interpreted
under and construed and enforced in accordance with the internal laws, and not
the laws pertaining to conflicts or choice of laws, of the State of Delaware,
applicable to agreements made and to be performed wholly within the State of
Delaware.
9.5. Proceeds. Proceeds from the sale of Shares pursuant to
Options shall constitute general funds of the Company.
9.6. Status of Optionee. Neither an Optionee nor any person to
whom an Option is transferred under Section 6.7 shall be deemed to be the holder
of, or to have any of the rights of a holder with respect to, any shares subject
to such Option unless and until such person has satisfied all requirements for
exercise of the Option pursuant to its terms.
9.7. Exculpation. No member of the Board or of the Human Resources
and Nominating Committee or Audit Committee of Orbital shall have any personal
liability to any Optionee and/or holder of Shares for any act or omission in
connection with this Plan (including without limitation any determination of
Fair Market Value), unless the Optionee and/or holder of Shares shall establish
that such determination, act or omission was not made in good faith.
9.8 Lockup Agreements. By its exercise of an Option, the holder thereof
agrees that upon the request of the managing underwriter of any underwritten
public offering of Shares such holder will
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enter into a "lockup agreement" with such underwriter in form and substance
reasonably satisfactory to the Company and containing provisions generally
preventing the sale of Shares by such holder for a period beginning no earlier
than seven days prior to filing the registration statement for such offering and
ending no later than 90 days (180 days in the case of the Company's initial
public offering) after the effectiveness of such registration statement.
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EXHIBIT 10.19
OGS ORDER AND AMENDMENT NO. 1
TO
ORBIMAGE GROUND STATIONS CONTRACT
CONTRACT NO. OGS-99-02-01
OGS ORDER AND AMENDMENT NO. 1 TO ORBIMAGE GROUND STATIONS CONTRACTS
NO.OGS-99-02-01 (this "Amendment") is made and entered into as of the 10th day
of August 1999 by and between MACDONALD, DETTWILER AND ASSOCIATES LTD., a
Canadian corporation ("MacDonald Dettwiler"), and Orbital Imaging Corporation, a
Delaware corporation ("ORBIMAGE").
RECITALS
WHEREAS, ORBIMAGE and MacDonald Dettwiler are parties to that certain
ORBIMAGE Ground Stations Contract No. OGS-99-02-01 dated May 26, 1999, pursuant
to which MacDonald Dettwiler has agreed to deliver a series of OGS Systems and
options meeting certain agreed technical and other specifications at an agreed
price, subject to final agreement of the parties with respect to each OGS System
ordered by ORBIMAGE ("the OGS Contract"); and
WHEREAS, in connection with the OGS Contract, MacDonald Dettwiler submitted
to ORBIMAGE that certain Order Specification Document No. 01-2477-5 dated August
10, 1999 (the "NTT Data OSD"), setting forth MacDonald Dettwiler's proposal to
deliver an OGS System to ORBIMAGE under the OGS Contract (the "NTT Data OGS"),
which proposal includes an option for an OrbView-3 Update Acceptance Test at a
FFP amount of [*CONFIDENTIAL TREATMENT REQUESTED*] (the "OrbView-3 Update); and
WHEREAS, ORBIMAGE desires to exercise CLINs 0005, 0009 and 0011 of Exhibit
B of the OGS Contract and the OrbView-3 Update for the delivery of the NTT Data
OGS; and
WHEREAS, MacDonald Dettwiler is prepared to deliver the NTT Data OGS on the
terms and conditions of the OGS Contract, as modified by the NTT Data OSD and
this Amendment; and
WHEREAS, the parties desire to amend certain provisions of the OGS Contract
as set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:
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ARTICLE 1. NTT DATA OGS ORDER
(a) ORBIMAGE hereby exercises (i) CLINs 0005, 0009 and 0011 of Exhibit B
of the OGS Contract, as modified by the NTT Data OSD and this Amendment, (ii)
the OrbView-3 Update, and (iii) the addition of CLIN 0005a, for the delivery of
the NTT Data OGS. MacDonald Dettwiler hereby acknowledges the foregoing and
agrees to deliver the NTT Data OGS on the terms and conditions of the OGS
Contract, as modified by the NTT Data OSD and this Amendment. The NTT Data OSD
is incorporated into the OGS Contract by this reference solely for purposes of
the delivery of the NTT Data OGS.
(b) Notwithstanding the schedule set forth in Section 3 of the NTT Data
OSD and GC-5 and GC-12 of Exhibit A to the OGS Contract, (i) title to the NTT
Data OGS (including the OrbView-3 Update) shall pass to ORBIMAGE upon the
issuance of the OrbView-3 Update Acceptance Certificate, and (ii) the Warranty
Period for the NTT Data OGS (including the OrbView-3 Update) shall commence upon
issuance of the OrbView-3 Update Acceptance Certificate. The parties acknowledge
that the CLIN 0005 FFP amount set forth in Article 1(c) below does not include
the costs of deferring the start date of the Warranty Period, as described in
item (ii) of the forgoing sentence (the "Deferral of Warranty"). MacDonald
Dettwiler and ORBIMAGE agree that they shall negotiate in good faith to promptly
(but in no event later than October 6, 1999) agree upon a commercially
reasonable amount and payment terms for the foregoing modification, Deferral of
Warranty, which amount shall be added as CLIN 0005a.
(c) Notwithstanding the FFP for CLIN 0005 set forth in Exhibit B,
Section 2.0 of the OGS Contract, the CLIN 0005 FFP for the NTT Data OGS shall be
[*CONFIDENTIAL TREATMENT REQUESTED*], plus the additional amount agreed upon
pursuant to Article 1(b) above which will be added as CLIN 0005a. The foregoing
price of [*CONFIDENTIAL TREATMENT REQUESTED*] and the schedule set forth in
Section 3 of the NTT Data OSD are only valid if ORBIMAGE exercises CLIN 0001c on
or before October 6, 1999.
(d) For the avoidance of doubt, the total price payable by ORBIMAGE for
the delivery of the NTT Data OGS, consisting of CLINs 0005, 0005a, 0009, 0011
and the OrbView-3 Update, and subject to the provisions of 1(b) and 1(c) above,
is set forth below:
[*CONFIDENTIAL TREATMENT REQUESTED*]
2
<PAGE> 3
(e) Notwithstanding Section 4.2 of Exhibit B to the OGS Contract, the
NTT Data OGS payment terms for CLINs 0005 and 0009 shall be as follows (and the
percentage amounts set forth in Section 4.2.1 shall be modified consistent with
the percentage amounts set forth below):
[*CONFIDENTIAL TREATMENT REQUESTED*]
(f) [*CONFIDENTIAL TREATMENT REQUESTED*]
(g) [*CONFIDENTIAL TREATMENT REQUESTED*]
3
<PAGE> 4
(h) Pursuant to Exhibit A, GC-3 of the OGS Contract, ORBIMAGE and
MacDonald Dettwiler hereby designate their respective authorized representatives
for the NTT Data OGS, as follows:
<TABLE>
<CAPTION>
DESCRIPTION FOR MACDONALD DETTWILER FOR ORBIMAGE
- -------------------------------- ------------------------------------ -----------------------------------
<S> <C> <C>
Name: Mauro Sartori Ron Huber
- -------------------------------- ------------------------------------ -----------------------------------
Address: 13800 Commerce Parkway 21700 Atlantic Blvd
Richmond, B.C. V6V 2J3 Dulles, VA 20166
- -------------------------------- ------------------------------------ -----------------------------------
Phone: (604) 231-2725 (703) 406-5294
- -------------------------------- ------------------------------------ -----------------------------------
Facsimile: (604) 278-0531 (703) 404-8061
- -------------------------------- ------------------------------------ -----------------------------------
Email: [email protected] [email protected]
- -------------------------------- ------------------------------------ -----------------------------------
Description and Scope of Project Manager responsible for Project Manager responsible for
Authority: management and execution of NTT management and execution of NTT
Data OGS Project Data OGS Project
- -------------------------------- ------------------------------------ -----------------------------------
</TABLE>
ARTICLE 2. AMENDMENTS TO EXHIBIT A OF THE OGS CONTRACT
(a) For the purposes of the NTT Data OSD only, the parties hereby agree
to add the defined term "SAT 'A'" to GC-1 of Exhibit A, which term
shall have the same meaning as the definition of OSAT contained in
Article 4.12.2.4 of Exhibit C, with the exception of using simulated
data instead of live data, and excluding the OrbView-3 Update.
Verification of SAT 'A' will be the issuance of the OSAT
Certificate.
(b) For the purposes of the NTT Data OSD only, the parties hereby agree
to add the defined term "SAT 'B'" to GC-1 of Exhibit A, which term
shall mean the Update Acceptance Test (UAT) conducted for the
OrbView-3 Update. Verification of SAT 'B' will be the issuance of
the UAT Certificate with respect to the OrbView-3 Update.
4
<PAGE> 5
ARTICLE 3. AMENDMENTS TO EXHIBIT B OF THE OGS CONTRACT
(a) The parties hereby amend the table set forth in Exhibit B, Section 2
of the OGS Contract by deleting said table in its entirety and replacing it with
the following (which amendment incorporates the new CLIN 0005 for the NTT Data
OGS set forth above):
[*CONFIDENTIAL TREATMENT REQUESTED*]
(b) The parties hereby amend the second paragraph of Section 3,
Exhibit B of the OGS Contract by deleting said paragraph in its entirety and
replacing it with the following:
[*CONFIDENTIAL TREATMENT REQUESTED*]
5
<PAGE> 6
ARTICLE 4. MISCELLANEOUS
(a) Capitalized terms not otherwise defined herein shall have the
meaning set forth in the OGS Contract.
(b) Except as expressly modified or amended hereby, all of the terms and
conditions of the Contract shall remain in full force and effect.
(c) This Amendment may be executed in two or more counterparts, each of
which shall be considered an original and all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this OGS Order and Amendment
No. 1 to the OGS Contract to be executed as of the date first written above.
<TABLE>
<S> <C>
MACDONALD, DETTWILER AND ORBITAL IMAGING CORPORATION
ASSOCIATES LTD.
- ------------------------------ ------------------------------
Signature Signature
- ------------------------------ ------------------------------
Name Name
- ------------------------------ ------------------------------
Title Title
</TABLE>
6
<PAGE> 1
EXHIBIT 10.20
OGS ORDER AND AMENDMENT NO. 2
TO
ORBIMAGE GROUND STATIONS CONTRACT
CONTRACT NO. OGS-99-02-01
OGS ORDER AND AMENDMENT NO. 2 TO ORBIMAGE GROUND STATIONS CONTRACTS
NO.OGS-99-02-01 (the "Amendment") is made and entered into as of the 30th day of
September 1999 by and between MACDONALD, DETTWILER AND ASSOCIATES LTD., a
Canadian corporation ("MacDonald Dettwiler"), and Orbital Imaging Corporation, a
Delaware corporation ("ORBIMAGE").
RECITALS
WHEREAS, ORBIMAGE and MacDonald Dettwiler are parties to that certain
ORBIMAGE Ground Stations Contract No. OGS-99-02-01 dated May 26, 1999, pursuant
to which MacDonald Dettwiler has agreed to deliver a series of OGS Systems and
options meeting certain agreed technical and other specifications at an agreed
price, subject to final agreement of the parties with respect to each OGS System
ordered by ORBIMAGE (the "OGS Contract"); and
WHEREAS, in connection with the OGS Contract, MacDonald Dettwiler submitted
to ORBIMAGE that certain Eagle Vision II OrbView Recording and Processing
Subsystem Price Proposal No. 01-2491 dated February 16, 1999 (the "EVII
Proposal"), setting forth MacDonald Dettwiler's proposal to deliver an OGS
System to ORBIMAGE under the OGS Contract (the "EVII OGS"); and
WHEREAS, ORBIMAGE desires to exercise CLIN 0002 and CLIN 0009 of Exhibit B
of the OGS Contract for the delivery of the EVII OGS; and
WHEREAS, MacDonald Dettwiler is prepared to deliver the EVII OGS on the
terms and conditions of the OGS Contract, as modified by (i) the EVII Statement
of Work attached hereto as Exhibit C-EVII, (ii) the EVII Statement of
Requirements attached hereto as Exhibit D-EVII, and (iii) this Amendment; and
WHEREAS, in connection with the delivery of the EVII OGS the parties desire
to amend certain provisions of the OGS Contract as set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:
1
<PAGE> 2
ARTICLE 1. EVII OGS ORDER
(a) ORBIMAGE hereby exercises CLIN 0002 and 0009 of Exhibit B of the OGS
Contract, as modified by Exhibit C-EVII, Exhibit D-EVII and this Amendment, for
the delivery of the EVII OGS. MacDonald Dettwiler hereby acknowledges the
foregoing and agrees to deliver the EVII OGS on the terms and conditions of the
OGS Contract, as modified by Exhibit C-EVII, Exhibit D-EVII and this Amendment.
(b) Notwithstanding the FFP for CLIN 0002 set forth in Exhibit B,
Section 2.0 of the OGS Contract, the CLIN 0002 FFP for the EVII OGS shall be
[*CONFIDENTIAL TREATMENT REQUESTED*].
(c) For the avoidance of doubt, the total price payable by ORBIMAGE for
the delivery of the EVII OGS, consisting of CLIN 0002 and 0009, is set forth
below:
[*CONFIDENTIAL TREATMENT REQUESTED*]
(d) Solely for purposes of the delivery of the EVII OGS, the following
options are added to Section 3.0 of the OGS Contract.
[*CONFIDENTIAL TREATMENT REQUESTED*]
* Period 1 commences on the completion of the ORBIMAGE Subsystem OSAT and
ends on December 31, 2000. Thereafter, Periods 2 through 4 shall each
commence on January 1 and end on December 31 of the applicable year.
Optional CLINs 0002a through 0002d may be exercised by ORBIMAGE as described
below, pursuant to which MacDonald Dettwiler will provide the services set forth
in Exhibit C-EVII; provided, however, that ORBIMAGE must exercise optional CLINs
0002a through 0002d in consecutive years, it being understood that if ORBIMAGE
does not exercise its option in any one year, its options for the remaining
periods shall automatically expire. Optional CLINs 0002a through 0002d must be
exercised at least 60 days prior to the start of the applicable Period. Optional
CLIN 0002e must be exercised by October 29, 1999. Optional CLIN 0002f may be
exercised on or before July 15, 2001 by a separate writing agreed to by both
parties where the scope and effort of the Technical Support will be identified,
and shall be performed on a Time and Materials (T&M) basis.
(e) Notwithstanding Section 4.2 of Exhibit B to the OGS Contract, the
EVII OGS payment terms for CLINs 0002 and 0009 shall be as follows (and the
percentage amounts set forth in Section 4.2.1 shall be modified consistent with
the percentage amounts set forth below):
[*CONFIDENTIAL TREATMENT REQUESTED*]
(f) [*CONFIDENTIAL TREATMENT REQUESTED*]
2
<PAGE> 3
(g) [*CONFIDENTIAL TREATMENT REQUESTED*]
(h) [*CONFIDENTIAL TREATMENT REQUESTED*]
(i) Pursuant to Exhibit A, GC-3 of the OGS Contract, ORBIMAGE and
MacDonald Dettwiler hereby designate their respective authorized representatives
for the EVII OGS, as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
DESCRIPTION FOR MACDONALD DETTWILER FOR ORBIMAGE
<S> <C> <C>
- -------------------------------- ------------------------------------ -----------------------------------
Name: Dave Shilton Ron Huber
- -------------------------------- ------------------------------------ -----------------------------------
Address: 13800 Commerce Parkway 21700 Atlantic Blvd
Richmond, B.C. V6V 2J3 Dulles, VA 20166
- -------------------------------- ------------------------------------ -----------------------------------
Phone: (604) 231-2038 (703) 406-5294
- -------------------------------- ------------------------------------ -----------------------------------
Facsimile: (604) 278-0531 (703) 404-8061
- -------------------------------- ------------------------------------ -----------------------------------
Email: [email protected] [email protected]
- -------------------------------- ------------------------------------ -----------------------------------
Description and Scope of Project Manager responsible for Project Manager responsible for
Authority: management and execution of EVII management and execution of EVII
OGS Project OGS Project
- -------------------------------- ------------------------------------ -----------------------------------
</TABLE>
(j) Solely for purposes of the delivery of the EVII OGS, the parties
hereby replace Exhibit C of the OGS Contract with Exhibit C-EVII attached
hereto.
(k) Solely for purposes of the delivery of the EVII OGS, the parties
hereby replace Exhibit D of the OGS Contract with Exhibit D-EVII attached
hereto.
(l) Solely for purposes of the delivery of the EVII OGS, MacDonald
Dettwiler agrees that any release of information relating to this Order during
the period of performance of this Order, and for a period of six months
thereafter, shall be approved in writing by ORBIMAGE. For purposes of this
Article 2(l), "information" shall include, but is not limited to, news releases,
articles, manuscripts, brochures, advertisements, still and motion pictures,
speeches, and disclosures at technical conferences, trade association meetings
and symposia.
ARTICLE 2. AMENDMENTS TO EXHIBIT B OF THE OGS CONTRACT
(a) The parties hereby amend the table set forth in Exhibit B, Section 2
of the OGS Contract by deleting said table in its entirety and replacing it with
the following (which amendment incorporates the new CLIN 0002 for the EVII OGS
set forth in Article 1(a) above):
[*CONFIDENTIAL TREATMENT REQUESTED*]
3
<PAGE> 4
ARTICLE 3. MISCELLANEOUS
(a) Capitalized terms not otherwise defined herein shall have the
meaning set forth in the OGS Contract or the EVII Proposal.
(b) Except as expressly modified or amended hereby, all of the terms and
conditions of the OGS Contract shall remain in full force and effect.
(c) This Amendment may be executed in two or more counterparts, each of
which shall be considered an original and all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
as of the date first written above.
<TABLE>
<S> <C>
MACDONALD, DETTWILER AND ORBITAL IMAGING CORPORATION
ASSOCIATES LTD.
- ------------------------------ ------------------------------
Signature Signature
- ------------------------------ ------------------------------
Name Name
- ------------------------------ ------------------------------
Title Title
</TABLE>
4
<PAGE> 5
EXHIBIT C-EVII
STATEMENT OF WORK
SEPTEMBER 30, 1999
[*CONFIDENTIAL TREATMENT REQUESTED*]
<PAGE> 6
EXHIBIT D-EVII
STATEMENT OF REQUIREMENTS
SEPTEMBER 30, 1999
[*CONFIDENTIAL TREATMENT REQUESTED*]
1
<PAGE> 1
EXHIBIT 10.21
AMENDMENT NO. 3
TO
ORBIMAGE GROUND STATIONS CONTRACT
CONTRACT NO. OGS-99-02-01
AMENDMENT NO. 3 TO ORBIMAGE GROUND STATIONS CONTRACTS NO. OGS-99-02-01 (the
"Amendment") is made and entered into as of the 6th day of October 1999 by and
between MACDONALD, DETTWILER AND ASSOCIATES LTD., a Canadian corporation
("MacDonald Dettwiler"), and Orbital Imaging Corporation, a Delaware corporation
("ORBIMAGE").
RECITALS
WHEREAS, ORBIMAGE and MacDonald Dettwiler are parties to that certain
ORBIMAGE Ground Stations Contract No. OGS-99-02-01 dated May 26, 1999, pursuant
to which MacDonald Dettwiler has agreed to deliver a series of OGS Systems and
options meeting certain agreed technical and other specifications at an agreed
price, subject to final agreement of the parties with respect to each OGS System
ordered by ORBIMAGE (the "OGS Contract"); and
WHEREAS, in connection with the OGS Contract, ORBIMAGE must exercise CLIN
0001c, Regional Distributor Software Development NRE, on or before October 6,
1999; and
WHEREAS, in connection with the NTT Data OGS, MacDonald Dettwiler submitted
to ORBIMAGE that certain Deferral of Warranty Price Proposal Ref. PS99-G-F/0504
dated September 29, 1999 (the "Deferral of Warranty Proposal"), which would
become CLIN 0005a, setting forth MacDonald Dettwiler's proposal to deliver said
Deferral of Warranty solely for the purposes of the NTT Data OGS (the "Deferral
of Warranty"); and
WHEREAS, ORBIMAGE desires to exercise CLIN 0001c and CLIN 0005a of Exhibit
B of the OGS Contract; and
WHEREAS, in connection with the delivery of the Regional Distributor
Software Development NRE and the Deferral of Warranty the parties desire to
amend certain provisions of the OGS Contract as set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:
1
<PAGE> 2
ARTICLE 1. ORDER
(a) ORBIMAGE hereby exercises CLIN 0001c and 0005a of Exhibit B of the
OGS Contract for the delivery of the Regional Distributor Software Development
NRE and delivery of the Deferral of Warranty. MacDonald Dettwiler hereby
acknowledges the foregoing and agrees to deliver the Regional Distributor
Software Development NRE and delivery of the Deferral of Warranty on the terms
and conditions of the OGS Contract.
(b) The FFP amount for CLIN 0005a is [*CONFIDENTIAL TREATMENT
REQUESTED*]. The total FFP amount payable by ORBIMAGE for the
delivery of the NTT Data OGS, consisting of CLINs 0005, 0005a,
0009, 0011 and the OrbView-3 Update is set forth below:
[*CONFIDENTIAL TREATMENT REQUESTED*]
(c) [*CONFIDENTIAL TREATMENT REQUESTED*]
2
<PAGE> 3
ARTICLE 2. AMENDMENTS TO EXHIBIT B OF THE OGS CONTRACT
(a) The parties hereby amend the table set forth in Exhibit B, Section
2 of the OGS Contract by deleting said table in its entirety and replacing it
with the following (which amendment incorporates the new CLIN 0001c for the
Regional Distributor Software Development NRE set forth in Article 1(a) above):
[*CONFIDENTIAL TREATMENT REQUESTED*]
ARTICLE 3. MISCELLANEOUS
(a) Except as expressly modified or amended hereby, all of the terms
and conditions of the OGS Contract shall remain in full force and effect.
(b) This Amendment may be executed in two or more counterparts, each
of which shall be considered an original and all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
as of the date first written above.
<TABLE>
<S> <C>
MACDONALD, DETTWILER AND ORBITAL IMAGING CORPORATION
ASSOCIATES LTD.
- ------------------------------ ------------------------------
Signature Signature
- ------------------------------ ------------------------------
Name Name
- ------------------------------ ------------------------------
Title Title
</TABLE>
3
<PAGE> 1
EXHIBIT 10.22
OGS-IMI-C-01-301
ORBIMAGE GROUND STATION CONTRACT
FOR
NTT DATA CORPORATION
BETWEEN
IMAGE MEASUREMENTS, INC.
AND
ORBITAL IMAGING COPORATION
(C) Copyright Orbital Imaging Corporation, 1999
All Rights Reserved
21700 Atlantic Boulevard
Dulles, Virginia
[ORBIMAGE GLOBAL IMAGING INFORMATION LOGO] 20166
Telephone (703) 406-5800
Fax (703) 406-5552
- --------------------------------------------------------------------------------
RESTRICTION ON USE, PUBLICATION, OR
DISCLOSURE OF PROPRIETARY INFORMATION
This document contains information proprietary to Orbital Imaging Corporation to
its subsidiaries, affiliates, or to a third party to which Orbital Imaging
Corporation may have a legal obligation to protect such information from
unauthorized disclosure, use or duplication. Any disclosure, use or duplication
of this document or of any of the information contained herein for other than
the specific purpose for which it was disclosed is expressly prohibited, except
as Orbital Imaging Corporation may otherwise agree to in writing. Consistent
with the export control regulations of the United States, this document must be
returned to Orbital Imaging Corporation within one year from the date of
shipment or upon demand by Orbital Imaging Corporation.
<PAGE> 2
ORBIMAGE GROUND STATION CONTRACT
CONTRACT NUMBER: OGS-IMI-C-01-301
THIS ORBIMAGE GROUND STATION CONTRACT (the "Contract") is entered
into as of July 26, 1999 by and between ORBITAL IMAGING CORPORATION
("ORBIMAGE"), a Delaware corporation, with its principal place of business
located at 21700 Atlantic Boulevard, Dulles, Virginia 20166, and IMAGE
MEASUREMENTS INC. ("CUSTOMER"), a Japanese corporation, with its principal place
of business located at Nishi Shinjuku Sanko Building, 7-22-35, Nishi Sinjuku,
Tokyo, Japan.
RECITALS
WHEREAS, CUSTOMER desires to purchase a turnkey ORBIMAGE Ground
Station ("OGS") capable of OrbView-3 and OrbView-4 data reception, recording,
archiving, cataloging, ordering and product generation for the panchromatic and
multispectral sensors on the OrbView-3 and OrbView-4 satellites; and
WHEREAS, CUSTOMER intends to purchase the OGS System on behalf of
NTT Data Corporation ("NTT Data"); and
WHEREAS, upon execution of the On-Site Acceptance Certificate (as
described herein) and payment in full for the OGS, CUSTOMER shall transfer title
to the OGS, and assign all of its rights and obligations under this Contract to
NTT Data, including, without limitation, the Licenses described in GC-15; and
WHEREAS, ORBIMAGE desires to provide said OGS based upon the terms
and conditions set forth in this Contract.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties, intending to be
legally bound, hereby agree as follows:
ARTICLE 1.0 THE CONTRACT
This Contract shall consist of the Exhibits set forth below, which
are hereby incorporated and made part of this Contract by this reference. Any
inconsistency between or among this Contract and the Exhibits attached hereto
shall be resolved in the following order of precedence:
<TABLE>
<S> <C>
(i) This Contract;
</TABLE>
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 3
<TABLE>
<S> <C>
(ii) Exhibit A - General Conditions;
(iii) Exhibit B - Price Schedule and Payment Terms;
(iv) Exhibit C - Statement of Work;
(v) Exhibit D - Technical Specification.
(vi) Exhibit E - Contract Data Requirements List (CDRL)
(vii) Exhibit F - Preliminary List of Contract Deliverables
</TABLE>
ARTICLE 2.0 WORK TO BE PERFORMED
Except as specified elsewhere in this Contract, ORBIMAGE shall
furnish all labor, materials, tools, supplies, equipment, transportation,
supervision, technical, professional and other services, and, shall serve as the
prime integrator and perform integration, delivery, installation and other
technical services in accordance with this Contract.
ARTICLE 3.0 CONTRACT TYPE, EFFECTIVE DATE; PERIOD OF PERFORMANCE
(a) Work authorized under this Contract shall be performed on a Firm
Fixed Price ("FFP") basis as set forth in Exhibit B.
(b) The Effective Date of this Contract shall be the date first
above written.
(c) The Period of Performance for this Contract shall be specified
in Exhibit B (Price Schedule and Payment Terms). The Period of Performance for
this Contract may only be extended in writing by mutual agreement of the parties
hereto.
ARTICLE 4.0 CONSIDERATION; LETTER OF CREDIT
For ORBIMAGE's satisfactory and complete performance of this
Contract, CUSTOMER shall pay ORBIMAGE in accordance with the payment terms set
forth in Exhibit B (Price Schedule and Payment Terms) hereto. As a condition
precedent to ORBIMAGE's commencement of work hereunder, CUSTOMER shall open an
irrevocable letter of credit valid through December 31, 2001 with Sanwa Bank for
the benefit of ORBIMAGE (or its designee) for the full amount of this Contract
as set forth in Exhibit B, which letter shall be in such form as is reasonably
acceptable to
-2-
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 4
ORBIMAGE (or its designee). In the event of a dispute, as specified in GC-18,
the letter of credit shall be maintained by CUSTOMER until such dispute is
resolved.
IN WITNESS WHEREOF, the parties have caused this Contract to be
executed as of the date first above written.
<TABLE>
<CAPTION>
IMAGE MEASUREMENTS INC. ORBITAL IMAGING CORPORATION
<S> <C>
By: By:
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Name Name
- ------------------------------ ------------------------------
Title Title
</TABLE>
-3-
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 5
OGS-IMI-C-01-301
EXHIBIT A
---------
GENERAL CONDITIONS
TO
ORBIMAGE GROUND STATION CONTRACT
FOR
NTT DATA CORPORATION
BETWEEN
IMAGE MEASUREMENTS, INC.
AND
ORBITAL IMAGING COPORATION
(C) Copyright Orbital Imaging Corporation, 1999
All Rights Reserved
21700 Atlantic Boulevard
Dulles, Virginia
[ORBIMAGE GLOBAL IMAGING INFORMATION LOGO] 20166
Telephone (703) 406-5800
Fax (703) 406-5552
- --------------------------------------------------------------------------------
RESTRICTION ON USE, PUBLICATION, OR
DISCLOSURE OF PROPRIETARY INFORMATION
This document contains information proprietary to Orbital Imaging Corporation to
its subsidiaries, affiliates, or to a third party to which Orbital Imaging
Corporation may have a legal obligation to protect such information from
unauthorized disclosure, use or duplication. Any disclosure, use or duplication
of this document or of any of the information contained herein for other than
the specific purpose for which it was disclosed is expressly prohibited, except
as Orbital Imaging Corporation may otherwise agree to in writing. Consistent
with the export control regulations of the United States, this document must be
returned to Orbital Imaging Corporation within one year from the date of
shipment or upon demand by Orbital Imaging Corporation.
<PAGE> 6
ORBIMAGE GROUND STATION CONTRACT
CONTRACT NUMBER: OGS-IMI-C-01-301
EXHIBIT A
General Conditions
------------------
GC-1 DEFINITIONS
As used in this Contract, each of the following terms has the
meaning set forth thereafter, such meaning to be equally applicable both to the
singular and plural forms of the terms herein defined:
"Acceptance Test Procedures" or "ATPs" means the procedures developed to test
the Technical Specifications of the OGS System as required under this Contract,
which can be designated by ORBIMAGE as "Factory," "On-Site," "System" or
otherwise as appropriate to describe the type of test to be conducted.
"Contract Line Item Number" or "CLIN" means the individual line items available
under this Contract as specified in Exhibit B.
"Commercial-Off-The-Shelf" or "COTS" means, for the purposes of GC-14
(Intellectual Property Rights), proprietary software products and/or tools owned
or under the control of its respective owner or exclusive licensee that is
offered to the public for sale at published prices and includes the availability
of post delivery support services at published prices.
"Contract" means this ORBIMAGE Ground Station Contract (i.e., Contract No.
OGS-IMI-C-01-301) between ORBIMAGE and CUSTOMER, dated _____________, 1999, and
all Exhibits thereto as specified in Article 1.0 of the Contract.
"Contractor Hardware" means hardware owned by ORBIMAGE for which title does not
transfer to CUSTOMER.
"Destination Country" means Japan.
"Developed Item" or "DI" means for the purposes of GC-14 (Intellectual Property
Rights), a software program or tool developed by ORBIMAGE or its Subcontractors
for the first time under this Contract.
"Factory Acceptance Certificate" means an official written statement signed by
CUSTOMER indicating that part or all of the OGS System has been implemented,
completed and tested satisfactorily according to the Factory Acceptance Test in
accordance with this Contract.
A-1
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 7
"Factory Acceptance Test" or "FAT" means the test undertaken at ORBIMAGE's or
its Subcontractor's or suppliers' facility to certify that the Supply, Service
or Goods meets the functional requirements of Exhibit D (Technical
Specification).
"Goods", "Equipment", "Supplies" or "Works" means the System, System Hardware
and Software, Firmware, Equipment and relevant documentation and handbooks to be
furnished to CUSTOMER or services to be rendered by ORBIMAGE and/or its
Subcontractor(s) under this Contract.
"Incoterms" means the international rules for the interpretation of trade terms
as published by ICC Publishing SA, 38 Cours Albert 1er, 75008 Paris, France, as
first published in 1953 and reprinted in 1967, 1974, 1976, 1980 and in 1990. All
shipping terms referred to herein, such as FOB, CIF, CIP and the like means
those terms pursuant to Incoterms 1990.
"MacDonald Dettwiler" means MacDonald Dettwiler and Associates Ltd., a Canadian
corporation and a subsidiary of Orbital Sciences Corporation.
"Modified COTS" and "Modified NDI" for the purposes of GC-14 (Intellectual
Property Rights), refers to Commercial-Off-the-Shelf and Non-Development Items
to which significant modifications are made such that the identity, function and
form of the original proprietary software product or tool is lost.
"Month" means a Gregorian calendar month.
"Non-Development Item" or "NDI" means for the purposes of GC-14 (Intellectual
Property Rights), any existing proprietary software products and/or tools owned
by ORBIMAGE or its Subcontractors. With respect to MacDonald Dettwiler, NDI
include, without limitation, NDI owned by MacDonald Dettwiler or which MacDonald
Dettwiler has developed for the Canadian Government and has been granted
exclusive rights to by the Canadian Government.
"NSP" means not separately priced.
"NTT Data Corporation" or "NTT Data" means the corporation organized and
existing under the laws of Japan, appointed by ORBIMAGE to serve as a
distributor of OrbView-3 and OrbView-4 data in the Territory, pursuant to the
terms and conditions set forth in the ORBIMAGE Distribution Agreement dated
March 18, 1999 between NTT Data and ORBIMAGE.
"OSAT" means on-site acceptance test.
"OGS" has the meaning set forth in the Recitals to the Contract.
A-2
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 8
"OGS System" means the Hardware, Software, Firmware and Technical Data and
includes all other materials/elements that individually or collectively
constitute the OGS. The OGS is a turnkey system which receives data from the
OrbView-3 and OrbView-4 satellites and stores, retrieves, processes and
manipulates such data to form products in accordance with Exhibit D (Technical
Specifications).
"On-Site Acceptance Certificate" means an official written statement signed by
CUSTOMER indicating that part or all of the OGS System has been implemented,
completed and tested satisfactorily according to the On-Site Acceptance Test
prescribed in this Contract.
"On-Site" Acceptance Test(s)" or "OSAT" means a test undertaken at a site or
field location to certify that the Supply, Service or Goods meets the
requirements of Exhibit D (Technical Specification). OSAT includes real time
data reception from OrbView-3 or OrbView-4, but does not include the integration
of subsystem components required to be provided by CUSTOMER hereunder.
"Period of Performance" has the meaning set forth in Article 3.0(c) of the
Contract.
"Provisional Acceptance Certificate" means a written statement signed by
CUSTOMER indicating that part or all of the OGS System has been implemented,
completed and tested satisfactorily according to the Provisional Acceptance Test
prescribed in this Contract.
"Provisional Acceptance Test" or "PAT" means the test undertaken by ORBIMAGE or
its Subcontractor(s) to certify that a separate identified part(s) of the Work
meets the requirements of this Contract.
"Site" means the actual place or places where the Goods are to be delivered and
installed, or where the Work is to be done by ORBIMAGE or its Subcontractor(s).
"Subcontract" means an agreement entered into between ORBIMAGE and another
person, company, corporation or other entity for the furnishing of materials and
services as a part of the Work.
"Subcontractor" means any party or parties (other than ORBIMAGE) to whom all or
any portion of the Goods and Work have been assigned by ORBIMAGE pursuant to a
Subcontract.
"Technical Documentation" means any and all designs, technical reports,
photographs, drawings, plans, manuals, specifications and computer software
relating to the Work.
"Technical Information" means any and all recorded information of a scientific
or technical nature relating to the Work, including, without, limitation,
experimental and test data, techniques, methods, processes, know-how,
inventions, magnetic tape, computer memory printouts or data retained in
computer memory, and any other technical data in whatever form presented and
whether or not susceptible to copyright.
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"Vendor Software" means for the purposes of GC-14 (Intellectual Property
Rights), Commercial Off-the-Shelf not owned by ORBIMAGE or its Subcontractors
and which is subject to the terms and conditions of licenses granted by the
vendor thereof.
"Work" means all things done or required to be done and all operations, duties
and obligations executed or to be executed by ORBIMAGE as specified, shown or
indicated in this Contract including, without limitation, all extra work,
changes, substitutions and variations in Work ordered by CUSTOMER in accordance
with this Contract.
GC-2 INDEPENDENT CONTRACTOR
ORBIMAGE shall act as an independent contractor and not as the
agent of CUSTOMER in performing the Contract, maintaining complete control over
its employees and all of its Subcontractors. Nothing contained in this Contract
or any Subcontract awarded to any Subcontractor by ORBIMAGE shall create any
contractual relationship between any such Subcontractor and CUSTOMER. ORBIMAGE
shall perform all Work in accordance with its own methods subject to compliance
with this Contract.
GC-3 AUTHORIZED REPRESENTATIVES
(a) Before commencing work under this Contract, ORBIMAGE shall
designate one or more person(s) as its authorized representative whom can
represent the overall interests of ORBIMAGE under the Contract. ORBIMAGE shall
provide the name, address, telephone and facsimile numbers of such
representative(s), and of any changes thereto, together with a clear definition
of the scope of his/her authority to represent and act for ORBIMAGE, and shall
specify any and all limitations of such authority.
(b) Before ORBIMAGE commences work under this Contract, CUSTOMER
shall designate one or more persons as its authorized representatives whom can
represent the overall interests of CUSTOMER under the Contract. CUSTOMER shall
provide the name, address, telephone and facsimile numbers of such
representative, and of any changes thereto, together with a clear definition of
the scope of his/her authority to represent and act for CUSTOMER, and shall
specify any and all limitations of such authority.
GC-4 NOTICES
All notices given under this Contract shall be in writing and
shall be given by (i) hand delivery, (ii) facsimile, (iii) by a recognized
international overnight courier guaranteeing at least three-day delivery or (iv)
by registered or certified mail, return receipt requested and postage
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prepaid (if available), to the persons set forth below. All such notices shall
be deemed to have been duly given: (i) when receipt acknowledged, if faxed; (ii)
five (5) business days after the date of mailing by sender, or (iii) the date of
actual receipt, if given by hand or international courier.
If to CUSTOMER:
Image Measurements Inc.
Nishi Shinjuku Sanko Bldg., 7-22-35
Nishi Shinjuku, Tokyo, JAPAN
Attn: OGS Program Manager
Telefax: 81-3-3365-3646
If to ORBIMAGE:
Orbital Imaging Corporation
21700 Atlantic Boulevard
Dulles, Virginia, 20166, USA
Attn: Program Manager
Telefax: (703) 404-8061
GC-5 WARRANTY
(a) ORBIMAGE warrants that the Equipment purchased for the OGS
System shall be of new material and of the stated performance at the time the
order is placed with the Suppliers and Vendors.
(b) ORBIMAGE hereby warrants for a period of twelve (12) months
from the date of the successful completion of the On-Site Acceptance Test for
the OGS System, as evidenced by the issuance of an On-Site Acceptance
Certificate in accordance with the Contract, that the overall performance of the
OGS System will be in accordance with the Technical Specifications set forth in
Exhibit D. The foregoing warranty does not apply to damage or defects
attributable to negligence or misuse of the OGS System, including, without
limitation, any Goods, on the part of CUSTOMER or its agents, or repair or
alteration of the OGS System (including Goods) by CUSTOMER or its agents not in
accordance with ORBIMAGE's procedures and/or instructions.
(c) ORBIMAGE hereby warrants for a period of twelve (12) months
from the date of the successful completion of the On-Site Acceptance Test for
the OGS System, as evidenced by the issuance of an On-Site Acceptance
Certificate in accordance with the Contract, that the Goods are free from
defects arising out of faulty or defective material or components, including,
without limitation, software design and inferior workmanship, excluding normal
wear and tear.
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(d) Notice of all claimed defects must be provided in writing to
ORBIMAGE within the warranty period. ORBIMAGE shall determine after inspection
that the Goods were in fact, defective, and shall then promptly repair or
replace such Goods to conform with the applicable Technical Specifications set
forth in Exhibit D without any charge. ORBIMAGE shall at its option repair the
defective Goods on-site or have the said Goods returned to the original
supplier's facility. All shipping and insurance costs associated with shipment
of these items by CUSTOMER to ORBIMAGE shall be paid by ORBIMAGE, unless
ORBIMAGE determines that the damage or defects were attributable to negligence
or misuse of Goods on the part of CUSTOMER or its agents. The warranties set
forth herein is CUSTOMER's sole and exclusive remedy against ORBIMAGE for
damaged or defective Goods.
(e) CUSTOMER ACKNOWLEDGES AND AGREES THAT (I) THE LIMITED
WARRANTY SET FORTH IN THIS GC-5 IS THE SOLE AND EXCLUSIVE WARRANTY MADE BY
ORBIMAGE, (II) IS IN LIEU OF ALL OTHER WARRANTIES, AND (III) THAT ORBIMAGE DOES
NOT MAKE, NOR SHALL BE DEEMED TO HAVE MADE, ANY OTHER WARRANTIES, GUARANTEES OR
REPRESENTATIONS OF ANY NATURE WHATSOEVER WITH RESPECT TO THE CONTRACT, THE OGS
SYSTEM OR ANY OF THE GOODS OR SERVICES BEING PROVIDED PURSUANT TO THE CONTRACT,
WHETHER EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THOSE RELATING TO
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR FUNCTION AND WHETHER
ARISING OUT OF STATUTE, LAW, EQUITY, COURSE OF DEALING, USAGE OF TRADE OR
OTHERWISE.
GC-6 INSURANCE
Without limitation to its obligations and responsibilities under
this Contract, ORBIMAGE shall obtain insurance against loss or damages in such
forms as prescribed below;
(a) Freight and Transport and Installation Insurance.
ORBIMAGE shall obtain insurance for each shipment to the Site by
inland and/or overseas transportation, from the factories or any other
originating places of Goods outside or within the Destination Country, including
temporary storage and local manufacturing under the following provisions:
(i) The insurance coverage amount shall be based upon
the price of the Goods (in US dollars) added to the freight and cost
of insurance (cost insurance freight) and in-country transportation
costs.
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(ii) Insurance will be against "All Risks" of physical
loss or damage from any external cause including strikes, riots and
civil commotions risks in accordance with standard insurance
industry provisions.
The above insurance will be extended to cover installation,
testing and demonstration, as applicable, or until which time the On-Site
Acceptance Certificate is executed by CUSTOMER.
(b) Third Party Liability Insurance.
ORBIMAGE shall obtain insurance against all damage to CUSTOMER's
and/or third-party's property resulting directly from the Work done by ORBIMAGE.
ORBIMAGE's liability shall be limited to One Million Dollars (US$1,000,000) per
occasion for both property damage and personnel injury, including death. In the
event of such loss or damage, ORBIMAGE shall provide similar Goods as
replacement and such Goods shall conform to the specifications set forth herein.
(c) System Outages and Failure.
(i) In the event that the OrbView-3 satellite fails prior to the
date on which it is declared to be operational by ORBIMAGE, and upon written
demand by ORBIMAGE, CUSTOMER shall promptly return all delivered Works to
ORBIMAGE and upon receipt of such Works, ORBIMAGE shall reimburse CUSTOMER for
the cost of returning such Works.
(ii) Notwithstanding the foregoing, if prior to any such failure
CUSTOMER uses the Works, or any portion thereof furnished under this Contract
for any purpose at any time, such use shall acknowledge CUSTOMER's acceptance of
the OGS System and shall enable ORBIMAGE to present the On-Site Acceptance
Certificate for immediate payment. However, ORBIMAGE shall have the option to
require CUSTOMER to return such Works to ORBIMAGE. Upon written demand by
ORBIMAGE, CUSTOMER shall promptly return all delivered Works to ORBIMAGE and
upon receipt of such Works, ORBIMAGE shall reimburse CUSTOMER for the cost of
returning such Works.
(iii) In the event ORBIMAGE has delivered Works to CUSTOMER but
is unable to complete OSAT, ORBIMAGE shall have the right in its sole discretion
to immediately recover all delivered Works. Upon written demand by ORBIMAGE,
CUSTOMER shall promptly return all delivered Works to ORBIMAGE and upon receipt
of such Works, ORBIMAGE shall reimburse CUSTOMER for the cost of returning such
Works.
GC-7 LIMITATION OF LIABILITY
(a) ORBIMAGE'S ENTIRE LIABILITY TO CUSTOMER FOR ANY AND ALL CLAIMS,
DAMAGES, LOSSES, COSTS, EXPENSES OR OTHER LIABILITIES OF ANY
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NATURE WHATSOEVER, INCLUDING, WITHOUT LIMITATION, PATENT INDEMNIFICATION CLAIMS
AND ATTORNEYS' FEES, INCURRED BY CUSTOMER IN CONNECTION WITH THIS CONTRACT OR AS
A RESULT OF ORBIMAGE'S OR ITS SUBCONTRACTOR'S PERFORMANCE OF THIS CONTRACT SHALL
NOT EXCEED THE TOTAL PRICE ACTUALLY PAID BY CUSTOMER FOR THE OGS SYSTEM.
(b) ORBIMAGE shall not be held liable for bodily injury, property
damage or other losses sustained by third parties (including the employees and
agents of CUSTOMER), which may arise in consequence of the execution and/or
completion of the Work, nor for damage inflicted or loss sustained in respect of
the equipment or of any property of CUSTOMER, unless such injuries, damages or
losses are due to the sole negligence of ORBIMAGE or its Subcontractors.
(c) NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IN NO EVENT
SHALL ORBIMAGE HAVE ANY LIABILITY OR OBLIGATION TO CUSTOMER UNDER THIS CONTRACT
FOR LOSS OF USE, REVENUE OR PROFIT, BUSINESS INTERRUPTION, OR FOR ANY SPECIAL,
EXEMPLARY, PUNITIVE, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES HEREUNDER,
WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE, EVEN IF ORBIMAGE HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
GC-8 FORCE MAJEURE
(a) If there is a delay in production of any part of the Goods or
non-performance of the Work due to causes beyond either party's control,
including the consequences of the Modification or the OGS System testing, then
in any such case either party shall, for the duration of any such causes, be
relieved of its obligations to produce the part of the Goods and/or Work thereby
affected, but the provisions of this Contract shall remain fully valid with
regard to the development, integration, installation and testing of those parts
of the Goods and Work not affected by such causes.
(b) If either party at any time has reason to believe that the
Period of Performance will need to be extended by virtue of Force Majeure such
as an act of God or public enemy, governmental acts, including, without
limitation, any governmental, regulatory or administrative measures, including
export control license requirements, that impede, or otherwise delay, the
performance of the obligations of either party hereto, fire, flood, earthquake,
landslide or other damage to roads, epidemics, quarantine restrictions, strike,
lockout, sabotage, combination of workmen and freight embargoes, then the party
so affected shall promptly notify the other party within seven (7) business days
of the occurrence of such event and shall subsequently specify in writing the
actual period of delay so caused by the factor which was beyond its control,
accompanied by appropriate supporting evidence in the form of written statements
and documentation.
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(c) In the case of Force Majeure as stated above, both parties
shall be entitled to suspend execution of this Contract until such time the
Force Majeure no longer exists. In the event that such case occurs, each party
shall properly protect and secure the Goods currently under its possession and
continue to do so during the entire period of suspension. If such protection and
securing of the Goods is deemed impracticable by either party, such party shall
promptly notify the other party in writing stating in detail the reasons
preventing such security. Both parties agree to make reasonable commercial
efforts in reaching resolution to the matter
(d) In the event such Force Majeure results in a three (3) month
continuous delay, the parties hereby agree to review the terms and conditions
for performance under this Contract and mutually determine if the agreement
needs to be extended, amended or terminated in whole or in part. Any amendment
or modification hereof as a result of such Force Majeure shall be in writing by
mutual agreement of the parties. Should such suspension last more than a period
of nine (9) continuous months, either party hereto shall be entitled to
terminate this Contract with respect to the remaining work thereby affected, and
shall give written notice of termination by registered mail to the other party.
In the event of such termination, CUSTOMER shall pay ORBIMAGE for all Goods
already shipped to Country and the cost of the Work executed prior to the date
of termination. All other expenses incurred by ORBIMAGE as a result of such
termination of this Contract, shall be resolved by an equitable adjustment upon
mutual agreement of the parties.
GC-9 DEFAULT
(a) CUSTOMER may, by written notice of default to ORBIMAGE,
terminate this Contract in whole or in part if ORBIMAGE:
(i) is delayed beyond December 31, 2001 in performance of
this Contract, for causes other than Force Majeure;
(ii) notifies CUSTOMER that it is unable to complete
performance or deliver any of the Goods or Work required under this
Contract;
(iii) commits any material breach or fails to comply or
observe any article or provision set forth in this Contract; or
(iv) becomes insolvent, requests its creditors for a
moratorium, or files a voluntary petition in bankruptcy, or shall
be adjudicated as bankrupt pursuant to an involuntary petition.
(b) CUSTOMER's right to terminate this Contract may be exercised
if ORBIMAGE does not submit a formal correction plan within thirty (30) days
after receipt of such notice. Such correction plan must describe in detail
ORBIMAGE's recovery schedule and completely address all issues surrounding the
potential default. If, in the reasonable opinion of CUSTOMER, the correction
plan is
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deemed to substantially jeopardize the success of the project, and it defeats
the objectives of this Contract, CUSTOMER may terminate the contract in whole or
in part.
(c) If the On-Site Acceptance Test(s) cannot be accomplished on or
before December 31, 2001, including installation and operation according to the
Contract schedule which shall necessarily include any extensions thereto
pursuant to an amendment to the Contract under GC-19 (Changes in Work), and
provided CUSTOMER causes no delay in ORBIMAGE's ability to maintain schedule or
to perform OSAT as described in GC-9 (e) herein, CUSTOMER shall promptly return
all delivered Works and neither party shall have any liability to the other of
any nature whatsoever hereunder.
(d) Any action taken by CUSTOMER under this GC-9 shall not effect
ORBIMAGE's right to dispute such action pursuant to GC-18 (Dispute Resolution
and Arbitration). If, after notice of termination for default has been issued by
CUSTOMER, it is determined by CUSTOMER that the notice was invalid in whole or
in part, or that the default was beyond the reasonable control of ORBIMAGE or
its authorized Subcontractor(s), such notice of termination shall be deemed to
have been issued pursuant to GC-19 (Changes and Extra Work) and both parties
hereby agree to negotiate an equitable adjustment for continuation of the Work
or a final settlement for termination without cause.
(e) If following FAT, CUSTOMER causes any delay which results in
ORBIMAGE's inability to maintain schedule or to perform OSAT for a period
exceeding thirty (30) days, CUSTOMER hereby agrees to pay ORBIMAGE the
following: 1) a $10,000 per day fee assessment for any schedule delay prior to
OSAT; and 2) upon OSAT, a payment of 80% of the total contract value for any
delay of OSAT. The official OSAT date, shall be as specified in the contract
schedule, or as amended by mutual agreement in writing by the parties, and in no
event shall OSAT be earlier than fifteen (15) months after the Effective Date of
this Contract. Such causes for delay shall include, but are not limited to:
failure to provide any of the necessary facilities as specified in GC-20;
failure to obtain or delay in obtaining all necessary permits and licenses
specified in GC-15 (b). In no event shall the cumulative delays extend beyond
December 31, 2001.
GC-10 TRANSFER AND SUBLETTING
(a) ORBIMAGE shall not transfer, sell, sublet or otherwise
dispose of this Contract or any part hereof without the previous written consent
of CUSTOMER which shall not be unreasonably withheld, except that ORBIMAGE shall
have the right to assign or subcontract all or any part of the Work to a
wholly-owned subsidiary or affiliated company of ORBIMAGE, including, without
limitation, MacDonald Dettwiler, pursuant to a Subcontract. ORBIMAGE shall also
have the right, for the purpose of performing its duties under this Contract, to
undertake normal purchasing and subcontracting to acquire Goods and Services
necessary to complete the Work.
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(b) ORBIMAGE shall not be relieved from any liability or
obligation under this Contract and ORBIMAGE shall be solely responsible for the
acts, defaults and neglects of any Subcontractor and its servants or agents as
fully as if they were the acts, defaults or neglects of ORBIMAGE. Nothing
contained herein shall be deemed to create any contractual relations or
commitments between any Subcontractor and CUSTOMER.
GC-11 TITLE TO GOODS AND SERVICES; RISK OF LOSS; LICENSED USE
(a) Except as may otherwise be provided herein, CUSTOMER shall
acquire title to all of the Goods and Services to be provided by ORBIMAGE in
performance of this Contract. Promptly upon completion of OSAT and payment in
full for the OGS as provided in Exhibit B, CUSTOMER shall assign its right,
title and interest in and to the OGS to NTT Data, together with all of its
rights and obligations under this Contract, including, without limitation, the
Licenses described in GC-15, pursuant to a written instrument of assignment
satisfactory to ORBIMAGE in its reasonable discretion. NTT Data shall have no
further right to assign the OGS System to any other entity without the advanced
written approval of ORBIMAGE.
ORBIMAGE warrants to CUSTOMER that it has good and marketable title to all of
such Goods and Services, and that they are and shall be free of and from any
claims, liens, charges or encumbrances of any kind. Title to such Goods and
Services shall pass to CUSTOMER upon receipt and acceptance at the place or
places designated herein as evidenced by its issue of an On-Site Acceptance
Certificate by CUSTOMER. Acceptance shall only be accomplished after receipt,
inspection and approval of the Goods and Services by CUSTOMER, and CUSTOMER
shall at all times have the right of inspection and be allowed a reasonable time
therefor. Subject to the provisions in GC-9 (e), until such title has passed to
CUSTOMER, the risk of loss to such Goods and Services shall at all times remain
with ORBIMAGE or the applicable Subcontractor.
If CUSTOMER uses any portion of the Works prior to OSAT, CUSTOMER shall be
deemed to have accepted the OGS System and ORBIMAGE shall be entitled to present
the On-Site Acceptance Certificate for immediate payment in full of the entire
price of the OGS System, which shall include all exercised CLINs, in accordance
with Exhibit B. In such event, CUSTOMER shall execute the On-Site Acceptance
Certificate immediately upon ORBIMAGE's request therefor.
(b) If any of the Goods and Services do not conform to the
requirements of this Contract, CUSTOMER may reject any or all of the Goods and
Services. Any approval by CUSTOMER of part of the Goods and Services shall not
relieve ORBIMAGE of its obligations under this Contract. Rejected goods may at
the option of CUSTOMER, be held for ORBIMAGE's disposition instructions or
returned to ORBIMAGE.
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(c) With respect to those Goods and Services required to be
delivered by ORBIMAGE to CUSTOMER, but for which title shall not pass to
CUSTOMER, including, without limitation, Contractor Hardware and Software and
documentation, and Vendor Software and Vendor documentation, ORBIMAGE shall
grant CUSTOMER a sublicense to use such Goods and Services solely as
specifically set forth in GC-15. The sublicense fees to be paid by CUSTOMER to
ORBIMAGE for said Sublicenses are included in CLIN 0001 of Exhibit B.
(d) In the event that any Japanese governmental authority (whether
national, regional or local) imposes or seeks to impose any withholding or
similar taxes on ORBIMAGE on any portion of the OGS System price set forth in
CLIN 0001 of Exhibit B based on the sublicense fees described in GC-11 (c),
CUSTOMER shall indemnify and hold harmless ORBIMAGE for the full amount of any
such withholding or similar taxes in excess of the first $250,000 of said OGS
System price.
GC-12 SYSTEM SUPPORT SERVICES OPTION
After the initial twelve month warranty period, CUSTOMER shall have the option
to purchase system support services for the maintenance of the OGS System from
ORBIMAGE or its designee on a yearly basis under a separate system support
services contract. A description of these services is contained in Exhibit C
(the SOW), Section 4.6. CUSTOMER must exercise its option to purchase each
yearly system support services contract at least ninety (90) days before the
commencement of the applicable year. The price for yearly system support
services contracts are set forth on Exhibit B (Price Schedule and Payment
Terms). Among other things, the system support services contract will provide
that any software releases required to maintain the continued operation of the
Developed Items, Modified Commercial-Off-The-Shelf (excluding Vendor Software)
and Modified Non-Development Items at the levels specified in Exhibit D
(Technical Specification) will be provided to CUSTOMER at no cost during the
term of the Distribution Agreement. CUSTOMER acknowledges that enhancements to
Developed Items, Modified Commercial-Off-The-Shelf (excluding Vendor Software)
or Modified Non-Development Items that add new features to Developed Items,
Modified Commercial-Off-The-Shelf (excluding Vendor Software) or Modified
Non-Development Items, as the case may be, or implement old features in new ways
shall not be covered by the system support services contract, it being
understood that CUSTOMER would have to purchase any such enhancements.
GC-13 INDEMNITY FOR PATENT INFRINGEMENT
In the event any cause, action, suit, proceeding or claim is
brought against CUSTOMER based upon actual or alleged infringement of United
States, Canadian or foreign letters patent, copyright, trade secret, or
trademark, or proprietary rights of others and resulting from sale or use of the
Goods or Services provided in this Contract by ORBIMAGE, ORBIMAGE shall at all
times
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defend, indemnify and hold harmless CUSTOMER from and against all damages,
costs and expenses, including, without limitation, reasonable attorneys' fees
and costs CUSTOMER may sustain, pay, or incur as a result thereof. CUSTOMER will
provide ORBIMAGE with prompt written notice of any such claim, and will
cooperate fully with ORBIMAGE in furtherance of ORBIMAGE obligations herein.
ORBIMAGE obligations herein shall not apply to liabilities resulting from
CUSTOMER provided designs or specifications.
GC-14 INTELLECTUAL PROPERTY RIGHTS
(a) ORBIMAGE or its applicable Subcontractors shall have
ownership and unrestricted rights in all Developed Items, Modified
Commercial-Off-The-Shelf (excluding Vendor Software) and Modified
Non-Development Items developed under this Contract. Upon payment in full of the
Contract price as set forth in Exhibit B, ORBIMAGE shall grant, or shall cause
its applicable Subcontractor to grant, CUSTOMER a non-exclusive sublicense to
use such Developed Items, Modified Commercial-Off-The-Shelf (excluding Vendor
Software) and Modified Non-Development Items developed under this Contract, and
all supporting documentation, solely for OrbView-3 and OrbView-4 data reception,
recording, archiving, cataloging, ordering and product generation for the
panchromatic and multispectral sensors on the OrbView-3 and OrbView-4 satellites
during the term of that certain ORBIMAGE Distribution Agreement executed on
March 18, 1999 between ORBIMAGE and NTT DATA Corporation (the "Distribution
Agreement"). The term of the sublicense shall automatically terminate upon
expiration of the Distribution Agreement, or the termination of the Distribution
Agreement for any reason, without any further action required of ORBIMAGE or
CUSTOMER. Upon such expiration or any termination thereof, CUSTOMER shall
promptly destroy licensed property and provide proof of such destruction to
ORBIMAGE, and shall make no copies of, all such Developed Items, Modified
Commercial-Off-The-Shelf (excluding Vendor Software) and Modified
Non-Development Items developed under this Contract for which a sublicense was
granted to CUSTOMER pursuant to this GC-14.
(b) Any Vendor Software furnished by ORBIMAGE shall be in
accordance with the vendor's standard license for such items, except that
ORBIMAGE shall make, at the request and expense of CUSTOMER, reasonable efforts
to negotiate the terms and conditions of any such licenses where it is deemed to
be in the best interests of the project to do so.
(c) Copyright in and title to the Software at all times remains
vested exclusively in ORBIMAGE or, as applicable, a Subcontractor or any third
party licensor.
GC-15 PERMITS AND LICENSES
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(a) ORBIMAGE shall obtain and maintain all registration licenses
and permits outside of the Destination Country, including United States export
licenses for the OGS System and other U.S. licenses or permits necessary for the
operation and use of the OGS System.
(b) CUSTOMER shall obtain and maintain all registration licenses,
frequency authorizations, and permits inside of the Destination Country
necessary for the operation and use of the OGS System. CUSTOMER shall assist
ORBIMAGE in obtaining all visas and/or work permits in the Destination Country
necessary or convenient for the performance of On-Site Work. CUSTOMER shall also
provide all reasonable support required by ORBIMAGE to secure and maintain
export permits, including, without limitation, the CUSTOMER Certificate if
required for the OGS System.
(c) ORBIMAGE shall assist CUSTOMER in obtaining visas and permits
for CUSTOMER personnel who are required to visit the United States, Canada or
any other country outside of the Destination Country for training and OGS System
tests.
GC-16 WAIVER
Waiver by either party hereto of the strict performance of any term,
condition, covenant, or agreement in the Contract shall not of itself constitute
a waiver of or abrogate such term, condition, covenant or agreement, nor be a
waiver of any subsequent breach of same, or any other term, condition, covenant
or agreement.
GC-17 CONFIDENTIAL INFORMATION
ORBIMAGE and CUSTOMER agree to receive and maintain as proprietary
and confidential, all Confidential Information and Industrial Property received
from the other and to protect same from disclosure to others or use by itself or
others for any purpose inconsistent with this Contract, without the prior
written consent of the other. Confidential Information and Industrial Property
shall be marked with the appropriate legend at time of disclosure. For purposes
of this Contract, "Confidential Information and Industrial Property" shall
include, without limitation, information or property falling within the scope of
ORBIMAGE's or CUSTOMER's, as the case may be, patents, copyright, trade secrets,
technical data, know-how or business information conveyed in written, graphic or
other permanent tangible form; or if conveyed orally, if promptly reduced to a
permanent tangible form and shall also include all information received by
ORBIMAGE or CUSTOMER, as the case may be, under an obligation of secrecy or
confidentiality, but shall not include information which: (i) was already known
to the receiving party and without an obligation of secrecy at the time of
disclosure under this Contract, or (ii) is lawfully in the public domain at the
time of disclosure under this Contract, or becomes lawfully within the public
domain but only after such time, or (iii) after disclosure is lawfully obtained
by the receiving party from another source without restriction upon disclosure.
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GC-18 DISPUTE RESOLUTION AND ARBITRATION
(a) Dispute Resolution.
The parties hereto agree that in the event any dispute, controversy,
difference or disagreement (a "dispute") may arise from time to time between the
parties under or out of this Contract, then the following course of action set
forth herein shall be initiated in order to resolve such dispute.
(i) A dispute originating from CUSTOMER shall be
reviewed and certified in writing by the CUSTOMER's designated
representative and any dispute originating from ORBIMAGE shall be
reviewed and certified in writing by the ORBIMAGE Contracting
Officer. The party initiating the dispute shall notify the other
party's designated representative as to the nature of the dispute,
whereupon that person shall respond with a decision within ten (10)
days. At no time will work under the Contract cease as the result of
a dispute between the parties. Any disputes regarding changes in
Work pursuant to this Contract shall be initiated prior to any
authorization to proceed with such change. Work will continue based
upon the CUSTOMER's designated representative's decision pending
final resolution of any dispute. The CUSTOMER's designated
representative shall not have the power to resolve any dispute
finally, but in order to facilitate his role in attempting to solve
such disputes, the parties shall respond to his reasonable requests
to meet and present arguments and evidence bearing upon or
supporting their positions in the particular matter.
(ii) If the designated representative(s) shall fail to
resolve any dispute to the satisfaction of the parties within seven
(7) days of its submission, the dispute shall be referred to a panel
(hereinafter called the "Special Panel") comprising of a delegate
("Delegate") from each party appointed in writing. Each Delegate
will be a Senior Manager or Vice President of the respective party
and shall have full authority to commit the party to a final and
binding resolution of the dispute. Within fourteen (14) days after
said notice is delivered, the Special Panel shall meet and resolve
the dispute by a decision and such decision shall be final and
binding upon the parties. If no decision resolving the dispute is
made by the Special Panel within fourteen (14) days or such longer
period as may be mutually agreed, the dispute shall be declared
irreconcilable and will proceed to binding arbitration and the
following procedure shall apply.
(b) Arbitration.
A-15
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 21
Any and all disputes, disagreements, or questions, be they fact or
law, which may arise between CUSTOMER and ORBIMAGE in connection with the
interpretation of any provision of this Contract or the compliance or
non-compliance therewith, or the validity or enforceability thereof, or the
performance or non-performance of either party to the Contract and which cannot
be amicably settled by the parties as set forth above in this GC-18 within
thirty (30) days of notification by one party to the other in writing, shall be
adjudicated in Washington, D.C., USA by the American Arbitration Association
(AAA) in accordance with the International Rules of the AAA then in effect (to
the extent not modified by this GC-18), by a Board of Arbitration consisting of
three (3) members, the decision of which shall be final and binding upon both
parties. The parties agree that the sole method for resolving disputes hereunder
shall be as provided in this GC-18.
(i) Each party shall, within thirty (30) days of the end
of the aforesaid thirty (30) day period, appoint one arbitrator, and
the two arbitrators thus appointed shall forthwith designate a third
arbitrator. Such designation of third arbitrator shall occur within
thirty (30) days of the appointment of the two arbitrators.
(ii) In the event the two arbitrators thus selected
cannot agree upon a third arbitrator, or if either party fails to
appoint its arbitrator within the prescribed time, the deadlock
shall be referred to the AAA who shall promptly designate the
arbitrator(s), and the arbitrator(s) shall be accepted
unconditionally by both parties.
(iii) The decision of the arbitrators may be entered in
any court of competent jurisdiction and execution entered thereupon
forthwith.
(iv) Each party shall bear the cost of preparing its own
case. The Board of Arbitrators shall determine as to who shall bear
the cost of arbitration.
(v) The law of the Commonwealth of Virginia shall apply,
without giving effect to the conflict of law rules thereof or the
Convention on Contracts for the International Sale of Goods.
(vi) The language of the arbitration shall be English.
(vii) Notwithstanding the foregoing subparagraphs (i)
through (vi) inclusive, either party may seek injunctive relief from
a court having jurisdiction to prevent infringement or damage to
Confidential Information and Industrial Property Rights protected
under this Contract.
A-16
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 22
(viii) Pending settlement of any dispute or disagreement
under this GC-18, including arbitration, and so long as CUSTOMER
fully maintains the irrevocable letter of credit as required under
Article 4.0 of this Contract, ORBIMAGE shall proceed diligently with
the performance of the Work, unless the CUSTOMER delivers a notice
of suspension or termination in accordance with the terms of this
Contract.
GC-19 CHANGES AND EXTRA WORK
(a) CUSTOMER may at any time direct in writing any change
in the Work within the general scope of this Contract.
(b) If at any time ORBIMAGE believes that other acts or
omissions of CUSTOMER constitute a change to the Work not identified as such,
ORBIMAGE shall notify CUSTOMER in writing within thirty (30) days. CUSTOMER
will either issue a change or determine that a change is not required and
notify ORBIMAGE accordingly.
(c) If any change or extra work direction causes an
increase or decrease in ORBIMAGE's costs, or the time required for the
performance of Work under this Contract, an equitable adjustment shall be made
in the contract price or schedule or both and in such other provisions of the
Contract as may be affected, and the Contract shall be modified in writing
accordingly. Unless otherwise directed by CUSTOMER, ORBIMAGE shall perform
changes so that all requirements of the Contract shall be met.
(d) Changes shall not include Work reasonably required to
complete the design, supply, installation and test of the OGS System in
accordance with standard engineering practices, which have been or reasonably
should have been anticipated and included in the original total estimated
price.
(e) Any claim for an adjustment under this GC-19 must be
asserted in writing within forty-five (45) days following ORBIMAGE's receipt of
a written change. Such claim will include a complete and detailed calculation
of costs and a revised schedule in order to permit evaluation by CUSTOMER. At
all times ORBIMAGE shall keep accurate records of the actual costs of
performing each change. A failure to agree on an equitable adjustment shall be
deemed to be a dispute within the meaning of GC-18 (Dispute Resolution and
Arbitration).
(f) When any adjustment to the contract price, schedule,
performance or any other provision has been agreed, a written amendment to the
Contract shall be prepared and executed by both parties.
GC-20 PURCHASER FURNISHED UTILITIES, FACILITIES, AND SERVICES
A-17
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 23
In addition to the items designated in Exhibit C (SOW), the CUSTOMER
shall provide the following for use by ORBIMAGE and its Subcontractors in
support of the installation and testing activities associated with furnishing
the OGS System:
(i) Buildings, building services and utilities suitable
to accommodate and support the operation of the OGS System within
the operating environment for each item of Equipment furnished as a
part of the OGS System.
(ii) All permits required by government authorities of
the Site whether local or otherwise, required to or necessary to
allow any installation or operations of the OGS System.
(iii) Unrestricted access to the Site at which the OGS
System is located, or is to be located, solely for the purpose of
performing its obligations hereunder.
(iv) Supply of telephone lines, toilet facilities and
the like to support the installation works.
GC-21 DELIVERY, RISK, SECURITY INTEREST
(a) ORBIMAGE shall arrange shipping for and on behalf of
the CUSTOMER, to deliver the Goods to the CUSTOMER facility. The Equipment and
the Software will be shipped:
(i) if by Air Freight; delivery by a common carrier to
CIP point; and
(ii) if by Ocean Freight; delivery by a common carrier
to CIF point.
(b) The CUSTOMER as importer, shall effect custom clearance
and pay all import duties, withholding taxes, tariffs and any other taxes or
duties associated therewith. ORBIMAGE shall be responsible for all insurance
and transportation charges from port of entry (after customs clearances have
occurred) to the CUSTOMER's facilities.
(c) Any demurrage arising from customs clearances shall be
to the account of CUSTOMER. Any demurrage resulting from improperly prepared
shipping documents on the part of the ORBIMAGE shall be to the account of
ORBIMAGE.
(d) So long as there remains any unpaid amount by CUSTOMER
to ORBIMAGE, ORBIMAGE or its applicable Subcontractor shall retain title in the
Equipment, and the Equipment shall remain personal property. During such
period, CUSTOMER will not permit, allow, or suffer the attachment of any lien,
charge or encumbrance of any kind to the Equipment, nor so
A-18
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 24
incorporate the Equipment in real property that it loses its identity as
personal property. CUSTOMER will promptly pay when due all assessments, levies,
fees, taxes, duties or other charges against the Equipment or its use.
(e) Upon payment at shipping, CUSTOMER shall obtain a
security interest in the Equipment equal to the payment made by CUSTOMER but
ORBIMAGE shall at all times maintain full title, custody and control of such
Equipment until title shall pass pursuant to GC-11 (Title to Goods and
Services; Risk of Loss; Licensed Use).
GC-22 PACKING AND MARKING
(a) ORBIMAGE shall utilize best commercial practices in
packing the Equipment for overseas shipment so as to avoid damage during
transit to destination. ORBIMAGE shall comply with weight and size limitations
for standard air transport in accordance with IATA Regulations.
(b) The Goods shall be packed in durable wooden case(s) or
in carton(s), suitable for long distance ocean or airfreight transportation, as
applicable, and shall be able to survive storage and transport within a dry
container, vessel or building and normal handling during transport.
(c) At least thirty (30) days prior to Factory Acceptance
Testing of the OGS System, CUSTOMER shall provide ORBIMAGE with the actual
destination address for delivery of the OGS System.
GC-23 TRANSPORTATION AND INSURANCE
(a) All transportation and shipping shall be conducted
under the provisions of the "Incoterms 1990." When ready, all equipment along
with documents as required by the Contract are to be delivered addressed to:
(i) Shipping Delivery Address:
--------------------------
--------------------------
--------------------------
--------------------------
(ii) Consign to:
--------------------------
--------------------------
A-19
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 25
--------------------------
--------------------------
(iii) Shipped by:
Orbital Imaging Corporation
21700 Atlantic Boulevard,
Dulles, Virginia, 20166, U.S.A.
(b) The waybills issued by public common carrier are
acceptable for negotiation purposes. Insurance of the cargo to port of entry
will be arranged by ORBIMAGE. Handing over of the equipment will be advised by
ORBIMAGE by facsimile to CUSTOMER with full details of the waybill. Along with
the equipment, copies of the following documents will be handed over by
ORBIMAGE to the carrier:
(i) Five (5) copies of the waybill;
(ii) Four (4) copies of ORBIMAGE's detached invoice
with itemized unit prices;
(iii) Four (4) copies of the Factory Acceptance
Test Certificate jointly issued by authorized Representatives of
CUSTOMER and ORBIMAGE;
(iv) Five (5) copies of the packing list;
(v) Four (4) copies of the insurance policy; and
(vi) Two (2) copies of the cablegram advising
CUSTOMER of shipping arrangements.
ORBIMAGE shall provide CUSTOMER with an itemized packing list
associated with shipment at least fifteen (15) days in advance of the expected
date of shipment.
GC-24 TARIFFS, DUTIES AND TAXES
(a) Export tariffs, duties or other taxes or charges levied
by the current or future laws of any country outside of the Destination Country
concerning the export and shipment of the OGS System shall be paid by ORBIMAGE,
and ORBIMAGE shall not demand reimbursement from CUSTOMER for any such
payments.
(b) All tariffs, duties, stamp duties, withholding or like
tax and all other taxes of any
A-20
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 26
kind and nature which might be imposed on ORBIMAGE with respect to importation
of the Goods or by virtue of the performance of the Work in the Destination
Country shall be borne by CUSTOMER.
(c) Payment of any taxes imposed by the Government of the
Destination Country on the Contract shall be made directly by the CUSTOMER
under the applicable regulations.
(d) Equipment and Materials brought into the Destination
Country by ORBIMAGE or its Subcontractors for carrying out the Contract and to
be subsequently re-exported shall be exempted from import duties, levies or
taxes. For this purpose, ORBIMAGE shall submit to CUSTOMER the list of such
necessary Equipment and Materials before shipment and CUSTOMER shall give any
assistance required to obtain the aforementioned exemptions. Any deposits that
need to be lodged with the Government of the Destination Country to secure
temporary importation of ORBIMAGE's or its Subcontractor's Equipment or
Materials shall be provided by CUSTOMER.
(e) Any Equipment and Material brought into the Destination
Country by ORBIMAGE or its Subcontractors for carrying out the Contract, but
thereafter disposed of in the Destination Country to the CUSTOMER, shall be
taxed at the current Destination Country tariffs or duties to the CUSTOMER.
GC-25 APPLICABLE LAW
This Contract shall be construed in accordance with and governed by
the laws of the Commonwealth of Virginia, without giving effect to the conflict
of law rules thereof or the Convention on Contracts for the International Sale
of Goods.
GC-26 SEVERABILITY; BINDING AGREEMENT
(a) The validity of remaining articles, sections,
provisions, terms and parts of this Contract shall not be affected by the
decision of a court, administrative board or any other proceeding of competent
jurisdiction determines that an article, section, provision, term, or part of
this Contract is illegal, unenforceable, or in conflict with any law, as long
as said remaining articles, sections, provisions, terms, and parts can be given
reasonable effect in line with the intentions of the parties.
(b) This Contract shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and duly
permitted assignees.
(c) Except as specifically permitted in this Contract,
neither party shall have the right
A-21
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 27
to assign this Contract without the prior written consent of the other party.
GC-27 LANGUAGE
The official language of this Contract shall be the English
language. All communications written or otherwise between CUSTOMER and ORBIMAGE
in connection with this Contract shall be in the English language.
GC-28 HEADINGS
Headings to any of the provisions of the Contract are for
convenience only and shall not have the effect of modifying, amending, or
altering any provision of the Contract.
GC-29 ENTIRE AGREEMENT
This Contract, including the Exhibits hereto, contains the entire
understanding between CUSTOMER and ORBIMAGE and supersedes all prior written and
oral understandings relating to the subject hereof. Any modification or
amendment of this Contract (including the Exhibits hereto) must be in writing
and signed by both parties.
GC-30 WAIVER OF SOVEREIGN IMMUNITY
Each party hereto (including any assignee or party assuming any
rights or obligations under this Contract) unconditionally and irrevocably:
(i) agrees that the execution, delivery
and performance by it of this Contract constitutes private
and commercial acts rather than public or governmental acts;
(ii) agrees that should any legal
proceedings be brought against it or its assets in relation to this
Contract or any transaction contemplated by this Contract no
immunity (sovereign or otherwise) from such legal proceedings shall
be claimed by or on behalf of itself or with respect to its assets,
to the maximum extent permitted by law;
(iii) to the maximum extent permitted by
law, waives any such right of immunity (sovereign or otherwise)
which it or its assets now has or may acquire in the future; and
A-22
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 28
(iv) consents in respect of the enforcement
of any judgment against it in any such proceedings to the giving of
any relief or the issue of any process in connection with such
proceedings including, without limitation, to the maximum extent
permitted by law, the making, enforcement or execution against or in
respect of any property whatsoever (irrespective of its use or
intended use) of any order or judgment which may be made or given in
such proceedings.
GC-31 PAYMENTS
All payments due and payable to ORBIMAGE hereunder shall be paid in
U.S. Dollars in immediately available funds to the bank account specified by
ORBIMAGE in writing.
GC-32 COUNTERPARTS
This Contract may be executed in two or more counterparts, each of
which shall be considered an original and all of which together shall constitute
one and the same instrument.
A-23
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 29
OGS-IMI-C-01-301
EXHIBIT B
PRICE SCHEDULE AND PAYMENT TERMS
TO
ORBIMAGE GROUND STATION CONTRACT
FOR
NTT DATA CORPORATION
BETWEEN
IMAGE MEASUREMENTS, INC.
AND
ORBITAL IMAGING CORPORATION
[*CONFIDENTIAL TREATMENT REQUESTED*]
B-1
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 30
OGS-SOW-01-301
EXHIBIT C
STATEMENT OF WORK
TO
ORBIMAGE GROUND STATION CONTRACT
FOR
NTT DATA CORPORATION
BETWEEN
IMAGE MEASUREMENTS, INC.
AND
ORBITAL IMAGING CORPORATION
JULY 1999
[*CONFIDENTIAL TREATMENT REQUESTED*]
C-1
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 31
OGS-TS-C-01-301
EXHIBIT D
PRELIMINARY TECHNICAL SPECIFICATION
TO
ORBIMAGE GROUND STATION CONTRACT
FOR
NTT DATA CORPORATION
BETWEEN
IMAGE MEASUREMENTS, INC.
AND
ORBITAL IMAGING CORPORATION
JULY 7, 1999
[*CONFIDENTIAL TREATMENT REQUESTED*]
D-1
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 32
OGS-CL-01-301
EXHIBIT E
CONTRACT DATA REQUIREMENTS LIST
TO
ORBIMAGE GROUND STATION CONTRACT
FOR
NTT DATA CORPORATION
BETWEEN
IMAGE MEASUREMENTS, INC.
AND
ORBITAL IMAGING CORPORATION
[*CONFIDENTIAL TREATMENT REQUESTED*]
E-1
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 33
EXHIBIT F
PRELIMINARY LIST OF CONTRACT DELIVERABLES
FOR THE NTT DATA ORBIMAGE GROUND STATION
[*CONFIDENTIAL TREATMENT REQUESTED*]
F-1
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 1
EXHIBIT 10.23
ORBIMAGE DISTRIBUTION AGREEMENT
THIS ORBIMAGE DISTRIBUTION AGREEMENT (the "Agreement") is entered into
as of August 4, 1999, by and between Orbital Imaging Corporation, a corporation
organized and existing under the laws of Delaware ("ORBIMAGE"), whose principal
place of business is 21700 Atlantic Blvd., Dulles, Virginia, 20166 United States
of America, and Spot Image, a societe anonyme organized and existing under the
laws of France ("DISTRIBUTOR"), whose principal place of business is 5 rue des
Satellites, BP 4359, F-31030 Toulouse Cedex 4, France.
RECITALS
WHEREAS, ORBIMAGE is authorized by the United States Department of
Commerce (the "DOC") to operate a private remote-sensing space system pursuant
to the DOC License; and
WHEREAS, pursuant to the DOC License, ORBIMAGE is in the business of
selling high resolution satellite imagery to commercial and government users
throughout the world; and
WHEREAS, DISTRIBUTOR desires to distribute ORBIMAGE satellite imagery
inside and outside of the Territory (as defined herein) and to use the ORBIMAGE
Trademarks (as defined herein) in connection therewith, on the terms and
conditions set forth in this Agreement; and
WHEREAS, ORBIMAGE desires to appoint DISTRIBUTOR as its exclusive
distributor of such imagery in the Territory and its non-exclusive distributor
of such imagery outside of the Territory, and to grant DISTRIBUTOR a license to
use the ORBIMAGE Trademarks in connection therewith, on the terms and conditions
set forth in this Agreement; and
WHEREAS, the DOC License contains certain requirements and limitations
with respect to the sale of such imagery applicable to ORBIMAGE and DISTRIBUTOR,
as more fully described herein.
NOW THEREFORE, in consideration of the foregoing recitals, which are
incorporated herein by this reference, the mutual covenants, agreements,
representations and warranties contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 2
SECTION 1. DEFINED TERMS
Capitalized terms used in this Agreement shall have the meanings set
forth below:
"Current SRP" has the meaning set forth in section 9(d).
"Designated Earth Station" means the earth station designated by
DISTRIBUTOR, to be located in or near Toulouse, France, that shall be capable of
receiving, processing and archiving OrbView Data.
"Designated Non-Exclusive Countries" means the countries set forth on
Schedule 1(a), which schedule sets forth estimated aggregate annual revenues for
each of said countries during the term hereof.
"Distributor Archive" shall mean DISTRIBUTOR's archive of Standard
Products and Value-Added Products acquired or created by DISTRIBUTOR hereunder.
"Distributor Data" means (i) Standard Products or Value-Added Products
of the Territory (whether such products are generated from OrbView Data obtained
from the ORBIMAGE Reserved Satellite Capacity or the DISTRIBUTOR Reserved
Satellite Capacity), (ii) Standard Products or Value-Added Products of areas
outside of the Territory which fall within the Imaging Radius of the Designated
Earth Station, provided that such products were generated from OrbView Data
obtained during DISTRIBUTOR's imaging window assigned pursuant to Schedule 3(b)
hereto, and (iii) any Recorder Data.
"DISTRIBUTOR Reserved Satellite Capacity" has the meaning set forth in
section 3(b).
"DOC" has the meaning set forth in the Recitals.
"DOC License" means the license issued by the DOC on May 5, 1994, as
amended to date, pursuant to which ORBIMAGE is authorized to operate a private
remote-sensing space system, and any orders, interpretations or rulings issued
thereunder (a complete copy of which is attached hereto as Exhibit 1), as such
may be hereinafter amended or replaced from time to time.
"DOC License Sale" has the meaning set forth in Sections 3(i)(i) and
(ii).
"Earth Station Agreement" has the meaning set forth in Section 6(a).
"End User Agreement" has the meaning set forth in Section 2(d).
"Existing Customer Agreement" shall have the meaning set forth in
Sections 2(a)(ii) and 2(c)(ii)(B).
2
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 3
"GEM" has the meaning set forth in Section 9(b)(i).
"GEM Value" has the meaning set forth in Section 9(b)(i).
"Gross Revenues" means all revenues from the sale or other disposition
of the applicable product or service actually received by the applicable party,
net of any amounts received as or for any value-added (VAT), sales, use, customs
or other taxes required to be collected under applicable law, provided that in
no event shall the amount of any income or similar taxes be excluded from the
calculation of gross revenues.
"Guaranteed Annual Minimum" has the meaning set forth in Section
8(b)(i).
"High-Resolution Satellite(s)" means one or both of the high-resolution
imaging satellites being constructed by ORBIMAGE or its affiliates that are
currently designated "OrbView-3" and "OrbView-4."
"Imaging Radius" means the area within a two thousand (2,000) kilometer
radius of the Designated Earth Station.
"Imaging Time" means the period of time during daylight hours during
which each High Resolution Satellite is within the two thousand (2,000)
kilometer communication range of the Designated Earth Station.
"Land Remote Sensing Policy Act" means The Land Remote Sensing Policy
Act of 1992 (15 U.S.C. Section 5601 et seq.), the regulations promulgated
thereunder (15 C.F.R. Part 960 et seq.) and any orders or policies announced or
implemented thereunder, as such may be amended or replaced from time to time.
"Marketing Materials" has the meaning set forth in Section 3(l).
"OFAC" means the Office of Foreign Assets Control of the United States
Department of the Treasury.
"Operational Date" shall mean the date on which ORBIMAGE declares
either the OrbView-3 or OrbView-4 satellite and related systems to be
operational, whichever occurs first; provided, however, that if ORBIMAGE has
declared the applicable satellite to be operational and the Designated Earth
Station has not successfully completed acceptance testing in accordance with the
procedures set forth in the Earth Station Agreement, the Operational Date shall
not be deemed to have occurred until the Designated Earth Station has
successfully completed said acceptance testing, subject to the conditions set
forth in Section 6(b) hereof.
"Operational Year" shall mean the twelve-month period commencing on the
Operational Date and each succeeding twelve-month period commencing on the
anniversary of the Operational Date during the term of this Agreement.
3
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 4
"ORBIMAGE Intellectual Property" has the meaning set forth in Section
7(a).
"ORBIMAGE Reserved Satellite Capacity" has the meaning set forth in
section 3(b).
"ORBIMAGE Trademarks" shall mean (a) the trademarks and/or service
marks set forth on Schedule 1(b) hereto and (b) the graphic design marks in the
form shown on Schedule 1(b) hereto, whether or not registered with the competent
authorities of any country inside or outside of the Territory.
"OrbNet Archive" means ORBIMAGE's archive of Standard Products,
Value-Added Products and other imagery and derived products, including, without
limitation, OrbView Data and OrbView Images.
"OrbView Data" means (i) one-meter panchromatic and four-meter
multispectral data sets generated by the High-Resolution Satellites; and (ii)
two-meter panchromatic data sets generated by the OrbView-4 satellite; in each
case meeting the Performance Parameters.
"OrbView Image" means one (1) panchromatic or multispectral image
generated from OrbView Data, the size of which is 8km x 8km when acquired by the
High Resolution Satellite at nadir, and larger when acquired off nadir.
"Performance Parameters" means the performance parameters for the High
Resolution Satellites and the OrbView Data set forth on Schedule 1(c) hereto.
"Person" means an individual, a corporation, a partnership, an
association, a joint-stock company, a limited liability company, a trust, an
unincorporated organization, or a government or political subdivision thereof.
"Recorder Data" has the meaning set forth in section 3(c).
"SICorp." has the meaning set forth in Section 2(e).
"SICorp. Agreement" has the meaning set forth in Section 2(e).
"Standard Operating Procedures" has the meaning set forth in Section
3(a)(i).
"Standard Products" shall mean (a) OrbView Data, and (b) the following
products produced from OrbView Data: (i) Basic Data-Sets, (ii) Geo Corrected
Data-Sets, and (iii) Ortho Corrected Data-Sets; and any future products produced
from OrbView Data developed by ORBIMAGE in substitution or replacement of any of
the foregoing products. Items (b)(i) through (iii) above are more fully
described in Table 3-1 of Exhibit D to the Earth Station Agreement. In the event
that ORBIMAGE adds any additional standard products to the Product Generation
System (PGS) (as defined in Earth Station Agreement), DISTRIBUTOR shall have the
right to distribute said products on the terms
4
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 5
and subject to the conditions of this Agreement, provided that the parties
mutually agree in writing to the compensation payable by DISTRIBUTOR for the
sale of such products.
"Start Up Expenses" means the following reasonable out-of-pocket
expenses incurred by DISTRIBUTOR in connection with its start-up activities
hereunder during the first twelve (12) months following DOC approval of this
Agreement as described in Section 10(d) hereof: the costs of hiring employees
and leasing office space and equipment, marketing expenses and other reasonable
start-up related expenses, but not including legal expenses incurred in
connection with this Agreement and the Earth Station Agreement.
"Subdistributor Agreement" has the meaning set forth in section
2(c)(i).
"Subdistributors" means the Persons designated in writing by
DISTRIBUTOR within 120 days of the date hereof and such additional Persons as
DISTRIBUTOR shall thereafter designate in writing from time to time, in each
case subject to ORBIMAGE's written consent, which shall not be unreasonably
withheld and then only if (i) such designation would cause ORBIMAGE to violate
the DOC License or (ii) such Person is an affiliate of an ORBIMAGE competitor.
The Subdistributors must be located in the Territory or in a non-exclusive
territory which at the time of designation has not been taken away from
DISTRIBUTOR pursuant to Section 2(a)(ii) hereof.
"Suggested Retail Price" means ORBIMAGE's written list of suggested
retail prices for Geo Corrected Data-Sets in effect from time to time, as posted
on ORBIMAGE's OrbNet web site.
[*CONFIDENTIAL TREATMENT REQUESTED.*]
"Suspension Period" has the meaning set forth in Section 8(b)(ii).
"Territory" means the countries set forth on Schedule 1(f) hereto.
"Third Party Distributor Agreement" has the meaning set forth in
Sections 2(a)(ii) and 2(c)(ii)(B).
[*CONFIDENTIAL TREATMENT REQUESTED.*]
5
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 6
"U.S. Air Force Contract" has the meaning set forth in Section 5(c).
"U.S. National Security Customers" has the meaning set forth in Section
4(i).
"Value-Added Products" means any products derived in whole or in part
from Standard Products, including, without limitation, derivative works created
from OrbView Data, but does not include Standard Products.
"Value-Added Resellers" means the Persons designated in writing by
DISTRIBUTOR within 120 days of the date hereof and such additional Persons as
DISTRIBUTOR shall thereafter designate in writing from time to time, in each
case subject to ORBIMAGE's written consent, which shall not be unreasonably
withheld and then only if (i) such designation would cause ORBIMAGE to violate
the DOC License or (ii) such Person is an affiliate of an ORBIMAGE competitor.
The Value-Added Resellers must be located in the Territory or in a non-exclusive
territory which at the time of designation has not been taken away from
DISTRIBUTOR pursuant to Section 2(c)(ii)(B) hereof.
"Value-Added Reseller Agreement" has the meaning set forth in Section
2(c)(ii).
SECTION 2. APPOINTMENT OF DISTRIBUTOR
(a) Appointment. During the term hereof and subject to Sections 5, 7
and 14 hereof, ORBIMAGE hereby appoints DISTRIBUTOR as its:
(i) exclusive distributor in the Territory of (A) Standard
Products contained in the Distributor Archive and/or the OrbNet
Archive, and (B) Value-Added Products created by DISTRIBUTOR, its
Value-Added Resellers or ORBIMAGE from such Standard Products, for sale
to customers located in the Territory; and
(ii) non-exclusive distributor of (A) Standard Products
contained in the Distributor Archive and/or the OrbNet Archive and (B)
Value-Added Products created from such Standard Products, for sale to
customers located outside of the Territory, except that DISTRIBUTOR
shall not have any distribution rights in the countries set forth on
Schedule 2(a). Notwithstanding the foregoing, ORBIMAGE shall have the
right, on sixty (60) days prior written notice to
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DISTRIBUTOR, to limit or terminate the rights of the DISTRIBUTOR (and
any applicable Subdistributors) to distribute Standard Products or the
rights of DISTRIBUTOR to distribute Value-Added Products outside of the
Territory, or receive Recorder Data of any countries located outside of
the Territory, if it would violate or conflict with any agreements
proposed to be entered into by ORBIMAGE with any Person after the date
of this Agreement (each, a "Third Party Distributor Agreement"). If
within fifteen (15) days of DISTRIBUTOR's receipt of such notice,
DISTRIBUTOR provides ORBIMAGE with a copy of all customer agreements
then in force which were entered into prior to the date of ORBIMAGE's
notice (each, an "Existing Customer Agreement") which would be limited
or prohibited by the Third Party Distributor Agreement, then ORBIMAGE
shall ensure that the Third Party Distributor Agreement permits
DISTRIBUTOR and Subdistributor, as applicable, to fulfill the terms of
each such Existing Customer Agreement. Except for the Existing Customer
Agreements, DISTRIBUTOR's and the Subdistributor's right to distribute
Standard Products and/or Value-Added Products and/or receive Recorder
Data, as applicable, shall automatically terminate as set forth in said
notice upon the execution of the Third Party Distributor Agreement (but
in no event earlier than 60 days from the date on which DISTRIBUTOR
received said notice).
DISTRIBUTOR hereby accepts the foregoing appointment on the terms and
subject to the conditions of this Agreement.
(b) Value-Added Products. Subject to Section 2(a), including, without
limitation, the exclusivity and territorial limitations contained therein,
ORBIMAGE hereby grants DISTRIBUTOR the right and license to create and
distribute Value-Added Products using Standard Products contained in the
Distributor Archive and the OrbNet Archive. DISTRIBUTOR may license Value-Added
Products to end users for a perpetual or shorter term and on such other terms
and conditions which do not conflict with this Agreement as DISTRIBUTOR shall
determine from time to time in its sole discretion.
(c) Appointment of Subdistributors and Value-Added Resellers.
(i) Subdistributors. Subject to Section 2(a), including,
without limitation, the exclusivity and territorial limitations
contained therein, and Sections 5, 7 and 14, ORBIMAGE hereby grants
DISTRIBUTOR the right and license to grant to the Subdistributors a
sublicense to distribute Standard Products hereunder. DISTRIBUTOR shall
grant the foregoing sublicense to the Subdistributors pursuant to a
written agreement reasonably acceptable to ORBIMAGE which shall pass
through to the Subdistributors the terms and conditions of Sections
2(a), 2(d), 7, 12, 14(a) and 14(b) hereof, and such other terms and
conditions of this Agreement as ORBIMAGE shall reasonably determine are
required to be passed through to the Subdistributor in order for
ORBIMAGE to ensure compliance with the DOC License (a "Subdistributor
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Agreement"). ORBIMAGE agrees that the inclusion in the Subdistributor
Agreements of the text set forth in Exhibit 2(c)(i) hereto meets the
current requirements of the DOC License, subject to final DOC approval
thereof as described in Section 10(d) hereof. DISTRIBUTOR agrees that
the Subdistributors shall have no right to grant sublicenses to
distribute Standard Products.
(ii) Value-Added Resellers.
(A) During the term of this Agreement and subject to
Sections 5, 7 and 14 hereof, ORBIMAGE hereby grants
DISTRIBUTOR the right and license to grant to the Value-Added
Resellers a sublicense to create and distribute Value-Added
Products using Standard Products contained in the Distributor
Archive and the OrbNet Archive. In DISTRIBUTOR's discretion,
Value-Added Resellers may distribute such Value-Added Products
anywhere in the world except Japan, notwithstanding the
territorial restrictions applicable to DISTRIBUTOR set forth
in Section 2(a). If at a later date the terms of ORBIMAGE's
current agreement with its Japanese distributor are amended to
permit distribution of Value-Added Products by the Value-Added
Resellers in Japan, ORBIMAGE shall so notify DISTRIBUTROR and
this Section 2(c)(ii) shall be amended to permit such
distribution in Japan. DISTRIBUTOR shall grant the foregoing
sublicense to the Value-Added Resellers pursuant to a written
agreement reasonably acceptable to ORBIMAGE which shall pass
through to the Value-Added Resellers the terms and conditions
of Sections 7, 12, 14(a) and 14(b) hereof, and such other
terms and conditions of this Agreement as ORBIMAGE shall
reasonably determine are required to be passed through to the
Value-Added Reseller in order to ensure compliance with the
DOC License (a "Value-Added Reseller Agreement"). ORBIMAGE
agrees that the inclusion in the Value-Added Reseller
Agreements of the text set forth in Exhibit 2(c)(ii) hereto
meets the current requirements of the DOC License, subject to
final DOC approval thereof as described in Section 10(d)
hereof. The Value-Added Resellers may license Value-Added
Products to end users for a perpetual or shorter term and on
such other terms and conditions which do not conflict with
this Agreement as DISTRIBUTOR shall determine from time to
time in its sole discretion. DISTRIBUTOR agrees that the
Value-Added Resellers shall have no right to grant sublicenses
to create and distribute Value-Added Products.
(B) Notwithstanding Section 2(c)(ii)(A), ORBIMAGE
shall have the right, on sixty (60) days prior written notice
to DISTRIBUTOR, to limit or terminate the rights of the Value
Added Resellers who are located outside the Territory to
create and distribute Value-Added Products outside of the
Territory if it would violate or conflict with any
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agreements proposed to be entered into by ORBIMAGE with any
Person after the date of this Agreement (also, a "Third Party
Distributor Agreement"). If within fifteen (15) days of
DISTRIBUTOR's receipt of such notice, DISTRIBUTOR provides
ORBIMAGE with a copy of all of such Value-Added Resellers
customer agreements then in force which were entered into
prior to the date of ORBIMAGE's notice (also, an "Existing
Customer Agreement") which would be limited or prohibited by
the Third Party Distributor Agreement, then ORBIMAGE shall
ensure that the Third Party Distributor Agreement permits such
Value-Added Resellers to fulfill the terms of each such
Existing Customer Agreement. Except for the Existing Customer
Agreements, the rights of such Value-Added Resellers to create
and distribute Value-Added Products and/or receive Recorder
Data shall automatically terminate as set forth in said notice
upon the execution of the Third Party Distributor Agreement
(but in no event earlier than 60 days from the date on which
DISTRIBUTOR received said notice).
(d) End User Agreements. DISTRIBUTOR acknowledges and agrees that as a
condition of any sale of Standard Products to any customer hereunder (other than
to a Value-Added Reseller), DISTRIBUTOR shall require each such customer to
enter into a written or "shrink-wrap-style end-user license agreement containing
substantially the terms set forth in Exhibit 2(d) and such additional terms as
DISTRIBUTOR shall determine which are not inconsistent with the terms set forth
in Exhibit 2(d) hereto (an "End User Agreement"). DISTRIBUTOR shall be
responsible for translating the End User Agreement into the language of the
applicable customer.
(e) SICorp. Concurrently with the execution and delivery of this
Agreement, ORBIMAGE and DISTRIBUTOR's wholly-owned U.S. subsidiary, Spot Image
Corp. ("SICorp."), entered into an ORBIMAGE VAR Agreement of even date herewith
pursuant to which ORBIMAGE grants SICorp. the non-exclusive right to distribute
OrbView Data in the United States on terms no less favorable than those granted
to any other U.S. distributors from time to time during the term hereof (the
"SICorp. Agreement"). ORBIMAGE hereby agrees that during the term of this
Agreement, ORBIMAGE shall not terminate the SICorp. Agreement without
DISTRIBUTOR's prior written consent, except for breach thereof as permitted by
the SICorp. Agreement and then only after the expiration of any applicable cure
periods set forth therein.
SECTION 3. RIGHTS AND OBLIGATIONS OF DISTRIBUTOR
(a) Reception of OrbView Data.
(i) Exclusive Reception Rights; Standard Operating Procedures.
Subject to Sections 5 and 14, DISTRIBUTOR shall have the exclusive
right and license in the Territory to receive OrbView Data via downlink
from the High
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Resolution Satellites, for distribution pursuant to this Agreement.
DISTRIBUTOR shall make all requests for OrbView Data in accordance with
ORBIMAGE's Standard Operating Procedures to be provided by ORBIMAGE
prior to the launch of the first High-Resolution Satellite, as such
procedures may be amended by ORBIMAGE from time to time ("Standard
Operating Procedures").
(ii) Sublicenses of Direct Downlink Rights to Customers.
DISTRIBUTOR shall have the right to grant its customers a sublicense to
directly receive OrbView Data in the Territory via satellite downlink
from the High Resolution Satellites, subject, however, to ORBIMAGE's
prior approval of each such customer, which shall not be unreasonably
withheld. All costs and expenses relating to direct downlink
sublicenses will be the responsibility of DISTRIBUTOR. All downlinking
of OrbView Data to a customer earth station shall be included in the
calculation of DISTRIBUTOR's use of its Reserved Satellite Capacity (as
defined below). Each customer granted direct downlink rights pursuant
to this Section 3(a)(ii) shall be required to enter into an written End
User Agreement prior to receiving any OrbView Data, which agreement
shall contain such other terms and conditions of this Agreement as
ORBIMAGE shall reasonably determine are required to be passed through
to each such customer in order to ensure compliance with the DOC
License. Furthermore, DISTRIBUTOR shall pay ORBIMAGE the fees set forth
on Schedule 8(a) hereto for all OrbView Data downlinked to any such
customer earth stations, which amounts shall be credited against the
Guaranteed Annual Minimum.
(b) Reserved Satellite Capacity. Subject to Section 5 below, ORBIMAGE
shall reserve not less than [*CONFIDENTIAL TREATMENT REQUESTED*] of each High
Resolution Satellite's Imaging Time for DISTRIBUTOR's use during each
Operational Year, in the manner set forth in Schedule 3(b) hereto ("DISTRIBUTOR
Reserved Satellite Capacity"). The remaining [*CONFIDENTIAL TREATMENT
REQUESTED*] of each High Resolution Satellite's Imaging Time shall be reserved
for ORBIMAGE's use, subject to Schedule 3(b) hereto ("ORBIMAGE Reserved
Satellite Capacity"). Notwithstanding the foregoing, ORBIMAGE shall make
available the ORBIMAGE Reserved Satellite Capacity for use by DISTRIBUTOR to the
extent not required by ORBIMAGE for other purposes and ORBIMAGE shall have the
right to use DISTRIBUTOR Reserved Satellite Capacity to the extent not utilized
by DISTRIBUTOR.
(c) Recorder Data of Areas Outside the Imaging Radius. DISTRIBUTOR
shall have the right to receive OrbView Data of areas outside of the Imaging
Radius on a non-priority basis, subject to the availability of High-Resolution
Satellite capacity, for distribution inside and outside of the Territory as
permitted under this Agreement ("Recorder Data"), subject to ORBIMAGE's right to
limit or terminate the rights of DISTRIBUTOR to receive Recorder Data as set
forth in Section 2(a)(ii). At DISTRIBUTOR's request, ORBIMAGE shall inform
DISTRIBUTOR of the estimated
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delivery time for Recorder Data. DISTRIBUTOR shall pay ORBIMAGE the tasking fee
a set forth on Schedule 8(a) for each OrbView Image requested under this Section
3(c). Recorder Data shall be downlinked to an earth station selected by ORBIMAGE
and shall be promptly forwarded to DISTRIBUTOR. If ORBIMAGE elects to downlink
the Recorder Data to an earth station other than the Designated Earth Station,
DISTRIBUTOR may request that ORBIMAGE downlink such data to the Designated Earth
Station. If ORBIMAGE agrees to such request, DISTRIBUTOR shall pay ORBIMAGE the
downlink fee set forth in Schedule 8(a) for each OrbView Image downlinked to the
Designated Earth Station. All satellite time utilized in downlinking such
Recorder Data to the Designated Earth Station shall be included in the
calculation of the DISTRIBUTOR Reserved Satellite Capacity. All requests for
Recorder Data shall be made in accordance with ORBIMAGE's Standard Operating
Procedures.
(d) Receipt of ORBIMAGE and Third-Party OrbView Data. DISTRIBUTOR
agrees that during the term of this Agreement, ORBIMAGE shall have the right to
downlink OrbView Data belonging to ORBIMAGE or third parties to the Designated
Earth Station, and DISTRIBUTOR further agrees that it shall promptly forward
such data to ORBIMAGE in such form and in such manner as ORBIMAGE requests.
Unless otherwise prohibited by ORBIMAGE's contractual arrangements with another
ORBIMAGE distributor or customer, DISTRIBUTOR shall have the right to include
such OrbView Data in the Distributor Archive free of charge, in which case
DISTRIBUTOR shall be responsible for the expense of forwarding copies of such
data to ORBIMAGE. If DISTRIBUTOR is prohibited from including such OrbView Data
in the Distributor Archive, ORBIMAGE shall pay DISTRIBUTOR the reception fee set
forth on Schedule 8(a) hereto for each OrbView Image that DISTRIBUTOR is unable
to include in the Distributor Archive, and DISTRIBUTOR shall be responsible for
the expense of forwarding copies of such OrbView Data to ORBIMAGE.
(e) Preferred Supplier; Non-Competition.
(i) Preferred Supplier. As of the Operational Date,
DISTRIBUTOR agrees that ORBIMAGE shall be DISTRIBUTOR's
preferred supplier of (A) panchromatic satellite imagery
with resolution equal to or better than two (2) meters
and (B) multispectral satellite imagery with resolution
equal to or better than four (4) meters, in the Territory
and in the countries outside of the Territory in which
DISTRIBUTOR continues to have non-exclusive distribution
rights hereunder. DISTRIBUTOR shall be deemed to have
fulfilled its obligations under this Section 3(e) if,
before purchasing any such satellite imagery from any
other provider, DISTRIBUTOR shall have given ORBIMAGE the
reasonable opportunity to sell the same to DISTRIBUTOR,
it being understood that DISTRIBUTOR shall be free to
exercise its
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commercially reasonable discretion in determining whether
to purchase the same from ORBIMAGE or such other
provider.
(ii) [*CONFIDENTIAL TREATMENT REQUESTED*]
(f) General Obligations as a Distributor.
(i) DISTRIBUTOR agrees that all of its sales of Standard
Products and Value-Added Products under this Agreement shall be made at
DISTRIBUTOR's sole expense, for its own account.
(ii) Although ORBIMAGE will from time to time publish the
Suggested Retail Price, such price is merely a suggested price and
DISTRIBUTOR shall be free to establish the actual prices for its sale
of Standard Products and Value-Added Products. In addition, DISTRIBUTOR
shall be free to establish the sublicense fees payable to DISTRIBUTOR
by the Subdistributors and Value-Added Resellers.
(iii) DISTRIBUTOR shall use commercially reasonable efforts to
market, promote and distribute the Standard Products and Value-Added
Products to customers inside and outside of the Territory in accordance
with the terms and conditions of this Agreement.
(g) Designated Earth Station. During the term of this Agreement,
DISTRIBUTOR shall be solely responsible for the maintenance and operation of the
Designated Earth Station, at its expense, subject to the warranty(ies) contained
in the Earth Station Agreement and any system support services agreements
entered into by DISTRIBUTOR pursuant to the Earth Station Agreement. DISTRIBUTOR
shall also be responsible, at its expense, for establishing and operating the
communications links necessary for system management purposes between the
Designated Earth Station and the ORBIMAGE control center located in the United
States designated by ORBIMAGE. DISTRIBUTOR shall use commercially reasonable
efforts to obtain and maintain during
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the term of this Agreement all approvals or licenses of all applicable
governmental authorities within the Territory necessary to construct, operate
and maintain the Designated Earth Station and all other approvals or licenses of
any other applicable governmental authorities necessary to otherwise perform its
obligations under this Agreement. DISTRIBUTOR shall have the right, at its sole
risk and expense, to move the Designated Earth Station to a site within fifty
(50) kilometers of the site at which the Designated Ground Station is located at
the time the earth station modification is completed pursuant to the Earth
Station Agreement. DISTRIBUTOR shall exercise such right by at least thirty (30)
days prior written notice to ORBIMAGE. During the relocation period and until
the Designated Ground Station is fully operational and able to receive and
process OrbView Data, DISTRIBUTOR's payment obligations under this Agreement
shall remain in full force and effect, including, without limitation, the
obligation to pay the Guaranteed Annual Minimum, subject to any adjustments to
the Guaranteed Annual Minimum required pursuant to Section 9(b).
(h) Copies of OrbView Data. In order to ensure that ORBIMAGE can comply
with the requirements of the DOC License, DISTRIBUTOR shall generate copies of
all OrbView Data directly downlinked to the Designated Earth Station or
authorized third party earth stations hereunder within ten (10) days of
reception, and shall promptly forward such copies to ORBIMAGE at its own
expense, in such manner as ORBIMAGE reasonably requests.
(i) DOC License Sales.
(i) Certain Sales to Foreign Governments. The DOC License
requires ORBIMAGE to make available to the government of any country
unenhanced OrbView Data concerning the territory under the jurisdiction
of such government which has been imaged by ORBIMAGE as soon as such
data is available, on reasonable cost terms and conditions, if
requested by the government of such country (a "DOC License Sale"). In
the event that a government requests to purchase any unenhanced
Distributor Data of any territory under the jurisdiction of such
government, ORBIMAGE shall refer the government to DISTRIBUTOR, and
DISTRIBUTOR shall sell such data to the government on reasonable cost
terms and conditions. If such government is unwilling to purchase such
data from DISTRIBUTOR and instead requests that ORBIMAGE sell it such
data , ORBIMAGE may sell such data to such government and ORBIMAGE
shall pay DISTRIBUTOR the fees set forth on Schedule 8(a) hereto.
(ii) Sales to U.S. Department of Interior. In the event that a
sale to the U.S. Department of Interior of any Distributor Data is
required by the DOC License (also, a "DOC License Sale"), ORBIMAGE
shall pay DISTRIBUTOR the fees set forth on Schedule 8(a) hereto for
the initial sale of such data to the Department of Interior, and all
subsequent sales of such data by the Department of Interior. ORBIMAGE
hereby agrees that the terms of any sales of such data shall be made on
a non-discriminatory basis. DISTRIBUTOR hereby acknowledges
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that sales of such data by the U.S. Department of Interior to Persons
in the Territory shall not be deemed to be a breach of DISTRIBUTOR's
exclusive distribution rights in the Territory set forth in Section
2(a)(i) hereof as long as ORBIMAGE pays the fees required by this
Section 3(i)(ii).
(j) Non-Solicitation. DISTRIBUTOR hereby agrees that during
the term of this Agreement and for a six (6) month period thereafter, it shall
not directly recruit, solicit or induce any employees of ORBIMAGE or Orbital
Sciences Corporation or any of their affiliated companies listed in Schedule
3(j) hereto (for purposes of this Section 3(j), individually and collectively,
"ORBIMAGE") to become employees of DISTRIBUTOR. This Section 3(j) shall not
prohibit DISTRIBUTOR from hiring (A) ORBIMAGE employees who have responded to
DISTRIBUTOR employment announcements in trade or other publications, or (B)
ORBIMAGE employees who have contacted DISTRIBUTOR concerning employment without
any direct solicitation by DISTRIBUTOR.
(k) Sales from Distributor Archive After Termination. After the
expiration of the term of this Agreement, or if this Agreement is terminated not
due to DISTRIBUTOR's breach, DISTRIBUTOR shall have the non-exclusive right to
continue to sell Standard Products and Value-Added Products contained in the
Distributor Archive on the same terms and conditions of this Agreement
applicable to the sale of Standard Products and Value-Added Products, and this
Agreement shall be amended accordingly.
(l) Approval of Marketing Materials. DISTRIBUTOR shall deliver to
ORBIMAGE for its prior approval, which shall not be unreasonably withheld,
copies of all marketing and promotional materials which DISTRIBUTOR proposes to
use from time to time in connection with the distribution and sale of Standard
Products and Value-Added Products hereunder, and all changes and revisions
thereto ("Marketing Materials"). ORBIMAGE shall be deemed to have approved any
Marketing Materials if it has not objected to such materials within thirty (30)
days after its receipt thereof. All Marketing Materials shall comply with the
requirements of this Agreement, including, without limitation, Section 7.
(m) Follow-On Systems. DISTRIBUTOR shall have a right of first refusal
to become a distributor in the Territory of satellite imagery generated by any
follow-on systems to the High Resolution Satellites. ORBIMAGE shall provide
DISTRIBUTOR with written notice if it receives a bona fide offer from a third
party to act as a distributor for such a follow-on system, which notice shall
contain the terms and conditions of the offer. DISTRIBUTOR shall have thirty
(30) days from the receipt of said notice to accept or decline such offer on the
same terms and conditions of the offer. If DISTRIBUTOR accepts such offer,
ORBIMAGE shall enter into a written distributorship agreement with DISTRIBUTOR
on the same terms and conditions of the offer. If DISTRIBUTOR declines the
offer, ORBIMAGE shall have the right to enter into a distributorship agreement
with such third party on the same terms and conditions of the
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offer. The provisions of this Section 3(m) shall apply if ORBIMAGE does
not enter into such distributorship agreement as provided herein.
SECTION 4. RIGHTS AND OBLIGATIONS OF ORBIMAGE
(a) Provision of OrbView Data. Subject to Sections 2(a)(ii), 4(c), 5
and 14, ORBIMAGE shall provide DISTRIBUTOR with OrbView Data as requested by
DISTRIBUTOR pursuant to Section 3 hereof.
(b) Agreement Not to Appoint Exclusive Distributor or License Other
Earth Stations in the Territory.
(i) During the term hereof, ORBIMAGE shall not (A) appoint
another distributor or subdistributor in the Territory
of Standard Products of any area of the world, (B)
solicit sales, sell or otherwise distribute in the
Territory Standard Products or Value-Added Products
(whether or not created by ORBIMAGE) of any area of the
world, (C) permit its other distributors and licensees
to solicit sales, sell or otherwise distribute in the
Territory Standard Products of any area of the world, or
(D) appoint, or permit its other distributors and
licensees to appoint, any value-added resellers of
Value-Added Products who are located in the Territory,
except that (X) ORBIMAGE may make unsolicited sales in
the Territory as permitted by Section 3(i)(i), 4(d) and
5(b), (Y) the Department of Interior may make sales in
the Territory as permitted by Section 3(i)(ii), and (Z)
US National Security Customers may share Standard
Products and Value-Added Products with U.S. allies
located in the Territory as permitted by Section 4(i).
Notwithstanding the foregoing, DISTRIBUTOR acknowledges
and agrees that value-added resellers located outside of
the Territory appointed by ORBIMAGE or other ORBIMAGE
distributors may sell Value-Added Products created in
whole or in part from products contained in the OrbView
Archive to customers located inside and outside of the
Territory, in each case for internal use by such
customers or for direct or indirect resale by such
customers inside and/or outside of the Territory.
DISTRIBUTOR agrees that the sale of such Value-Added
Products in the Territory shall not be considered a
breach of Section 2(a)(i) or this Section 4(b)(i),
provided that ORBIMAGE pays DISTRIBUTOR the fees set
forth
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on Schedule 8(a) on any sales by such value-added
resellers in the Territory of Value-Added Products
created in whole or in part from Distributor Data.
(ii) Subject to Section 5(a) below, during the term hereof
ORBIMAGE shall not downlink any OrbView Data to an earth
station located in the Territory, nor license any Person
to receive OrbView Data at an earth station located in
the Territory, without DISTRIBUTOR's prior written
consent.
(iii) Except as permitted by Sections 3(i)(i), 4(d) and 5(b),
in the event that a customer located in the Territory
requests to purchase any OrbView Data of any area of the
world, or any products made or created therefrom
(whether in the form of Standard Products or Value-Added
Products), ORBIMAGE shall refer such customer to
DISTRIBUTOR. If a customer located in the Territory
attempts to circumvent DISTRIBUTOR's territorial
exclusivity in the Territory by purchasing Standard
Products and/or Value-Added Products from ORBIMAGE
outside of the Territory, ORBIMAGE and DISTRIBUTOR shall
meet to reach a solution to such circumvention in good
faith.
(c) Limitations on Obligations. Subject to Section 9(b), ORBIMAGE's
obligations under this Agreement are limited by, and ORBIMAGE shall have the
right to curtail or terminate the transmission of OrbView Data, or terminate
this Agreement as permitted by Section 10(i), to the extent required to do so by
the requirements of the DOC License or the Land Remote Sensing Policy Act.
(d) Certain Internet Sales from the OrbNet Archive. DISTRIBUTOR
acknowledges that ORBIMAGE sells Standard Products and Value-Added Products from
the OrbNet Archive through the internet to customers located world-wide and
agrees that any such sales to customers located in the Territory shall not be
deemed to be a breach of Section 2(a)(i), provided that such sales are made in
compliance with the other provisions of this Section 4(d). ORBIMAGE and
DISTRIBUTOR will use commercially reasonable efforts to develop an internet link
that will transfer customers located in the Territory who access the OrbNet
Archive via the internet to a DISTRIBUTOR internet site. Notwithstanding the
foregoing, if ORBIMAGE and DISTRIBUTOR are unable to implement said internet
link, any sales by ORBIMAGE of such products via the internet to customers
located in the Territory shall not be considered a breach of the DISTRIBUTOR's
exclusive distribution rights set forth in Section 2(a)(i) hereof, provided that
ORBIMAGE pays DISTRIBUTOR the fee set forth on Schedule 8(a) hereto on each such
sale. In addition, if ORBIMAGE and DISTRIBUTOR implement said internet link, any
inadvertent sales by ORBIMAGE of such products via the internet to customers
located in the Territory shall not be considered a breach of the DISTRIBUTOR's
exclusive distribution rights if ORBIMAGE pays DISTRIBUTOR the
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fee set forth on Schedule 8(a) hereto on each such sale. For purposes of this
Section 4(d), a sale shall be deemed to be "inadvertent" if it is made in good
faith in the belief that the relevant customer is not located in the Territory.
(e) Sales of Certain Imagery Outside of the Territory. During the term
of this Agreement, ORBIMAGE shall pay DISTRIBUTOR the fees set forth on Schedule
8(a) for all sales outside of the Territory by ORBIMAGE or any of its other
distributors of Distributor Data.
(f) Maintenance of Government Approvals and Permits. During the term of
this Agreement, ORBIMAGE shall use commercially reasonable efforts to obtain and
maintain all approvals or licenses of all applicable governmental authorities
necessary to construct, deploy, operate and maintain the High Resolution
Satellites and all other approvals or licenses of any other applicable
governmental authorities necessary to otherwise perform its obligations under
this Agreement.
(g) Marketing Assistance. ORBIMAGE will provide DISTRIBUTOR with copies
of ORBIMAGE marketing materials selected by ORBIMAGE for use by DISTRIBUTOR in
marketing and distributing Standard Products and Value-Added Products hereunder.
ORBIMAGE will provide a reasonable quantity of such materials free of charge,
and shall provide additional materials at DISTRIBUTOR's expense. ORBIMAGE shall
also provide DISTRIBUTOR with a reasonable number of OrbView Images each
Operational Year during the term free of charge solely for marketing purposes.
In addition, at DISTRIBUTOR's request, ORBIMAGE shall provide DISTRIBUTOR with
such reasonable marketing assistance as it customarily provides to its other
distributors.
(h) Non-Solicitation. ORBIMAGE hereby agrees that during the term of
this Agreement and for a six month (6) period thereafter, it shall not directly
recruit, solicit or induce any employees of DISTRIBUTOR or any of its affiliated
companies listed on Schedule 4(h) hereto (for purposes of this Section 4(h),
individually and collectively, "DISTRIBUTOR") to become employees of ORBIMAGE.
This Section 4(h) shall not prohibit ORBIMAGE from hiring (A) DISTRIBUTOR
employees who have responded to ORBIMAGE employment announcements in trade or
other publications, or (B) DISTRIBUTOR's employees who have contacted ORBIMAGE
concerning employment without any direct solicitation by ORBIMAGE.
(i) U.S. National Security Customers. From time to time ORBIMAGE sells
Standard Products and Value-Added Products to U.S. governmental military,
defense and intelligence customers ("U.S. National Security Customers") pursuant
to written agreements which may permit such customers to share such products
with U.S. allies located in the Territory for non-commercial military, defense
and intelligence purposes. ORBIMAGE shall pay DISTRIBUTOR the fees set forth on
Schedule 8(a) hereto in connection with the sale and sharing of any Distributor
Data to or by such U.S. National Security Customers.
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(j) Imagery Acquisition Strategy. ORBIMAGE will consult at least
annually with DISTRIBUTOR to solicit DISTRIBUTOR's suggestions for an imagery
acquisition strategy inside and outside of the Territory. ORBIMAGE will consider
DISTRIBUTOR's suggestions in good faith, but shall have no obligation to
implement such suggestions.
(k) [*CONFIDENTIAL TREATMENT REQUESTED*]
(l) Insurance. ORBIMAGE shall use commercially reasonable
efforts to assist DISTRIBUTOR in obtaining launch, deployment and on-orbit
failure insurance for the High Resolution Satellites, not to exceed fifteen (15)
person days of assistance. DISTRIBUTOR shall be responsible for all of
ORBIMAGE's out-of-pocket expenses in connection with such assistance, including,
without limitation, travel and room and board.
(m) Suggested Retail Price.
(i) ORBIMAGE agrees that it shall maintain the
Suggested Retail Price at a level that accurately reflects
applicable market conditions for Geo Corrected Data-Sets in
effect from time to time.
(ii) ORBIMAGE agrees that it shall not sell Standard
Products below the Suggested Retail Price except in good
faith. "Good faith" sales below the Suggested Retail Price
shall include, without limitation, sales involving volume and
loss leader discounts and any other sales below the Suggested
Retail Price that could reasonably be anticipated to result in
future sales or increased market share sufficient to
compensate for the income lost as a result of such sales below
the Suggested Retail Price. Subject to Section 9(d), nothing
in this Agreement shall limit or restrict ORBIMAGE's ability
to increase or decrease the Suggested Retail Price from time
to time in its sole discretion.
(n) Algeria, Tunisia, Morocco and Ukraine. DISTRIBUTOR has
non-exclusive distribution rights in Algeria, Tunisia, Morocco and Ukraine
pursuant to Section 2(a)(ii) hereof. ORBIMAGE agrees that it shall pay
DISTRIBUTOR the fees set forth on Schedule 8(a) hereto on all sales of Standard
Products and Value-Added Products (whether made by ORBIMAGE or another
distributor) to customers located in Algeria, Tunisia, Morocco or Ukraine, as
the case may be. Notwithstanding the foregoing, ORBIMAGE's obligation to pay
said fees shall terminate if ORBIMAGE elects to appoint an exclusive distributor
in Algeria, Tunisia, Morocco and/or Ukraine, as the case may be, pursuant to the
termination mechanism set forth in Section 2(a)(ii). After any such termination,
ORBIMAGE shall thereafter pay DISTRIBUTOR the fees required by Section 4(e) on
all sales of Distributor Data to customers located in Algeria, Tunisia, Morocco
and/or Ukraine. Any such exclusive distributors shall have the right to
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receive OrbView Data by direct satellite downlink to an earth station located in
Algeria, Tunisia, Morocco and/or Ukraine, as the case may be.
(o) Performance Updates. ORBIMAGE shall provide DISTRIBUTOR
with periodic updates of any material changes of which ORBIMAGE becomes aware in
the performance specifications of the High Resolution Satellites which directly
affect the GEM or the performance specifications of the Designated Earth Station
set forth in the Earth Station Agreement, it being agreed that this Section 4(o)
shall not give ORBIMAGE the right to amend or otherwise change the GEM or the
performance specifications for the Designated Earth Station set forth in the
Earth Station Agreement.
SECTION 5. U.S. AND FOREIGN NATIONAL SECURITY CUSTOMERS
(a) U.S. National Security Customers. Nothing in this Agreement shall
prevent or restrict ORBIMAGE from granting U.S. National Security Customers the
right (i) to task the High Resolution Satellites on a priority basis for imaging
purposes when they pass over the Territory, and (ii) to receive OrbView Data of
the Territory or any other area of the world for non-commercial military,
defense and intelligence purposes via direct satellite downlink at an earth
station located inside or outside of the Territory, or by any other method of
delivery. In the event of any such U.S. National Security Customer priority
tasking request over the Territory, ORBIMAGE shall first use the ORBIMAGE
Reserved Satellite Capacity to fulfill such request (even if this entails
preemption of ORBIMAGE's intended use thereof for itself or its other
distributors and customers). If such priority tasking request requires the use
of satellite capacity in excess of the ORBIMAGE Reserved Satellite Capacity,
ORBIMAGE shall have the right to use the DISTRIBUTOR Reserved Satellite Capacity
to fulfill such request, in which case the provisions of Section 9(b) shall
apply.
(b) National Security Customers in the Territory. Notwithstanding
Section 2(a)(i), subject to the payment terms set forth in Schedule 8(a) hereto,
ORBIMAGE shall have the right to sell Standard Products and Value-Added Products
of the Territory or any other area of the world (through direct downlink or
otherwise) to governmental military, defense and intelligence customers located
in the Territory for non-commercial for non-commercial military, defense and
intelligence purposes, provided that ORBIMAGE (i) shall not solicit any such
sales, and (ii) shall encourage such customers to purchase such products from
DISTRIBUTOR.
(c) U.S. Air Force Contract. DISTRIBUTOR acknowledges that it is aware
of ORBIMAGE's obligations to deliver imagery from the OrbView-4 satellite to the
U.S. Air Force on a first priority basis under an existing contract with the
U.S. Air Force (the "U.S. Air Force Contract"), and that under certain
circumstances U.S. Air Force requests under such contract could preempt
DISTRIBUTOR's and ORBIMAGE's rights to utilize all or any portion of their
respective Reserved Satellite Capacity. In the event of any priority tasking
request of the Territory under the U.S. Air Force Contract, ORBIMAGE
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shall first use the ORBIMAGE Reserved Satellite Capacity to fulfill such request
(even if this entails preemption of ORBIMAGE's intended use thereof for itself
or its other distributors and customers). If such priority tasking request
requires the use of satellite capacity in excess of the ORBIMAGE Reserved
Satellite Capacity, ORBIMAGE shall have the right to use the DISTRIBUTOR
Reserved Satellite Capacity to fulfill such request, in which case the
provisions of Section 9(b) shall apply.
(d) U.S. Government National Security Requests. DISTRIBUTOR
acknowledges that under the DOC License the U.S. Government has the authority to
require ORBIMAGE to limit collection of OrbView Data and/or distribution by the
High Resolution Satellites and related systems during periods when U.S. national
security or international obligations and/or foreign policies may be
compromised. If the U.S. Government limits DISTRIBUTOR's ability to utilize the
DISTRIBUTOR Reserved Satellite Capacity pursuant to the DOC License, ORBIMAGE
shall use the ORBIMAGE Reserved Satellite Capacity to fulfill DISTRIBUTOR's
imaging request (even if this entails preemption of ORBIMAGE's intended use
thereof for itself or its other distributors and customers), to the extent
permitted by the U.S. Government. If such U.S. Government limitation limits
DISTRIBUTOR from utilizing the DISTRIBUTOR Reserved Satellite Capacity in a
manner that is not cured by ORBIMAGE utilizing the ORBIMAGE Reserved Satellite
Capacity for the benefit of DISTRIBUTOR as described in the preceding sentence,
the provisions of Section 9(b) shall apply.
SECTION 6. DESIGNATED EARTH STATION
(a) Earth Station Agreement. Concurrently with the execution and
delivery of this Agreement, ORBIMAGE and DISTRIBUTOR have entered into a Ground
Station Contract of even date herewith pursuant to which ORBIMAGE shall upgrade
the Designated Earth Station so that such earth station is capable of receiving,
archiving and processing OrbView Data (the "Earth Station Agreement").
(b) Acceptance Testing. ORBIMAGE shall notify DISTRIBUTOR in writing
that either the OrbView-3 or OrbView-4 satellite is operational, whichever
occurs first, and that it is ready to begin acceptance testing for the
Designated Earth Station in accordance with the procedures set forth in the
Earth Station Agreement. Acceptance testing shall be deemed to have been
satisfactorily completed and the Operational Date shall be deemed to have
occurred if ORBIMAGE is unable to begin acceptance testing within thirty (30)
days of DISTRIBUTOR's receipt of said notice solely due to the fault of
DISTRIBUTOR. If acceptance testing is delayed for reasons not solely due to the
fault of DISTRIBUTOR, the parties shall cooperate and shall use commercially
reasonable efforts to commence acceptance testing as soon as possible.
SECTION 7. INTELLECTUAL PROPERTY RIGHTS
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(a) Ownership of OrbView Data and Standard Products and Value-Added
Products Created by ORBIMAGE. DISTRIBUTOR agrees that (i) ORBIMAGE has sole and
exclusive title to and ownership of all copyrights, trade secrets, patents, and
other intellectual property rights in and to (A) the OrbView Data, (B) Standard
Products contained in the OrbNet Archive, (C) Value-Added Products created by
ORBIMAGE contained in the OrbNet Archive, and (D) any graphic or other
representations of the foregoing (individually and collectively, "ORBIMAGE
Intellectual Property"), and DISTRIBUTOR shall not have any rights of ownership
therein, (ii) ORBIMAGE's copyright in OrbView Data shall arise upon the first
fixation and creation of OrbView Data, which DISTRIBUTOR agrees shall occur upon
generation thereof by the High-Resolution Satellites, and (iii) to the maximum
extent permitted by applicable law, all issues, disputes and claims between
ORBIMAGE and DISTRIBUTOR arising out of or relating to copyrights, trade
secrets, patents, and other intellectual property rights in ORBIMAGE
Intellectual Property shall be governed by the laws of the United States of
America and/or the Commonwealth of Virginia, as applicable. DISTRIBUTOR hereby
acknowledges that the national origin of all ORBIMAGE Intellectual Property,
shall be deemed to be the United States of America.
(b) Copyright License; Ownership of Value-Added Products Created by
DISTRIBUTOR.
(i) Copyright License. During the term hereof and subject to
the territorial limitations set forth in Section 2(a) of
this Agreement, ORBIMAGE hereby grants to DISTRIBUTOR a
non-exclusive, royalty-free, fully paid-up license to
use, reproduce, distribute, perform and display publicly
the OrbView Data and/or any graphic or other
representations (whether in the form of Standard
Products or Value-Added Products), and to make
derivative works thereof, on the terms and conditions
set forth in this Agreement. ORBIMAGE shall not own the
media on which Standard Products or Value-Added Products
are recorded. DISTRIBUTOR shall own the media on which
OrbView Data is recorded by DISTRIBUTOR.
(ii) Ownership of Value-Added Products Created by
DISTRIBUTOR. ORBIMAGE agrees that DISTRIBUTOR has sole
and exclusive title to and ownership of all copyrights,
trade secrets, patents, and other intellectual property
rights in the Value-Added Products it creates hereunder
based upon Standard Products or Value-Added Products,
and in any graphic or other representations thereof,
subject to ORBIMAGE's or its other distributor's and
licensee's copyright and other intellectual property
rights in the preexisting (i) OrbView Data, (ii)
Standard Products and/or (iii) Value-Added Products, as
applicable, which DISTRIBUTOR incorporates in such
Value-Added Products created by DISTRIBUTOR.
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(c) Non-Circumvention. DISTRIBUTOR agrees that ORBIMAGE may, at any
time during the term of this Agreement, adopt technological systems for the
purpose of preventing or reducing unauthorized reproduction of the OrbView Data,
including, but not limited to, inclusion of a "digital watermark" system.
DISTRIBUTOR agrees not to circumvent such systems or to assist or encourage
others to circumvent such systems.
(d) Trademark Ownership and License.
(i) Ownership. DISTRIBUTOR agrees that ORBIMAGE has sole and
exclusive title to the ORBIMAGE Trademarks, and that DISTRIBUTOR shall
not have any rights of ownership therein. DISTRIBUTOR further agrees
that all good will associated with the use of the ORBIMAGE Trademarks,
whether developed by ORBIMAGE, DISTRIBUTOR or ORBIMAGE's other
distributors and licensees, shall be owned by, and shall inure to the
benefit of, ORBIMAGE. Except as provided in Section 3(k), upon the
expiration or termination of this Agreement, DISTRIBUTOR shall
immediately cease all display, advertising and use of all ORBIMAGE
Trademarks, trade names, logos and designations and will not thereafter
use, advertise or display any trademark, trade name, logo or
designation which is, or any part of which is, similar to or confusing
with any ORBIMAGE Trademarks, trade names, logos and designations.
(ii) License. During the term hereof and subject to the
territorial limitations set forth in Section 2(a) of this Agreement,
ORBIMAGE hereby grants to DISTRIBUTOR a non-exclusive, royalty-free,
fully paid-up license to use the ORBIMAGE Trademarks in connection with
the advertising, promotion and sale of OrbView Data and graphic
representations thereof, including, without limitation, Standard
Products, Value-Added Products and OrbView Images, on the terms and
conditions set forth in this Agreement. DISTRIBUTOR further agrees that
(i) ORBIMAGE may, in its sole discretion, require that one or more of
the ORBIMAGE Trademarks be reproduced or "burned in" on all copies of
Standard Products produced by DISTRIBUTOR, and (ii) ORBIMAGE may, in
its sole discretion, register the ORBIMAGE Trademarks in any country or
jurisdiction within the Territory, and that DISTRIBUTOR shall cooperate
with ORBIMAGE in such registration to the extent reasonable. ORBIMAGE
shall reimburse DISTRIBUTOR's reasonable out-of-pocket expenses
incurred in connection therewith.
(e) Legend.
(i) Standard Products and Value-Added Products Created by
ORBIMAGE. DISTRIBUTOR shall (A) print in a noticeable fashion the
following notice on all copies received by it hereunder of (1) OrbView
Data, (2) Standard Products, and (3) Value-Added Products created by
ORBIMAGE, and (B) require its customers to agree in accordance with
Section 2(d) hereof that they
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will print in a noticeable fashion the following notice on all copies
of such Standard Products and Value-Added Products generated by such
customers from Standard Products and Value-Added Products provided to
them in data form:
"(C) [year of reception] Orbital Imaging Corporation. All
Rights Reserved."
(ii) Other Value-Added Products. DISTRIBUTOR shall (A) print
in a noticeable fashion the following notice on all copies of (i)
Value-Added Products it creates hereunder, and (ii) Value-Added
Products it obtains from the OrbNet Archive which were created by other
ORBIMAGE distributors and licensees, and (B) require its customers to
agree that they will print in a noticeable fashion the following notice
on all copies of Value-Added Products generated by such customers from
such Value-Added Products provided to them in data form:
"Produced under license from, and contains copyrighted
material of, Orbital Imaging Corporation. All Rights
Reserved."
(f) Obligation to Protect. DISTRIBUTOR agrees to use commercially
reasonable efforts to protect ORBIMAGE's proprietary rights in (i) the Standard
Products and Value-Added Products, (ii) the ORBIMAGE Trademarks, and (iii) any
other ORBIMAGE intellectual property rights related thereto, in a manner
consistent with this Section 7, and to cooperate in ORBIMAGE's reasonable
efforts to protect such proprietary rights. DISTRIBUTOR agrees to promptly
notify ORBIMAGE in writing of any known or suspected breach of any such
proprietary rights that come to DISTRIBUTOR's attention.
(g) Indemnification for Infringement.
(i) Subject to the limitations set forth in this Section 7(g),
ORBIMAGE agrees to indemnify and hold harmless DISTRIBUTOR from and
against all claims, demands, complaints, actions and liabilities
resulting or arising from any claim of any third party (not including
any affiliates of DISTRIBUTOR) based on the allegation that the
Standard Products and/or Value-Added Products supplied by ORBIMAGE
hereunder infringe any U.S. or non-U.S. patent, trademark, trade secret
or copyright of a third party, provided that DISTRIBUTOR (A) gives
ORBIMAGE prompt written notice of any such claims, (B) allows ORBIMAGE
to direct the defense and settlement of the claims, provided that the
terms of any such settlement shall have been approved by DISTRIBUTOR,
which consent shall not be unreasonably withheld, and (C) provides
ORBIMAGE with the information and assistance reasonably necessary for
the defense and settlement of the claim, at no cost to DISTRIBUTOR. All
costs of such defense and the amount of any judgment, award or
settlement that may result therefrom, shall be the sole responsibility
of and shall be paid by ORBIMAGE. Notwithstanding the foregoing, the
DISTRIBUTOR shall have the
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right, at its sole expense, to appoint its own counsel to participate
in such defense. In such event, ORBIMAGE shall instruct the counsel
retained by ORBIMAGE to defend DISTRIBUTOR to cooperate with the
DISTRIBUTOR's designated counsel. This indemnification obligation
shall survive the expiration or termination of this Agreement for a
period of two (2) years. If a final injunction is obtained in an
action based on any such claim against DISTRIBUTOR's use of Standard
Products and/or Value-Added Products by reason of such infringement,
or if in ORBIMAGE's opinion such an injunction is likely to be
obtained, ORBIMAGE may, at its sole option, either (X) obtain for
DISTRIBUTOR the right to continue using the Standard Products and/or
Value-Added Products, or (Y) replace or modify the Standard Products
and/or Value-Added Products so that it becomes noninfringing.
(iii) Notwithstanding Section 7(g)(i), ORBIMAGE shall not be
liable to DISTRIBUTOR for any claim to the extent that
such claim arises from or is based upon the combination,
manipulation, processing or use of any Standard Products
and/or Value-Added Products by DISTRIBUTOR, the
Subdistributors and/or the Value-Added Resellers in
violation of this Agreement, or with equipment, data or
programming not supplied by ORBIMAGE, or arising from
any alteration or modification of Standard Products
and/or Value-Added Products by DISTRIBUTOR, the
Subdistributors and/or the Value-Added Resellers,
including, without limitation, derivative works created
therefrom.
SECTION 8. PAYMENT TERMS
(a) Sales of OrbView Images and Value-Added Products.
DISTRIBUTOR agrees that it shall pay ORBIMAGE the fees set forth on Schedule
8(a) hereto in consideration of the sale (including any transfers or other
dispositions, whether or not in exchange for consideration) of Standard Products
and Value-Added Products hereunder.
(b) Guaranteed Annual Minimum; Suspension Period.
(i) Guaranteed Annual Minimum. In consideration of the
DISTRIBUTOR Reserved Satellite Capacity being provided
to DISTRIBUTOR hereunder, DISTRIBUTOR shall pay ORBIMAGE
the minimum annual amounts set forth in Schedule 8(b)
hereto during each Operational Year commencing as of the
Operational Date, which amounts shall be applied against
amounts owed by DISTRIBUTOR to ORBIMAGE for sales of
Standard Products and Value-Added Products hereunder
(such amounts in each Operational Year being referred to
herein as the "Guaranteed
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Annual Minimum"), subject to adjustment as provided in
Section 9 or suspension as provided in Sections 8(b)(ii)
or (iii). DISTRIBUTOR shall not be required to pay the
Guaranteed Annual Minimum with respect to the second
High-Resolution Satellite until such satellite has
successfully completed on-orbit check-out as determined
by ORBIMAGE and is capable of downlinking OrbView Data
to the Designated Earth Station in accordance with the
performance specifications set forth in the Earth
Station Agreement. The applicable Guaranteed Annual
Minimum shall be paid in equal monthly installments
during the term hereof. The first monthly installment of
the applicable Guaranteed Annual Minimum shall be
payable within thirty (30) days of (A) the end of the
first month following the Operational Date, or (B) the
date on which the second High-Resolution Satellite has
successfully completed on-orbit check out and is capable
of downlinking OrbView Data to the Designated Earth
Station in accordance with the performance
specifications set forth in the Earth Station Agreement,
as applicable. Thereafter, subsequent monthly
installments of the applicable Guaranteed Annual Minimum
shall be payable in arrears no later than the first
business day (i.e., a day on which banks are open for
business in both Dulles, Virginia and Toulouse, France)
of each succeeding month. Amounts owed to ORBIMAGE by
SICorp. under the SICorp. Agreement shall be credited
towards the Guaranteed Annual Minimum. DISTRIBUTOR shall
be obligated to pay the applicable Guaranteed Annual
Minimum due in each Operational Year (or shorter period
if this Agreement is earlier terminated) even if the
amounts due under Schedule 8(a) hereto for the sale of
Standard Products and Value-Added Products during such
period are less than the amount of the Guaranteed Annual
Minimum otherwise due for such period.
(ii) [*CONFIDENTIAL TREATMENT REQUESTED*]
(c) Payments for Sales of Standard Products and Value-Added
Products.
(i) DISTRIBUTOR shall pay ORBIMAGE all amounts due pursuant to
Schedule 8(a) on a quarterly basis within (30) days after the end of
such quarter, less the amount of the Guaranteed Annual Minimum paid
during such quarter. Each payment shall be accompanied by a written
accounting setting forth the basis for such payment in reasonable
detail, as well as such other information as ORBIMAGE shall reasonably
request.
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(ii) ORBIMAGE shall pay DISTRIBUTOR all amounts due pursuant
to Schedule 8(a) on a quarterly basis within thirty (30) days after the
end of such quarter. Each payment shall be accompanied by a written
accounting setting forth the basis for such payment in reasonable
detail, as well as such other information as DISTRIBUTOR shall
reasonably request.
(iii) Each of ORBIMAGE and DISTRIBUTOR agree that they shall
use commercially reasonable efforts to collect all amounts owed to them
by their respective customers and licensees and which constitute Gross
Revenues for purposes of calculating fees owed to the other based on
Gross Revenues.
(d) Records. DISTRIBUTOR and ORBIMAGE shall keep accurate
records of their respective activities that give rise to the payment
requirements under this Agreement. Such records shall be in a form that is
sufficient to demonstrate compliance with the provisions of this Agreement. This
obligation shall survive two (2) years following termination of this Agreement.
(e) Audit Rights. ORBIMAGE and DISTRIBUTOR (the "Auditing
Party") shall have the right to audit (under a duty of confidentiality) the
other party's records (the "Audited Party") for the sole purpose of confirming
any amounts payable by the Audited Party hereunder to the Auditing Party, by
giving fifteen (15) days written notice to the Audited Party; provided that such
audit rights shall be subject to any applicable national security limitations
required by military, intelligence and defense customers, in which case the
parties shall cooperate in good faith to meet the intent of this Section 8(e) in
a manner consistent with the requirements of such national security limitations.
The audit shall be carried out by the Auditing Party or its representatives. The
Audited Party shall make its records available to the Auditing Party during
normal business hours, within thirty (30) days of the Audited Party's receipt of
the Auditing Party's written request. The Auditing Party shall complete its
audit within fifteen (15) days of obtaining access to such records, and shall
deliver its results to the Audited Party within thirty (30) days of the
completion of the audit. The costs of the audit shall be borne by the Auditing
Party, unless it is determined that the Audited Party has underpaid amounts due
to the Auditing Party hereunder by more than five percent (5%), in which case
the Audited Party shall pay for the cost of the audit. The Audited Party shall
promptly pay any amounts determined to be owed as a result of such audit. This
Section 8(e) shall survive for two (2) years following termination of this
Agreement.
(f) Late Payments; Off-Set. All amounts due but remaining unpaid after
payment is due under this Agreement shall bear interest until paid at the annual
rate equal to the prime rate announced by Morgan Guaranty Trust Company of New
York from time to time, plus two percent (2%) per annum, during the period of
nonpayment. All payments required to be made by either party hereunder shall be
made without off-set, adjustment or reduction of any kind, except as permitted
by applicable law.
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SECTION 9. [*CONFIDENTIAL TREATMENT REQUESTED*]
SECTION 10. TERM; TERMINATION; EXTENSION OF TERM
(a) Term. The term of this Agreement shall commence on the date of this
Agreement and shall continue in effect for a period of five (5) years following
the Operational Date, unless extended or earlier terminated in accordance with
this Agreement, in which event the term shall end at the expiration of the
applicable extension period or the effective date of the applicable termination,
as the case may be.
(b) Termination by ORBIMAGE. This Agreement may be terminated by
ORBIMAGE at any time by written notice to DISTRIBUTOR after the occurrence of
any of the following events of default:
(i) DISTRIBUTOR shall fail to pay the Guaranteed Annual
Minimum or any other amount when due hereunder, or shall breach any of
its representations, warranties, covenants or other obligations under
this Agreement (other than breaches covered by Sections 10(g) or
10(i)), and such failure shall remain uncured for a period of thirty
(30) days after receipt by DISTRIBUTOR of written notice thereof; or
(ii) DISTRIBUTOR shall become insolvent, admit in writing its
inability to pay its debts as they become due, make a general
assignment for the benefit of creditors, suffer or permit the
appointment of a receiver for its business or assets, initiate or
become subject to any proceeding under any bankruptcy or insolvency
law, whether domestic or foreign, or liquidate or wind up, voluntarily
or otherwise.
In addition, ORBIMAGE shall have the right to terminate this Agreement
as provided in Sections 10(d), 10(g), 10(h) and 10(i).
(c) Termination by DISTRIBUTOR. This Agreement may be terminated by
DISTRIBUTOR at any time by written notice to ORBIMAGE after the occurrence of
any of the following events of default:
(i) ORBIMAGE shall fail to pay any amounts due to DISTRIBUTOR
when due hereunder, or shall breach any of its representations,
warranties, covenants or other obligations under this Agreement (other
than breaches covered by Section 10(g) or 10(i)), and such failure
shall remain uncured for a period of thirty (30) days after receipt by
ORBIMAGE of written notice thereof; or
(ii) ORBIMAGE shall become insolvent, admit in writing its
inability to pay its debts as they become due, make a general
assignment for the benefit of creditors, suffer or permit the
appointment of a receiver for its business or assets,
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initiate or become subject to any proceeding under any bankruptcy or
insolvency law, whether domestic or foreign, or liquidate or wind up,
voluntarily or otherwise.
In addition, DISTRIBUTOR shall have the right to terminate this
Agreement as provided in Sections 4(k), 8(b)(ii), 9(b)(v), 9(c)(iv), 9(d)(ii),
10(d), 10(g), 10(h) and 10(i).
(d) Termination Due to DOC Disapproval; Termination of DOC License.
(i) Termination Due to DOC Disapproval. The parties
acknowledge that this Agreement is subject to review and approval by
the DOC. ORBIMAGE agrees that it shall submit this Agreement to the DOC
promptly after its execution by the parties. This agreement shall
automatically terminate with no further action required by either party
and with no liability to either party if DOC disapproves the Agreement,
or if DOC approval has not been received within ninety (90) days of the
date of this Agreement, provided that ORBIMAGE shall refund to
DISTRIBUTOR all amounts paid to ORBIMAGE by DISTRIBUTOR pursuant to the
Earth Station Agreement within sixty (60) days of such termination.
(ii) Termination of DOC License. Subject to any
permitted cure periods described in Section 10(i), this Agreement shall
terminate automatically if the U.S. Government terminates the DOC
License. In such event, the liability of the parties to each other from
any such termination shall be governed solely by Section 10(i).
(e) Termination of Subdistributor and Value-Added Reseller Agreements.
In the event of the occurrence of the following events of default under a
Subdistributor Agreement or Value-Added Reseller Agreement, ORBIMAGE shall have
the right to require DISTRIBUTOR to immediately terminate such agreement if
required in order for ORBIMAGE to remain in compliance with the DOC License: A
Subdistributor or Value-Added Reseller shall breach any of its obligations
contained in its Subdistributor Agreement or Value-Added Reseller Agreement, as
applicable, comparable to those set forth in Sections 14(a) hereof. DISTRIBUTOR
shall provide ORBIMAGE with prompt notice of any such breach of which it becomes
aware.
(f) Extension of Term. DISTRIBUTOR shall have an option to extend the
term of this Agreement for an additional term of two (2) years, followed by an
option to extend the term by additional term of three (3) years, by giving
written notice to ORBIMAGE not less that twelve (12) months prior to the end of
the then current term, provided, that the Guaranteed Annual Minimum during the
additional terms shall be increased to (i) [*CONFIDENTIAL TREATMENT REQUESTED*]
per Operational Year if only the OrbView-3 satellite is operational; (ii)
[*CONFIDENTIAL TREATMENT REQUESTED*] per Operational Year if only the OrbView-4
satellite is
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operational; and (iii) [*CONFIDENTIAL TREATMENT REQUESTED*] per Operational Year
if both the OrbView-3 and OrbView-4 satellites are operational.
(g) Violation of Exclusivity Provisions. Notwithstanding any contrary
provision of this Agreement, ORBIMAGE and DISTRIBUTOR hereby agree as follows:
(i) ORBIMAGE may terminate this Agreement by written notice to
DISTRIBUTOR in the event that DISTRIBUTOR (A) materially breaches its
obligations as set forth in section 3(e)(i) hereof, and fails to cure
such breach within a period of thirty (30) days after receipt by
DISTRIBUTOR of written notice thereof, or (B) breaches its obligations
as set forth in section 3(e)(ii) hereof.
(ii) DISTRIBUTOR may terminate this Agreement by written
notice to ORBIMAGE in the event that ORBIMAGE materially breaches its
obligations as set forth in sections 4(b) or 4(d) hereof, and fails to
cure such breach within a period of thirty (30) days after receipt by
ORBIMAGE of written notice thereof.
(iii) If either ORBIMAGE or DISTRIBUTOR terminates this
Agreement pursuant to this Section 10(g) (for purposes of this Section
10(g), a "terminating party"), the breaching party shall be liable to
the terminating party for any actual damages suffered by such
terminating party as a result of such breach, including, without
limitation, any foreseeable lost profits, documented to the breaching
party's reasonable satisfaction, to the extent not specifically covered
by the terminating party's insurance, up to a maximum aggregate amount
of [*CONFIDENTIAL TREATMENT REQUESTED*].
(h) Cross Default. ORBIMAGE and DISTRIBUTOR hereby agree as
follows:
(i) If either party (or such party's trustee in bankruptcy) is
permitted to terminate, and so terminates, the Earth Station Agreement,
this Agreement shall automatically terminate without any further action
required by either party, effective as of the termination date of the
Earth Station Agreement.
(ii) If either party (or such party's trustee in bankruptcy)
is permitted to terminate, and so terminates, this Agreement, the Earth
Station Agreement shall automatically terminate without any further
action required by either party, effective as of the termination date
of this Agreement.
(iii) If this Agreement and the Earth Station Agreement are
terminated pursuant to Sections 10(h)(i) or 10(h)(ii) above, the
SICorp. Agreement shall automatically terminate without any further
action required by either party, effective as of the termination date
of said agreements.
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(iv) ORBIMAGE and DISTRIBUTOR agree that they shall each
execute such documents and take such actions as are required to
effectuate the intent of this Section 10(h).
(i) [*CONFIDENTIAL TREATMENT REQUESTED*]
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(j) Effective Date of Notices. Any party entitled to terminate this
Agreement may give notice of termination to the other party specifying the
effective date thereof, which shall not be less than thirty (30) days from the
date of such notice, except as otherwise specifically set forth herein.
(k) Effect of Termination. In the event of the termination of this
Agreement by either party as permitted by this Agreement, effective on the
effective date of such termination, neither party shall have any obligation or
liability to the other party of any nature whatsoever except as otherwise
expressly provided in this Agreement.
(l) Return of Licensed Technology. DISTRIBUTOR shall immediately return
all proprietary software and hardware which ORBIMAGE or its affiliates licensed
to DISTRIBUTOR pursuant to the Earth Station Agreement at the expiration of the
term of this Agreement or any termination of this Agreement; provided, however,
that DISTRIBUTOR shall be entitled to keep any such proprietary software and
hardware necessary to continue selling Standard Products and Value-Added
Products contained in the Distributor Archive pursuant to Section 3(k).
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(m) Termination Payments. Any amount becoming due hereunder to any
party as a result of termination of this Agreement shall be paid to such party
no later than sixty (60) days following the effective date of such termination.
(n) Ratification and Approval; Exclusive Dealing.
(i) Each of ORBIMAGE and DISTRIBUTOR acknowledge and agree
that this Agreement, the Earth Station Agreement and the SICorp.
Agreement shall not enter into legal effect if (A) ORBIMAGE's Board of
Directors has not ratified and approved this Agreement, the Earth
Station Agreement and the SICorp. Agreement on or before August 20,
1999, which approval shall be expressly contingent upon the
DISTRIBUTOR's Board of Directors approving this Agreement and the Earth
Station Agreement on the exact terms and condition set forth herein and
therein; or (B) DISTRIBUTOR's Board of Directors has not ratified and
approved (i) the [*CONFIDENTIAL TREATMENT REQUESTED*] liability cap
applicable to DISTRIBUTOR and ORBIMAGE set forth in Sections 10(g) and
10(i) hereof, and (ii) the eighteen (18) month deadline for the
delivery of the Designated Earth Station set forth in Exhibit B,
Section 5 of the Earth Station Agreement, on or before September 30,
1999. In the event that the foregoing conditions have not been
satisfied, this Agreement, the Earth Station Agreement and the SICorp.
Agreement shall automatically terminate without any liability to either
party and without any further action being required of either party.
(ii) DISTRIBUTOR hereby agrees that from the date of this
Agreement through September 30, 1999 (or August 20, 1999, if earlier
terminated pursuant to the foregoing paragraph), it shall not, directly
or indirectly, through any employee, officer, agent, representative or
otherwise, make offers to, solicit or entertain offers from, negotiate
with or in any manner encourage, discuss, accept or consider any
proposal of, any Person for DISTRIBUTOR to become a distributor of
panchromatic satellite imagery with resolution equal to or better than
two (2) meters and/or multispectral satellite imagery with resolution
equal to or better than four (4) meters in the Territory and/or the
countries outside of the Territory in which DISTRIBUTOR has
non-exclusive distribution rights hereunder. Notwithstanding anything
in Section 10(n)(i) above to the contrary, DISTRIBUTOR further agrees
that this Section 10(n)(ii) is the legally binding agreement of
DISTRIBUTOR.
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(iii) ORBIMAGE hereby agrees that from the date of this
Agreement through September 30, 1999 (or August 20, 1999, if earlier
terminated pursuant to the foregoing paragraph), it shall not, directly
or indirectly, through any employee, officer, agent, representative or
otherwise, make offers to, solicit or entertain offers from, negotiate
with or in any manner encourage, discuss, accept or consider any
proposal of, any Person for such Person to become a distributor of
Standard Products and/or Value-Added Products in the Territory.
Notwithstanding anything in Section 10(n)(i) above to the contrary,
ORBIMAGE further agrees that this Section 10(n)(iii) is the legally
binding agreement of ORBIMAGE.
SECTION 11. REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
(a) Representations and Warranties. Each of ORBIMAGE and DISTRIBUTOR
represents and warrants to the other as follows:
(i) Such party is duly organized and in good standing under
the laws of its jurisdiction of organization and in each other
jurisdiction where such organization or good standing is required for
the performance of this Agreement;
(ii) Such party has the power and authority, corporate or
otherwise, to enter into this Agreement and to perform its obligations
hereunder, and the execution, delivery and performance of the Agreement
by such party has been duly authorized by all necessary action;
(iii) The Agreement has been duly executed and delivered by
such party and constitutes a legally valid and binding obligation of
such party, enforceable against such party in accordance with its
terms; and
(iv) Such party's entry into and performance under this
Agreement does not violate any its certificate of incorporation, bylaws
or similar constituent documents, or any law, rule or regulation,
judicial, administrative or executive order, or contractual commitment
by which such party or its assets is bound.
(b) Indemnification. Except as otherwise set forth in Section 7(g),
each of ORBIMAGE and DISTRIBUTOR (each, an "Indemnifier") agrees to indemnify
and hold harmless the other (the "Indemnitee") from and against all claims,
demands, complaint, action or liabilities (including reasonable attorneys' fees)
asserted by third parties (not including any affiliates of the Indemnitee)
against the Indemnitee arising out of or in connection with the Indemnifier's
breach of this Agreement or any representations, warranties, covenants or
agreements contained herein, provided that the Indemnitee (i) gives the
Indemnifier prompt written notice of any such claims, demands, complaint, action
or liabilities; (ii) allows the Indemnifier to direct the defense and settlement
of the claims, provided that the terms of any such settlement shall have been
approved by
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DISTRIBUTOR, which consent shall not be unreasonably withheld; and (iii)
provides the Indemnifier with the information and assistance reasonably
necessary for the defense and settlement of the claim, at no cost to the
Indemnitee. All costs of such defense and the amount of any judgment, award or
settlement that may result therefrom, shall be the sole responsibility of and
shall be paid by the Indemnifier. Notwithstanding the foregoing, the Indemnitee
shall have the right, at its sole expense, to appoint its own counsel to
participate in such defense. In such event, the Indemnifier shall instruct the
counsel retained by the Indemnifier to defend the Indemnitee to cooperate with
the Indemnitee's designated counsel. This indemnification obligation shall
survive the expiration or termination of this Agreement for a period of two (2)
years.
SECTION 12. LIMITED WARRANTY; LIMITATION OF LIABILITY
(a) Limited Warranty.
(i) ORBIMAGE hereby warrants to DISTRIBUTOR that any Standard
Products and/or Value-Added Products supplied by ORBIMAGE to
DISTRIBUTOR from the OrbNet Archive for sale will, for ninety (90) days
from the date of delivery to DISTRIBUTOR, be free from defects in media
and conform to the supplier's specifications when used on appropriate
computer hardware.
(ii) DISTRIBUTOR hereby warrants to ORBIMAGE that any Standard
Products and/or Value-Added Products supplied by DISTRIBUTOR to
ORBIMAGE from the Distributor Archive for sale will, for ninety (90)
days from the date of delivery to ORBIMAGE, be free from defects in
media and conform to the supplier's specifications when used on
appropriate computer hardware.
(b) DISCLAIMER OF WARRANTIES. EXCEPT AS SET FORTH IN SECTION 12(A),
EACH OF DISTRIBUTOR AND ORBIMAGE HEREBY ACKNOWLEDGE AND AGREE THAT THE OTHER
PARTY HAS NOT MADE NOR SHALL IT BE DEEMED TO HAVE MADE ANY REPRESENTATIONS OR
WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO THE PRODUCTS AND
SERVICES BEING PROVIDED BY DISTRIBUTOR AND ORBIMAGE, AS THE CASE MAY BE,
HEREUNDER. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF DISTRIBUTOR AND
ORBIMAGE EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, ARISING
BY LAW, COURSE OF PERFORMANCE, CUSTOM OR USAGE IN THE TRADE OR OTHERWISE, WITH
RESPECT TO ANY PRODUCTS OR SERVICES TO BE PROVIDED BY SUCH PARTY HEREUNDER,
INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY, OR
FITNESS FOR A PARTICULAR PURPOSE. Without limitation of the foregoing, neither
DISTRIBUTOR nor ORBIMAGE represent or warrant that the services and
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products to be provided by them hereunder shall be provided free of omissions,
errors delays or interruptions.
(c) Warranties by Parties. Neither DISTRIBUTOR nor ORBIMAGE shall make
any warranties, representations or guarantees, whether written or oral, on the
other party's behalf.
(d) Limitation of Liability of ORBIMAGE. EXCEPT AS SPECIFICALLY SET
FORTH IN SECTIONS 4(K), 7(G), 8(B)(II), 8(B)(III), 9(B)(V), 9(C)(IV), 9(D)(II),
10(D), 10(G) AND 10(I), ORBIMAGE'S ENTIRE LIABILITY TO DISTRIBUTOR FOR ANY AND
ALL CLAIMS, DAMAGES, LOSSES, COSTS, EXPENSES OR OTHER LIABILITIES OF ANY NATURE
WHATSOEVER, INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES, INCURRED BY
DISTRIBUTOR IN CONNECTION WITH ORBIMAGE'S PRODUCTION AND DELIVERY OF ORBVIEW
DATA, STANDARD PRODUCTS AND/OR VALUE-ADDED PRODUCTS TO DISTRIBUTOR HEREUNDER
SHALL, IN EACH INSTANCE, BE LIMITED TO THE FEES ACTUALLY PAID BY DISTRIBUTOR FOR
SUCH ORBVIEW DATA, STANDARD PRODUCTS AND/OR VALUE-ADDED PRODUCTS. Nothing in
this Section 12(d) shall be interpreted to limit or restrict DISTRIBUTOR's right
to receive damages from ORBIMAGE under Sections 4(k), 7(g), 8(b)(ii), 8(b)(iii),
9(b)(v), 9(c)(iv), 9(d)(ii), 10(g) or (10)(i) hereof.
(e) Limitation of Liability of DISTRIBUTOR. EXCEPT AS SPECIFICALLY SET
FORTH IN SECTIONS 10(G), AND 10(I) HEREOF, DISTRIBUTOR'S ENTIRE LIABILITY TO
ORBIMAGE FOR ANY AND ALL CLAIMS, DAMAGES, LOSSES, COSTS, EXPENSES OR OTHER
LIABILITIES OF ANY NATURE WHATSOEVER, INCLUDING, WITHOUT LIMITATION, ATTORNEYS'
FEES, INCURRED BY ORBIMAGE IN CONNECTION WITH DISTRIBUTOR'S PRODUCTION AND
DELIVERY OF ORBVIEW DATA, STANDARD PRODUCTS AND/OR VALUE-ADDED PRODUCTS TO
ORBIMAGE HEREUNDER SHALL, IN EACH INSTANCE, BE LIMITED TO THE FEES ACTUALLY PAID
BY ORBIMAGE FOR SUCH ORBVIEW DATA, STANDARD PRODUCTS AND/OR VALUE-ADDED
PRODUCTS. Nothing in this Section 12(e) shall be interpreted to limit or
restrict ORBIMAGE's right to receive damages from DISTRIBUTOR under Sections
10(g) and 10(i) hereof.
(f) NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IN NO EVENT SHALL
ORBIMAGE OR DISTRIBUTOR HAVE ANY LIABILITY OR OBLIGATION TO THE OTHER OR THEIR
RESPECTIVE CUSTOMERS UNDER THIS AGREEMENT FOR LOSS OF USE, REVENUE OR PROFIT,
BUSINESS INTERRUPTION, OR FOR ANY SPECIAL, EXEMPLARY, PUNITIVE, INDIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES HEREUNDER, WHETHER ARISING IN CONTRACT, TORT
OR OTHERWISE, EVEN IF ORBIMAGE OR DISTRIBUTOR, AS THE CASE MAY BE, HAS BEEN
ADVISED
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OF THE POSSIBILITY OF SUCH DAMAGES, EXCEPT AS OTHERWISE PROVIDED IN SECTIONS
10(G) AND 10(I).
SECTION 13. DISPUTE RESOLUTION; ARBITRATION
(a) Dispute Resolution. ORBIMAGE and DISTRIBUTOR agree that if any
controversy, claim or dispute (a "Dispute") arises from time to time between the
parties in respect of this Agreement or either party's performance hereunder,
then the following course of action shall be initiated in order to amicably
resolve such Dispute: Either party may notify the other party of the Dispute,
which notice shall describe the Dispute in reasonable detail. Promptly after the
other party's receipt of said notice, a designated representative of each of the
parties shall attempt to amicably resolve the Dispute. If the designated
representatives are unable to resolve such Dispute within ten (10) days of the
other party's receipt of said notice, the Dispute shall be referred to a panel
consisting of a delegate from each party (the "Special Panel"), who shall be a
senior manager or vice president of the applicable party. The Special Panel
shall meet within five (5) days of the end of said 10-day period. If the Special
Panel is unable to resolve the Dispute within ten (10) days of the date on which
it first meets, or such longer period as may be mutually agreed, the dispute
shall be declared irreconcilable and will proceed to binding arbitration in
accordance with the procedures set forth in Section 13(b).
(b) Arbitration. The parties hereto agree that the sole and exclusive
method for resolving any Disputes which cannot be amicably settled by the
parties pursuant to Section 13(a) shall be by final and binding arbitration
administered by the American Arbitration Association ("AAA"), in accordance with
the International Arbitration Rules of the AAA then in effect, to the extent not
modified by this Section 13. The arbitral tribunal shall be composed of three
(3) arbitrators.
(i) If the Special Panel is unable to resolve the Dispute as
described in Section 13(a), the Special Panel shall initiate
arbitration hereunder by written notice to the AAA, which notice shall
include the appointment of each party's arbitrator. Such notice shall
be sent to the AAA's International Center located at 140 West 51st
Street, New York, New York 10020-1203 within ten (10) days of the date
on which the Dispute is declared irreconcilable. Within ten (10) days
of the appointment of the second arbitrator, the two arbitrators shall
appoint the third arbitrator, who shall be expert in satellite remote
sensing systems and shall act as the chairman of the arbitral tribunal
(the "Chairman").
(ii) If the Special Panel fails to initiate arbitration as
provided in 13(b)(i), either party may commence arbitration hereunder
by written notice to the AAA (at the address above) and the other
party, which notice shall include the appointment of such party's
arbitrator. The other party shall appoint its arbitrator within ten
(10) days of its receipt of said notice. If such party fails to appoint
its arbitrator within such time period, the AAA shall appoint the
second arbitrator.
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Within fifteen (15) days of the appointment of the second arbitrator,
the two arbitrators shall appoint the third arbitrator who shall act as
the Chairman.
(iii) If the two arbitrators are unable to agree on the third
arbitrator within the specified time period in Section 13(b)(i) or
13(b)(ii), as applicable, the AAA shall appoint the third arbitrator.
(iv) The arbitration shall be conducted in English and shall
be held in Washington, D.C. Judgment upon any award rendered by the
arbitrators may be entered in any U.S. or non-U.S. court having
jurisdiction over the matter. The parties agree that if it becomes
necessary for any party to enforce an arbitral award by a legal action
or additional arbitration or judicial methods, the party against whom
an award is enforced shall pay all reasonable costs and attorneys' fees
incurred by the party seeking to enforce the award.
(v) TO THE FULLEST EXTENT PERMITTED BY LAW, THE PARTIES WAIVE
ALL REQUIREMENTS AS TO PERSONAL JURISDICTION WITH RESPECT TO ANY
JUDICIAL ENFORCEMENT OF THE ARBITRATION AWARD OR ANY JUDICIAL
PROCEEDING TO ENFORCE THIS SECTION 13.
(c) Consolidation of Disputes. In the event that one or more Disputes
arise under each of this Agreement and the Earth Station Agreement, such
Disputes shall be consolidated and addressed simultaneously under the procedures
set forth in this Section 13.
(d) Continuing Obligations. The existence of any Dispute between the
parties, whether or not the same is the subject of a dispute resolution or
arbitration proceeding described in Sections 13(a) or 13(b), shall not relieve
the parties of their obligations under this Agreement or the Earth Station
Agreement in the event of a consolidation of Disputes, except as specifically
provided in the Earth Station Agreement.
(e) Injunctive Relief. Notwithstanding Sections 13(a) and 13(b),
DISTRIBUTOR agrees that if it breaches the provisions of Section 7, and each of
ORBIMAGE and DISTRIBUTOR agree that if it violates the provisions of Section
15(o), the non-breaching party would be irreparably injured and that the
remedies available under this Section 13 or at law for such breach would be
inadequate. In such event, each of ORBIMAGE and DISTRIBUTOR agree that the
non-breaching party shall be entitled to temporary or other injunctive relief,
including, without limitation, specific performance, without necessity of
proving monetary damages or posting a bond, pending final resolution of the
matter in accordance with this Section 13.
SECTION 14. COMPLIANCE WITH LAWS
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(a) DOC License.
(i) DISTRIBUTOR acknowledges that this Agreement is subject to
the terms and conditions of the DOC License. Without limitation of the
foregoing, the DOC License requires ORBIMAGE to operate the High
Resolution Satellites in a manner that preserves the United States
national security and observes international obligations and foreign
policies of the United States and that DISTRIBUTOR abide by the terms
and conditions of the DOC License addressing United States national
security, international obligations and foreign policies.
(ii) In order to ensure ORBIMAGE's compliance with the DOC
License, DISTRIBUTOR hereby agrees that it shall abide by the terms and
conditions of the DOC License addressing United States national
security and international obligations and foreign policies. In
addition, DISTRIBUTOR agrees to abide by all other terms and conditions
of the DOC License applicable to the DISTRIBUTOR, and any other
obligations applicable to the DISTRIBUTOR that may be imposed by the
United States Government from time to time pursuant to the DOC License.
Without limitation of the foregoing, in order to ensure DISTRIBUTOR's
compliance with the foregoing, the DOC requires that DISTRIBUTOR agree
as follows: DISTRIBUTOR hereby agrees that it shall not sell,
distribute, transmit or otherwise distribute any Standard Products or
Value-Added Products to (i) any Person who is headquartered in,
organized under the laws of or a citizen of any country on the U.S.
State Department list of terrorist countries, (ii) any Person who is
subject to sanctions administered by OFAC, including, without
limitation, Persons who are designated by OFAC from time to time as
"Specially Designated Nationals or Blocked Persons," or (iii) any
Person who under U.S. laws, regulations or orders is otherwise
prohibited from receiving such products.
(iii) ORBIMAGE will provide DISTRIBUTOR with prompt written
notice of any amendments or other changes to the DOC License affecting
DISTRIBUTOR's rights or obligations under this Agreement.
(b) Compliance with U.S. and Other Laws. Each of ORBIMAGE and
DISTRIBUTOR shall comply in all material respects with all applicable laws,
rules and regulations of all applicable United States, French or other foreign
governmental authorities, and all applicable international agreements, in the
performance of their respective obligations hereunder. DISTRIBUTOR shall
endeavor to provide ORBIMAGE with timely notice of all changes in French law or
the laws of any other countries in the Territory applicable to ORBIMAGE's
performance of, or which affect ORBIMAGE's rights under, this Agreement, it
being agreed that such notices are solely for informational purposes and
ORBIMAGE shall remain ultimately responsible for knowledge of, and compliance
with, any such changes. ORBIMAGE shall endeavor to provide DISTRIBUTOR with
timely notice of all changes in U.S. law (other than
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changes to the DOC License, which are covered by Section 14(a)(iii) above)
applicable to DISTRIBUTOR's performance of, or which affect DISTRIBUTOR's rights
under, this Agreement, including, without limitation, any changes to the OFAC
prohibited countries and Persons described in Section 14(a)(ii) hereof, it being
agreed that such notices are solely for informational purposes and DISTRIBUTOR
shall remain ultimately responsible for knowledge of, and compliance with, any
such changes.
(c) Export Control and Munitions Regulations. DISTRIBUTOR acknowledges
that ORBIMAGE is subject to United States Arms Export Control Act and
International Traffic In Arms Regulations (22 U.S.C. Section 275 et seq., 22
C.F.R. Part 120, et seq.) and other laws and regulations which govern the export
of certain technology related to the transmission and receipt of OrbView Data
("Export Control Laws"). DISTRIBUTOR agrees that it shall comply with all
applicable Export Control Laws and shall not do any act or take any action which
will cause ORBIMAGE to violate the Export Control Laws.
(d) Permits. Each party shall be solely responsible for securing any
permits or licenses it may need to fulfill its obligations under this Agreement.
Without limitation of the foregoing, ORBIMAGE shall be solely responsible for
securing any permits or licenses it may need to export deliverables from the
United States under this Agreement and DISTRIBUTOR shall be solely responsible
for securing any permits or licenses it may need to import deliverables under
this Agreement into the Territory.
(e) Changes in Law.
(i) U.S. Law. In the event of any change in any applicable
U.S. laws, rules or regulations, including, without limitation, the DOC
License and the Land Remote Sensing Policy Act, which have a material
adverse commercial impact on DISTRIBUTOR's rights under this Agreement,
ORBIMAGE and DISTRIBUTOR will use commercially reasonable efforts,
consistent with U.S. law and the DOC License, to minimize the adverse
commercial impact of any such changes.
(ii) French Law. In the event of any change in any applicable
French laws, rules or regulations which have a material adverse
commercial impact on ORBIMAGE's rights under this Agreement, ORBIMAGE
and DISTRIBUTOR will use commercially reasonable efforts, consistent
with French law, to minimize the adverse commercial impact of any such
changes.
SECTION 15. MISCELLANEOUS
(a) Notices. All notices given under this Agreement must be in writing
and must be given by (i) hand delivery, (ii) by a recognized international
overnight courier guaranteeing at least three-day delivery or (iii) by
registered or certified mail, return receipt requested, postage prepaid, to:
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ORBIMAGE:
ORBIMAGE
21700 Atlantic Boulevard
Dulles, VA 20166
Telephone: (703) 406-5409
Facsimile: (703) 406-5552
Attention: Steven M. Cox
DISTRIBUTOR:
Spot Image
5 rue de Satellites
BP 4359
F-31030 Toulouse Cedex 4 - France
Telephone: 33-(0)5-62-19-40-01
Facsimile: 33-(0)5-62-19-40-11
Attention: President - Directeur General
All such notices shall be deemed to have been duly given on the date of receipt
(i) as indicated on the return receipt, if sent by mail, (ii) if sent by
international courier, as indicated in the records of the international courier
company, or (iii) if given by hand, on the date of actual receipt.
(b) Successors and Assigns. This Agreement shall be binding upon the
parties hereto, their successors and permitted assigns. Neither party may assign
(by operation of law or otherwise) this Agreement nor any interests or duties of
such party hereunder without the express written consent of the other party.
(c) Entire Agreement. This Agreement and the Earth Station Agreement,
including the exhibits, schedules and other attachments hereto and thereto,
contain the entire understanding between DISTRIBUTOR and ORBIMAGE and supersedes
all prior written and oral understandings relating to the subject hereof and
thereof. Any modification or amendment of this Agreement (including the
attachments hereto) must be in writing and signed by both parties.
(d) Governing Law and Jurisdiction. This Agreement and any and all
claims, controversies or disputes arising under this Agreement or related to the
subject matter hereof shall be governed by and construed in accordance with the
laws of the Commonwealth of Virginia, without giving effect to the conflict of
law rules thereof or the Convention on Contracts for the International Sale of
Goods.
(e) Waiver of Sovereign Immunity. Each party hereto (including any
assignee or party assuming any rights or obligations under this Agreement)
unconditionally and irrevocably:
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(i) agrees that the execution, delivery and performance by it
of this Agreement constitutes private and commercial acts rather than
public or governmental acts;
(ii) agrees that should any legal proceedings be brought
against it or its assets in relation to this Agreement or any
transaction contemplated by this Agreement no immunity (sovereign or
otherwise) from such legal proceedings shall be claimed by or on behalf
of itself or with respect to its assets, to the maximum extent
permitted by law;
(iii) to the maximum extent permitted by law, waives any such
right of immunity (sovereign or otherwise) which it or its assets now
has or may acquire in the future; and
(iv) consents in respect of the enforcement of any judgment
against it in any such proceedings to the giving of any relief or the
issue of any process in connection with such proceedings including,
without limitation, to the maximum extent permitted by law, the making,
enforcement or execution against or in respect of any property
whatsoever (irrespective of its use or intended use) of any order or
judgment which may be made or given in such proceedings.
(f) Force Majeure. Except as provided in Section 10(i), Section 4(k) or
elsewhere in this Agreement, neither party shall be held responsible for failure
or delay in performance, delivery or data transmission if such failure or delay
is the result of an act of God, the public enemy, embargo, governmental act,
fire, accident, war, riot, strikes, inclement weather or other cause of a
similar nature that is beyond its control. In the event of such occurrence, this
Agreement shall be amended by mutual agreement to reflect an extension in the
period of performance and/or time of delivery. Failure to agree on an equitable
extension shall be considered a dispute and resolved in accordance with Section
13.
(g) Costs. Except as otherwise expressly set forth herein, each party
shall bear its own costs and expenses incident to the negotiation and
performance of this Agreement.
(h) Waiver. It is understood and agreed that no failure or delay by
ORBIMAGE or DISTRIBUTOR in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any other or further exercise thereof, or the exercise of any
other right, power or privilege hereunder. No waiver of any term or condition of
this Agreement shall be deemed to be a waiver of any subsequent breach of any
term or condition. All waivers must be in writing and signed by the party sought
to be bound.
(i) Survival. DISTRIBUTOR's and ORBIMAGE's obligation to pay all
amounts due hereunder which accrued prior to the expiration of the term or
termination
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of this Agreement, as well as their respective obligations under Sections 3(k),
7(a), 7(b)(ii), 7(d)(i), 12, 13, 15(d), 15(e) and 15(f), shall survive
indefinitely after the expiration of the term or any termination of this
Agreement. Sections 3(j) and 4(h) shall survive for a period of six (6) months
after the expiration of the term or any termination of this Agreement. Sections
7(g), 8(d), 8(e), 11(b) and 15(o) shall survive for a period of two (2) years
after the expiration of the term or any termination of this Agreement.
(j) Severability. If any part of this Agreement shall be held
unenforceable, the remainder of this Agreement will nevertheless remain in full
force and effect.
(k) Headings; Appendixes. Headings in this Agreement are included for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose. The appendixes, exhibits and schedules described in this
Agreement and attached hereto are an integral part hereof and are incorporated
herein by this reference.
(l) Independent Contractors. DISTRIBUTOR and ORBIMAGE are independent
contractors to one another, neither party has the authority to bind the other in
any way or to any third party, and nothing in this Agreement shall be construed
as granting other party the right or authority to act as a representative, agent
or employee of the other or shall be deemed to create a partnership or joint
venture between the parties.
(m) Agreement and Communications in English. The parties agree that
this Agreement, and all communications, notices or any written material to be
provided by ORBIMAGE to DISTRIBUTOR or by DISTRIBUTOR to ORBIMAGE hereunder,
shall be in the English language, and the parties hereby waive their rights, if
any, to require that this Agreement, or any communications, notices or written
materials provided hereunder, be in the French language.
(n) Payments. All payments due and payable to either party hereunder
shall be paid in U.S. Dollars in immediately available funds to the bank account
specified by such party in writing from time to time.
(o) Confidentiality. In the course of performing their respective
obligations hereunder, each of DISTRIBUTOR and ORBIMAGE may receive proprietary
information of the other party which will be nonpublic and confidential
("Confidential Information"). Each of DISTRIBUTOR and ORBIMAGE agrees that (i)
it shall keep the Confidential Information of the other in strictest confidence
using at least the same degree of care as it uses to protect its own proprietary
and confidential information and in no event less than a reasonable degree of
care under the circumstances; (ii) it shall not disclose any Confidential
Information of the other to any Person, except its employees who need to know
such information for the performance of their duties in connection with this
Agreement and who have agreed in writing prior to receipt of such Confidential
Information to receive such information under terms at least as restrictive as
those set forth in this Agreement; and (iii) it shall not use the Confidential
Information for any purpose other than as permitted by this Agreement.
Confidential Information shall not
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include information that (A) is generally available to the public at the time of
disclosure; (B) after disclosure becomes generally available to the public,
other than as a result of a disclosure to the public in breach of this
Agreement; (C) is lawfully obtained by the receiving party on a non-confidential
basis from a source other than the disclosing party prior to its receipt of the
Confidential Information from the disclosing party; or (D) is independently
developed by employees or other representatives of the receiving party. This
Section 15(o) shall not prevent the parties from submitting this Agreement
and/or a summary of its terms to their respective national authorities,
including, with respect to ORBIMAGE, the DOC and the U.S. Securities and
Exchange Commission.
(p) No Third Party Beneficiaries. Nothing expressed or referred to
herein shall be construed or interpreted to give any Person other than the
parties to this Agreement, including, without limitation, the Subdistributors
and the Value-Added Resellers, any legal, equitable or other right, remedy or
claim under or with respect to this Agreement.
(q) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be considered an original and all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.
ORBITAL IMAGING CORPORATION
By:
---------------------------------
Name:
------------------------
Title:
-----------------------
SPOT IMAGE
By:
---------------------------------
Name:
------------------------
Title:
-----------------------
44
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EXHIBIT 1
DOC License
[*CONFIDENTIAL TREATMENT REQUESTED*]
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EXHIBIT 2(c)(i)
Pass Through Provisions for Subdistributor Agreements
Your rights are subject to the following conditions, all of which are expressly
accepted by you. You acknowledge that any failure by you to comply with any of
the following conditions can result, at our election, in termination of your
rights, without notice and without compensation.
1. You understand that your rights are geographically limited to customers
located in [define territory within Territory]. Your rights are
[exclusive/non-exclusive].
2. You agree to require each of your customers to agree as follows (by written
or "shrink-wrap" agreement acceptable to us):
2.1 The customer will use the [Standard Products] solely for internal
purposes; and
2.2 The customer will not sell, transfer, license or otherwise distribute
the [Standard Products] or any rights therein to any third party.
3. You acknowledge that the [Standard Products] contain OrbView Data, and/or
intellectual property derived from OrbView Data, which is the property of
Orbital Imaging Corporation ("ORBIMAGE"). You agree that all copies of the
[Standard Products] will bear the following legend:
"(C) [year of reception] Orbital Imaging Corporation. All Rights
Reserved."
4. You acknowledge that ORBIMAGE has granted no warranty with respect to the
[Standard Products] and assumes no liability to you or your customers.
5. You acknowledge that your right to distribute the [Standard Products] is
subject to your compliance with the applicable terms and conditions of a U.S.
Government license issued to ORBIMAGE. You further agree that you will comply
with all applicable provisions of U.S. law in connection with your distribution
of the [Standard Products].
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EXHIBIT 2(c)(II)
Pass Through Provisions for Value-Added Reseller Agreements
Your rights are subject to the following conditions, all of which are expressly
accepted by you. You acknowledge that any failure by you to comply with any of
the following conditions can result, at our election, in termination of your
rights, without notice and without compensation.
1. You understand that your rights are geographically limited to customers
located in [define territory, which can include any country in the world except
Japan]. Your rights are [exclusive/non-exclusive].
2. You acknowledge that the [Standard Products and Value-Added Products] contain
OrbView Data and/or intellectual property derived from OrbView Data, which is
the property of Orbital Imaging Corporation ("ORBIMAGE"). You agree that all
copies of [Value-Added Products created using Standard Products] will bear the
following legend:
"Produced under license from, and contains copyrighted material of,
Orbital Imaging Corporation. All Rights Reserved."
4. You acknowledge that ORBIMAGE has granted no warranty with respect to the
[Standard Products or Value-Added Products] and assumes no liability to you or
your customers.
5. You acknowledge that your right to create and/or distribute the [Value-Added
Products] is subject your compliance with the applicable terms and conditions of
a U.S. Government license issued to ORBIMAGE. You further agree that you will
comply with all applicable provisions of U.S. law in connection with your
distribution of the [Value-Added Products].
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EXHIBIT 2(d)
Required Terms in End-User Agreement
1. The End User Agreement must limit the end user's ("End User") license to use
the Standard Products to internal purposes only and not for resale or
distribution. The term of the sublicense for the Standard Products set forth in
the End User Agreement may be perpetual or a shorter period, in DISTRIBUTOR's
sole discretion.
2. The End User Agreement must prohibit the End User from selling, transferring,
licensing or otherwise distributing the Standard Products to any other Person.
3. The End User Agreement must disclose that the Standard Products contain
OrbView Data, and/or intellectual property derived from OrbView Data, which is
the property of Orbital Imaging Corporation ("ORBIMAGE"). The End User must
agree that all permitted copies of the Standard Products will bear the following
legend:
"(C) [year of reception] Orbital Imaging Corporation. All Rights
Reserved."
4. Any representations and warranties in the End User Agreement must be made by
DISTRIBUTOR or the Subdistributors, as applicable, and not on behalf of
ORBIMAGE.
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SCHEDULE 1(a)
Designated Non-Exclusive Countries
1. [*CONFIDENTIAL TREATMENT REQUESTED*]
2. [*CONFIDENTIAL TREATMENT REQUESTED*]
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SCHEDULE 1(b)
ORBIMAGE Trademarks
<TABLE>
<CAPTION>
Mark Country U.S. Reg. No. Int'l Class
---- ------- ------------- -----------
<S> <C> <C> <C>
"ORBIMAGE" U.S.A. 2039409 (2/18/97) 42
"ORBVIEW" U.S.A. 2091116 (8/26/97) 42
"ORBNET" U.S.A. 2152720 (4/21/98) 42
</TABLE>
"ORBIMAGE GLOBAL IMAGING INFORMATION & DESIGN" (design attached)
(U.S.A. / U.S. Application No. 75/632,470; filed February 5, 1999 /
Int'l Class 42)
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SCHEDULE 1(c)
Performance Parameters
[*CONFIDENTIAL TREATMENT REQUESTED*]
SCHEDULE 1(f)
Territory
The Territory shall consist of the following countries and any
successor countries.
Albania
Andorra
Austria
Belarus
Belgium
Bosnia
Bulgaria
Croatia
Czech Republic
Denmark
Estonia
France
Germany
Gibraltar
Greece
Hungary
Ireland
Italy
Latvia
Liechtenstein
Lithuania
Luxembourg
Malta
Macedonia
Moldavia
Monaco
Netherlands
Norway
Poland
Portugal
Romania
San Marino
Slovakia
Slovenia
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Spain
Sweden
Switzerland
The Vatican
The United Kingdom
Yugoslavia (Serbia, Montenegro and Kosovo)
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SCHEDULE 2(a)
Countries Excluded from DISTRIBUTOR's Non-Exclusive Distribution Rights
Anguilla
Antigua
Armenia
Aruba
Azerbaijan
Barbados
Barbuda
Belize
Canada
Cayman Islands
Columbia
Costa Rica
Djibouti
Dominica
Dominican Republic
Egypt
El Salvador
Eritrea
Ethiopia
Grenada
Guatemala
Haiti
Honduras
Iran
Iraq
Jamaica
Japan
Jordan
Korea (North and South)
Lebanon
Mexico
Montserrat
Netherlands Antilles
Nicaragua
Oman
Panama
Qatar
Saint Kitts and Nevis
Saint Lucia
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ORBITAL IMAGING CORPORATION
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Saint Vincent & the Grenadines
Saudi Arabia
Somalia
South Africa
Sudan
Syria
Taiwan
Trinidad & Tobago
United Arab Emirates
United States of America and its possessions and territories,
including, without limitation, Puerto Rico
Uganda
Venezuela
Virgin Islands
Yemen
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SCHEDULE 3(b)
Reserved Satellite Capacity
[*CONFIDENTIAL TREATMENT REQUESTED*]
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<PAGE> 56
SCHEDULE 3(j)
ORBIMAGE'S Affiliates
McDonald Dettwiller & Associates Ltd.
ORBCOMM Global, L.P.
Magellan Corporation
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SCHEDULE 4(h)
DISTRIBUTOR's Affiliates
Spot Image Corporation (United States)
Spot Imaging Services (Australia)
Beijing Spot Image (China)
Spot Asia (Singapore)
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SCHEDULE 8(a)
Fee Schedule
[*CONFIDENTIAL TREATMENT REQUESTED*]
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SCHEDULE 8(b)
Guaranteed Annual Minimum
[*CONFIDENTIAL TREATMENT REQUESTED*]
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ANNEX 1 TO SCHEDULE 8(b)
Example 1
[*CONFIDENTIAL TREATMENT REQUESTED*]
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ANNEX 2 TO SCHEDULE 8(b)
Example 2
[*CONFIDENTIAL TREATMENT REQUESTED*]
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ANNEX 3 TO SCHEDULE 8(b)
Example 3
[*CONFIDENTIAL TREATMENT REQUESTED*]
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SCHEDULE 9(b)
Global Efficiency Metric (GEM)
[*CONFIDENTIAL TREATMENT REQUESTED*]
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SCHEDULE 9(c)
Example
[*CONFIDENTIAL TREATMENT REQUESTED*]
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<PAGE> 1
EXHIBIT 10.24
ORBIMAGE GROUND STATION CONTRACT
(Contract Number: OGS-SPOT-C-01-300)
THIS ORBIMAGE GROUND STATION CONTRACT ("Contract" or "Agreement") is
entered into as of August 4, 1999 (the "Effective Date") by and between ORBITAL
IMAGING CORPORATION ("ORBIMAGE"), a Delaware corporation, with its principal
place of business located at 21700 Atlantic Boulevard, Dulles, Virginia 20166,
and SPOT IMAGE ("CUSTOMER" or "SPOT Image"), a French societe anonyme, with its
principal place of business located at 5 rue de Satellites, BP 4359, F-31030
Toulouse Cedex 4, France.
RECITALS
WHEREAS, CUSTOMER desires to modify its existing ground station located
in or near Toulouse, France (the "Customer Ground Station") so that it is
capable of OrbView-3 and OrbView-4 data reception, recording, archiving,
cataloging, ordering and product generation for the panchromatic and
multispectral sensors on the OrbView-3 and OrbView-4 satellites; and
WHEREAS, ORBIMAGE is prepared to provide said modification on the terms
and conditions of this Contract.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties, intending to be legally bound,
hereby agree as follows:
ARTICLE 1.0 THE CONTRACT
This Contract shall consist of the Exhibits set forth below, which are
hereby incorporated and made part of this Contract by this reference. Any
inconsistency between or among this Contract and the Exhibits attached hereto
shall be resolved in the following order of precedence:
(i) This Contract;
(ii) Exhibit A - General Conditions;
(iii) Exhibit B - Price Schedule and Payment Terms;
(iv) Exhibit C - Statement of Work;
(v) Exhibit D - Technical Specification. Exhibit D shall consist of
the Preliminary Technical Specification and the Final Technical
Specification. The Preliminary Technical Specification shall be
attached as Exhibit D hereto at the time this Contract is
executed, and the Final Technical Specification shall be delivered
as set forth in Item SE-1, Exhibit E (Contract Data Requirements
List) hereto and shall replace and supercedes the Preliminary
Technical Specification; and
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 2
(vi) Exhibit E - Contract Data Requirements List.
ARTICLE 2.0 WORK TO BE PERFORMED
Except as specified elsewhere in this Contract, ORBIMAGE shall furnish
all labor, materials, tools, supplies, equipment, transportation, supervision,
technical, professional and other services, and, shall serve as the prime
integrator and perform integration, delivery, installation and other technical
services for the Modification in accordance with this Contract.
ARTICLE 3.0 CONTRACT TYPE, EFFECTIVE DATE; PERIOD OF PERFORMANCE
(a) Work authorized under this Contract shall be performed on a Firm
Fixed Price ("FFP") basis as set forth in Exhibit B.
(b) The Effective Date of this Contract shall be the date first above
written.
(c) The Period of Performance for this Contract shall be specified in
Exhibit B (Price Schedule and Payment Terms). The Period of Performance for this
Contract may only be extended in writing by mutual agreement of the parties
hereto.
ARTICLE 4.0 CONSIDERATION; LETTER OF CREDIT
For ORBIMAGE's satisfactory and complete performance of this Contract,
CUSTOMER shall pay ORBIMAGE in accordance with the payment terms set forth in
Exhibit B (Price Schedule and Payment Terms) hereto. As a condition precedent to
ORBIMAGE's commencement of work hereunder, CUSTOMER shall establish an
irrevocable letter of credit for the benefit of ORBIMAGE (or its designee) for
the full amount of this Contract as set forth in Exhibit B. Such letter of
credit shall be opened or confirmed by such U.S. bank and shall be in such form
as are reasonably acceptable to ORBIMAGE (or its designee).
ARTICLE 5.0 PERFORMANCE BOND
Prior to commencing work hereunder, ORBIMAGE shall establish a
performance bond for the benefit of CUSTOMER to guaranty ORBIMAGE's performance
hereunder on terms and conditions reasonably acceptable to CUSTOMER.
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IN WITNESS WHEREOF, the parties have caused this Contract to be executed
as of the date first above written.
<TABLE>
<CAPTION>
SPOT IMAGE ORBITAL IMAGING CORPORATION
<S> <C>
By: By:
------------------------------ ------------------------------
- ------------------------------ ------------------------------
Name Name
- ------------------------------ ------------------------------
Title Title
</TABLE>
3
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<PAGE> 4
ORBIMAGE GROUND STATION CONTRACT
(Contract Number: OGS-SPOT-C-01-300)
EXHIBIT A
General Conditions
GC-1 DEFINITIONS
As used in this Contract, each of the following terms has the meaning set
forth thereafter, such meaning to be equally applicable both to the singular and
plural forms of the terms herein defined:
"Acceptance Test Procedures" or "ATPs" means the procedures developed to test to
the Technical Specifications of the OGS System as required under this Contract,
which can be designated by ORBIMAGE as "Factory," "On-Site," "System" or
otherwise as appropriate to describe the type of test to be conducted.
"Commercial-Off-The-Shelf" or "COTS" means, for the purposes of GC-14
(Intellectual Property Rights), proprietary software products and/or tools owned
or under the control of its respective owner or exclusive licensee that is
offered to the public for sale at published prices and includes the availability
of post delivery support services at published prices.
"Contract" means the Contract between ORBIMAGE and CUSTOMER, dated as of July
31, 1999, and all Exhibits thereto as specified in Article 1.0 of the Contract.
"Customer Ground Station" has the meaning set forth in the Recitals to the
Contract.
"Destination Country" means France.
"Developed Item" or "DI" means for the purposes of GC-14 (Intellectual Property
Rights), a software program or tool developed by ORBIMAGE or its Subcontractors
for the first time under this Contract.
"Distribution Agreement" has the meaning set forth in GC-9(e).
"Factory Acceptance Certificate" means an official written statement signed by
CUSTOMER indicating that part or all of the OGS System has been implemented,
completed and tested satisfactorily according to the Factory Acceptance Test in
accordance with this Contract.
"Factory Acceptance Test" or "FAT" means the test undertaken at ORBIMAGE's or
its Subcontractor's or suppliers' facility to certify that the Supply, Service
or Goods meets the functional requirements of Exhibit D (Technical
Specification).
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 5
"Goods," "Equipment," "Supplies" or "Works" means the OGS System, the OGS System
hardware, software, firmware, equipment, and relevant documentation and
handbooks therefor to be furnished to CUSTOMER or services to be rendered by
ORBIMAGE and its Subcontractor(s) under this Contract.
"Incoterms" means the international rules for the interpretation of trade terms
as published by ICC Publishing SA, 38 Cours Albert 1er, 75008 Paris, France, as
first published in 1953 and reprinted in 1967, 1974, 1976, 1980 and in 1990. All
shipping terms referred to herein, such as FOB, CIF, CIP and the like means
those terms pursuant to Incoterms 1990.
"MacDonald Dettwiler" means MacDonald Dettwiler and Associates Ltd., a Canadian
corporation and a subsidiary of Orbital Sciences Corporation.
"Modification" means the modification to the Existing Ground Station to be
performed by ORBIMAGE hereunder so that the Existing Ground Station is capable
of OrbView-3 and OrbView-4 data reception, recording, archiving, cataloging,
ordering and product generation for panchromatic and multispectral sensors on
the OrbView-3 and OrbView-4 satellites. The Modification shall consist of the
design, build, integration, testing and installation of the OGS System.
"Modified COTS" and "Modified NDI" for the purposes of GC-14 (Intellectual
Property Rights), refers to Commercial-Off-the-Shelf and Non-Development Items
to which significant modifications are made such that the identity, function and
form of the original proprietary software product or tool is lost.
"Month" means a Gregorian calendar month.
"Non-Development Item" or "NDI" means for the purposes of GC-14 (Intellectual
Property Rights), any existing proprietary software products and/or tools owned
by ORBIMAGE or its Subcontractors. With respect to MacDonald Dettwiler, NDI
include, without limitation, NDI owned by MacDonald Dettwiler or which MacDonald
Dettwiler has developed for the Canadian Government and has been granted
exclusive rights to by the Canadian Government.
"NSP" means not separately priced.
"OGS System" and "OGS" mean the hardware, software, firmware and Technical
Information and includes all other materials/elements that individually or
collectively constitute the Modification, which system receives data from the
OrbView-3 and OrbView-4 satellites and stores, retrieves, processes and
manipulates such data to form products in accordance with Exhibit D (Technical
Specifications).
"On-Site Acceptance Certificate" means an official written statement signed by
CUSTOMER indicating that part or all of the OGS System has been implemented,
completed and tested satisfactorily according to the On-Site Acceptance Test
prescribed in this Contract.
"On-Site" Acceptance Test(s)" or "OSAT" means a test undertaken at a site or
field location to certify that the Supply, Service or Goods meets the
requirements of Exhibit D (Technical Specification).
"Period of Performance" has the meaning set forth in Article 3.0(c) of the
Contract.
2
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"Provisional Acceptance Certificate" means a written statement signed by
CUSTOMER indicating that part or all of the OGS System has been implemented,
completed and tested satisfactorily according to the Provisional Acceptance Test
prescribed in this Contract.
"Provisional Acceptance Test" or "PAT" means the test undertaken by ORBIMAGE or
its Subcontractor(s) to certify that a separate identified part(s) of the Work
meets the requirements of this Contract.
"Site" means the actual place or places where the Goods are to be delivered and
installed, or where the Work is to be done by ORBIMAGE or its Subcontractor(s).
"Subcontract" means an agreement entered into between ORBIMAGE and another
person, company, corporation or other entity for the furnishing of materials and
services as a part of the Work.
"Subcontractor" means any party or parties (other than ORBIMAGE) to whom all or
any portion of the Goods and Work have been assigned by ORBIMAGE pursuant to a
Subcontract.
"Technical Documentation" means any and all designs, technical reports,
photographs, drawings, plans, manuals, specifications and computer software
relating to the Work.
"Technical Information" means any and all recorded information of a scientific
or technical nature relating to the Work, including, without, limitation,
experimental and test data, techniques, methods, processes, know-how,
inventions, magnetic tape, computer memory printouts or data retained in
computer memory, and any other technical data in whatever form presented and
whether or not susceptible to copyright.
"VAR Agreement" has the meaning set forth in GC-9(e)(iii).
"Vendor Software" means for the purposes of GC-14 (Intellectual Property
Rights), Commercial Off-the-Shelf not owned by ORBIMAGE or its Subcontractors
and which is subject to the terms and conditions of licenses granted by the
vendor thereof.
"Warranty" has the meaning set forth in GC-5(b) and GC-5(c).
"Warranty Period" means the twelve (12) month Warranty period described in
GC-5(b), GC-5(c) and GC-5(d).
"Work" means all things done or required to be done and all operations, duties
and obligations executed or to be executed by ORBIMAGE as specified, shown or
indicated in this Contract including, without limitation, all extra work,
changes, substitutions and variations in Work ordered by CUSTOMER in accordance
with this Contract.
GC-2 INDEPENDENT CONTRACTOR
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ORBIMAGE hereby represents that it is fully experienced and properly
qualified to perform the Work as stated herein, and that it is properly
licensed, equipped, organized, and financed to perform such Work. ORBIMAGE shall
act as an independent contractor and not as the agent of CUSTOMER in performing
the Contract, maintaining complete control over its employees and all of its
Subcontractors. Nothing contained in this Contract or any Subcontract awarded to
an Subcontractor by ORBIMAGE shall create any contractual relationship between
any such Subcontractor and CUSTOMER. ORBIMAGE shall perform all Work in
accordance with its own methods subject to compliance with this Contract.
GC-3 AUTHORIZED REPRESENTATIVES
(a) Before commencing work under this Contract, ORBIMAGE shall designate
one person as its authorized representative who shall represent the overall
interests of ORBIMAGE under the Contract. ORBIMAGE shall provide the name,
address, telephone and facsimile numbers of such representative, and of any
changes thereto, together with a clear definition of the scope of his/her
authority to represent and act for ORBIMAGE, and shall specify any and all
limitations of such authority.
(b) Before ORBIMAGE commences work under this Contract, CUSTOMER shall
designate one person as its authorized representative who shall represent the
overall interests of CUSTOMER under the Contract. CUSTOMER shall provide the
name, address, telephone and facsimile numbers of such representative, and of
any changes thereto, together with a clear definition of the scope of his/her
authority to represent and act for CUSTOMER, and shall specify any and all
limitations of such authority.
GC-4 NOTICES
All notices given under this Contract must be in writing and must be
given by (i) hand delivery, (ii) by a recognized international overnight courier
guaranteeing at least three-day delivery or (iii) by registered or certified
mail, return receipt requested, postage prepaid, to:
ORBIMAGE:
ORBIMAGE
21700 Atlantic Boulevard
Dulles, VA 20166
Telephone: (703) 406-5294
Facsimile: (703) 404-8061
Attn: Program Manager
CUSTOMER:
Spot Image
5 rue de Satellites
4
ORBITAL IMAGING CORPORATION
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<PAGE> 8
BP 4359
F-31030 Toulouse Cedex 4 - France
Telephone: 33-(0)5-62-19-40-01
Facsimile: 33-(0)5-62-19-40-11
Attention: President - Directeur General
All such notices shall be deemed to have been duly given on the date of
receipt (i) as indicated on the return receipt, if sent by mail, (ii) if sent by
international courier, as indicated in the records of the international courier
company, or (iii) if given by hand, on the date of actual receipt.
GC-5 WARRANTY
(a) ORBIMAGE warrants that the Equipment purchased for the OGS System
shall be of new material and of the stated performance at the time the order is
placed with the Suppliers and Vendors.
(b) ORBIMAGE hereby warrants for a period of twelve (12) months from the
date of the successful completion of the On-Site Acceptance Test for the OGS
System, as evidenced by the issuance of an On-Site Acceptance Certificate in
accordance with the Contract (the "Warranty Period"), that the overall
performance of the OGS System will be in accordance with the Technical
Specifications set forth in Exhibit D to the Contract (the "Warranty").
(c) ORBIMAGE hereby warrants for a period of twelve (12) months from the
date of the successful completion of the On-Site Acceptance Test for the OGS
System, as evidenced by the issuance of an On-Site Acceptance Certificate in
accordance with the Contract (the "Warranty Period"), that the Goods are free
from defects arising out of faulty or defective material or components,
including, without limitation, software design and inferior workmanship,
excluding normal wear and tear (also, the "Warranty"). The Warranty described in
GC-5(b) and (c) does not apply to damage or defects attributable to negligence
or misuse of the OGS System, including, without limitation, any Goods, on the
part of CUSTOMER or its agents, or repair or alteration of the OGS System,
including, without limitation, the Goods, by CUSTOMER or its agents not in
accordance with ORBIMAGE's procedures and/or instructions.
(d) CUSTOMER shall have an option to extend the Warranty for an
additional twelve (12) month period, which extended Warranty will cover the
second year following the date of the successful completion of the On-Site
Acceptance Test for the OGS System, as evidenced by the issuance of an On-Site
Acceptance Certificate in accordance with this Contract (also, the "Warranty
Period"). The price payable and other payment terms for said extended Warranty
are set forth on Exhibit B.
(e) During the applicable Warranty Period, ORBIMAGE shall provide
CUSTOMER, or cause to be provided, as applicable, the system support services
described in Exhibit C, Sections 4.10.
(f) Notice of all claimed defects must be provided in writing to ORBIMAGE
within the Warranty Period. If the Goods are defective, ORBIMAGE shall promptly
repair or replace such
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Goods to conform with the applicable Technical Specifications set forth in
Exhibit D without any charge. ORBIMAGE shall at its option repair the defective
Goods on-site or have the said Goods returned to the original supplier's
facility. All shipping and insurance costs associated with shipment of these
items by CUSTOMER to ORBIMAGE shall be paid by ORBIMAGE, unless the damage or
defects were attributable to negligence or misuse of Goods on the part of
CUSTOMER or its agents. Except as otherwise specifically provided in the
Distribution Agreement, the Warranty is CUSTOMER's sole and exclusive remedy
against ORBIMAGE for damaged or defective Goods.
(g) During the term of the Distribution Agreement, if ORBIMAGE upgrades
or otherwise changes its systems (including the OrbView-3 and OrbView-4
satellites) such that the OGS System no longer meets the Technical
Specifications set forth in Exhibit D, ORBIMAGE shall upgrade or otherwise
modify the OGS System free of charge so that the OGS System meets said Technical
Specifications, whether or not the Warranty Period is still in effect.
(h) During the term of the Distribution Agreement, ORBIMAGE shall provide
CUSTOMER, free of charge, with all software releases required to maintain the
operation of the OGS System at the performance levels set forth in Exhibit D
(Technical Specifications), whether or not the Warranty Period is still in
effect. ORBIMAGE shall sell, and CUSTOMER shall have an option to buy, any
future software improvements or upgrades which increase performance levels of
the OGS System above the Technical Specifications, on reasonable terms and
conditions mutually agreeable to the parties.
(i) CUSTOMER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED IN THE DISTRIBUTION AGREEMENT, (I) THE LIMITED WARRANTY
SET FORTH IN THIS GC-5 IS THE SOLE AND EXCLUSIVE WARRANTY MADE BY ORBIMAGE, (II)
IS IN LIEU OF ALL OTHER WARRANTIES, AND (III) ORBIMAGE DOES NOT MAKE, NOR SHALL
BE DEEMED TO HAVE MADE, ANY OTHER WARRANTIES, GUARANTEES OR REPRESENTATIONS OF
ANY NATURE WHATSOEVER, WITH RESPECT TO THE MODIFICATION, THE OGS SYSTEM OR ANY
OF THE GOODS OR SERVICES BEING PROVIDED PURSUANT TO THE CONTRACT, WHETHER
EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THOSE RELATING TO
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR FUNCTION AND WHETHER
ARISING OUT OF STATUTE, LAW, EQUITY, COURSE OF DEALING, USAGE OF TRADE OR
OTHERWISE.
GC-6 INSURANCE
Without limitation to its obligations and responsibilities under this
Contract, ORBIMAGE shall obtain insurance against loss or damages in such forms
as prescribed below;
(a) Freight and Transport and Installation Insurance.
ORBIMAGE shall obtain insurance for each shipment to the Site by inland
and/or overseas transportation, from the factories or any other originating
places of Goods outside or within the
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Destination Country, including temporary storage and local manufacturing under
the following provisions:
(i) The insurance coverage amount shall be based upon the price of
the Goods (in US dollars) added to the freight and cost of insurance
(cost insurance freight) and in-country transportation costs.
(ii) Insurance will be against "All Risks" of physical loss or
damage from any external cause including strikes, riots and civil
commotions risks in accordance with standard insurance industry
provisions.
The above insurance will be extended to cover installation, testing and
demonstration, as applicable, or until which time the On-Site Acceptance
Certificate is executed by CUSTOMER.
(b) Third Party Liability Insurance.
ORBIMAGE shall obtain insurance against all damage to CUSTOMER's and/or
third-party's property resulting directly from the Work done by ORBIMAGE.
ORBIMAGE's liability shall be limited to One Million Dollars (US$1,000,000) per
occasion for both property damage and personnel injury, including death. In the
event of such loss or damage, ORBIMAGE shall provide similar Goods as
replacement and such Goods shall conform to the specifications set forth herein.
GC-7 LIMITATION OF LIABILITY
(a) EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THE DISTRIBUTION
AGREEMENT,ORBIMAGE'S ENTIRE LIABILITY TO CUSTOMER FOR ANY AND ALL CLAIMS,
DAMAGES, LOSSES, COSTS, EXPENSES OR OTHER LIABILITIES OF ANY NATURE WHATSOEVER,
INCLUDING, WITHOUT LIMITATION, PATENT INDEMNIFICATION CLAIMS AND ATTORNEYS'
FEES, INCURRED BY CUSTOMER IN CONNECTION WITH THIS CONTRACT OR AS A RESULT OF
ORBIMAGE'S OR ITS SUBCONTRACTOR'S PERFORMANCE OF THIS CONTRACT SHALL NOT EXCEED
THE TOTAL PRICE ACTUALLY PAID BY CUSTOMER FOR THE OGS SYSTEM.
(b) ORBIMAGE shall not be held liable for bodily injury, property damage
or other losses sustained by third parties (including the employees and agents
of CUSTOMER), which may arise in consequence of the execution and/or completion
of the Work, nor for damage inflicted or loss sustained in respect of the
equipment or of any property of CUSTOMER, except to the extent that such
injuries, damages or losses are due to the negligence or intentional wrong doing
of ORBIMAGE or its Subcontractors.
(c) EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THE DISTRIBUTION
AGREEMENT AND NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IN NO EVENT SHALL
ORBIMAGE HAVE ANY LIABILITY OR
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OBLIGATION TO CUSTOMER UNDER THIS CONTRACT FOR LOSS OF USE, REVENUE OR PROFIT,
BUSINESS INTERRUPTION, OR FOR ANY SPECIAL, EXEMPLARY, PUNITIVE, INDIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES HEREUNDER, WHETHER ARISING IN CONTRACT, TORT
OR OTHERWISE, EVEN IF ORBIMAGE HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
GC-8 FORCE MAJEURE
Except as otherwise specifically provided in the Distribution Agreement:
(a) If there is a delay in production of any part of the Goods or
non-performance of the Work due to causes beyond either party's control,
including the consequences of the Modification or the OGS System testing, then
in any such case either party shall, for the duration of any such causes, be
relieved of its obligations to produce the part of the Goods and/or Work thereby
affected, but the provisions of this Contract shall remain fully valid with
regard to the development, integration, installation and testing of those parts
of the Goods and Work not affected by such causes.
(b) If either party at any time has reason to believe that the Period of
Performance will need to be extended by virtue of Force Majeure such as an act
of God or public enemy, governmental acts, including, without limitation, any
governmental, regulatory or administrative measures, including export control
license requirements, that impede, or otherwise delay, the performance of the
obligations of either party hereto, fire, flood, earthquake, landslide or other
damage to roads, epidemics, quarantine restrictions, strike, lockout, sabotage,
combination of workmen and freight embargoes, then the party so affected shall
promptly notify the other party within thirty (30) days of the occurrence of
such event and shall subsequently specify in writing the actual period of delay
so caused by the factor which was beyond its control, accompanied by appropriate
supporting evidence in the form of written statements and documentation.
(c) In the case of Force Majeure as stated above, both parties shall be
entitled to suspend execution of this Contract until such time the Force Majeure
no longer exists. In the event that such case occurs, each party shall properly
protect and secure the Goods currently under its possession and continue to do
so during the entire period of suspension. If such protection and securing of
the Goods is deemed impracticable by either party, such party shall promptly
notify the other party in writing stating in detail the reasons preventing such
security. Both parties agree to make reasonable commercial efforts in reaching
resolution to the matter
(d) In the event such Force Majeure results in a three (3) month
continuous delay, the parties hereby agree to review the terms and conditions
for performance under this Contract and mutually determine if the agreement
needs to be extended, amended or terminated in whole or in part. Any amendment
or modification hereof as a result of such Force Majeure shall be in writing by
mutual agreement of the parties.
GC-9 DEFAULT
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(a) CUSTOMER may, by written notice of default to ORBIMAGE, terminate
this Contract in whole or in part if ORBIMAGE:
(i) is delayed in schedule for more than six (6) months in the
performance of the Modification, for causes other than Force Majeure;
(ii) notifies CUSTOMER that it is unable or unwilling to complete
performance or deliver any of the Goods or Work required under this
Contract;
(iii) commits any substantial breach or fails to comply or observe
any article or provision set forth in this Contract; or
(iv) becomes insolvent, requests its creditors for a moratorium,
or files a voluntary petition in bankruptcy, or shall be adjudicated as
bankrupt pursuant to an involuntary petition.
(b) CUSTOMER's right to terminate this Contract may be exercised if
ORBIMAGE does not submit a formal correction plan within thirty (30) days after
receipt of such notice. Such correction plan must describe in detail ORBIMAGE's
recovery schedule and completely address all issues surrounding the potential
default. If, in the reasonable opinion of CUSTOMER, the correction plan is
deemed to substantially jeopardize the success of the project, and it defeats
the objectives of this Contract, CUSTOMER may terminate the contract in whole or
in part and ORBIMAGE is obligated to compensate CUSTOMER for all sums already
paid, for those Goods and Services so terminated.
(c) If the On-Site Acceptance Test(s) cannot be accomplished within four
(4) months from the scheduled On-Site Acceptance Test(s) date, including
installation and operation according to the Contract schedule which shall
necessarily include any extensions thereto pursuant to an amendment to the
Contract under GC-19 (Changes in Work), CUSTOMER shall have the right to return
in whole or in part, such Goods delivered but not installed or not operational.
CUSTOMER shall furthermore, as its complete and sole remedy under this GC-9,
have the right to recover all sums paid for the Goods so returned, except as
otherwise specifically provided in the Distribution Agreement.
(d) Any action taken by CUSTOMER under this GC-9 shall not effect
ORBIMAGE's right to dispute such action pursuant to GC-18 (Dispute Resolution
and Arbitration). If, after notice of termination for default has been issued by
CUSTOMER, it is determined by CUSTOMER that the notice was invalid in whole or
in part, or that the default was beyond the reasonable control of ORBIMAGE or
its authorized Subcontractor(s), such notice of termination shall be deemed to
have been issued pursuant to GC-19 (Changes and Extra Work) and both parties
hereby agree to negotiate an equitable adjustment for continuation of the Work
or a final settlement for termination without cause.
(e) ORBIMAGE and CUSTOMER hereby agree as follows:
(i) If either party (or such party's trustee in bankruptcy) is
permitted to terminate, and so terminates, that certain ORBIMAGE Distribution
Agreement of even date herewith between ORBIMAGE and CUSTOMER (the
"Distribution Agreement"), this Contract shall automatically
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terminate without any further action required by either party, effective as of
the termination date of the Distribution Agreement.
(ii) If either party (or such party's trustee in bankruptcy) is
permitted to terminate, and so terminates, this Contract, the Distribution
Agreement shall automatically terminate without any further action required by
either party, effective as of the termination date of this Contract.
(iii) If this Contract and the Distribution Agreement are
terminated pursuant to GC-9(e)(i) or GC-9(e)(ii) above, that certain ORBIMAGE
VAR Agreement of even date herewith between ORBIMAGE and Spot Image Corporation
(the "VAR Agreement"), CUSTOMER's wholly-owned U.S. subsidiary, shall
automatically terminate without any further action required by either party,
effective as of the termination date of said agreements.
(iv) ORBIMAGE and CUSTOMER agree that they shall each execute such
documents and take such actions as are required to effectuate the intent of this
GC-9.
GC-10 TRANSFER AND SUBLETTING
(a) ORBIMAGE shall not transfer, sell, sublet or otherwise dispose of
this Contract or any part hereof without the previous written consent of
CUSTOMER which shall not be unreasonably withheld, except that ORBIMAGE shall
have the right to assign or subcontract all or any part of the Work to a
wholly-owned subsidiary or affiliated company of ORBIMAGE, including, without
limitation, MacDonald Dettwiler, pursuant to a Subcontract. ORBIMAGE shall also
have the right, for the purpose of performing its duties under this Contract, to
undertake normal purchasing and subcontracting to acquire Goods and Services
necessary to complete the Work.
(b) ORBIMAGE shall not be relieved from any liability or obligation under
this Contract and ORBIMAGE shall be solely responsible for the acts, defaults
and neglects of any Subcontractor and its servants or agents as fully as if they
were the acts, defaults or neglects of ORBIMAGE. Nothing contained herein shall
be deemed to create any contractual relations or commitments between any
Subcontractor and CUSTOMER.
GC-11 TITLE TO GOODS AND SERVICES; RISK OF LOSS; LICENSED USE
(a) Except as may otherwise be provided herein, CUSTOMER shall acquire
title to all of the Goods and Services to be provided by ORBIMAGE in performance
of this Contract. ORBIMAGE warrants to CUSTOMER that it has good and marketable
title to all of such Goods and Services, and that they are and shall be free of
and from any claims, liens, charges or encumbrances of any kind. Title to such
Goods and Services shall pass to CUSTOMER upon receipt and acceptance at the
place or places designated herein as evidenced by its issue of an On-Site
Acceptance Certificate by CUSTOMER. Acceptance shall only be accomplished after
receipt, inspection and approval of the Goods and Services by CUSTOMER, and
CUSTOMER shall at all times have the right of inspection and be allowed a
reasonable time therefor. Until such title has passed to CUSTOMER, the risk of
loss
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to such Goods and Services shall at all times remain with ORBIMAGE or the
applicable Subcontractor.
(b) If any of the Goods and Services do not conform to the requirements
of this Contract, CUSTOMER may reject any or all of the Goods and Services. Any
approval by CUSTOMER of part of the Goods and Services shall not relieve
ORBIMAGE of its obligations under this Contract. Rejected goods may at the
option of CUSTOMER, be held for ORBIMAGE's disposition instructions or returned
to ORBIMAGE.
(c) With respect to those Goods and Services required to be delivered by
ORBIMAGE to CUSTOMER, but for which title shall not pass to CUSTOMER, consisting
of the Developed Items, Non-Development Items, Modified COTs, Modified NDI and
related documentation, ORBIMAGE shall grant CUSTOMER a sublicense to use such
Goods and Services solely as specifically set forth in GC-15. The sublicense
fees payable by CUSTOMER to ORBIMAGE for said sublicense are included in Exhibit
B (Price Schedule and Payment Terms), Contract Line Item 0001. With respect to
the Vendor Software (for which title shall not pass to CUSTOMER), CUSTOMER's
rights in such software shall be governed by the provisions of GC-14(b).
GC-12 SYSTEM SUPPORT SERVICES OPTION
(a) After the expiration of (i) the initial Warranty Period described in
GC-5(b) and GC-5(c), and, if CUSTOMER exercises its option to extend the
Warranty as described in GC-5(d), (ii) the extended Warranty Period, CUSTOMER
shall have a yearly option in each of the third (3rd) through fifth (5th) years
after OSAT to enter into a system support maintenance agreement with ORBIMAGE
pursuant to which ORBIMAGE would provide the services set forth in Sections
4.10.4, 4.10.5 and 4.10.6 of Exhibit C (SOW); provided, however, that CUSTOMER
must exercise its options (and the options set forth in GC-12(b) and (c)) in
consecutive years, it being understood that if it does not exercise its option
in any one year, its options for the remaining years shall automatically expire.
The price payable by CUSTOMER for each such contract is set forth on Exhibit B
(Price Schedule and Payment Terms). CUSTOMER must exercise each yearly option at
least one hundred twenty (120) days before the applicable OSAT anniversary date.
In addition, CUSTOMER may request ORBIMAGE to provide the services set forth in
Sections 4.10.1, 4.10.2 and 4.10.3 of Exhibit C (SOW). In such event, ORBIMAGE
shall use reasonable commercial efforts to obtain such additional services on
reasonable terms and conditions, subject to availability. If such additional
services are available, the parties shall agree in good faith within the
foregoing time period as to the pricing and exact services to be provided, and
such additional services shall be included in the applicable system support
services agreement.
(b) If CUSTOMER exercises its option to extend the term of the
Distribution Agreement for an additional two (2) years pursuant to Section 10(f)
thereof and CUSTOMER has entered into system support maintenance agreements in
the third (3rd) through fifth (5th) years after OSAT pursuant to GC-12(a) above,
CUSTOMER shall have a yearly option during such extended term to enter into a
system support maintenance agreement with ORBIMAGE for the
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post-Warranty maintenance of the OGS System during such extended term as
provided in GC-12(a).
(c) If CUSTOMER exercises its option to extend the term of the
Distribution Agreement for an additional three (3) years pursuant to Section
10(f) thereof and CUSTOMER has entered into system support maintenance
agreements in the sixth (6th) and seventh (7th) years after OSAT pursuant to
GC-12(b) above, CUSTOMER shall have a yearly option during such extended term to
enter into a system support maintenance agreement with ORBIMAGE for the
post-Warranty maintenance of the OGS System during such extended term as
provided in GC-12(a).
GC-13 INDEMNITY FOR PATENT INFRINGEMENT
(a) Subject to the limitations set forth in this GC-13, ORBIMAGE agrees
to indemnify and hold harmless CUSTOMER from and against all claims, demands,
complaints, actions and liabilities resulting or arising from any claim of any
third party (not including any affiliates of CUSTOMER) based on the allegation
that the Goods or Services provided by ORBIMAGE hereunder infringe any U.S. or
non-U.S. patent, trademark, trade secret or copyright of a third party, provided
that CUSTOMER (A) gives ORBIMAGE prompt written notice of any such claims, (B)
allows ORBIMAGE to direct the defense and settlement of the claims, provided
that the terms of any such settlement shall have been approved by CUSTOMER,
which consent shall not be unreasonably withheld, and (C) provides ORBIMAGE with
the information and assistance reasonably necessary for the defense and
settlement of the claim, at no cost to CUSTOMER. All costs of such defense and
the amount of any judgment, award or settlement that may result therefrom, shall
be the sole responsibility of and shall be paid by ORBIMAGE. Notwithstanding the
foregoing, CUSTOMER shall have the right, at its sole expense, to appoint its
own counsel to participate in such defense. In such event, ORBIMAGE shall
instruct the counsel retained by ORBIMAGE to defend CUSTOMER to cooperate with
CUSTOMER's designated counsel. This indemnification obligation shall survive the
expiration or termination of this Contract for a period of two (2) years. If a
final injunction is obtained in an action based on any such claim against
CUSTOMER use of the Goods and/or Services by reason of such infringement, or if
in ORBIMAGE's opinion such an injunction is likely to be obtained, ORBIMAGE may,
at its sole option, either (X) obtain for CUSTOMER the right to continue using
the Goods and/or Services, or (Y) replace or modify the Goods and/or Services so
that they become noninfringing.
(b) Notwithstanding GC-13(a), ORBIMAGE shall not be liable to CUSTOMER
for any claim of infringement to the extent that such claim arises from or is
based upon (i) the use of any Goods and/or Services by CUSTOMER in violation of
this Contract or with equipment, data or programming not supplied by ORBIMAGE,
(ii) any alteration or modification of the Goods and/or Services by CUSTOMER, or
(iii) any CUSTOMER provided designs or specifications.
GC-14 INTELLECTUAL PROPERTY RIGHTS
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(a) ORBIMAGE or its applicable Subcontractors shall have ownership and
unrestricted rights in all Developed Items, Modified COTS (excluding Vendor
Software) and Modified NDI developed under this Contract and the Non-Development
Items. Upon payment in full of the Contract price as set forth in Exhibit B,
ORBIMAGE shall grant, or shall cause its applicable Subcontractor to grant,
CUSTOMER a non-exclusive sublicense to use such Developed Items, Modified COTS
(excluding Vendor Software) and Modified NDI developed under this Contract and
the Non-Development Items, and all supporting documentation, solely for
OrbView-3 and OrbView-4 data reception, recording, archiving, cataloging,
ordering and product generation for the panchromatic and multispectral sensors
on the OrbView-3 and OrbView-4 satellites during the term of that certain
ORBIMAGE Distribution Agreement dated as of July 31, 1999 between ORBIMAGE and
CUSTOMER (the "Distribution Agreement"). The term of the sublicense shall
automatically terminate upon the expiration of the term or the termination of
the Distribution Agreement for any reason without any further action required of
ORBIMAGE or CUSTOMER. Upon such expiration or any termination thereof, CUSTOMER
shall promptly return to ORBIMAGE, and shall make no copies of, all any
Developed Items, Modified COTS and Modified NDI developed under this Contract
and the Non-Development Items for which a sublicense was granted to CUSTOMER
pursuant to this GC-14.
(b) Any Vendor Software furnished by ORBIMAGE shall be in accordance with
the vendor's standard license for such items, except that ORBIMAGE shall make,
at the request and expense of CUSTOMER, reasonable efforts to negotiate the
terms and conditions of any such licenses where it is deemed to be in the best
interests of the project to do so.
(c) Copyright in and title to Developed Items, Modified COTS, Modified
NDI, Non-Development Items and Vendor Software at all times remains vested
exclusively in ORBIMAGE or, as applicable, a Subcontractor or any third party
licensor.
GC-15 PERMITS AND LICENSES
(a) ORBIMAGE shall obtain and maintain all registration licenses and
permits outside of the Destination Country, including United States export
licenses for the OGS System and other U.S. licenses or permits necessary for the
operation and use of the OGS System.
(b) CUSTOMER shall obtain and maintain all registration licenses,
frequency authorizations, and permits inside of the Destination Country
necessary for the operation and use of the OGS System. CUSTOMER shall assist
ORBIMAGE in obtaining all visas and/or work permits in the Destination Country
necessary or convenient for the performance of On-Site Work. CUSTOMER shall also
provide all reasonable support required by ORBIMAGE to secure and maintain
export permits, including, without limitation, the Customer Certificate if
required for the OGS System.
(c) ORBIMAGE shall assist CUSTOMER in obtaining visas and permits for
CUSTOMER personnel who are required to visit the United States, Canada or any
other country outside of the Destination Country for training and OGS System
tests.
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GC-16 WAIVER
Waiver by either party hereto of the strict performance of any term,
condition, covenant, or agreement in the Contract shall not of itself constitute
a waiver of or abrogate such term, condition, covenant or agreement, nor be a
waiver of any subsequent breach of same, or any other term, condition, covenant
or agreement.
GC-17 CONFIDENTIAL INFORMATION
In the course of performing their respective obligations hereunder, each
of CUSTOMER and ORBIMAGE may receive proprietary information of the other party
which will be nonpublic and confidential ("Confidential Information and
Industrial Property"). Each of CUSTOMER and ORBIMAGE agrees that (i) it shall
keep the Confidential Information and Industrial Property of the other in
strictest confidence using at least the same degree of care as it uses to
protect its own proprietary and confidential information and in no event less
than a reasonable degree of care under the circumstances; (ii) it shall not
disclose any Confidential Information and Industrial Property of the other to
any person or entity, except its employees who need to know such information for
the performance of their duties in connection with this Agreement and who have
agreed in writing prior to receipt of such Confidential Information and
Industrial Property to receive such information under terms at least as
restrictive as those set forth in this Agreement; and (iii) it shall not use the
Confidential Information and Industrial Property for any purpose other than as
permitted by this Agreement. For purposes of this Contract, "Confidential
Information and Industrial Property" shall include, without limitation,
information or property falling within the scope of ORBIMAGE's or CUSTOMER's, as
the case may be, patents, copyright, trade secrets, technical data, know-how or
business information conveyed in written, graphic or other permanent tangible
form; or if conveyed orally, if promptly reduced to a permanent tangible form
and shall also include all information received by ORBIMAGE or CUSTOMER, as the
case may be, under an obligation of secrecy or confidentiality, but shall not
include information that (A) is generally available to the public at the time of
disclosure; (B) after disclosure becomes generally available to the public,
other than as a result of a disclosure to the public in breach of this
Agreement; (C) is lawfully obtained by the receiving party on a non-confidential
basis from a source other than the disclosing party prior to its receipt of the
Confidential Information and Industrial Property from the disclosing party; or
(D) is independently developed by employees or other representatives of the
receiving party.
GC-18 DISPUTE RESOLUTION AND ARBITRATION
(a) Dispute Resolution. ORBIMAGE and CUSTOMER agree that if any
controversy, claim or dispute (a "Dispute") arises from time to time between the
parties in respect of this Agreement or either party's performance hereunder,
then the following course of action shall be initiated in order to amicably
resolve such Dispute: Either party may notify the other party of the Dispute,
which notice shall describe the Dispute in reasonable detail. Promptly after the
other party's receipt of said notice, a designated representative of each of the
parties shall attempt to amicably resolve the Dispute. If the designated
representatives are unable to resolve such Dispute within ten (10) days of the
other party's
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receipt of said notice, the Dispute shall be referred to a panel
consisting of a delegate from each party (the "Special Panel"), who shall be a
senior manager or vice president of the applicable party. The Special Panel
shall meet within five (5) days of the end of said 10-day period. If the Special
Panel is unable to resolve the Dispute within ten (10) days of the date on which
it first meets, or such longer period as may be mutually agreed, the dispute
shall be declared irreconcilable and will proceed to binding arbitration in
accordance with the procedures set forth in GC-18(b).
(b) Arbitration. The parties hereto agree that the sole and exclusive
method for resolving any Disputes which cannot be amicably settled by the
parties pursuant to GC-18(a) shall be by final and binding arbitration
administered by the American Arbitration Association ("AAA"), in accordance with
the International Arbitration Rules of the AAA then in effect, to the extent not
modified by this GC-18. The arbitral tribunal shall be composed of three (3)
arbitrators.
(i) If the Special Panel is unable to resolve the Dispute as described
in GC-18(a), the Special Panel shall initiate arbitration hereunder by
written notice to the AAA, which notice shall include the appointment of
each party's arbitrator. Such notice shall be sent to the AAA's
International Center located at 140 West 51st Street, New York, New York
10020-1203 within ten (10) days of the date on which the Dispute is
declared irreconcilable. Within ten (10) days of the appointment of the
second arbitrator, the two arbitrators shall appoint the third
arbitrator, who shall be expert in satellite remote sensing ground
systems and shall act as the chairman of the arbitral tribunal (the
"Chairman").
(ii) If the Special Panel fails to initiate arbitration as provided in
GC-18(b)(i), either party may commence arbitration hereunder by written
notice to the AAA (at the address above) and the other party, which
notice shall include the appointment of such party's arbitrator. The
other party shall appoint its arbitrator within ten (10) days of its
receipt of said notice. If such party fails to appoint its arbitrator
within such time period, the AAA shall appoint the second arbitrator.
Within fifteen (15) days of the appointment of the second arbitrator, the
two arbitrators shall appoint the third arbitrator who shall act as the
Chairman.
(iii) If the two arbitrators are unable to agree on the third arbitrator
within the specified time period in GC-18(b)(i) or GC-18(b)(ii), as
applicable, the AAA shall appoint the third arbitrator.
(iv) The arbitration shall be conducted in English and shall be held in
Washington, D.C. Judgment upon any award rendered by the arbitrators may
be entered in any U.S. or non-U.S. court having jurisdiction over the
matter. The parties agree that if it becomes necessary for any party to
enforce an arbitral award by a legal action or additional arbitration or
judicial methods, the party against whom an award is enforced shall pay
all reasonable costs and attorneys' fees incurred by the party seeking to
enforce the award.
(v) TO THE FULLEST EXTENT PERMITTED BY LAW, THE PARTIES WAIVE ALL
REQUIREMENTS AS TO PERSONAL JURISDICTION WITH RESPECT TO ANY JUDICIAL
ENFORCEMENT OF THE ARBITRATION AWARD OR ANY JUDICIAL PROCEEDING TO
ENFORCE THIS GC-18.
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(c) Continuing Obligations. Pending settlement of any Dispute under this
GC-18 and so long as CUSTOMER has paid all amounts owed hereunder, ORBIMAGE
shall proceed diligently with the performance of the Work, unless the CUSTOMER
delivers a notice of suspension or termination in accordance with the terms of
this Contract. Notwithstanding the foregoing, any Dispute regarding changes in
Work pursuant to this Contract must be resolved prior to any authorization to
proceed with such a change becoming effective.
(d) Injunctive Relief. Notwithstanding GC-18(a) and GC-18(b), each of
ORBIMAGE and CUSTOMER agrees that if it breaches the provisions of GC-17, the
non-breaching party would be irreparably injured and that the remedies available
under this GC-18 or at law for such breach would be inadequate. In such event,
each of ORBIMAGE and CUSTOMER agree that the non-breaching party shall be
entitled to temporary or other injunctive relief, including, without limitation,
specific performance, without necessity of proving monetary damages or posting a
bond, pending final resolution of the matter in accordance with this GC-18.
(e) Consolidation of Disputes. In the event that one or more Disputes
arise under each of this Contract and the Distribution Agreement, such disputes
shall be consolidated and addressed simultaneously under the dispute resolution
and arbitration procedures set forth in the Distribution Agreement.
Notwithstanding the foregoing, any such Dispute regarding changes in Work
pursuant to this Contract must be resolved prior to any authorization to proceed
with such a change becoming effective.
GC-19 CHANGES AND EXTRA WORK
(a) CUSTOMER may at any time direct in writing any change in the Work
within the general scope of this Contract.
(b) If at any time ORBIMAGE believes that other acts or omissions of
CUSTOMER constitute a change to the Work not identified as such, ORBIMAGE shall
notify CUSTOMER in writing within thirty (30) days. CUSTOMER will either issue a
change or determine that a change is not required and notify ORBIMAGE
accordingly.
(c) If any change or extra work direction causes an increase or decrease
in ORBIMAGE's costs, or the time required for the performance of Work under this
Contract, an equitable adjustment shall be made in the contract price or
schedule or both and in such other provisions of the Contract as may be
affected, and the Contract shall be modified in writing accordingly. Unless
otherwise directed by CUSTOMER, ORBIMAGE shall perform changes so that all
requirements of the Contract shall be met.
(d) Changes shall not include Work reasonably required to complete the
design, supply, installation and test of the OGS System in accordance with
standard engineering practices, which have been or reasonably should have been
anticipated and included in the original total estimated price.
(e) Any claim for an adjustment under this GC-19 must be asserted in
writing within
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forty-five (45) days following ORBIMAGE's receipt of a written change. Such
claim will include a complete and detailed calculation of costs and a revised
schedule in order to permit evaluation by CUSTOMER. At all times ORBIMAGE shall
keep accurate records of the actual costs of performing each change. A failure
to agree on an equitable adjustment shall be deemed to be a dispute within the
meaning of GC-18 (Dispute Resolution and Arbitration).
(f) When any adjustment to the contract price, schedule, performance or
any other provision has been agreed, a written amendment to the Contract shall
be prepared and executed by both parties.
GC-20 PURCHASER FURNISHED UTILITIES, FACILITIES, AND SERVICES
In addition to the items designated in Exhibit C (SOW), the CUSTOMER
shall provide the following for use by ORBIMAGE and its Subcontractors in
support of the installation and testing activities associated with furnishing
the OGS System:
(i) Buildings, building services and utilities suitable to
accommodate and support the operation of the OGS System within the
operating environment for each item of Equipment furnished as a part of
the OGS System.
(ii) All permits required by government authorities of the Site
whether local or otherwise, required to or necessary to allow any
installation or operations of the OGS System.
(iii) Unrestricted access to CUSTOMER's property on which the OGS
System is located, or is to be located, including the Site location of
the reception facility.
(iv) Supply of telephone lines, toilet facilities and the like to
support the installation works.
GC-21 DELIVERY, SECURITY INTEREST
(a) ORBIMAGE shall arrange shipping for and on behalf of the CUSTOMER, to
deliver the Goods to the CUSTOMER facility. The Goods will be shipped:
(i) if by Air Freight; delivery by a common carrier to CIP point;
and
(ii) if by Ocean Freight; delivery by a common carrier to CIF
point.
(b) The CUSTOMER as importer, shall effect custom clearance and pay all
import duties, withholding taxes, tariffs and any other taxes or duties
associated therewith. ORBIMAGE shall be responsible for all insurance and
transportation charges from port of entry (after customs clearances have
occurred) to the CUSTOMER's facilities.
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(c) Any demurrage arising from customs clearances shall be to the account
of CUSTOMER. Any demurrage resulting from improperly prepared shipping documents
on the part of the ORBIMAGE shall be to the account of ORBIMAGE.
(d) So long as there remains any unpaid amount by CUSTOMER to ORBIMAGE,
ORBIMAGE or its applicable Subcontractor shall retain title in the Equipment,
and the Equipment shall remain personal property. During such period, CUSTOMER
will not permit, allow, or suffer the attachment of any lien, charge or
encumbrance of any kind to the Equipment, nor so incorporate the Equipment in
real property that it loses its identity as personal property. CUSTOMER will
promptly pay when due all assessments, levies, fees, taxes, duties or other
charges against the Equipment or its use.
(e) Upon payment at shipping, CUSTOMER shall obtain a security interest
in the Equipment equal to the payment made by CUSTOMER but ORBIMAGE shall at all
times maintain full title, custody and control of such Equipment until title
shall pass pursuant to GC-11 (Title to Goods and Services; Risk of Loss;
Licensed Use).
GC-22 PACKING AND MARKING
(a) ORBIMAGE shall utilize best commercial practices in packing the
Equipment for overseas shipment so as to avoid damage during transit to
destination. ORBIMAGE shall comply with weight and size limitations for standard
air transport in accordance with IATA Regulations.
(b) The Goods shall be packed in durable wooden case(s) or in carton(s),
suitable for long distance ocean or airfreight transportation, as applicable,
and shall be able to survive storage and transport within a dry container,
vessel or building and normal handling during transport.
(c) At least thirty (30) days prior to Factory Acceptance Testing of the
OGS System, CUSTOMER shall provide ORBIMAGE with the shipping delivery address
for delivery of the OGS System, as well as the consignment address.
GC-23 TRANSPORTATION AND INSURANCE
(a) All transportation and shipping shall be conducted under the
provisions of Incoterms. When ready, all Equipment along with documents as
required by the Contract are to be delivered addressed to the shipping delivery
address provided by CUSTOMER pursuant to GC-22(c).
(b) The waybills issued by public common carrier are acceptable for
negotiation purposes. Insurance of the cargo to port of entry will be arranged
by ORBIMAGE. Handing over of the equipment will be advised by ORBIMAGE by
facsimile to CUSTOMER with full details of the waybill. Along with the
equipment, copies of the following documents will be handed over by ORBIMAGE to
the carrier:
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(i) Five (5) copies of the waybill;
(ii) Four (4) copies of ORBIMAGE's detached invoice with itemized
unit prices;
(iii) Four (4) copies of the Factory Acceptance Test Certificate
jointly issued by authorized Representatives of CUSTOMER and ORBIMAGE;
(iv) Five (5) copies of the packing list;
(v) Four (4) copies of the insurance policy; and
(vi) Two (2) copies of the cablegram advising CUSTOMER of shipping
arrangements.
ORBIMAGE shall provide CUSTOMER with an itemized packing list associated
with shipment at least fifteen (15) days in advance of the expected date of
shipment.
GC-24 TARIFFS, DUTIES AND TAXES
(a) Export tariffs, duties or other taxes or charges levied by the
current or future laws of any country outside of the Destination Country
concerning the export and shipment of the OGS System shall be paid by ORBIMAGE,
and ORBIMAGE shall not demand reimbursement from CUSTOMER for any such payments.
(b) Import tariffs, duties, or other taxes or charges levied by the
current or future laws of the Destination Country concerning the import and
shipment of the OGS System shall be paid by CUSTOMER, and CUSTOMER shall not
demand reimbursement from ORBIMAGE for any such payments.
(c) Intentionally Deleted.
(d) Equipment and Materials brought into the Destination Country by
ORBIMAGE or its Subcontractors for carrying out the Contract and to be
subsequently re-exported shall be exempted from import duties, levies or taxes.
For this purpose, ORBIMAGE shall submit to CUSTOMER the list of such necessary
Equipment and Materials before shipment and CUSTOMER shall give any assistance
required to obtain the aforementioned exemptions. Any deposits that need to be
lodged with the Government of the Destination Country to secure temporary
importation of ORBIMAGE's or its Subcontractor's Equipment or Materials shall be
provided by CUSTOMER.
(e) Any Equipment and Material brought into the Destination Country by
ORBIMAGE or its Subcontractors for carrying out the Contract, but thereafter
disposed of in the Destination Country to the CUSTOMER, shall be taxed at the
current Destination Country tariffs or duties to the CUSTOMER.
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GC-25 APPLICABLE LAW
This Contract and any and all claims, controversies or disputes arising
under this Agreement or related to the subject matter hereof shall be governed
by and construed in accordance with the laws of the Commonwealth of Virginia,
without giving effect to the conflict of law rules thereof or the Convention on
Contracts for the International Sale of Goods.
GC-26 SEVERABILITY; BINDING AGREEMENT
(a) If any part of this Contract shall be held unenforceable, the
remainder of this Contract will nevertheless remain in full force and effect.
(b) This Contract shall be binding upon the parties hereto and their
successors and permitted assigns.
GC-27 COMMUNICATIONS IN ENGLISH
The parties agree that all communications, notices or any written
material provided by ORBIMAGE to CUSTOMER or by CUSTOMER to ORBIMAGE under this
Agreement shall be in English.
GC-28 HEADINGS
Headings in this Contract are included for convenience of reference only
and shall not constitute a part of this Contract for any other purpose. The
appendixes, exhibits and schedules described in this Contract and attached
hereto are an integral part hereof and are incorporated herein by this
reference.
GC-29 ENTIRE AGREEMENT
This Contract and the Distribution Agreement, including the exhibits,
schedules and other attachments hereto and thereto, contain the entire
understanding between CUSTOMER and ORBIMAGE and supersedes all prior written and
oral understandings relating to the subject hereof. Any modification or
amendment of this Contract (including the attachments hereto) must be in writing
and signed by both parties.
GC-30 WAIVER OF SOVEREIGN IMMUNITY
Each party hereto (including any assignee or party assuming any rights or
obligations
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ORBITAL IMAGING CORPORATION
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<PAGE> 24
under this Contract) unconditionally and irrevocably:
(i) agrees that the execution, delivery and performance by it of
this Contract constitutes private and commercial acts rather than public
or governmental acts;
(ii) agrees that should any legal proceedings be brought against
it or its assets in relation to this Contract or any transaction
contemplated by this Contract no immunity (sovereign or otherwise) from
such legal proceedings shall be claimed by or on behalf of itself or with
respect to its assets, to the maximum extent permitted by law;
(iii) to the maximum extent permitted by law, waives any such
right of immunity (sovereign or otherwise) which it or its assets now has
or may acquire in the future; and
(iv) consents in respect of the enforcement of any judgment
against it in any such proceedings to the giving of any relief or the
issue of any process in connection with such proceedings including,
without limitation, to the maximum extent permitted by law, the making,
enforcement or execution against or in respect of any property whatsoever
(irrespective of its use or intended use) of any order or judgment which
may be made or given in such proceedings.
GC-31 PAYMENTS
All payments due and payable to ORBIMAGE hereunder shall be paid in U.S.
Dollars in immediately available funds to the bank account specified by ORBIMAGE
in writing.
GC-32 COUNTERPARTS
This Contract may be executed in two or more counterparts, each of which
shall be considered an original and all of which together shall constitute one
and the same instrument.
GC-33 RATIFICATION AND APPROVAL
Each of ORBIMAGE and CUSTOMER acknowledge and agree that this Contract
shall not enter into legal effect if (A) ORBIMAGE's Board of Directors does not
ratify and approve this Contract, the Distribution Agreement and the VAR
Agreement in accordance with Section 10(n)(i) of the Distribution Agreement; or
(B) CUSTOMER's Board of Directors does not ratify and approve the Distribution
Agreement and this Contract in accordance with Section 10(n)(i) of the
Distribution Agreement. In the event that the foregoing conditions have not been
satisfied, this Contract, the Distribution Agreement and the VAR Agreement shall
automatically terminate without any liability to either party and without any
further action being required of either party, as provided in Section 10(n)(i)
of the Distribution Agreement.
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EXHIBIT "B" - SPOT IMAGE OGS PRICE SCHEDULE AND PAYMENT TERMS
[*CONFIDENTIAL TREATMENT REQUESTED*]
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 26
CONTRACT NUMBER: OGS-SPOT-C-01-300
DOCUMENT NUMBER: OGS-SOW-01-300
EXHIBIT C
STATEMENT OF WORK
FOR THE
ORBIMAGE GROUND STATION (OGS)
UPGRADE
30 July 1999
[*CONFIDENTIAL TREATMENT REQUESTED*]
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 27
CONTRACT NUMBER: OGS-SPOT-C-01-300
DOCUMENT NUMBER: OGS-TS-01-300
EXHIBIT D
PRELIMINARY SPECIFICATION
FOR THE
SPOT GROUND STATION UPGRADE
[*CONFIDENTIAL TREATMENT REQUESTED*]
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 28
ORBVIEW HIGH RESOLUTION IMAGERY SYSTEM
DRAFT PRODUCT SPECIFICATIONS FOR SPOT
[*CONFIDENTIAL TREATMENT REQUESTED*]
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 29
EXHIBIT E
CONTRACT DATA REQUIREMENTS LIST (CDRL)
FOR THE ORBIMAGE GROUND STATION UPGRADE
[*CONFIDENTIAL TREATMENT REQUESTED*]
ORBITAL IMAGING CORPORATION
CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 1
EXHIBIT 10.25
ORBIMAGE VAR AGREEMENT
THIS ORBIMAGE VAR AGREEMENT is entered into as of August 4, 1999 by and
between Orbital Imaging Corporation, a Delaware corporation (herein called
"ORBIMAGE"), with offices at 21700 Atlantic Boulevard, Dulles, VA 20166 and SPOT
Image Corporation, a Delaware corporation (herein called "VAR"), with offices at
1897 Preston White Drive, Reston, VA 20191.
RECITALS
WHEREAS, ORBIMAGE generates and markets various geographical information
products; and
WHEREAS, VAR desires to use ORBIMAGE geographical information products in
the production of VAR Products (as defined below) and to become an ORBIMAGE
distributor for the resale of ORBIMAGE Products (as defined below); and
WHEREAS, ORBIMAGE wishes to license VAR to use ORBIMAGE Products (as
defined below) in the production of and sale of VAR Products and the resale of
ORBIMAGE Products.
NOW, THEREFORE, in consideration of the mutual undertakings reflected
herein, and for good and other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS
As used in this Agreement, each of the following capitalized terms shall
have the meanings set forth below, such meaning to be equally applicable both to
the singular and plural forms of the terms herein defined:
"Agreement" means this agreement, together with the Schedules hereto, as
the same may be modified, amended or supplemented from time to time.
"Customer" means a third party to whom VAR Products or ORBIMAGE Products
are provided and licensed by VAR, as an end user or a resale distributor of VAR
Products or ORBIMAGE Products.
"License" means the license for ORBIMAGE Products granted pursuant to
this Agreement.
"ORBIMAGE Product" means (1) the geographical information products listed
in Schedule 1, as that Schedule may be modified from time to time by ORBIMAGE,
and (ii) unless
ORBIMAGE CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 2
the context indicates otherwise, all updates, modifications, and corrections
generated by ORBIMAGE for such ORBIMAGE Products.
"VAR Product" shall mean products that are developed by VAR that are
derived from or incorporate ORBIMAGE Product.
Except when the context specifically refers to the transfer of ORBIMAGE
Product by ORBIMAGE to VAR for use in production of VAR Products, the terms
"sale" and "resale" and any grammatical variant thereof shall include, without
limitation, sales, contracts for sale, conditional sales, installment sales,
rentals or leases, licensing, and any other arrangement whereby ORBIMAGE
Products are placed at the disposal and licensed for the use of the Customer.
"Territory" shall mean the United States of America.
2. PROVISION OF ORBIMAGE PRODUCT
A. ORBIMAGE agrees to provide ORBIMAGE Products to VAR under the
terms of this Agreement, as ordered by VAR from time to time.
B. Each order for ORBIMAGE Product shall be made by a separate order
form signed by an authorized VAR representative referencing this Agreement and
specifying the ORBIMAGE Product ordered, the specific use of the ORBIMAGE
Product (i.e., use in VAR Product or for resale on the terms and conditions set
forth in Schedule 4 hereto), the quantity, and the payment terms (based on the
published list price as described in Section 2D or royalty arrangement, if
applicable). No purchase order shall be binding on ORBIMAGE until accepted in
writing by a duly authorized officer or employee of ORBIMAGE. ORBIMAGE may
refuse to accept purchase orders in its commercially reasonable discretion.
C. VAR's orders shall be subject to such reasonable allocation as, in
the sole judgment of ORBIMAGE, may be necessary or equitable in the event of any
shortages of ORBIMAGE Products at any time. VAR may cancel orders without
penalty in the event that ORBIMAGE fails to meet the delivery schedule for the
ORBIMAGE Product published by ORBIMAGE from time to time. ORBIMAGE may cancel
orders at any time without liability to VAR if it is unable to deliver ORBIMAGE
Product due to technical or other problems with the OrbView-3 and 4 satellites
and related systems or any U.S. Government requirements pursuant to ORBIMAGE's
U.S. Department of Commerce license to operate said satellites.
D. Prices, specifications and delivery schedules for ORBIMAGE Product
shall be published on ORBIMAGE "ORBIMAGE.com" web site from time to time.
ORBIMAGE shall have the right to change its list prices, specifications and
delivery schedules for, or discontinue any, ORBIMAGE Products with thirty (30)
day advance written notice to VAR without incurring any liability to VAR
whatsoever.
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<PAGE> 3
E. VAR agrees that ORBIMAGE shall be VAR's preferred supplier of (i)
panchromatic satellite imagery with resolution equal to or better than two (2)
meters and (ii) multispectral satellite imagery with resolution equal to or
better than four (4) meters. VAR shall be deemed to have fulfilled its
obligations under this Article 2(E) if, before purchasing any such satellite
imagery from any other provider, VAR shall have given ORBIMAGE the reasonable
opportunity to sell the same to VAR, it being understood that VAR shall be free
to exercise its commercially reasonable discretion in determining whether to
purchase the same from ORBIMAGE or such other provider.
3. LICENSE TO CREATE AND DISTRIBUTE VAR PRODUCTS
A. Subject to payment of fees in accordance with this Agreement and
during the term hereof, ORBIMAGE grants VAR a nontransferable, non-exclusive
license to use ORBIMAGE Products solely for generation of and incorporation or
merger into VAR Products for sale to Customers ("Permitted Use"), so long as VAR
does not exceed the Permitted Use.
B. Under the Permitted Use, VAR may specifically:
i. Reformat the ORBIMAGE Product into formats or media
different from those in which it is delivered to VAR; and
ii. Make one (1) copy of the ORBIMAGE Product solely for its
internal archival or backup purposes.
C. VAR shall conduct its business in the development and resale of
VAR Products as a principal for its own account and at its own expense and risk.
This Agreement does not in any way create the relationship of principal and
agent, or any similar relationship, between ORBIMAGE and VAR.
D. Except for the rights and licenses expressly granted the VAR by
ORBIMAGE under this Agreement, all rights, title and interests in and to the
ORBIMAGE Products (whether or not incorporated into the VAR Products) shall
remain the sole and exclusive property of ORBIMAGE. The VAR Products shall be
the sole and exclusive property of the VAR, except for the rights of ORBIMAGE
with respect to the ORBIMAGE Products which are incorporated or merged therein.
4. LIMITS ON LICENSE; PROHIBITED ACTS.
3
ORBIMAGE CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 4
A. VAR recognizes and agrees that ORBIMAGE Products are the property
of ORBIMAGE, contain valuable assets and proprietary information of ORBIMAGE,
and are provided to VAR on a confidential basis. VAR expressly acknowledges and
agrees that, notwithstanding any possession of ORBIMAGE Product provided to it
under this Agreement, it shall have no ownership rights in any intellectual
property underlying or contained in such ORBIMAGE Product. VAR agrees not to,
and shall not, do any of the following without ORBIMAGE's written permission:
i. Copy or reproduce any ORBIMAGE Product other than as
consistent with the Permitted Use.
ii. Rent, disclose, publish, sell, assign, lease, market, or
transfer any ORBIMAGE Product except as permitted under Section 3.A.,
above, or use it in any manner not authorized by this Agreement.
iii. Alter or remove any copyright notice or proprietary legend
contained in or on any ORBIMAGE Product.
5. SUBLICENSES
A. In each sale or other disposition or transfer of VAR Product, VAR
shall grant sub-licenses for ORBIMAGE Product that is incorporated or merged
into such VAR Product solely on the following terms and conditions:
i. If the Customer is an end user, VAR shall grant the
Customer a sublicense solely for internal use.; or
ii. If the Customer is a VAR Product distributor, the VAR
distributor shall be permitted to sell the VAR Product to (A) another
VAR Product distributor, or (B) a Customer described in the preceding
paragraph, whose end user sublicense shall be limited solely to internal
use.
iii. The terms of the sublicenses for Customers who are end
users may be perpetual or have such shorter terms as VAR shall determine
in its sole discretion.
B. VAR shall cause each sublicense to explicitly prohibit the
Customer from decompiling, disassembling, or reverse engineering a VAR Product
that results in Customer extracting the ORBIMAGE Product from the VAR Product.
6. EXCEEDING APPLICATION; ASSURANCES.
VAR will, from time to time and as requested by ORBIMAGE, provide
assurances to
4
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<PAGE> 5
ORBIMAGE that it is using ORBIMAGE Products consistently with the Permitted Use,
and VAR grants ORBIMAGE access, at reasonable times and in a reasonable manner,
to ORBIMAGE Products in VAR's hands, and to VAR's books, records and facilities
to permit ORBIMAGE to verify appropriate use of ORBIMAGE Products. In the event
VAR's use of any ORBIMAGE Product exceeds the Permitted Use, such use shall be
considered a breach hereof and ORBIMAGE shall be entitled to terminate this
Agreement pursuant to Article 12 hereof and to seek such other remedies as are
permitted by law.
7. FEES
A. For each ORBIMAGE Product ordered by VAR under this Agreement, VAR
shall pay ORBIMAGE the listed price in effect at the time of order, less any
applicable discounts as set forth in Schedule 2. By payment of this fee, VAR
shall be entitled to distribute one (1) VAR Product or one ORBIMAGE Product
without paying any additional fees or royalties.
B. For each ORBIMAGE Product acquired by VAR under this Agreement
that is (i) incorporated into multiple VAR Products, or (ii) incorporated into a
VAR Product that is then copied and resold, then VAR shall pay ORBIMAGE
royalties on the sales of such VAR Products on such terms and conditions as the
parties shall mutually agree. If ORBIMAGE and the VAR are unable to negotiate a
mutually agreeable royalty arrangement with respect to a particular VAR Product,
then VAR shall pay ORBIMAGE the listed price (with the appropriate discount) for
the ORBIMAGE Product incorporated into such VAR Product times the number of
sales of such VAR Product.
C. For purposes of any royalty arrangements based on gross revenues
negotiated by the parties, "gross revenues" shall be calculated using amounts
invoiced by VAR (and its sub-distributors), whether these amounts are collected
or not. Gross revenues shall be adjusted by permitted product returns and
warranty claims. Gross revenues shall exclude all sales or use or other taxes,
assessments, fees, and shipping and handling costs that VAR (or its
subdistributor) may collect from its Customers.
D. ORBIMAGE shall invoice VAR for ORBIMAGE Product ordered at the
time ORBIMAGE Product is delivered pursuant to Section 7.A above and VAR shall
pay ORBIMAGE based upon standard Net 45 day terms. With respect to royalty
amounts, within twenty business days after the end of each calendar month, VAR
shall advise ORBIMAGE in writing by submitting a monthly sales report for the
previous period. Such sales report shall accurately detail the VAR's calculation
of the total gross revenues for the period and include all other information
pertaining to the royalty calculation. The VAR shall include royalty payment as
required herein with the submission of the monthly sales report. In the event of
royalty payment discrepancies, ORBIMAGE will invoice VAR, and VAR agrees to pay
for any royalty amounts due as a result in errors identified in the sales
report. Likewise, ORBIMAGE shall credit VAR in the event of VAR's overpayments
identified as a result of errors to the sales report. In the event VAR does not
provide ORBIMAGE with the foregoing information, and fails to comply within a
5
ORBIMAGE CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 6
reasonable period of time with a request by ORBIMAGE for such information, then
this inaction shall be considered a breach of contract subject to the provisions
of Article 12 of this Agreement.
E. All amounts due but remaining unpaid after payment is due shall
bear interest until paid at the rate equal to the prime rate announced by Morgan
Guarantee Trust Company of New York during the period of nonpayment plus 2% per
annum.
F. VAR grants ORBIMAGE access at reasonable times and in a reasonable
manner, to VAR's books, records and facilities to permit ORBIMAGE to verify
amounts owed under this Agreement. VAR shall require any sub-distributor to
grant ORBIMAGE similar access.
G. This Section 7 shall survive termination of this Agreement.
8. LIMITED WARRANTY; LIMITATION OF LIABILITY
A. ORBIMAGE warrants that the ORBIMAGE Product will, for ninety (90)
days from the date of shipment, be free from defects in media and substantially
conform to ORBIMAGE's specifications when used on appropriate computer hardware.
VAR must notify ORBIMAGE in writing, and return the ORBIMAGE product, within
ninety (90) days from the date of shipment of any warranty claims under this
Section 8(A). ORBIMAGE's sole obligation, and VAR's sole remedy, hereunder shall
be for ORBIMAGE, in its sole discretion, to (i) repair the applicable ORBIMAGE
Product so that it substantially conforms to the applicable product
specifications, (ii) replace the applicable ORBIMAGE Product, or (iii) refund
the amount paid by VAR for the applicable ORBIMAGE product, in each case, within
sixty (60) days of ORBIMAGE's receipt of the warranty claim. The limited
warranty set forth in this Section 8(A) is for the sole benefit of VAR and is
void if the claimed defect or non-conformity resulted from misuse, abuse,
misapplication or modification by VAR, VAR's VAR Product , VAR's ORBIMAGE
Product distributors, or the Customers.
B. ORBIMAGE further warrants that it holds sufficient rights in the
ORBIMAGE Product to grant the License, and that VAR will hold and use the
ORBIMAGE Products hereunder free of the claims by any third party that the
ORBIMAGE Product violates or infringes the United States patent, trademark or
copyright rights of such party, and ORBIMAGE will, at its expense and subject to
VAR's cooperation, defend, indemnify and hold VAR harmless in respect thereof.
PROVIDED, HOWEVER, that the foregoing warranty and indemnity does not apply to
patent, trademark or copyright claims to the extent they arise out of merger or
incorporation of the ORBIMAGE Products with or into other materials. Further,
if, because of such suit or claim, the ORBIMAGE Product is held to constitute an
infringement of any United States copyright or patent, and use of the ORBIMAGE
Product is thereby enjoined, ORBIMAGE shall, at its own option and expense,
either procure the right to continue using the ORBIMAGE Product or replace the
same with a non-infringing product substantially conforming to that described
herein, or modify the same so that it shall be non-infringing, or refund the
price paid for the ORBIMAGE Product. The foregoing states the entire liability
of ORBIMAGE in the event of infringement.
6
ORBIMAGE CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 7
C. VAR acknowledges that the ORBIMAGE Product is complex and may contain
some non-conformities, defects or errors. ORBIMAGE EXPRESSLY DISCLAIMS ALL
WARRANTIES, EXPRESS OR IMPLIED, NOT STATED HEREIN INCLUDING WITHOUT LIMITATION,
ANY WARRANTY AS TO THE ACCURACY OF THE DATA, MERCHANTABIITY OR FITNESS FOR A
PARTICULAR PURPOSE. Without limitation of the foregoing, ORBIMAGE does not
warrant to VAR that the ORBIMAGE Products will (i) meet VAR's expectations,
(ii) be free of non-conformities, defects or errors, or (iii) operate without
interruptions or delays.
9. DELIVERIES
Delivery of ORBIMAGE Products shall be F.O.B. ORBIMAGE's facility.
ORBIMAGE shall not thereafter be liable for transportation or for loss or damage
in transit. Claims for shortages or damages to shipments thereafter shall be
made against carrier by VAR.
10. REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
A. Each party represents and warrants to the other, the following:
i. Such party is duly organized and in good standing under the
laws of its jurisdiction of organization and in each other jurisdiction
where such organization or good standing is required for the performance
of this Agreement;
ii. Such party has the power, corporate or otherwise, to enter
into this Agreement and to perform its obligations hereunder, and the
execution, delivery and performance of the Agreement by such party has
been duly authorized by all necessary action;
iii. The Agreement has been duly executed and delivered by such
party and constitutes a legally valid and binding obligation of such
party, enforceable against such party in accordance with its terms; and
iv. Such party's entry into and performance under this Agreement
does not violate any law or regulation, judicial or executive order, or
contractual commitment by which such party is bound.
B. Each party hereby agrees to indemnify and hold harmless the other
party from and against any and all claims, damages and liabilities whatsoever,
asserted by any third party or entity, arising out of or relating to the
indemnifying party's performance under this Agreement.
11. DISTRIBUTORSHIP OF ORBIMAGE PRODUCTS
7
ORBIMAGE CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 8
Subject to the payment of fees in accordance with this Agreement,
ORBIMAGE hereby appoints VAR as an authorized distributor of ORBIMAGE Products
in the Territory on the terms and conditions set forth in Schedule 4 hereto.
12. TERM AND TERMINATION
A. Unless terminated as hereinafter provided, the term of this
Agreement shall run concurrently with the term (including any extensions) of
that certain Distribution Agreement of even date herewith (the "Non-U.S.
Agreement") between ORBIMAGE and SPOT Image, S.A. ("SPOT Image-France"), and
shall terminate automatically upon the expiration of the term or any termination
of the Non-U.S. Agreement. Termination of this Agreement as provided herein
shall automatically terminate all schedules hereto.
B. Intentionally Deleted.
C. Intentionally Deleted.
D. In the event a change in the control of ownership occurs with
respect to VAR, this Agreement shall be void and of no further force and effect
unless ORBIMAGE consents in writing to such change in control, which consent
shall not be unreasonably withheld. For purposes of this Agreement, a change in
the control of ownership shall be deemed to have occurred if SPOT Image-France,
shall:
i. cease to own, directly or indirectly, at least 51 percent of
the issued and outstanding shares of capital stock or other interests of
VAR entitled to vote generally for the election of directors or persons
performing similar functions, or
ii. not have the ability to elect a majority of the directors or
persons performing similar functions of VAR.
E. This Agreement shall terminate automatically, and without the
giving of notice in the event either party shall become insolvent, or shall ask
its creditors for a moratorium, or shall file a voluntary petition in
bankruptcy, or shall be adjudicated as a bankrupt pursuant to an involuntary
petition, or shall suffer appointment of a temporary or permanent receiver,
trustee, or custodian for all or a substantial part of its assets who shall not
be discharged within thirty days.
F. Notwithstanding any other provision of this Article, either party
may terminate this Agreement for failure by the other party to perform or adhere
to any of its obligations under this Agreement, if such failure shall remain
uncured for a period of thirty (30) days after receipt by the other Party of
written notice thereof. If such failure is not cured, or such cure does not
commence, within thirty days of such notice, the non-breaching party may
terminate this Agreement with immediate effect by written notice to the other
party.
8
ORBIMAGE CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 9
G. Upon termination of this Agreement:
i. the License granted under Article 3 shall also
terminate, provided, however, that VAR shall retain rights and
obligations as stipulated herein, for a period of one year from the
effective date of termination, to continue use of ORBIMAGE Products for
incorporation into VAR Products, provided VAR continues to make payment
of royalties to ORBIMAGE as required herein. Following such one year
period, such rights granted to VAR shall cease and VAR shall have no
further rights to the use of ORBIMAGE Products for incorporation into
VAR Products. At this time, VAR shall promptly return all copies of
ORBIMAGE Products held in its possession to ORBIMAGE.
ii. the Distributorship License granted under Article 11
shall immediately terminate and VAR shall promptly return all copies of
ORBIMAGE Products held in its possession to ORBIMAGE.
H. Neither Party shall by reason of the termination or non-renewal of
this Agreement be liable to the other for compensation, reimbursement or damages
on account of the loss of prospective profits, or anticipated sales or on
account of expenditures, investments, leases, property improvements or
commitments in connection with the business or good will of either Party, or
otherwise.
I. Each of ORBIMAGE and VAR acknowledge and agree that this Agreement
shall not enter into legal effect if (A) ORBIMAGE's Board of Directors does not
ratify and approve this Agreement, the Non-U.S. Agreement and the Ground Station
Contract of even date herewith between ORBIMAGE and SPOT Image-France (the
"Ground Station Contract") in accordance with Section 10(n)(i) of the Non-U.S.
Agreement; or (B) SPOT Image-France's Board of Directors does not ratify and
approve the Non-U.S. Agreement and the Ground Station Contract in accordance
with Section 10(n)(i) of the Non-U.S. Agreement. In the event that the foregoing
conditions have not been satisfied, this Agreement, the Non-U.S. Agreement and
the Ground Station Contract shall automatically terminate without any liability
to either party and without any further action being required of either party,
as provided in Section 10(n)(i) of the Non-U.S. Agreement.
13. NOTICES
All notices, requests, demands, directions and other communications
provided for hereunder shall be in writing and shall be sufficient (and shall be
deemed to have been duly given or made upon receipt) if delivered in person, by
courier service, by telecopier, or by registered or certified mail (postage
prepaid, return receipt requested) to the attention and address of the Party
intended as the recipient thereof. The point of contact and address of both
Parties are set forth below:
Notices to ORBIMAGE shall be sent to:
9
ORBIMAGE CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 10
Orbital Imaging Corporation
21700 Atlantic Blvd.
Dulles, VA 20166
Attn: Clark R. Rolf, Contracts Manager
(703) 404-8061 (fax)
Notices to VAR shall be sent to:
SPOT Image Corporation
1897 Preston White Drive
Reston, VA 20191-4368
Attn: Corporate Secretary
(703) 648-1813 (fax)
14. DISPUTE RESOLUTION
A. The parties agree that they will use reasonable efforts to resolve
any claim, dispute or controversy arising out of or in connection with or
relating to this Agreement or the breach or alleged breach thereof. If, after
thirty days from the date one party gives notice to the other of such claim,
dispute or controversy, the parties are unable to resolve any such claim,
dispute or controversy, either party may submit it to binding arbitration (and
give notice to the other party of such submission) under the rules of the
American Arbitration Association in Washington, District of Columbia, before a
single arbitrator agreeable to both parties. If the parties cannot agree on a
designee within four weeks after arbitration is requested in writing, the
arbitration shall proceed before a single arbitrator appointed by the American
Arbitration Association. The award shall be rendered in such form that judgment
may be entered thereon in any court having jurisdiction thereof.
B. ANY ACTION FOR AN ALLEGED BREACH OF THIS AGREEMENT MUST BE
COMMENCED WITHIN ONE YEAR AFTER THE CAUSE OF ACTION ACCRUES.
15. APPLICABLE LAW
This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Virginia, excluding its conflict of laws rules. Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
16. EXPORT
10
ORBIMAGE CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 11
VAR shall be responsible for compliance with all laws and regulations
governing transactions with foreign entities, including, but not limited to,
obtaining requisite export licenses for ORBIMAGE Products and VAR Products.
17. GOVERNMENT RIGHTS
For any sales to the U.S. Government of ORBIMAGE Products or VAR
Products, VAR shall take all measures necessary to ensure that the Government
obtains only "restricted rights" (as defined in applicable federal procurement
regulations) in such products.
18. CONFIDENTIALITY
The parties agree with respect to this Agreement, including the terms
contained herein, that it constitutes confidential information the disclosure of
which would be adverse to the business interests of each party; that neither
party shall disclose it in whole or in part to any third party; and that each
party shall protect it with the same standard of care it protects its own
confidential or proprietary information, but in no event with less than a
commercially reasonable standard of care.
19. MISCELLANEOUS
A. IN NO EVENT WILL EITHER ORBIMAGE OR VAR BE LIABLE TO EACH OTHER OR
ANY THIRD PARTY FOR ANY INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES
(INCLUDING LOSS OF PROFITS) EVEN IF ORBIMAGE OR VAR, AS THE CASE MAY BE, HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EXCEPT AS PROVIDED IN ARTICLES
8(B) AND 10(B), ORBIMAGE'S ENTIRE LIABILITY TO VAR HEREUNDER SHALL BE LIMITED IN
THE AGGREGATE TO VAR'S DIRECT DAMAGES, NOT TO EXCEED THE AMOUNT OF THE LICENSE
FEES VAR PAID FOR THE ORBIMAGE PRODUCT.
B. This Agreement supersedes all prior or contemporaneous agreements,
representations, warranties and understandings and contains the entire agreement
between the Parties hereto.
C. No amendment, modification, termination, or waiver of any
provision of this Agreement, except for Schedule 1 as described in the
definition of "ORBIMAGE Product," nor consent to any departure therefrom, shall
in any event be effective unless the same shall be in writing and signed by duly
authorized representatives of each Party hereto, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
11
ORBIMAGE CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 12
D. VAR shall not have the right to assign this Agreement in whole or
in part without the prior express written consent of ORBIMAGE, which shall not
be unreasonably withheld.
E. No notice to or demand on either Party in any case shall entitle
it to any other or further notice or demand in similar or other circumstances.
F. No failure or delay on the part of either Party in exercising any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy hereunder.
G. This Agreement may be executed in counterparts, each of which when
so executed and delivered shall be deemed to be an original and both of which
taken together shall constitute but one and the same instrument. Headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose.
12
ORBIMAGE CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 13
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed as of the date first above written.
ORBITAL IMAGING CORPORATION
By:
-------------------------------------
Name:
---------------------
Title:
---------------------
SPOT IMAGE CORPORATION
By:
-------------------------------------
Name:
---------------------
Title:
---------------------
13
ORBIMAGE CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 14
SCHEDULE 1
ORBIMAGE PRODUCT LIST
<TABLE>
<CAPTION>
ORBVIEW-2 PRODUCTS
Standard
Data Geographic File Retail
Product Layers Size Size Availability Price
---------------------------- ------------ --------------------- ------------- ----------------- ----------------
<S> <C> <C> <C> <C> <C>
Basic Data-Sets
Level-1A (HDF) 8 1,500 x 2,800 km 28 Mbytes 48 Hours $ 500 *
Level-1B (CEOS) 8 1,500 x 2,800 km 28 Mbytes 48 Hours $ 500 *
Level-2A (CEOS) 9 1,500 x 2,800 km 31 Mbytes 48 Hours $ 500 *
</TABLE>
* Price for single-user license only
Basic Data-Sets
If VAR wants to order individual images from the OrbView-2 satellite, ORBIMAGE
offers Basic Data-Sets for $500 per data-set with a single-user license. If VAR
requires a multi-agency license, ORBIMAGE offers Basic Data-Sets for $1,000 per
data-set. Each data-set comprises a coverage area of 1,500km x 2,800km and
includes imaging information from all eight channels of the OrbView-2 imaging
instrument. The Basic Data-Sets include both Level-1 data that has been
radiometrically calibrated for top-of-the-atmosphere radiances and Level-2 data
that has been atmospherically corrected over water areas. The OrbView-2 Basic
Data-Sets are compatible with standard image processing software packages.
ORBIMAGE also has a data format that is compatible with the SeaDAS
image-processing software package developed by NASA. Prices do not include sales
taxes or shipping fees.
14
ORBIMAGE CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 15
SCHEDULE 1
ORBIMAGE PRODUCT LIST
<TABLE>
<CAPTION>
ORBVIEW-3 PRODUCTS
Basic Imagery Products Enhanced Imagery Products
-------------------------------------------- -------------------------------------------------
<S> <C>
1. Basic Data-Sets 4. Digital Elevation Data
1.1 Fast Delivery 4.1 Digital Surface Models
1.2 Medium Accuracy Low, Medium, High Accuracy
1.3 High Accuracy 4.2 Digital Elevation Models
1.4 Very High Accuracy Low, Medium, High Accuracy
2. Precision Data-Sets 5. Thematic Maps
2.1 Fast Delivery 5.1 Vegetation Stress Maps
2.2 Medium Accuracy 5.2 Biomass Maps
2.3 High Accuracy 5.3 Land Cover Maps
2.4 Very High Accuracy
2.5 Coarse Mosaic 6. Feature Maps
6.1 Topo 1
3. Orthoimages 6.2 Topo 2
3.1 Standard 6.3 Engineering
3.2 Seamless Mosaic
ARCHIVED IMAGERY PRODUCTS
--------------------------------------------
1. 1m Pan Ortho City Mosaics
</TABLE>
15
ORBIMAGE CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 16
SCHEDULE 2
Discount
[*CONFIDENTIAL TREATMENT REQUESTED*]
16
ORBIMAGE CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 17
SCHEDULE 3
Intentionally deleted
17
ORBIMAGE CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 18
SCHEDULE 4
Distributorship Terms and Conditions
This Schedule 4 sets forth the terms and conditions under which VAR is
entitled to distribute ORBIMAGE Products pursuant to Section 11 of this
Agreement. Except as otherwise expressly provided in this Schedule 4, all of the
other terms and conditions set forth in the Agreement shall apply to VAR's
distribution of ORBIMAGE Products pursuant to Section 11.
1. During the term hereof ORBIMAGE hereby appoints VAR and VAR hereby
accepts such appointment to become an authorized distributor of ORBIMAGE
Products to Customers in the Territory. Subject to the payment of fees in
accordance with this Agreement and during the term hereof, ORBIMAGE grants VAR a
nontransferable, non-exclusive license to promote, market, sell, sublicense or
otherwise resell ORBIMAGE Products to Customers within the Territory.
2. VAR covenants and warrants that it will not act or represent
itself directly or by implication as agent for ORBIMAGE and will not attempt to
create any obligation, or make any representation, on behalf of or in the name
of ORBIMAGE.
3. VAR shall have the authority to appoint an associate distributor
or subdistributor of ORBIMAGE Products, subject to the prior express written
consent of ORBIMAGE; provided, however, if ORBIMAGE does not deny consent to
such appointment within 30 days after its receipt of VAR's request for consent
such consent shall be deemed to have been given.
4. Intentionally Deleted.
5. VAR will establish, staff, equip and maintain facilities for the
sale of ORBIMAGE Products in the Territory. Such facilities shall be sufficient
to enable VAR to satisfy properly its sales responsibilities under this
Agreement. VAR's conduct and such facilities shall be consistent with promoting
the reputation of, and public confidence in, ORBIMAGE Products and ORBIMAGE. VAR
will cause its suitably trained and professional employees to call in a
businesslike manner upon Customers and potential Customers at appropriate
intervals.
6. ORBIMAGE may share in the expense of local advertising or
promotion by VAR or other sales promotion projects subject to an express
agreement in writing by the parties.
7. VAR may use ORBIMAGE's name, trademarks, and trade names (and any
mark or name closely resembling the same) now or hereafter owned or licensed by
ORBIMAGE related to the ORBIMAGE products ("ORBIMAGE Trademarks") solely for
purposes related to this Agreement in a manner which promotes the sale of
ORBIMAGE Products. VAR shall deliver to ORBIMAGE for its prior approval, which
shall not be unreasonably withheld, copies of all marketing and promotional
materials VAR proposes to use from time to time which use or incorporate any
ORBIMAGE Trademarks, and all changes and revisions thereto. ORBIMAGE shall be
deemed to have approved any such material if it has not objected to such
material within
18
ORBIMAGE CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 19
thirty (30) days after its receipt thereof. VAR's use of the ORBIMAGE Trademarks
shall comply with the requirements of this Agreement and such commercially
reasonable standards as ORBIMAGE shall specify in writing from time to time. VAR
is not authorized to use any such trademark or trade name outside VAR's
Territory nor as a part of VAR's trade style or corporate name.
8. VAR will keep records of its business relating to sale of ORBIMAGE
Products. From time to time during regular business hours, ORBIMAGE or its
authorized representatives may examine such records and VAR's accounts relating
to the sale of ORBIMAGE Products to confirm VAR's compliance with its
obligations hereunder.
9. The sale by ORBIMAGE to VAR of ORBIMAGE Products shall be subject
to the provisions of this Agreement. Any provision of any purchase order placed
by VAR which is inconsistent with any term of this Agreement shall be null and
void unless expressly accepted by ORBIMAGE in writing.
10. The prices of ORBIMAGE Products sold to VAR by ORBIMAGE for resale
shall be determined pursuant to Article 2.D of the Agreement, less ORBIMAGE's
discounts as set forth herein, plus such sums as are in reimbursement for any
taxes paid, or equivalent to any taxes described in Section 12 of this Schedule
4, except to the extent that VAR may provide proper exemption certificates.
11. Intentionally Deleted.
12. VAR shall pay all sales, use or similar taxes (but not income
taxes) which may be assessed or levied on ORBIMAGE by any national, state or
local government and any departments and subdivisions thereof in connection with
the purchase by VAR of ORBIMAGE Products.
13. Intentionally Deleted.
14. Intentionally Deleted.
15. CUSTOMER LICENSE FOR ORBIMAGE PRODUCTS
19
ORBIMAGE CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 20
VAR shall include the following terms as the grant of license in each
sale of ORBIMAGE Products to a Customer who will be an end user:
"A. LICENSE AND USE OF ORBIMAGE PRODUCT
i. Customer is granted a non-transferable, non-exclusive, fully
paid-up perpetual license to use the ORBIMAGE Products solely for
internal use ("Permitted Use"). The term of this license shall be
[determined by VAR], so long as Customer does not exceed the Permitted
Use. ORBIMAGE retains all ownership rights in the ORBIMAGE Products, and
under no circumstances shall this license or the delivery or use of
ORBIMAGE Products be deemed to constitute receipt by Customer of any such
rights.
ii. Under the Permitted Use, Customer may specifically:
a. Reformat the Product into formats or media different
from those in which it is delivered to Customer.
b. Make one copy of the Product for Customer's internal
archival or backup purposes.
B. LIMITS ON LICENSE. PROHIBITED ACTS.
Customer recognizes and agrees that the ORBIMAGE Product is property of
ORBIMAGE, contains valuable assets and proprietary information of ORBIMAGE, and
is provided to Customer on a confidential basis. Customer agrees not to, and
Customer shall not, do any of the following without ORBIMAGE's written
permission:
i. Copy or reproduce the ORBIMAGE Product other than as consistent
with the Permitted Use.
ii. Rent, disclose, publish, sell, assign, lease, sub license,
market, or transfer the ORBIMAGE Product or use it in any manner not
expressly authorized by this Agreement.
iii. Alter or remove any copyright notice or proprietary legend
contained in or on the Image Product.
iv. Use the ORBIMAGE Product to generate a new product, or
incorporate or merge it into another product, that is intended for sale.
v. Attempt to decompile, disassemble or reverse engineer the
ORBIMAGE Product.
20
ORBIMAGE CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 21
C. EXCEEDING APPLICATION.
Customer will, from time to time and as requested by VAR provide
assurances to VAR that it is using the ORBIMAGE Product consistent with the
Permitted Use, and Customer grants VAR access, at reasonable times and in
reasonable manner, to the ORBIMAGE Product in its hands, and to its books,
records and facilities to permit VAR to verify appropriate use of the ORBIMAGE
Product. However, non-exercise of this right by VAR, or its failure to discover
or object to any inappropriate use, shall not constitute its consent thereto or
waiver of its rights. In the event Customer's use of the ORBIMAGE Product
exceeds the Permitted Use, VAR/ORBIMAGE may, in addition any other remedies at
law: (a) demand return of the ORBIMAGE Product, (b) forbid and enjoin Customer's
further use of the ORBIMAGE Product, and/or (c) assess Customer the cost of
their inspection and enforcement efforts (including attorneys' fees)."
21
ORBIMAGE CONFIDENTIAL AND PROPRIETARY INFORMATION
<PAGE> 1
EXHIBIT 4.9
Execution Copy
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is entered into as of
the 26th day of October, 1999 by and among Orbital Sciences Corporation
("Orbital" or the "Purchaser") and Orbital Imaging Corporation, a Delaware
corporation (the "Company").
RECITALS:
A. WHEREAS, upon the terms and subject to the conditions set forth in
this Agreement, the Company proposes to issue and sell Common Shares (as defined
herein) to the Purchaser.
B. WHEREAS, upon the terms and subject to the conditions set forth in
this Agreement, the Purchaser desires to contribute capital to the Company in
exchange for the issuance to the Purchaser of Common Shares as set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, the parties hereby agree as
follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"Common Stock" means the common stock, par value $.01 per share, of
the Company, or any other capital stock of the Company into which such stock is
reclassified or reconstituted.
"Contractual Obligation" means as to any Person, any provision of any
security issued by such Person or any provision of any agreement, lease of real
or personal property, undertaking, contract, indenture, mortgage, deed of trust
or other instrument to which such Person is a party or by which it or any of its
property is bound, other than the Orbital Credit Facility.
"Governmental Authority" means the government of any nation, state,
city, locality or other political subdivision of any thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other entity
exercising public functions owned or controlled, through stock or capital
ownership or otherwise, by any of the foregoing.
"Orbital Credit Facility" means the Note Agreement dated June 1, 1995
between the Purchaser and Northwestern Mutual Life Insurance Co., as amended or
replaced.
"Person" means any individual, firm, corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
limited liability company, Governmental Authority or other entity of any kind,
and shall include any successor (by merger or otherwise) of such entity.
<PAGE> 2
"Procurement Agreement" means the Restated and Amended Orbimage System
Procurement Agreement dated as of December 31, 1998 between Orbital Sciences
Corporation and Orbital Imaging Corporation, as amended.
"RadarSat-2 Agreement means the RadarSat-2 License Agreement dated
December 31, 1998 among Purchaser, the Company and MacDonald, Dettwiler and
Associates ltd., as amended.
"Requirements of Law" means, as to any Person, the provisions of the
Certificate of Incorporation and By-laws or other organizational or governing
documents of such Person, and any law, treaty, rule, regulation, right,
privilege, qualification, license or franchise, order, judgment, or
determination, in each case, of an arbitrator or a court or other Governmental
Authority, in each case, applicable to or binding upon such Person or any of its
property (or to which such Person or any of its property is subject) or
applicable to any or all of the transactions contemplated by or referred to in
this Agreement.
"Stockholder Agreement" means the Amended and Restated Stockholders
Agreement dated February 25, 1998 among the Company and certain of its
stockholders
ARTICLE 2
AUTHORIZATION OF COMMON STOCK;
PURCHASE AND SALE OF COMMON STOCK
2.1 Common Stock. Purchaser hereby agrees to purchase from the Company
up to an aggregate of 2,500,000 shares of Common Stock (the "Common Shares") for
an aggregate purchase price of up to $25,000,000, on the terms and conditions
set forth herein.
2.2 Purchase and Sale of Common Shares.
(a) Purchase. Upon the terms and subject to the conditions herein
contained, at the Closing (as defined herein) on the Closing Date (as defined
herein), the Company agrees that it will issue and sell to the Purchaser, and
the Purchaser agrees that it will acquire and purchase from the Company, at
least 500,000 Common Shares. The purchase price of the Common Shares shall be
$10.00 per share (the "Per Share Purchase Price"). The Company shall not be
obligated to sell and the Purchaser shall not be obligated to purchase more than
an aggregate of 2,500,000 Common Shares.
(b) Closing. The closing of the sale to and purchase by the Purchaser
of the Common Shares referred to in Section 2.2 hereof (the "Closing") shall
occur no later than 20 business days after a Purchase Event (as defined herein)
(the "Closing Date"). At the Closing, (i) the Company shall deliver to the
Purchaser certificates evidencing the Common Shares being purchased by the
Purchaser as set forth in the Election Amount Notice (as defined herein) or as
otherwise specified in this Section 2.2(b), free and clear of any liens of any
nature whatsoever, other than those created by the certificate, registered in
the Purchaser's name, and (ii) the Purchaser shall deliver to the Company the
product of the Per Share Purchase Price and the amount of Common Shares the
Purchaser has elected to purchase (the "Purchase Price") pursuant to Section
2.2(c), by cashier's check or wire transfer of immediately available funds (a
"Cash Closing"). Notwithstanding the foregoing, in the event that the Purchaser
does not obtain on or before December 31, 1999 the necessary consents and
approvals under the Orbital Credit Facility to consummate the transactions
contemplated hereby, the Purchaser agrees that it shall not invoice the Company
for the first $25,000,000, in the aggregate, incurred on or after January 1,
2000 under the Procurement Agreement, and the RadarSat-2 Agreement (the "Orbital
Agreements"), until such time as the Purchaser has obtained the necessary
consents and approvals under the Orbital Credit Facility to consummate said
transactions; provided, however, that if the Purchaser has not obtained
2
<PAGE> 3
the necessary consents and approvals under the Orbital Credit Facility within
one (1) year of the earlier to occur of the date on which either the OrbView-3
or OrbView-4 satellite has completed on-orbit checkout and commenced business
operations, the Purchaser shall be entitled to thereafter invoice the Company
for all amounts which the Purchaser is then entitled to invoice the Company
under the Orbital Agreements and the Company shall pay such invoices pursuant to
the applicable Agreements, whereupon this Agreement shall terminate and nether
party shall have any obligation to the other hereunder. This Agreement
contemplates multiple Cash Closings and Closing Dates.
(c) Purchase Event. A "Purchase Event" shall mean any date upon which
the Company's outstanding balance of cash, cash equivalents and
available-for-sale securities ("Cash Balance") is less than $10,000,000. The
Company shall provide written notice to the Purchaser within 3 business days of
such event ("Purchase Event Notice"). Upon receipt of the Purchase Event Notice,
the Purchaser shall elect to purchase Common Shares in an amount not less than
500,000 shares and not more than an aggregate of 2,5000,000 shares (including
Common Shares previously purchased pursuant to this Agreement, if any) (the
"Election Amount Notice").. The Purchase shall provide the Election Amount
Notice to the Company within 5 business days of the receipt of the Purchase
Event Notice.
(d) Covenant to Obtain Consents. Orbital covenants and agrees with
ORBIMAGE that it shall use commercially reasonable efforts to obtain on or
before December 31, 1999, or as promptly thereafter as is practicable, the
necessary consents and approvals under the Orbital Credit Facility to consummate
the transactions contemplated hereby.
(e) Series A Preemptive Rights. To the extent that any holders of the
Company's Series A Preferred stock exercise their preemptive rights pursuant to
Section 4.1 of the Stockholders Agreement with respect to any Purchase Event,
the Purchaser's obligation to purchase Common Shares pursuant to Section 2.2(b)
shall be reduced proportionately.
ARTICLE 3
CONDITIONS TO THE OBLIGATION OF THE
PURCHASERS TO PURCHASE THE SECURITIES
The obligation of the Purchaser to purchase the Common Shares, to pay
the Purchase Price therefor and to perform any obligations hereunder on the
Closing Date (unless otherwise specified) shall be subject to the satisfaction
as determined by, or waiver by, the Purchaser of the following conditions on or
before the Closing Date:
3.1 Representations and Warranties. The representations and warranties
of the Company contained in Article 5 hereof shall be true and correct at and as
of the Closing Date as if made at and as of such date.
3.2 Compliance with Terms and Conditions of this Agreement. The
Company shall have duly and properly performed and complied with all of the
agreements, covenants, obligations and conditions set forth herein that are
required to be performed or complied with by the Company on or before the
Closing Date.
3.3 Delivery of Certificates Evidencing the Common Shares. The Company
shall have delivered to the Purchaser the certificates evidencing the Common
Shares as set forth in Section 2.2.
3.4 Closing Certificates. The Company shall have delivered to the
Purchaser a certificate executed by an authorized officer of the Company
certifying to such matters as the Purchasers may reasonably request, including
that the representations and warranties of the Company contained in
3
<PAGE> 4
the Agreement are true and correct on and as of the Closing Date, and that the
conditions set forth in this Section 3 to be satisfied by the Company have been
satisfied on and as of the Closing Date.
3.5 Purchase Permitted by Applicable Laws. The acquisition of and
payment for the Common Shares to be acquired by the Purchaser hereunder and the
consummation of the transactions contemplated by this Agreement shall not (a)
violate any Requirements of Law, (b) result in a material breach or default (i)
under any of the Contractual Obligations of the Company or (ii) under any order,
writ, judgment, injunction, decree, determination or award of any court,
arbitrator, or commission, board, bureau, agency or other governmental
instrumentality, or (c) result in, or require, the creation or imposition of any
lien, or the obligation to make any payment with respect to any lien, upon or
with respect to any of the property of the Company.
3.6 Consents and Approvals. All agreements, approvals, consents,
exemptions, authorizations, or other actions by, or notices to, or filings with,
Governmental Authorities and other Persons in respect of all Requirements of Law
and with respect to those material Contractual Obligations of the Company,
necessary or required in connection with the execution, delivery or performance
of this Agreement by the Company, shall have been obtained and be in full force
and effect, and the Purchaser shall have been furnished with appropriate
evidence thereof, and all waiting periods shall have lapsed without extension or
the imposition of any conditions or restrictions, except for filings which may
be made post-Closing under applicable Federal and state securities laws.
3.7 Certain Waivers. Each holder of the shares of the capital stock of
the Company (or any other party who may possess such rights) which possesses any
preemptive rights, rights of first refusal, "tag along" rights, rights of
co-sale or any similar rights with respect to the issuance of the Common Shares
contemplated hereby shall have waived all such rights.
ARTICLE 4
CONDITIONS TO THE
OBLIGATIONS OF THE COMPANY TO CLOSE
The obligation of the Company to issue and sell the Common Shares and
the other obligations of the Company hereunder, shall be subject to the
satisfaction as determined by, or waiver by, the Company of the following
conditions on or before the Closing Date:
4.1 Representations and Warranties. The representations and warranties
of the Purchasers contained in Article 6 hereof shall be true and correct at and
as of the Closing Date.
4.2 Compliance with Terms and Conditions of this Agreement. The
Purchaser shall have duly and properly performed and complied with all of the
agreements, obligations and conditions set forth herein that are required to be
performed or complied with by the Purchaser on or before the Closing Date.
4.3 Closing Certificates. The Purchaser shall have delivered to the
Company a certificate executed by an authorized officer certifying that the
representations and warranties contained in Section 6 of this Agreement are true
and correct on and as of the Closing Date, and that the conditions set forth in
this Section 4 to be satisfied have been satisfied on and as of the Closing
Date.
4.4 Issuance Permitted by Applicable Laws. The issuance of the Common
Shares by the Company hereunder and the consummation of the transactions
contemplated by this Agreement shall not (a) violate any Requirements of Law, or
(b) result in a material breach or default (i) under any of the Contractual
Obligations of the Purchaser, or (ii) under any order, writ, judgment,
injunction, decree,
4
<PAGE> 5
determination or award of any court, arbitrator, or commission, board, bureau,
agency or other governmental instrumentality, or (c) require any consents,
approvals, exemptions, authorizations, registrations, declarations or filings by
the Purchaser which have not been made or obtained.
4.5 Payment of Purchase Price or Amendment. The Purchaser shall tender
to the Company the Purchase Price set forth in Section 2.2.
4.6 Consents and Approvals. All agreements, approvals consents,
exemptions, authorizations, or other actions by, or notices to, or filings with,
Governmental Authorities and other Persons in respect of all Requirements of Law
and with respect to those material Contractual Obligations of the Purchaser;
necessary or required in connection with the execution, delivery or performance
of this Agreement by the Purchaser, shall have been obtained and be in full
force and effect, and the Company shall have been furnished with appropriate
evidence thereof as requested by the Company and all waiting periods shall have
lapsed without extension or imposition of any conditions or restrictions.
ARTICLE 5
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser as of the
date hereof as follows:
5.1 Corporate Existence and Authority. The Company (a) is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, (b) has all requisite corporate power and authority to
own and operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently, or is currently proposed to be
engaged, (c) is duly qualified as a foreign corporation, licensed and in good
standing in each jurisdiction in which such qualification is necessary under
applicable law as a result of the conduct of its business or the ownership of
its properties, and (d) has the corporate power and authority to execute,
deliver and perform its obligations under this Agreement.
5.2 Corporate Authorization; No Contravention. The execution, delivery
and performance by the Company of this Agreement and the consummation of the
transactions contemplated hereby, including without limitation, the issuance of
the Common Shares (a) has been duly authorized by all necessary corporate
action, including, if required, stockholder action, (b) does not and will not
conflict with or contravene the terms of the Certificate of Incorporation or the
By-Laws of the Company, or any amendment thereof; and (c) does not and will not
violate, conflict with or result in any material breach or contravention of (i)
any Contractual Obligation of the Company, or (ii) any Requirements of Law
applicable to the Company.
5.3 Governmental Authorization; Third Party Consents. Except for the
notice to the holders of the Company's Series A Preferred Stock required by
Section 4.1 of the Stockholder Agreement, no approval, consent, compliance,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person in respect of any applicable
Requirements of Law, and no lapse of a waiting period under any applicable
Requirements of Law, is necessary or required in connection with the execution,
delivery or performance by the Company or the enforcement against the Company of
this Agreement, or the transactions contemplated thereby, except as have been
obtained, made or filed and except for filings which may be made post-Closing
under applicable Federal and state securities laws.
5
<PAGE> 6
5.4 Due Issuance. The Common Shares shall be issued to the Purchaser
free and clear of any and all liens, and shall be validly issued, fully paid and
non-assessable.
ARTICLE 6
REPRESENTATIONS AND
WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company as of the
date hereof as follows:
6.1 Existence and Authority. The Purchaser (a) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation or a natural person, (b) has all requisite
corporate power and authority, if applicable, to own its assets and operate its
business, and (c) has all requisite corporate power and authority, if
applicable, to execute, deliver and perform its obligations under this
Agreement.
6.2 Authorization; No Contravention. The execution, delivery and
performance by the Purchaser of this Agreement to which it is a party and the
consummation of the transactions contemplated thereby, including, without
limitation, the acquisition of the Common Shares: (a) is within the Purchaser's
corporate power and authority and has been duly authorized by all necessary
corporate action on the part of the Purchaser, if applicable; (b) does not
conflict with or contravene the terms of the Purchaser's certificate of
incorporation or bylaws or any amendment thereof, if applicable; and (c) except
for the Orbital Credit Facility, will not violate, conflict with or result in
any material breach or contravention of (i) any Contractual Obligation of the
Purchaser, or (ii) the Requirements of Law or any order or decree applicable to
the Purchaser. The Purchaser hereby covenants and agrees with the Company that
it shall not after the date hereof enter into any new Contractual Obligations
with any Person which would prevent it from performing the transactions
contemplated by this Agreement.
6.3 Purchase for Own Account. The Common Shares will be acquired by
the Purchaser for its own account and with no intention of distributing or
reselling such securities or any part thereof in any transaction that would be
in violation of the securities laws of the United States of America, or any
state. The Purchaser agrees to the imprinting, so long as required by law, of a
legend on certificates representing all of the Common Shares to the following
effect:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF
SUCH ACT OR SUCH LAWS.
THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO THE RESTRICTIONS, INCLUDING RESTRICTIONS ON OWNERSHIP BY FOREIGN
PERSONS, SET FORTH IN THAT CERTAIN AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
DATED DECEMBER 31, 1998 AMONG ORBITAL IMAGING CORPORATION, ORBITAL SCIENCES
CORPORATION AND CERTAIN STOCKHOLDERS, COPIES OF WHICH ARE AVAILABLE FOR
INSPECTION AT THE OFFICES OF ORBITAL IMAGING CORPORATION, AND SUCH SECURITIES
MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH THE TERMS AND CONDITIONS OF SAID
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT."
6
<PAGE> 7
ARTICLE 7
MISCELLANEOUS
7.1 Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of the parties
hereto. Neither the Company nor the Purchaser may assign any of its respective
rights under this Agreement without the written consent of the other party. No
Person other than the parties hereto and their successors and permitted assigns
is intended to be a beneficiary of any of this Agreement.
7.2 Amendment and Waiver. Any amendment, supplement or modification of
or to any provision of this Agreement, any waiver of any provision of this
Agreement, and any consent to any departure by any party from the terms of any
provision of this Agreement, shall be effective (i) only if it is made or given
in writing and signed by the Company and the Purchaser, and (ii) only in the
specific instance and for the specific purpose for which made or given. Except
where notice is specifically required by this Agreement, no notice to or demand
on any party in any case shall entitle any party hereto to any other or further
notice or demand in similar or other circumstances.
7.3 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
7.4 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
7.5 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without regard to the
principles of conflicts of law of such state.
7.6 Jurisdiction. Each party to this Agreement hereby irrevocably
agrees that any legal action or proceeding arising out of or relating to this
Agreement or any agreements or transactions contemplated hereby shall be brought
in the courts of the State of New York or of the United States of America for
the Southern District of New York and hereby expressly submits to the personal
jurisdiction and venue of such courts for the purposes thereof and expressly
waives any claim of improper venue and any claim that such courts are an
inconvenient forum.
7.7 Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provision or
provisions held invalid, illegal or unenforceable shall substantially impair the
remaining provisions hereof.
7.8 Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and therein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
herein or therein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
7
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BLANK. SIGNATURES FOLLOW ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement or caused this Agreement to be duly executed and
delivered by their respective officers or authorized representatives, as the
case may be, thereunto duly authorized as of the date first above written.
ORBITAL SCIENCES CORPORATION
By:
----------------------------------
Name:
-------------------------------
Title:
-------------------------------
ORBITAL IMAGING CORPORATION
By
----------------------------------
Name:
-----------------------------
Title:
-----------------------------
<PAGE> 1
EXHIBIT 10.26
AMENDMENT NO. 2 TO
RADARSAT-2 LICENSE AGREEMENT
This Amendment No. 2 to RadarSat-2 Master Agreement is entered into
as of October 26, 1999 by and among ORBITAL SCIENCES CORPORATION, a Delaware
corporation ("Orbital"), its wholly owned subsidiary, MACDONALD, DETTWILER AND
ASSOCIATES LTD., a Canadian corporation ("MDA"), and ORBITAL IMAGING
CORPORATION, a Delaware corporation ("ORBIMAGE").
WHEREAS Orbital, MDA and ORBIMAGE have entered into that certain
RadarSat-2 License Agreement as of December 31, 1998, as amended by Amendment
No. 1 dated April 1, 1999 (as amended, the "Original Agreement"), which
agreement the parties now desire to amend.
WHEREAS, Orbital and MDA have entered into a letter agreement
regarding the mechanism for the payment of intercompany obligations including
such obligations arising in connection with the Original Agreement; and
WHEREAS, the parties desire to amend the Original Agreement in order
to clarify the payment mechanisms under the Original Agreement and to revise
certain payment terms relating to the License Fee due in 2000.
NOW, THEREFORE, in consideration of the agreements and covenants
contained herein, the parties hereto agree as follows:
References to MDA in the sentences described elow shall be deleted
and the word Orbital substituted in its place:
1. Payment Terms
Notwithstanding anything in the Original Agreement to the contrary,
the parties acknowledge and agree that payments due under the Original Agreement
shall be paid by ORBIMAGE to Orbital, and that Orbital and MDA shall reconcile
amounts owing between them in connection with Radarsat-2.
2. Specific Amendments
(a) Amendment to Section 7.5.2.
The second sentence of Section 7.5.2 is deleted in its
entirety with the following language substituted in its place:
"Furthermore, if a launch vehicle has not been selected
by June 30, 2000, then ORBIMAGE shall also be entitled
to a refund of $7,500,000 in the form of a credit
against future License Fee installments, and the total
aggregate License Fee shall be adjusted downward
accordingly."
<PAGE> 2
(b) Payment of 2000 License Fee Installment.
ORBIMAGE agrees to pay to Orbital the License Fee
installment that would have been due in 2000 as set forth on Schedule 1.4 of the
Original Agreement, and Orbital and MDA acknowledge and agree that no additional
installments of the License Fee shall be owed by ORBIMAGE until 2001.
3. Miscellaneous.
The Original Agreement, as amended by this Amendment No. 2, contains
the entire understanding among MDA, ORBIMAGE and Orbital and supersede all prior
written and oral understandings relating to the subject hereof. All other
provisions of the Original Agreement, as amended, shall remain in full force and
effect.
2
<PAGE> 3
IN WITNESS WHEREOF, the parties have caused this Amendment No. 2 to
be executed as of the day and year first written above.
MACDONALD, DETTWILER AND ASSOCIATES LTD.
By:
-------------------------------------
Name:
Title:
ORBITAL SCIENCES CORPORATION
By:
-------------------------------------
Name:
Title:
ORBITAL IMAGING CORPORATION
By: --------------------------------------
Name:
Title:
3
<PAGE> 1
EXHIBIT 10.27
AMENDMENT NO. 2 TO
AMENDED AND RESTATED
ORBIMAGE SYSTEM PROCUREMENT AGREEMENT
Amendment No. 2 (this "Amendment") is made and entered into as of this
15th day of September 1999 between Orbital Sciences Corporation, a Delaware
corporation ("Orbital"), and Orbital Imaging Corporation, a Delaware corporation
("OIC" or "ORBIMAGE").
WITNESSETH
WHEREAS, Orbital and OIC are parties to the Amended and Restated ORBIMAGE
System Procurement Agreement dated February 26, 1998, as amended by Amendment
No. 1 to Amended and Restated ORBIMAGE System Procurement Agreement dated
December 31, 1998 (the "Agreement"); and
WHEREAS, the parties desire to amend the Agreement as set forth below.
NOW, THEREFORE, the parties agree as follows:
SECTION 1. Amendment to Article 2.
(a) A new Section 2.4.2 is added as follows:
"Section 2.4.2. Provision of Distributor Image Tasking and Optimization
System. Orbital shall develop, deliver and test the Distributor Image
Tasking and Optimization System ("DITOS") in accordance with the Statement
of Work for Distributor Image Tasking and Optimization System and
Technical Specification for Distributor Image Tasking and Optimization
System (Exhibit C). For purposes of this Agreement, TADS shall be deemed
to include DITOS."
SECTION 2. Amendment to Article 3.
(a) Section 3.1 is amended to read in its entirety as follows:
"Section 3.1. The price for the work hereunder (collectively, the
"Price") is as follows:
[*CONFIDENTIAL TREATMENT REQUESTED*]
"
1
<PAGE> 2
SECTION 3. Amendments to Article 5.
(a) Section 5.4 is amended to add a last sentence as follows:
"Orbital shall submit separate invoices to OIC upon achieving, and OIC
acceptance of, such CLIN 011 milestones. Such invoices shall be paid
within 10 days of receipt of an acceptable invoice."
SECTION 4. Amendments to Article 6.
(a) A new Section 6.1 (e), (6) is added as follows:
(6) Full functionality for the DITOS shall be delivered and verified
no later than 60 days following OrbView-3 launch.
SECTION 5. Amendments to Article 13.
(a) Section 13.3 is amended to add a last sentence as follows:
"Notwithstanding the foregoing, OIC shall have the right and Orbital
hereby grants to OIC a perpetual, fully paid, worldwide license to
sublicense DITOS for the purpose of operating the OrbView-3 and OrbView-4
Satellites and related ground segments."
SECTION 6. Amendments to List of Exhibits and Schedules.
(a) Exhibit C is amended to add subparagraphs (d) and (e) as follows:
"(d) Statement of Work for Distributor Image Tasking and
Optimization System, dated August 19, 1999;
(e) Distributor Image Tasking and Optimization System Technical
Requirements Specification, dated August 19, 1999."
SECTION 7. Amendment to Exhibit F. Exhibit F is deleted in its entirety and
replaced with the attached Exhibit F, dated September 15, 1999.
2
<PAGE> 3
SECTION 8. Miscellaneous
(a) Capitalized terms not otherwise defined herein shall have the
meaning set forth in the Agreement.
(b) This Amendment may be executed in two or more counterparts, each
of which shall be considered an original and all of which together
shall constitute one and the same instrument.
(c) Except as expressly modified by this Amendment, all of the terms
and conditions set forth in the Agreement shall remain in full force
and effect.
IN WITNESS WHEREOF, the parties have caused this Amendment No. 2 to the
Amended and Restated ORBIMAGE System Procurement Agreement to be executed as of
the date first written above.
<TABLE>
<S> <C>
ORBITAL SCIENCES CORPORATION ORBITAL IMAGING CORPORATION
- ------------------------------ ------------------------------
Richard J Hampton Gilbert D. Rye
Senior Director, Contracts President and COO
</TABLE>
3
<PAGE> 4
EXHIBIT F
SEPTEMBER 15, 1999
PAYMENT SCHEDULE
($ IN THOUSANDS)
[*CONFIDENTIAL TREATMENT REQUESTED*]
4
<PAGE> 1
EXHIBIT 10.28
DATA LICENCE AND DISTRIBUTION AGREEMENT
Between:
RADARSAT INTERNATIONAL INC.,
a company incorporated under the laws of Canada
having its head office in Vancouver,
British Columbia, Canada
(hereinafter called "RSI")
OF THE FIRST PART
ORBIMAGE
company incorporated under the laws of U.S.A
having its head office in Dulles, Virginia,
U.S.A.
(hereinafter called "the Distributor")
OF THE SECOND PART
WHEREAS Canadian Space Agency ("CSA") put into polar orbit a remote sensing
satellite using synthetic aperture radar technology;
AND WHEREAS pursuant to and subject to the terms of a Master Licence
Agreement between RSI and the Canadian Space Agency and Her Majesty the Queen as
represented by Natural Resources Canada, RSI has, subject to the reservations
set out therein, received an exclusive, unrestricted, worldwide licence,
including the right to sublicence, distribute and market worldwide, RADARSAT-1
Data and Data Products to be Commercially Distributed in any form, on any media
and for any computer environment;
AND WHEREAS RSI has agreed to distribute and market RADARSAT-1 Data and
Data Products in a manner consistent with United Nations Resolution A/41/65 of
December 3, 1986 on "The Principles Relating to Remote Sensing of the Earth from
Space";
AND WHEREAS the Distributor wishes to obtain a sublicence for the
distribution of RADARSAT-1 Data and Data Products in the Territory;
NOW THEREFORE the parties agree as follows:
Page 1
<PAGE> 2
ARTICLE 1 - INTERPRETATION
In this Agreement, the following terms shall have the meanings set forth below:
1.1.1 "Agreement" means this Agreement as well as all schedules annexed
hereto which shall form part of this Agreement.
1.1.2 "Catalog" means all reference information of RADARSAT-1 Scenes
received by ground stations worldwide and compiled in the worldwide catalog
system in Canada.
1.1.3 "Commercially Distributed" means the sale or distribution of Data
or Data Products delivered to any person, under any conditions except Data and
Data Products distributed to NASA or NOAA pursuant to the IMOU, Her Majesty the
Queen pursuant to the Master Licence Agreement (including the Government of the
Provinces). Data and Data Products used by Distributor for any purpose including
the production of Value-Added Products shall be deemed to be commercially
distributed.
1.1.4 "Data" means all SAR data received from the RADARSAT-1 satellite
including SAR signal data and ephemeris data and on all media including
photographic and digital media.
1.1.5 "Data Products" means Data processed to include information such as
georeferencing, radiometric corrections and multilooking. These products include
but are not limited to:
SGF - Georeferenced fine resolution products generated in swath section
units.
SGC - Georeferenced coarse resolution products, generated from SGFs in
swath section units.
SSG - Systematically geocoded products generated for user specific
scenes.
SPG - Precision geocoded products generated for user specified scenes.
1.1.6 "DIP" means Derived Image Product. A DIP is a product which still
contains the pixel structure of the original RADARSAT-1 Data.
1.1.7 "Distributed" means any distribution of Data and Data Products to
any person and under any conditions.
1.1.8 "Ex-Works" Richmond, B.C. and/or Gatineau, Quebec, Canada (1990
I.C.C. Incoterms) means the Data or Data Products will be placed at the disposal
of the Distributor at RSI premises, and include standard packaging and marking,
unless otherwise stated. If transmitted by electronic device, Ex-Works Richmond
and/or Gatineau shall be input of the data stream to the equipment or facilities
of the common carrier.
1.1.9 "IMOU" means the International Memorandum of Understanding between
CSA, National Ocean and Atmospheric Administration and the National Aeronautics
and Space Administration concerning the RADARSAT-1 Satellite.
1.1.10 "Master Licence Agreement" means that agreement between Her Majesty
the Queen in Right of Canada, as represented by each of the Canadian Space
Agency and Natural
Page 2
<PAGE> 3
Resources Canada, and RSI, including any licences, sublicences and other
licences and agreements contemplated therein.
1.1.11 "Person" means an individual, company, partnership, trust or any
other entity or association including any national, regional or local government
authority or agency thereof.
1.1.12 "RADARSAT Mission Control System" (MCS) means CSA operated facility
located at Saint Hubert, Quebec for control and operation of the RADARSAT-1
Satellite.
1.1.13 "RADARSAT SAR" means the synthetic aperture radar instrument placed
on the RADARSAT-1 Satellite for the transmission of Data to ground receiving
stations.
1.1.14 "RADARSAT-1 Satellite" means the satellite using remote sensing
synthetic aperture radar technology placed into earth polar orbit and operated
by the CSA on behalf of the Government of Canada.
1.1.15 "Scene" means a set of Data which covers a region nominally ranging
from 50 km by 50 km in Fine beam mode to 500 km by 500 km in ScanSAR beam mode.
A Scene may vary in length depending upon the strip of imagery chosen along the
RADARSAT-1 Satellite path.
1.1.16 "Services" means Rush and Near-Real Time processing services,
programming services, orthorectification, and other services as defined by RSI
from time to time but excludes educational materials and brochures.
1.1.17 "Territory" means the country of United States of America
1.1.18 "Value-Added Products" means products derived at least partially
from Data that include a significant addition of other information. Included but
not limited to, are manually and digitally interpreted Data or Data Products,
such as Digital Terrain Models (DTMs) and Digital Elevation Models (DEMs).
ARTICLE 2 - GRANT OF DISTRIBUTORSHIP AND SUBLICENSE
NON-EXCLUSIVE DISTRIBUTORSHIP AND SUBLICENSE
2.1 Subject to the terms hereof, the rights reserved by the IMOU and the
Master Licence Agreement, RSI hereby appoints the Distributor as a non-exclusive
distributor and grants a non-exclusive sublicence for the term of this Agreement
for the sale and distribution pursuant to such sales of Data and Data Products
and associated Services in any form on any media and for any computer
environment in the Territory. Distributor's non-exclusive sublicense hereunder
shall entitle Distributor to sell Data and Data Products and associated Services
to any person in the Territory, including, without limitation, U.S. Government
military, defense and intelligence customers.
NON-DISCRIMINATION
2.2 Subject to the licence restrictions set out in Article 2.1, the
Distributor agrees to make the Data and Data Products and associated Services
available to all residents of the Territory on an open and non-discriminatory
basis consistent with United Nations Resolution A/41/65 of December 3, 1986 on
"The Principles Relating to the Remote Sensing of Earth from Space". No Data or
Data Products or associated Services shall be reserved for the exclusive use of
the Distributor or any particular client.
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TIME OF DISTRIBUTION
2.3 RSI shall ensure that in the absence of an event of Force Majeure, all
Data and Data Products ordered, unless otherwise stipulated in such order, shall
be distributed within ten (10) working days for normal delivery, forty-eight
(48) hours for Rush processing, and within four (4) hours of receipt at the
ground receiving station for Near-Real Time processing where available and
commercially feasible. In the event of a delay as a result of an occurrence of
Force Majeure, RSI shall promptly inform the Distributor of the delay and the
expected delivery date.
ARTICLE 3 - DISTRIBUTOR'S UNDERTAKINGS
SALE OF PRODUCTS
3.1 The Distributor, for itself and its agents, sub-distributors,
representatives and employees agrees to conduct any and all sales activities in
connection with the Data or Data Products or associated Services in a lawful
manner, consistent with the standards of fair trade, fair competition and
business ethics. The Distributor shall service in a competent and professional
manner the Data and Data Products and associated Services requirements of its
clients.
DISTRIBUTION
3.2 The Distributor will distribute Data and Data Products received by it in
such a manner as to satisfy requests for Data and Data Products in the
Territory. The Distributor shall place all Data and Data Product orders directly
and exclusively with RSI. The Distributor shall have no right to archive or
reproduce Data or Data Products and associated Services.
MARKETING EFFORTS
3.3 The Distributor agrees to use commercially reasonable efforts to
diligently and actively develop demand for the Data or Data Products or
associated Services and to solicit purchases thereof. The Distributor agrees to
annually provide RSI with a detailed Marketing and Business Plan in accordance
with Article 3.4.
MARKETING AND BUSINESS PLAN
3.4 The Distributor will provide, every year in advance, RSI with a Marketing
and Business Plan relative to the development of the market in the Territory to
be treated in a confidential manner, stating in particular:
(i) the number of actual (or expected for the first year) clients per
geographic region, and prospects in three categories: immediate prospects,
middle-term prospects and long-term prospects, identifying the main application
and beam mode;
(ii) the expected average number of Data Products to be sold per client and per
beam mode, for major clients;
(iii) the sales force team, dedicated to the marketing and sales of RADARSAT-1
Data and Data Products and associated Services with the area of responsibility
of each of the team members;
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(iv) its quarterly sales objectives on an annual basis. The minimum annual
sales amount to be achieved will be as per the figures detailed in the Marketing
and Business Plan required in Article 3.4. This will be revised each year.
(v) the actions to be taken with the Distributor to:
- present existing Data Products and Services to clients;
- identify clients' needs for new and existing Data Products and Services:
direct marketing including visits, mailings; and indirect marketing including
publications, news releases, conferences, seminars and advertisements;
(vi) the expected support from RSI in terms of:
- commercial or technical documentation;
- follow-up towards international funding agencies when applicable
- radar application experts (costs are borne by the Distributor or the
project)
- joint visits to clients when RSI personnel are in the area
DISTRIBUTOR MEETING
3.5 Once a year RSI will hold a Distributor's meeting. The Distributor will
send at least one member of its Sales Force to attend this meeting in Vancouver
at its own expense.
PERFORMANCE UNDERTAKING
3.6 The Distributor shall work with RSI to achieve sales of Data, Data
Products and associated Services in the Territory.
Failure to achieve these sales objectives could lead to:
(i) analysis by RSI and the Distributor of the reason(s) why the
Distributor has not reached the sales objective;
(ii) implementation by the Distributor of measures aimed at improving the
Distributor's sales volume; in particular RSI and the Distributor will attempt
to link Direct Marketing actions to identifiable RADARSAT projects.
(iii) termination of the contract as it constitutes a material breach for
the purposes of Article 11.1
NEW APPLICATIONS
3.7 The Distributor agrees to use commercially reasonable efforts in diligently
assisting RSI in the promotion of the use of Data and Data Products and
associated Services in the Territory. Distributor shall publicize RADARSAT-1
Data and Data Products and associated Services and potential applications of
such Data and Data Products and associated Services. The Distributor undertakes
to inform users of new products and new applications as developed. RSI and the
Distributor will cooperate as they see fit to inform users and potential users
within the Territory of Data and Data Products and associated Services, and of
new products and potential applications as developed.
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VALUE-ADDED PRODUCTS
3.8 To the extent that it is the Distributor's right to do so, the Distributor
may provide RSI during the term of its distributorship with the non-exclusive
right to distribute RADARSAT Value-Added Products created by that Distributor
and to receive such products for distribution on terms and conditions no less
favourable than comparable distributors (to the extent permitted by law,
regulation, the terms of a prime contract or confidentiality agreement).
RSI places no restriction on worldwide distribution of Value-Added Products
processed from RADARSAT-1 Data and Data Products. The original RADARSAT-1 Data
and Data Products from which the Value-Added Product is generated must be
delivered together with the said Value-Added Product to clients located outside
of the Territory provided that:
* RSI receives a written commitment from the final client that the
RADARSAT-1 Data or Data Products shall not be redistributed or resold to any
third party, and
* The Distributor shall not keep any copy of the said RADARSAT-1 Data or
Data Products
EXPENSES
3.9 Unless otherwise agreed, each party shall pay any and all of its costs and
expenses under this Agreement and shall be solely responsible for the acts and
expenses of its respective sub-distributors, employees, agents and
representatives.
SERVICING OF DATA AND DATA PRODUCTS
3.10 The Distributor shall be responsible for the adequate servicing of any
nature and character of any and all Data and Data Products sold to clients.
Should the Distributor desire RSI personnel to assist the Distributor's client,
RSI will, at the cost of the Distributor, provide upon request the required
assistance.
TRAINING
3.11 The Distributor agrees to ensure that its personnel will be familiar with
and adequately trained to ensure compliance with RSI and CSA objectives,
methods, documentation and procedures relating to Data acquisition and Data
Products distribution as communicated to the Distributor by RSI.
DERIVED IMAGE PRODUCT
3.12 RSI grants the Distributor the right to distribute in the Territory Derived
Image Products processed from RADARSAT-1 Data and Data Products. The original
RADARSAT-1 Data and Data Products from which the Derived Image Product is
generated must be delivered together with the said Derived Image Product to
clients located in the Territory.
The Distributor may provide RSI during the terms of its distributorship with
the non-exclusive right to distribute Derived Image Products generated from
RADARSAT-1 Data and Data Products and created by that Distributor. Distribution
terms and conditions will at least be comparable to Distributor's rights (to
the extent permitted by law, regulation, the terms of prime contract or
confidentiality agreement).
3.13 Royalties are applicable to all second and subsequent sales of Derived
Image Products generated from RADARSAT-1 Data and Data Products and created by
that Distributor. A royalty
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report shall be submitted on a calendar quarterly basis thirty (30) days after
the completion of a quarter.
ARTICLE 4 - LIST PRICE OF DATA, DATA PRODUCTS AND ASSOCIATED SERVICES AND
DISTRIBUTOR DISCOUNT
DETERMINATION OF PRICE
4.1 Data and Data Products and associated Services shall be sold to the
Distributor by RSI at wholesale prices, being RSI's List Price less such
distribution discounts as are communicated by RSI from time to time. In the case
of the Distributor, the distribution discount is fixed at [*CONFIDENTIAL
TREATMENT REQUESTED*] of RSI's List Price, subject to Article 6.1 and unless
otherwise agreed upon in writing.
Any change in the price of the Data or Data Products or associated Services
shall not affect orders by the Distributor that were accepted by RSI before the
price change was communicated.
4.2 Any discount directly negotiated by the Distributor to a client will be
borne by the Distributor except when otherwise agreed to by RSI in writing.
CURRENT PRICE
4.3 The current RSI Price List is attached hereto and incorporated herein by
this reference. The Price List is valid until modified by RSI.
REIMBURSEMENT FOR LABOUR OR MATERIAL REGARDING SPECIAL DELIVERY CONDITIONS
4.4 In the event that any labour or material is required to be supplied by RSI
in an effort to comply with any special delivery condition(s) requested by the
Distributor, any and all costs and expenses approved by the Distributor and
incurred by RSI for such labour or material shall be added to the invoice price
of the RADARSAT-1 Data Products involved.
ARTICLE 5 - ACCEPTANCE OF ORDERS AND SHIPMENT OF PRODUCTS
ACCEPTANCE
5.1 Subject to Articles 5.2, 5.3 and 7.1, RSI will be bound by any order for the
Data or Data Products and associated Services placed by the Distributor. Such
orders shall constitute a binding agreement for RSI to sell and ship, and for
the Distributor to purchase and tender payment for, the Data and Data Products
and associated Services specified under the terms and conditions of this
Agreement.
DATA AND DATA PRODUCTS SUPPLY
5.2 Subject to Article 7.1, RSI will use commercially reasonable efforts to
diligently supply ordered Data and Data Products and associated Services for the
duration of the Agreement under the normal operational capability of the
satellite. RSI agrees, subject to adequate collection and processing time being
made available by CSA, to deliver against orders sufficient Data and Data
Products and associated Services to meet the Distributor's requirements. The
Distributor acknowledges that Data acquisition is subject to the operational
requirements of CSA.
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INCONSISTENT TERMS IN AN ORDER
5.3 In the event that any terms or conditions contained in the Distributor's
order are inconsistent with the terms of this Agreement, such inconsistent terms
or conditions in the order shall not be binding on RSI.
TECHNICAL PERSONNEL
5.4 RSI will make available for such periods of time and under such conditions
as it may deem appropriate, the services of its technical personnel to consult
with and assist with the distribution of Data and Data Products and associated
Services.
SHIPPING OF THE PRODUCTS
5.5 RSI shall promptly ship to the Distributor the Data or Data Products set
forth in an accepted order to the Distributor, after RSI's acceptance of such an
order and payment therefor. It is understood and agreed that any and all
typographical and clerical errors contained in RSI's shipping documents shall be
subject to correction by RSI.
DISCHARGE OF RSI'S OBLIGATION
5.6 RSI's List Prices are given Ex-Works RSI's premises, Richmond, British
Columbia, or Gatineau, Quebec, Canada (1990 I.C.C. Incoterms). RSI will arrange,
at the Distributor's cost and upon the Distributor's request, shipping of the
Data or Data Products covering risk of loss and damages which could occur during
transportation. In case of loss or damages during shipment, RSI will replace the
Data or Data Products at no cost to the Distributor. RSI will accommodate
special shipping requirements where feasible and upon the Distributor's request.
ARTICLE 6 - PAYMENTS
6.1 All amounts from Data, Data Products and associated Services delivered shall
be due thirty (30) days from the date of RSI invoice by the Distributor in the
Territory. Any overdue sums are subject to interest charges at the rate of 1.5%
per month until payment is made. All payments due hereunder will be in U.S.
dollars.
TAXES
6.2 Payments required under this Agreement are to be net of all taxes, duties
and levies of any kind (including withholding taxes) that may be applicable in
the Territory. In the event that any taxes are imposed by any level of
government in the Territory on payments made under this Article, the Distributor
will add the amount of such taxes to the payments required hereunder.
PAYMENT OF DISTRIBUTOR'S DISCOUNT
6.3 Should RSI directly invoice the Distributor's client, at the Distributor's
request, then, upon receipt of the client's final payment and unless otherwise
agreed upon in writing, RSI will remit to the Distributor the Distributor's
discount of an amount equal to twenty five percent (25%) of the RSI List Price
of Data, Data Products and associated Services less the difference between the
List Price and the actual sale price.
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ARTICLE 7 - NO GUARANTEE
DATA SUPPLY
7.1 It is understood and agreed that because of the substantial elements of risk
relating to operation of the RADARSAT-1 Satellite and the RADARSAT SAR beyond
the control of the CSA, neither CSA nor RSI guarantees Data continuity, the
quality or the availability of Data or Data Products or their suitability for
any purpose. Availability of Data or Data Products shall be dependent upon the
operational capability of the RADARSAT SAR. Acceptance of an order by RSI shall
not constitute guarantee of delivery. The Distributor acknowledges and agrees
that the transmission of Data may be temporarily suspended on the space or
ground segments. In such case, the Distributor will be notified in writing of
such suspension and advised of projected resumption of transmission. The
Distributor acknowledges that Data acquisition is subject to the operational
requirements of CSA.
WARRANTY LIMITATION
7.2 Except as expressly stated in this Agreement, the Data and Data Products are
provided and sublicenced "as is" and there are no warranties, representations or
conditions expressed or implied, written or oral, arising by statute, operation
of law or otherwise regarding them or any other Data Products or Services
provided under this Agreement or in connection therewith. CSA and RSI disclaim
any implied warranty or condition of merchantable quality, merchantability,
durability or fitness for a particular purpose. No representation or other
affirmation of fact including but not limited to statements regarding
performance of the Data or Data Products which is not contained in this
Agreement shall be deemed to be a warranty by RSI or CSA. No agreements varying
or extending this warranty or the foregoing limitations will be binding on RSI
or CSA unless in writing and signed by an authorized officer of RSI in the case
of RSI or by an authorized representative of CSA in the case of CSA.
ARTICLE 8 - LIABILITY
EXCLUSIONS
8.1 In no event will RSI or CSA be liable for incidental, indirect, special or
consequential damages, any damages whatsoever resulting from loss of use of the
Data or Data Products, or loss of profits, arising out of or in connection with
this Agreement or the use or performance of the Data or Data Products or storage
material or other RSI or CSA provided material, whether in an action in contract
or tort, including but not limited to negligence.
LIMITATION
8.2 The aggregate liability of RSI or CSA shall not, in any event, including,
without limitation, negligence, breach of contract, misrepresentation or
otherwise, in respect of a single occurrence or a series of occurrences in any
circumstances, exceed the amount paid by the Distributor to RSI in respect of
the Scene(s) ordered, sold or distributed, which is the subject matter of the
action.
INDEMNITY
8.3 The Distributor shall indemnify and save harmless CSA and RSI against any
and all claims, demands, costs and liabilities (including legal fees and
expenses) of any kind whatsoever arising directly or indirectly by third parties
related to the provision or use of Data, Data Products,
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Derived Image Products and Value-Added Products, excluding claims based upon
breach of copyright of the Data and Data Products and Derived Image Products.
ARTICLE 9 - COPYRIGHT
CSA COPYRIGHT
9.1 All copyright in the Data, Data Products and Derived Image Products are and
remain vested in the CSA. In all distribution and sale of the licenced Data,
Data Products and Derived Image Products by the Distributor, other than
Value-Added Products, the Distributor will affirm CSA's copyright or will affix
CSA's copyright notice in the distribution and sale of such Data, Data Products
and Derived Image Products by the Distributor.
All media containing Data and Data Products delivered by RSI shall be clearly
marked by RSI prior to delivery to the Distributor or directly to clients of
the Distributor with the following legend:
RADARSAT-1 Data (C) Canadian Space Agency/Agence spatiale canadienne
19_(year of acquisition). Distributed under Licence by RADARSAT
International Inc.
END USER LICENCE
9.2 RSI shall provide to the Distributor the form of end user licence annexed as
Exhibit A to be used for the distribution and sale of the licenced Data and Data
Products or Derived Image Products by the Distributor. The Distributor shall not
amend the terms thereof without the prior agreement of RSI in writing. Terms of
sale to end users must specify that, except to the extent permitted by the end
user licence, the end user is acquiring Data, Data Products and Derived Image
Products for its own use and not for resale or redistribution directly to or to
prime contractors or subcontractors of any other tier for delivery in any other
format.
PACKAGING
9.3 The Parties shall clearly mark all packaging of licenced Data, Data Products
that are shipped, distributed or sold by either of them with the following
inscription: "Distributed under Licence by RADARSAT International Inc.".
OFFICIAL MARK AND LOGOS
9.4 The Distributor acknowledges and agrees that "RADARSAT" and the logos
associated therewith are official marks and the sole and exclusive property of
CSA under licence to RSI, while RSI and the logos associated therewith are
trademarks and the exclusive property of RSI and that the Distributor shall
neither have nor acquire any interest in the marks save and except for a right
to use in the manner expressly provided for in this Agreement.
ARTICLE 10 - INFRINGEMENT
COOPERATION
10.1 The Distributor shall cooperate fully and in good faith with RSI or CSA as
required for the purpose of securing and preserving CSA's rights in and to the
copyright of the Data, Data Products and Derived Image Products.
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NO ASSIGNMENT
10.2 Nothing contained in this Agreement shall be construed as an assignment to
the Distributor of any right, title, or interest in or to the copyright of the
Data, Data Products and Derived Image Products. All rights relating to the
copyright of the Data, Data Products and Derived Image Products are expressly
reserved by CSA, except for the licence expressly granted to RSI and the
sublicence expressly granted to the Distributor hereunder in respect of the
Data. The Distributor shall not at any time acquire any rights in such copyright
of Data, and Data Products by virtue of any use it may make of any of them. Upon
termination or expiration of the Agreement, the Distributor shall be deemed to
have assigned, transferred, and conveyed to CSA all rights in and to the
copyright of the Data, Data Products which may have been obtained by, or accrued
to or vested in the Distributor hereunder. The Distributor shall execute any and
all instruments reasonably requested by RSI or CSA to accomplish or confirm the
foregoing. Any such assignment, transfer, or conveyance shall be without any
consideration other than the mutual covenants and considerations of this
Agreement.
NO ATTACK
10.3 The Distributor acknowledges CSA's exclusive right, title, interest and
benefit in and to the copyright of the Data, Data Products and Derived Image
Products in all countries of the world and shall not, at any time while a
sublicencee hereunder do or cause to be done any act or thing to dispute,
contest, attack, impair or tend to impair, any part of such right, title,
interest or benefit. The Distributor will not at any time, either during the
term or at any time after the termination for any reason whatsoever or
expiration of this Agreement, directly or indirectly, violate the rights in the
copyright of the Data or Data Products or Derived Image Products, or dispute,
contest, attack, impair or tend to impair, the validity of any registration of
the copyright or the title thereto, or assist any other person disputing,
contesting, attacking, impairing or tending to impair, the same, or obtain or
apply to obtain, or to prevent CSA from obtaining, a registration for the
copyright of the Data or Data Products or Derived Image Products.
COMPLIANCE
10.4 The Distributor shall mark all advertisements for the Data and Data
Products, including packaging, with such markings, information and labeling, as
may be required by the federal, provincial and local laws of each jurisdiction
of the Territory, in accordance with all codes and industry standards of
relevant organizations, and as may be reasonably requested by RSI or CSA.
DEFENCE BY CSA
10.5 CSA is entitled at its discretion, but shall not be obligated, to defend,
at its own cost, any proceeding instituted, even by way of a counterclaim, for
the expungement, or declaration of non-infringement, of the copyright Data and
Data Products. Should CSA choose to defend such proceeding, it may give notice
to RSI and to the Distributor to such effect at the cost of CSA.
DEFENCE BY DISTRIBUTOR
10.6 If CSA shall decide not to defend any such proceeding, it shall, within
thirty (30) days of service on CSA of the initial pleadings in the proceeding,
give such notice to RSI and RSI shall give such notice to the Distributor, and
RSI may or failing which the Distributor may defend such proceeding at its own
cost. In such case, CSA, the Distributor and RSI, as the case may be, shall, at
their expense, provide all reasonable assistance.
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WATCH
10.7 The Distributor shall keep reasonable watch during the term of this
Agreement for any products and activities which may, in the opinion of the
Distributor, violate the rights of CSA in any of the copyright of the Data, Data
Products and Derived Image Products. Upon discovery of any such violation,
suspected, threatened or actual, the Distributor shall promptly deliver to RSI
and CSA notice of the pertinent facts known to the Distributor relating to
suspected, threatened or actual infringement.
ACTION BY CSA
10.8 Upon receipt of the notice, CSA shall have three (3) months, in its
discretion, to institute appropriate proceedings against the alleged violator or
to take steps to settle the matter. In no event shall CSA be obliged to
institute any proceedings or take any steps to settle. If CSA institutes such
proceedings or takes such steps to settle, CSA shall give notice to RSI and RSI
shall give such notice to the Distributor. RSI and the Distributor shall execute
any documents necessary for such proceedings or settlement and each shall
provide any evidence and available information to CSA. The benefits of any
settlement efforts and proceedings commenced by CSA shall accrue to, and the
costs of any such efforts and proceedings shall be borne by, CSA.
NO ACTION BY CSA
10.9 If, within such three (3) month period, CSA does not give notice to RSI
that it has commenced appropriate proceedings against the alleged violator or
has taken and continues to take steps to settle the matter, and if the alleged
violation has not ceased, RSI and failing it, the Distributor, shall have the
right, for a period of two (2) months, commencing the day after the last day in
such three (3) month period, to institute appropriate proceedings against the
alleged violator or to take such steps to settle, unless prior to the expiration
of the two (2) month period within which RSI or the Distributor has the
exclusive right to take action, CSA advises RSI that neither RSI nor the
Distributor shall have the right to institute proceedings with respect to the
violation or to take such steps to settle. If, within such two (2) month period,
RSI and failing it, the Distributor, does not commence appropriate proceedings
against the alleged violator or take such steps to settle, CSA shall thereafter
be the only party entitled to institute such proceedings or to take steps to
settle, unless RSI or the Distributor is specifically authorized in writing to
do so by CSA.
ACTION BY THE DISTRIBUTOR
10.10 If the Distributor institutes such proceedings, the Distributor shall
immediately give notice to CSA and RSI, and CSA and RSI shall execute any
documents necessary for such proceedings and shall provide any evidence and
available information to the Distributor. The benefits of any settlement or
proceedings commenced by the Distributor shall belong to Distributor.
COOPERATION
10.11 The parties shall cooperate with each other with respect to any
proceeding, settlement negotiations or other actions taken in respect of third
party violators of rights in any of the copyright of the Data, Data Products and
Derived Image Products and to keep the other party promptly and fully advised
with respect thereto. In the event that any party elects to institute
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proceedings, such party shall, to the extent practicable, furnish to the other
parties copies of all pleadings and other relevant documents.
ARTICLE 11 - TERMINATION FOR CAUSE
DEFAULT
11.1 Either party may, upon written notice to the other, terminate this
Agreement because of the material breach by the other of any provision of this
Agreement, including performance undertakings that the other party fails to
remedy within thirty (30) days of receipt of a written notice to this effect.
INSOLVENCY
11.2 This Agreement shall terminate if either party shall become insolvent or
bankrupt or shall avail itself of any statute pertaining to insolvency or if the
Distributor has recourse to statutory avoidance of its obligations under this
Agreement.
ARTICLE 12 - TERMINATION FOR CONVENIENCE
TERMINATION BY CSA
12.1 In the event that the Master Licence Agreement is terminated by CSA, under
Article 15 thereof the parties shall have no further liability to each other.
Provided however that this Agreement shall not be terminated if RSI shall
dispute such termination in which event the contract hereunder shall be
suspended until final resolution of such dispute under the terms of the Master
Licence Agreement.
ARTICLE 13 - FORCE MAJEURE
DELAY
13.1 Unless otherwise specifically provided in this Agreement, no default or
breach shall be deemed to occur nor shall either Party be liable to the other
for any loss, damage, delay in the performance or the non-performance of any
obligations caused by an event of force majeure.
DEFINITION
13.2 The events of force majeure include but are not limited to: war, riot,
fire, flood, strike, the act of any Government or authority outside of this
Agreement, acting either in its sovereign or contractual capacity, and lockout,
strikes or other labour disputes and other events that are unavoidable and
beyond the Party's reasonable control.
NOTICE
13.3 Upon the occurrence of such an event, the Party whose obligation is
affected shall provide a Notice to the other Party describing the event, the
reasonable means to be used to circumvent the effects of the event as well as
any consequences on any existing timetable for the fulfillment of the Party's
obligation and the timetable and performance obligations shall be amended
accordingly.
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TERMINATION UNDER FORCE MAJEURE
13.4 Should the event of force majeure continue for a period exceeding three (3)
months, then either Party may provide the other with a notice of its intention
to terminate this Agreement. The Parties will then meet and discuss the
situation including possible alternate means to resume the performance before
the termination becomes effective.
ARTICLE 14 - CONFIDENTIALITY
RESTRICTIONS
14.1 Each of the Parties hereto agree to keep confidential without restriction
any and all information with respect to the other Party which it has received or
may in future receive in connection with this Agreement which is not otherwise
available to the general public unless: such confidential information becomes
public knowledge thereafter without fault on the part of each Party; is already
available to the public at the time of disclosure; is received by each Party
from a third party who is not in violation of a confidential disclosure
agreement with the Corporation; or is independently developed by each Party.
Notwithstanding the foregoing, each of the Parties shall be entitled to disclose
such information:
i) to its agents, employees or representatives who have a need to know
such information for the purpose of performance under this Agreement and
exercising the rights granted under this Agreement,
ii) to the extent required by applicable law, or
iii) during the course of or in connection with any litigation, arbitration
or other proceedings based upon or in connection with the subject matter of this
Agreement.
ARTICLE 15 - ASSIGNMENT, SUBCONTRACTING AND SUBLICENSING
ASSIGNMENT
15.1 The Distributor may not assign or subcontract all, substantially all or a
material portion of or sublicence any portion of this Agreement or rights
granted hereunder (except the final user licence as provided herein) without the
prior consent of RSI, which consent may be unreasonably withheld at RSI's
discretion. Any permitted subcontracting or sublicencing by the Distributor
shall not relieve the Distributor of any of its obligations hereunder including
the reporting of sales and the payment of royalties and other amounts due to
RSI. In the event of a change of control of the Distributor, directly or
indirectly, such change of control shall, for the purposes of this paragraph, be
deemed to be an assignment and shall not be valid without the prior written
consent of RSI, which may be unreasonably withheld. RSI may, or may be required
by CSA pursuant to the Master Licence Agreement to, without consent of the
Distributor, assign this Agreement to CSA, which assignment shall be binding
upon the Distributor.
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ARTICLE 16 - CONTRACT DOCUMENTS
WHOLE AGREEMENT
16.1 This document as well as the Appendices hereto form part of this Agreement.
APPENDICES
16.2 The Commercial Appendix to this Agreement is incorporated by reference into
this Agreement to the extent that its provisions affect the carrying out of this
Agreement.
CONFLICT
16.3 In the event of conflict or inconsistencies between the documents referred
to herein, the order of precedence shall be as follows:
1. The Articles to this Agreement (this document)
2. Commercial Appendix to this Agreement - Catalog Price List
3. Exhibit A to this Agreement - End User License
4. Exhibit B to this Agreement - List of Derived Image Products
PROCEDURE
16.4 This Agreement supersedes and replaces any previous understandings and
agreements between the Parties in relation to the matters dealt with in this
Agreement.
ARTICLE 17 - AMENDMENTS
AMENDMENT
17.1 No amendment to this Agreement shall have any effect unless it is in
writing and is duly approved by authorized representatives of the Parties.
PERMITTED AMENDMENT
17.2 The Distributor acknowledges that commercial or technical procedures,
formats, media specifications, technical parameters and specifications imposed
under the terms of this Agreement including, without limitation, the RADARSAT
System Specification Document RSCSA-SP002, the quality specifications of the
Data, the media and/or format of the Data and Data Products sold, the procedure
related to the daily update of the Catalog, the list of Derived Image Products
may be amended when necessary, as required by the status of the satellite
itself, or by reasonable and prudent management of the Data and Data Products
and the sale, use and/or distribution or redistribution thereof. The Distributor
shall be notified of such modifications, as they may arise and whenever
possible, but shall be notified at least four (4) weeks in advance, and the
Distributor will undertake to comply with the same with reasonable diligence.
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ARTICLE 18 - APPLICABLE LAW
LAW
18.1 This Agreement shall be interpreted in accordance with the laws in force in
the Province of British Columbia. The Parties irrevocably and specifically
attorn to the exclusive jurisdiction of the courts of the Province of British
Columbia except in respect to the enforcement of the judgments of such courts in
other jurisdictions. The Parties explicitly agree to exclude the application of
the United Nations Convention on Contracts for the International Sale of Goods
to this Agreement.
CONSULTATION
18.2 Where RSI is permitted by the terms of this Agreement to determine
standards or fix other requirements from time to time, it shall do so acting
reasonably and shall, where possible, consult with the Distributor prior to said
determination with respect to the impact or implementation of same.
DISPUTES
18.3 The Parties agree that they shall use reasonable best efforts to resolve
any dispute arising, out of this Agreement including any dispute concerning the
meaning of its terms and the Parties performance or failure to perform their
obligations hereunder.
ARBITRATION
18.4 In the event that the Parties are not able to resolve any such dispute, the
Parties agree that all disputes thereafter will be settled by arbitration and
not by judicial proceedings. The Parties agree further that the rules of the
commercial arbitration code as set out in the schedule to the Commercial
Arbitration Act of Canada and based upon the model law on International
Commercial Arbitration as adopted by the United Nations Commission on
International Trade Law on June 21, 1985 shall apply. Any arbitration in respect
of the subject matter of this Agreement shall be conducted in Vancouver, British
Columbia, Canada in English.
ARTICLE 19 - TERM
19.1 This Agreement shall be effective on execution hereof by the Parties,
however, the operating terms and obligations shall commence on the date of
signature of this Agreement and subject to the performance of the obligations
set out herein, continue until the earliest of the following events:
(i) three (3) years from the commencement date,
(ii) the date on which the RADARSAT SAR shall cease to be functional, or
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<PAGE> 17
(iii) the date on which the Master Licence Agreement for the Data and Data
Products shall be discontinued or terminated.
SURVIVAL
19.2 Notwithstanding the termination of this Agreement for any reason, the
obligations set out in Articles 6, 7.2, 8, 9, and 14 shall survive such
termination.
ARTICLE 20 - MISCELLANEOUS
HEADINGS
20.1 The headings and any sub-headings of Articles in this Agreement are for
convenience only and shall not be considered in the interpretation of the
Agreement.
INDEPENDENT CONTRACTORS
20.2 The Parties to this Agreement are independent contractors. No relationship
of principal to agent, master to servant, employer to employee or franchiser to
franchisee, is established hereby between the parties. No Party has the
authority to bind any other Party hereto or incur any obligations on its behalf.
SEVERABILITY
20.3 In the event that any one or more of the provisions of this Agreement shall
be found to be illegal or unenforceable, this Agreement shall, unless otherwise
determined by RSI, nevertheless remain in full force and effect and such term or
provision shall be deemed severed. RSI may, in the event of any provision being
deemed unenforceable, on sixty (60) days notice terminate the Agreement.
WAIVER
20.4 No Party's rights to enforce the provisions of this Agreement shall be
affected by any prior course of dealing, waiver, delay, omission or forbearance.
CSA CONSIDERATION
20.5 The Distributor acknowledges that all obligations imposed on the
Distributor in respect of CSA are given for value including the programming of
RADARSAT-1 Satellite and supply of the Data therefrom and the Distributor
acknowledges both receipt and sufficiency of such consideration and agrees to be
bound by all such obligations to CSA.
ARTICLE 21 - OFFICIAL NOTIFICATION
21.1 All notices required or permitted hereunder shall be in writing and shall
be delivered or sent prepaid by airmail, telex, telegram, or facsimile to the
following address:
a) if to RSI
RADARSAT International Inc.,
13800 Commerce Parkway
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<PAGE> 18
MacDonald Dettwiler Building
Richmond, British Columbia,
Canada V6V 2J3
Attention: Dr. John Hornsby, Vice President, Sales and Marketing
Facsimile: (604) 231-4999
with a copy to:
La Barge Weinstein
Xerox Tower
333 Preston Street, 11th Floor
Ottawa, Ontario K1S 5N4
Attention: Mr. P.C. LaBarge
Facsimile: (613) 231-3900
(b) if to Distributor: ORBIMAGE
ORBIMAGE
21700 Atlantic Boulevard
Dulles, Virginia
USA 20166
Attention: Mark Callis
Facsimile: 703-406-5552
21.2 Notices shall be deemed given upon receipt. Either Party may change the
above addresses and person designated to receive notice, upon reasonable prior
written notice to the other.
ARTICLE 22 - SIGNATURE
This Agreement has been executed by the parties hereto.
RADARSAT International Inc.
Signed:
---------------------
Title: Dr. John Hornsby, Vice President, Sales and Marketing
Date:
------------------------
Distributor: ORBIMAGE
Signed:
---------------------
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<PAGE> 19
Title:
------------------------
Date:
--------------------------
DATA LICENCE AND DISTRIBUTION AGREEMENT
COMMERCIAL APPENDIX
(RADARSAT INTERNATIONAL PRICE LIST)
Page 19
<PAGE> 20
EXHIBIT A
RADARSAT INTERNATIONAL INC. LICENCE AGREEMENT
IMPORTANT - READ CAREFULLY BEFORE OPENING DATA PACKAGE
THIS DOCUMENT IS A LEGAL AGREEMENT BETWEEN YOU, THE CANADIAN SPACE AGENCY
("CSA") AS OWNER OF THE DATA AND RADARSAT INTERNATIONAL INC. ("RSI") AS MASTER
LICENCEE FROM CSA OF THE DATA. OPENING THE ENCLOSED DATA PACKAGE MAKES YOU THE
END USER (THE "LICENCEE") OF THE DATA CONTAINED THEREIN AND INDICATES YOUR
ACCEPTANCE OF THE TERMS AND CONDITIONS IN THE LICENCE AGREEMENT AND LIMITED
WARRANTY (COLLECTIVELY THE "LICENCE"). IF YOU DO NOT AGREE WITH THE TERMS AND
CONDITIONS, YOU SHOULD, WITHOUT BREAKING THE SEAL, RETURN THE ENCLOSED PACKAGE
AND THE OTHER ITEMS WHICH ARE PART OF THIS PRODUCT WITHIN TWO (2) WEEKS OF
RECEIPT TO RADARSAT INTERNATIONAL INC. AND YOU WILL RECEIVE A FULL REFUND.
BY OPENING THIS PACKAGE, THE LICENCEE ACKNOWLEDGES THAT IT HAS READ THIS
LICENCE, UNDERSTANDS IT, AND AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS. THE
LICENCEE ALSO AGREES THAT THIS LICENCE IS THE COMPLETE AND EXCLUSIVE AGREEMENT
BETWEEN THE PARTIES AND SUPERSEDES ALL PROPOSALS OR PRIOR AGREEMENTS, ORAL OR
WRITTEN, ANY OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT
MATTER HEREIN. THIS LICENCE CANNOT BE MODIFIED OR RESCINDED, NOR MAY ANY OF ITS
TERMS BE CANCELLED OR WAIVED.
GRANT OF LICENCE: The enclosed package contains CSA Data, Data Products and
accompanying written materials (collectively the "Data") containing intellectual
property rights proprietary to CSA and under licence to RSI and its
sublicencee(s).
The Licencee agrees that the Data may be used only for the internal business use
of the Licencee and may not be reproduced, published, distributed, sold, leased,
rented, licenced, copied or disposed of in any other manner. The Licencee
acknowledges that the Data is a valuable and unique asset and is disclosed to
the Licencee on the basis that it represents confidential information. The
Licencee will only disclose the Data to its employees, contractors and
consultants directly related to the Licencee's internal use of the Data. In
addition, the Licencee agrees to take appropriate action, by instruction,
agreement or otherwise, with any persons or organizations permitted access to
the Data, including appropriate security measures to prevent illegal disclosure,
all so as to enable the Licencee to satisfy its obligations contained herein.
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<PAGE> 21
Use of the Data by anyone other than the Licencee shall constitute infringement
of these rights. Upon payment for the use of the Data, RSI grants to the
Licencee a limited, perpetual, non-exclusive licence to use this copy of the
Data. This Licence certifies the Licencee to:
(a) make the authorized number of internal copies of the Data in
support of the Licencee's use of the Data on a single workstation with a single
central processing unit, but not to network or distribute the Data for
Licencee's use or otherwise;
(b) use the Data solely for internal purposes of the Licencee.
Contractors or consultants working for the Licencee may have access to the Data
for purposes related to the Licencee's internal use of the Data; and
(c) the purchaser agrees to respect CSA copyright interest and, in
particular, shall not distribute or sell RADARSAT Derived Image Products (DIP)
or copies thereof unless they have been authorized to do so in writing from RSI.
DIPs include but are not limited to, mosaics, geocoding, sub-scenes and
sub-sampling.
(d) reproduce and distribute Value-Added Products from the Data where
"Value-Added Products" are defined as Data that includes a significant addition
of other information including but not limited to:
i. classifications; (manual and digital interpretations of Data
or Data Product)
ii. products derived from the Data and Data Products such as
Digital Terrain Models.
CSA and RSI reserve all rights not specifically granted to Licencee. The
Licencee will be held legally responsible for any copyright infringement which
is caused or encouraged by its failure to abide by the terms of this Licence.
For greater certainty, the Licencee may not copy, modify or transfer the Data,
in whole or in part, other than as expressly set out in this Agreement.
OWNERSHIP OF DATA: The Licencee owns the magnetic or other physical media on
which the Data is originally or subsequently recorded or fixed, but an express
condition of this Licence is that CSA retains title and ownership of the Data
recorded on the original diskette copy and all subsequent copies of the Data,
regardless of the form in or media on which the original and other copies may
exist. This Licence is not a sale of the original Data or any copy, translation
or compilation thereof, in whole or in part. The access to and use of the Data
does not grant the Licencee any right to use, without prior written consent, any
trademarks, tradenames or logo of CSA or others.
RESTRICTION ON TRANSFER: This License and the Data may not be transferred to
anyone without the prior written consent of RSI. Any transferee of the Licence
shall be bound by the terms and conditions of this Licence. The Licencee is
strictly prohibited from distributing, leasing, selling or otherwise disposing
of the Data. For the purposes of this Licence, any distribution or disposition
by Licencee to any branch, agency, office, division, subdivision, subsidiary or
affiliate of the Licencee is strictly prohibited without the consent of RSI. The
Licencee shall not reverse engineer, decompile or disassemble the Data or
transfer the Data to another machine readable language, or attempt any
foregoing.
TERMINATION: This Licence will terminate automatically without notice from RSI
if (i) the Licencee fails to comply with any of its provisions, (ii) the
Licencee becomes insolvent or bankrupt, or (iii) the Licencee passes a
resolution for the winding up of its affairs. Upon termination, the Licencee
shall destroy all copies of the Data and any accompanying written materials,
including any modified copies, translations or compilations thereof, if any.
GOVERNING LAW: This Licence is governed by the applicable laws of Canada and the
Province of British Columbia, and shall enure to the benefit of CSA and/or RSI,
their successors and assigns. The parties irrevocably and specifically attorn to
the exclusive jurisdiction of the Courts of the Province of British Columbia.
The parties
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<PAGE> 22
expressly exclude the application of the United Nations Convention on Contracts
for the International Sales of Goods and the implementing legislation thereto.
DISCLAIMER OF WARRANTY AND LIMITED WARRANTY: The entire risk as to the results
and the performance of the Data is assumed by the Licencee. The Data is provided
"as is" without warranty of any kind, other than RSI warrants that the storage
media on which the Data is supplied to Licensee is free from defects in
materials and workmanship under normal use and service for a period of ninety
(90) days from the date of purchase. CSA's entire liability and the Licencee's
exclusive remedy with respect to the Data is, at RSI's option, to either (a)
return the purchase price paid by the Licencee directly to RSI or distributor of
the Data, whichever is less or (b) replace the Data that does not meet this
Limited Warranty.
In no event shall CSA or anyone else who has been involved in the creation,
production, distribution or delivery of the Data, be liable for any damages
whatsoever (including, without limitation, damages for loss of profits, business
interruption, loss of business information, and the like, or any consequential
damages) arising out of or resulting from the use of or inability to use the
Data or the performance of the Data, storage media or other CSA provided
material, whether in an action in contract or tort, including, but not limited
to, negligence.
Except as provided above, CSA and RSI disclaim all warranties, either expressed
or implied, including but not limited to implied warranties of merchantable
quality, merchantability, durability or fitness for a particular purpose, with
respect to the Data and any accompanying written materials.
THE ABOVE IS THE ONLY WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, IN LIEU
OF ANY OTHER WARRANTY INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, THAT ARE MADE BY CSA AND
RSI FOR THIS PRODUCT.
ORAL OR WRITTEN INFORMATION OR ADVICE OR OTHER AFFIRMATION OR FACT INCLUDING,
BUT NOT LIMITED TO, STATEMENTS REGARDING PERFORMANCE OF DATA GIVEN BY CSA AND/OR
RSI, THEIR AGENTS OR EMPLOYEES, RSI'S DEALERS OR DISTRIBUTORS, SHALL NOT CREATE
ANY OTHER WARRANTY OR IN ANY WAY INCREASE THE SCOPE OF THIS LIMITED WARRANTY AND
THE LICENSEE MAY NOT RELY ON ANY SUCH INFORMATION OR ADVICE.
Page 22
<PAGE> 23
LIST OF DERIVED IMAGE PRODUCTS (DIPS)
EXHIBIT B
<TABLE>
<CAPTION>
DERIVED IMAGE PRODUCTS ROYALTIES
---------------------- ---------
<S> <C>
- - Sub-sampled scenes, sub-scenes and imagettes *
- - Basic image processing such as speckle-filtering, appliance of LUT, histogram equalization, *
contrast stretching, etc.
- - Coloured composite image using multiple data sets *
- - Non-orthorectified mosaic with or without a simple layout *
- - Orthorectified scene or sub-scene derived from a DTED Level 0 or 1 or 2 DEM with or without a *
simple layout
- - Orthorectified mosaic derived from a DTED Level 0 or 1 or 2 DEM with or without a simple layout *
- - Georeferenced space maps with index map, mapsheet reference, layout, embedded names, etc. *
- - Geocoded space maps with index map, mapsheet reference, layout embedded names, etc. *
- - Orthorectified space maps with index map, mapsheet reference, layout embedded names, etc. *
Orthorectification performed with a DTED Level 0 or 1 or 2 DEM
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED.
Page 23
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEETS AND STATEMENTS OF OPERATIONS AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 21,751
<SECURITIES> 48,606
<RECEIVABLES> 5,123
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 75,480
<PP&E> 270,002
<DEPRECIATION> (38,709)
<TOTAL-ASSETS> 356,092
<CURRENT-LIABILITIES> 15,449
<BONDS> 213,340
0
71,349
<COMMON> 252
<OTHER-SE> 37,326
<TOTAL-LIABILITY-AND-EQUITY> 356,092
<SALES> 13,135
<TOTAL-REVENUES> 13,135
<CGS> 14,183
<TOTAL-COSTS> 14,183
<OTHER-EXPENSES> 8,187
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (1,718)
<INCOME-PRETAX> (7,517)
<INCOME-TAX> (2,819)
<INCOME-CONTINUING> (4,698)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,698)
<EPS-BASIC> (0.44)
<EPS-DILUTED> (0.44)
</TABLE>
