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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
MARCH 31, 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 (Telephone number)
offices)
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 May 10, 1999.
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PART 1
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ORBITAL IMAGING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED; IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
ASSETS
------
DECEMBER 31, MARCH 31,
1998 1999
-------------------- --------------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 25,082 $ 20,298
Available-for-sale securities, at fair value 34,401 16,274
Restricted held-to-maturity securities, at amortized cost 16,724 16,798
Receivables and other current assets, net 3,199 2,260
-------------------- --------------------
Total current assets 79,406 55,630
Restricted held-to-maturity securities, at amortized cost 7,813 -
Property, plant and equipment, at cost, less accumulated
depreciation of $7,360 and $8,336, respectively 15,956 17,277
Satellites and related rights, at cost, less accumulated
depreciation and amortization of $22,367 and
$24,518, respectively 196,598 215,453
Other assets 8,196 8,346
-------------------- --------------------
Total assets $ 307,969 $ 296,706
==================== ====================
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable and accrued expenses $ 16,879 $ 9,165
Current portion of deferred revenue 8,522 8,393
Deferred tax liabilities 580 -
-------------------- --------------------
Total current liabilities 25,981 17,558
Senior notes 141,620 141,814
Deferred revenue, net of current portion 23,698 21,607
Deferred tax liabilities 3,190 3,150
Capitalized lease obligation, net of current portion 108 80
-------------------- --------------------
Total liabilities 194,597 184,209
Stockholders' equity:
Preferred stock, par value $0.01; 10,000,000 shares authorized;
Series A 12% cumulative convertible, 2,000,000 shares
authorized, 687,576 shares issued and outstanding,
respectively (liquidation value of $70,133 and $72,196,
respectively) 7 7
Common stock, par value $0.01; 75,000,000 shares authorized;
25,214,000 shares issued and outstanding 252 252
Additional paid-in-capital 152,488 154,709
Accumulated deficit (39,375) (42,471)
-------------------- --------------------
Total stockholders' equity 113,372 112,497
-------------------- --------------------
Total liabilities and stockholders' equity $ 307,969 $ 296,706
==================== ====================
</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 MARCH 31,
-------------------------------------------------------
1998 1999
----------------------- -----------------------
<S> <C> <C>
Revenues $ 2,417 $ 3,316
Direct expenses 4,189 4,025
----------------------- -----------------------
Gross loss (1,772) (709)
Selling, general and administrative expenses 987 1,893
----------------------- -----------------------
Loss from operations (2,759) (2,602)
Interest income, net of interest expense of $2,156 in 1998 1,043 949
----------------------- -----------------------
Loss before benefit for income taxes (1,716) (1,653)
Benefit for income taxes (1,716) (620)
----------------------- -----------------------
Net loss $ - $ (1,033)
======================= =======================
Loss per common share - basic and assuming dilution $ (0.06) $ (0.12)
Loss available to common stockholders $ (1,438) $ (3,096)
Weighted average shares outstanding:
Basic 25,214,000 25,214,000
Assuming dilution 37,818,206 43,595,532
</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>
Three Months Ended March 31,
1998 1999
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ - $ (1,033)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation, amortization and other 3,463 3,136
Deferred tax benefit (1,716) (620)
Changes in assets and liabilities:
Increase in receivables and other current assets (526) (578)
(Increase) decrease in other assets (264) 256
Increase (decrease) in accounts payable and accrued expenses 2,981 (7,715)
Increase (decrease) in deferred revenue 942 (2,220)
------------ -----------
Net cash provided by (used in) operating activities 4,880 (8,774)
Cash flows from investing activities:
Capital expenditures (17,436) (22,875)
Purchases of held-to-maturity securities (32,896) -
Purchases of available-for-sale securities (9,801) (7,350)
Maturities of held-to-maturity securities - 8,471
Maturities of available-for-sale securities 5,400 21,458
Sales of available-for-sale securities 999 4,386
------------ -----------
Net cash (used in) provided by investing activities (53,734) 4,090
Cash flows from financing activities:
Net proceeds (costs) from issuance of long-term obligations 136,576 (73)
Repayment of capitalized lease obligation - (28)
Net proceeds from issuance of common stock warrants 8,690 -
Net proceeds from issuance of preferred stock 21,318 -
------------ -----------
Net cash provided by (used in) financing activities 166,584 (101)
------------ -----------
Increase (decrease) in cash and cash equivalents 117,730 (4,785)
Cash and cash equivalents, beginning of period 10,883 25,083
------------ -----------
Cash and cash equivalents, end of period $ 128,613 $ 20,298
============ ===========
Supplemental cash flow information:
Interest paid $ - $ 8,719
============ ===========
Non-cash item:
Capitalized compensatory stock options $ - $ 158
============ ===========
</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>
SERIES A
PREFERRED STOCK COMMON STOCK ADDITIONAL
------------------ --------------------- PAID-IN ACCUMULATED
SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT TOTAL
------------------ --------------------- ------------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance as of December 31, 1997 392,887 $ 4 25,214,000 $ 252 $ 111,636 $ (26,532) $ 85,360
Shares issued in private offering, net 227,295 2 - - 21,316 - 21,318
Issuance of common stock warrants - - - - 9,000 - 9,000
Accrual of preferred stock dividends - - - - 1,438 (1,438) -
------------------ --------------------- ------------- -------------- ------------
Balance as of March 31, 1998 620,182 $ 6 25,214,000 $ 252 $ 143,390 $ (27,970) $ 115,678
================== ===================== ============= ============== ============
Balance as of December 31, 1998 687,576 $ 7 25,214,000 $ 252 $ 152,488 $ (39,375) $ 113,372
Issuance of stock options - - - - 158 - 158
Accrual of preferred stock dividends - - - - 2,063 (2,063) -
Net loss - - - - - (1,033) (1,033)
------------------ --------------------- ------------- -------------- ------------
Balance as of March 31, 1999 687,576 $ 7 25,214,000 $ 252 $ 154,709 $ (42,471) $ 112,497
================== ===================== ============= ============== ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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ORBITAL IMAGING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1998 AND 1999
(UNAUDITED)
(1) BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited interim condensed
consolidated financial information reflects all adjustments, consisting of
normal recurring adjustments, considered necessary for a fair presentation of
the information. Certain information and footnote disclosure 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 three months ended March
31, 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."
(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.
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
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statements of operations.
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.
(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. For the
three months ended March 31, 1998 and 1999, capitalized interest totaled $1.7
million and $4.7 million, respectively.
(4) RELATED PARTY TRANSACTIONS
ORBIMAGE incurred and capitalized costs of approximately $15.4 million and
$16.4 million for the three months ended March 31, 1998 and 1999, respectively
under a procurement contract with Orbital Sciences Corporation ("Orbital"),
ORBIMAGE's majority stockholder, for the purchase of various satellites and
ground systems. ORBIMAGE incurred and expensed costs of approximately $0.5
million and $0.4 million for the three months ended March 31, 1998 and 1999,
respectively, under an administrative services agreement with Orbital.
(5) COMPREHENSIVE INCOME (LOSS)
For the three months ended March 31, 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 ended March 31, 1998 and 1999 were as follows (in thousands, except share
data):
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
1998 1999
---- ----
<S> <C> <C>
Numerator for basic and diluted loss per common share:
Net loss $ - $ (1,033)
Preferred stock dividends (1,438) (2,063)
-------------- -------------
Loss available to common stockholders $ (1,438) $ (3,096)
============== =============
Denominator for basic loss per common
share -- weighted average shares 25,214,000 25,214,000
Effect of dilutive securities:
Convertible preferred stock 11,541,475 16,488,633
Warrants 510,512 1,312,746
Stock options 552,218 580,153
-------------- -------------
Denominator for diluted loss per common
share -- adjusted weighted average
shares assuming dilution 37,818,205 43,595,532
============== =============
</TABLE>
<TABLE>
<S> <C> <C>
Loss per common share -- basic and diluted
$ (0.06) $ (0.12)
=========== =========
</TABLE>
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(7) 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 three months ended March 31, 1998 and 1999.
ORBIMAGE recognized revenues related to contracts with the National
Aeronautics and Space Administration of approximately $2.3 million and $2.4
million for the three months ended March 31, 1998 and 1999, respectively,
representing approximately 97% and 72%, respectively, of total revenues
recognized during those periods.
(8) SUBSEQUENT EVENTS
On April 22, 1999, ORBIMAGE completed a debt offering raising net proceeds of
approximately $68.6 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.
On April 26, 1999, ORBIMAGE granted 725,323 options to purchase shares of
common stock 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. ORBIMAGE will expense the value of the
36,250 compensatory options totaling $0.1 million over the three-year vesting
period of the options.
On May 1, 1999, ORBIMAGE declared a preferred stock dividend of 41,271 shares
payable in kind.
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
ORBIMAGE operates and is further developing a fleet of satellites that
collect, process and distribute digital imagery of the Earth's surface, the
atmosphere and weather conditions. ORBIMAGE has entered into a procurement
agreement with Orbital to purchase the OrbView-1,
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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
RadarSat-2 (the "RadarSat-2 License") and has in turn granted these rights to
MDA. MDA will own and operate the RadarSat-2 satellite and provide operations,
data reception, processing, archiving, marketing and distribution services to
ORBIMAGE. 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 first quarter of 2000,
OrbView-4 to be operational in the fourth quarter of 2000 and RadarSat-2 to be
operational in early 2002.
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. In April 1999, ORBIMAGE issued $75 million in principal amount of 11 5/8%
senior notes due 2005 (the "1999 Offering").
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. ORBIMAGE is
performing under several long-term sales contracts to provide imagery products
and receives contractual payments in advance of product delivery. In these
circumstances, ORBIMAGE initially records deferred revenue for the total amount
of the payment and recognizes revenue over the contractual delivery period. As
of March 31, 1999, ORBIMAGE had approximately $30.0 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. Interest on the senior notes together with amortization of
debt discount, is
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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 MONTHS ENDED MARCH 31, 1998 AND 1999
Revenues. Revenues for the three months ended March 31, 1998 and 1999 were
approximately $2.4 million and $3.3 million, respectively. The increase in 1999
revenues was primarily due to the acquisition of TRIFID. Revenues during the
three months ended March 31, 1999 included $0.6 million in sales generated from
the image processing business acquired from TRIFID in April 1998.
Direct Expenses. Direct expenses include the costs of operating and
depreciating the OrbView-1 satellite, the OrbView-2 License, and the related
ground system. Satellite operating costs primarily consist of labor expenses.
Direct expenses for the three months ended March 31, 1998 and 1999 were
approximately $4.2 million and $4.0 million, respectively. 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
approximately $1.0 million and $1.9 million for the three months ended March 31,
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.
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
issued pursuant to the 1998 Offering and the 1999 Offering, net of applicable
capitalized interest. Interest income for the three months ended March 31, 1999
was approximately $0.9 million. Interest income was approximately $1.0 million
for the three months ended March 31, 1998, which is net of interest expense of
approximately $2.2 million. For the three months ended March 31, 1998 and 1999,
capitalized interest in connection with the construction of the OrbView-3 and
OrbView-4 satellites and related ground system totaled $1.7 million and $4.7
million, respectively. 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
approximately $1.7 million and $0.6 million for the three months ended March 31,
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.
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LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1999, ORBIMAGE had approximately $36.6 million of cash, cash
equivalents and available-for-sale securities. On April 22, 1999, ORBIMAGE
completed the 1999 Offering raising net proceeds of approximately $68.6 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 13.6%. 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 March 31, 1999, restricted held-to-maturity securities
totaled $16.8 million.
Operating activities provided cash of approximately $4.9 million and used
cash of $8.8 million during the three months ended March 31, 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 $7.7 million and $2.2 million, respectively.
Investing activities used cash of approximately $53.7 million and provided
cash of $4.1 million for the three months ended March 31, 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 its
private equity and debt financings in 1998 and 1999, ORBIMAGE invested the
proceeds from the financings 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 three months ended March 31, 1998 and 1999 were approximately
$15.7 million and $18.2 million (excluding capitalized interest). The total cost
of the OrbView-1, OrbView-3 and OrbView-4 satellites, the OrbView-2 License and
the related U.S. ground systems, is estimated to be approximately $285 million,
which amount does not include contracts of approximately $31 million to be
funded by the U.S. Air Force through a contract with Orbital. Of this amount, as
of March 31, 1999, ORBIMAGE had incurred costs of approximately $241 million,
excluding insurance.
Through the third quarter of 2000, when OrbView-4 is expected to be launched,
we expect to incur capital expenditures of approximately $90 million for the
OrbView-3 and OrbView-4 satellites and the RadarSat-2 License. Of this amount,
approximately $60 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 of the RadarSat-2 License will be approximately $60 million,
which amount does not include approximately $140 million to be funded by the
Canadian Space Agency ("CSA") through a contract with MDA. We expect to make
installment payments on the RadarSat-2 License through the operational date of
RadarSat-2, which we expect to be in early 2002. ORBIMAGE expects to fund future
capital expenditures as well as
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negative cash flows from operating activities using the net proceeds of the
recently completed 1999 Offering, together with available cash, cash equivalents
and securities.
ORBIMAGE does not expect to generate net positive cash flow from operations
sufficient to fund both operations and capital expenditures before the fourth
quarter of 2000, when both OrbView-3 and OrbView-4 are expected to be
operational. While ORBIMAGE believes it has sufficient resources to meet its
requirements through that time, additional funding may be necessary in the event
of an OrbView-3 or OrbView-4 launch delay, 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 mid-2000. 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 software and
hardware, including mainframes, mini computers, 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 June 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 administrative services.
Orbital has substantially completed the awareness and assessment phases of its
Year 2000 plan and intends to achieve a goal of Year 2000 readiness in mid-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 expects that it will spend no more than $500,000 on Year 2000
compliance. 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
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2000 problems occur. All costs, including the cost of internal personnel,
outside consultants, systems replacements and other equipment, will be expensed
as incurred, except for long-lived assets, which will be capitalized in
accordance with ORBIMAGE's capitalization policies. ORBIMAGE will develop
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.
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 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 commercial 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 and distribution channels 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
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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
$42.5 million through March 31, 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 fourth quarter of
2000. 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. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations."
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 recently complete debt offering,
together with cash on hand, expected cash flows from operations and advance
payments from customers will be sufficient to fund our operations through the
fourth quarter of 2000. 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 fourth quarter of 2000, or if our capital
expenditures exceed our estimates, we would need additional capital.
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; or
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<PAGE> 16
- 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 one or
both of the high-resolution OrbView satellites and the RadarSat-2 satellite.
SCHEDULE DELAYS -- DELAYS IN THE COMMERCIAL OPERATION OF OUR SATELLITES COULD
ADVERSELY AFFECT OUR BUSINESS.
We could experience 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 the licenses necessary to construct and operate
the satellite systems;
- 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. We previously encountered significant delays in
the design, production and testing of the OrbView-2 satellite that was launched
in August 1997. We have also experienced slight delays in the production
schedule of OrbView-3 and OrbView-4. Significant 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
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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 26 missions and has a greater than 90% success rate.
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.
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 is not yet
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
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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. 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>
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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, although
this has not yet happened with OrbView-1.
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.
- 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 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.
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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 has announced plans to launch its first
one-meter high-resolution satellite in mid-1999;
- EarthWatch, which has announced plans to launch its one-meter
high-resolution satellite in late 1999; 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 SUPPLIER COULD RESULT IN DELAYS IF
THE SUPPLIER FAILS TO PERFORM, AND OUR RECOURSE AGAINST THE SUPPLIER IS LIMITED.
We depend on one supplier, Orbital:
- to design, develop and launch OrbView-3 and OrbView-4 and to
construct the U.S. ground system for these satellites;
- to design, develop and construct the RadarSat-2 satellite and the
Canadian ground system; and
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- through its wholly owned subsidiary MDA, to operate RadarSat-2, and
to 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 the RadarSat-2 License from Orbital's wholly owned
subsidiary, MDA, to market the RadarSat-2 imagery. 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 us and Orbital. 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. 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 the high-resolution
OrbView satellites 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 license, 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 55% of our outstanding voting stock on a fully
diluted basis. 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.
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Although we have adopted policies we believe will prevent a conflict from
arising, these policies cannot ensure that a conflict will not arise.
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. Orbital's
interests as an equity holder in our business may at times conflict with our
interests under these agreements, and may conflict with your interests as a
holder of the Notes. Our recourse against Orbital is limited in the event of
breaches by Orbital under the procurement agreement or 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
holds an approximate 70% equity interest in Radarsat International Inc. ("RSI"),
a company that markets imagery from the RadarSat-1 satellite. MDA has a contract
to acquire the remaining shares of RSI. 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 such 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.
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The DoC license for OrbView-4 imagery restricts the resolution for
hyperspectral imagery sold commercially. The license also imposes certain
limitations on our ability to process and distribute imagery outside of the
United States. These 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.
While we do not believe a DoC license is required for RadarSat-2, and Orbital
has informed us that it does not believe a DoC license will be required in
connection with MDA's operation of RadarSat-2, DoC may impose a licensing
requirement for RadarSat-2 in the future. If the DoC imposed a license
requirement and we were not able to obtain a license on acceptable terms, our
financial condition and results of operations would be materially adversely
affected.
Under the DoC licenses, the U.S. government can interrupt service during
certain periods of national emergency. In addition, the Canadian government can
interrupt RadarSat-2 service during certain periods of national emergency. The
prospect of actual or threatened interruptions could adversely affect our
ability to market our products to certain foreign distributors or end-users.
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 the
OrbView-3 and OrbView-4 satellites 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 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 the RadarSat-2
satellite 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
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governments in the countries in which they do business to receive imagery
directly from the OrbView-2 satellite, the high-resolution OrbView satellites
and RadarSat-2. If these regional distributors are not successful in obtaining
the necessary approvals, we will not be able to distribute real time remote
imagery in those regions. Our inability to offer 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 satellite 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 the high-resolution OrbView satellites.
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 Department of State in connection with the export of certain
components of the RadarSat-2 satellite, which will be constructed by Orbital in
the U.S. and delivered to MDA in Canada. If the DoC or the Department of State
does not issue these export licenses, or if these licenses are significantly
delayed, 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.
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RISK ASSOCIATED WITH INTERNATIONAL OPERATIONS -- OUR INTERNATIONAL BUSINESS
EXPOSES US TO RISKS RELATING TO INCREASED REGULATION AND POLITICAL OR ECONOMIC
INSTABILITY IN FOREIGN MARKETS.
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 the foreign entity;
- 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 76%, 95% and
94% of our revenues for 1996, 1997 and 1998, respectively. At December 31, 1998,
contracts with U.S. government agencies constituted approximately 72% 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 us or Orbital, 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 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.
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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 somecircumstances; or
- Orbital does not start the integration and testing of the OrbView-4
spacecraft by November 15, 1999. We may extend the 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 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
INDENTURES.
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 indentures governing the
notes.
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<PAGE> 27
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As of March 31, 1999, ORBIMAGE had senior notes outstanding of $141.8 million
with a fair value of $145.5 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 March 31, 1999, held-to-maturity securities restricted for the payment
of interest on the senior notes totaled $16.8 million. ORBIMAGE does not have
any derivative financial instruments as of March 31, 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 subject ORBIMAGE's financial
position to interest rate risk.
27
<PAGE> 28
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 - Not applicable.
28
<PAGE> 29
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: May 17 , 1999 By: /s/ Gilbert D. Rye
-- ------------------
Gilbert D. Rye, President
and Chief Operating Officer
DATED: May 17 , 1999 By: /s/ Armand D. Mancini
-- ---------------------
Armand D. Mancini, Vice President
and Principal Financial Officer
29
<PAGE> 30
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.
4.1 Specimen certificate of 11 5/8% Series C Senior Note due 2005
(included in Exhibit 4.5 hereto).
4.2 Specimen certificate of 11 5/8% Series D Senior Notes due 2005
(substantially in the same form as the certificate included in
Exhibit 4.5 hereto).
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 at
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.
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.
</TABLE>
30
<PAGE> 31
<TABLE>
<S> <C>
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.
10.8+ ORBIMAGE 1996 Stock Option Plan.
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 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.
10.13 Purchase Agreement dated April 19, 1999 by and among ORBIMAGE, Bear
Stearns & Co. and Merrill Lynch & Co. as the initial purchasers.
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,
MacDonald Dettwiler and Associates Ltd. and ORBIMAGE.
</TABLE>
31
<PAGE> 32
<TABLE>
<S> <C>
11 Statement re computation of loss per common share
(included in the notes to condensed consolidated financial
statements).
27 Financial Data Schedule.
+ 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 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.
</TABLE>
32
<PAGE> 1
EXHIBIT 4.5
ORBITAL IMAGING CORPORATION
AND
HSBC BANK USA,
AS TRUSTEE
-----------------------
INDENTURE
DATED AS OF APRIL 22, 1999
-----------------------
$75,000,000
11 5/8% SENIOR NOTES DUE 2005
-----------------------
<PAGE> 2
Reconciliation and tie between Trust Indenture Act of 1939,
as amended, and Indenture, dated as of April 22, 1999
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
- ---------------- ---------
<S> <C>
Section 310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8, 7.11
Section 311 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.12
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.12
Section 312 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . __
Section 313 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6, 4.8
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
Section 314 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.8
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5
Section 315 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1(c)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1(b)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5, 7.2
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
Section 316 (a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2, 6.5
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.7
Section 317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
Section 318 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1
</TABLE>
- ------------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed
to be a part of this Indenture.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I DEFINITIONS OF GENERAL APPLICATION .........................................................1
SECTION 1.1 Definitions ...........................................................................1
SECTION 1.2 Incorporation by Reference of Trust Indenture Act ....................................23
SECTION 1.3 Rules of Contruction .................................................................24
ARTICLE II THE NOTES ................................................................................24
SECTION 2.1 Form and Dating ......................................................................24
SECTION 2.2 Execution and Authentication .........................................................26
SECTION 2.3 Trustee, Registrar and Paying Agent ..................................................27
SECTION 2.4 Paying Agent To Hold Money In Trust ..................................................28
SECTION 2.5 Holder Lists .........................................................................28
SECTION 2.6 Transfer and Exchange ................................................................28
SECTION 2.7 Replacement Notes ....................................................................35
SECTION 2.8 Outstanding Notes ....................................................................35
SECTION 2.9 Treasury Notes .......................................................................36
SECTION 2.10 Temporary Notes .....................................................................36
SECTION 2.11 Cancellation ........................................................................36
SECTION 2.12 Defaulted Interest ..................................................................37
SECTION 2.13 Persons Deemed Owners ...............................................................37
SECTION 2.14 CUSIP Numbers .......................................................................37
ARTICLE III REDEMPTION ..............................................................................38
SECTION 3.1 Optional Redemption ..................................................................38
SECTION 3.2 Mandatory Redemption .................................................................38
SECTION 3.3 Election to Redeem; Notice to Trustee ................................................38
SECTION 3.4 Notes to Be Redeemed Pro Rata ........................................................39
SECTION 3.5 Notice of Redemption .................................................................39
</TABLE>
i
<PAGE> 4
<TABLE>
<S> <C>
SECTION 3.6 Effect of Notice of Redemption .......................................................40
SECTION 3.7 Deposit of Redemption ................................................................40
SECTION 3.8 Notes Payable on Redemption Date .....................................................41
SECTION 3.9 Notes Redeemed in Part ...............................................................41
ARTICLE IV COVENANTS ................................................................................41
SECTION 4.1 Payment of Notes .....................................................................41
SECTION 4.2 Maintenance of Office or Agency ......................................................42
SECTION 4.3 Corporate Existence ..................................................................42
SECTION 4.4 Payment of Taxes and Other Claims ....................................................43
SECTION 4.5 Maintenance of Properties and Insurance ..............................................43
SECTION 4.6 Compliance Certificate; Notice of Default ............................................46
SECTION 4.7 Compliance with Laws .................................................................47
SECTION 4.8 Reports ..............................................................................47
SECTION 4.9 Waiver of Stay, Extension or Usury Laws ..............................................47
SECTION 4.10 Limitation on Restricted Payments ...................................................48
SECTION 4.11 Limitation on Transaction with Affiliates ...........................................51
SECTION 4.12 Limitation on Incurrence of Indebtedness or Issuance of Disqualified Stock ..........52
SECTION 4.13 Dividend and Other Payment Restrictions Affecting Subsidiaries ......................54
SECTION 4.14 Limitation on Change of Control .....................................................56
SECTION 4.15 Limitation on Sales of Assets and Subsidiary Interests ..............................58
SECTION 4.16 Limitation on Liens .................................................................61
SECTION 4.17 Business Activities .................................................................61
SECTION 4.18 Limitations on Sale and Leaseback Transactions ......................................61
SECTION 4.19 Limitation on Sale of Capital Stock of Subsidiaries .................................61
ARTICLE V MERGER, CONSOLIDATION OR SALE OF ASSETS ...................................................62
SECTION 5.1 Mergers, Consolidations and Sale of Assets ...........................................62
SECTION 5.2 Successor Substitued .................................................................63
</TABLE>
ii
<PAGE> 5
<TABLE>
<S> <C>
ARTICLE VI EVENTS OF DEFAULT AND REMEDIES ...........................................................63
SECTION 6.1 Events of Default ....................................................................63
SECTION 6.2 Acceleration .........................................................................65
SECTION 6.3 Other Remedies .......................................................................66
SECTION 6.4 Waiver of Past Defaults ..............................................................67
SECTION 6.5 Control by Majority ..................................................................67
SECTION 6.6 Limitation on Suits ..................................................................67
SECTION 6.7 Rights of Holders to Receive Payment .................................................68
SECTION 6.8 Collection Suit by Trustee ...........................................................68
SECTION 6.9 Trustee May File Proofs of Claim .....................................................68
SECTION 6.10 Priorities ..........................................................................69
SECTION 6.11 Undertaking for Costs ...............................................................69
ARTICLE VII TRUSTEE .................................................................................70
SECTION 7.1 Duties of Trustee ....................................................................70
SECTION 7.2 Rights of Trustee ....................................................................71
SECTION 7.3 Individual Rights of Trustee and Agents ..............................................72
SECTION 7.4 Trustee's Disclaimer .................................................................72
SECTION 7.5 Notice of Default ....................................................................72
SECTION 7.6 Reports by Trustee to Holders ........................................................72
SECTION 7.7 Compensation and Indemnify ...........................................................73
SECTION 7.8 Resignation and Removal; Appointment of Successor ....................................74
SECTION 7.9 Acceptance of Appointment by Successor ...............................................75
SECTION 7.10 Successor Trustee by Merger, Etc. ...................................................76
SECTION 7.11 Trustee Required; Eligibility; Disqualification .....................................76
SECTION 7.12 Preferential Collection of Claims Against Company ...................................76
ARTICLE VIII DEFEASANCE AND SATISFACTION AND DISCHARGE ..............................................76
SECTION 8.1 Legal Defeasance and Covenant Defeasance .............................................76
</TABLE>
iii
<PAGE> 6
<TABLE>
<S> <C>
SECTION 8.2 Satisfaction and Discharge ...........................................................79
SECTION 8.3 Survival of Certain Obligations ......................................................79
SECTION 8.4 Acknowledgment of Discharge by Trustee ...............................................80
SECTION 8.5 Application of Trust Moneys and Government Securities ................................80
SECTION 8.6 Repayment to the Company; Unclaimed Money ............................................81
SECTION 8.7 Reinstatement ........................................................................81
ARTICLE IX AMENDEMENTS, SUPPLEMENTS AND WAIVERS .....................................................81
SECTION 9.1 Without Consent of Holders ...........................................................81
SECTION 9.2 With Consent of Holders ..............................................................82
SECTION 9.3 Execution of Supplemental Indentures .................................................84
SECTION 9.4 Effect of Supplemental Indentures ....................................................84
SECTION 9.5 Compliance with Trust Indenture Act ..................................................84
SECTION 9.6 Reference in Notes to Supplemental Indentures ........................................84
SECTION 9.7 Revocation and Effect of Consents ....................................................84
ARTICLE X SUBSIDIARY GUARANTEES .....................................................................85
SECTION 10.1 Unconditional Guarantee .............................................................85
SECTION 10.2 Priority of Guarantee ...............................................................86
SECTION 10.3 Severability ........................................................................86
SECTION 10.4 Limitation of Subsidiary Guarantor's Liability ......................................86
SECTION 10.5 Waiver of Subrogation ...............................................................87
SECTION 10.6 Successors and Assigns ..............................................................87
SECTION 10.7 No Waiver ...........................................................................87
SECTION 10.8 Modification ........................................................................88
SECTION 10.9 Release of Subsidiary Guarantor .....................................................88
SECTION 10.10 Execution of Supplemental Indenture by Future Restricted Subsidiaries ..............88
SECTION 10.11 Waiver of Stay, Extension or Usury Laws ............................................89
ARTICLE XI MISCELLANEOUS ............................................................................89
</TABLE>
iv
<PAGE> 7
<TABLE>
<S> <C>
SECTION 11.1 Trust Indenture Act Controls ........................................................89
SECTION 11.2 Notices to Company and Trustee ......................................................89
SECTION 11.3 Notices to Holders ..................................................................90
SECTION 11.4 Trustee, Paying Agent and Registrar Procedures ......................................90
SECTION 11.5 Compliance Certificates and Opinions ................................................90
SECTION 11.6 Form of Documents Delivered to Trustee ..............................................91
SECTION 11.7 Acts of Holders; Registered Holders; Record Dates ...................................92
SECTION 11.8 Successors and Assigns ..............................................................93
SECTION 11.9 Severability ........................................................................93
SECTION 11.10 Benefits of Indenture ..............................................................94
SECTION 11.11 Governing Law; Jurisdiction ........................................................94
SECTION 11.12 Legal Holdays ......................................................................94
SECTION 11.13 No Recourse Against Others; Limitation on Liability ................................94
SECTION 11.14 Counterparts .......................................................................94
</TABLE>
v
<PAGE> 8
INDENTURE, dated as of April 22, 1999, by and between Orbital Imaging
Corporation (the "Company" or "ORBIMAGE") with its principal office at 21700
Atlantic Boulevard, Dulles, Virginia 20166, and HSBC Bank USA, a New York
banking corporation and trust company, as trustee (the "Trustee").
RECITALS:
WHEREAS, the Company has duly authorized the issuance of $75,000,000
aggregate principal amount of its 11 5/8% Senior Notes Due 2005 (the "Notes")
of substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture; and
WHEREAS, all things necessary to make the Notes, when executed by the
Company and authenticated and delivered hereunder, duly issued by the Company,
the valid obligations of the Company, and to make this Indenture a valid and
binding agreement of Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH: for and in consideration of
the premises and the purchase of the Notes by the Holders (as hereinafter
defined) thereof, each party hereto hereby mutually covenants and agrees, for
the equal and proportionate benefit of all Holders of the Notes, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 DEFINITIONS.
"Acceleration Notice" has the meaning set forth in Section 6.2(a).
"Acquired Debt" means, with respect to any specified Person:
(i) Indebtedness of any other Person existing at the time
such other Person is merged with or into or became a Restricted Subsidiary of
such specified Person, including, without limitation, Indebtedness incurred in
connection with, or in contemplation of, such other Person merging with or into
or becoming a Restricted Subsidiary of such specified Person; and
(ii) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"Act" has the meaning set forth in Section 11.7(a).
"Affiliate" of any specified Person means any other Person directly or
indirectly
<PAGE> 9
controlling or controlled by or under direct or indirect common control with
such specified Person. For purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling," "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of Voting Equity Interests, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the Voting Equity Interests (or the
equivalent) of a Person shall be deemed to be control.
"Affiliate Transaction" has the meaning set forth in Section 4.11.
"Agent Member" shall mean members of, or participants in, the
Depositary.
"Asset Sale" means:
(i) the sale, lease, license, conveyance or other
disposition of any assets or rights (including, without limitation, by way of a
Sale and Leaseback Transaction or similar arrangement) by the Company or a
Restricted Subsidiary of the Company (a "disposition"), provided that the
disposition of all or substantially all of the assets of the Company and its
Restricted Subsidiaries taken as a whole will be governed by Sections 4.14
and/or 5.1 of this Indenture, and not by Section 4.15.
(ii) except to the extent excluded by clause (i) above,
the issuance or disposition by the Company or any of its Restricted
Subsidiaries of Equity Interests of the Company's Restricted Subsidiaries.
in the case of either clause (i) or (ii) above, whether in a single transaction
or a series of related transactions: (a) that has a Fair Market Value in excess
of $2.5 million; or (b) for net proceeds in excess of $2.5 million.
Notwithstanding the foregoing: (i) sales of imagery, imagery
distribution or satellite tasking rights, software or rights in software for
processing and storing imagery, license grants to imagery value-added
resellers or distributors and other associated rights, and sales of services,
products or inventory in the ordinary course of business; (ii) a transfer of
assets by the Company to any of its Restricted Subsidiaries or by a Restricted
Subsidiary of the Company to the Company; (iii) an issuance of Equity Interests
by a Restricted Subsidiary of the Company to the Company or to a Wholly Owned
Restricted Subsidiary of the Company; (iv) an exchange of an asset held by the
Company or a Restricted Subsidiary of the Company for an asset of a third party
upon a determination by the disinterested members of the Board of Directors of
the Company made in good faith (evidenced by a resolution approved by a
majority of the disinterested members of the Board of Directors of the Company
and set forth in an Officers' Certificate delivered to the Trustee) that the
asset received by the Company or a Restricted Subsidiary of the Company in such
exchange (x) is a Related Asset, (y) has a Fair Market Value at least equal to
the fair market value of the asset transferred by the Company or such
Restricted
- 2 -
<PAGE> 10
Subsidiary of the Company and (z) is usable in the ordinary course of the
Company's business to at least the same extent as the asset transferred by the
Company or such Restricted Subsidiary; (v) sales or dispositions of damaged,
worn out or other obsolete property in the ordinary course of business so long
as such property is no longer necessary for the proper conduct of the business
of the Company or any of its Restricted Subsidiaries; and (vi) a Restricted
Payment that is permitted under Section 4.10, will not be deemed to be Asset
Sales.
"Asset Sale Offer" has the meaning set forth in Section 4.15(a).
"Asset Sale Offer Trigger Date" has the meaning set forth in Section
4.15(a).
"Attributable Debt" means, with respect to any sale and leaseback
transaction, the present value at the time of determination (discounted at a
rate consistent with accounting guidelines, as determined in good faith by the
Company) of the payments during the remaining term of the lease (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended) or until the earliest date on which the lessee may
terminate such lease without penalty or upon payment of a penalty (in which
case the rental payments shall include such penalty, after excluding all
amounts required to be paid on account of maintenance and repairs, insurance,
taxes, assessments, water, utilities and similar charges).
"Business Assets" means any hardware, software, technology,
intellectual property, or other rights in or assets (or, in the case of clause
(vi), inventory) relating to (i) the remote imaging satellites owned and/or
operated by ORBIMAGE on the First Issue Date, (ii) the OrbView Satellites,
(iii) the Replacement Satellites, (iv) any other remote imaging satellites
developed, constructed or acquired by ORBIMAGE, (v) the ground segment (or any
components thereof) related to the operation of, and processing of data from,
the satellites described in clauses (i)-(v) above, and (vi) the Company's
imagery catalogue and archive.
"Business Day" means any day other than a Saturday, Sunday or day on
which commercial banking institutions in The City of New York, New York are
authorized or obligated by law or executive order to close.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital
lease that would at such time be required to be capitalized on a balance sheet
in accordance with GAAP.
"Capital Stock" means: (i) in the case of a corporation, corporate
stock; (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock; (iii) in the case of a partnership, partnership
interests (whether general or limited); and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
- 3 -
<PAGE> 11
"Cash Consideration" means any consideration received from an Asset
Sale in the form of cash or Cash Equivalents, in either case in U.S. dollars or
freely convertible into U.S. dollars.
"Cash Equivalents" means:
(i) United States dollars;
(ii) Government Securities;
(iii) certificates of deposit and eurodollar time deposits
with maturities of six months or less from the date of acquisition, bankers'
acceptances or money market deposit accounts with maturities not exceeding six
months and overnight bank deposits, in each case with any Eligible Institution;
(iv) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clauses (ii) and
(iii) above entered into with any Eligible Institution;
(v) commercial paper having the highest rating obtainable
from Moody's or S&P and in each case maturing within six months after the date
of acquisition; and
(vi) mutual funds or other pooled investment vehicles
investing solely in investments of the types described in (i) through (v)
above.
"Cash Insurance" has the meaning set forth in Section 4.5.
"Change of Control" means:
(i) the failure by Orbital to hold at least 12,600,000
shares of Common Stock of the Company (being 50% of the shares of Common Stock
held by Orbital on May 8, 1997), adjusted for stock splits, stock combinations
and the like;
(ii) the failure by Orbital to hold at least thirty
percent (30%) of the Common Stock of the Company on a fully diluted basis,
without giving effect to the conversion of Capital Stock of the Company issued
as a dividend paid-in-kind with respect to shares of Series A Preferred Stock
or Capital Stock of the Company issued pursuant to options granted under the
Stock Option Plan or any other option plan adopted for the benefit of the
Company's employees or directors;
(iii) the direct or indirect acquisition of beneficial
ownership of Voting Equity Interests of the Company by any Person or group of
Persons acting in concert, in an amount greater than the amount of Voting
Equity Interests held contemporaneously by Orbital except (x) purchases by
record holders of Series A Preferred Stock as of the First Issue Date (and
their Affiliates, to the extent that such holders are permitted to transfer
their shares of Series A
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<PAGE> 12
Preferred Stock to Affiliates under the Stock Purchase Agreement ("Series A
Affiliates")) from other holders of Series A Preferred Stock and their Series A
Affiliates and (y) purchases permitted pursuant to the subscription rights of
the holders of Series A Preferred Stock under Section 4.1 of the Stockholders'
Agreement;
(iv) the acquisition of the Company, or the sale, lease,
transfer, conveyance or other disposition, in one transaction or a series of
related transactions, directly or indirectly, including through a liquidation
or dissolution, of all or substantially all of the assets of the Company and
its Restricted Subsidiaries or the combination of the Company or all or
substantially all its assets with another Person (other than any such transfer
to any Wholly Owned Restricted Subsidiary of the Company), unless the acquiring
or surviving Person shall be a corporation more than fifty percent (50%) of the
combined voting power of which corporation's then outstanding Voting Equity
Interests, after giving effect to such acquisition or combination, are owned,
immediately after such acquisition or combination, by the owners of the Voting
Equity Interests of the Company outstanding immediately prior to such
acquisition or combination;
(v) the adoption of a plan relating to the liquidation or
dissolution of the Company (other than any such liquidation or dissolution to
or for the benefit of any Wholly Owned Restricted Subsidiary of the Company);
(vi) the failure by the Company to obtain any applicable
License (or License amendment, as applicable) so that it is in full force and
effect within thirty (30) days prior to the scheduled launch of any of the
OrbView Satellites;
(vii) the revocation of any License necessary to operate
OrbView-2 or the OrbView Satellites consistent with the Company's current and
planned commercial operations and which revocation is not cured within thirty
(30) days of the occurrence thereof or such later date when all applicable
appeals have been finally determined, if during such appeal period the Company
has received regulatory approval to continue operations under the License
pending the outcome of such appeals; or
(viii) at any time prior to the latest to occur of (a) the
successful on-orbit checkout of the imaging satellite known as OrbView-3, (b) a
Qualifying Public Offering or (c) the Business Day next following the end of a
180 consecutive day period during which the average closing price per share of
the Company's Common Stock shall have exceeded the Threshold Price (as defined
in the definition of "Qualifying Public Offering" below) then in effect, and
unless consented to in writing by the holders of at least fifty percent (50%)
of the shares of Series A Preferred Stock then outstanding, the acquisition by
any Person or group of Persons acting in concert of beneficial ownership,
direct or indirect, of securities of Orbital representing thirty-five percent
(35%) or more of the combined voting power of Orbital's then outstanding equity
securities and at any time thereafter either (x) less than a majority of
Orbital's board of directors shall be Continuing Directors or (y) there shall
be an announcement by Orbital or such acquiring Person or group of Persons or
the approval of a business plan by Orbital's
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<PAGE> 13
Board of Directors, in either case that indicates an intention to de-emphasize
or curtail the relationship between the Company and Orbital.
"Change of Control Date" has the meaning set forth in Section 4.14(b).
"Change of Control Offer" has the meaning set forth in Section
4.14(a).
"Change of Control Payment" has the meaning set forth in Section
4.14(a).
"Change of Control Payment Date" has the meaning set forth in Section
4.14(b).
"Collateral Agent" means the collateral agent under the Pledge
Agreement.
"Commission" means the Securities and Exchange Commission, or
successor body performing the duties now assigned to it under the TIA.
"Common Stock" means the common stock, $.01 par value, of the Company.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period,
(a) plus, to the extent deducted or otherwise excluded in
computing such Consolidated Net Income:
(i) an amount equal to any extraordinary loss
plus any net loss realized in connection with a sale of assets;
(ii) provision for taxes based on income or
profits of such Person and its Restricted Subsidiaries for such period;
(iii) Consolidated Interest Expense; and
(iv) depreciation, amortization (including
amortization of goodwill and other intangibles but excluding amortization of
prepaid cash expenses that were paid in a prior period) and other non-cash
charges (excluding any such non-cash charge to the extent that it represents an
accrual of or reserve for cash charges in any future period or amortization of
a prepaid cash expense that was paid in a prior period) of such Person and its
Restricted Subsidiaries for such period;
(b) minus, to the extent added or otherwise included in
computing Consolidated Net Income, consolidated interest income of such Person
and its Restricted Subsidiaries for such period and non-cash items increasing
such Consolidated Net Income (including, without limitation, (x) unrealized
currency exchange gains and (y) amortized non-cash contract revenues related to
(i) cash received prior to the First Issue Date and (ii) cash
- 6 -
<PAGE> 14
received subsequent to the First Issue Date that is specifically intended to
fund capital expenditures, including, but not limited to that certain contract
between Orbital and the U.S. Air Force with respect to hyperspectral imagery
and that certain contract dated as of December 18, 1998 between MacDonald,
Dettwiler and Associates Ltd. and the Canadian Space Agency relating to
RadarSat-2, as the same may be amended from time to time, in each case, on a
consolidated basis and determined in accordance with GAAP). Notwithstanding
the foregoing, the provision for taxes on the income or profits of, and the
depreciation and amortization and other non-cash charges of, a Restricted
Subsidiary of any such Person shall be added to Consolidated Net Income to
compute Consolidated Cash Flow only to the extent (and in the same proportion)
that the Net Income of such Restricted Subsidiary was included in calculating
the Consolidated Net Income of such Person and only if a corresponding amount
would be permitted at the date of determination to be distributed by dividend
to such Person by such Restricted Subsidiary without prior approval (that has
not been obtained), pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to such Restricted Subsidiary or its stockholders.
"Consolidated Interest Expense" means, with respect to any Person for
any period, (a) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP, whether paid or accrued and whether or not capitalized
(including, without limitation, amortization of original issue discount,
non-cash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, commissions, discounts and other fees and charges incurred
in respect of letter of credit or bankers' acceptance financing, and net
payments (if any) pursuant to Hedging Obligations) plus (b) the aggregate
amount for such period of cash or non-cash dividends on any Disqualified Stock
of the Company and its Subsidiaries.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(i) the Net Income of any Person that is not a Subsidiary
Guarantor or that is accounted for by the equity method of accounting shall be
included only to the extent of the amount of dividends or distributions
actually paid in cash to the referent Person or a Wholly Owned Restricted
Subsidiary thereof;
(ii) the Net Income of any Restricted Subsidiary that is
not a Subsidiary Guarantor shall be excluded to the extent that the declaration
or payment of dividends or similar distributions by such Restricted Subsidiary
of such Net Income is not at the date of determination permitted without any
prior governmental approval (which has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to such Restricted Subsidiary or its stockholders;
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<PAGE> 15
(iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition
shall be excluded;
(iv) the cumulative effect of a change in accounting
principles shall be excluded; and
(v) the Net Income of any Unrestricted Subsidiary shall
be included only to the extent of the amount of dividends or distributions
actually paid in cash to the referent Person or a Restricted Subsidiary
thereof.
"Consolidated Net Worth" means, with respect to any Person as of any
date:
(i) the consolidated equity of the equity holders of such
Person and its consolidated Restricted Subsidiaries as of such date; plus
(ii) the respective amounts reported on such Person's
balance sheet as of such date with respect to any series of preferred Equity
Interests (other than Disqualified Stock) that by its terms is not entitled to
the payment of dividends unless such dividends may be declared and paid only
out of net earnings in respect of the year of such declaration and payment, but
only to the extent of any cash received by such Person upon issuance of such
preferred stock; minus
(iii) all write-ups (other than write-ups resulting from
foreign currency translations and write-ups of tangible assets of a
going-concern business made within 12 months after the acquisition of such
business) subsequent to the First Issue Date in the book value of any asset
owned by such Person or a consolidated Subsidiary of such Person; minus
(iv) all investments as of such date in unconsolidated
Subsidiaries and in Persons that are not Restricted Subsidiaries; minus
(v) all unamortized debt discount and expense and
unamortized deferred charges as of such date.
"Consolidated Tangible Net Assets" means, with respect to any Person,
the Consolidated Net Worth of such Person less goodwill and any other
intangible assets shown on the consolidated balance sheet of such Person and
its Restricted Subsidiaries.
"Continuing Director" means a director of Orbital that is a director
on the First Issue Date or is nominated as a director by a majority of
Orbital's Board of Directors, which majority consists of directors in place for
at least 12 months (other than in connection with replacements or vacancies
occurring in the ordinary course) prior to the acquisition representing 35% or
more of the combined voting power of Orbital's outstanding equity securities.
"Corporate Trust Office" means, with respect to the Trustee or any
agent, the principal corporate trust office of such Person.
- 8 -
<PAGE> 16
"Covenant Defeasance" has the meaning set forth in Section 8.1(c).
"Credit Facilities" means, with respect to the Company, one or more
debt facilities or commercial paper facilities with banks or other
institutional lenders providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables to such
lenders or to special purpose entities formed to borrow from such lenders
against such receivables) or letters of credit, in each case, as amended,
restated, modified, renewed, refunded, replaced or refinanced in whole or in
part from time to time.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Definitive Note" has the meaning set forth in Section 2.6.
"Depository" means, with respect to the Notes issuable or issued in
whole or in part in the form of one or more Global Notes, The Depository Trust
Company, for so long as it shall be a clearing agency registered under the
Exchange Act, or such successor as the Company shall designate from time to
time in an Officers' Certificate delivered to the Trustee.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable, at the option of the holder thereof), or upon the happening of
any event: (i) matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise at the option of the holder thereof; or (ii) is
redeemable or is convertible or exchangeable for Indebtedness at the option of
the holder thereof, in whole or in part, on or prior to the date on which the
Notes are repaid, redeemed or retired in full; provided, however, that
Disqualified Stock shall not include any Capital Stock that would constitute
Disqualified Stock solely because the holders thereof have the right to require
the Company to repurchase such Capital Stock if the terms of such Capital Stock
provide that the Company may not repurchase or redeem any such Capital Stock
pursuant to such provisions unless such repurchase or redemption complies with
Section 4.10 of this Indenture. The Series A Preferred Stock shall not be
Disqualified Stock.
"Eligible Institution" means a domestic commercial banking institution
that has combined capital and surplus of not less than $500 million or its
equivalent in foreign currency, whose debt is rated "A" or higher according to
S&P or Moody's at the time as of which any investment or rollover therein is
made.
"Eligible Receivables" means the accounts receivable of the Company
(net of accounts more than 90 days past due and reserves and allowances for
doubtful accounts determined in accordance with GAAP).
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<PAGE> 17
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Event of Default" has the meaning specified in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
(or any successor act) and the rules and regulations thereunder.
"Exchange Note" means any Note issued in exchange for an Original Note
pursuant to the Exchange Offer.
"Exchange Offer" means the offer to exchange and issuance by the
Company of a principal amount of Exchange Notes (which shall be registered
pursuant to the Exchange Offer Registration Statement) equal to the outstanding
principal amount of Original Notes that are validly tendered by such Holders in
connection with such exchange and issuance.
"Exchange Offer Registration Statement" means the Registration
Statement relating to the Exchange Offer, including the related Prospectus.
"Existing Indebtedness" means Indebtedness of the Company in existence
on the First Issue Date, until such amounts are repaid.
"Fair Market Value" means, with respect to any asset, the sale value
that would be obtained in an arm's-length free market transaction, between a
willing seller and a willing buyer, neither of which is under pressure or
compulsion to complete the transaction; provided that the Fair Market Value of
any such asset or assets shall be determined by the Board of Directors of the
Company, acting in good faith and by unanimous resolution, and which
determination shall be evidenced by an Officers' Certificate delivered to the
Trustee.
"First Issue Date" means February 25, 1998, the date on which the
Company issued 150,000 units consisting of the 1998 Notes and warrants to
purchase 1,312,746 shares of Common Stock.
"Fixed Asset Financing" means Indebtedness that is secured by
ground-based equipment and other tangible assets of the Company or a sale and
leaseback transaction with respect to such assets, in which case the
Attributable Debt shall be treated as Indebtedness for purposes of this
definition.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession and which are in effect on the Issue Date.
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<PAGE> 18
"Global Note" has the meaning set forth in Section 2.1.
"Government Securities" means securities that are direct obligations
of, or obligations fully guaranteed by, the United States of America for the
payment of which guarantee or obligations the full faith and credit of the
United States is pledged.
"Guarantee" or "guarantee" means a guarantee (other than by
endorsement of negotiable instruments for collection in the ordinary course of
business), direct or indirect, in any manner (including, without limitation,
letters of credit and reimbursement agreements in respect thereof), of all or
any part of any Indebtedness.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under: (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements; (ii) foreign currency
hedge obligations; and (iii) other agreements or arrangements designed to
protect such Person against fluctuations in interest and foreign currency
rates.
"Holder" means a Person in whose name a Note is registered in the Note
Register.
"Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or bankers' acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable to
the extent that any such accrued expense or trade payable is not more than 90
days overdue or is otherwise being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted, if and to the extent
any of the foregoing indebtedness (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP, as well as all indebtedness of others secured
by a Lien on any asset of such Person (whether or not such indebtedness is
assumed by such Person and, in the event such indebtedness is not assumed by,
and is otherwise non-recourse to, such Person, the amount of such indebtedness
shall be deemed to equal the greater of book value or Fair Market Value of such
assets), all obligations to purchase, redeem, retire, defease or otherwise
acquire for value any Disqualified Stock or any warrants, rights or options to
acquire such Disqualified Stock valued, in the case of Disqualified Stock, at
the greatest amount payable in respect thereof on a liquidation (whether
voluntary or involuntary) plus accrued and unpaid dividends, the liquidation
value of any preferred stock issued by Subsidiaries of such Person, plus
accrued and unpaid dividends, and, to the extent not otherwise included, the
Guarantee by such Person of any indebtedness of any other Person; and provided,
that "Indebtedness" shall be calculated without duplication and after
elimination of Intercompany Indebtedness.
- 11 -
<PAGE> 19
"Indebtedness to Capital Ratio" means, on any date of determination
for the Company and its Restricted Subsidiaries, on a consolidated basis, the
ratio (expressed as a percentage) of Indebtedness on such date to Total
Invested Capital on such date.
"Indebtedness to Cash Flow Ratio" means, with respect to any Person as
of any date of determination, the ratio of: (i) total Indebtedness of such
Person and its Restricted Subsidiaries as of such date; to (ii) two times
Consolidated Cash Flow of such Person and its Restricted Subsidiaries for the
two most recently ended fiscal quarters for which financial statements of such
Person are available (the "Measurement Period"); provided, however, that: (a)
in making such computation, the total Indebtedness of such Person and its
Restricted Subsidiaries shall include the total amount of funds outstanding
under any credit facilities; and (b) in the event such Person or any of its
Restricted Subsidiaries consummates a material acquisition or sale of assets,
or issues or redeems Disqualified Stock subsequent to the commencement of the
Measurement Period, then the Indebtedness to Cash Flow Ratio shall be
calculated giving pro forma effect to such material acquisition, sale of assets
or issuance or redemption of Disqualified Stock as if the same had occurred at
the beginning of the Measurement Period. For purposes of this definition,
whenever the pro forma effect is to be given to a transaction, the pro forma
calculations shall be made in good faith by a responsible financial or
accounting officer of the Company.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"1998 Indenture" means the Indenture, dated as of February 25, 1998
between the Company and HSBC Bank USA (formerly known as Marine Midland Bank),
governing the 1998 Notes.
"Independent Financial Advisor" means an accounting, appraisal or
investment banking firm of nationally recognized standing that is, in the good
faith judgment of the Board of Directors of the Company (evidenced by a
resolution of the majority of the Board of Directors of the Company as set
forth in an Officers' Certificate delivered to the Trustee), qualified to
perform the task for which it has been engaged and is disinterested and
independent with respect to the Company and its Affiliates.
"Initial Purchasers" means Bear, Stearns & Co. Inc. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated.
"Insurance Account" has the meaning set forth in Section 4.5.
"Intercompany Indebtedness" has the meaning set forth in Section
4.12(b).
"Interest Payment Date" means, with respect to any installment of
interest on the Notes, March 1 and September 1 of each year.
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<PAGE> 20
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans, guarantees, advances or capital contributions (excluding
commission, travel and similar advances to officers and employees made in the
ordinary course of business), purchases or other acquisitions for consideration
of Indebtedness, Equity Interests or other securities and all other items that
are or would be classified as investments on a balance sheet prepared in
accordance with GAAP; provided that an acquisition of assets, Equity Interests
or other securities by the Company for consideration consisting of common
Equity Interests (other than Disqualified Stock) of the Company shall not be
deemed to be an Investment. Notwithstanding the foregoing, Investments shall
not include advance payments for satellite capacity or imagery related services
or products in the ordinary course of business.
"Issue Date" means April 22, 1999, the date on which the Notes are
first authenticated and delivered under this Indenture.
"Joint Venture" means a Person in a Related Business in which the
Company or one of its Subsidiaries holds 50% or less of the Voting Equity
Interests.
"Legal Defeasance" has the meaning set forth in Section 8.1(b).
"License" means any Federal Communications Commission license or
Department of Commerce license issued to the Company relating to the operation
of OrbView-2 or the OrbView Satellites (including the Department of Commerce
license and the Federal Communications Commission license currently owned by
Orbital relating to the operation of OrbView-2).
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease
in the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Liquidated Damages" has the meaning set forth in the Registration
Rights Agreement, dated as of April 22, 1999, between the Company and the
Initial Purchasers, as the same may be amended, supplemented or otherwise
modified from time to time.
"Marketable Securities" means: (i) Government Securities or, for
purpose of determining whether such Government Securities may serve as
substitute Pledged Securities, Government Securities having a maturity date on
or before the date on which the payments of interest on the Notes to which such
Government Securities are pledged occur; (ii) any certificate of deposit
maturing not more than 270 days after the date of acquisition issued by, or
time deposit of, an Eligible Institution; (iii) commercial paper maturing not
more than 270 days after the date of acquisition issued by a corporation (other
than an Affiliate of the Pledgor) with a rating at the time as of which any
investment therein is made, of "A-1" (or higher) according to S&P or "P-1"
- 13 -
<PAGE> 21
(or higher) according to Moody's; (iv) any banker's acceptances or money market
deposit accounts issued or offered by an Eligible Institution; and (v) any fund
investing exclusively in investments of the types described in clauses (i)
through (iv) above; and in the case of (ii) through (iv) above, which have a
maturity date on or before the date on which the payments of interest on the
Notes to which such securities are pledged occur.
"Moody's" means Moody's Investors Service, Inc. or its successors.
"Net Income" means, with respect to any Person, the net income (or
loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however,
(i) any gain (but not loss), together with any related
provision for taxes on such gain (but not loss), realized in connection with:
(a) any sale of assets (including, without limitation, dispositions pursuant to
Sale and Leaseback Transactions); or (b) the disposition of any securities by
such Person or any of its Restricted Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of its Restricted Subsidiaries; and
(ii) any extraordinary or nonrecurring gain (but not
loss), together with any related provision for taxes on such extraordinary or
nonrecurring gain (but not loss).
"Net Proceeds" means (a) with respect to any Asset Sale, the aggregate
cash proceeds received by the Company or any of its Restricted Subsidiaries in
respect of such Asset Sale (including, without limitation, any cash received
upon the sale or other disposition of any non-cash consideration received in
any Asset Sale), net of the direct costs relating to such Asset Sale
(including, without limitation, legal, accounting and investment banking fees,
and sales commissions) and any relocation expenses incurred as a result
thereof, taxes paid or payable as a result thereof (after taking into account
any available tax credits or deductions and any tax sharing arrangements and
provided that any such amount not so required to be paid for taxes shall be
deemed to constitute Net Proceeds at the time such amount is not retained for
such purpose), amounts required to be applied to the repayment of Indebtedness
secured by a Lien on the asset or assets (including Equity Interests) that were
the subject of such Asset Sale and any reserve for adjustment in respect of the
sale price of such asset or assets (including Equity Interests) established in
accordance with GAAP (provided that the amount of any such reserve shall be
deemed to constitute Net Proceeds at the time such reserve shall have been
released or is not otherwise required to be retained for such purpose) and (b)
with respect to any issuance or sale of Capital Stock, the proceeds of such
issuance or sale in the form of cash or Cash Equivalents, including payments in
respect of deferred payment obligations (to the extent corresponding to the
principal, but not interest, component thereof) when received in the form of
cash or Cash Equivalents (except to the extent such obligations are financed or
sold with recourse to the Company or any Restricted Subsidiary of the Company)
and proceeds from the conversion of other property received when converted to
cash or Cash Equivalents, net of legal, accounting and investment banking fees,
discounts and sales commissions and net of taxes paid or payable as a result
thereof.
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<PAGE> 22
"Non-Recourse Debt" means Indebtedness:
(i) as to which neither the Company nor any of its
Restricted Subsidiaries: (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Indebtedness); (b)
is directly or indirectly liable (as a guarantor or otherwise); or (c)
constitutes the lender;
(ii) no default that (including any rights that the
Holders thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit (upon notice, lapse of time or both) any holder of any
other Indebtedness of the Company or any of its Restricted Subsidiaries to
declare a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its Stated Maturity; and
(iii) as to which the lenders have been notified in writing
that they will not have any recourse to the stock or assets of any of the
Company or any of its Restricted Subsidiaries.
"Note Custodian" means the Trustee, as custodian with respect to the
Global Notes, or any successor entity thereto.
"Note Register" has the meaning specified in Section 2.3.
"Notes" means the Exchange Notes and the Original Notes.
"1998 Notes" means the 11-5/8% Senior Notes due 2005 issued pursuant
to the 1998 Indenture.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the offer and sale by the Company to the Initial
Purchasers of $75,000,000 in aggregate principal amount at maturity of the
Notes at a purchase price of $70,830,000.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chief Executive Officer, President or a
Vice-President and the chief financial and accounting officer of such Person.
"Opinion of Counsel" means a written opinion of legal counsel
acceptable to the Trustee, and delivered to the Trustee.
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<PAGE> 23
"Orbital" means Orbital Sciences Corporation, a Delaware corporation,
or any successor entity whether by merger, sale of all or substantially all its
assets or otherwise.
"Orbital Agreements" means each of the Amended and Restated
Procurement Agreement between the Company and Orbital, dated as of February 25,
1998 and amended as of December 31, 1998, the Amended and Restated ORBIMAGE
Services Agreement between Orbital and the Company, dated as of December 31,
1997; the Non-Compete and Teaming Agreement between the Company and Orbital,
dated as of May 8, 1997; the OrbView-2 License Agreement between the Company
and Orbital, dated as of May 8, 1997; the Software License Agreement between
the Company and Earth Observation Sciences dated March 14, 1996, as amended;
the RadarSat-2 License Agreement, dated as of December 31, 1998 and amended as
of April 1, 1999, among the Company, Orbital and MacDonald, Dettwiler and
Associates Ltd., a wholly owned subsidiary of Orbital, and the Software
Maintenance and Support Agreement between the Company and Earth Observation
Sciences, dated as of October 1, 1997; each agreement as in effect as of the
Issue Date and as amended from time to time if such amendment is not prohibited
by this Indenture or the 1998 Indenture.
"OrbView Satellites" means each of the high-resolution satellites
currently designated as OrbView-3 and OrbView-4 under the Procurement
Agreement, and any Replacement Satellite.
"Original Notes" means the Notes initially issued under this Indenture
prior to the issuance of the Exchange Notes.
"Paying Agent" has the meaning set forth in Section 2.3.
"Permitted Investment" means:
(i) any Investments in the Company or any Wholly Owned
Restricted Subsidiary of the Company;
(ii) any Investments in cash or Cash Equivalents;
(iii) Investments by the Company or any of its Restricted
Subsidiaries in a Person if, as a result of such Investment: (a) such Person
becomes a Restricted Subsidiary of the Company; or (b) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys substantially
all of its assets to, or is liquidated into, the Company or any Restricted
Subsidiary of the Company;
(iv) any Investment made as a result of the receipt of
non-Cash Consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.15 of this Indenture;
(v) any Investment made with Excess Proceeds remaining
after the consummation of an Asset Sale Offer as described in Section 4.15 of
this Indenture;
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(vi) any Investment made by the Company or any of its
Restricted Subsidiaries in any Unrestricted Subsidiary using the proceeds of a
substantially concurrent contribution to the equity capital of the Company; and
(vii) any Investment made by the Company or any of its
Restricted Subsidiaries in a Related Business, Related Satellite Business or a
Joint Venture; provided that at the time any such Investment is made, such
Investment will not cause the aggregate amount of Investments at any one time
outstanding under clause (vii) of the defined term "Permitted Investment" in
Section 1.1 of the 1998 Indenture and this clause (vii) to exceed the greater
of (x) $10 million or (y) 7.5% of the Consolidated Net Worth of the Company.
"Permitted Liens" means:
(i) Liens securing the Notes;
(ii) Liens in favor of the Company;
(iii) Liens on property of a Person existing at the time
such Person is merged into or consolidated with the Company or any of its
Restricted Subsidiaries; provided that such Liens were in existence prior to
the contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with the
Company or its Restricted Subsidiary;
(iv) Liens on property existing at the time of acquisition
thereof by the Company or any of its Restricted Subsidiaries; provided that
such Liens were in existence prior to the contemplation of such acquisition;
(v) Liens to secure the performance of statutory
obligations, surety, appeal or performance bonds or other obligations of a like
nature or mechanics' or purchase money Liens incurred in the ordinary course of
business;
(vi) Liens existing on the First Issue Date and Liens
created between the First Issue Date and the Issue Date pursuant to Section
4.16 of the 1998 Indenture or that constitute "Permitted Liens" as such term is
defined in Section 1.1 of the 1998 Indenture;
(vii) Liens on inventory, accounts receivable or domestic
and/or international ground operation centers and related systems securing
Indebtedness incurred pursuant to clause (i), (vii), (x) or (xi) of Section
4.12(b) of this Indenture, or securing Permitted Refinancing Indebtedness
incurred to refinance Indebtedness pursuant to clause (i), (viii), (x) or (xi)
of Section 4.12(b) of this Indenture;
(viii) Liens for taxes, assessments or governmental charges
or claims that are not yet delinquent or that are being contested in good faith
by appropriate proceedings promptly
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instituted and diligently concluded; provided that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor;
(ix) Liens incurred in the ordinary course of business of
the Company or any Subsidiary of the Company with respect to obligations that
do not exceed $5 million at any one time outstanding (whether incurred under
this clause (ix) or under clause (ix) of the defined term "Permitted Liens" in
Section 1.1 of the 1998 Indenture) and that (a) are not incurred in connection
with the borrowing of money or the obtaining of advances or credit (other than
trade credit in the ordinary course of business), (b) do not in the aggregate
materially detract from the value of the property or materially impair the use
thereof in the operation of business by the Company or its Subsidiaries and (c)
are not for the benefit of an Affiliate of the Company; and
(x) Liens on assets of Unrestricted Subsidiaries that
secure Non-Recourse Debt of Unrestricted Subsidiaries.
"Permitted Refinancing Indebtedness" has the meaning set forth in
Section 4.12(b)(viii).
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Pledge Account" means the account established with the Collateral
Agent pursuant to the terms of the Pledge Agreement for the deposit of the
Pledged Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of the date of
this Indenture, by and between the Company and the Collateral Agent governing
the Pledge Account.
"Pledged Securities" means the portfolio of securities, initially
consisting of U.S. government securities (including any Marketable Securities
substituted in respect thereof), purchased by the Company with a portion of the
net proceeds from the Offering to be deposited in the Pledge Account and
pledged as security for the Notes.
"Proceeds Purchase Date" has the meaning set forth in Section
4.15(b)(ii).
"Procurement Agreement" means the Amended and Restated Procurement
Agreement between the Company and Orbital dated February 25, 1998, as amended
on December 31, 1998.
"QIB" means a "qualified institutional buyer" within the meaning of
Rule 144A under the Securities Act.
"Qualifying Public Offering" means a public offering of Common Stock
registered under the Securities Act (i)(a) that shall have resulted in an
aggregate price to the public of not less than $30 million or (b) that involves
the sale to the public of Common Stock constituting at least twenty percent
(20%) of the Common Stock immediately outstanding after the offering, in either
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<PAGE> 26
case at a price per share of Common Stock equal to or greater than the
Threshold Price and (ii) that shall have resulted in listing or admission to
trading of the Common Stock on the New York Stock Exchange, a national
securities exchange, the Nasdaq National Market System or Nasdaq
over-the-counter market. For the purposes of this definition, Threshold Price
means (i) as of any date through May 1, 1999, 100% of the then current
conversion price of the Series A Preferred Stock, (ii) from May 2, 1999 through
May 1, 2000, the then current conversion price of the Series A Preferred Stock,
multiplied by the amount (expressed as a percentage) equal to 100% plus the
result of 30% times a fraction, the numerator of which is the number of days
after May 1, 1999 the calculation of the Threshold Price occurs and the
denominator of which is 365, (iii) from May 2, 2000 through May 1, 2001, the
then current conversion price of the Series A Preferred Stock, multiplied by
the amount (expressed as a percentage) equal to 130% plus the result of 20%
times a fraction, the numerator of which is the number of days after May 1,
2000, the calculation of the Threshold Price occurs and the denominator of
which is 365, and (iv) from May 2, 2001 forward, 150% of the then current
conversion price of the Series A Preferred Stock.
"RadarSat-2 License" means the ten-year license for (i) the exclusive
distribution and marketing rights for RadarSat-2 imagery products and services
and (ii) the non-exclusive right to use the mark "RadarSat" to market and
distribute RadarSat-2 imagery products and services, including renewal options,
granted to the Company by MacDonald, Dettwiler and Associates Ltd., a wholly
owned subsidiary of Orbital, under the RadarSat-2 License Agreement, dated as
of December 31, 1998 and amended as of April 1, 1999, among the Company,
Orbital and MacDonald, Dettwiler and Associates Ltd.
"Record Date" shall have the meaning set forth in the form of the Note
attached hereto as Exhibit A.
"Redemption Date," when used with respect to any Note to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price," when used with respect to any Note to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Refinanced Indebtedness" has the meaning set forth in Section
4.12(b)(viii).
"Registrar" has the meaning set forth in Section 2.3.
"Regulation S" means Regulation S under the Securities Act (or any
successor provision), as it may be amended from time to time.
"Related Asset" means any asset used in connection with a Related
Business or Related Satellite Business.
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<PAGE> 27
"Related Business" means any Related Satellite Business and any
business relating to the worldwide acquisition, marketing, processing and sales
of remote imagery-based products and services.
"Related Satellite Business" means any business relating to the
design, development, and operation of remote imaging satellites and the
worldwide marketing and sales of satellite-based remote imagery-based products
and services.
"Replacement Satellite" means any satellite constructed to replace an
OrbView Satellite in the event of a failure of such OrbView Satellite;
provided, however, that any such Replacement Satellite need not include
hyperspectral imagery capacity, if it is determined in good faith by the Board
of Directors of the Company (evidenced by a resolution approved by at least a
majority of the Board of Directors of the Company and set forth in an Officers'
Certificate delivered to the Trustee) that hyperspectral imagery is not
required to maintain the competitiveness of the Company's satellites.
"Responsible Officer" when used with respect to the Trustee, means any
officer within the corporate trust department of the Trustee (or any successor
group of the Trustee) with direct responsibility for the administration of this
Indenture and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Payment" has the meaning set forth in Section 4.10.
"Restricted Security" has the meaning set forth in Rule 144(a)(3)
under the Securities Act.
"Restricted Subsidiary" of a Person means any Subsidiary of such
Person that is not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
"S&P" means Standard & Poor's Ratings Services, or its successors.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement pursuant to which any property (other than Capital Stock) or assets
is sold by a Person or a Subsidiary and is thereafter leased back from the
purchaser or transferee thereof by such Person or one or more of its
Subsidiaries, except a Fixed Asset Financing.
"Securities Act" means the Securities Act of 1933, as amended.
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<PAGE> 28
"Series A Offering" means the sale of shares of Series A Preferred
Stock that was consummated on February 25, 1998.
"Series A Preferred Stock" means the Series A Cumulative Convertible
Preferred Stock, $.01 par value, of the Company.
"Shelf Registration Statement" means with respect the Notes, a shelf
registration statement pursuant to Rule 415 under the Securities Act relating
to the Transfer Restricted Securities.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article I, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Stated Maturity" means, when used with respect to any Note, March 1,
2005.
"Stock Purchase Agreement" means the Series A Preferred Stock Purchase
Agreement, dated May 7, 1997, as amended, by and among the Company and the
purchasers of Series A Preferred Stock, as in effect on the First Issue Date.
"Stockholders' Agreement" means the agreement by and among the Company
and its stockholders, dated May 8, 1997, as amended, as in effect on the First
Issue Date.
"Stock Option Plan" means the Orbital Imaging Corporation 1996 Stock
Option Plan, adopted as of November 15, 1996 and any successor stock option
plan adopted for the benefit of the Company's directors and/or employees.
"Subsidiary" means, with respect to any Person:
(i) any corporation, association or other business entity
of which more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of such Person (or a combination thereof); and
(ii) any partnership (a) the sole general partner or the
managing general partner of which is such Person or a Subsidiary of such Person
or (b) the only general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantee" means any Guarantee of the Company's
obligations under this Indenture and the Notes given by a Subsidiary Guarantor.
"Subsidiary Guarantor" means any Person that becomes a Restricted
Subsidiary of the Company after the Issue Date.
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<PAGE> 29
"Successor Note" of any particular Note means every Note issued after,
and evidencing all or a portion of the same debt as that evidenced by, such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.7 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Note.
"TIA" means the Trust Indenture Act of 1939, as amended, as in force
at the date as of which this instrument was executed; provided, however, that
in the event the Trust Indenture Act is amended after such date, "TIA" means,
to the extent required by such amendment, the Trust Indenture Act of 1939 as so
amended.
"Transfer Restricted Security" means each Note, until the earliest to
occur of (a) the date on which such Note is exchanged in the Exchange Offer and
entitled to be resold to the public by the Holder thereof without complying
with the prospectus delivery requirements of the Securities Act, (b) the date
on which such Note has been disposed of in accordance with a Shelf Registration
Statement, (c) the date on which such Note is disposed of by a Broker-Dealer
pursuant to the "Plan of Distribution" contemplated by the Exchange Offer
Registration Statement (including delivery of the Prospectus contained therein)
or (d) the date on which such Note is distributed to the public pursuant to
Rule 144 under the Securities Act.
"Total Invested Capital" means, as of any date of determination, the
sum of (a) total Indebtedness as of such date and (b) $91.5 million plus the
aggregate proceeds received by the Company or any Restricted Subsidiary of the
Company in respect of the issuance of Capital Stock (other than Disqualified
Stock) of the Company or such Restricted Subsidiary, including the fair value
of property other than cash (as determined in good faith by the Board of
Directors of the Company (evidenced by a resolution approved by at least a
majority of the Board of Directors of the Company and set forth in an Officers'
Certificate delivered to the Trustee)), less any redemptions of, or dividends
or other distributions on, Capital Stock of the Company made after the First
Issue Date and on or prior to the date of determination.
"Trustee" means HSBC Bank USA until a successor Trustee shall have
been appointed pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean such successor Trustee.
"Units Offering" means the issuance by the Company on February 25,
1998 of 150,000 units consisting of the 1998 Notes and warrants to purchase
1,312,746 shares of Common Stock, resulting in gross proceeds of $150 million.
"Unrestricted Subsidiary" of a Person means any Subsidiary of such
Person that is designated by such Person as an Unrestricted Subsidiary, but
only if and for so long as such Subsidiary:
(i) has no Indebtedness other than Non-Recourse Debt;
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(ii) is not party to any agreement, contract, arrangement
or understanding with the Company or any Restricted Subsidiary of the Company
unless the terms of any such agreement, contract, arrangement or understanding
are no less favorable to the Company or such Restricted Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates of the
Company;
(iii) is a Person with respect to which neither the Company
nor any of its Restricted Subsidiaries has any direct or indirect obligation:
(1) to subscribe for additional Equity Interests; or (2) to maintain or
preserve such Person's financial condition or to cause such Person to achieve
any specified levels of operating results;
(iv) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of any of the Company
or any of its Restricted Subsidiaries; and
(v) in the case of a corporate entity or limited
liability company, has at least one director on its board of directors and at
least one executive officer, in each case who is not a director or executive
officer of the Company or any of its Restricted Subsidiaries.
"Voting Equity Interests" means the Equity Interest in a corporation
or other Person with voting power under ordinary circumstances entitling the
holders thereof to elect or appoint the board of directors, executive committee
or other governing body of such corporation or Person, whether at all times or
only so long as no senior class of securities has such voting power by reason
of any contingency.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing: (i) the sum
of the products obtained by multiplying: (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one- twelfth) that will elapse
between such date and the making of such payment; by (ii) the then outstanding
principal of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person and/or one or more other Wholly Owned
Restricted Subsidiaries of such Person.
SECTION 1.2. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
(1) "indenture securities" means the Notes; (2) "indenture security holder"
means a Holder; (3) "indenture to be qualified" means this Indenture; (4)
"indenture trustee" or "institutional trustee" means the Trustee; and (5)
"obligor" on the indenture securities
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<PAGE> 31
means the Company or any other obligor on the Notes. All other TIA terms used
in this Indenture that are defined by the TIA, defined by TIA reference to
another statute or defined by Commission rule under the TIA and not otherwise
defined herein have the meanings assigned to them therein.
SECTION 1.3. RULES OF CONSTRUCTION.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and, where appropriate, words of the masculine
gender shall mean and include correlative words of the feminine and neutral
genders and where applicable words in the singular shall mean and include the
plural, and vice versa;
(2) accounting terms used herein and not otherwise
defined have the meanings ascribed to them in accordance with GAAP;
(3) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision;
(4) Articles and Sections referred to by number shall
mean the corresponding Articles and Sections of this Indenture;
(5) any headings preceding the texts of the several
Articles and Sections of this Indenture, shall be solely for convenience of
reference, and shall not constitute a part of this Indenture, nor shall they
affect its meaning, construction or effect; and
(6) any reference to a statute shall be construed to
include any statutory provision consolidating, amending or replacing the
statute referred to.
ARTICLE II
THE NOTES
SECTION 2.1. FORM AND DATING.
(a) General Form of Notes. The Notes and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A
hereto, which Exhibit is part of this Indenture. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage. Each
Note shall be dated the date of its authentication. The Notes shall be issued
only in registered form without coupons and only in minimum denominations of
$1,000 and integral multiples thereof. The terms and provisions contained in
the Notes shall constitute, and are hereby expressly made, a part of this
Indenture and the Company and the
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Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby. The Notes will initially be
issued in global form (the "Global Notes"). One or more Global Notes will be
issued to evidence each of the following: (i) Notes sold in reliance on Rule
144A under the Securities Act, (ii) Notes sold outside of the United States to
a non-U.S. Person in reliance on Regulation S under the Securities Act, and
(iii) Notes sold to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) in
reliance on an exemption from the registration requirements of the Securities
Act other than Rule 144A. Global Notes shall be substantially in the form of
Exhibit A attached hereto (including the text and schedule called for by
footnotes 1 and 2 thereto). Definitive Notes shall be substantially in the
form of Exhibit A attached hereto (excluding the text and schedule called for
by footnotes 1). Global Notes or Definitive Notes issued as Exchange Notes
will not include the legend called for by footnote 2 of Exhibit A.
(b) Form of Global Notes. Each Global Note (i) shall
represent such portion of the outstanding Notes as shall be specified therein,
(ii) shall provide that it shall represent the aggregate amount of outstanding
Notes from time to time endorsed thereon and that the aggregate amount of
outstanding Notes represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions, (iii) shall be
registered in the name of the Depositary or its nominee, duly executed by the
Company and authenticated by the Trustee as provided herein, for credit to the
respective accounts of the Agent Members (or such accounts as they may direct)
at the Depositary, (iv) shall be delivered by the Trustee or its agent to the
Depositary or a Note Custodian pursuant to the Depositary's instructions and
(v) shall bear a legend substantially to the following effect:
Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by
the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or
by the Depositary or any such nominee to a successor Depositary or a
nominee of such successor Depositary. Unless this certificate is
presented by an authorized representative of The Depository Trust
Company, a New York corporation ("DTC"), New York, New York, to the
Company or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede
& Co. or such other name as may be requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such
other entity as may be requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
Agent Members shall have no rights under this Indenture with respect
to any Global Note held on their behalf by the Depositary, and the Depositary
may be treated by the Company, the Trustee, and any agent of the Company or the
Trustee as the absolute owner of such Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the
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<PAGE> 33
Company, the Trustee, or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished to
the Depositary or impair, as between the Depositary and its Agent Members, the
operation of customary practices governing the exercise of the rights of a
Holder of any Note.
Any endorsement of a Global Note to reflect the amount of any increase
or decrease in the amount of outstanding Notes represented thereby shall be
made by the Trustee or the Note Custodian, at the direction of the Trustee, in
accordance with instructions given by the Holder thereof as required by Section
2.6 hereof.
(c) Form of Definitive Notes. Definitive Notes may be
produced in any manner determined by the Officers of the Company executing such
Notes, as evidenced by their execution of such Notes. The Trustee must
register Definitive Notes so issued in the name of, and cause the same to be
delivered to, such Person (or its nominee). Except as provided in this Section
2.1 or Section 2.6, no Person having a beneficial interest in the Global Note
may exchange such beneficial interest for fully certificated Definitive Notes
in duly registered form.
(d) Provisions Applicable to Forms of Notes. The Notes
may also have such additional provisions, omissions, variations or
substitutions as are not inconsistent with the provisions of this Indenture,
and may have such letters, numbers or other marks of identification and such
legends or endorsements placed thereon as may be required to comply with this
Indenture, any applicable law or with any rules made pursuant thereto or with
the rules of any securities exchange or governmental agency or as may be
determined consistently herewith by the Officers of the Company executing such
Notes, as conclusively evidenced by their execution of such Notes. All Notes
shall be otherwise substantially identical except as provided herein.
Subject to the provisions of this Article II, the Holder of a Global
Note may grant proxies and otherwise authorize any Person to take any action
that a Holder is entitled to take under this Indenture or the Notes.
SECTION 2.2. EXECUTION AND AUTHENTICATION.
An Officer of the Company shall sign the Notes for the Company by
manual or facsimile signature. The Company's seal may be reproduced on the
Notes and may be in facsimile form. If an Officer of the Company whose
signature is on a Note no longer holds that office at the time a Note is
authenticated, the Note shall nevertheless be valid. A Note shall not be valid
or obligatory for any purpose or entitled to the benefits of this Indenture
until authenticated by the manual signature of the Trustee or its
authenticating agent. The signature shall be conclusive evidence that the Note
has been authenticated under this Indenture.
The Trustee shall, upon the delivery to the Trustee of a written order
of the Company signed by two Officers, from time to time, authenticate Notes
for original issue up to an aggregate principal amount of $75,000,000. The
aggregate principal amount of Notes outstanding at any time may not exceed such
amount except as provided in Section 2.7 hereof.
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<PAGE> 34
The Trustee may appoint an authenticating agent to authenticate Notes.
An authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as
the Trustee to deal with the Company or an Affiliate of the Company.
SECTION 2.3. TRUSTEE, REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent").
The Registrar shall keep a note register ("Note Register") of the Notes and of
their transfer and exchange. The Company may also from time to time appoint
one or more co-registrars and one or more additional paying agents. The term
"Registrar" includes any co-registrar and the term "Paying Agent" includes any
additional paying agent. The Company may change any Paying Agent or Registrar
upon notice to the Holders. The Company shall notify the Trustee in writing of
the name and address of any Paying Agent or Registrar not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act, subject to the last paragraph
of this Section 2.3, as such. The Company or any of its Subsidiaries may act as
Paying Agent or Registrar; provided, however, that none of the Company, its
Subsidiaries or the Affiliates of the foregoing shall act (i) as Paying Agent
in connection with any redemption, offer to purchase, discharge or defeasance,
as otherwise specified in this Indenture, and (ii) as Paying Agent or Registrar
if a Default or Event of Default has occurred and is continuing.
The Company hereby appoints HSBC Bank USA, at its Corporate Trust
Office, as the Trustee hereunder and HSBC Bank USA, hereby accepts such
appointment. The Trustee shall have the powers and authority granted to and
conferred upon it in the Notes and hereby and such further powers and authority
to act on behalf of the Company as may be mutually agreed upon in writing by
the Company and the Trustee, and the Trustee shall keep a copy of this
Indenture available for inspection during normal business hours at its
Corporate Trust Office.
The Company initially appoints The Depository Trust Company to act as
Depositary with respect to the Global Notes. The Company initially appoints
the Trustee to act as the Registrar and Paying Agent and to act as Note
Custodian with respect to the Global Notes.
All of the terms and provisions with respect to such powers and
authority contained in the Notes are subject to and governed by the terms and
provisions hereof.
The Trustee may resign as Registrar or Paying Agent upon 30 days prior
written notice to the Company.
SECTION 2.4. PAYING AGENT TO HOLD MONEY IN TRUST.
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The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
the Holders and the Trustee all money held by the Paying Agent for the payment
of principal of, premium, if any, interest and Liquidated Damages, if any, on
the Notes, and shall notify the Trustee of any default by the Company in making
any such payment. While any such default or an Event of Default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee.
The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon payment of all such money over to the Trustee,
the Paying Agent (if other than the Company or a Subsidiary) shall have no
further liability for the money. If the Company or a Subsidiary acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent. Upon any bankruptcy or
reorganization proceedings relating to the Company, the Trustee shall serve as
Paying Agent for the Notes.
SECTION 2.5. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable to it the most recent list available to it of the names and
addresses of all Holders and, after the consummation of the Exchange Offer,
shall otherwise strictly comply with TIA Section 312(a). If the Trustee is not
the Registrar, the Company shall furnish to the Trustee at least ten Business
Days before each Interest Payment Date and at such other times as the Trustee
may request in writing, a list in such form and as of such date as the Trustee
may require of the names and addresses of the Holders of Notes and, after the
consummation of the Exchange Offer, the Company shall otherwise strictly comply
with TIA Section 312(a).
SECTION 2.6. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Definitive Notes. If notes
in definitive form ("Definitive Notes") are presented by a Holder to the
Registrar with a request: (x) to register the transfer of the Definitive
Notes; or (y) to exchange such Definitive Notes for an equal principal amount
of Definitive Notes of other authorized denominations, the Registrar shall
register the transfer or make the exchange as requested if its requirements for
such transactions are met; provided, however, that the Definitive Notes
presented or surrendered for registration of transfer or exchange: (i) shall
be duly endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar duly executed by such Holder or by such Holder's
attorney, duly authorized in writing; and (ii) in the case of a Definitive Note
that is a Transfer Restricted Security, such request shall be accompanied by
the following additional information and documents, as applicable:
(i) if such Transfer Restricted Security is being
delivered to the Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification to that effect from such Holder (in
substantially the form of Exhibit B hereto);
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<PAGE> 36
(ii) if such Transfer Restricted Security is being
transferred (1) to a QIB in accordance with Rule 144A under the Securities Act
or (2) pursuant to an effective registration statement under the Securities
Act, a certification to that effect (in substantially the form of Exhibit B
hereto);
(iii) if such Transfer Restricted Security is being
transferred to an institutional "accredited investor" within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act pursuant to a private
placement exemption from the registration requirements of the Securities Act
(and based on an Opinion of Counsel if the Company so requests in the case of a
transfer of Notes with an aggregate principal amount of $100,000 or less), a
certification to that effect (in substantially the form of Exhibit B hereto)
and a certification of the applicable transferee (in substantially the form of
Exhibit C hereto);
(iv) if such Transfer Restricted Security is being
transferred pursuant to an exemption from registration in accordance with Rule
904 under the Securities Act, a certification to that effect (in substantially
the form of Exhibit B hereto); or
(v) if such Transfer Restricted Security is being
transferred in reliance on another exemption from the registration requirements
of the Securities Act (and based on an Opinion of Counsel if the Company so
requests) a certification to that effect (in substantially the form of Exhibit
B hereto).
(b) Restrictions on Transfer of a Definitive Note for a
Beneficial Interest in a Global Note. A Definitive Note may not be exchanged
for a beneficial interest in a Global Note except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive
Note, duly endorsed or accompanied by appropriate instruments of transfer, in
form satisfactory to the Trustee, together with: (i) if such Definitive Note is
a Transfer Restricted Security, a certification from the Holder thereof (in
substantially the form of Exhibit B hereto) to the effect that such Definitive
Note is being transferred by such Holder either (A) to a QIB in accordance with
Rule 144A under the Securities Act, (B) outside the United States to a foreign
person in a transaction meeting the requirements of Rule 904 under the
Securities Act or (C) to an institutional "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act pursuant to
a private placement exemption from the registration requirements of the
Securities Act (provided that the applicable transferee furnishes a certificate
substantially in the form of Exhibit C hereto, and based on an Opinion of
Counsel if the Company so requests in the case of a transfer of Notes with an
aggregate principal amount of $100,000 or less) who wishes to take delivery
thereof in the form of a beneficial interest in a Global Note; and (ii) whether
or not such Definitive Note is a Transfer Restricted Security, written
instructions from the Holder thereof directing the Trustee to make, or to
direct the Note Custodian to make, an endorsement on the appropriate Global
Note to reflect an increase in the aggregate principal amount of the Notes
represented by such Global Note, in which case the Trustee or its agent shall
cancel such Definitive Note in accordance with Section 2.11 hereof and cause,
or direct the Note Custodian to cause, in accordance with the standing
instructions and procedures existing between the Depositary and the Note
Custodian, the aggregate principal amount of Notes represented by
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<PAGE> 37
the Global Note to be increased accordingly. If no Global Notes are then
outstanding, the Company shall issue and, upon receipt of an authentication
order in accordance with Section 2.2 hereof, the Trustee shall authenticate a
new Global Note in the appropriate principal amount.
(c) Transfer and Exchange of a Beneficial Interest in a
Global Note. The transfer and exchange of beneficial interests in Global Notes
shall be effected through the Depositary, in accordance with this Indenture and
the procedures of the Depositary therefor, which shall include restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act, provided that if such Global Note is a Transfer Restricted
Security, the Holder thereof will furnish to the Trustee a certification (in
substantially the form of Exhibit B hereto) to the effect that such beneficial
interest is being transferred by such Holder either (A) to a QIB in accordance
with Rule 144A under the Securities Act, (B) outside the United States to a
foreign person in a transaction meeting the requirements of Rule 904 under the
Securities Act or (C) to an institutional "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act pursuant to
a private placement exemption from the registration requirements of the
Securities Act (provided that the applicable transferee furnishes a certificate
substantially in the form of Exhibit C hereto, and based on an Opinion of
Counsel if the Company so requests in the case of a transfer of Notes with an
aggregate principal amount of $100,000 or less) who wishes to take delivery
thereof in the form of a beneficial interest in a Global Note. Any Notes
evidenced by the Regulation S Global Note may only be transferred in accordance
with the provisions of Regulation S under the Securities Act. Notwithstanding
the foregoing, in the case of a Transfer Restricted Security, a beneficial
interest in a Global Note being transferred in reliance on an exemption from
the registration requirements of the Securities Act (other than in accordance
with Rule 144A, Rule 144 or Rule 904 under the Securities Act) may only be
transferred for a Definitive Note and pursuant to the provisions of Section
2.6(d) below.
(d) Transfer and Exchange of a Beneficial Interest in a
Global Note for a Definitive Note.
(i) Any Person having a beneficial interest in a
Global Note may upon request exchange such beneficial interest for a Definitive
Note. Upon receipt by the Trustee of written instructions or such other form of
instructions as is customary for the Depositary from the Depositary or its
nominee on behalf of any Person having a beneficial interest in a Global Note
and, in the case of any Transfer Restricted Security, the following additional
information and documents (all of which may be submitted by facsimile):
(A) if such beneficial interest is being
delivered to the Person designated by the Depositary as being the beneficial
owner, a certification to that effect (in substantially the form of Exhibit B
hereto);
(B) if such beneficial interest is being
transferred (1) to a QIB in accordance with Rule 144A under the Securities Act
or (2) pursuant to an effective registration
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<PAGE> 38
statement under the Securities Act, a certification to that effect (in
substantially the form of Exhibit B hereto);
(C) if such beneficial interest is being
transferred to any institutional "accredited investor" within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act pursuant to a private
placement exemption from the registration requirements of the Securities Act
(and based on an Opinion of Counsel if the Company so requests in the case of a
transfer of Notes with an aggregate principal amount of $100,000 or less), a
certification to that effect (in substantially the form of Exhibit B hereto)
and a certification from the applicable transferee (in substantially the form
of Exhibit C hereto);
(D) if such beneficial interest is being
transferred pursuant to an exemption from registration in accordance with Rule
904 under the Securities Act, a certification to that effect (in substantially
the form of Exhibit B hereto), provided that no Notes represented by the
Regulation S Global Note may be exchanged for Definitive Notes until expiration
of the applicable restricted period under Regulation S of the Securities Act;
or
(E) if such beneficial interest is being
transferred in reliance on another exemption from the registration requirements
of the Securities Act (and based on an Opinion of Counsel if the Company so
requests), a certification to that effect (in substantially the form of Exhibit
B hereto);
in which case the Trustee or the Note Custodian, at the direction of the
Trustee, shall, in accordance with the standing instructions and procedures
existing between the Depositary and the Note Custodian, cause the aggregate
principal amount of Global Notes to be reduced accordingly and, following such
reduction, the Company shall execute and, upon receipt of an authentication
order in accordance with Section 2.2 hereof, the Trustee shall authenticate
and deliver to the transferee a Definitive Note in the principal amount.
(ii) Definitive Notes issued in exchange for a
beneficial interest in a Global Note pursuant to this Section 2.6(d) shall be
registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Trustee. The Trustee shall deliver such
Definitive Notes to the Persons in whose names such Notes are so registered.
(e) Restrictions on Transfer and Exchange of Global
Notes. Notwithstanding any other provision of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.6), a Global Note may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Authentication of Definitive Notes in Absence of
Depositary. If at any time: (i) the Depositary for the Notes notifies the
Company that the Depositary is unwilling or
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<PAGE> 39
unable to continue as Depositary for the Global Notes or, if at any time such
Depositary ceases to be a "clearing agency" registered under the Exchange Act,
and a successor Depositary for the Global Notes is not appointed by the Company
within 90 days after delivery of such notice; or (ii) the Company, at its sole
discretion, notifies the Trustee in writing that it elects to cause the
issuance of Definitive Notes under this Indenture in exchange for all or any
part of the Notes represented by a Global Note or Global Notes, the Depositary
or the Note Custodian shall surrender such Global Note to the Trustee, without
charge, and then the Company shall execute, and the Trustee shall, upon receipt
of an authentication order in accordance with Section 2.2 hereof, authenticate
and deliver in exchange for such Global Notes, Definitive Notes in an aggregate
principal amount equal to the principal amount of such Global Notes. Such
Definitive Notes shall be registered in such names as the Depositary shall
direct in writing.
(g) Legends. (i) Except as permitted by the following
paragraphs (ii), and (iii), each Note evidencing Global Notes and Definitive
Notes (and Notes issued in exchange therefor or substitution thereof) shall
bear legends in substantially the following form:
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED
HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE NOTE EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF ORBITAL IMAGING CORPORATION AND ITS
SUCCESSORS (THE "COMPANY") THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED
OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE
UNITED STATES TO A PERSON THAT IS NOT A U.S. PERSON (AS DEFINED IN
RULE 902 UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, (d) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1),
(2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) THAT, PRIOR
TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE NOTES (THE FORM
OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) OR (e) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
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<PAGE> 40
COMPANY OR TRUSTEE, REGISTRAR OR TRANSFER AGENT FOR THE SECURITIES SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH IN (A) ABOVE.
(ii) Upon any sale or transfer of a Transfer
Restricted Security (including any Transfer Restricted Security represented by
a Global Note) pursuant to an effective registration statement under the
Securities Act or pursuant to Rule 144 under the Securities Act (pursuant to an
Opinion of Counsel reasonably satisfactory to the Company that no legend is
required):
(A) in the case of any Transfer
Restricted Security that is a Definitive Note, the Registrar shall permit the
Holder thereof to exchange such Transfer Restricted Security for a Definitive
Note that does not bear the legend set forth in (i) above and rescind any
restriction on the transfer of such Transfer Restricted Security;
(B) in the case of any Transfer
Restricted Security represented by a Global Note, such Transfer Restricted
Security shall not be required to bear the legend set forth in (i) above, but
shall continue to be subject to the provisions of Section 2.6(c) hereof;
provided, however, that with respect to any request for an exchange of a
Transfer Restricted Security that is represented by a Global Note for a
Definitive Note that does not bear the legend set forth in (i) above, which
request is made in reliance upon Rule 144 under the Securities Act (and based
upon an Opinion of Counsel if the Company so requests), the Holder thereof
shall certify in writing to the Registrar that such request is being made
pursuant to Rule 144 under the Securities Act (such certification to be
substantially in the form of Exhibit B hereto).
(iii) Notwithstanding the foregoing, upon
consummation of the Exchange Offer, the Company shall issue and, upon receipt
of an authentication order in accordance with Section 2.2 hereof, the Trustee
shall authenticate Exchange Notes in exchange for Original Notes accepted for
exchange in the Exchange Offer, which Exchange Notes shall not bear the legend
set forth in (i) above, and the Registrar shall rescind any restriction on the
transfer of such Notes, in each case unless the Holder of such Original Notes
certifies that in connection with the Exchange Offer that it is not (A) a
broker-dealer, (B) a Person participating in the distribution of the Original
Notes or (C) a Person who is an affiliate (as defined in Rule 144A) of the
Company.
(h) Cancellation and/or Adjustment of Global Notes. At
such time as all beneficial interests in Global Notes have been exchanged for
Definitive Notes, redeemed, repurchased or canceled, all Global Notes shall be
returned to or retained and canceled by the
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<PAGE> 41
Trustee or its agent in accordance with Section 2.11 hereof. At any time prior
to such cancellation, if any beneficial interest in a Global Note is exchanged
for Definitive Notes, redeemed, repurchased or canceled, the principal amount
of Notes represented by such Global Note shall be reduced accordingly and an
endorsement shall be made on such Global Note, by the Trustee or the Note
Custodian, at the direction of the Trustee, to reflect such reduction.
(i) General Provisions Relating to Transfers and
Exchanges.
(i) To permit registrations of transfers and
exchanges, the Company shall execute and the Trustee shall authenticate
Definitive Notes and Global Notes at the Registrar's request.
(ii) No service charge shall be made to the Holder
for any registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or registration of transfer
pursuant to Sections 2.2, 2.10, 3.5, 3.8 and 4.14 hereto).
(iii) All Definitive Notes and Global Notes issued
upon any registration of transfer or exchange of Definitive Notes or Global
Notes shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Definitive Notes
or Global Notes surrendered upon such registration of transfer or exchange.
(iv) Neither the Registrar nor the Company shall
be required:
(A) to issue, to register the transfer
of or to exchange Notes during a period beginning at the opening of business 15
days before the day of any selection of Notes for redemption under Section 3.1
hereof and ending at the close of business on the day of selection; or
(B) to register the transfer of or to
exchange any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part; or
(C) to register the transfer of or to
exchange a Note between a Record Date and the next succeeding Interest Payment
Date.
(v) The Trustee shall authenticate Definitive
Notes and Global Notes in accordance with the provisions of Section 2.2 hereof.
(j) Certain Transfers in Connection with and after the
Exchange Offer. Notwithstanding any other provision of this Indenture: (i) no
Exchange Note may be exchanged by the Holder thereof for an Original Note; (ii)
accrued and unpaid interest on the Original Notes being exchanged in the
Exchange Offer shall be due and payable on the next Interest Payment
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<PAGE> 42
Date for the Exchange Notes following the Exchange Offer; and (iii) interest on
the Exchange Notes to be issued in the Exchange Offer shall accrue from the
date of the Exchange Offer.
SECTION 2.7. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or the Company
and the Trustee receive evidence to their satisfaction of the destruction, loss
or theft of any Note, the Company shall, upon the written request of the Holder
thereof, issue and the Trustee, upon the written order of the Company signed by
two Officers of the Company, shall authenticate a replacement Note if the
Trustee's requirements are met. If required by the Trustee or the Company, an
indemnity bond must be supplied by such Holder that is sufficient in the
judgment of the Trustee and the Company to protect the Company, the Trustee,
any Paying Agent, the Registrar and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
The provisions of this Section 2.7 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.8. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it (or its agent), those delivered to
it (or its agent) for cancellation, those reductions in the interest in a
Global Note effected by the Trustee in accordance with the provisions hereof,
and those described in this Section as not outstanding. Except as set forth in
Section 2.9 hereof, a Note does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.7 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note (other than a mutilated Note surrendered for replacement) is held
by a "protected purchaser" (as such term is defined in Section 8-303 of the
Uniform Commercial Code as in effect in the State of New York).
If the principal amount of any Note is considered paid under Section
4.1 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
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<PAGE> 43
SECTION 2.9. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Company, shall be
considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that a Responsible Officer of the
Trustee has actual knowledge are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes upon a written order of the
Company signed by two Officers of the Company. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate definitive Notes in exchange for
temporary Notes.
Until such exchange, Holders of temporary Notes shall be entitled to
all of the benefits of this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee or its agent
for cancellation. The Registrar and Paying Agent shall forward to the Trustee
any Notes surrendered to them for registration of transfer, exchange or
payment. The Trustee (or its agent) and no one else shall cancel all Notes
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall destroy canceled Notes (subject to the record retention
requirement of the Exchange Act) in accordance with its usual procedures.
Certification of the destruction of all canceled Notes shall be delivered to
the Company from time to time. The Company may not issue new Notes to replace
Notes that it has paid or that have been delivered to the Trustee (or its
agent) for cancellation. If the Company acquires any of the Notes, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Notes unless and until the same are
surrendered to the Trustee (or its agent) for cancellation pursuant to this
Section 2.11.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.1 hereof. The Company shall notify the Trustee
in writing
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of the amount of defaulted interest proposed to be paid on each Note and the
date of the proposed payment. The Company shall fix or cause to be fixed each
such special record date and payment date, provided that no such special record
date shall be less than 10 days prior to the related payment date for such
defaulted interest. At least 15 days before the special record date, the
Company (or, upon the written request of the Company, the Trustee in the name
and at the expense of the Company) shall mail or cause to be mailed to Holders
a notice that states the special record date, the related payment date and the
amount of such defaulted interest to be paid.
SECTION 2.13. PERSONS DEEMED OWNERS.
Prior to due presentment for the registration of a transfer of any
Note, the Trustee, any Paying Agent, the Registrar, the Company and any agent
of the foregoing shall deem and treat the Person in whose name any Note is
registered as the absolute owner of such Note for all purposes (including the
purpose of receiving payment of principal of and interest on such Notes;
provided that defaulted interest shall be paid as set forth in Section 2.12),
and none of the Trustee, Paying Agent, the Registrar, the Company or any agent
of the foregoing shall be affected by notice to the contrary.
SECTION 2.14. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will print CUSIP numbers on the
Notes, and the Trustee may use CUSIP numbers in notices of redemption and
purchase as a convenience to Holders; provided, however, that any such notices
may state that no representation is made as to the correctness of such numbers
as printed on the Notes, and any such redemption or purchase shall not be
affected by any defect or omission in such numbers.
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<PAGE> 45
ARTICLE III
REDEMPTION
SECTION 3.1. OPTIONAL REDEMPTION.
(a) The Notes will not be redeemable prior to March 1,
2002. Thereafter, the Notes will be subject to redemption at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below, plus accrued and unpaid interest and Liquidated Damages (if
any) thereon to the applicable redemption date, if redeemed during the
twelve-month period beginning on March 1 of the years indicated below:
<TABLE>
<CAPTION>
Redemption
Year Price
- ---- -----------------
<S> <C>
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105.8125%
2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.9063%
2004 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0000%
</TABLE>
(b) Notwithstanding the foregoing, prior to March 1,
2001, the Company may, on one or more occasions, redeem outstanding Notes with
the net cash proceeds of one or more sales of Capital Stock (other than
Disqualified Stock) of the Company to one or more Persons (but only to the
extent the proceeds of such sales of Capital Stock consist of cash or Cash
Equivalents) at a redemption price equal to 111.625% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages (if any)
thereon to the redemption date; provided, however, that: (i) not less than 65%
of the aggregate principal amount of the Notes initially issued remains
outstanding immediately after any such redemption; and (ii) such redemption
shall occur within 60 days after the date of closing of such sale of Capital
Stock.
SECTION 3.2. MANDATORY REDEMPTION.
The Company will not be required to make mandatory redemption or
sinking fund payments with respect to the Notes.
SECTION 3.3. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Notes pursuant to Section
3.1 shall be evidenced by an Officers' Certificate of the Company. In case of
any redemption at the election of the Company of less than all the Notes, the
Company shall, at least 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee), notify
the Trustee in writing of such Redemption Date and of the principal amount of
Notes to be redeemed. In the case of any redemption of Notes prior to the
expiration of any
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<PAGE> 46
restriction on such redemption provided in the terms of such Notes or elsewhere
in this Indenture, the Company shall furnish the Trustee with an Officers'
Certificate evidencing compliance with such restriction.
SECTION 3.4. NOTES TO BE REDEEMED PRO RATA.
If less than all of the Notes are to be redeemed or repurchased
pursuant to any purchase offer required under this Indenture at any time,
selection of Notes for redemption or repurchase will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not so listed, on a
pro rata basis, selected by lot or by such method as the Trustee shall deem
fair and appropriate; provided that no Note with a principal amount of $1,000
or less shall be redeemed or repurchased in part.
Notices of redemption or repurchase shall be mailed by first class
mail at least 30 but not more than 60 days before the redemption or repurchase
date to each Holder of Notes to be redeemed or repurchased at its registered
address. If any Note is to be redeemed or repurchased in part only, the notice
that relates to such Note shall state the portion of the principal amount
thereof to be redeemed or repurchased. A new Note in principal amount equal to
the unredeemed or unrepurchased portion will be issued in the name of the
Holder thereof upon cancellation of the original Note. On and after the
redemption or repurchase date (unless the Company shall default in the payment
of the Redemption Price, accrued and unpaid interest or Liquidated Damages, if
any), interest will cease to accrue on the Notes or portions thereof called for
redemption or repurchase.
SECTION 3.5. NOTICE OF REDEMPTION.
(a) Notice of redemption shall be given by first-class
mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to
the Redemption Date, to each Holder of Notes to be redeemed, at such Holder's
address appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price, and the amount of accrued
interest and Liquidated Damages (if any) to be paid;
(iii) the paragraph of the Notes and/or section of this
Indenture pursuant to which the redemption is being made;
(iv) if less than all the outstanding Notes are to be
redeemed, the identification (and, in the case of partial redemption of any
Notes, the principal amounts) of the particular Notes to be redeemed;
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(v) that on the Redemption Date the Redemption Price will
become due and payable upon each such Note to be redeemed and that interest
thereon will cease to accrue on and after said date;
(vi) the place or places where such Notes are to be
surrendered for payment of the Redemption Price;
(vii) that in the case that a Note is only redeemed in
part, upon surrender of such Note, the Company shall execute and the Trustee
shall authenticate and deliver to the Holder of such Note without charge a new
Note or Notes in an aggregate principal amount equal to the unredeemed portion
of the Note;
(viii) the aggregate principal amount of Notes being
redeemed; and
(ix) the CUSIP number or numbers of the Notes being
redeemed, and that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, as listed on such notice or printed on the Notes.
(b) Notice of redemption of Notes to be redeemed at the
election of the Company shall be given by the Company or, if request is made to
the Trustee no less than 45 days prior to the Redemption Date, by the Trustee
in the name and at the expense of the Company.
SECTION 3.6. EFFECT OF NOTICE OF REDEMPTION
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
Redemption Date at the Redemption Price. A notice of redemption may not be
conditional.
SECTION 3.7. DEPOSIT OF REDEMPTION PRICE.
The Company shall, by 11:00 a.m., New York City time, on any
Redemption Date, deposit with the Trustee or with the Paying Agent an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued and unpaid interest and
Liquidated Damages (if any) with respect to all the Notes which are to be
redeemed on that date.
SECTION 3.8. NOTES PAYABLE ON REDEMPTION DATE.
Upon notice of redemption, the Notes or any portion thereof to be
redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price, accrued and
unpaid interest or Liquidated Damages (if any)), such Notes shall cease to bear
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interest. If a Note is redeemed on or after a Record Date but on or prior to
the related Interest Payment Date, then any accrued and unpaid interest shall
be paid to the Person in whose name such Note was registered at the close of
business on such Record Date. Upon surrender of any such Note for redemption
in accordance with said notice, such Note or portion thereof shall be paid by
the Company at the Redemption Price, together with accrued and unpaid interest
and Liquidated Damages (if any) to the Redemption Date. If any Note called for
redemption shall not be so paid upon surrender thereof for redemption, the
principal and premium (if any) shall, until paid, bear interest from the
Redemption Date at the rate provided by the Note.
SECTION 3.9. NOTES REDEEMED IN PART.
Any Note that is to be redeemed only in part shall be surrendered at
an office or agency of the Company designated for that purpose pursuant to
Section 4.2 (with, if the Company or the Trustee so require, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or its attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Note without service charge, a
new Note or Notes of like tenor, of any authorized denomination as requested by
such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Note so surrendered.
ARTICLE IV
COVENANTS
SECTION 4.1. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal and premium
(if any) of, and interest and Liquidated Damages (if any) on, the Notes on the
dates and in the manner provided in the Notes and in this Indenture. An
installment of principal and premium (if any) of, or interest and Liquidated
Damages (if any) on, the Notes shall be considered paid on the date it is due
if the Paying Agent (other than the Company or an Affiliate of the Company)
holds no later than 11:00 a.m., New York City time, on that date U.S. dollars
designated for and sufficient to pay the installment in full and is not
prohibited from paying such money to the Holders pursuant to the terms of this
Indenture. The Paying Agent shall return to the Company no later than five
days following the date of payment, any money that exceeds such installment of
principal and premium (if any) of, and interest and Liquidated Damages (if
any) payable on, the Notes.
The Company shall pay, to the extent such payments are lawful,
interest on overdue principal and on overdue installments of interest (without
regard to any applicable grace periods) from time to time on demand at the rate
borne by the Notes plus 1% per annum. Interest will be computed on the basis
of a 360-day year comprised of twelve 30-day months.
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Notwithstanding anything to the contrary contained in this Indenture,
the Company may, to the extent it is required to do so by law, deduct or
withhold income or other similar taxes imposed by the United States of America
from principal or interest payments hereunder.
SECTION 4.2. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain the office or agency required under Section
2.3. The Company shall give prior written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 11.2.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York for such purposes. The Company
shall give prior written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or
agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as such office or agency of the Company in accordance with Section 2.3.
SECTION 4.3. CORPORATE EXISTENCE.
Except as otherwise permitted by Articles IV and V, the Company shall
do or cause to be done, at its own cost and expense, all things necessary to
preserve and keep in full force and effect its corporate existence and the
corporate existence of each of its Subsidiaries (if any) in accordance with the
respective organizational documents of the Company and each such Subsidiary and
the material rights (charter and statutory) and franchises of the Company and
each such Subsidiary;
SECTION 4.4. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon it or any of its Subsidiaries or
its properties or any of its Subsidiaries' properties and (ii) all lawful
claims for labor, materials and supplies that, if unpaid, would by law become a
Lien upon its properties or any of its Subsidiaries' properties; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith and by
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appropriate proceedings properly instituted and diligently conducted and for
which adequate reserves, to the extent required under GAAP, have been taken.
SECTION 4.5. MAINTENANCE OF PROPERTIES AND INSURANCE.
(a) The Company shall maintain its properties in good
working order and condition (subject to ordinary wear and tear) and make all
reasonably necessary repairs, renewals, replacements, additions and
improvements required for it to actively conduct and carry on its business;
(b) The Company shall maintain insurance (including
appropriate self-insurance) against loss or damage of the kinds that, in the
good faith judgment of the Company, are adequate and appropriate for the
conduct of the business of the Company and its Subsidiaries in a prudent
manner, with reputable insurers or with the government of the United States of
America or an agency or instrumentality thereof, in such amounts, with such
deductibles, and by such methods as shall be customary, in the good faith
judgment of the Company, for companies similarly situated in the industry
(provided that insurance with respect to the OrbView Satellites, the
Replacement Satellites and the RadarSat-2 Satellite shall be governed by clause
(c) below).
(c) In addition to the foregoing, the Company shall
obtain or maintain (as applicable) in full force and effect:
(i) launch and on-orbit checkout insurance with
respect to each OrbView Satellite, which insurance shall be procured promptly
prior to the launch of each such satellite and shall be in effect on the launch
date and remain in effect through the launch and the initial check-out period
of such OrbView Satellite, in an amount sufficient to provide for the
construction, launch and insurance of a Replacement Satellite to be payable in
the event of a launch or satellite failure during the initial check-out
period; provided, however, that at the time the Company is required to procure
launch and on-orbit check- out insurance with respect to an OrbView Satellite,
the Company may reduce the amount to be insured if another OrbView Satellite is
fully operational, is being used in commercial service and is insured in
accordance with clause (ii) below, by (x) the amount of cash, Cash Equivalents
and short-term investments (excluding proceeds of this Offering, the Units
Offering and the Series A Offering and amounts allocated or expected to be
allocated for capital expenditures) currently available to the Company to
construct a Replacement Satellite as determined in good faith by the Board of
Directors of the Company (evidenced by a resolution approved by at least a
majority of the Board of Directors of the Company and set forth in an Officers'
Certificate delivered to the Trustee), and (y) the value of any long lead-time
spare parts that the Company has procured to date for any satellite that is
comparable to the technological capability of the OrbView Satellite being
insured, as such value is determined in good faith by the Board of Directors of
the Company (evidenced by a resolution approved by at least a majority of the
Board of Directors of the Company and set forth in an Officers' Certificate
delivered to the Trustee);
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(ii) on-orbit operations insurance with respect to
each OrbView Satellite, at all times following the date an OrbView Satellite is
placed in commercial service, representing the value of such satellite (taking
into account the foregone useful life of such satellite) and the pro rata cost
of a launch vehicle, payable in the event that such satellite ceases to be used
for commercial revenue producing service (provided that such insurance may
contain customary provisions for deductible payments and minimum thresholds for
satellite failure); provided, however, that at the time the Company is required
to procure or renew on- orbit operations insurance with respect to an OrbView
Satellite, the Company may reduce the amount to be insured if another OrbView
Satellite is fully operational, is being used in commercial service, and is
insured in accordance with this clause (ii), by (x) the amount of cash, Cash
Equivalents and short-term investments (excluding proceeds of this Offering,
the Units Offering and the Series A Offering and amounts allocated or expected
to be allocated for capital expenditures), currently available to the Company
to construct a Replacement Satellite as determined in good faith by the Board
of Directors of the Company (evidenced by a resolution approved by at least a
majority of the Board of Directors of the Company and set forth in an Officers'
Certificate delivered to the Trustee), and (y) the value of any long lead-time
spare parts that the Company has procured to date for any satellite that is
comparable to the technological capability of the OrbView Satellite being
insured, as such value is determined in good faith by the Board of Directors of
the Company (evidenced by a resolution approved by at least a majority of the
Board of Directors of the Company and set forth in an Officers' Certificate
delivered to the Trustee);
(iii) launch and on-orbit checkout insurance with
respect to the RadarSat-2 satellite in the amount of $55 million, which
insurance shall be procured promptly prior to the launch of the RadarSat-2
satellite and shall be in effect on the launch date and remain in effect
through the launch and the initial checkout period of the RadarSat-2 satellite
and be payable to ORBIMAGE in the event of a launch or satellite failure during
the initial checkout period; and
(iv) following the date the RadarSat-2 satellite
is placed in commercial operation, on-orbit operations insurance with respect
to the RadarSat-2 satellite in an amount representing the book value of the
undepreciated portion of the $60 million component of the fee for the
RadarSat-2 License as recorded on the Company's balance sheet, and payable to
ORBIMAGE in the event that such satellite ceases to be used for commercial
revenue producing service (provided that such insurance may contain customary
provisions for deductible payments and minimum thresholds for satellite
failure).
The obligation of the Company to maintain insurance pursuant to this
clause (c) may be satisfied by any combination of (i) insurance commitments
obtained from any recognized insurance provider; (ii) insurance commitments
obtained from any entity other than an entity referred to in clause (i) if the
Board of Directors of the Company determines in good faith (evidenced by a
majority resolution of the Board of Directors of the Company and set forth in
an Officers' Certificate delivered to the Trustee) that such entity is
creditworthy and otherwise capable of bearing the financial risk of providing
such insurance and making payments in respect
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of any claims on a timely basis; and (iii) unrestricted cash segregated and
maintained by the Company in a segregated account established with an Eligible
Institution (the "Insurance Account") solely for disbursement in accordance
with the terms of this covenant ("Cash Insurance"), and to be held in trust for
the sole and express benefit of the Holders of the Notes.
Within 30 days following any date on which the Company is required to
obtain insurance pursuant to this clause (c), the Company will deliver to the
Trustee an insurance certificate certifying the amount of insurance then
carried, and in full force and effect, and an Officers' Certificate stating
that such insurance, together with any other insurance or Cash Insurance
maintained by the Company, complies with this Indenture. In addition, the
Company will cause to be delivered to the Trustee no less than once each year
an insurance certificate setting forth the amount of insurance then carried,
which insurance certificate shall entitle the Trustee to (i) notice of any
claim under any such insurance policy; and (ii) at least 30 days' notice from
the provider of such insurance prior to the cancellation of any such insurance
and an Officers' Certificate that complies with the first sentence of this
paragraph.
In the event that the Company maintains any Cash Insurance in
satisfaction of any part of its obligation to maintain insurance pursuant to
this Section 4.5(c), the Company shall deliver, in lieu of any insurance
certificate otherwise required by this covenant, an Officers' Certificate to
the Trustee certifying the amount of such Cash Insurance.
In the event that the Company receives any proceeds of any insurance
that it is required to maintain pursuant to this Section 4.5(c), the Company
shall promptly deposit such proceeds into an escrow account established with an
Eligible Institution for such purpose. If the Company maintains any Cash
Insurance in satisfaction of any part of its obligation to maintain insurance
pursuant to this clause (c), the Company shall transfer the cash maintained in
the Insurance Account to such escrow account upon the occurrence of the event
(e.g., a launch failure) that would have entitled the Company to the payment of
insurance had the Company purchased insurance from a recognized insurance
provider. The Company may use monies on deposit in such escrow account for the
design, development, construction, procurement, launch and insurance of any
Replacement Satellite or replacement radar satellite or to procure a license
substantially similar to the RadarSat-2 License, if: (i) the Company delivers
to the Trustee a certificate of the Company's President certifying that such
Replacement Satellite or replacement radar satellite is comparable to the
technological capability of the satellite being replaced and with respect to a
replacement license, that such license is substantially similar to the
RadarSat-2 License, (ii) within 30 days following the receipt of such insurance
proceeds, the Company delivers to the Trustee an Officers' Certificate
certifying that (A) the Company will use its reasonable best efforts to ensure
that such Replacement Satellite or replacement radar satellite is launched
within 24 months following delivery from the escrow account of such insurance
proceeds; and (B) the Company will have sufficient funds to service the
Company's projected debt service requirements until the scheduled launch of
such Replacement Satellite or replacement radar satellite and to develop,
construct, launch and insure such Replacement Satellite or replacement radar
satellite.
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SECTION 4.6. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT.
(a) The Company shall deliver to the Trustee, within 90
days after the end of each of the Company's fiscal years, an Officers'
Certificate stating that a review of its activities during the preceding fiscal
year has been made under the supervision of the signing officers with a view to
determining whether it has kept, observed, performed and fulfilled its
obligations under this Indenture and further stating, as to each such officer
signing such certificate, that to the best of such officer's knowledge, the
Company during such preceding fiscal year has kept, observed, performed and
fulfilled each and every such covenant and no Default or Event of Default
occurred during such year and that, to each officer's knowledge, at the date of
such certificate there is no Default or Event of Default that has occurred and
is continuing or, if such signers do know of such Default or Event of Default,
the certificate shall describe the Default or Event of Default and its status
with particularity.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
annual financial statements delivered pursuant to Section 4.8 shall be
accompanied by a written report of the Company's independent accountants (who
shall be a firm of established national reputation) that in conducting their
audit of such financial statements nothing has come to their attention that
would lead them to believe that the Company has violated any provisions of
Article IV, V or VI of this Indenture insofar as they relate to accounting
matters or, if any such violation has occurred, specifying the nature and
period of existence thereof, it being understood that such accountants shall
not be liable directly or indirectly to any Person for any failure to obtain
knowledge of any such violation. In the event that such written report of the
Company's independent accountants cannot be obtained, the Company shall deliver
an Officers' Certificate certifying that it has used its best efforts to obtain
such written report but was unable to do so.
(c) If any Default or Event of Default has occurred and
is continuing or if any Holder seeks to exercise any remedy hereunder with
respect to a claimed Default under this Indenture or the Notes, the Company
shall deliver to the Trustee, at its address set forth in Section 11.2 hereof,
by registered or certified mail or by telegram or facsimile transmission
followed by hard copy by registered or certified mail an Officers' Certificate
specifying such event, notice or other action within five Business Days of its
becoming aware of such occurrence.
SECTION 4.7. COMPLIANCE WITH LAWS.
The Company shall, and shall cause each of its Subsidiaries to, comply
with all applicable statutes, rules, regulations and orders of the United
States of America, all states and municipalities thereof, and of any
governmental department, commission, board, regulatory authority, bureau,
agency and instrumentality of the foregoing, in respect of the conduct of its
businesses and the ownership of its properties.
SECTION 4.8. REPORTS.
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Whether or not required by the rules and regulations of the
Commission, so long as any Notes are outstanding, the Company will furnish to
the Holders of Notes:
(i) all Forms 8-K, 10-Q and 10-K filed with the Commission and,
with respect to the annual information only, a report thereon by the Company's
independent certified public accountants; and
(ii) if the Company is not required to file such reports with the
Commission, all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q and 10-K
if the Company were required to file such Forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" that
describes the financial condition and results of operations of the Company and
its Restricted Subsidiaries and, with respect to the annual information only, a
report thereon by the Company's independent certified public accountants, and
all information that would be required to be filed with the Commission on Form
8-K if the Company were required to file such reports.
In addition, following the consummation of the Exchange Offer, whether
or not required by the rules and regulations of the Commission, but only if
then permitted by the Commission, the Company will file a copy of all such
information and reports with the Commission for public availability and make
such information available to securities analysts and prospective investors
upon request. In addition, for so long as any Notes remain outstanding, the
Company will furnish to the Holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act.
SECTION 4.9. WAIVER OF STAY, EXTENSION OR USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law or any usury
law, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) the Company hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
SECTION 4.10. LIMITATION ON RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any of
its Restricted Subsidiaries to, directly or indirectly: (i) declare or pay any
dividend or make any distribution on account of the Equity Interests of the
Company (including, without limitation, any payment in connection with any
merger or consolidation involving the Company or any of its Restricted
Subsidiaries), other than dividends or distributions declared and payable (x)
in Equity Interests (other than Disqualified Stock) of the Company or any of
its Restricted Subsidiaries or (y) to the
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Company or to any Restricted Subsidiary of the Company; (ii) purchase, redeem,
defease, retire for value or otherwise acquire or return for value any Equity
Interests of the Company, other than any such Equity Interests owned by the
Company or any Wholly Owned Restricted Subsidiary of the Company; (iii) make
any principal payment on (except at maturity) or purchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness that is subordinated
(whether pursuant to its terms, by operation of law, structurally or otherwise)
to the Notes; or (iv) make any Restricted Investment (all such payments and
other actions set forth in clauses (i) through (iv) above being collectively
referred to as "Restricted Payments"), unless, at the time of and after giving
effect to such Restricted Payment:
(x) no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof;
(y) the Company would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such
Restricted Payment had been made at the beginning of the immediately
preceding fiscal quarter, have been permitted to incur at least $1.00
of additional Indebtedness pursuant to Section 4.12(a) hereof and
pursuant to Section 4.12(a) of the 1998 Indenture; and
(z) such Restricted Payment, together with the aggregate
of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the First Issue Date (excluding
Restricted Payments permitted by clauses (ii), (iii) and (iv) of
paragraph (b) below), is less than the sum, without duplication, of:
(1) 50% of the Consolidated Net Income of the Company for the period
(taken as one accounting period) from the beginning of the first
fiscal quarter commencing after the First Issue Date to the end of the
Company's most recently ended fiscal quarter for which financial
statements are available at the time of such Restricted Payment (or,
if such Consolidated Net Income for such period is a deficit, less
100% of such deficit); plus (2) 100% of the aggregate net cash
proceeds received by the Company since the First Issue Date as a
contribution to its common equity capital or from the issue or sale of
Equity Interests of the Company (other than Disqualified Stock) or
from the issue of Disqualified Stock or debt securities of the Company
that have been converted into such Equity Interests (other than (A)
Equity Interests (or Disqualified Stock or convertible debt
securities) sold to a Subsidiary of the Company, (B) Disqualified
Stock or debt securities that have been converted into Disqualified
Stock, (C) equity capital contributions described in clause (vi) of
the definition of "Permitted Investment," (D) to the extent that the
net cash proceeds of the issuance of such Equity Interests are used to
redeem the Notes as permitted under Section 3 hereof and (E) Series A
Preferred Stock issued in the Series A Offering); plus (3) to the
extent that any Restricted Investment that was made after the First
Issue Date is sold for cash or otherwise liquidated or repaid for
cash, the lesser of (A) the cash return of capital with respect to
such Restricted Investment (less the cost of disposition, if any) and
(B) the initial amount of such Restricted Investment; plus (4) to the
extent that any Unrestricted Subsidiary is designated by the Company
as a Restricted Subsidiary, an amount equal to
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the lesser of (A) the Fair Market Value of such Restricted Investment
and (B) the Company's Investment in such Unrestricted Subsidiary at
the time of such designation.
(b) Notwithstanding the foregoing, the provisions set
forth in paragraph (a) above shall not prohibit:
(i) the payment of any dividend within 60 days
after the date of declaration thereof, if at said date of declaration such
payment would have complied with the provisions of this Indenture;
(ii) so long as no Default has occurred and is
continuing or will arise therefrom, the redemption, repurchase, retirement or
other acquisition of any Equity Interests of the Company in exchange for, or
out of the proceeds of, the substantially concurrent sale (other than to a
Subsidiary of the Company) of other Equity Interests of the Company (other than
any Disqualified Stock); provided that the amount of any such net cash proceeds
that are utilized for any such redemption, repurchase, retirement or other
acquisition shall be excluded from clause (2) of paragraph (z) above;
(iii) so long as no Default has occurred and is
continuing or will arise therefrom, the repayment, defeasance, redemption or
repurchase of Intercompany Indebtedness or Indebtedness with the net cash
proceeds from an incurrence of Permitted Refinancing Indebtedness or the
substantially concurrent sale (other than to a Subsidiary of the Company) of
Equity Interests of the Company (other than Disqualified Stock); provided that
the amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement or other acquisition shall be excluded from
clause (2) of paragraph (z) above;
(iv) the issuance of shares of Series A Preferred
Stock as paid-in-kind dividends in accordance with the terms of the Series A
Preferred Stock as in effect on the First Issue Date;
(v) the purchase, redemption or retirement by the
Company of shares of its Common Stock held by an employee or former employee of
the Company or its Subsidiaries issued under the Stock Option Plan; provided
that the amount of any such payments in any fiscal year does not exceed
$1,000,000; and provided, further, that the limitation set forth in the
foregoing proviso does not apply to the purchase, redemption or retirement of
shares of common stock with funds or other property or amounts paid by the
Company for which the Company receives concurrent reimbursement from any other
Person (other than the Company's Subsidiaries); and
(vi) payments made in respect of (x) the
cancellation of fractional shares of Common Stock in connection with the
conversion of the Series A Preferred Stock and the exercise of the warrants in
the Units Offering and (y) the repurchase or redemption of any shares of Series
A Preferred Stock in an aggregate amount in the case of (x) and (y) not to
exceed $500,000.
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In determining the amount of Restricted Payments permissible under
clause (z) of Section 4.10(a) above, amounts expended pursuant to clauses (i),
(v) and (vi) of this Section 4.10(b) shall be included as Restricted Payments.
Notwithstanding the foregoing, payments made by the Company to Orbital pursuant
to the Orbital Agreements shall not be deemed Restricted Payments.
The Company may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default and, at
the time of and after giving effect to such designation, the Company could
incur $1.00 of additional Indebtedness under the applicable provisions of the
first paragraph under Section 4.12(a); provided, however, that in no event
shall all or any portion of the material assets or properties (other than cash)
owned by the Company on the First Issue Date be transferred to or held by an
Unrestricted Subsidiary of the Company and provided, further, that such ability
to incur $1.00 of additional Indebtedness shall not be required in the case of
any newly created Unrestricted Subsidiary funded solely with an Investment
described in clause (vi) of the definition of "Permitted Investment." For
purposes of making such determination, all Investments by the Company and its
Restricted Subsidiaries outstanding on the First Issue Date (except to the
extent repaid in cash and except for Investments described in clause (vi) of
the definition of "Permitted Investment") in the Subsidiary so designated will
be deemed to be Restricted Payments at the time of such designation and will
reduce the amount available for Restricted Payments under Section 4.10. All
such outstanding Investments will be deemed to constitute Investments in an
amount equal to the greatest of: (1) the net book value of such Investments at
the time of such designation; (2) the Fair Market Value of such Investments at
the time of such designation; and (3) the original Fair Market Value of such
Investments at the time they were made. Such designation will only be
permitted if such Restricted Payment would be permitted at such time and if
such Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
The amount of all Restricted Payments, if not made in cash, shall be
the Fair Market Value on the date of the Restricted Payment of the asset(s)
proposed to be transferred by the Company or such Restricted Subsidiary, as the
case may be, pursuant to the Restricted Payment. Not later than the date of
making any Restricted Payment, the Company shall deliver to the Trustee an
Officers' Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this covenant
were computed, which calculations may be based upon the latest available
financial statements of the Company.
SECTION 4.11. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
(a) The Company shall not, and shall not permit any of
its Restricted Subsidiaries to, sell, lease transfer or otherwise dispose of
any of its properties or assets to, or purchase any property or assets from, or
enter into or make any contract, agreement, understanding, loan, advance or
guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an
"Affiliate Transaction"), unless:
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(i) such Affiliate Transaction is on terms that
are no less favorable to the Company or such Restricted Subsidiary than those
that would have been obtained in a comparable transaction by the Company or
such Restricted Subsidiary with an unrelated Person;
(ii) the Company delivers to the Trustee: (a) with
respect to any Affiliate Transaction involving aggregate consideration in
excess of $2.5 million, (x) a determination by the disinterested members of the
Board of Directors of the Company made in good faith (evidenced by a resolution
approved by at least a majority of the disinterested members of the Board of
Directors of the Company and set forth in an Officers' Certificate delivered to
the Trustee) or (y) an opinion as to the fairness of such Affiliate Transaction
to the Company or Restricted Subsidiary of the Company involved in such
Affiliate Transaction from a financial point of view issued by an Independent
Financial Advisor or, with respect to development, launch and operations of
satellites and remote imaging-related matters, a nationally recognized expert
in the respective applicable industry; and (b) with respect to any Affiliate
Transaction involving aggregate consideration in excess of $10 million, an
opinion as to the fairness of such Affiliate Transaction to the Company or
Restricted Subsidiary of the Company involved in such Affiliate Transaction
from a financial point of view issued by an Independent Financial Advisor or,
with respect to development, launch and operations of satellites and remote
imaging-related matters, a nationally recognized expert in the respective
applicable industry.
(b) The following shall not be deemed Affiliate
Transactions:
(i) any employment agreement, stock option or
stock purchase agreement entered into by the Company or any of its Restricted
Subsidiaries with any of their respective employees in the ordinary course of
business;
(ii) transactions between or among the Company and/or its Wholly Owned
Restricted Subsidiaries;
(iii) Restricted Payments permitted by clauses (i),
(ii), (iv), (v) and (vi) of the Section 4.10(b) and Permitted Investments of a
type referred to in clauses (i), (iii) and (vi) of the definition of Permitted
Investments;
(iv) the sale of common Equity Interests (other
than Disqualified Stock, except as contemplated by the Stock Purchase
Agreement) of the Company for cash to an Affiliate of the Company;
(v) transactions pursuant to agreements entered
into with resellers of the Company's products and services on terms
substantially the same as the Company's standard agreements entered into with
such parties in the ordinary course of business;
(vi) transactions pursuant to the Orbital
Agreements, including transactions pursuant to any amendments to the
Procurement Agreement with respect to the
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selection of the launch vehicle for the satellite designated on the First Issue
Date as the OrbView-4 satellite;
(vii) amendments, supplements or other
modifications to the Orbital Agreements that do not involve the payment of cash
by the Company or any of its Restricted Subsidiaries;
(viii) payment of reasonable directors fees to
Persons who are not otherwise Affiliates of the Company; and
(ix) the sale of securities (other than common
Equity Interests) of the Company for cash to an Affiliate of the Company;
provided that: (A) an amount of such securities at least equal to the amount
sold to such Affiliate have been or are being sold substantially simultaneously
to Persons that are not Affiliates of the Company; (B) the price per security
paid by such Affiliate is no less than the price paid by such non-Affiliates;
and (C) the Company shall not have entered into any other arrangement with such
non-Affiliates to induce such non-Affiliates to purchase such securities.
SECTION 4.12. LIMITATION ON INCURRENCE OF INDEBTEDNESS
OR ISSUANCE OF DISQUALIFIED STOCK.
(a) The Company shall not, and shall not permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guaranty or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Debt) or any Disqualified Stock; provided,
however, that the Company may incur Indebtedness (including Acquired Debt) or
issue shares of Disqualified Stock and the Restricted Subsidiaries may incur
Indebtedness if, after giving pro forma effect to the incurrence of such
Indebtedness or the issuance of such Disqualified Stock and the use of proceeds
thereof, the aggregate Indebtedness to Cash Flow Ratio of the Company does not
exceed 4.0 to 1. Notwithstanding the foregoing, prior to June 30, 2001, the
Company or any Restricted Subsidiary of the Company may incur Indebtedness if
immediately after giving pro forma effect to the incurrence of such
Indebtedness and the receipt and application of the proceeds thereof, the
Indebtedness to Capital Ratio would be less than or equal to 65.0%.
(b) The provisions set forth in clause (a) above shall
not apply to:
(i) the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness under Credit Facilities; provided that
the aggregate principal amount of all Indebtedness (with letters of credit
being deemed to have a principal amount equal to the maximum potential
liability of the Company and its Subsidiaries thereunder) outstanding under all
Credit Facilities after giving effect to such incurrence does not exceed an
amount equal to the greater of (A) $25 million and (B) 85% of Eligible
Receivables;
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(ii) the incurrence by the Company of Indebtedness
represented by the Notes and this Indenture or the issuance of shares of Series
A Preferred Stock as paid-in-kind dividends;
(iii) Existing Indebtedness or Indebtedness
incurred after the First Issue Date and before the Issue Date pursuant to
Section 4.12(b) of the 1998 Indenture;
(iv) the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness under (A) Hedging Obligations, provided
that (1) the notional principal amount of any interest rate protection
agreement does not significantly exceed the principal amount of the
Indebtedness to which such interest rate protection agreement relates and (2)
any agreements related to fluctuations in currency rates do not increase the
outstanding Indebtedness other than as a result of fluctuations in foreign
currency exchange rates, and (B) performance, surety and workers' compensation
bonds or other obligations of a like nature incurred in the ordinary course of
business;
(v) the incurrence by any Unrestricted
Subsidiary of the Company of Non-Recourse Debt; provided that if any such
Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary such
event shall be deemed to constitute an incurrence of Indebtedness by a
Restricted Subsidiary;
(vi) the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness owed to and held by the Company or any
of its Wholly Owned Restricted Subsidiaries (the Indebtedness incurred pursuant
to this clause (vi) being hereafter referred to as "Intercompany
Indebtedness"); provided that an incurrence of Indebtedness shall be deemed to
have occurred upon (x) any sale or other disposition of Intercompany
Indebtedness to a Person other than the Company or any of its Restricted
Subsidiaries, (y) any sale or other disposition of Equity Interests of the
Company's Restricted Subsidiaries which holds Intercompany Indebtedness such
that such Restricted Subsidiary ceases to be a Restricted Subsidiary after such
sale or other disposition or (z) designation of a Restricted Subsidiary as an
Unrestricted Subsidiary;
(vii) the incurrence by the Company or any of its
Restricted Subsidiaries of Non-Recourse Debt to finance purchase money
obligations;
(viii) the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness ("Permitted Refinancing Indebtedness")
incurred to refinance, replace or refund Indebtedness ("Refinanced
Indebtedness") incurred pursuant to paragraph (a) of this Section 4.12 or
pursuant to clause (i) or (iii) of this paragraph (b); provided that: (x) the
aggregate principal amount of such Permitted Refinancing Indebtedness does not
exceed the aggregate principal amount of the Refinanced Indebtedness (including
accrued and unpaid interest thereon); (y) such Permitted Refinancing
Indebtedness shall have a final maturity equal to or later than, and a Weighted
Average Life to Maturity equal to or greater than, the final maturity and
Weighted Average Life to Maturity of the Refinanced Indebtedness, respectively;
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and (z) such Permitted Refinancing Indebtedness shall rank no higher relative
to the Notes than the Refinanced Indebtedness and in no event may any
Indebtedness of the Company, or any of its Restricted Subsidiaries be
refinanced with Indebtedness of any Restricted Subsidiary under this clause
(viii);
(ix) the incurrence by the Company or any of its
Restricted Subsidiaries of Capital Lease Obligations in an aggregate amount for
all such Persons not to exceed $15 million at any one time outstanding;
(x) the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness not to exceed $15 million outstanding
at any time pursuant to a Fixed Asset Financing; and
(xi) the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness in addition to that described in
clauses (i) through (x) of this Section 4.12(b), so long as the aggregate
principal amount of all such Indebtedness, including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any Indebtedness incurred
pursuant to this clause (xi), together with any Indebtedness incurred pursuant
to Section 4.12(b)(xi) of the 1998 Indenture prior to the Issue Date, shall not
exceed $10 million outstanding at any one time in the aggregate.
SECTION 4.13. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES.
(a) The Company shall not, and shall not permit any of
its Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any encumbrance or restriction on
the ability of any Restricted Subsidiary to:
(i) pay dividends or make any other distributions
to the Company or any of its Restricted Subsidiaries on its Capital Stock or
with respect to any other interest or participation in, or measured by, its
profits;
(ii) pay any Indebtedness owed to the Company or
any of its Restricted Subsidiaries;
(iii) make loans or advances to the Company or any
of its Restricted Subsidiaries; or
(iv) transfer any of its properties or assets to
the Company or any of its Restricted Subsidiaries.
(b) The restrictions set forth in clause (a) above shall
not apply to encumbrances or restrictions existing under or by reason of:
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(i) this Indenture, the 1998 Indenture, the
Pledge Agreement, the Notes or the 1998 Notes;
(ii) Existing Indebtedness;
(iii) applicable law;
(iv) any instrument governing Indebtedness or
Capital Stock of a Person acquired by the Company or any of its Restricted
Subsidiaries as in effect at the time of such acquisition (except to the extent
such Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired;
(v) customary non-assignment provisions in leases
or other agreements entered into in the ordinary course of business;
(vi) purchase money obligations for property
acquired in the ordinary course of business that impose restrictions of the
nature described in clause (iv) above on the property so acquired;
(vii) Permitted Refinancing Indebtedness; provided
that the restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive than those contained in the
agreements governing the Refinanced Indebtedness;
(viii) restrictions on cash or other deposits or net
worth imposed by customers under contracts entered into in the ordinary course
of business;
(ix) secured Indebtedness otherwise permitted to
be incurred pursuant to Section 4.16 hereof that limits the right of the debtor
to dispose of the assets securing such Indebtedness; or
(x) in the case of clauses (i), (ii), (iv), (v),
(vi), (vii), (viii) and (ix) above, any amendments, modifications,
restatements, renewals, increases, supplements, modifications, restatements or
refinancings thereof, provided that such amendments, modifications,
restatements or refinancings are not materially more restrictive with respect
to such dividend and other payment restrictions than those contained in such
instruments as in effect on the date of their incurrence.
SECTION 4.14. LIMITATION ON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each
Holder shall have the right to require the Company to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of such Holder's Notes
pursuant to the offer described below (the "Change of Control
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Offer") at an offer price in cash equal to 101% of the aggregate principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages (if
any) thereon to the date of purchase (the "Change of Control Payment").
(b) Within ten days following the date on which any
Change of Control occurs (the "Change of Control Date"), the Company shall
send, by first class mail, a notice to each Holder, with a copy to the Trustee,
which notice shall govern the terms of the Change of Control Offer. The notice
to the Holders shall contain all instructions and materials necessary to enable
such Holders to tender Notes pursuant to the Change of Control Offer. The
notice shall state:
(i) that the Change of Control Offer is being
made pursuant to this Section 4.14 and that all Notes tendered and not
withdrawn shall be accepted for payment;
(ii) the purchase price (including the amount of
accrued interest and Liquidated Damages, if any) and the purchase date (which
shall be no earlier than 30 days nor later than 40 days from the date such
notice is mailed, other than as may be required by law) (the "Change of Control
Payment Date");
(iii) that any Note not tendered will continue to
accrue interest;
(iv) that, unless the Company defaults in making
payment therefor, any Note accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of Control
Payment Date;
(v) that Holders electing to have a Note
purchased pursuant to a Change of Control Offer will be required to surrender
the Note, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Note completed, to the Paying Agent at the address specified in
the notice prior to the close of business on the third Business Day prior to
the Change of Control Payment Date;
(vi) that Holders will be entitled to withdraw
their election if the Paying Agent receives, not later than five Business Days
prior to the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Notes the Holder delivered for purchase and a statement that such
Holder is withdrawing such Holder's election to have such Notes purchased;
(vii) that Holders whose Notes are purchased only
in part will be issued new Notes in a principal amount equal to the unpurchased
portion of the Notes surrendered; provided that each Note purchased and each
new Note issued shall be in an original principal amount of $1,000 or integral
multiples thereof; and
(viii) the circumstances and relevant facts
regarding such Change of Control.
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(c) On or before the Change of Control Payment Date, the
Company shall, to the extent lawful: (i) accept for payment all Notes or
portions thereof tendered pursuant to the Change of Control Offer; (ii) deposit
with the Paying Agent in U.S. dollars, an amount equal to the Change of
Control Payment in respect of all Notes or portions thereof so tendered; and
(iii) deliver or cause to be delivered to the Trustee, Notes so accepted
together with an Officers' Certificate stating the aggregate principal amount
of Notes or portions thereof being purchased by the Company. The Paying Agent
shall promptly mail to the Holders of Notes so accepted the Change of Control
Payment for such Notes, and the Trustee shall promptly authenticate and mail
(or cause to be transferred by book entry) to each Holder a new Note equal in
principal amount to any unpurchased portion of the Note surrendered; provided
that each such new Note will be in a principal amount of $1,000 or an integral
multiple thereof. Any Notes not so accepted shall be promptly mailed by the
Company to the Holder thereof. Any amounts remaining after the purchase of
Notes pursuant to a Change of Control Offer shall be returned by the Trustee to
the Company.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Change of Control Offer. To the extent the
provisions of any securities laws or regulations conflict with the provisions
under this Section 4.14, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 4.14 by virtue thereof. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date. Any amounts remaining
after the purchase of Notes pursuant to a Change of Control Offer shall be
returned by the Trustee to the Company.
(d) The Company will not be required to make a Change of
Control Offer upon a Change of Control if a third party makes the Change of
Control Offer in the manner, at the time and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Change of Control
Offer made by the Company and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer.
SECTION 4.15. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY INTERESTS.
(a) The Company shall not, and shall not permit any of
its Restricted Subsidiaries to consummate an Asset Sale unless:
(i) the Company or such Restricted Subsidiary, as
the case may be, receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value of the assets sold or otherwise disposed of;
(ii) at least 75% of the consideration received in
the Asset Sale by the Company or such Restricted Subsidiary, as the case may
be, consists of (a) cash or Cash
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Equivalents or (b) the assumption of Indebtedness (other than Indebtedness that
is subordinated) of the Company or such Restricted Subsidiary and the release
of the Company and the Restricted Subsidiaries, as applicable, from all
liability on the Indebtedness assumed; and
(iii) the aggregate Fair Market Value of all
non-Cash Consideration received therefor by the Company or such Restricted
Subsidiary, as the case may be, when aggregated with the Fair Market Value of
all other non-Cash Consideration received by the Company and its Restricted
Subsidiaries from all other Asset Sales since the First Issue Date that has not
yet been converted into cash or Cash Equivalents (in either case, in U.S.
dollars or freely convertible into U.S. dollars), does not exceed (without
duplication) 5% of the aggregate Consolidated Tangible Net Assets of the
Company at the time of such Asset Sale; provided, however, that any securities,
notes or similar obligations received by any of the Company or such Restricted
Subsidiaries from such transferees that are contemporaneously (subject to
ordinary settlement periods) converted by the Company or such Restricted
Subsidiaries into cash, shall be deemed to be cash (to the extent of the net
cash received) for purposes of clauses (ii) and (iii).
Within 270 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply such Net Proceeds to: (i) make capital expenditures
or acquire Business Assets, (ii) acquire 100% of the Equity Interests of a
Related Satellite Business, (iii) market imagery products and services, (iv)
repay Indebtedness under a Credit Facility, and (v) provide working capital.
Pending the final application of any such Net Proceeds, the Company may
temporarily invest such Net Proceeds in any manner that is not prohibited by
this Indenture. Any Net Proceeds from an Asset Sale that are not applied or
invested as provided in the first sentence of this paragraph will be deemed to
constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds
exceeds $7.5 million (the "Asset Sale Offer Trigger Date"), the Company will be
required to make an offer to all Holders of Notes (an "Asset Sale Offer") to
purchase on a date not less than 30 nor more than 45 days following the Asset
Sale Offer Trigger Date the maximum principal amount of Notes that may be
purchased out of the Excess Proceeds (and not solely the amount in excess of
$7.5 million), at an offer price in cash in an amount equal to 100% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages (if any) thereon to the date of purchase, in accordance with the
procedures set forth in clause (b) below. To the extent that the aggregate
amount of Notes tendered pursuant to an Asset Sale Offer is less than the
Excess Proceeds, the Company may use any remaining Excess Proceeds for general
business purposes. If the aggregate amount of Notes surrendered by Holders
thereof exceeds the amount of Excess Proceeds, the Trustee will select the
Notes to be purchased on a pro rata basis in accordance with the procedures set
forth in Section 3.4.
Upon completion of such offer to purchase, the amount of Excess
Proceeds will be reset at zero. The Asset Sale Offer shall remain open for a
period of 20 Business Days or such longer period as may be required by law.
If the Purchase Date is on or after a Record Date and on or before the
related Interest Payment Date, any accrued and unpaid interest shall be paid to
the Person in whose name a Note
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is registered at the close of business on such Record Date, and no additional
interest shall be payable to Holders who tender Notes pursuant to the Asset
Sale Offer.
(b) Each notice of an Asset Sale Offer pursuant to this
Section 4.15 shall be mailed or caused to be mailed, by first class mail, by
the Company not more than 25 days after the Asset Sale Offer Trigger Date to
all Holders at their last registered addresses determined as of a date within
15 days of the mailing of such notice, with a copy to the Trustee. The notice
shall contain all instructions and materials necessary to enable such Holders
to tender Notes pursuant to the Asset Sale Offer and shall state the following
terms:
(i) that the Asset Sale Offer is being made
pursuant to Section 4.15 and that all Notes tendered will be accepted for
payment; provided, however, that if the aggregate principal amount of Notes
tendered in an Asset Sale Offer plus accrued interest and Liquidated Damages
(if any) at the expiration of such offer exceeds the aggregate amount of the
Excess Proceeds, the Trustee shall select the Notes to be purchased on a pro
rata basis (with such adjustments as may be deemed appropriate by the Trustee
so that only Notes in denominations of $1,000 or multiples thereof shall be
purchased);
(ii) the purchase price (including the amount of
accrued interest and Liquidated Damages, if any) and the purchase date (which
shall be 20 Business Days from the date of mailing of notice of such Asset Sale
Offer, or such longer period as required by law) (the "Proceeds Purchase
Date");
(iii) that any Note not tendered will continue to
accrue interest;
(iv) that, unless the Company defaults in making
payment therefor, any Note accepted for payment pursuant to the Asset Sale
Offer shall cease to accrue interest after the Proceeds Purchase Date;
(v) that Holders electing to have a Note
purchased pursuant to an Asset Sale Offer will be required to surrender the
Note, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Note completed, to the Paying Agent at the address specified in
the notice prior to the close of business on the third Business Day prior to
the Proceeds Purchase Date;
(vi) that Holders will be entitled to withdraw
their election if the Paying Agent receives, not later than five Business Days
prior to the Proceeds Purchase Date, a telegram, telex, facsimile transmission
or letter setting forth the name of the Holder, the principal amount of the
Notes the Holder delivered for purchase and a statement that such Holder is
withdrawing such Holder's election to have such Note purchased; and
(vii) that Holders whose Notes are purchased only
in part will be issued new Notes in a principal amount equal to the unpurchased
portion of the Notes surrendered;
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provided that each Note purchased and each new Note issued shall be in an
original principal amount of $1,000 or integral multiples thereof.
On or before the Proceeds Purchase Date, the Company shall, to the
extent lawful, (i) accept for payment Notes or portions thereof tendered
pursuant to the Asset Sale Offer which are to be purchased in accordance with
this Section 4.15, (ii) deposit with the Paying Agent in U.S. dollars, an
amount sufficient to pay the purchase price plus accrued interest and
Liquidated Damages (if any) of all Notes to be purchased and (iii) deliver to
the Trustee Notes so accepted together with an Officers' Certificate stating
the Notes or portions thereof being purchased by the Company. The Paying Agent
shall promptly mail to the Holders of Notes so accepted payment in an amount
equal to the purchase price plus accrued interest and Liquidated Damages, if
any.
Any amounts remaining after the purchase of Notes pursuant to an Asset
Sale Offer shall be returned by the Trustee to the Company.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with this Section
4.15, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under
Section 4.15 by virtue thereof.
(c) The foregoing provisions shall not apply to the sale,
lease, conveyance or other disposition of all or substantially all of the
assets of the Company, which shall be governed by the provisions of Article V.
SECTION 4.16. LIMITATION ON LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien on any asset or property now owned or hereafter acquired, or any
income or profits therefrom, or assign or convey any right to receive income
therefrom, unless (i) in the case of Liens securing obligations subordinate to
the Notes, the Notes are secured by a valid, perfected Lien on such asset or
property that is senior in priority to such Liens, (ii) in the case of Liens
securing obligations subordinate to a Subsidiary Guarantee, such Subsidiary
Guarantee is secured by a valid, perfected Lien on such asset or property that
is senior in priority to such Liens, and (iii) in all other cases, the Notes
(and, if such Lien secures obligations of a Restricted Subsidiary, a Subsidiary
Guarantee of such Restricted Subsidiary) are equally and ratably secured;
provided, however, that the foregoing shall not prohibit or restrict Permitted
Liens.
SECTION 4.17. BUSINESS ACTIVITIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in any business other than that which is related to the
design, development and operation of
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remote imaging satellites and the worldwide marketing and sales of remote
imagery-based products and services.
SECTION 4.18. LIMITATIONS ON SALE AND LEASEBACK TRANSACTIONS.
The Company shall not, and shall not permit any Restricted Subsidiary
of the Company to, directly or indirectly, enter into any Sale and Leaseback
Transaction with respect to any property or assets (whether now owned or
hereafter acquired), except for a Sale and Leaseback Transaction not exceeding
365 days, unless (i) the sale or transfer of such property or assets to be
leased is treated as an Asset Sale and complies with the covenants contained in
Section 4.15 hereof and (ii) the Company or such Restricted Subsidiary would be
entitled under Section 4.12 hereof to incur Indebtedness (with the lease
obligations being treated as Indebtedness for purposes of ascertaining
compliance with this covenant) in respect of such Sale and Leaseback
Transaction.
SECTION 4.19. LIMITATION ON SALE OF CAPITAL STOCK OF SUBSIDIARIES.
The Company shall not, and shall not permit any Restricted Subsidiary
of the Company to, issue, transfer, convey, lease or otherwise dispose of any
shares of Capital Stock or other ownership interests in a Restricted Subsidiary
of the Company or securities convertible or exchangeable into, or options,
warrants, rights or other interest with respect to, Capital Stock of or other
ownership interests in a Restricted Subsidiary of the Company to any Person
(other than to the Company or a Wholly Owned Restricted Subsidiary of the
Company) except in a transaction that consists of a sale of all of the Capital
Stock of or other ownership interests in such Subsidiary owned by the Company
and any Subsidiary of the Company that complies with the provisions contained
in Section 4.15 hereof to the extent such provisions apply.
ARTICLE V
MERGER, CONSOLIDATION OR SALE OF ASSETS
SECTION 5.1. MERGERS, CONSOLIDATIONS AND SALES OF ASSETS.
(a) The Company may not consolidate or merge with or into
(whether or not the Company is the surviving Person), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions to, another Person
unless:
(i) the Company is the surviving Person or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized and existing
under the laws of the United States, any state thereof or the District of
Columbia;
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(ii) the Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the obligations of the Company under the
Notes, this Indenture and the Pledge Agreement pursuant to a supplemental
indenture in form reasonably satisfactory to the Trustee;
(iii) immediately after such transaction, no
Default or Event of Default exists;
(iv) the Company, or the Person formed by or
surviving any such consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made will have Consolidated Net Worth immediately after the
transaction equal to or greater than the Consolidated Net Worth of the Company
immediately preceding the transaction;
(v) the Company, or the Person formed by or
surviving any such consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made, at the time of such transaction and after giving pro
forma effect thereto as if such transaction had occurred at the beginning of
the immediately preceding fiscal quarter, will be permitted to incur at least
$1.00 of additional Indebtedness pursuant to Section 4.12(a) hereof; and
(vi) the Company and the surviving entity shall
have delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, sale, assignment,
transfer, lease, conveyance or other disposition and, if a supplemental
indenture is required in connection with such transaction, such supplemental
indenture, comply with all applicable provisions of this Indenture and that all
conditions precedent in this Indenture relating to such transaction have been
satisfied.
(b) For purposes of the foregoing, the transfer (by
lease, assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Subsidiaries of the Company, the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
SECTION 5.2. SUCCESSOR SUBSTITUTED.
Upon any consolidation of the Company with, or merger of either of the
Company with or into, any other Person or any conveyance, transfer or lease of
the properties and assets of the Company substantially as an entity in
accordance with Section 5.1, the successor Person formed by such consolidation
or into which the Company is merged or to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor Person had been named as the Company herein.
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ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(i) default for 30 days in the payment when due
of interest on, or Liquidated Damages (if any) with respect to, the Notes;
(ii) default in payment when due (whether at
maturity, upon redemption or repurchase, or otherwise) of the principal of or
premium (if any) on the Notes;
(iii) default in the payment of principal, interest
or Liquidated Damages (if any) on the Notes required to be purchased pursuant
to Section 4.14 or Section 4.15 or failure by the Company to comply with the
provisions of Article V;
(iv) failure by the Company or any of its
Restricted Subsidiaries for 30 days after notice to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% of the
outstanding principal amount of the Notes, to comply with any of their other
covenants in this Indenture, the Notes, the 1998 Indenture or the 1998 Notes;
(v) default under the 1998 Indenture or any other
indenture, mortgage or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by any the Company or any of its Restricted Subsidiaries), whether
such Indebtedness or guarantee now exists, or is created after the date of this
Indenture, which default:
(A) is caused by a failure to pay
principal of, or premium, if any, or interest on, such Indebtedness prior to
the expiration of the grace period provided in such Indebtedness on the date of
such default (a "Payment Default"); or
(B) results in the acceleration (which
acceleration has not been rescinded) of such Indebtedness prior to its express
maturity, and, in each case described in clause (a) and (b) of this paragraph,
the principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there has been a Payment
Default or the maturity of which has been so accelerated, aggregates $5 million
or more;
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(vi) failure by the Company or any of its
Restricted Subsidiaries to pay final judgments (other than any judgments as to
which a reputable insurance company has accepted full liability and whose bond,
premium or similar charge therefor is not in excess of $5 million) aggregating
in excess of $5 million, which judgments are not paid, discharged or stayed
within 60 days after their entry;
(vii) breach by the Company of any representation
or warranty set forth in the Pledge Agreement, or default by the Company in the
performance of any covenant set forth in the Pledge Agreement, or repudiation
by the Company of any of its obligations under the Pledge Agreement or the
unenforceability of the Pledge Agreement against the Company for any reason
which in any one case or in the aggregate results in an impairment of the
rights intended to be afforded thereby;
(viii) the entry by a court having jurisdiction in
the premises of (A) a decree or order for relief in respect of the Company or
any Restricted Subsidiary of the Company in an involuntary case or proceeding
under any applicable federal or state bankruptcy, insolvency, reorganization or
other similar law or (B) a decree or order adjudging the Company or any
Restricted Subsidiary of the Company bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any Restricted Subsidiary of the
Company under any applicable federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar official
of either of the Company or any Restricted Subsidiary of the Company or of any
substantial part of its property, or ordering the winding up or liquidation of
its affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 30
consecutive days; or
(ix) the commencement by the Company or any
Restricted Subsidiary of the Company of a voluntary case or proceeding under
any applicable federal or state bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by it to the entry of a decree or order for relief in
respect of the Company or any Restricted Subsidiary of the Company in an
involuntary case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against it, or
the filing by it of a petition or answer or consent seeking reorganization or
relief under any applicable federal or state law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the either of Company or any Restricted Subsidiary of the
Company, or of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due, or the taking of
corporate action by the Company or any Restricted Subsidiary of the Company in
furtherance of any such action.
SECTION 6.2. ACCELERATION.
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(a) If an Event of Default, other than an Event of
Default specified in Section 6.1(viii) or (ix) with respect to the Company, any
Significant Subsidiary of the Company or any group of Restricted Subsidiaries
of the Company that, taken together, would constitute a Significant Subsidiary,
occurs and is continuing and has not been waived pursuant to Section 6.4, then
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare the principal of and accrued interest and
Liquidated Damages (if any) on all the outstanding Notes to be due and payable
by notice in writing to the Company and the Trustee specifying the respective
Event of Default, such notice to be deemed a "notice of acceleration" (an
"Acceleration Notice"), and the same shall become immediately due and payable.
(b) If an Event of Default specified in Section 6.1(viii)
or (ix) with respect to the Company, any Significant Subsidiary or any group of
Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary occurs and is continuing, then all unpaid principal of, and premium
(if any) and accrued and unpaid interest and Liquidated Damages (if any) on
all of the outstanding Notes shall become due and payable without further
action or notice on the part of the Trustee or any Holder.
(c) At any time after a declaration of acceleration with
respect to the Notes in accordance with Section 6.2(a), the Holders of a
majority in principal amount of the Notes may rescind and cancel such
declaration and its consequences, but only: (i) if the rescission would not
conflict with any judgment or decree, (ii) if all existing Events of Default
have been cured or waived except nonpayment of principal or interest or
Liquidated Damages (if any) that has become due solely because of the
acceleration, (iii) to the extent the payment of such interest is lawful,
interest on overdue installments of interest and overdue principal, which has
become due otherwise than by such declaration of acceleration, has been paid,
(iv) if the Company has paid the Trustee its reasonable compensation and
reimbursed the Trustee for its expenses, disbursements and advances and all
other amounts due the Trustee pursuant to Section 7.7, and (v) if the Trustee
shall have received an Officers' Certificate that such Event of Default has
been cured or waived. No such rescission shall affect any subsequent Default
or impair any right consequent thereto.
(d) In the case of any Event of Default occurring by
reason of any willful action (or inaction) taken (or not taken) by or on behalf
of the Company with the intention of avoiding payment of the premium that the
Company would have had to pay if the Company then had elected to redeem the
Notes pursuant to the optional redemption provisions of this Indenture, an
equivalent premium shall also become and be immediately due and payable upon
the acceleration of the Notes pursuant to Section 6.2(a) or (b). If an Event
of Default occurs prior to March 1, 2002 by reason of any such willful action
(or inaction) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of the Notes prior to March 1, 2002, then the premium
specified herein shall also become immediately due and payable to the extent
permitted by law upon the acceleration of the Notes pursuant to Section 6.2(a)
or (b).
SECTION 6.3. OTHER REMEDIES.
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If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal or premium (if any) of or interest or Liquidated Damages
(if any) on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 6.4. WAIVER OF PAST DEFAULTS.
Subject to Sections 2.9, 6.7 and 9.2, at any time prior to a
declaration of acceleration with respect to the Notes in accordance with
Section 6.2(a), the Holders of a majority in aggregate principal amount of the
Notes then outstanding, by notice to the Trustee may, on behalf of the Holders
of all the Notes, waive an existing Default or Event of Default and its
consequences, except a continuing Default or Event of Default in the payment of
principal or premium (if any) of or interest or Liquidated Damages (if any) on
any Note as specified in clauses (i) and (ii) of Section 6.1.
SECTION 6.5. CONTROL BY MAJORITY.
Subject to Section 2.9, the Holders of a majority in principal amount
of the outstanding Notes may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on it, including, without limitation, any remedies provided
for in Section 6.3. Subject to Section 7.1, however, the Trustee may refuse to
follow any direction that the Trustee reasonably believes conflicts with any
law or this Indenture or that the Trustee determines may be unduly prejudicial
to the rights of another Holder. Notwithstanding any provision to the contrary
herein, the Trustee shall not be obligated to take any action with respect to
the provisions of Section 6.2(d) unless directed to do so pursuant to this
Section 6.5.
SECTION 6.6. LIMITATION ON SUITS.
A Holder may not pursue any remedy with respect to this Indenture or
the Notes unless:
(a) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(b) Holders of at least 25% in principal amount of the
outstanding Notes make a written request to the Trustee to pursue the remedy;
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(c) such Holders offer to the Trustee indemnity
reasonably satisfactory to the Trustee against any loss, liability or expense
to be incurred in compliance with such request;
(d) the Trustee does not comply with the request within
30 days after receipt of the request and the offer of satisfactory indemnity;
and
(e) during such 30-day period the Holders of a majority
in principal amount of the outstanding Notes do not give the Trustee a
direction which, in the opinion of the Trustee, is inconsistent with the
request.
The foregoing limitations shall not apply to a suit instituted by a
Holder for the enforcement of the payment of principal and premium (if any) or
interest and Liquidated Damages (if any) on such Note on or after the
respective due dates set forth in such Note (including upon acceleration
thereof) or the institution of any proceeding with respect to this Indenture or
any remedy hereunder, including, without limitation, acceleration, by the
Holders of a majority in principal amount of outstanding Notes, provided that
upon institution of any proceeding or exercise of any remedy, such Holders
provide the Trustee with prompt notice thereof.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder, it being
understood and intended that no one or more Holders shall have any right by
virtue of any provision of this Indenture to affect, disturb or prejudice the
rights of any other Holders, or to obtain or to seek to obtain priority or
preference over any other Holders, or to enforce any right under this Indenture
except in the manner herein provided and for the equal and ratable benefit of
all the Holders.
SECTION 6.7. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of, and interest and Liquidated
Damages (if any) on a Note, on or after the respective due dates expressed in
such Note, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
such Holder.
SECTION 6.8. COLLECTION SUIT BY TRUSTEE.
If an Event of Default in payment of principal or interest or
Liquidated Damages (if any) specified in clause (i) or (ii) of Section 6.1
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company or any other
obligor on the Notes for the whole amount of principal and accrued interest
remaining unpaid and Liquidated Damages, if any, together with interest on
overdue principal and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest, and such further amount as shall
be sufficient to cover the costs and expenses of collection, including
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the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and all other amounts due to the Trustee
pursuant to Section 7.7.
SECTION 6.9. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses, taxes,
disbursements and advances of the Trustee, its agents and counsel and all other
amounts due to the Trustee pursuant to Section 7.7) and the Holders allowed in
any judicial proceedings relating to the Company or any other obligor upon the
Notes, any of their respective creditors or any of their respective property
and shall be entitled and empowered to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same,
and any custodian, receiver, assignee, trustee, liquidator or other similar
official in any such judicial proceedings is hereby authorized by each Holder
to make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses, taxes,
disbursements and advances of the Trustee, its agent and counsel, and any other
amounts due the Trustee under Section 7.7. The Company's payment obligations
to the Trustee under this Section 6.9 shall be secured in accordance with the
provisions of Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money or property pursuant to this Article
VI, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.7;
Second: if the Holders are forced to proceed against the
Company directly without the Trustee, to the Holders for their collection
costs;
Third: to Holders for amounts due and unpaid on the Notes for
principal and premium (if any) and interest and Liquidated Damages (if any),
ratably, without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal and premium, and interest and
Liquidated Damages, respectively; and
Fourth: to the Company or any other obligor on the Notes, as
their interests may appear, or as a court of competent jurisdiction may direct.
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The Trustee, upon prior notice to the Company, may fix a record date
and payment date for any payment to Holders pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.7, or a suit by a Holder or Holders of more than 10% in
principal amount of the outstanding Notes.
ARTICLE VII
TRUSTEE
SECTION 7.1. DUTIES OF TRUSTEE.
(a) The duties and responsibilities of the Trustee shall
be as provided by the TIA and this Indenture. No provision of this Indenture
shall require the Trustee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
(b) If an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in its exercise
thereof as a prudent person would exercise or use under the circumstances in
the conduct of his own affairs.
(c) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties as
are required by the TIA or specifically set forth in this Indenture and no
other covenants or obligations shall be implied in this Indenture against the
Trustee.
(ii) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
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(d) Notwithstanding anything to the contrary herein
contained, the Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct.
(e) Every provision of this Indenture that relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.1.
(f) The Trustee shall not be liable for interest on any
money or assets received by it except as the Trustee may agree in writing.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
SECTION 7.2. RIGHTS OF TRUSTEE.
Subject to Section 7.1:
(a) The Trustee may rely and shall be fully protected in
acting or refraining from acting upon any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it
may consult with counsel and may require an Officers' Certificate or an Opinion
of Counsel, or both. The Trustee shall not be liable for any action it takes
or omits to take in good faith in reliance on such Officers' Certificate or
Opinion of Counsel.
(c) The Trustee may act through its attorneys and agents
and shall not be responsible for the misconduct or negligence of any agent
appointed with due care.
(d) The Trustee shall not be liable for any action that
it takes or omits to take in good faith which it reasonably believes to be
authorized or within its rights or powers.
(e) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, notice, request, direction, consent, order,
bond, debenture, or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled, upon reasonable notice
to the Company, to examine the books, records, and premises of the Company,
personally or by agent or attorney and to consult with the officers and
representatives of the Company, including the Company's accountants and
attorneys.
(f) The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request,
order or direction of any of the Holders pursuant to the provisions of this
Indenture, including, without limitation, the provisions of Section 6.5 hereof,
unless such Holders shall have offered to the Trustee security or indemnity
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reasonably satisfactory to the Trustee against the costs, expenses and
liabilities which may be incurred by it in compliance with such request, order
or direction.
(g) The Trustee shall not be required to give any bond or
surety in respect of the performance of its powers and duties hereunder.
(h) the Trustee shall not be charged with knowledge of
any Default or Event of Default unless either (1) a Responsible Officer of the
Trustee shall have actual knowledge of such Default or Event of Default or (2)
written notice of such Default or Event of Default shall have been given to the
Trustee by the Company or any Holder.
SECTION 7.3. INDIVIDUAL RIGHTS OF TRUSTEE AND AGENTS.
Each of the Trustee, any Paying Agent and any Registrar, in its
individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with the Company or any of its Subsidiaries or Affiliates
with the same rights it would have if it were not Trustee or such agent.
SECTION 7.4. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of
this Indenture, the Pledge Agreement, the Pledged Securities or the Notes, and
it shall not be accountable for the Company's use of the proceeds from the
Notes, and it shall not be responsible for any statement of the Company in this
Indenture or the Notes, other than the Trustee's certificate of authentication.
SECTION 7.5. NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to each Holder notice of the
uncured Default or Event of Default within 30 days after such Default or Event
of Default becomes known to the Trustee. Except in the case of a Default or an
Event of Default in payment of principal of, premium, if any, interest or
Liquidated Damages (if any) on any Note, including an accelerated payment and
the failure to make payment on the Change of Control Payment Date pursuant to a
Change of Control Offer or on the Proceeds Purchase Date pursuant to an Asset
Sale Offer, and, except in the case of a failure to comply with Article V
hereof, the Trustee may withhold the notice if and so long as it in good faith
determines that withholding such notice is in the interest of the Holders.
SECTION 7.6. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 15, the Trustee shall, to the extent
that any of the events described in TIA Section 313(a) occurred within the
previous twelve months, but not otherwise, mail to each Holder a report dated
as of such date that complies with TIA Section 313(a). The Trustee also shall
comply with TIA Sections 313(b) and (c).
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A copy of each report at the time of its mailing to Holders shall be
mailed to the Company and filed with the Commission and each securities
exchange, if any, on which the Notes are listed.
The Company shall promptly notify the Trustee if the Notes become
listed on any securities exchange and the Trustee shall comply with TIA Section
313(d).
SECTION 7.7. COMPENSATION AND INDEMNITY.
(a) The Company agrees:
(i) to pay to the Trustee from time to time
reasonable compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(ii) except as otherwise expressly provided
herein, to reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith;
and
(iii) to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense (including the reasonable
compensation, expenses and disbursements of its agents, accountants, experts
and counsel) incurred without negligence or bad faith on its part, arising out
of or in connection with the acceptance or administration of this trust,
including the costs and expenses of enforcing this Indenture against the
Company (including, without limitation, this Section 7.7) and of defending
itself against any claim (whether asserted by any Holder or the Company) or
liability in connection with the exercise or performance of any of its powers
or duties hereunder.
(b) The Trustee shall notify the Company promptly of any
claim asserted against the Trustee for which it may seek indemnity. Failure by
the Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder.
(c) The Company need not reimburse any expense or
indemnify the Trustee against any loss or liability to the extent incurred by
the Trustee through its negligence, bad faith or willful misconduct.
(d) To secure the Company's payment obligations in this
Section 7.7, the Trustee shall have a lien prior to the Notes on all assets or
money held or collected by the Trustee, in its capacity as Trustee, except
assets or money held in trust to pay principal of, or interest or Liquidated
Damages (if any) on, particular Notes. The Trustee's right to receive
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payment of any amounts due under this Section 7.7 shall not be subordinate to
any other liability or indebtedness of the Company.
(e) When the Trustee incurs expenses or renders services
after an Event of Default specified in Section 6.1(viii) or (ix) occurs, such
expenses and the compensation for such services are intended to constitute
expenses of administration under Title 11, U.S. Code, or any similar federal or
state law.
(f) The provisions of this Section 7.7 shall survive the
resignation or removal of the Trustee and the satisfaction and discharge of
this Indenture.
(g) The Trustee shall comply with the provisions of TIA
Section 313(b)(2) to the extent possible.
SECTION 7.8. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article VII shall become
effective until the acceptance of appointment by the successor Trustee under
Section 7.9, at which time the retiring Trustee shall be fully discharged from
its obligations hereunder.
(b) The Trustee may resign at any time by giving at least
30 days' advance written notice thereof to the Company. If an instrument of
acceptance by a successor Trustee shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.
(c) The Trustee may be removed at any time by notice, in
writing, of the Holders of a majority in principal amount of the outstanding
Notes, delivered to the Trustee and to the Company.
(d) If at any time:
(i) the Trustee shall fail to comply with Section
7.11 hereof; or
(ii) the Trustee shall cease to be eligible under
Section 7.11 and shall fail to resign after written request therefor by the
Company or by any such Holder; or
(iii) the Trustee shall become incapable of acting
or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case (1) the
Company by an appropriate board resolution evidenced by an Officers'
Certificate may remove the Trustee, or (2) subject to Section 6.11, any Holder
may, on behalf of himself and all others similarly
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situated, petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, the Company, by an appropriate board resolution evidenced by an
Officers' Certificate shall promptly appoint a successor Trustee. If, within
one year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee shall be appointed by Act of the Holders of a
majority in principal amount of the outstanding Notes delivered to the Company
and the retiring Trustee, the successor Trustee so appointed shall, forthwith
upon its acceptance of such appointment, become the successor Trustee and
supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders and accepted
appointment in the manner herein provided, any Holder may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the appointment of a successor Trustee.
(f) If the Trustee, after written request by the Company
or by any Holder who has been a Holder for at least six months, fails to comply
with Section 7.11 hereof, such Holder may petition any court of competent
jurisdiction for the removal of the Trustee or the appointment of a successor
Trustee.
(g) The Company shall give or cause to be given notice of
each resignation and each removal of the Trustee and each appointment of a
successor Trustee to all Holders in the manner provided herein. Each notice
shall include the name of the successor Trustee and the address of its
Corporate Trust Office.
SECTION 7.9. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee a written instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee. Upon request of the Company
or the successor Trustee, the retiring Trustee shall execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder, in each case subject to the lien of the retiring Trustee granted
pursuant hereto. Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article VII.
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SECTION 7.10. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee, provided that such
corporation shall be otherwise qualified and eligible under this Article VII.
In case any Notes shall have been authenticated, but not delivered, by the
Trustee then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the Notes
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Notes.
SECTION 7.11. TRUSTEE REQUIRED; ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the TIA to act as such, and has a combined
capital and surplus of at least $50,000,000 and its Corporate Trust Office in
the Borough of Manhattan, The City of New York, New York. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of a federal, state, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect specified in this Article VII. If the Trustee has or shall
acquire a conflicting interest within the meaning of the TIA, the Trustee shall
either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the TIA and this Indenture.
SECTION 7.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Notes), the Trustee shall be subject to the
provisions of the TIA regarding the collection of claims against the Company
(or any such other obligor).
ARTICLE VIII
DEFEASANCE AND SATISFACTION AND DISCHARGE
SECTION 8.1. LEGAL DEFEASANCE AND COVENANT DEFEASANCE.
(a) Company's Option to Effect Defeasance or Covenant
Defeasance. The Company may at its option, by an appropriate board resolution
evidenced by an Officers' Certificate, at any time (subject to 10-day prior
written notification to the Trustee), elect to have the provisions of either
Section 8.1(b) or (c) applied to the outstanding Notes upon compliance with the
conditions set forth below in this Article VIII.
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(b) Legal Defeasance and Discharge. Upon the Company's
exercise of the option provided in Section 8.1(a) applicable to this Section,
the Company shall be deemed to have been discharged from its obligations with
respect to the outstanding Notes on the date the conditions set forth below are
satisfied (hereinafter, "Legal Defeasance"). For this purpose, such Legal
Defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by the outstanding Notes and to have
satisfied all its other obligations under such Notes and this Indenture insofar
as such Notes are concerned (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of outstanding Notes to receive, solely
from the trust fund described in Section 8.1(d) and as more fully set forth in
such Section, payments in respect of the principal and premium (if any) of and
interest and Liquidated Damages (if any) on such Notes when such payments are
due, (ii) the Company's obligations with respect to such Notes under Sections
2.4, 2.6, 2.7, 2.10 and 4.2, (iii) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and (iv) this Article VIII. Subject to
compliance with this Article VIII, the Company may exercise its option under
this Section 8.1(b) notwithstanding the prior exercise of its option under
Section 8.1(c).
(c) Covenant Defeasance. Upon the Company's exercise of
the option provided in Section 8.1(a) applicable to this Section, (i) the
Company shall be released from its obligations under Sections 4.5 through 4.19,
inclusive, and (ii) the occurrence of an event specified in Section 6.1(iv)
shall not be deemed to be an Event of Default, on and after the date the
conditions set forth below are satisfied (hereinafter, "Covenant Defeasance").
For this purpose, such Covenant Defeasance means that the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any
other document, but the remainder of this Indenture and such Notes shall be
unaffected thereby.
(d) Conditions to Legal Defeasance or Covenant
Defeasance. The following shall be the conditions to application of either
Section 8.1(b) or 8.1(c) to the outstanding Notes:
(i) The Company shall irrevocably have deposited
or caused to be deposited with the Trustee as trust funds in trust for the
purpose of making the following payments, specifically pledged as security for,
and dedicated solely to, the benefit of the Holders of such Notes: (A) cash in
U.S. dollars, or (B) non-callable Government Securities which through the
scheduled payment of principal and interest in respect thereof in accordance
with their terms will provide, not later than one day before the due date of
any payment, money in an amount, or (C) a combination thereof, sufficient, in
the opinion of a nationally recognized firm of independent certified public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge, and which shall be applied by the Trustee to pay
and discharge, the principal and premium (if any) of, and interest and
Liquidated Damages (if any) on the Notes at the Stated Maturity of such
principal or installment of interest on the day on
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which such payments are due and payable in accordance with the terms of this
Indenture and of such Notes;
(ii) No Default or Event of Default shall have
occurred and be continuing on the date of such deposit;
(iii) Such Legal Defeasance or Covenant Defeasance
shall not cause the Trustee to have a conflicting interest as described in
Section 7.11 and for purposes of the TIA with respect to any securities of the
Company;
(iv) Such Legal Defeasance or Covenant Defeasance
shall not result in a breach or violation of, or constitute a default under,
this Indenture or any other agreement or instrument to which any Issuer or
Guarantor is a party or by which it is bound;
(v) The Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that after the 91st day (or such
applicable date) following the deposit, the trust funds will not be subject to
the effect of any applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally;
(vi) The Company shall have delivered to the
Trustee an Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders of Notes over the other
creditors of the Company with the intent of defeating, hindering, delaying or
defrauding creditors of the Company or others;
(vii) The Company shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
all conditions precedent provided for relating to either the Legal Defeasance
under Section 8.1(b) or the Covenant Defeasance under Section 8.1(c), as the
case may be, have been complied with;
(viii) In the case of an election under Section
8.1(b), the Company shall have delivered to the Trustee an Opinion of Counsel
stating that (x) the Company has received from, or there has been published by,
the Internal Revenue Service a ruling, or (y) since the date of this Indenture
there has been a change in the applicable federal income tax law, in either
case to the effect that, and based thereon such opinion shall confirm that, the
Holders of the outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such deposit,
defeasance and discharge had not occurred;
(ix) In the case of an election under Section
8.1(c), the Company shall have delivered to the Trustee an Opinion of Counsel
to the effect that the Holders of the outstanding Notes will not recognize
income, gain or loss for federal income tax purposes as a result of such
deposit and Covenant Defeasance and will be subject to federal income tax on
the
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same amounts, in the same manner and at the same times as would have been the
case if such covenant defeasance had not occurred; and
(x) The Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that such deposit and Legal
Defeasance or Covenant Defeasance shall not result in the trust arising from
such deposit constituting an investment company as defined in the Investment
Company Act of 1940, as amended, or such trust shall be qualified under such
act or exempt from regulation thereunder.
SECTION 8.2. SATISFACTION AND DISCHARGE.
In addition to the Company's rights under Section 8.1, the Company may
terminate all of its obligations under this Indenture when:
(a) all Notes theretofore authenticated and delivered
(other than Notes which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.7 and Notes for whose payment money
has theretofore been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from such trust)
have been delivered to the Trustee for cancellation or all such Notes not
theretofore delivered to the Trustee for cancellation have become due and
payable and the Company has irrevocably deposited or caused to be deposited
with the Trustee as trust funds in trust solely for that purpose an amount of
money sufficient to pay and discharge the entire principal and premium (if any)
of and interest and Liquidated Damages (if any) on the Notes not theretofore
delivered to the Trustee for cancellation;
(b) the Company has paid or caused to be paid all other
sums payable hereunder;
(c) the Company has delivered irrevocable instructions to
the Trustee to apply the deposited money toward the payment of the Notes at
maturity or redemption, as the case may be; and
(d) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, stating that all conditions precedent
specified herein relating to the satisfaction and discharge of this Indenture
have been complied with.
SECTION 8.3. SURVIVAL OF CERTAIN OBLIGATIONS.
Notwithstanding the satisfaction and discharge of this Indenture and
of the Notes referred to in Section 8.1 or 8.2, the respective obligations of
the Company and the Trustee under Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.10,
2.12, 2.13, 4.1, 4.2, 6.7, Article VII, and Sections 8.5, 8.6 and 8.7 shall
survive until no Notes are outstanding, and thereafter the obligations of the
Company and the Trustee under Sections 7.7, 8.5, 8.6 and 8.7 shall survive.
Nothing contained
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in this Article VIII shall abrogate any of the obligations or duties of the
Trustee under this Indenture.
SECTION 8.4. ACKNOWLEDGMENT OF DISCHARGE BY TRUSTEE.
After (i) the conditions of Section 8.1 or 8.2 have been satisfied,
(ii) the Company has paid or caused to be paid all other sums payable hereunder
and (iii) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent referred to
in clause (i) above relating to the satisfaction and discharge of this
Indenture have been complied with, the Trustee, upon written request, shall
acknowledge in writing the discharge of the Company's obligations under this
Indenture, except for those surviving obligations specified in Section 8.3.
SECTION 8.5. APPLICATION OF TRUST MONEYS AND GOVERNMENT SECURITIES.
Subject to the provisions of Section 2.4, all money and Government
Securities (including the proceeds thereof) deposited with the Trustee pursuant
to Section 8.1(d)(i) in respect of the Notes shall be held in trust and applied
by the Trustee, in accordance with the provisions of such Notes and this
Indenture, to the payment, either directly or through any Paying Agent as the
Trustee may determine, to the Holders of such Notes, of all sums due and to
become due thereon in respect of principal and premium (if any) of and interest
and Liquidated Damages (if any) on the Notes, but such money and Government
Securities need not be segregated from other funds except to the extent
required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the Government Securities
deposited pursuant to Section 8.1(d)(i) or the principal and interest received
in respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of the outstanding Notes.
Anything in this Article VIII to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon request by
an Officers' Certificate any money or Government Securities held by it as
provided in Section 8.1(d)(i) which, in the opinion of a nationally recognized
firm of independent certified public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of the amount
thereof which would then be required to be deposited to effect an equivalent
defeasance or covenant defeasance.
SECTION 8.6. REPAYMENT TO THE COMPANY; UNCLAIMED MONEY.
Any money or Government Securities deposited with the Trustee or the
Paying Agent in trust for the payment of the principal and premium (if any) of
and interest and Liquidated Damages (if any) on the Notes and remaining
unclaimed for two years after it has become due and payable shall be paid to
the Company upon written request in the form of an Officers' Certificate, and
the Holder of such Notes shall thereafter, as a creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such
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trust money shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and
The Wall Street Journal (national edition), notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such notification or publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
SECTION 8.7. REINSTATEMENT.
If the Trustee or the Paying Agent is unable to apply any money or
Government Securities in accordance with Section 8.1(b) or 8.1(c) by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Company's
obligations under this Indenture and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to this Article VIII until such time
as the Trustee or Paying Agent is permitted to apply all such money or
Government Securities in accordance with Section 8.1(b) or 8.1(c); provided,
however, that if the Company makes any payment of principal and premium (if
any) on any Note following the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Notes to receive such
payment from the money held by the Trustee or the Paying Agent.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1. WITHOUT CONSENT OF HOLDERS.
Notwithstanding Section 9.2 of this Indenture, without notice to or
the consent of any Holder, the Company, when authorized by an appropriate board
resolution evidenced by an Officers' Certificate, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, and may amend this Indenture, the Notes or the
Pledge Agreement, for any of the following purposes:
(a) to cure any ambiguity, defect or inconsistency;
provided that such amendment or supplement does not, as evidenced by an Opinion
of Counsel delivered to the Trustee, adversely affect the legal rights of any
Holder;
(b) to comply with Article V;
(c) to provide for uncertificated Notes in addition to or
in place of certificated Notes;
(d) to comply with any requirements of the Commission in
order to effect or maintain the qualification of this Indenture under the TIA;
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(e) to make any change that would provide any additional
benefit or rights to the Holders or that does not, as evidenced by an Opinion
of Counsel delivered to the Trustee, adversely affect the legal rights of any
Holder;
(f) to provide for issuance of the Exchange Notes (which
will have terms substantially identical in all material respects to the
Original Notes, except that the transfer restrictions contained in the Original
Notes will be modified or eliminated as appropriate, and which will be treated
together with any outstanding Original Notes as a single issue of securities);
or
(g) to make any other change that does not, as evidenced
by an Opinion of Counsel delivered to the Trustee, adversely affect the legal
rights of any Holder;
provided that the Company deliver to the Trustee an Opinion of Counsel and an
Officers' Certificate stating that such amendment or supplement complies with
the provisions of this Section.
SECTION 9.2. WITH CONSENT OF HOLDERS.
Subject to Section 6.7, the Company, when authorized by an appropriate
board resolution evidenced by an Officers' Certificate, and the Trustee, the
Indenture, the Notes and the Pledge Agreement may be amended or supplemented
with the consent of the Holders of at least a majority in principal amount of
the Notes then outstanding (including consents obtained in connection with a
purchase of, or tender offer or exchange offer for, Notes), and any existing
default or compliance with any provision of the Indenture, the Notes or the
Pledge Agreement may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes (including consents obtained in
connection with a purchase of, or tender offer or exchange offer for Notes).
Without the consent of each Holder of each Note affected thereby, an
amendment, supplement or waiver may not (with respect to any Note held by a
non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders
must consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity
of any Note, or alter the provisions with respect to the redemption of the
Notes (other than provisions set forth in Sections 4.14 and 4.15 of this
Indenture);
(c) reduce the rate of or change the time for payment of
interest on any Note;
(d) waive a Default or Event of Default in the payment of
principal and premium (if any) of, and interest or Liquidated Damages (if any)
on, the Notes (except a
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rescission of acceleration of the Notes by the Holders of at least a majority
in aggregate principal amount of the Notes and a waiver of the payment default
that resulted from such acceleration);
(e) make any Note payable in money other than that stated
in the Notes;
(f) make any change in provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of Notes to
receive payments of principal and premium (if any) of, and interest or
Liquidated Damages (if any) on, the Notes;
(g) waive a redemption payment with respect to any Note
(other than a payment required by Section 4.14 and 4.15); or
(h) make any change in the amendment and waiver
provisions of this Section 9.2.
Upon the request of the Company accompanied by an Officers'
Certificate in form satisfactory to the Trustee certifying corporate
resolutions, authorizing the execution of any amended or supplemental
indenture, and upon the filing with the Trustee of evidence satisfactory of the
consent of the Holders as aforesaid, and upon receipt by the Trustee of the
documents described in Section 11.5 hereof, the Trustee shall join with the
Company in the execution of such amended or supplemental indenture unless such
amended or supplemental indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture. It shall not be necessary for the consent of the
Holders under this Section to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if such consent
approves the substance thereof. After an amendment, supplement or waiver under
this Section 9.2 becomes effective, the Company shall mail to the Holders
affected thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture.
SECTION 9.3. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article IX or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 7.1) shall be fully protected in relying
upon, in addition to the documents required by Section 11.5, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Trustee may, but shall not be obligated
to, enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
SECTION 9.4. EFFECT OF SUPPLEMENTAL INDENTURES.
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Upon the execution of any supplemental indenture under this Article
IX, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Notes theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 9.5. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment, waiver or supplement of this Indenture or the Notes
shall comply with the TIA as then in effect.
SECTION 9.6. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article IX may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Notes so modified as to conform, in the opinion of the Trustee
and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for outstanding Notes.
SECTION 9.7. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if notation of the consent is not made on any
Note. Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note or portion of such Note by
notice to the Trustee or the Company received before the date on which the
Trustee receives an Officers' Certificate certifying that the Holders of the
requisite principal amount of Notes have consented (and not theretofore revoked
such consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the last
sentence of the immediately preceding paragraph, those Persons who were Holders
at such record date (or their duly designated proxies), and only those Persons,
shall be entitled to revoke any consent previously given, whether or not such
Persons continue to be Holders after such record date. No such consent shall
be valid or effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (a)
through (h) of Section 9.2, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same debt
as the consenting Holder's Note; provided that any such waiver shall not impair
or affect the right of any Holder to receive payment of principal of, and
interest and Liquidated Damages (if any)
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on, a Note, on or after the respective due dates expressed in such Note, or to
bring suit for the enforcement of any such payment on or after such respective
dates without the consent of such Holder.
ARTICLE X
SUBSIDIARY GUARANTEES
SECTION 10.1. UNCONDITIONAL GUARANTEE.
Each Subsidiary Guarantor, upon execution and delivery of a
supplemental indenture pursuant to Section 10.10, hereby fully and
unconditionally guarantees, jointly and severally with each other Subsidiary
Guarantor, if any, to each Holder of a Note authenticated and delivered by the
Trustee and to the Trustee and its successors and assigns, irrespective of the
validity and enforceability of this Indenture or the Notes or the obligations
of the Subsidiary Guarantors under this Indenture or the Notes that: (i) the
principal of and premium (if any) and interest and Liquidated Damages (if any)
on the Notes will be paid in full when due, subject to any applicable grace
period, whether at maturity, by acceleration or otherwise and interest on the
overdue principal, if any, and interest on any interest (if any) to the extent
lawful, on the Notes and all other obligations of the Company to the Holders or
the Trustee hereunder or thereunder will be promptly paid in full or performed,
all in accordance with the terms hereof and thereof; and (ii) in case of any
extension of time of payment or renewal of any Notes or of any such other
obligations, the same will be paid in full when due or performed in accordance
with the terms of the extension or renewal, subject to any applicable grace
period, whether at stated maturity, by acceleration or otherwise, subject,
however, in the case of clauses (i) and (ii) above, to the limitations set
forth in Section 10.4. Each Subsidiary Guarantor hereby agrees that its
obligations hereunder shall be unconditional, irrespective of the validity or
enforceability of the Notes or this Indenture. Each Subsidiary Guarantor
hereby waives diligence, presentment, demand of payment, filing of claims with
a court in the event of insolvency or bankruptcy of the Company, any right to
require a proceeding first against the Company, protest, notice and all demands
whatsoever and covenants that its Subsidiary Guarantee will not be discharged
(except to the extent released pursuant to Section 10.9) except by complete
performance of the obligations contained in the Notes, this Indenture and in
its Subsidiary Guarantee. If any Holder or the Trustee is required by any
court or otherwise to return to the Company, any Subsidiary Guarantor, or any
custodian, trustee, liquidator or other similar official acting in relation to
the Company or any Subsidiary Guarantor, any amount paid by the Company or any
Subsidiary Guarantor to the Trustee or such Holder, each Subsidiary Guarantee,
to the extent theretofore discharged, shall be reinstated in full force and
effect (except to the extent released pursuant to Section 10.9). Each
Subsidiary Guarantor further agrees that, as between each Subsidiary Guarantor,
on the one hand, and the Holders and the Trustee, on the other hand, (x) the
maturity of the obligations guaranteed hereby may be accelerated as provided in
Article VI for the purposes of its Subsidiary Guarantee, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect
of the obligations guaranteed hereby, and (y) in the event of any acceleration
of such obligations as provided in Article VI, such obligations (whether or
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not due and payable) shall forthwith become due and payable by each Subsidiary
Guarantor for the purpose of its Subsidiary Guarantee.
SECTION 10.2. PRIORITY OF GUARANTEE.
The obligations of each Subsidiary Guarantor to the Holders of Notes
and to the Trustee pursuant to its Subsidiary Guarantee and this Indenture will
rank senior in right and priority of payment to all other indebtedness of such
Subsidiary Guarantor that is expressly subordinated to its Subsidiary Guarantee
and will rank pari passu in right and priority of payment with all other
indebtedness of such Subsidiary Guarantor that is not expressly so subordinated
to such Subsidiary Guarantee, except to the extent of any collateral securing
such other indebtedness.
SECTION 10.3. SEVERABILITY.
In case any provision of a Subsidiary Guarantee shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 10.4. LIMITATION OF SUBSIDIARY GUARANTOR'S LIABILITY.
Any term or provision of this Indenture to the contrary
notwithstanding, the maximum aggregate amount of the obligations guaranteed
hereunder by any Subsidiary Guarantor shall not exceed the maximum amount that
can be hereby guaranteed without rendering this Indenture, as it relates to
such Subsidiary Guarantor, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally. To effectuate the foregoing intention, the obligations of
each Subsidiary Guarantor shall be limited to the maximum amount as will, after
giving effect to all other contingent and fixed liabilities of such Subsidiary
Guarantor and after giving effect to any collections from, rights to receive
contributions from, or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor
under its Subsidiary Guarantee or pursuant to its contribution obligations
hereunder, result in the obligations of such Subsidiary Guarantor under its
Subsidiary Guarantee not constituting a fraudulent conveyance or fraudulent
transfer under any applicable law. Each Subsidiary Guarantor that makes a
payment or distribution under a Subsidiary Guarantee shall be entitled to a
contribution from each other Subsidiary Guarantor so long as the exercise of
such right does not impair the rights of the Holders under the Subsidiary
Guarantees.
SECTION 10.5. WAIVER OF SUBROGATION.
Until all Obligations are paid in full, each Subsidiary Guarantor
hereby irrevocably waives any claim or other rights which it may now or
hereafter acquire against the Company that arise from the existence, payment,
performance or enforcement of such Subsidiary Guarantor's obligations under its
Subsidiary Guarantee and this Indenture, including, without limitation, any
right of subrogation, reimbursement, exoneration, indemnification, and any
right to participate in
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any claim or remedy of any Holder of Notes against the Company, whether or not
such claim, remedy or right arises in equity, or under contract, statute or
common law, including, without limitation, the right to take or receive from
the Company, directly or indirectly, in cash or other property or by set-off or
in any other manner, payment or security on account of such claim or other
rights. If any amount shall be paid to any Subsidiary Guarantor in violation
of the preceding sentence and the Notes shall not have been paid in full, such
amount shall have been deemed to have been paid to such Subsidiary Guarantor
for the benefit of, and held in trust for the benefit of, the Holders of the
Notes, and shall forthwith be paid to the Trustee for the benefit of such
Holders to be credited and applied upon the Notes, whether matured or
unmatured, in accordance with the terms of this Indenture.
SECTION 10.6. SUCCESSORS AND ASSIGNS.
This Article X shall be binding upon each Subsidiary Guarantor and its
successors and assigns and shall inure to the benefit of the successors and
assigns of the Trustee and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges
conferred upon that party in this Indenture and in the Notes shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions of this Indenture.
SECTION 10.7. NO WAIVER.
Neither a failure nor a delay on the part of either the Subsidiary
Guarantors, the Trustee or the Holders in exercising any right, power or
privilege under this Article X shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of
any right, power or privilege. The rights, remedies and benefits of the
Subsidiary Guarantors, the Trustee and the Holders herein expressly specified
are cumulative and not exclusive of any other rights, remedies or benefits
which either may have under this Article X at law, in equity, by statute or
otherwise.
SECTION 10.8. MODIFICATION.
No modification, amendment or waiver of any provision of this Article
X, nor the consent to any departure by any Subsidiary Guarantor therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Trustee, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice to or demand
on any Subsidiary Guarantor in any case shall entitle such Subsidiary Guarantor
to any other or further notice or demand in the same, similar or other
circumstances.
SECTION 10.9. RELEASE OF SUBSIDIARY GUARANTOR.
Upon the sale or disposition of all the capital stock of a Subsidiary
Guarantor (or substantially all of its assets) by way of merger, consolidation
or otherwise or the designation of a Subsidiary Guarantor as an Unrestricted
Subsidiary pursuant to and in compliance with the
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terms of this Indenture, such Subsidiary shall be released from and relieved of
its obligations under its Subsidiary Guarantee. The Trustee shall deliver an
appropriate instrument evidencing such release upon receipt of a request by the
Company accompanied by an Officers' Certificate and Opinion of Counsel
certifying as to the compliance with this Section. Any Subsidiary Guarantor
not so released shall remain liable for the full amount of principal of and
interest and Liquidated Damages (if any) on the Notes as provided in this
Article X.
SECTION 10.10. EXECUTION OF SUPPLEMENTAL INDENTURE
BY FUTURE RESTRICTED SUBSIDIARIES.
The Company shall cause each Person that becomes a Restricted
Subsidiary, upon becoming a Restricted Subsidiary, to become a Subsidiary
Guarantor with respect to the Notes. The Company shall cause any such
Restricted Subsidiary to execute and deliver to the Trustee (i) a supplemental
indenture, in form and substance satisfactory to the Trustee, pursuant to which
such Subsidiary shall unconditionally guarantee all of the Company's
obligations under the Notes and this Indenture on the terms set forth in this
Indenture and (ii) deliver to the Trustee an Opinion of Counsel to the effect
that such supplemental indenture has been duly authorized, executed and
delivered by such Subsidiary Guarantor and, subject to the application of
bankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and other
similar laws relating to creditors' rights generally and to the principles of
equity, whether considered in a proceeding at law or in equity, the Subsidiary
Guarantee of such Subsidiary Guarantor is a legal, valid and binding obligation
of such Subsidiary Guarantor, enforceable against such Subsidiary Guarantor in
accordance with its terms. Thereafter, such Subsidiary shall be a Subsidiary
Guarantor for all purposes of this Indenture.
SECTION 10.11. WAIVER OF STAY, EXTENSION OR USURY LAWS.
Each Subsidiary Guarantor covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law, wherever enacted, now or at any time hereafter
in force, or which may affect the covenants or the performance of this
Indenture, and (to the extent that it may lawfully do so) each such Subsidiary
Guarantor hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
a provision of the TIA that is required under the TIA to be a part of and
govern this Indenture, such required provision
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shall control. If any provision of this Indenture modifies or excludes any
provision of the TIA that may be so modified or excluded, the provision of the
TIA shall be deemed to apply to this Indenture as so modified or excluded, as
the case may be.
SECTION 11.2. NOTICES TO COMPANY AND TRUSTEE.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by facsimile, or by registered or certified mail, postage prepaid, return
receipt requested, and addressed as follows:
If to the Company:
Orbital Imaging Corporation
21700 Atlantic Boulevard
Dulles, Virginia 20166
Attn: General Counsel
Facsimile: 703-406-5572
If to the Trustee:
HSBC Bank USA
140 Broadway, 12th Floor
New York, New York 10005-1180
Attn: Corporate Trust Department
Facsimile: 212-658-6425
Each of the Company and the Trustee by written notice as specified herein to
each other Person may designate additional or different addresses for notices
to such Person. Any notice or communication to the Company or the Trustee
shall be deemed to have been given or made: as of the date delivered, if
personally delivered; when receipt is confirmed, if sent by facsimile; and five
calendar days after mailing, if sent by registered or certified mail, postage
prepaid; provided that a notice of change of address shall not be deemed to
have been given until actually received by the addressee.
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SECTION 11.3. NOTICES TO HOLDERS.
Where this Indenture provides for notice to Holders, such notice shall
be sufficiently given (unless otherwise herein expressly provided) if in
writing and: (i) in the case of a Global Note, by facsimile or by overnight
mail to the Depository; and (ii) in the case of Notes other than a Global Note,
by first-class mail, postage prepaid, in each case to each Holder affected at
his address as it appears in the Note Register, and shall be sufficiently given
if sent not later than the latest date (if any) and not earlier than the
earliest date (if any) prescribed for the giving of such notice. Neither the
failure to mail any such notice nor any defect in any notice so mailed to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Notice may be waived in writing by any Person entitled to
receive such notice, either before or after the event requiring notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 11.4. TRUSTEE, PAYING AGENT AND REGISTRAR PROCEDURES.
The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at meetings of Holders, and the Paying
Agent and the Registrar may make reasonable rules for their functions.
SECTION 11.5. COMPLIANCE CERTIFICATES AND OPINIONS.
(a) Upon any application or request by the Company to the
Trustee to take any action under any provision of this Indenture, the Company
shall furnish to the Trustee such certificates and opinions as may be required
under the TIA and under this Indenture. Each such certificate or opinion
required to be made under this Indenture shall be given in the form of an
Officers' Certificate, if to be given by the Company, or an Opinion of Counsel,
if to be given by counsel, and shall comply with the requirements of the TIA
and any other requirement set forth in this Indenture.
(b) Every certificate or opinion with respect to
compliance with a condition or covenant provided for in this Indenture shall
include:
(i) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the definitions
herein relating thereto;
(ii) a brief statement as to the nature and scope
of the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
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(iv) a statement as to whether, in the opinion of
each such individual, such condition or covenant has been complied with.
SECTION 11.6. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
(a) In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by the opinion of,
only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or several
documents.
(b) Any Officers' Certificate may be based, insofar as it
relates to legal matters, upon an Opinion of Counsel submitted therewith,
unless such officer knows, or in the exercise of reasonable care should know,
that the opinion with respect to the matters upon which his certificate is
based is erroneous. Any Opinion of Counsel may be based, insofar as it relates
to factual matters, upon a certificate of officers of the Company submitted
therewith stating the information on which such counsel is relying, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate with respect to such matters is erroneous.
SECTION 11.7. ACTS OF HOLDERS; REGISTERED HOLDERS; RECORD DATES.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to be given
or taken by Holders may be embodied in and evidenced by one or more written
instruments of substantially similar tenor signed by such Holders in person or
by agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 7.1)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of
any such instrument or writing pursuant to this Section may be proved by the
affidavit of a witness of such execution or by a certificate of a notary public
or other officer authorized by law to take acknowledgments of deeds, certifying
that the individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or affidavit shall also
constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
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(c) The ownership of Notes shall be proved by the Note
Register.
(d) Any request, demand, authorization, direction,
notice, consent, waiver or other Act of the Holder of any Note shall bind every
future Holder of the same Note and the Holder of every Note issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made
upon such Note.
(e) The Company may set any day as a record date for the
purpose of determining the Holders of outstanding Notes entitled to give, make
or take any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given, made or
taken by Holders of Notes; provided that the Company may not set a record date
for, and the provisions of this paragraph shall not apply with respect to, the
giving or making of any notice, declaration, request or direction referred to
in paragraph (f) below. If not set by the Company prior to the first
solicitation of a Holder made by any Person in respect of any such matter
referred to in the foregoing sentence, the record date for any such matter
shall be the 30th day (or, if later, the date of the most recent list of
Holders required pursuant to Section 2.5) prior to such first solicitation. If
any record date is set pursuant to this paragraph, the Holders of outstanding
Notes on such record date, and no other Holders, shall be entitled to take the
relevant action, whether or not such Holders remain Holders after such record
date. Nothing in this paragraph shall be construed to prevent the Company from
setting a new record date for any action for which a record date has previously
been set pursuant to this paragraph (whereupon the record date previously set
shall automatically and with no action by any Person be canceled and of no
effect), and nothing in this paragraph shall be construed to render ineffective
any action taken by Holders of the requisite principal amount of outstanding
Notes on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Company, at its own expense, shall cause notice
of such record date, the proposed action by Holders to be given to the Trustee
in writing and to each Holder of Notes in the manner set forth in Section 11.2.
(f) The Trustee may set any day as a record date for the
purpose of determining the Holders of outstanding Notes entitled to join in the
giving or making of (i) any notice hereunder, (ii) any declaration of
acceleration referred to in Section 6.2, (iii) any request to institute
proceedings referred to in Section 6.6 or (iv) any direction referred to in
Section 6.5. If any record date is set pursuant to this paragraph, the Holders
of outstanding Notes on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date. Nothing in this
paragraph shall be construed to prevent the Trustee from setting a new record
date for any action for which a record date has previously been set pursuant to
this paragraph (whereupon the record date previously set shall automatically
and with no action by any Person be canceled and of no effect), and nothing in
this paragraph shall be construed to render ineffective any action taken by
Holders of the requisite principal amount of outstanding Notes on the date such
action is taken. Promptly after any record date is set pursuant to this
paragraph, the Trustee, at the Company's
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expense, shall cause notice of such record date, the proposed action by Holders
to be given to the Company in writing and to each Holder of Notes in the manner
set forth in Section 11.2.
(g) Without limiting the foregoing, a Holder entitled
hereunder to take any action hereunder with regard to any particular Note may
do so with regard to all or any part of the principal amount of such Note or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such principal amount.
SECTION 11.8. SUCCESSORS AND ASSIGNS.
All covenants and agreements of the Company in this Indenture and the
Notes shall bind its successors. All agreements of the Trustee in this
Indenture shall bind its successors.
SECTION 11.9. SEVERABILITY.
In case any one or more of the provisions in this Indenture or in the
Notes shall be held invalid, illegal or unenforceable in any jurisdiction, in
any respect for any reason, the validity, legality and enforceability of any
such provision in every other jurisdiction and in every other respect, and of
the remaining provisions, shall not in any way be affected or impaired thereby,
it being intended that all of the provisions hereof shall be enforceable to the
full extent permitted by law.
SECTION 11.10. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder and the Holders of Notes, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 11.11. GOVERNING LAW; JURISDICTION.
This Indenture and the Notes shall be governed by and construed in
accordance with the laws of the State of New York, as applied to contracts made
and performed entirely within the State of New York, without regard to
principles of conflict of laws. Each of the parties hereto agrees to submit to
the jurisdiction of the courts of the State of New York in any action or
proceeding arising out of or relating to this Indenture.
SECTION 11.12. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date, Proceeds
Purchase Date or Change of Control Payment Date of any Note shall not be a
Business Day, then, notwithstanding any other provision of this Indenture or of
the Notes or the Subsidiary Guarantees, payment of interest or Liquidated
Damages (if any) on or principal and premium (if any) of the Notes need not be
made on such date, but may be made on the next succeeding Business Day with the
same force and effect as if made on such Interest Payment Date,
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Redemption Date, Proceeds Purchase Date or Change of Control Payment Date, as
the case may be.
SECTION 11.13. NO RECOURSE AGAINST OTHERS; LIMITATION ON LIABILITY.
Notwithstanding anything contained in this Indenture or the Notes to
the contrary, (i) except for the Company to the extent provided in clause (ii)
below, no Person shall have any liability whatsoever with respect to or arising
out of this Indenture, the Notes, or the Company's obligations thereunder or
any agreements or documents executed by the Company in connection therewith and
(ii) claims with respect to this Indenture, the Notes and any obligations
thereunder or under any agreements or documents executed in connection
therewith shall be satisfied solely from the assets of the Company. Each
Holder, by accepting a Note, waives and releases all such liability. Such
waiver and release are part of the consideration for the issuance of the Notes.
SECTION 11.14. COUNTERPARTS.
This Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
ORBITAL IMAGING CORPORATION
By:
------------------------------------------
Name:
Title:
HSBC BANK USA,
as Trustee
By:
------------------------------------------
Name:
Title:
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<PAGE> 102
EXHIBIT A
(FORM OF FACE OF NOTE)
Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
New York, New York, to the Company or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as may be requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as may be requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.[1]
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE NOTE
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY
BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE NOTE EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF ORBITAL IMAGING CORPORATION AND ITS SUCCESSORS (THE
"COMPANY") THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED
STATES TO A PERSON THAT IS NOT A U.S. PERSON (AS DEFINED IN RULE 902 UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE
SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE NOTES (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM THE TRUSTEE) OR (e) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL IF THE COMPANY OR TRUSTEE, REGISTRAR OR
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<PAGE> 103
TRANSFER AGENT FOR THE SECURITIES SO REQUESTS), (2) TO THE COMPANY OR (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND,
IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL,
AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. [2]
[1] This paragraph should be included only if the Note is issued in
global.
[2] This legend not required in the case of (1) a Note issued pursuant to
Section 2.6(g)(ii) of the Indenture of (2) a Exchange Note issued pursuant to
Section 2.6(g)(iii) of the Indenture.
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<PAGE> 104
ORBITAL IMAGING CORPORATION
11 5/8% SENIOR NOTES DUE 2005, [SERIES C][SERIES D]
NO. ___
CUSIP #_________
ORBITAL IMAGING CORPORATION, a Delaware corporation (the "Company"),
promises to pay to ________ or its registered assigns, the principal sum
indicated on Schedule A on March 1, 2005.
Interest Payment Dates: March 1 and September 1, commencing on
September 1, 1999.
Interest will accrue from the most recent date on which interest has
been paid or, if no interest has been paid, from April 22, 1999.
Record Dates: February 15 and August 15.
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at
this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officer.
ORBITAL IMAGING CORPORATION
By:
------------------------------------------
Name: Armand D. Mancini
Title: Vice President and Chief Financial
Officer
Dated: ________
<PAGE> 105
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 11 5/8% Senior Notes due 2005 referred to in the
within-mentioned Indenture.
HSBC BANK USA,
as Trustee
By:
-----------------------------------
Authorized Signatory
<PAGE> 106
(FORM OF REVERSE SIDE OF NOTE)
11 5/8% Senior Notes due 2005, [Series C][Series D]
Capitalized terms used herein shall have the meanings ascribed to them
in the Indenture (as defined below) unless otherwise indicated.
1. Interest. ORBITAL IMAGING CORPORATION, a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this Note
at the rate per annum shown above. Interest on the Notes will accrue from the
most recent date on which interest has been paid or, if no interest has been
paid, from April 22, 1999. The Company will pay interest semi-annually in
arrears on each Interest Payment Date, commencing September 1, 1999.
The Company shall pay, to the extent such payments are lawful,
interest on overdue principal, from time to time on demand at the rate equal to
1% per annum in excess of the rate then in effect; it shall pay interest on
overdue installments of interest (without regard to any applicable grace
periods) from time to time on demand at the same rate to the extent such
payments are lawful. Interest will be computed on the basis of a 360-day year
of twelve 30-day months.
Notwithstanding any other provision of the Indenture or this Note:
(i) accrued and unpaid interest on the Original Notes being exchanged in the
Exchange Offer shall be due and payable on the next Interest Payment Date for
the Exchange Notes following the Exchange Offer; (ii) interest on the Exchange
Notes to be issued in the Exchange Offer shall accrue from the date the
Exchange Offer is consummated; and (iii) the Exchange Notes shall have no
provisions for Liquidated Damages.
2. Method of Payment. The Company shall pay the principal of,
and premium, interest and Liquidated Damages (if any) on, the Notes on the
dates and in the manner provided herein, in the Indenture and in the
Registration Rights Agreement. Principal of, and premium, interest and
Liquidated Damages on, Definitive Notes will be payable, and Definitive Notes
may be presented for registration of transfer or exchange, at the office or
agency of the Company maintained for such purpose. Principal of, and premium,
interest and Liquidated Damages on, Global Notes will be payable by the Company
through the Trustee to the Depositary by wire transfer of immediately available
funds. Holders of Definitive Notes will be entitled to receive interest
payments by wire transfer in immediately available funds if appropriate wire
transfer instructions have been received in writing by the Trustee not less
than 15 days prior to the applicable Interest Payment Date. Such wire
instructions, upon receipt by the Trustee, shall remain in effect until revoked
by such Holder. If wire instructions have not been received by the Trustee
with respect to any Holder of a Definitive Note, payment of interest and
Liquidated Damages, if any, may be made by check in immediately available funds
mailed to such Holder at the address set forth upon the Register maintained by
the Registrar.
<PAGE> 107
3. Paying Agent and Registrar. Initially, HSBC Bank USA, a New
York banking corporation and trust company (the "Trustee", which term includes
any successor trustee under the Indenture referred to below), will act as
Paying Agent and Registrar. The Company may change the Paying Agent or
Registrar without notice to or consent of the Holders.
4. Indenture. The Company issued the Note under an Indenture,
dated as of April 22, 1999 (the "Indenture"), between the Company and the
Trustee. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S. Code Section 77aaa-77bbbb) (the "TIA"), as in effect on the date
of the Indenture, except as otherwise provided in the Indenture.
Notwithstanding anything to the contrary herein, the Notes are subject to all
such terms, and Holders of Notes are referred to the Indenture and the TIA for
a statement of such terms. The Notes are general obligations of the Company
limited in aggregate principal amount to $75,000,000. Each Holder, by
accepting a Note, agrees to be bound by all of the terms and provisions of the
Indenture, as the same may be amended from time to time.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and its Restricted Subsidiaries to incur
additional Indebtedness, pay dividends or make other distributions, repurchase
any capital stock or subordinated Indebtedness, make certain investments,
create certain Liens, enter into certain transactions with Affiliates, sell
assets, enter into certain mergers and consolidations, restrict such Restricted
Subsidiaries from making certain dividend and other payments, entering into
Sale and Leaseback Transactions, and issuing or selling capital stock of
Restricted Subsidiaries of the Company. Such limitations are subject to
important qualifications and exceptions. The Company must annually report to
the Trustee on compliance with such limitations. The Indenture requires the
Company to cause any Person that becomes a Restricted Subsidiary of the Company
after the Issue Date to execute and deliver to the Trustee a supplemental
indenture pursuant to which such Restricted Subsidiary will Guarantee the
Notes.
5. Redemption.
(a) The Notes will not be redeemable prior to March 1,
2002. Thereafter, the Notes will be subject to redemption at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below, plus accrued and unpaid interest and Liquidated Damages (if
any) thereon to the applicable redemption date, if redeemed during the
twelve-month period beginning on March 1 of the years indicated below:
- 2 -
<PAGE> 108
<TABLE>
<CAPTION>
Redemption
Year Price
- ---- -----------------
<S> <C>
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105.8125%
2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.9063%
2004 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0000%
</TABLE>
(b) Notwithstanding the foregoing, prior to March 1,
2001, the Company may, on one or more occasions, redeem outstanding Notes with
the net cash proceeds of one or more sales of Capital Stock (other than
Disqualified Stock) of the Company to one or more Persons (but only to the
extent the proceeds of such sales of Capital Stock consist of cash or Cash
Equivalents) at a redemption price equal to 111.625% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages (if any)
thereon to the redemption date; provided, however, that: (i) not less than 65%
of the aggregate principal amount of the Notes initially issued remains
outstanding immediately after any such redemption; and (ii) such redemption
shall occur within 60 days after the date of closing of such sale of Capital
Stock.
6. Mandatory Redemption; Offer to Purchase. The Company shall
not be required to make mandatory redemption or sinking fund payments with
respect to the Notes.
Sections 4.14 and 4.15 of the Indenture provide that, after certain
Asset Sales and upon the occurrence of a Change of Control, and subject to the
conditions and limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture at a purchase price equal to 101% in the case of a
Change of Control and 100% in the case of Asset Sales, of the principal amount
thereof plus accrued and unpaid interest and Liquidated Damages (if any) to the
date of purchase.
7. Notice of Redemption. Notice of redemption will be given by
first-class mail, postage prepaid, mailed not less than 30 days nor more than
60 days prior to the Redemption Date to each Holder of Notes to be redeemed at
such Holder's registered address as it appears in the Note Register.
Notes to be redeemed shall cease to bear interest from and after the
Redemption Date and the only right of the Holders of such Notes will be to
receive payment of the Redemption Price plus accrued and unpaid interest and
Liquidated Damages (if any).
8. Denominations, Transfer, Exchange. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any
- 3 -
<PAGE> 109
Note being redeemed in part. Also, it need not exchange or register the
transfer of any Notes for a period of 15 days before a selection of Notes to be
redeemed or during the period between a Record Date and the corresponding
Interest Payment Date.
9. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
10. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company, after which all liability of the Trustee and
Paying Agent with respect to such money shall cease.
11. Discharge Prior to Redemption or Maturity. If the Company at
any time deposits with the Trustee U.S. dollars or Government Securities
sufficient to pay the principal of and interest on the Notes to redemption or
maturity, and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of, and interest and Liquidated Damages (if
any) payable on, the Notes).
12. Amendment; Supplement; Waiver. Subject to certain exceptions,
the Indenture, the Notes and the Pledge Agreement may be amended or
supplemented with the written consent of the Holders of at least a majority in
aggregate principal amount of the Notes then outstanding, and certain existing
Defaults or Events of Default or noncompliance with any provision may be waived
with the written consent of the Holders of a majority in aggregate principal
amount of the Notes then outstanding. Without notice to or consent of any
Holder, the parties thereto may make such amendments or supplements to, among
other things, cure any ambiguity, defect or inconsistency, provide for
uncertificated Notes in addition to or in place of certificated Notes, comply
with Article V of the Indenture (dealing with certain mergers and
consolidations) or make any other change that does not adversely affect the
legal rights of any Holder of a Note.
13. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and
payable in the manner, at the time and with the effect provided in the
Indenture. Holders of Notes may not enforce the Indenture or the Notes except
as provided in the Indenture. The Trustee is not obligated to enforce the
Indenture or the Notes unless it has received security or indemnity reasonably
satisfactory to the Trustee. The Indenture permits, subject to certain
limitations therein provided, Holders of a majority in aggregate principal
amount of the Notes then outstanding to direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of Notes notice of
any continuing Default or Event of Default (except a Default in payment of
principal of, or interest or Liquidated Damages, if any, payable on the Notes)
if it determines that withholding notice is in the Holders' interest.
14. Pledge Agreement. In order to secure the due and punctual
payment of the principal of, premium, interest and Liquidated Damages, if any,
on the Notes and the payment
- 4 -
<PAGE> 110
and performance of all other obligations of the Company to the Holders of the
Notes or the Trustee under the Indenture, the Company has granted a first
priority Lien on certain Pledged Securities to the Trustee for the benefit of
the Holders, as more particularly described in the Pledge Agreement. If the
Pledged Securities exceed the amount sufficient, in the opinion of a nationally
recognized firm of independent public accountants selected by the Company, to
provide for payment in full of the first two scheduled interest payments due on
the Notes (or, in the event an interest payment or interest payments have been
made, an amount sufficient to provide for payment in full of any interest
payments remaining, up to and including the second scheduled interest payment),
and no Default or Event of Default is then continuing, upon the satisfaction of
certain conditions specified in the Pledge Agreement, any such excess amount of
Pledged Securities shall be returned to the Company. Upon such release and
delivery to the Company, the Lien of the Trustee thereon for the benefit of the
Holders shall be released.
15. Trustee's Dealings with Company. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not the Trustee, subject to the
provisions of TIA Section 310.
16. No Recourse Against Others; Limitation on Liability.
Notwithstanding anything contained in the Indenture or the Notes to the
contrary, (i) except for the Company to the extent provided in clause (ii)
below, no person or entity (including, without limitation, the past, present or
future directors, officers, shareholders and employees of the Company) shall
have any liability whatsoever with respect to or arising out of the Indenture,
the Notes or any of the Company's obligations thereunder or any agreements or
documents executed by the Company in connection therewith and (ii) claims with
respect to the Indenture, the Notes and any obligations thereunder or under any
agreements or documents executed in connection therewith shall be satisfied
solely from the assets of the Company. Each Holder, by accepting a Note,
waives and releases all such liability. Such waiver and release are part of
the consideration for the issuance of the Notes.
17. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
18. Abbreviations. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(=Uniform Gifts to Minors Act).
19. Additional Rights of Holders of Transfer Restricted
Securities. In addition to the rights provided to Holders under the Indenture,
Holders of Transfer Restricted Securities shall have all the rights set forth
in the Registration Rights Agreement.
20. CUSIP Numbers. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of redemption as a
- 5 -
<PAGE> 111
convenience to Holders. No representation is made as to the accuracy of such
numbers either as printed on the Notes or as contained in any notice of
redemption.
21. Governing Law. THE INDENTURE AND THIS NOTE SHALL BE GOVERNED
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAW OF THE
STATE OF NEW YORK AS APPLIED TO CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN
THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
22. Indenture. Each Holder, by accepting a Note, agrees to be
bound by all of the terms and provisions of the Indenture, as the same may be
amended from time to time.
The Company will furnish without charge to any Holder of a Note upon
written request a copy of the Indenture, which has the text of this Note
printed therein. Requests may be made c/o Orbital Imaging Corporation, 21700
Atlantic Boulevard, Dulles, Virginia 20166, Attn: Secretary.
- 6 -
<PAGE> 112
SCHEDULE A
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The initial principal amount at maturity of this Global Note shall be
$________. The following increases or decreases in this Global Note have been
made:
Principal Amount
-----------------
Amount of :
decrease in
--------
increase in
--------
of this Global Note (or Exchange Note)
Principal Amount of the Global Note (or Exchange Note) following such increase
or decrease
$
----------------
HSBC BANK USA
By:
------------------------------------
Authorized Officer
Date:
-----------------
- 7 -
<PAGE> 113
EXHIBIT B
ASSIGNMENT FORM
To assign this Note, fill in the form below and have your signature
guaranteed:
I or we assign and transfer this Note to:
- -------------------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
(Print or type name, address and zip code and social security or tax ID number
of assignee)
and irrevocably appoint _________________________________________________,
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for it.
Date:
--------------------
Signed:
------------------
(Signed exactly as your name appears on the other side of this Note)
Signature Guarantee:
- -----------------------------------------
- 1 -
<PAGE> 114
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the Securities
and Exchange Commission of the effectiveness of a registration statement under
the Securities Act of 1933, as amended (the "Securities Act") covering resales
of this Note (which effectiveness shall not have been suspended or terminated
at the date of the transfer) and (ii) April 22, 2001, the undersigned confirms
that it has not utilized any general solicitation or general advertising in
connection with the transfer and that this Note is being transferred:
- ---------------------------
(Check One)
(1) __ to the Company or a Subsidiary thereof; or
(2) __ pursuant to and in compliance with Rule 144A under the
Securities Act; or
(3) __ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) that has
furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter can
be obtained from the Trustee); or
(4) __ outside the United States to a "foreign person" in compliance
with Regulation S under the Securities Act; or
(5) __ pursuant to the exemption from registration provided by Rule
144 under the Securities Act; or
(6) __ pursuant to an effective registration statement under the
Securities Act; or
(7) __ pursuant to another available exemption from the registration
requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to
register any of the Notes evidenced by this certificate in the name of any
Person other than the Holder thereof; provided that if box (3), (4), (5) or (7)
is checked, the Company or the Trustee may require, prior to registering any
such transfer of the Notes, in its sole discretion, such legal opinions,
certifications (including an investment letter in the case of box (3) or (4))
and other information as the Trustee or the Company may reasonably request to
confirm that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities
Act.
If none of the foregoing boxes is checked, the Trustee or Registrar
shall not be obligated to register this Note in the name of any Person other
than the Holder hereof unless and until the
- 2 -
<PAGE> 115
conditions to any such transfer of registration set forth herein and in Section
2.6 of the Indenture shall have been satisfied.
Date:
--------------------
Signed:
------------------
(Signed exactly as your name appears on the other side of this Note)
Signature Guarantee:
- -----------------------------------------
NOTICE: Your signature must be guaranteed by an Institution which is a member
of one of the following recognized signature Guarantee Programs: (i) The
Securities Transfer Agent Medallion Program; (ii) The New York Stock Exchange
Medallion Program; (iii) The Stock Exchange Medallion Program; or (iv) any
other guarantee program acceptable to the Trustee.
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:
----------------------
NOTICE: To be executed by an executive officer
- 3 -
<PAGE> 116
OPTION OF HOLDER TO ELECT PURCHASE
If you elect to have this Note purchased by the Company pursuant to
Section 4.14 or Section 4.15 of the Indenture, check the appropriate box:
Section 4.14 [ ]
Section 4.15 [ ]
If you elect to have only part of this Note purchased by the Company
pursuant to Section 4.14 or Section 4.15 of the Indenture, state the amount you
elect to have purchased:
$
----------------
Dated:
------------------------
NOTICE: The signature on this assignment must correspond with the name as it
appears upon the face of the within Note in every particular without alteration
or any change whatsoever and be guaranteed by the endorser's bank or broker.
Signature Guarantee:
- ---------------------------------
NOTICE: Your signature must be guaranteed by an Institution which is a member
of one of the following recognized signature Guarantee Programs: (i) The
Securities Transfer Agent Medallion Program; (ii) The New York Stock Exchange
Medallion Program; (iii) The Stock Exchange Medallion Program; or (iv) any
other guarantee program acceptable to the Trustee.
- 4 -
<PAGE> 117
EXHIBIT C
FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL
ACCREDITED INVESTOR
Orbital Imaging Corporation
21700 Atlantic Boulevard
Dulles, VA 20166
Attention: General Counsel
HSBC Bank USA
140 Broadway, 12th Floor
New York, New York 10005
Attention: Corporate Trust Department
Re: 11 5/8% Senior Notes Due 2005
Reference is hereby made to the Indenture, dated as of April 22, 1999
(the "Indenture"), between Orbital Imaging Corporation., as issuer (the
"Company") and HSBC Bank USA, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture. In
connection with our proposed purchase of $____________ aggregate principal
amount of Notes, we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the Securities Act of
1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which
we are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A)(1) to a person who we reasonably
believe is a "qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in a transaction meeting the requirements of Rule 144A, (2) in
a transaction meeting the requirements of Rule 144 under the Securities Act,
(3) outside the United States to a person that is not a U.S. person (as defined
in Rule 902 under the Securities Act) in a transaction meeting the requirements
of Rule 904 under the Securities Act, (4) to an institutional "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under
the Securities Act) that, prior to such transfer, furnishes to you a signed
letter containing certain representations and agreements relating to the Notes
(the form of which letter can be obtained from the Trustee), or (5) in
accordance with another exemption from the registration requirements of the
Securities Act (and in the case of any transfer with an aggregate principal
amount of $100,000 or less, based upon an Opinion of Counsel if the Company or
Trustee, Registrar or Transfer Agent for the Notes so requests), (B) to
- 5 -
<PAGE> 118
the Company or (C) pursuant to an effective registration statement and, in each
case, in accordance with any applicable securities laws of any state of the
United States or any other applicable jurisdiction, and we further agree to
provide to any Person purchasing the Certificated Notes or interests therein
from us in a transaction meeting the requirements of clauses (A) through (C) of
this paragraph a notice advising such purchaser that resales thereof are
restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or any
interests therein, we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the Company may
reasonably require to confirm that the proposed sale complies with the
foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect. We further understand that any
subsequent transfer by us of the Notes or interests therein acquired by us must
be effected through one of the Initial Purchasers.
4. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment.
5. We are acquiring the Notes or interests therein for our own
account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion. You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
[Insert Name of Accredited Investor]
By:
--------------------------------
Name:
Title:
Dated:
------------------
- 6 -
<PAGE> 1
EXHIBIT 4.6
REGISTRATION RIGHTS AGREEMENT
DATED AS OF APRIL 22, 1999
BY AND AMONG
ORBITAL IMAGING CORPORATION
AND
BEAR, STEARNS & CO. INC.
MERRILL LYNCH & CO., MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED.
<PAGE> 2
This Registration Rights Agreement (this "Agreement") is made and
entered into as of April 22, 1999, by and among Orbital Imaging Corporation, a
Delaware corporation (the "Company"), Bear, Stearns & Co. Inc. and Merrill Lynch
& Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (each, an "Initial
Purchaser" and, collectively, the "Initial Purchasers"), each of whom has agreed
to purchase $75,000,000 in aggregate principal amount at maturity of the
Company's 11 5/8% Series C Senior Notes due 2005 pursuant to the Purchase
Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated as of
April 22, 1999 (the "Purchase Agreement"), by and between the Company and the
Initial Purchasers. In order to induce the Initial Purchasers to purchase the
Notes, the Company has agreed to provide the registration rights set forth in
this Agreement. The execution and delivery of this Agreement is a condition to
the obligations of the Initial Purchasers set forth in Section 8 of the Purchase
Agreement. Capitalized terms not defined herein shall have the meanings ascribed
to them in the Indenture.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS. As used in this Agreement, the following
capitalized terms shall have the following meanings:
Act: The Securities Act of 1933, as amended.
Business Day: Any day except a Saturday, Sunday or other day in the City
of New York, or in the city of the corporate trust office of the Trustee, on
which banks are authorized to close.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Broker-Dealer Transfer Restricted Securities: Series D Notes that are
acquired by a Broker-Dealer in the Exchange Offer in exchange for Series C Notes
that such Broker-Dealer acquired for its own account as a result of market
making activities or other trading activities (other than Notes acquired
directly from the Company or any of its affiliates).
Certificated Securities: As defined in the Indenture.
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Consummate: An Exchange Offer shall be deemed "Consummated" for purposes
of this Agreement upon the occurrence of (a) the filing and effectiveness under
the Act of the Exchange Offer Registration Statement relating to the Series D
Notes to be issued in the Exchange Offer, (b) the maintenance of such Exchange
Offer Registration Statement continuously effective and the keeping of the
Exchange Offer open for a period not less than the minimum period required
pursuant to Section 3(b) hereof and (c) the delivery by the Company to the
Registrar under the
<PAGE> 3
Indenture of Series D Notes in the same aggregate principal amount as the
aggregate principal amount of Series C Notes that were validly tendered by
Holders thereof pursuant to the Exchange Offer.
Damages Payment Date: With respect to the Series C Notes, each Interest
Payment Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer: The offer to exchange and issuance by the Company of a
principal amount of Series D Notes (which shall be registered pursuant to the
Exchange Offer Registration Statement) equal to the outstanding principal amount
of Series C Notes that are validly tendered by such Holders in connection with
such exchange and issuance.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchasers propose
to sell the Series C Notes to certain "qualified institutional buyers," as such
term is defined in Rule 144A under the Act.
Global Note Holder: As defined in the Indenture.
Holders: As defined in Section 2 hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The Indenture, dated the Closing Date, by and between the
Company and HSBC Bank USA, as trustee (the "Trustee"), pursuant to which the
Notes are to be issued, as such Indenture is amended or supplemented from time
to time in accordance with the terms thereof.
Interest Payment Date: As defined in the Indenture and the Notes.
NASD: National Association of Securities Dealers, Inc.
Notes: The Series C Notes and the Series D Notes, as the context
requires.
Person: An individual, partnership, corporation, limited liability
company, joint venture, trust, unincorporated organization, or a government or
agency or political subdivision thereof.
Prospectus: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
-2-
<PAGE> 4
Record Holder: With respect to any Damages Payment Date, each Person who
is a Holder of Notes on the record date with respect to the Interest Payment
Date on which such Damages Payment Date shall occur.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company
relating to (a) an offering of Series D Notes pursuant to an Exchange Offer or
(b) the registration for resale of Transfer Restricted Securities pursuant to
the Shelf Registration Statement, in each case, (i) which is filed pursuant to
the provisions of this Agreement and (ii) including the Prospectus included
therein, all amendments and supplements thereto (including post-effective
amendments) and all exhibits and material incorporated by reference therein.
Restricted Broker-Dealer: Any Broker-Dealer which holds Broker-Dealer
Transfer Restricted Securities.
Series C Notes: The Company's 11 5/8% Series C Senior Notes due 2005 to
be issued to the Initial Purchasers pursuant to the Indenture.
Series D Notes: The Company's 11 5/8% Series D Senior Notes due 2005 to
be issued pursuant to the Indenture in the Exchange Offer.
Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as
in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note, until the earliest to occur
of (a) the date on which such Series C Note is exchanged in the Exchange Offer
and entitled to be resold to the public by the Holder thereof without complying
with the prospectus delivery requirements of the Act, (b) the date on which such
Series C Note has been sold pursuant to a Shelf Registration Statement, (c) the
date on which such Series D Note is disposed of by a Broker-Dealer pursuant to
the "Plan of Distribution" contemplated by the Exchange Offer Registration
Statement (including delivery of the Prospectus contained therein) or (d) the
date on which such Note is distributed to the public pursuant to Rule 144 under
the Act.
Trustee: HSBC Bank USA or such other Person who may be the trustee under
the Indenture.
Underwritten Registration or Underwritten Offering: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
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<PAGE> 5
SECTION 2. HOLDERS. A Person is deemed to be a holder of Transfer
Restricted Securities (each, a "Holder") whenever such Person owns Transfer
Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER.
(a) General. Unless the Exchange Offer shall not be permitted by
applicable federal law (after the procedures set forth in Section 6(a)(i) below
have been complied with), the Company shall (i) use its best efforts to file
with the Commission as soon as practicable after the Closing Date, but in no
event later than 45 days after the Closing Date, the Exchange Offer Registration
Statement, (ii) use its best efforts to cause such Exchange Offer Registration
Statement to become effective at the earliest possible time, but in no event
later than 150 days after the Closing Date, (iii) in connection with the
foregoing, (A) file all pre-effective amendments to such Exchange Offer
Registration Statement as may be necessary in order to cause such Exchange Offer
Registration Statement to become effective, (B) file, if applicable, a
post-effective amendment to such Exchange Offer Registration Statement pursuant
to the Act, and (C) cause all necessary filings, if any, in connection with the
registration and qualification of the Series D Notes to be made under the blue
sky laws of such jurisdictions as are necessary to permit Consummation of the
Exchange Offer, and (iv) upon the effectiveness of such Exchange Offer
Registration Statement, commence and Consummate the Exchange Offer. The Exchange
Offer shall be on the appropriate form permitting registration of the Series D
Notes to be offered in exchange for the Notes that are Transfer Restricted
Securities and to permit sales of Broker-Dealer Transfer Restricted Securities
by Restricted Broker-Dealers as contemplated by Section 3(c) below.
(b) Duration. The Company shall use its best efforts to cause the
Exchange Offer Registration Statement to be effective continuously, and shall
keep the Exchange Offer open for a period of not less than the minimum period
required under applicable federal and state securities laws to Consummate the
Exchange Offer; provided, however, that in no event shall such period be less
than 20 Business Days. The Company shall cause the Exchange Offer to comply with
all applicable federal and state securities laws. No securities other than the
Notes shall be included in the Exchange Offer Registration Statement. The
Company shall use its best efforts to cause the Exchange Offer to be Consummated
on the earliest practicable date after the Exchange Offer Registration Statement
has become effective, but in no event later than 30 Business Days thereafter.
(c) Broker-Dealer. The Company shall include a "Plan of
Distribution" section in the Prospectus contained in the Exchange Offer
Registration Statement and indicate therein that any Restricted Broker-Dealer
who holds Transfer Restricted Securities that were acquired for the account of
such Broker-Dealer as a result of market-making activities or other trading
activities, may exchange such Transfer Restricted Securities (other than
Transfer Restricted Securities acquired directly from the Company or one of its
affiliates) pursuant to the Exchange Offer; however, such Broker-Dealer may be
deemed to be an "underwriter" within the meaning of the Act and must, therefore,
deliver a prospectus meeting the requirements of the Act in connection with any
resale of the Series D Notes received by such Broker-Dealer in the
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<PAGE> 6
Exchange Offer, which prospectus delivery requirement may be satisfied by the
delivery by such Broker-Dealer of the Prospectus contained in the Exchange Offer
Registration Statement. Such "Plan of Distribution" section shall also contain
all other information with respect to such sales of Broker-Dealer Transfer
Restricted Securities by Restricted Broker-Dealers that the Commission may
require in order to permit such resales pursuant thereto, but such "Plan of
Distribution" shall not name any such Broker-Dealer or disclose the amount of
Notes held by any such Broker-Dealer, except to the extent required by the
Commission as a result of a change in policy after the date of this Agreement.
The Company shall use its best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 6(c) below to the extent necessary to
ensure that it is available for resales of Broker-Dealer Transfer Restricted
Securities by Restricted Broker-Dealers, and to ensure that the Exchange Offer
Registration Statement conforms with the requirements of this Agreement, the Act
and the policies, rules and regulations of the Commission as announced from time
to time, for a period of 180 days from the date on which the Exchange Offer is
Consummated.
The Company shall provide sufficient copies of the latest version of
such Prospectus to such Restricted Broker-Dealers promptly upon request, at any
time during such 180-day period in order to facilitate such resales.
SECTION 4. SHELF REGISTRATION.
(a) Shelf Registration. If (i) the Company is not required to file
an Exchange Offer Registration Statement with respect to the Series D Notes
because the Exchange Offer is not permitted by applicable federal law (after the
procedures set forth in Section 6(a)(i) below have been complied with), (ii) any
Holder of Transfer Restricted Securities shall notify the Company within 20
Business Days following the Consummation of the Exchange Offer (the "Holder
Resale Notice") that (A) such Holder was prohibited by applicable law or
Commission policy from participating in the Exchange Offer or (B) such Holder
may not resell the Series D Notes acquired by it in the Exchange Offer to the
public without delivering a prospectus and the Prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available for such
resales by such Holder or (C) such Holder is a Broker-Dealer and holds Series C
Notes acquired directly from the Company or one of its affiliates, or (iii) the
Exchange Offer is for any other reason not consummated within 180 days of the
Closing Date then the Company shall: (x) cause to be filed on or prior to 45
days after the date on which the Company determines that it is not required to
file the Exchange Offer Registration Statement pursuant to clause (i) above or
45 days after the date on which the Company receives the notice specified in
clause (ii) above a shelf registration statement pursuant to Rule 415 under the
Act (which may be an amendment to the Exchange Offer Registration Statement (in
either event, the "Shelf Registration Statement")), relating to all Transfer
Restricted Securities the Holders of which shall have provided the information
required pursuant to Section 4(b) hereof; and (y) use its best efforts to cause
such Shelf Registration Statement to become effective on or prior to 150 days
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<PAGE> 7
after the date on which the Company becomes obligated to file such Shelf
Registration Statement.
If, after the Company has filed an Exchange Offer Registration
Statement which satisfies the requirements of Section 3(a) above, the Company is
required to file and make effective a Shelf Registration Statement solely
because the Exchange Offer shall not be permitted under clause (i), (ii) or
(iii) in Section 4(a), then the filing of the Exchange Offer Registration
Statement shall be deemed to satisfy the requirements of clause (x) above. Such
an event shall have no effect on the requirements of clause (y) above. The
Company shall use its best efforts to keep the Shelf Registration Statement
discussed in this Section 4(a) continuously effective, supplemented and amended
as required by and subject to the provisions of Sections 6(b) and (c) hereof to
the extent necessary to ensure that it is available for resales of Transfer
Restricted Securities by the Holders thereof entitled to the benefit of this
Section 4(a), and to ensure that it conforms with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, until the earlier of (A) the date that is two years
after the effective date thereof (plus any extension of such two-year period
pursuant to Sections 4(c) or 6(c)(i) below), provided that in the event such
applicable policies, rules and regulations of the Commission are amended to
provide for a period of less than two years, then such period shall be deemed to
be in effect for purposes of this Section 4(a), or (B) the consummation of the
Exchange Offer with respect to all Transfer Restricted Securities and the
expiration of 20 Business Days after the Consummation thereof if during such 20
Business Days no Holder Resale Notice shall have been received by the Company or
(C) the date when all securities covered by the Shelf Registration Statement
have been sold pursuant to the Shelf Registration Statement.
(b) Provision by Holders of Certain Information in Connection with
the Shelf Registration Statement. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 days after receipt of a request therefor, such
information specified in Item 507 and Item 508 of Regulation S-K under the Act
for use in connection with any Shelf Registration Statement or Prospectus or
preliminary Prospectus included therein. No Holder of Transfer Restricted
Securities shall be entitled to Liquidated Damages pursuant to Section 5 hereof
unless and until such Holder shall have used its best efforts to provide all
such information. Each Holder as to which any Shelf Registration Statement is
being effected agrees to furnish promptly to the Company all information
required to be disclosed in order to make the information previously furnished
to the Company by such Holder not materially misleading.
(c) Black-out Periods. During any consecutive 365 day period, the
Company may suspend the effectiveness of the Shelf Registration Statement on two
occasions for a period of not more than 45 consecutive days if there is a
possible acquisition or business combination or other transaction, business
development or event involving the Company that may require disclosure in the
Shelf Registration Statement and the Board of Directors of the Company
determines in the exercise of its reasonable judgment that such disclosure is
not in the best
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<PAGE> 8
interests of the Company and its stockholders or obtaining any financial
statements relating to a possible acquisition or business combination required
to be included in the Shelf Registration Statement would be impracticable. In
such a case, the Company shall promptly notify the Holders of the suspension of
the Shelf Registration Statement's effectiveness, provided that such notice
shall not require the Company to disclose the possible acquisition or business
combination or other transaction, business development or event if the Board of
Directors of the Company determines in good faith that such acquisition or
business combination or other transaction, business development or event should
remain confidential. Upon the abandonment, consummation, or termination of the
possible acquisition or business combination, or the availability of the
required financial statements with respect to a possible acquisition or business
combination , the suspension of the use of the Shelf Registration Statement
pursuant to this Section 4(c) shall cease and the Company shall promptly comply
with Section 6(c) hereof and notify the Holders that disposition of Transfer
Restricted Securities may be resumed. The length of any periods during which the
Company prohibits offers and sales of Transfer Restricted Securities pursuant to
the Shelf Registration Statement under this Section 4(c) shall not be considered
periods of a Registration Default under Section 5 hereof. In addition, the
length of any periods during which the Company prohibits offers and sales of
Transfer Restricted Securities pursuant to the Shelf Registration Statement
under this Section 4(c) shall be added to the two year period described in
Section 4(a) above.
SECTION 5. LIQUIDATED DAMAGES. If (i) any Registration Statement
required by this Agreement is not filed with the Commission on or prior to the
date specified for such filing in this Agreement, (ii) any such Registration
Statement has not been declared effective by the Commission on or prior to the
date specified for such effectiveness in this Agreement (the "Effectiveness
Target Date"), (iii) the Exchange Offer has not been Consummated within 30
Business Days of the Effectiveness Target Date with respect to the Exchange
Offer Registration Statement, or (iv) any Registration Statement required by
this Agreement is filed and declared effective but shall thereafter cease to be
effective or fail to be usable for its intended purpose without being succeeded
immediately by a post-effective amendment to such Registration Statement that
cures such failure and that is itself declared effective immediately (each such
event referred to in clauses (i) through (iv), a "Registration Default"), the
Company shall pay as liquidated damages ("Liquidated Damages") to each Holder an
amount (the "Damage Amount") equal to 0.25% per annum of the face amount of the
Notes during the first 90-day period or any portion thereof immediately
following the occurrence of such Registration Default. The Damage Amount will be
increased by an additional 0.25% per annum of the face amount of the Notes for
each subsequent 90-day period that any such Damage Amount continues to accrue,
and the Damage Amount will accrue at the rate specified above until such
Registration Default is cured; provided that in no event shall the Damage Amount
be increased by more than 1% of the face amount of the Notes. Notwithstanding
anything to the contrary set forth herein, (1) upon filing of the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration
Statement), in the case of (i) above, (2) upon the effectiveness of the Exchange
Offer Registration Statement (and/or, if applicable, the Shelf Registration
Statement), in the case of (ii) above, (3) upon Consummation of the Exchange
Offer, in the case of (iii) above, or (4) upon the filing of a post-effective
amendment to the Registration Statement or an additional Registration
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<PAGE> 9
Statement that causes the Exchange Offer Registration Statement (and/or, if
applicable, the Shelf Registration Statement) to again be declared effective or
made usable in the case of (iv) above, the accrual of liquidated damages payable
with respect to the Transfer Restricted Securities as a result of such clause
(i), (ii), (iii) or (iv), as applicable, shall cease.
All accrued liquidated damages will be paid by the Company on each
Damages Payment Date to the Global Note Holder by wire transfer of immediately
available funds or by federal funds check and to Holders of Certificated
Securities by mailing checks to their registered addresses, as on each Interest
Payment Date. All obligations of the Company set forth in the preceding
paragraph that are outstanding with respect to any Transfer Restricted Security
at the time such security ceases to be a Transfer Restricted Security shall
survive until such time as all such obligations with respect to such security
shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES.
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company shall comply with all applicable provisions of
Section 6(c) below, shall use its best efforts to effect such exchange and to
permit the sale of Broker-Dealer Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution thereof, and
shall comply with all of the following provisions:
(i) If, following the date hereof there has been published a
change in Commission policy with respect to exchange offers such as the Exchange
Offer, such that in the reasonable opinion of counsel to the Company there is a
substantial question as to whether the Exchange Offer is permitted by applicable
federal law, the Company hereby agrees to seek a no-action letter or other
favorable decision from the Commission allowing the Company to Consummate an
Exchange Offer for such Series C Notes. The Company hereby agrees to pursue the
issuance of such a decision to the Commission staff level, but is not required
to take a commercially unreasonable action to effect a change of Commission
policy. In connection with the foregoing, the Company hereby agrees to take all
such other actions as are requested by the Commission or otherwise required in
connection with the issuance of such decision, including without limitation (A)
participating in telephonic conferences with the Commission, (B) delivering to
the Commission staff an analysis prepared by counsel to the Company setting
forth the legal bases, if any, upon which such counsel has concluded that such
an Exchange Offer should be permitted and (C) diligently pursuing a resolution
(which need not be favorable) by the Commission staff of such submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer Restricted
Securities shall furnish, upon the request of the Company, prior to the
Consummation of the Exchange Offer, a written representation to the Company
(which may be contained in the letter of transmittal contemplated by the
Exchange Offer Registration Statement) to the effect that (A) it is not an
affiliate of the Company, (B) it is not engaged in, and does not intend to
engage in, and has no arrangement or understanding with any Person to
participate in, a distribution of the Series D Notes to be issued
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<PAGE> 10
in the Exchange Offer and (C) it is acquiring the Series D Notes in its ordinary
course of business. Each Holder hereby acknowledges and agrees that any
Broker-Dealer and any such Holder using the Exchange Offer to participate in a
distribution of the securities to be acquired in the Exchange Offer (1) could
not under Commission policy as in effect on the date of this Agreement rely on
the position of the Commission enunciated in Morgan Stanley and Co., Inc.
(available June 5, 1991) and Exxon Capital Holdings Corporation (available May
13, 1988), as interpreted in the Commission's letter to Shearman & Sterling
dated July 2, 1993, and similar no-action letters (including, if applicable, any
no-action letter obtained pursuant to clause (i) above), and (2) must comply
with the registration and prospectus delivery requirements of the Act in
connection with a secondary resale transaction and that such a secondary resale
transaction must be covered by an effective registration statement containing
the selling security holder information required by Item 507 or 508, as
applicable, of Regulation S-K if the resales are of Series D Notes obtained by
such Holder in exchange for Series C Notes acquired by such Holder directly from
the Company or an affiliate thereof.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company shall provide a supplemental letter to the Commission (A)
stating that the Company is registering the Exchange Offer in reliance on the
position of the Commission enunciated in Exxon Capital Holdings Corporation
(available May 13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991)
and, if applicable, any no-action letter obtained pursuant to clause (i) above,
(B) including a representation that the Company has not entered into any
arrangement or understanding with any Person to distribute the Series D Notes to
be received in the Exchange Offer and that, to the best of the Company's
information and belief, each Holder participating in the Exchange Offer is
acquiring the Series D Notes in its ordinary course of business and has no
arrangement or understanding with any Person to participate in the distribution
of the Series D Notes received in the Exchange Offer and (C) including any other
undertaking or representation required by the Commission as set forth in any
no-action letter obtained pursuant to clause (i) above.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company shall comply with all the provisions of
Section 6(c) below and shall use its best efforts to effect such registration to
permit the sale of the Transfer Restricted Securities being sold in accordance
with the intended method or methods of distribution thereof (as indicated in the
information furnished to the Company pursuant to Section 4(b) hereof), and
pursuant thereto the Company will prepare and file with the Commission a
Registration Statement relating to the registration on any appropriate form
under the Act, which form shall be available for the resale of the Transfer
Restricted Securities in accordance with the intended method or methods of
distribution thereof within the time periods and otherwise in accordance with
the provisions hereof.
(c) General Provisions. In connection with any Registration
Statement and any related Prospectus required by this Agreement, the Company
shall:
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<PAGE> 11
(i) use its best efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements for the
period specified in Section 3 or 4 of this Agreement, as applicable. Upon the
occurrence of any event that would cause any such Registration Statement or the
Prospectus contained therein (A) to contain a material misstatement or omission
or (B) not to be effective and usable for resale of Transfer Restricted
Securities during the period required by this Agreement, the Company shall file
promptly an appropriate amendment to such Registration Statement or file
appropriate documents that will be so incorporated by reference, (1) in the case
of clause (A), correcting any such misstatement or omission, and (2) in the case
of either clause (A) or (B), use its best efforts to cause such amendment to be
declared effective and such Registration Statement and the related Prospectus to
become usable for their intended purpose(s) as soon as reasonably practicable
thereafter;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be necessary to
keep the Registration Statement effective for the applicable period set forth in
Section 3 or 4 hereof, as applicable, or such shorter period as will terminate
when all Transfer Restricted Securities covered by such Registration Statement
have been sold or exchanged; cause the Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 under the Act, and to comply fully with Rules 424, 430A and 462, as
applicable, under the Act in a timely manner; and comply with the provisions of
the Act with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with the
intended method or methods of distribution by the sellers thereof set forth in
such Registration Statement or supplement to the Prospectus;
(iii) advise the underwriter(s), if any, and selling Holders
promptly and, if requested by such Persons, confirm such advice in writing, (A)
when the Prospectus or any Prospectus supplement or post-effective amendment has
been filed, and, with respect to any Registration Statement or any
post-effective amendment thereto, when the same has become effective, (B) of any
request by the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional information
relating thereto, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the Act or of
the suspension by any state securities commission of the qualification of the
Transfer Restricted Securities for offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding purposes, or (D) of the
existence of any fact or the happening of any event that makes any statement of
a material fact made in the Registration Statement, the Prospectus, any
amendment or supplement thereto or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes in
the Registration Statement in order to make the statements therein not
misleading, or that requires the making of any additions to or changes in the
Prospectus in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption from
qualification of the Transfer
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<PAGE> 12
Restricted Securities under state securities or blue sky laws, the Company shall
use its best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time;
(iv) furnish to the Initial Purchaser(s), each selling Holder
named in any Registration Statement or Prospectus and each of the
underwriter(s), if any, in connection with such sale before filing with the
Commission, copies of any Registration Statement or any Prospectus included
therein or any amendments or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the initial
filing of such Registration Statement), which documents will be subject to the
review of such Holders and underwriter(s), if any, in connection with such sale
for a period of at least five Business Days, and the Company will not file any
such Registration Statement or Prospectus or any amendment or supplement to any
such Registration Statement or Prospectus (including all such documents
incorporated by reference) to which the selling Holders of the Transfer
Restricted Securities covered by such Registration Statement or the
underwriter(s), if any, in connection with such sale shall reasonably object
within five Business Days after the receipt thereof. A selling Holder or
underwriter, if any, shall be deemed to have reasonably objected to such filing
if such Registration Statement, amendment, Prospectus or supplement, as
applicable, as proposed to be filed, contains a material misstatement or
omission or fails to comply with the applicable requirements of the Act;
(v) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus, provide
notice identifying such document, and, upon request, furnish copies of, such
document to one counsel for such selling Holders designated by a majority of
such selling Holders and to the managing underwriter(s), if any, in connection
with such sale, make the Company's representatives available for discussion of
such document and other customary due diligence matters, and include such
information in such document prior to the filing thereof as such selling Holders
or underwriter(s), if any, reasonably may request;
(vi) subject to the entry of appropriate confidentiality
agreements, make available at reasonable times for inspection by the selling
Holders, any managing underwriter participating in any disposition pursuant to
such Registration Statement and any attorney or accountant retained by such
selling Holders or any of such underwriter(s), all financial and other records,
pertinent corporate documents and properties of the Company and cause the
Company's officers, directors and employees to supply all information reasonably
requested by any such Holder, underwriter, attorney or accountant in connection
with such Registration Statement or any post-effective amendment thereto
subsequent to the filing thereof and prior to its effectiveness;
(vii) if requested by any selling Holders or the underwriter(s),
if any, in connection with such sale, promptly include in any Registration
Statement or Prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information as such selling Holders and underwriter(s), if any,
may reasonably request to have included therein, including, without limitation,
information relating to the "Plan of Distribution" of the Transfer
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<PAGE> 13
Restricted Securities, information with respect to the principal amount of
Transfer Restricted Securities being sold to such underwriter(s), the purchase
price being paid therefor and any other terms of the offering of the Transfer
Restricted Securities to be sold in such offering; and make all required filings
of such Prospectus supplement or post-effective amendment available to such
selling Holders as soon as practicable after the Company is notified of the
matters to be included in such Prospectus supplement or post-effective
amendment;
(viii) furnish to each selling Holder and each of the
underwriter(s), if any, in connection with such sale without charge, at least
one copy of the Registration Statement, as first filed with the Commission, and
of each amendment thereto, and make available all documents incorporated by
reference therein and all exhibits (including exhibits incorporated therein by
reference);
(ix) deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement thereto
as such Persons reasonably may request; the Company hereby consents to the use
(in accordance with law) of the Prospectus and any amendment or supplement
thereto by each of the selling Holders and each of the underwriter(s), if any,
in connection with the offering and the sale of the Transfer Restricted
Securities covered by the Prospectus or any amendment or supplement thereto;
(x) enter into such agreements (including an underwriting
agreement) and make such representations and warranties and take all such other
actions in connection therewith in order to expedite or facilitate the
disposition of the Transfer Restricted Securities pursuant to any Registration
Statement contemplated by this Agreement as may be reasonably requested by any
Holder of Transfer Restricted Securities or underwriter, and in such connection,
(A) make such representations and warranties to the underwriters, with respect
to the business of the Company and the Registration Statement, Prospectus and
documents, if any, incorporated or deemed incorporated by reference therein, in
each case, as are customarily made by issuers to underwriters in underwritten
offerings, and confirm the same if and when requested; (B) obtain an opinion,
dated the date of Consummation of the Exchange Offer or the date of
effectiveness of the Shelf Registration Statement, as the case may be, of
counsel for the Company covering matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be reasonably
requested by the underwriters, including a statement to the effect that such
counsel has participated in conferences with officers and other representatives
of the Company, representatives of the independent public accountants for the
Company at which the contents of such Shelf Registration Statement and related
Prospectus were discussed, although such counsel has not independently verified,
and does not assume any responsibility for, the accuracy, completeness or
fairness of such statements; and that such counsel advises that, on the basis of
the foregoing (relying as to materiality to a large extent upon facts provided
to such counsel by officers and other representatives of the Company and without
independent check or verification), no facts came to such counsel's attention
that caused such counsel to believe that the applicable Registration Statement,
at the time such Registration Statement or any post-effective amendment thereto
became effective and, in the case of the Exchange Offer
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<PAGE> 14
Registration Statement, as of the date of Consummation of the Exchange Offer,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus contained in such Registration Statement
as of its date and, in the case of the opinion dated the date of Consummation of
the Exchange Offer, as of the date of Consummation, contained an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. Without limiting the foregoing, such
counsel may state further that such counsel assumes no responsibility for, and
has not independently verified, the accuracy, completeness or fairness of the
financial statements, notes and schedules and other financial and statistical
data included in any Registration Statement contemplated by this Agreement or
the related Prospectus; and (C) obtain a customary comfort letter, dated as of
the date of effectiveness of the Shelf Registration Statement or the date of
Consummation of the Exchange Offer, as the case may be, from the Company's
independent accountants, in the customary form and covering matters of the type
customarily covered in comfort letters to underwriters; and (D) if an
underwriting agreement is entered into, the same shall contain indemnification
and contribution provisions and procedures no less favorable than those set
forth in Section 8 hereof with respect to all parties to be indemnified pursuant
to Section 8. The above shall be done at each closing under such underwriting or
similar agreement, as and to the extent required thereunder, and if at any time
the representations and warranties of the Company contemplated in (A) above
cease to be true and correct, the Company shall so advise the underwriter(s), if
any, the selling Holders and each Restricted Broker-Dealer promptly and if
requested by such Persons, shall confirm such advice in writing;
(xi) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if any, and
their counsel in connection with the registration and qualification of the
Transfer Restricted Securities under the securities or blue sky laws of such
jurisdictions as the selling Holders or underwriter(s), if any, may request and
do any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Transfer Restricted Securities covered
by the applicable Registration Statement; provided, however, that the Company
shall not be required to register or qualify as a foreign corporation where it
is not now so qualified or would not otherwise be required to be so qualified
but for this Section 6(c)(xi) or to take any action that would subject it to the
service of process in suits or to taxation, in any jurisdiction where it is not
now so subject; (xii) issue, upon the request of any Holder of Series C Notes
covered by any Shelf Registration Statement contemplated by this Agreement,
Series D Notes having an aggregate principal amount equal to the aggregate
principal amount of Series C Notes surrendered to the Company by such Holder in
exchange therefor or being sold by such Holder; such Series D Notes to be
registered in the name of such Holder or in the name of the purchaser(s) of such
Series D Notes, as the case may be; in return, the Series C Notes held by such
Holder shall be surrendered to the Company for cancellation; (xiii) in
connection with any sale of Transfer Restricted Securities that will result in
such securities no longer being Transfer Restricted Securities, cooperate with
the selling Holders and the underwriter(s), if any, to facilitate the timely
preparation and delivery of certificates representing Transfer Restricted
Securities to be sold and not bearing any restrictive
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<PAGE> 15
legends; and to register such Transfer Restricted Securities in such
denominations and such names as the Holders or the underwriter(s), if any, may
request at least two Business Days prior to such sale of Transfer Restricted
Securities;
(xiv) use its best efforts to cause the disposition of the
Transfer Restricted Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or authorities
as may be necessary to enable the seller or sellers thereof or the
underwriter(s), if any, to consummate the disposition of such Transfer
Restricted Securities, subject to the proviso contained in clause (xi) above;
(xv) subject to Section 6(c)(i), if any fact or event
contemplated by Section 6(c)(iii)(D) above shall exist or have occurred, prepare
a supplement or post-effective amendment to the Registration Statement or
related Prospectus or any document incorporated therein by reference or file any
other required document so that, as thereafter delivered to the purchasers of
Transfer Restricted Securities, the Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading;
(xvi) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration Statement
covering such Transfer Restricted Securities and provide the Trustee under the
Indenture with printed certificates for the Transfer Restricted Securities which
are in a form eligible for deposit with the Depository Trust Company;
(xvii) cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter") that is required
to be retained in accordance with the rules and regulations of the NASD, and use
its best efforts to cause such Registration Statement to become effective and
approved by such governmental agencies or authorities as may be necessary to
enable the Holders selling Transfer Restricted Securities to consummate the
disposition of such Transfer Restricted Securities;
(xviii) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make generally available
to the Holders as soon as reasonably practicable, a consolidated earnings
statement meeting the requirements of Rule 158 (which need not be audited)
covering a twelve-month period beginning after the "effective date of the
registration statement" (as such term is defined in paragraph (c) of Rule 158
under the Act);
(xix) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement required by
this Agreement and, in connection therewith, cooperate with the Trustee and the
Holders of Notes to effect such changes to the Indenture as may be required for
such Indenture to be so qualified in accordance with the terms of the TIA; and
execute and use its best efforts to cause the Trustee to execute, all documents
that
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<PAGE> 16
may be required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to be so
qualified in a timely manner; and
(xx) provide promptly to each Holder upon request each document
filed with the Commission pursuant to the requirements of Section 13 or Section
15(d) of the Exchange Act.
(d) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(i) or any notice from the Company of the existence of any fact of
the kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof,
or until it is advised in writing by the Company that the use of the Prospectus
may be resumed, and has received copies of any additional or supplemental
filings that are incorporated by reference in the Prospectus (the "Advice"). If
so directed by the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of either such notice. In the
event the Company shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 hereof,
as applicable, shall be extended by the number of days during the period from
and including the date of the giving of such notice pursuant to Section 6(c)(i)
or Section 6(c)(iii)(D) hereof to and including the date when each selling
Holder covered by such Registration Statement shall have received the copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof
or shall have received the Advice.
SECTION 7. REGISTRATION EXPENSES.
(a) All reasonable expenses incident to the Company's performance of
or compliance with this Agreement will be borne by the Company, regardless of
whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses (including filings
made by any Initial Purchaser or Holder with the NASD); (ii) all fees and
expenses of compliance with federal securities and state blue sky or securities
laws; (iii) all expenses of printing (including, without limitation, printing or
engraving certificates for the Series D Notes to be issued in the Exchange Offer
and printing of Prospectuses), messenger and delivery services and telephone;
(iv) all fees and disbursements of counsel for the Company and, subject to
Section 7(b) below, the Holders of Transfer Restricted Securities; (v) all
application and filing fees in connection with listing the Notes on a national
securities exchange or automated quotation system pursuant to the requirements
hereof; and (vi) all fees and disbursements of independent certified public
accountants of the Company (including the expenses of any special audit and
comfort letters required by or incident to such performance).
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<PAGE> 17
The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company will reimburse the
Initial Purchasers and the Holders of Transfer Restricted Securities being
tendered in the Exchange Offer and/or resold pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel, who shall be
chosen by the Holders of a majority in principal amount of the Transfer
Restricted Securities for whose benefit such Registration Statement is being
prepared; provided, however, that, in that case of an Exchange Offer
Registration Statement, the Company shall not be required to reimburse the
Initial Purchasers and the Holders of Transfer Restricted Securities being
registered pursuant to the Exchange Offer Registration Statement for such fees
and disbursements of counsel in excess of $10,000.
SECTION 8. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless (i) each
Holder and (ii) each Person, if any, who controls a Holder within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act any Holder (a
"Controlling Person") and (iii) the respective officers, directors, partners,
employees, representatives and agents of any Holder or any Controlling Person
(any of the Persons referred to in this clause (i), (ii) or (iii) may
hereinafter be referred to as an "Indemnified Holder") to the fullest extent
lawful, from and against any and all losses, liabilities, claims, damages and
expenses whatsoever (including but not limited to reasonable attorneys' fees and
any and all reasonable expenses whatsoever incurred in investigating, preparing
for or defending against any investigation or litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or the Prospectus, or
in any supplement thereto or amendment thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that
the Company will not be liable in any such case to the extent that any such
loss, liability, claim, damage or expense arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Holder expressly for
use therein.
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<PAGE> 18
(b) Each Holder, severally and not jointly, agrees to indemnify and
hold harmless the Company and any of its respective directors, officers, and any
Controlling Person of the Company, and the officers, directors, partners,
employees, representatives and agents of each such Person, to the same extent as
the foregoing indemnity from the Company to each of the Indemnified Holders, but
only with respect to losses, liabilities, claims, damages or expenses (including
but not limited to reasonable attorneys' fees and any and all reasonable
expenses whatsoever incurred in investigating, preparing for or defending
against any investigation or litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus, or in any amendment thereof or supplement
thereto, or arising out of or based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading in each case to the extent, but only to the extent, that
such loss, liability, claim, damage or expense arises out of or is based upon
any untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on the behalf of such Holder expressly for use
therein. In no event shall any Holder be liable or responsible for any amount in
excess of the dollar amount of the proceeds received by such Holder upon its
sale of the Transfer Restricted Securities giving rise to such indemnification
obligation.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve such indemnifying
party from any liability which it may have under this Section 8 except to the
extent that it has been prejudiced in any material respect by such failure to
notify by the indemnified party or from any liability which it may otherwise
have). In case any such action is brought against any indemnified party, and it
notifies an indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein, and to the extent it may elect by
written notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party. Notwithstanding the
foregoing, the indemnified party or parties shall have the right to employ its
or their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such indemnified party or parties unless (i) the
employment of such counsel shall have been authorized in writing by the
indemnifying party or parties in connection with the defense of such action,
(ii) the indemnifying party or parties shall not have employed counsel to take
charge of the defense of such action within a reasonable time after notice of
commencement of the action, or (iii) such indemnified party or parties shall
have reasonably concluded, upon the advice of counsel that there may be defenses
available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
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<PAGE> 19
indemnifying party or parties shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties), in any of which
events such fees and expenses of counsel shall be borne by the indemnifying
parties. The indemnifying party under subsection (a) or (b) above, shall only be
liable for the legal expenses of one counsel (in addition to any local counsel)
for all indemnified parties in each jurisdiction in which any claim or action is
brought. Anything in this subsection to the contrary notwithstanding, an
indemnifying party shall not be liable for any settlement of any claim or action
effected without its prior written consent; provided that such consent was not
unreasonably withheld.
(d) In order to provide for contribution in circumstances in which
the indemnification provided for in this Section 8 is for any reason held to be
unavailable or is insufficient to hold harmless a party indemnified hereunder,
the Company and each Holder shall contribute to the aggregate losses, claims,
damages, liabilities and expenses of the nature contemplated by such
indemnification provision (including any investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claims asserted, but after deducting in the case of
losses, claims, damages, liabilities and expenses suffered by the Company, any
contribution received by the Company from Persons, other than the Holder who may
also be liable for contribution, including Controlling Persons of the Company to
which the Company and any Holders may be subject, in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Holders or, if such allocation is not permitted by applicable law or
indemnification is not available as a result of the indemnifying party not
having received notice as provided in this Section 8, in such proportion as is
appropriate to reflect not only the relative benefits referred to above but also
the relative fault of the Company and the Holder in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and any Holder shall be deemed to
be in the same proportion as (x) the total proceeds from the offering of the
Notes (net of discounts but before deducting expenses) received by the Company
and (y) the total proceeds received by such Holder upon its sale of Notes which
would otherwise give rise to the indemnification obligation, respectively. The
relative fault of the Company and of the Holders shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Holders and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Holders agree that it
would not be just and equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to above.
Notwithstanding the provisions of this Section 8(d), (i) no Holder shall be
required to contribute, in the aggregate, any amount in excess of the dollar
amount by which the proceeds received by such Holder with respect to the sale of
its Transfer Restricted Securities pursuant to a Registration Statement exceeds
the sum of (A) the amount paid by such Holder for such Transfer Restricted
Securities plus (B) the amount of any damages which such Holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission and indemnification obligation, respectively; and
(ii) no Person guilty of
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<PAGE> 20
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. The Holders' obligations to contribute pursuant to
this Section 8(d) are several in proportion to the respective principal amount
of Notes held by each of the Holders hereunder and not joint.
For purposes of this Section 8, (A) each Controlling Person, if any, of
any Holder and (B) the respective officers, directors, partners, employees,
representatives and agents of any Initial Purchaser or any Controlling Person
thereof shall have the same rights to contribution as such Initial Purchaser,
and each Controlling Person, if any, of the Company shall have the same rights
to contribution as the Company, subject in each case to clauses (i) and (ii) of
this Section 8(d). Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties under this Section 8(d), notify such party or parties from whom
contribution may be sought, but the failure to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 8(d) or otherwise. No
party shall be liable for contribution with respect to any action or claim
settled without its prior written consent; provided that such written consent
was not unreasonably withheld.
SECTION 9. RULE 144A.
The Company hereby agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding and during any period in which the
Company is not subject to Section 13 or 15(d) of the Act, to make available,
upon request of any Holder of Transfer Restricted Securities, to any Holder or
beneficial owner of Transfer Restricted Securities in connection with any sale
thereof and any prospective purchaser of such Transfer Restricted Securities
designated by such Holder or beneficial owner, the information required by Rule
144A(d)(4) under the Act in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144A.
SECTION 10. UNDERWRITTEN REGISTRATIONS.
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in customary underwriting arrangements entered
into in connection therewith and (b) completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements, lockup
letters and other documents required under the terms of such underwriting
arrangements.
SECTION 11. SELECTION OF UNDERWRITERS. For any Underwritten Offering,
the investment banker or investment bankers and manager or managers for any
Underwritten Offering that will administer such offering will be selected by the
Holders of a majority in aggregate principal amount of the Transfer Restricted
Securities included in such offering
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<PAGE> 21
provided that such investment bankers and managers must be reasonably
satisfactory to the Company. Such investment bankers and managers are referred
to herein as the "underwriters."
SECTION 12. MISCELLANEOUS.
(a) Remedies. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not, on or after
the date of this Agreement, enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof. Except as disclosed
in the Offering Memorandum, the Company has not previously entered into any
agreement granting any registration rights with respect to its securities to any
Person. The rights granted to the Holders hereunder do not in any way conflict
with and are not inconsistent with the rights granted to the holders of the
Company's securities under any agreement in effect on the date hereof.
(c) Adjustments Affecting the Notes. The Company will not take any
action, or voluntarily permit any change to occur, with respect to the Notes
that would materially and adversely affect the ability of the Holders to
Consummate any Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless the Company has obtained the
written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the Exchange
Offer or registered pursuant to the Shelf Registration Statement and that does
not affect directly or indirectly the rights of other Holders whose securities
are not being tendered pursuant to such Exchange Offer or registered pursuant to
the Shelf Registration Statement may be given by the Holders of a majority of
the outstanding principal amount of Transfer Restricted Securities subject to
such Exchange Offer.
(e) Notice. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), facsimile transmission,
telex, telecopier, or air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
(ii) if to the Company:
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<PAGE> 22
Orbital Imaging Corporation
21700 Atlantic Boulevard
Dulles, Virginia 20166
Phone: (703) 406-5000
Fax: (703) 406-5552
All such notices and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; upon receipt of a
confirmation notice, if sent by facsimile transmission; when answered back, if
telexed; when receipt acknowledged, if telecopied; and on the next Business Day,
if timely delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; provided,
however, that this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder unless and to the extent such successor
or assign acquired Transfer Restricted Securities directly from such Holder.
(g) 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.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) 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
CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and 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. There are no restrictions, promises,
warranties or undertakings, other than those set forth
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<PAGE> 23
or referred to herein with respect to the registration rights granted with
respect to the Transfer Restricted Securities. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
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<PAGE> 24
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
ORBITAL IMAGING CORPORATION
By:
----------------------------------
Name:
Title:
BEAR, STEARNS & CO. INC.
By:
----------------------------------
Name:
Title:
MERRILL LYNCH, PIERCE FENNER & SMITH
INCORPORATED
By:
----------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 4.7
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of April 22, 1999 between Orbital Imaging
Corporation, a Delaware corporation (the "Pledgor") and HSBC Bank USA, as
collateral agent (the "Collateral Agent"), for the Holders of the Notes (as
defined herein). Capitalized terms used but not otherwise defined herein shall
have the meanings given to such terms in the Indenture (as defined below).
W I T N E S S E T H:
WHEREAS, the Pledgor and HSBC Bank USA, as Trustee (the "Trustee") have
entered into that certain Indenture dated as of April 22, 1999 (as amended,
restated, supplemented or otherwise modified from time to time, the
"Indenture"), pursuant to which the Pledgor issued $75,000,000 in aggregate
principal amount of 11 5/8% Senior Notes due 2005 (the "Notes");
WHEREAS, the Pledgor has agreed, pursuant to a Purchase Agreement dated
April 19, 1999 by and among the Pledgor, Bear, Stearns & Co. Inc., Merrill Lynch
& Co. and Merrill Lynch, Pierce Fenner & Smith Incorporated, to (i) purchase a
portfolio of securities initially consisting of Government Securities (as
defined), which Government Securities may subsequently be substituted with
Marketable Securities (as defined) pursuant to the terms of this Pledge
Agreement (collectively, the "Pledged Securities) in an amount sufficient, upon
receipt of the scheduled interest and principal payments in respect of the
Pledged Securities, in the opinion of a nationally recognized firm of
independent certified public accountants selected by the Pledgor, to provide for
payment of the first two scheduled interest payments due on the Notes, and (ii)
place such Pledged Securities in the Pledge Account (as defined herein) held by
the Collateral Agent for the benefit of the Holders of the Notes;
WHEREAS, the Pledgor is the sole legal and beneficial owner of the
Pledged Securities; and
WHEREAS, to secure the payment and performance by the Pledgor of its
obligations under the Indenture and the Notes (collectively, the "Obligations"),
the Pledgor has agreed to (i) pledge to the Collateral Agent for its benefit and
the ratable benefit of the Holders of the Notes a security interest in the
Pledged Securities and the Pledge Account, and (ii) execute and deliver this
Pledge Agreement.
NOW, THEREFORE, in order to induce the Holders of Notes to purchase the
Notes, and for good and valuable consideration, the receipt of which is hereby
acknowledged, the Pledgor hereby agrees with the Collateral Agent for its
benefit and for the ratable benefit of the Holders of Notes as follows:
<PAGE> 2
1. DEFINED TERMS. All capitalized terms used but not defined herein
shall have the meanings ascribed to them in the Indenture. In addition to any
other defined terms used herein, the following terms shall constitute defined
terms for purposes of this Pledge Agreement and shall have the meanings set
forth below:
"Collateral" has the meaning given in Section 2 hereof.
"Government Securities" means securities that are direct obligations of,
or obligations fully guaranteed by, the United States of America for the payment
of which guarantee or obligations the full faith and credit of the United States
is pledged.
"Marketable Securities" means: (i) Government Securities or, for purpose
of determining whether such Government Securities may serve as substitute
Pledged Securities, Government Securities having a maturity date on or before
the date on which the payments of interest on the Notes to which such Government
Securities are pledged occur; (ii) any certificate of deposit maturing not more
than 270 days after the date of acquisition issued by, or time deposit of, an
Eligible Institution; (iii) commercial paper maturing not more than 270 days
after the date of acquisition issued by a corporation (other than an Affiliate
of the Pledgor) with a rating at the time as of which any investment therein is
made, of "A-1" (or higher) according to S&P or "P-1" (or higher) according to
Moody's; (iv) any banker's acceptances or money market deposit accounts issued
or offered by an Eligible Institution; and (v) any fund investing exclusively in
investments of the types described in clauses (i) through (iv) above; and in the
case of (ii) through (iv) above, which have a maturity date on or before the
date on which the payments of interest on the Notes to which such securities are
pledged occur.
"UCC" means, with respect to the validity and perfection and the effect
of perfection or non-perfection of the security interest, the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
2. PLEDGE AND GRANT OF SECURITY INTEREST. The Pledgor hereby pledges and
grants to the Collateral Agent for the ratable benefit of the Holders of the
Notes, a continuing first priority security interest in and to (i) all of the
Pledgor's right, title and interest in the Pledged Securities and the Pledge
Account, (ii) all certificates or other evidence of ownership representing the
Pledged Securities and the Pledge Account, and (iii) all products and proceeds
of any of the Pledged Securities, including, without limitation, all dividends,
interest, principal payments, cash, options, warrants, rights, instruments,
subscriptions and other property or proceeds from time to time received,
receivable or otherwise distributed or distributable in respect of or in
exchange for any or all of the Pledged Securities (collectively, the
"Collateral").
The Collateral Agent, as securities intermediary, will comply with
entitlement orders originated by the Trustee concerning the Pledge Account, and
the entitlements therein, without further consent of the Pledgor.
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<PAGE> 3
3. SECURITY FOR OBLIGATIONS. This Pledge Agreement and the Collateral
secure the prompt and complete payment and performance when due (whether at
stated maturity, by acceleration or otherwise) of all of the Obligations.
4. DELIVERY OF COLLATERAL; PLEDGE ACCOUNT; INTEREST; SUBSTITUTION OF
COLLATERAL.
(a) If and to the extent the Pledged Securities comprise
"certificated securities," as defined in Section 8-102 of the UCC, such
securities shall be registered in the name of the Collateral Agent or its
nominee for the benefit of the Holders of the Notes and delivered to the
Collateral Agent or its custodian in the State of New York, and possession
thereof shall be maintained by the Collateral Agent within the State of New
York.
(b) All Government Securities included in the Collateral shall be
registered in the name of the Collateral Agent or its nominee for the benefit of
the Holders of the Notes on the records of the Federal Reserve Bank of New York
and credited in the books and records of the Collateral Agent to the Pledge
Account. All other uncertificated securities, if any, included in the Collateral
shall be registered on the books of the issuer of such uncertificated securities
in the name of the Collateral Agent or its nominee for the benefit of the
Holders of the Notes, and credited in the books and records of the Collateral
Agent to the Pledge Account.
(c) Concurrently with the execution and delivery of this Pledge
Agreement, the Collateral Agent shall establish an account entitled the "HSBC
BANK USA PLEDGE ACCOUNT FOR THE BENEFIT OF HOLDERS OF 11 5/8% SENIOR NOTES DUE
2005 OF ORBITAL IMAGING CORPORATION" for the deposit of the Pledged Securities
(the "Pledge Account") at its office at 140 Broadway, New York, New York, 10005.
The Pledge Account is and shall be maintained as a "securities account" within
the meaning of Article 8 of the UCC, and the Collateral Agent will treat all
property held by it in the Pledge Account as "financial assets" under Article
8-501(a) of the UCC. Subject to the other terms and conditions of this Pledge
Agreement, all funds or other property accepted by the Collateral Agent pursuant
to this Pledge Agreement shall be held in the Pledge Account for the ratable
benefit of the Holders of the Notes. All proceeds of the Pledged Securities
shall remain on deposit in the Pledge Account until withdrawn in accordance with
this Pledge Agreement.
(d) All proceeds of, interest earned on and other distributions or
amounts paid with respect to, any Collateral shall be credited to and retained
in the Pledge Account, and the Collateral Agent shall invest and reinvest the
same as directed from time to time in writing by the Pledgor; provided, however,
that such proceeds and other amounts must be invested in Government Securities
except as otherwise provided in this Section 4(d) or in Section 4(e). Prior to
the Collateral Agent's receipt of written instructions from the Pledgor, the
Collateral Agent shall invest any such proceeds and other amounts in Federated
Investors Treasury Cash Service Fund. In all events, any monies so invested or
reinvested and any securities acquired thereby shall be (i) held as Collateral
in the Pledge Account, (ii) subject in all respects to the security interest
created hereby and shall be and remain under the control of the Collateral
Agent, and (iii) otherwise subject to the terms hereof.
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<PAGE> 4
(e) At any time while this Pledge Agreement is in force, the
Pledgor may substitute Marketable Securities for the Government Securities
originally pledged as Collateral hereunder; provided, however, that the
Marketable Securities so substituted must have a fair market value (measured at
the date of substitution) as certified to the Collateral Agent, in the opinion
of a nationally recognized firm of independent public accountants selected by
the Pledgor, at least equal to 125.0% of the amount of any of the first two
scheduled interest payments on the Notes that are unpaid (or the pro rata
portion of such interest payments equal to the percentage of such interest
payments to be secured by such Marketable Securities) as of the date such
Marketable Securities are proposed to be substituted as Collateral hereunder.
Concurrently with such substitution, the Pledgor shall deliver to the Collateral
Agent a certificate signed by an executive officer of the Pledgor reaffirming
the representations and warranties set forth in Section 6 hereof, and an Opinion
of Counsel stating that the Collateral Agent has a perfected lien in such
Marketable Securities. The Collateral Agent hereby confirms such pledge and
security interest (whether of Collateral now owned or hereafter acquired) to the
Trustee and the Holders of the Notes.
5. DISBURSEMENTS.
(a) Unless notified at least one Business Day in advance of an
Interest Payment Date of the Pledgor's election pursuant to Section 5(b), on the
date when each of the first two scheduled interest payments is due on the Notes
and without notice from the Pledgor, the Collateral Agent shall transfer from
the Pledge Account to the Paying Agent under the Indenture, funds necessary to
provide for payment in full or of any portion of the next scheduled interest
payment on the Notes and the Paying Agent shall apply the proceeds to such
interest payment.
(b) If the Pledgor elects to pay any of the first two scheduled
interest payments (or portion thereof) on the Notes from a source of funds other
than the Pledge Account (the "Pledgor's Funds"), then the Pledgor may, after
payment in full of such interest payment, deliver to the Collateral Agent
written acknowledgment from the Paying Agent of its receipt of such funds,
together with a written request for release of a portion of Collateral not in
excess of the Pledgor's Funds so paid, whereupon the Collateral Agent is hereby
authorized and directed to release to the Pledgor an amount of funds from the
Pledge Account less than or equal to the amount of Pledgor Funds so expended.
Upon receipt of such written direction from the Pledgor, together with the
certificate described in the following sentence, the Collateral Agent shall take
such action as is necessary to provide for the payment to the Pledgor of the
amount requested from the Pledge Account. Prior to any release of funds to the
Pledgor from the Pledge Account pursuant to this Section 5(b), the Pledgor shall
deliver to the Collateral Agent an Officer's Certificate stating that such use
of Pledgor's Funds has been duly authorized by all necessary corporate action
and does not contravene or constitute a default under any provision of
applicable law, regulation or the certificate of incorporation of the Pledgor,
or of any material agreement, judgment, injunction, order, decree or other
instrument binding upon the Pledgor, and does not result in the creation or
imposition of any Lien on any asset of the Pledgor.
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<PAGE> 5
(c) If at any time the amount of Collateral exceeds the amount
sufficient, in the opinion of a nationally recognized firm of independent
certified public accountants selected by the Pledgor, to provide for payment in
full of the first two scheduled interest payments due on the Notes (or, in the
event any interest payments have been made on the Notes, an amount sufficient to
provide for payment in full of all interest payments then remaining up to and
including the second scheduled interest payment), the Pledgor may direct the
Collateral Agent in writing to release to the Pledgor or as it directs, an
amount less than or equal to such excess. Upon receipt of such written direction
from the Pledgor, together with the opinion of a nationally recognized firm of
independent certified public accountants with respect to the value of the
Pledged Securities, the Collateral Agent shall take such action as is necessary
to provide for the payment to the Pledgor of the amount requested from the
Pledge Account.
(d) Upon payment in full of the first two scheduled interest
payments on the Notes, the security interest in the Collateral evidenced by this
Pledge Agreement shall terminate and be of no further force and effect.
Furthermore, upon release of any Collateral from the Pledge Account in
accordance with the terms of this Pledge Agreement, whether upon release of
Collateral to the Paying Agent, to the Pledgor or otherwise, the security
interest evidenced by this Pledge Agreement in the Collateral so released shall
terminate and be of no further force and effect.
6. REPRESENTATIONS AND WARRANTIES. The Pledgor hereby represents and
warrants that:
(a) The execution, delivery and performance by the Pledgor of this
Pledge Agreement has been duly authorized by all necessary corporate action and
does not contravene or constitute a default under any provision of applicable
law, regulation or the certificate of incorporation or the bylaws of the
Pledgor, or of any judgment, injunction, order, decree or any material agreement
or instrument binding upon the Pledgor, and does not result in the creation or
imposition of any Lien on any asset of the Pledgor, except for the security
interests granted under this Pledge Agreement.
(b) The Pledgor is the record and beneficial owner of the
Collateral, free and clear of any Lien or claims of any Person (except for the
security interest granted under this Pledge Agreement). No financing statement
covering the Pledged Securities is on file in any public office, other than
financing statements filed pursuant to this Pledge Agreement. This Pledge
Agreement has been duly executed and delivered by the Pledgor and constitutes a
valid and binding obligation of the Pledgor, enforceable against the Pledgor in
accordance with its terms, except as such enforceability may be limited by the
effect of any applicable bankruptcy, insolvency, reorganization, fraudulent
conveyances, moratorium or other similar laws affecting creditors' rights
generally or general principles of equity.
(c) Upon the delivery to the Collateral Agent of the certificates,
if any, representing the Pledged Securities, any filing of financing statements
required by the UCC and
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<PAGE> 6
notation on the records of the Collateral Agent that it holds the Pledged
Securities as pledgee, the pledge of the Collateral pursuant to this Pledge
Agreement creates a valid and perfected first priority security interest in and
to the Collateral, securing the payment and performance of the Obligations for
the ratable benefit of the Holders of the Notes, enforceable as such against all
creditors of the Pledgor and any Persons purporting to purchase any of the
Collateral from the Pledgor.
(d) No consent of any other Person and no consent, authorization,
approval, or other action by, and no notice to or filing with, any governmental
authority or regulatory body, is required either (i) for the pledge by the
Pledgor of the Collateral pursuant to this Pledge Agreement or for the
execution, delivery or performance of this Pledge Agreement by the Pledgor
(except for any filings and notations necessary to perfect the security interest
created hereby in the Collateral) or (ii) for the exercise by the Collateral
Agent of the rights provided for in this Pledge Agreement or the remedies in
respect of the Collateral pursuant to this Pledge Agreement. No litigation,
proceeding or investigation of or before any arbitrator or governmental
authority is pending or, to the knowledge of the Pledgor, threatened by or
against the Pledgor with respect to this Pledge Agreement or any of the
transactions contemplated hereby.
(e) The pledge of the Collateral pursuant to this Pledge Agreement
is not prohibited by any applicable law or government regulation, release,
interpretation or opinion of the Board of Governors of the Federal Reserve
System or other regulatory agency (including, without limitation, Regulations G,
T, U and X of the Board of Governors of the Federal Reserve System).
7. FURTHER ASSURANCES. The Pledgor agrees promptly to take such
actions and to execute and deliver or cause to be executed and delivered, or use
its best efforts to procure, such stock or bond powers, proxies, assignments,
instruments and such other or different writings as the Collateral Agent may
reasonably request, all in form and substance satisfactory to the Collateral
Agent, deliver any instruments to the Collateral Agent and take any other
actions that are necessary or, in the opinion of the Collateral Agent,
desirable, to perfect, continue the perfection of, confirm and assure the first
priority of the Collateral Agent's security interest in the Collateral, to
protect the Collateral against the rights, claims or interests of third persons,
or to otherwise effect the purposes of this Pledge Agreement. The Pledgor also
hereby authorizes the Collateral Agent to file any financing or continuation
statements with respect to the Collateral without the signature of the Pledgor
(to the extent permitted by applicable law). The Pledgor will pay all costs
incurred by the Collateral Agent in connection with any of the foregoing.
8. COVENANTS. The Pledgor covenants and agrees with the Collateral
Agent and the Holders of the Notes from and after the date of this Pledge
Agreement until the earlier of payment in full in cash of (A) each of the first
two scheduled interest payments due on the Notes under the terms of the
Indenture or (B) all Obligations due and owing under the Indenture and
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<PAGE> 7
the Notes in the event such Obligations become due and payable prior to the
payment of the first two scheduled interest payments on the Notes, as follows:
(a) The Pledgor agrees that it (i) will not sell or otherwise
dispose of, or grant any option or other interest with respect to, any of the
Collateral, (ii) will not create or permit to exist any Lien upon or with
respect to any of the Collateral, except for the Liens created pursuant to this
Pledge Agreement, and (iii) will at all times be the sole beneficial owner of
the Collateral.
(b) The Pledgor agrees that it will not (i) enter into any
agreement or understanding that purports to or may restrict or inhibit the
Collateral Agent's rights or remedies hereunder, including, without limitation,
the Collateral Agent's right to sell or otherwise dispose of the Collateral, or
(ii) with regard to the Collateral, fail to pay or discharge any tax, assessment
or levy of any nature due with respect thereto later than five days prior to the
date of any proposed sale under any judgment, writ or warrant of attachment.
9. POWER OF ATTORNEY.
(a) The Pledgor hereby appoints and constitutes the Collateral
Agent as the Pledgor's attorney-in-fact with full power of substitution to
exercise to the fullest extent permitted by law all of the following powers upon
and at any time after the occurrence and during the continuance of an Event of
Default:
(i) collection of proceeds of any Collateral;
(ii) conveyance of any item of Collateral to any purchaser
thereof as specified herein;
(iii) giving of any notices or recording of any Liens pursuant
to Section 7 hereof;
(iv) making any payments or taking any acts pursuant to
Section 10 hereof;
(v) paying or discharging taxes or Liens levied or placed upon
the Collateral, the legality or validity thereof and the amounts necessary to
discharge the same to be determined by the Collateral Agent in its sole
discretion, and any such payments made by the Collateral Agent shall become
Obligations of the Pledgor to the Collateral Agent, due and payable immediately
upon demand; and
(vi) taking any acts pursuant to Section 13 hereof.
(b) The Collateral Agent's authority under this Section 9 shall
include, without limitation, the authority to endorse and negotiate any checks
or instruments representing proceeds of Collateral in the name of the Pledgor,
execute and give receipt for any certificate of
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<PAGE> 8
ownership or any document constituting Collateral, transfer title to any item of
Collateral, to the extent permitted by applicable law, sign the Pledgor's names
on all financing statements or any other documents deemed necessary or
appropriate by the Collateral Agent to preserve, process or perfect the security
interest in the Collateral, and to file the same, and to prepare, sign the
Pledgor's name and file any notice of Lien, and to take any other actions
arising from or incident to the powers granted to the Collateral Agent in this
Pledge Agreement. This power of attorney is coupled with an interest and shall
be irrevocable by the Pledgor.
(c) The Pledgor acknowledges that the rights and responsibilities
of the Collateral Agent under this Pledge Agreement with respect to any action
taken by the Collateral Agent or the exercise or non-exercise by the Collateral
Agent of any option, right, request, judgment or other right or remedy provided
for herein or resulting or arising out of this Pledge Agreement shall, as
between the Collateral Agent and the Holders of the Notes, be governed by this
Pledge Agreement and by such other agreements with respect thereto as may exist
from time to time among them, but, as between the Collateral Agent and the
Pledgor, the Collateral Agent shall be conclusively presumed to be acting as
agent for the Holders of the Notes with full and valid authority so to act or
refrain from acting, and the Pledgor shall not be obligated or entitled to make
any inquiry respecting such authority.
(d) The Collateral Agent undertakes to perform such duties and
only such duties as are specifically set forth in this Pledge Agreement and no
implied covenants or obligations shall be read in this Pledge Agreement against
the Collateral Agent. The Collateral Agent shall not be deemed to have
knowledge of an Event of Default under the Indenture unless informed in writing
by the Pledgor or the Holder of any Note.
(e) The Collateral Agent shall not be required to exercise any
remedies hereunder unless requested in writing to do so by the Trustee or the
Holders of a majority in principal amount of the outstanding Notes and only if
furnished with indemnity reasonably satisfactory to the Collateral Agent. The
Collateral Agent may consult with counsel and shall not be liable for any action
taken in good faith in reliance upon advice of counsel except for gross
negligence or willful misconduct. The Collateral Agent makes no representation
or warranty and shall have not responsibility concerning the value or validity
of the Collateral or the validity or perfection of the pledge thereof or any
security interest therein.
(f) The Collateral Agent may at any time on 30 days notice to the
Pledgor and the Holders of the Notes resign hereunder. Upon any such resignation
the Pledgor shall promptly appoint another financial institution reasonably
satisfactory to the Holders of a majority in principal amount or the outstanding
Notes to act as Collateral Agent hereunder and such resignation shall become
effective upon the acceptance of the appointment by the successor.
(g) The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which a prudent financial institution similarly situated would accord its own
property, it being understood that neither the Collateral Agent nor the Holders
of
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<PAGE> 9
the Notes shall have responsibility for (i) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Collateral, whether or not any such Person has or is
deemed to have knowledge of such matters, or (ii) taking any necessary steps to
preserve rights against any parties with respect to any Collateral.
10. COLLATERAL AGENT MAY PERFORM. If the Pledgor fails to perform any
agreement contained herein, the Collateral Agent may, but shall not be obligated
to, itself perform or cause performance of such agreement, and the expenses
incurred by or on behalf of the Collateral Agent in connection therewith shall
be payable by the Pledgor under Section 14 hereof.
11. NO ASSUMPTION OF DUTIES; REASONABLE CARE. The rights and powers
granted to the Collateral Agent hereunder are being granted in order to preserve
and protect the security interest of the Collateral Agent and the Holders of
Notes in and to the Collateral granted hereby and shall not be interpreted to,
and shall not, impose any duties on the Collateral Agent in connection therewith
other than those imposed under applicable law.
12. INDEMNITY. The Pledgor shall indemnify, defend and hold harmless the
Collateral Agent and its directors, officers, agents and employees from and
against all claims, actions, obligations, losses, liabilities and expenses,
including costs, fees and disbursements of counsel, the costs of investigations,
and claims for damages, arising from the Collateral Agent's performance under
this Pledge Agreement, except insofar as the same may have been caused by the
bad faith, gross negligence or willful misconduct of such indemnified Person.
The obligations of the Pledgor under this Section 12 shall survive the
resignation or removal of the Collateral Agent or the termination of this Pledge
Agreement.
13. REMEDIES UPON EVENT OF DEFAULT. If an Event of Default shall have
occurred:
(a) Upon the acceleration of the Notes in accordance with the terms
of the Indenture, the Collateral Agent shall have and may exercise with
reference to the Collateral any or all of the rights and remedies of a secured
party under the UCC, and as otherwise granted herein or under any other
applicable law or under any other agreement executed by Pledgor, including,
without limitation, the right and power to sell, at public or private sale or
sales, or otherwise dispose of, or otherwise utilize the Collateral and any part
or parts thereof, in any manner authorized or permitted under the UCC after
default by a debtor, and to apply the proceeds thereof toward payment of any
costs and expenses and attorneys' fees and expenses thereby incurred by the
Collateral Agent and toward payment of the Obligations in such order or manner
as the Collateral Agent may elect. The purchaser of any or all Collateral so
sold shall thereafter hold the same absolutely, free from any claim, encumbrance
or right of any kind whatsoever created by or through the Pledgor. Unless any of
the Collateral threatens, in the reasonable judgment of the Collateral Agent, to
decline speedily in value or is or becomes of a type sold on a recognized
market, the Collateral Agent shall give the Pledgor reasonable notice of the
time and place of any public sale thereof, or of the time after which any
private sale or other intended disposition is to be made. Any sale of the
Collateral conducted in conformity with reasonable commercial practices of
banks, insurance companies, commercial finance
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<PAGE> 10
companies, or other financial institutions disposing of property similar to the
Collateral shall be deemed to be commercially reasonable. Any requirements of
reasonable notice shall be met if such notice is mailed to the Pledgor as
provided in Section 17 herein, at least fifteen (15) days before the time of the
sale or disposition. The Collateral Agent or any Holder of Notes may, in its own
name or in the name of a designee or nominee, buy any of the Collateral at any
public sale and, if permitted by applicable law, at any private sale. All
expenses (including court costs and reasonable attorneys' fees, expenses and
disbursements) of, or incident to, the enforcement of any of the provisions
hereof shall be recoverable from the proceeds of the sale or other disposition
of the Collateral.
(b) The Pledgor further agrees to use its best efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Collateral pursuant to this Section 13 valid
and binding and in compliance with any and all other applicable requirements of
law. The Pledgor further agrees that a breach of any of the covenants contained
in this Section 13 will cause irreparable injury to the Collateral Agent and the
Holders of Notes, that the Collateral Agent and the Holders of Notes have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section 13 shall be specifically
enforceable against the Pledgor, and the Pledgor hereby waives and agrees not to
assert any defenses against an action for specific performance of such
covenants, except for a defense that no Event of Default has occurred.
(c) All rights to marshalling of assets of the Pledgor, including
any such right with respect to the Collateral, are hereby waived by the Pledgor.
The Pledgor shall not contest or support any other Person in contesting the
validity or priority of the security interests created under this Pledge
Agreement.
14. FEES AND EXPENSES. The Pledgor shall, upon demand, pay to the
Collateral Agent the amount of its fees (which shall be in an amount previously
agreed by the Pledgor and the Collateral Agent) and any and all expenses
(including, without limitation, the reasonable fees, expenses and disbursements
of counsel, experts and agents retained by the Collateral Agent) that the
Collateral Agent may incur in connection with (i) the administration of this
Pledge Agreement, (ii) the custody or preservation of, or the sale of,
collection from, or other realization upon, any of the Collateral, (iii) the
exercise or enforcement of any of the rights of the Collateral Agent and the
Holders of the Notes hereunder, or (iv) the failure by the Pledgor to perform or
observe any of the provisions hereof.
15. SECURITY INTEREST ABSOLUTE. All rights of the Collateral Agent and
the Holders of the Notes, and the security interests created hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Indenture or any
other agreement or instrument relating thereto;
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<PAGE> 11
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Indenture;
(c) any exchange, surrender, release or non-perfection of any Liens
on any other Collateral for all or any of the Obligations; or
(d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Pledgor in respect of the
Obligations or of this Pledge Agreement.
16. AUTHORITY OF THE COLLATERAL AGENT. (a) The Collateral Agent shall
have and be entitled to exercise all powers hereunder that are specifically
granted to the Collateral Agent by the terms hereof, together with such powers
as are incident thereto. The Collateral Agent may perform any of its duties
hereunder or in connection with the Collateral by or through agents or employees
and shall be entitled to retain counsel and to act in reliance upon the advice
of counsel concerning all such matters. None of the Collateral Agent, any
director, officer, employee, attorney or agent of the Collateral Agent nor the
Holders of the Notes shall be liable to the Pledgor for any action taken or
omitted to be taken by it or them hereunder, except for its own bad faith, gross
negligence or willful misconduct, nor shall the Collateral Agent be responsible
for the validity, effectiveness or sufficiency hereof or of any document or
security furnished pursuant hereto. The Collateral Agent and its directors,
officers, employees, attorneys and agents shall be entitled to rely on any
communication, instrument or document believed by it or them to be genuine and
correct and to have been signed or sent by the proper Person or Persons.
17. NOTICES. Any communication, notice or demand to be given hereunder
shall be duly given hereunder if given in the form and manner, and delivered to
the address set forth in the Indenture, or in such other form and manner or to
such other address as shall be designated by any party hereto to each other
party hereto in a written notice delivered in accordance with the terms of the
Indenture.
18. NO WAIVER; CUMULATIVE RIGHTS. No failure on the part of the
Collateral Agent to exercise, and no delay in exercising, any right, remedy or
power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise by the Collateral Agent of any right, remedy or power hereunder
preclude any other or future exercise of any other right, remedy or power. Each
and every right, remedy and power hereby granted to the Collateral Agent or
allowed it by law or other agreement shall be cumulative and not exclusive the
one of any other, and may be exercised by the Collateral Agent from time to
time.
19. BENEFITS OF PLEDGE AGREEMENT. Nothing in this Pledge Agreement,
whether express or implied, shall give to any Person other than the parties
hereto and their successors hereunder, and the Holders of the Notes, any benefit
or any legal or equitable right, remedy or claim under this Pledge Agreement.
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<PAGE> 12
20. APPLICABLE LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. (a)
THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK. TO INDUCE THE COLLATERAL AGENT TO ENTER INTO THIS PLEDGE AGREEMENT,
THE PLEDGOR HEREBY IRREVOCABLY AGREES THAT, SUBJECT TO THE COLLATERAL AGENT'S
SOLE AND ABSOLUTE ELECTION, ALL ACTIONS OR PROCEEDINGS THAT IN ANY MANNER ARISE
OUT OF OR IN CONNECTION WITH OR ARE IN ANY WAY RELATED TO THIS PLEDGE AGREEMENT
SHALL BE LITIGATED IN COURTS HAVING SITUS WITHIN THE COUNTY OF NEW YORK, STATE
OF NEW YORK. THE PLEDGOR HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW YORK, STATE OF NEW YORK. THE
PLEDGOR HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL TO THE PLEDGOR'S NOTICE ADDRESS AS
SPECIFIED HEREIN. THE PLEDGOR HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR
CHANGE THE VENUE OF ANY LITIGATION BETWEEN THE PLEDGOR AND THE COLLATERAL AGENT
IN ACCORDANCE WITH THIS PARAGRAPH. EACH OF THE PLEDGOR AND THE COLLATERAL AGENT
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY
IN ANY ACTION OR PROCEEDING THAT IN ANY MANNER ARISES OUT OF OR IN CONNECTION
WITH OR IS IN ANY WAY RELATED TO THIS PLEDGE AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN.
(b) THE PROVISIONS OF THIS SECTION 20 ARE A MATERIAL INDUCEMENT FOR
THE COLLATERAL AGENT ENTERING INTO THIS PLEDGE AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY. THE PLEDGOR HEREBY ACKNOWLEDGES THAT IT HAS REVIEWED THE
PROVISIONS OF THIS SECTION 20 WITH INDEPENDENT COUNSEL.
21. CALCULATION OF INTEREST. For purposes of this Pledge Agreement, all
calculations of the first two scheduled interest payments on the Notes shall be
calculated on the basis that interest will accrue on the Notes at the rate of 11
5/8% per annum and will be payable semi-annually in arrears on September 1, 1999
and March 1, 2000. Interest on the Notes will be computed on the basis of a
360-day year comprised of twelve 30-day months.
22. EXECUTION IN COUNTERPARTS. This Pledge Agreement may be executed in
any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute one and the same instrument.
23. SETTLEMENT. Amounts, if any, held in the Pledge Account pending
settlement of purchase of the Pledged Securities shall constitute Collateral
hereunder, shall be held by the Collateral Agent for the benefit of the Holders
of the Notes and a portion thereof equal to the
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<PAGE> 13
aggregate price paid for such Pledged Securities shall be released by the
Collateral Agent (without further direction or instruction required from any
other party hereto) against delivery of such Pledged Securities, and any excess
funds remaining in the Pledge Account after giving effect to such settlement
shall be promptly forwarded pursuant to written instructions of the Company.
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<PAGE> 14
IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed as of the day and year first above written.
ORBITAL IMAGING CORPORATION
By:
-----------------------------
Name:
Title:
HSBC BANK USA,
as Collateral Agent
By:
----------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 10.13
ORBITAL IMAGING CORPORATION
$75,000,000
11 5/8% SENIOR NOTES DUE 2005
PURCHASE AGREEMENT
APRIL 19, 1999
BEAR, STEARNS & CO. INC.
MERRILL LYNCH & CO., MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
<PAGE> 2
ORBITAL IMAGING CORPORATION
$75,000,000
11 5/8% Senior Notes due 2005
PURCHASE AGREEMENT
April 19, 1999
New York, New York
BEAR, STEARNS & CO. INC.
MERRILL LYNCH & CO., MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Ladies & Gentlemen:
Orbital Imaging Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell to Bear, Stearns & Co. Inc. and Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated (together, the "Initial
Purchasers") $75,000,000 in aggregate principal amount of 11 5/8% Senior Notes
due 2005 (the "Notes"), subject to the terms and conditions set forth herein.
The Notes will be issued pursuant to an indenture (the "Indenture"), to be dated
the Closing Date (as defined), between the Company and HSBC Bank USA, as trustee
(the "Trustee"). Capitalized terms used herein and not otherwise defined shall
have the meanings assigned to such terms in the Indenture.
1. Issuance of Notes. The Company proposes, upon the terms and
subject to the conditions set forth herein, to issue and sell to the Initial
Purchasers $75,000,000 in aggregate principal amount of Notes. The Notes
issuable in exchange therefor are collectively referred to herein as the
"Exchange Notes."
Upon original issuance thereof, and until such time as the same is
no longer required under the applicable requirements of the Securities Act of
1933, as amended (the "Act"), the Notes (and all securities issued in exchange
therefor or in substitution thereof) shall bear the following legend:
<PAGE> 3
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED
HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE NOTE EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF ORBITAL IMAGING CORPORATION AND ITS
SUCCESSORS (THE "COMPANY") THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED
OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE
UNITED STATES TO A PERSON THAT IS NOT A U.S. PERSON (AS DEFINED IN
RULE 902 UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, (d) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1),
(2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
NOTES (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) OR
(e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY OR TRUSTEE, REGISTRAR OR TRANSFER AGENT FOR
THE NOTES SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN
EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THE NOTE EVIDENCED HEREBY OF THE
RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
2. Offering. The Notes will be offered and sold to the Initial
Purchasers pursuant to an exemption from the registration requirements under the
Act. The Company has prepared a preliminary offering memorandum, dated April 9,
1999 (the "Preliminary Offering Memorandum"), and a final offering memorandum,
dated April 19, 1999 (the "Offering Memorandum"), relating to the Company and
the Notes.
<PAGE> 4
The Initial Purchasers have advised the Company that the Initial
Purchasers will make offers (the "Exempt Resales") of the Notes on the terms set
forth in the Offering Memorandum, as amended or supplemented, solely to persons
whom the Initial Purchasers reasonably believe to be "qualified institutional
buyers," as defined in Rule 144A under the Act ("Eligible Purchasers"). The
Initial Purchasers will offer the Notes to such Eligible Purchasers initially at
the price set forth herein. Such price may be changed at any time without
notice.
Holders (including subsequent transferees) of the Notes will have
the registration rights set forth in the registration rights agreement relating
thereto (the "Registration Rights Agreement") in the form agreed to by the
Company and the Initial Purchasers, to be dated the Closing Date, in the form
agreed to by the Company and the Initial Purchasers, for so long as such Notes
are "Transfer Restricted Securities" (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, the Company will
agree to file with the Securities and Exchange Commission (the "Commission"),
under the circumstances set forth therein, (i) a registration statement under
the Act (the "Exchange Offer Registration Statement") relating to the Exchange
Notes to be offered in exchange for the Notes (the "Exchange Offer") and (ii) a
shelf registration statement pursuant to Rule 415 under the Act (the "Shelf
Registration Statement") relating to the resale by certain holders of the Notes,
and to use its best efforts to cause such registration statements to be declared
effective and consummate the Exchange Offer.
The Company will use a portion of the net proceeds from the sale of
the Notes to purchase a portfolio of Government Securities pursuant to the
Pledge Agreement (the "Pledged Securities") in an amount sufficient to provide
for payment in full of the first two scheduled interest payments due on the
Notes. The Pledged Securities will be pledged as security for the benefit of the
Initial Purchasers and other holders of the Notes (including subsequent
transferees) pursuant to the Pledge Agreement, in the form agreed to by the
Company and the Initial Purchasers.
This Agreement, the Notes, the Indenture, the Registration Rights
Agreements and the Pledge Agreement are hereinafter sometimes referred to
collectively as the "Operative Documents."
3. Purchase, Sale and Delivery. (a) On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to its terms and conditions, the Company agrees to issue and sell to
each Initial Purchaser, and each Initial Purchaser agrees, severally and not
jointly, to purchase from the Company, that amount of Notes set forth opposite
its name on Schedule I hereto. The aggregate principal amount of the Notes will
be $75,000,000 and the purchase price for the Notes will be $70,830,000.
(b) Delivery of the Notes shall be made, against payment of the
purchase price therefor, at the offices of Fried, Frank, Harris, Shriver &
Jacobson, 1001 Pennsylvania Avenue, N.W., Washington, D.C. or such other
location as may be mutually acceptable. Such delivery and payment shall be made
at 10:00 a.m., New York City time, on April 22, 1999 or at such
<PAGE> 5
other time as shall be agreed upon by the Initial Purchasers and the Company.
The time and date of such delivery and payment are herein called the "Closing
Date."
(c) The Notes will initially be represented by one or more
permanent Notes in global form without interest coupons (a "Restricted Global
Note") registered in the name of Cede & Co., as nominee of DTC, having an
aggregate amount corresponding to the aggregate principal amount of the Notes.
The Restricted Global Note shall be delivered by the Company to the Initial
Purchasers (or as the Initial Purchasers direct), against payment by the Initial
Purchasers of the purchase price therefor, by wire transfer of immediately
available funds to an account specified by the Company or as the Company may
direct in writing, provided that the Company shall give at least two business
days' prior written notice to the Initial Purchasers of the information required
to effect such wire transfers. The Restricted Global Note shall be made
available to the Initial Purchasers for inspection not later than 9:30 a.m., New
York City time, on the business day immediately preceding the Closing Date.
4. Agreements of the Company. The Company covenants and agrees with
the Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if requested
by the Initial Purchasers, confirm such advice in writing of: (i) the issuance
by any state securities commission of any stop order suspending the
qualification or exemption from qualification of any Notes for offering or sale
in any jurisdiction, or the initiation of any proceeding for such purpose by any
state securities commission or other regulatory authority; and (ii) the
happening of any event that, in the reasonable opinion of either counsel to the
Company or counsel to the Initial Purchasers, makes any statement of a material
fact made in the Preliminary Offering Memorandum or the Offering Memorandum
untrue or that requires the making of any additions to or changes in the
Preliminary Offering Memorandum or the Offering Memorandum in order to make the
statements therein, in the light of the circumstances under which they are made,
not misleading. The Company shall use its best efforts to prevent the issuance
of any stop order or order suspending the qualification or exemption of any
Notes under any state securities or Blue Sky laws and, if at any time any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption of any Notes under any state
securities or Blue Sky laws, the Company shall use its best efforts to obtain
the withdrawal or lifting of such order at the earliest possible time.
(b) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers to the Company, without charge, as many
copies of the Preliminary Offering Memorandum and the Offering Memorandum, and
any amendments or supplements thereto, as the Initial Purchasers may reasonably
request. The Company consents to the use of the Preliminary Offering Memorandum
and the Offering Memorandum, and any amendments and supplements thereto required
pursuant hereto, by the Initial Purchasers in connection with Exempt Resales.
(c) Not to amend or supplement the Preliminary Offering
Memorandum or the Offering Memorandum prior to the Closing Date unless the
Initial Purchasers shall previously
<PAGE> 6
have been advised thereof and shall not have reasonably objected thereto within
a reasonable time after being furnished a copy thereof. The Company shall
promptly prepare, upon the Initial Purchasers' request, any amendment or
supplement to the Preliminary Offering Memorandum or the Offering Memorandum
that may be necessary or advisable in connection with Exempt Resales.
(d) If, after the date hereof and prior to consummation of any
Exempt Resale, any event shall occur as a result of which, in the judgment of
the Company or in the reasonable opinion of either counsel to the Company or
counsel to the Initial Purchasers, it becomes necessary or advisable to amend or
supplement the Preliminary Offering Memorandum or Offering Memorandum in order
to make the statements therein, in the light of the circumstances in which they
were made, not misleading, or if it is necessary or advisable to amend or
supplement the Preliminary Offering Memorandum or Offering Memorandum to comply
with applicable law, (i) notify the Initial Purchasers and (ii) forthwith to
prepare an appropriate amendment or supplement to such Offering Memorandum so
that the statements therein as so amended or supplemented will not, in the light
of the circumstances when it is so delivered, be misleading, or so that such
Offering Memorandum will comply with applicable law.
(e) To cooperate with the Initial Purchasers and counsel to the
Initial Purchasers in connection with the qualification or registration of the
Notes under the securities or Blue Sky laws of such jurisdictions as the Initial
Purchasers may reasonably request and to continue such qualification in effect
so long as required for the Exempt Resales; provided, however, that the Company
shall not be required in connection therewith to register or qualify as a
foreign corporation where it is not now qualified or to take any action that
would subject it to service of process in suits or taxation, in each case, other
than as to matters and transactions relating to the Preliminary Offering
Memorandum, the Offering Memorandum or Exempt Resales, in any jurisdiction where
it is not now so subject.
(f) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement becomes effective or is terminated,
to pay all costs, expenses, fees and taxes incident to the performance of the
obligations of the Company hereunder, including in connection with: (i) the
preparation, printing, filing and distribution of the Preliminary Offering
Memorandum and the Offering Memorandum (including, without limitation, financial
statements) and all amendments and supplements thereto required pursuant hereto,
(ii) the issuance, transfer and delivery by the Company of the Notes to the
Initial Purchasers, (iii) the qualification or registration of the Notes for
offer and sale under the securities or blue sky laws of the several states
(including, without limitation, the cost of preparing, printing and mailing a
preliminary and final blue sky memorandum and the reasonable fees and
disbursements of counsel to the Initial Purchasers relating thereto), (iv)
furnishing such copies of the Preliminary Offering Memorandum and the Offering
Memorandum, and all amendments and supplements thereto, as may be requested for
use in connection with Exempt Resales, (v) the preparation of certificates for
the Notes (including, without limitation, printing and engraving thereof), (vi)
the fees, disbursements and expenses of the Company's counsel and accountants,
(vii) all expenses and listing fees in connection with the application for
quotation of the Notes in the National Association of Securities Dealers, Inc.
("NASD") Automated Quotation
<PAGE> 7
System - PORTAL ("PORTAL"), (viii) all fees and expenses (including fees and
expenses of counsel to the Company) of the Company in connection with the
approval of the Notes by DTC for "book-entry" transfer, (ix) the rating of the
Notes by rating agencies, (x) the reasonable fees and expenses of the Trustee
and its counsel in connection with the Indenture and the Notes, (xi) the
performance by the Company of its other obligations under this Agreement and the
other Operative Documents and (xii) "roadshow" travel and other expenses
incurred in connection with the marketing and sale of the Notes.
(g) To use the proceeds from the sale of the Notes in the manner
described in the Offering Memorandum under the caption "Use of Proceeds."
(h) Not to voluntarily claim, and to resist actively any attempts
to claim, the benefit of any usury laws against the holders of any Notes.
(i) To do and perform all things required to be done and
performed under this Agreement by it prior to or after the Closing Date and to
satisfy all conditions precedent on its part to the delivery of the Notes.
(j) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Notes in a manner that would require
the registration under the Act of the sale to the Initial Purchasers, or the
Eligible Purchasers, of the Notes or to take any other action that would result
in the Exempt Resales not being exempt from registration under the Act.
(k) For so long as any of the Notes remain outstanding and during
any period in which the Company is not subject to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), to make
available to any beneficial owner of Notes in connection with any sale thereof
and any prospective purchaser of such Notes from such beneficial owner, the
information required by Rule 144A(d)(4) under the Act.
(l) To cause the Exchange Offer to be made in the appropriate
form to permit registered Exchange Notes to be offered in exchange for the Notes
and to comply with all applicable federal and state securities laws in
connection with the Exchange Offer.
(m) To comply with all of its agreements set forth in the
Registration Rights Agreement and all agreements set forth in the representation
letters of the Company to DTC relating to the approval of the Notes by DTC for
"book-entry" transfer.
(n) To use its best efforts to obtain approval of the Notes by
DTC for "book-entry" transfer.
(o) During a period of five years following the Closing Date, to
deliver without charge to each of the Initial Purchasers, as they may reasonably
request, promptly upon their becoming available, copies of (i) all reports or
other publicly available information that the Company shall mail or otherwise
make available to its securityholders and (ii) all reports,
<PAGE> 8
financial statements and proxy or information statements filed by the Company
with the Commission or any national securities exchange and such other publicly
available information concerning the Company or its subsidiaries, if any,
including without limitation, press releases.
(p) Prior to the Closing Date, to furnish to each of the Initial
Purchasers, as soon as they have been prepared in the ordinary course by the
Company, copies of any unaudited interim financial statements for any period
subsequent to the periods covered by the financial statements appearing in the
Offering Memorandum.
(q) Not to take, directly or indirectly, any action designed to,
or that might reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Notes. Except as permitted by the Act, the Company will not
distribute any (i) preliminary offering memorandum, including, without
limitation, the Preliminary Offering Memorandum, (ii) offering memorandum,
including, without limitation, the Offering Memorandum, or (iii) other offering
material in connection with the offering and sale of the Notes.
(r) To perform all things required or necessary to be done and
performed under this Agreement prior to the Closing Date and to satisfy all
conditions precedent to the delivery of the Notes.
5. Representations and Warranties. (a) The Company represents and
warrants to the Initial Purchasers that:
(i) The Preliminary Offering Memorandum and the Offering
Memorandum do not, and any supplement or amendment to them will not,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the
representations and warranties contained in this paragraph shall not
apply to statements in or omissions from the Preliminary Offering
Memorandum and the Offering Memorandum (or any supplement or
amendment thereto) made in reliance upon and in conformity with
information relating to the Initial Purchasers furnished to the
Company in writing by or on behalf of the Initial Purchaser
expressly for use therein. No stop order preventing the use of the
Preliminary Offering Memorandum or the Offering Memorandum, or any
amendment or supplement thereto, or any order asserting that any of
the transactions contemplated by this Agreement are subject to the
registration requirements of the Act, has been issued.
(ii) When the Notes are issued and delivered pursuant to
this Agreement, no Note will be of the same class (within the
meaning of Rule 144A under the Act) as securities of the Company
that are listed on a national securities exchange registered under
Section 6 of the Exchange Act or that are quoted in a United States
automated inter-dealer quotation system.
<PAGE> 9
(iii) The Company (A) has been duly incorporated, is
validly existing as a corporation in good standing under the laws of
its respective jurisdiction of incorporation, (B) has all requisite
corporate power and authority to carry on its business as it is
currently being conducted and as described in the Offering
Memorandum and to own, lease and operate its properties and (C) is
duly qualified and in good standing as a foreign corporation
authorized to do business in each jurisdiction in which the nature
of its business or its ownership or leasing of property requires
such qualification except, with respect to this clause (C), where
the failure of the Company to be so qualified or in good standing
does not and could not reasonably be expected to individually or in
the aggregate, result in a material adverse effect on the assets,
liabilities, business, results of operations, condition (financial
or otherwise), cash flows, affairs or prospects of the Company or on
the Company's ability to issue the Notes (a "Material Adverse
Effect").
(iv) Except as set forth on Schedule 5(iv), the Company
has no direct or indirect subsidiaries as of the Closing Date.
(v) All of the outstanding shares of capital stock of
the Company have been duly authorized and validly issued and are
fully paid and nonassessable and were not issued in violation of any
preemptive or similar rights. The Company has an authorized and
outstanding consolidated capitalization as set forth in the Offering
Memorandum under the caption "Capitalization."
(vi) Except as disclosed in the Offering Memorandum,
there are not currently, and will not be as a result of the
Offering, any outstanding subscriptions, rights, warrants, calls,
commitments of sale or options to acquire, or instruments
convertible into or exchangeable for, any capital stock or other
equity interest of the Company (collectively, "Equity Rights"). The
issuance of the Notes will not result in an adjustment to the
exercise price or number of shares issuable upon the exercise of
such Equity Rights.
(vii) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under each
of this Agreement and the other Operative Documents and to
consummate the transactions contemplated hereby and thereby,
including, without limitation, the corporate power and authority to
issue, sell and deliver the Notes as provided herein and therein.
(viii) This Agreement has been duly and validly
authorized, executed and delivered by Company and is the legal,
valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject
to general principles of equity.
(ix) The Indenture has been duly and validly authorized
by the Company and, when duly executed and delivered by the Company,
will be the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
<PAGE> 10
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity. On the
Closing Date, the Indenture will conform, in all material respects,
to the requirements of the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), and the rules and regulations of the
Commission applicable to an indenture which is qualified thereunder.
The Offering Memorandum contains a summary of the terms of the
Indenture, which is accurate in all material respects.
(x) The Notes have been duly and validly authorized for
issuance and sale to the Initial Purchasers by the Company pursuant
to this Agreement and, when issued and authenticated in accordance
with the terms of the Indenture and delivered against payment
therefor in accordance with the terms hereof and thereof, will be
the legal, valid and binding obligations of the Company. The
description of the Notes in the Offering Memorandum is accurate in
all material respects.
(xi) The Exchange Notes have been duly and validly
authorized for issuance by the Company and, when issued and
authenticated in accordance with the terms of the Exchange Offer and
the Indenture, will be the legal, valid and binding obligations of
the Company, enforceable against the Company in accordance with
their terms and entitled to the benefits of the Indenture, subject
to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity. The
description of the Exchange Notes in the Offering Memorandum is
accurate in all material respects.
(xii) Each of the Registration Rights Agreement and the
Pledge Agreement has been duly and validly authorized by the Company
and, when duly executed and delivered by the Company, will be the
legal, valid and binding obligation of the Company. The descriptions
of the Registration Rights Agreement and the Pledge Agreement in the
Offering Memorandum are accurate in all material respects.
(xiii) The Company is not and, after giving effect to
the Offering, will not be (A) in violation of its charter or bylaws,
(B) in default in the performance of any bond, debenture, note,
indenture, mortgage, deed of trust or other agreement or instrument
to which it is a party or by which it is bound or to which any of
its properties is subject, which singly or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, or (C) in
violation of any local, state, federal or foreign law, statute,
ordinance, rule, regulation, requirement, judgment or court decree
(including, without limitation, the Communications Act of 1934, as
amended by the Telecommunications Act of 1996 (the
"Telecommunications Act"), and the rules and regulations of the
Federal Communications Commission (the "FCC"), the Department of
Commerce (the "DoC"), the National Telecommunications and
Information Administration (the "NTIA") and the International
Telecommunications Union ("ITU") and environmental laws, statutes,
ordinances, rules, regulations, judgments or court decrees)
applicable to the Company or any of its assets or properties
(whether owned or leased), which singly or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. To the
best
<PAGE> 11
knowledge of the Company, there exists no condition that, with
notice, the passage of time or otherwise, would constitute a default
under any such document or instrument.
(xiv) None of (A) the execution, delivery or performance
by the Company of this Agreement and the other Operative Documents,
(B) the issuance and sale of the Notes and (C) consummation by the
Company of the transactions contemplated by the Operative Documents
or the Offering Memorandum described under the captions "Use of
Proceeds" and "Related Party Transactions," violates, conflicts with
or constitutes a breach of any of the terms or provisions of, or a
default under (or an event that with notice or the lapse of time, or
both, would constitute a default), or require consent under, or
result in the imposition of a lien or encumbrance on any properties
of the Company, or an acceleration of any indebtedness of the
Company pursuant to, (i) the charter or bylaws of the Company, (ii)
any bond, debenture, note, indenture, mortgage, deed of trust or
other agreement or instrument to which the Company is a party or by
which it or its property is or may be bound, (iii) any local, state,
federal or foreign law, statute, ordinance, rule, regulation or
requirement (including, without limitation, the Telecommunications
Act and the rules and regulations of the FCC, the DoC, the NTIA and
the ITU, environmental laws, statutes, ordinances, rules or
regulations) applicable to the Company, or any of its assets or
properties or (iv) any judgment, order or decree of any court or
governmental agency or authority having jurisdiction over the
Company or any of its assets or properties. Other than as described
in the Offering Memorandum, no consent, approval, authorization or
order of, or filing, registration, qualification, license or permit
of or with, (A) any court or governmental agency, body or
administrative agency (including, without limitation, the FCC, the
DoC, the NTIA and the ITU) or (B) any other person is required for
(1) the execution, delivery and performance by the Company of this
Agreement and the other Operative Documents or (2) the issuance and
sale of the Notes and the transactions contemplated hereby and
thereby, except such as have been obtained and made on or prior to
the Closing Date (or, in the case of the Registration Rights
Agreement will be obtained and made) under the Act, the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act") and
state securities or Blue Sky laws and regulations or such as may be
required by the NASD.
(xv) There is (A) no action, suit or proceeding before
or by any court, arbitrator or governmental agency, body or
official, domestic or foreign, now pending or, to the knowledge of
the Company, threatened or contemplated to which the Company is or
may be a party or to which the business, assets or property of the
Company is subject, (B) no local, state, federal or foreign law,
statute, ordinance, rule, regulation, requirement, judgment or court
decree (including, without limitation, the Telecommunications Act
and the rules and regulations of the FCC, the DoC, the NTIA and the
ITU) or order that has been enacted, adopted or issued by any
governmental agency or that has been proposed by any governmental
body or (C) no injunction, restraining order or order of any nature
by a federal or state court or foreign court of competent
jurisdiction to which the Company is or may be subject or to which
the business, assets, or property of the Company is or may be
subject, that, in the case of clauses (A), (B) and (C) above, (1) is
required to be disclosed in the Preliminary Offering Memorandum or
the Offering
<PAGE> 12
Memorandum and that is not so disclosed, or (2) could reasonably be
expected to result in a Material Adverse Effect.
(xvi) No action has been taken and no local, state,
federal or foreign law, statute, ordinance, rule, regulation, order,
requirement, judgment or court decree has been enacted, adopted or
issued by any governmental agency that prevents the issuance of the
Notes or prevents or suspends the use of the Offering Memorandum; no
injunction, restraining order or order of any nature by a federal,
state or foreign court of competent jurisdiction has been issued
that prevents the issuance of the Notes or prevents or suspends the
sale of the Notes in any jurisdiction referred to in Section 4(e)
hereof; and the Company has complied with every request of any
securities authority or agency of any jurisdiction for additional
information.
(xvii) There is (i) no unfair labor practice complaint
pending or, to the knowledge of the Company, threatened against the
Company, before the National Labor Relations Board, or any state or
local labor relations board or any foreign labor relations board,
and no significant grievance or significant arbitration proceeding
arising out of or under any collective bargaining agreement is so
pending or, to the knowledge of the Company, threatened against the
Company, (ii) no significant strike, labor dispute, slowdown or
stoppage pending or, to the knowledge of the Company, threatened
against the Company, and (iii) no union representation question
existing with respect to the employees of the Company. To the
knowledge of the Company, no collective bargaining organizing
activities are taking place with respect to the Company. The Company
has not violated (A) any federal, state or local law or foreign law
relating to discrimination in hiring, promotion or pay of employees,
(B) any applicable wage or hour laws, or (C) any provision of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or the rules and regulations thereunder.
(xviii) The Company has not violated any foreign,
federal, state or local law or regulation relating to the protection
of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental
Laws"), lacks any permit, license or other approval required of it
under applicable Environmental Laws, or is violating any term or
condition of such permit, license or approval which could reasonably
be expected to have a Material Adverse Effect. There is no alleged
liability or potential liability (including, without limitation,
alleged or potential liability or investigatory costs, cleanup
costs, governmental response costs, natural resource damages,
property damages, personal injuries or penalties) of the Company
arising out of, based on or resulting from (a) the presence or
release into the environment of any Hazardous Material (as defined)
at any location, whether or not owned by the Company, or (b) any
violation or alleged violation of any Environmental Law, which
alleged or potential liability is required to be disclosed in the
Offering Memorandum, other than as disclosed therein, or could
reasonably be expected to have a Material Adverse Effect. The term
"Hazardous Material" means (i) any "hazardous substance" as defined
by the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, (ii) any "hazardous waste" as
defined by the Resource Conservation
<PAGE> 13
and Recovery Act, as amended, (iii) any petroleum or petroleum
product, (iv) any polychlorinated biphenyl, and (v) any pollutant
or contaminant or hazardous, dangerous or toxic chemical,
material, waste or substance regulated under or within the
meaning of any other law relating to protection of human health
or the environment or imposing liability or standards of conduct
concerning any such chemical material, waste or substance.
(xix) The Company has (i) good and marketable title to
all of the properties and assets described in the Offering
Memorandum as owned by it, free and clear of all liens, charges,
encumbrances and restrictions (except for Permitted Liens and taxes
not yet payable), (ii) peaceful and undisturbed possession under all
leases to which it is a party as lessee, (iii) except as disclosed
in the Offering Memorandum, all licenses, certificates, permits,
authorizations, approvals, franchises and other rights from, and has
made all declarations and filings with, all federal, foreign, state
and local authorities (including, without limitation, the FCC, the
DoC, the NTIA and the ITU), all self-regulatory authorities and all
courts and other tribunals (each an "Authorization") necessary to
engage in the business conducted by it in the manner described in
the Offering Memorandum (including, but not limited to an FCC
license and a DoC License, or amendments thereto, with respect to
the high-resolution satellites described in the Offering
Memorandum), and (iv) no reason to believe that any governmental
body or agency is considering limiting, suspending or revoking any
such Authorization. All such Authorizations are valid and in full
force and effect and the Company is in compliance with the terms and
conditions of all such Authorizations and with the rules and
regulations of the regulatory authorities having jurisdiction with
respect thereto, except where the failure to so comply would not
have a Material Adverse Effect. All leases to which the Company is a
party are valid and binding and no default by the Company has
occurred and is continuing thereunder and no defaults by the
landlord are existing under any such lease, except such defaults
that could not reasonably be expected to have a Material Adverse
Effect.
(xx) The Company owns, possesses or has the right to
employ all patents, patent rights, intellectual property licenses,
including the OrbView-2 License and the RadarSat-2 License (each as
defined in the Offering Memorandum), inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, software,
systems or procedures), trademarks, service marks and trade names,
inventions, computer programs, technical data and information
(collectively, the "Intellectual Property") employed by the Company
in connection with its business, free and clear of and without
violating any right, claimed right, charge, encumbrance, pledge,
security interest, restriction or lien of any kind of any other
person, except where the failure to own, possess or have the right
to employ such Intellectual Property would not have a Material
Adverse Effect. The Company has not infringed and is not infringing
with asserted rights of others with respect to any such Intellectual
Property, except infringements that would not have a Material
Adverse Effect, and the Company has not received notice of the
infringement of asserted rights of others with respect to any such
Intellectual Property.
<PAGE> 14
(xxi) None of the Company or any of its officers,
directors, partners, employees, agents or affiliates or any other
person acting on behalf of the Company, has, directly or indirectly,
given or agreed to give any money, gift or similar benefit (other
than legal price concessions to customers in the ordinary course of
business) to any customer, supplier, employee or agent of a customer
or supplier, official or employee of any governmental agency
(domestic or foreign), instrumentality of any government (domestic
or foreign) or any political party or candidate for office (domestic
or foreign) or other person who was, is or may be in a position to
help or hinder the business of the Company (or assist the Company in
connection with any actual or proposed transaction) which (i) might
subject the Company, or any other individual or entity to any damage
or penalty in any civil, criminal or governmental litigation or
proceeding (domestic or foreign), (ii) if not given in the past,
could reasonably be expected to have had a Material Adverse Effect
on the assets, business or operations of the Company or (iii) if not
continued in the future, could reasonably be expected to have a
Material Adverse Effect.
(xxii) All material tax returns required to be filed by
the Company in all jurisdictions have been so filed. All taxes,
including withholding taxes, penalties and interest, assessments,
fees and other charges due or claimed to be due from such entities
or that are due and payable have been paid, except to the extent
such taxes are (A) currently payable without penalty or interest or
(B) being contested in good faith and for which adequate reserves
have been provided. To the knowledge of the Company, there are no
material proposed additional tax assessments against the Company or
the assets or property of the Company.
(xxiii) The Company is not, and after giving effect to
the Offering will not be, an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "Investment Company
Act").
(xxiv) There are no holders of securities of the Company
who, by reason of the execution by the Company of this Agreement or
any other Operative Document to which it is a party or the
consummation by the Company of the transactions contemplated hereby
and thereby, have the right to request or demand that the Company
register any of its securities under the Act or analogous foreign
laws and regulations.
(xxv) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that:
(i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect thereto.
<PAGE> 15
(xxvi) The Company maintains insurance covering its
properties, operations, personnel and businesses, and will maintain
insurance as required by the Indenture. Such insurance insures
against such losses and risks as are consistent with industry
practice to protect the Company and its business. The Company has
not received notice from any insurer or agent of such insurer that
substantial capital improvements or other expenditures will have to
be made in order to continue such insurance. All such insurance is
outstanding and duly in force on the date hereof.
(xxvii) The Company has not (i) taken, directly or
indirectly, any action designed to, or that might reasonably be
expected to, cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or
resale of the Notes or (ii) since the date of the Preliminary
Offering Memorandum (A) sold, bid for, purchased or paid any person
any compensation for soliciting purchases of the Notes or (B) paid
or agreed to pay to any person any compensation for soliciting
another to purchase any other securities of the Company.
(xxviii) No registration under the Act of the Notes is
required for the sale of the Notes to the Initial Purchasers as
contemplated hereby or for the Exempt Resales assuming (i) that the
purchasers who buy the Notes in the Exempt Resales are either
Eligible Purchasers and (ii) the accuracy of the Initial Purchasers'
representations regarding the absence of general solicitation in
connection with the sale of Notes to the Initial Purchasers and the
Exempt Resales contained herein. No form of general solicitation or
general advertising was used by the Company or any of its
representatives (other than the Initial Purchasers, as to which the
Company makes no representation or warranty) in connection with the
offer and sale of any of the Notes in connection with Exempt
Resales, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine, or similar
medium or broadcast over television or radio, or any seminar or
meeting whose attendees have been invited by any general
solicitation or general advertising. No securities of the same class
as the Notes have been issued and sold by the Company within the
six-month period immediately prior to the date hereof.
(xxix) Except as set forth on Schedule 5(xxix), there
are no employee pension or benefit plans with respect to which the
Company or any corporation considered an affiliate of the Company
within the meaning of Section 407(d)(7) of ERISA (an "ERISA
Affiliate") is a party in interest or disqualified person. The
execution and delivery of this Agreement, the other Operative
Documents and the sale of the Notes to be purchased by the Eligible
Purchasers will not involve any prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Internal
Revenue Code of 1986. The representation made by the Company in the
preceding sentence is made in reliance upon and subject to the
accuracy of, and compliance with, the representations and covenants
made or deemed made by the Eligible Purchasers, as set forth in the
Offering Memorandum under the caption "Notice to Investors."
<PAGE> 16
(xxx) Each of the Preliminary Offering Memorandum and
the Offering Memorandum, as of its date, and each amendment or
supplement thereto, as of its date, contains the information
specified in, and meets the requirements of, Rule 144A(d)(4) under
the Act.
(xxxi) Subsequent to the respective dates as of which
information is given in the Offering Memorandum and up to the
Closing Date, and except as set forth in the Offering Memorandum,
(A) the Company has not entered into any amendment to or agreed to
any modification of the Orbital Agreements, the Stock Purchase
Agreement or the Stockholders' Agreement, (B) the Company has not
incurred any liabilities or obligations, direct or contingent, which
are or will be material, individually or in the aggregate, to the
Company, nor entered into any transaction not in the ordinary course
of business, (C) there has not been, singly or in the aggregate, any
change or development which could reasonably be expected to result
in a Material Adverse Effect, and (D) there has been no dividend or
distribution of any kind declared, paid or made by the Company on
any class of capital stock.
(xxxii) None of the execution, delivery and performance
of this Agreement, the issuance and sale of the Notes, the
application of the proceeds from the issuance and sale of the Notes
and the consummation of the transactions contemplated thereby as set
forth in the Offering Memorandum, will violate Regulations G, T, U
or X promulgated by the Board of Governors of the Federal Reserve
System or analogous foreign laws and regulations.
(xxxiii) The accountants who have certified or will
certify the financial statements included or to be included as part
of the Offering Memorandum are independent accountants as required
by the Act. The historical financial statements of the Company,
together with related notes thereto, comply as to form with the
requirements applicable to registration statements on Form S-4 under
the Act, and the historical financial statements of the Company
present fairly the financial position and results of operations of
the Company at the dates and for the periods indicated. Such
financial statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis
throughout the periods presented except as noted therein. The other
financial and statistical information and data included in the
Offering Memorandum derived from the historical financial statements
are accurately presented and prepared on a basis consistent with the
historical financial statements included in the Offering Memorandum
and the books and records of the Company.
(xxxiv) The Company does not intend to, nor does it
believe that it will, incur debts beyond its ability to pay such
debts as they mature. Upon the issuance of the Notes, the present
fair saleable value of the assets of the Company will exceed the
amount that will be required to be paid on or in respect of the
existing debts and other liabilities (including contingent
liabilities) of the Company as they become absolute and matured.
Upon the issuance of the Notes, the assets of the Company will not
constitute unreasonably small capital to carry out its businesses as
now conducted, including the
<PAGE> 17
capital needs of the Company, taking into account the projected
capital requirements and capital availability.
(xxxv) Except pursuant to this Agreement, there are no
contracts, agreements or understandings between the Company and any
other person that would give rise to a valid claim against the
Company or either of the Initial Purchasers for a brokerage
commission, finder's fee or like payment in connection with the
issuance, purchase and sale of the Notes.
(xxxvi) The Company has complied with all provisions of
Section 517.075, Florida Statutes, relating to doing business with
the Government of Cuba or with any affiliate located in Cuba.
(xxxvii) There exist no conditions that would constitute
a default (or an event which with notice or the lapse of time, or
both, would constitute a default) under any of the Operative
Documents or any of the documents relating to the Series A Preferred
Stock.
(xxxviii) Except as disclosed in the Offering
Memorandum, there are no business relationships or related party
transactions required to be disclosed therein pursuant to Item 404
of Regulation S-K of the Commission (assuming for purposes of this
subparagraph that Regulation S-K is applicable to the Offering
Memorandum).
(xxxix) It is not necessary in connection with the
offer, sale and delivery of the Notes to the Initial Purchasers and
to each subsequent purchaser in the manner contemplated by this
Agreement and the Offering Memorandum to qualify the Indenture under
the Trust Indenture Act of 1939, as amended.
(xl) Each certificate signed by any officer of the
Company and delivered to the Initial Purchasers or counsel for the
Initial Purchasers pursuant to this Agreement shall be deemed to be
a representation and warranty by the Company to the Initial
Purchasers as to the matters covered thereby.
(xli) The data relating to market size included in the
Offering Memorandum is based on or derived from sources that the
Company believes to be reliable and accurate in all material
respects.
The Company acknowledges that each of the Initial Purchasers and,
for purposes of the opinions to be delivered to the Initial Purchasers pursuant
to Section 8 hereof, counsel to the Company and counsel to the Initial
Purchasers, will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
(b) Each of the Initial Purchasers, severally and not
jointly, represents, warrants and covenants to the Company and agrees that:
<PAGE> 18
(i) Nature of Initial Purchasers; Offers and Sales only
to Qualified Institutional Buyers. Each Initial Purchaser is (i) a "qualified
institutional buyer" within the meaning of Rule 144A under the 1933 Act and (ii)
an "accredited investor" within the meaning of Rule 501(a) under the 1933 Act.
Offers and sales of the Notes shall be made only to Eligible Purchasers. Each
Initial Purchaser agrees that it will not offer, sell or deliver any of the
Notes in any jurisdiction outside the United States except under circumstances
that will result in compliance with the applicable laws thereof, and that it
will take at its own expense whatever action is required to permit its purchase
and resale of the Notes in such jurisdictions.
(ii) No General Solicitation. No general solicitation
or general advertising (within the meaning of Rule 502(c) under the 1933 Act)
will be used in the United States in connection with the offering or sale of
the Notes.
(iii) Purchases by Non-Bank Fiduciaries. In the case of
a non-bank Eligible Purchaser of a Note acting as a fiduciary for one or more
third parties, each third party shall, in the judgment of the applicable Initial
Purchaser, be an Eligible Purchaser.
(iv) Subsequent Purchaser Notification. Each Initial
Purchaser will take reasonable steps to inform, and cause each of its U.S.
affiliates to take reasonable steps to inform, persons acquiring Notes from such
Initial Purchaser or affiliate, as the case may be, in the United States that
the Notes (A) have not been and will not be registered under the Securities Act,
(B) are being sold to them without registration under the Securities Act in
reliance on Rule 144A or in accordance with another exemption from registration
under the Securities Act, as the case may be, and (C) may not be offered, sold
or otherwise transferred except (1) to the Company, (2) outside the United
States in accordance with Regulation S or (3) inside the United States in
accordance with (x) Rule 144A to a person whom the Seller reasonably believes is
a QIB that is purchasing such Notes for its own account or for the account of a
QIB to whom notice is given that the offer, sale or transfer is being made in
reliance on Rule 144A or (y) pursuant to another available exemption from
registration under the 1933 Act.
(v) Minimum Principal Amount. No sale of the Notes to
any one Eligible Purchaser will be for less than U.S. $100,000 principal amount
and no Note will be issued in a smaller principal amount. If the Eligible
Purchaser is a non-bank fiduciary acting on behalf of others, each of the
persons for whom it is acting must purchase at least U.S. $100,000 principal
amount of the Notes.
(vi) Restrictions on Transfer. The transfer
restrictions and the other provisions set forth in the Offering Memorandum
under the heading "Notice to Investors," including the legend required thereby,
shall apply to the Notes except as otherwise agreed by the Company and the
Initial Purchasers.
(vii) Delivery of Offering Memorandum. Each Initial
Purchaser will deliver to each purchaser of the Notes from such Initial
Purchaser, in connection with its original distribution of the Notes, a copy of
the Offering Memorandum, as amended and supplemented at the date of such
delivery.
<PAGE> 19
The Initial Purchasers understand that the Company and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant to Section 8
hereof, counsel for the Company and counsel for the Initial Purchasers, will
rely upon the accuracy and truth of the foregoing representations and hereby
consent to such reliance.
6. Indemnification.
(a) The Company agrees to indemnify and hold harmless
(i) each of the Initial Purchasers, (ii) each person, if any, who controls
either of the Initial Purchasers within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act and (iii) the respective officers, directors,
partners, employees, representatives and agents of each of the Initial
Purchasers or any controlling person to the fullest extent lawful, from and
against any and all losses, liabilities, claims, damages and expenses whatsoever
(including but not limited to reasonable attorneys' fees and any and all
reasonable expenses whatsoever incurred in investigating, preparing or defending
against any investigation or litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Offering Memorandum or the Offering
Memorandum, or in any supplement thereto or amendment thereof, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided, however, that the Company will not be liable in any such case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with information relating to either of the Initial Purchasers
furnished to the Company in writing by or on behalf of such Initial Purchaser
expressly for use therein; provided, further, that such indemnity with respect
to the Preliminary Offering Memorandum shall not inure to the benefit of either
Initial Purchaser (or any persons controlling such Initial Purchaser) from whom
the person asserting such loss, claim, damage or liability purchased the Notes
which are the subject thereof if such person did not receive a copy of the
Offering Memorandum (or the Offering Memorandum as amended or supplemented) at
or prior to the confirmation of the sale of such Notes to such person (and the
Offering Memorandum or any such amended or supplemented Offering Memorandum, as
applicable, shall have been delivered by the Company to such Initial Purchaser a
reasonable amount of time prior to the mailing or delivery, as applicable, of
such confirmation) and any such untrue statement or omission or alleged untrue
statement or omission of a material fact contained in such Preliminary Offering
Memorandum was corrected in the Offering Memorandum (or the Offering Memorandum
as amended or supplemented). This indemnity agreement will be in addition to any
liability which the Company may otherwise have, including under this Agreement.
<PAGE> 20
(b) Each of the Initial Purchasers, severally and not
jointly, agrees to indemnify and hold harmless (i) the Company, (ii) each
person, if any, who controls the Company within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act, and (iii) the officers, directors,
partners, employees, representatives and agents of the Company against any
losses, liabilities, claims, damages and expenses whatsoever (including but not
limited to reasonable attorneys' fees and any and all expenses whatsoever
incurred in investigating, preparing or defending against any investigation or
litigation, commenced or threatened, or any claim whatsoever and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, in each case to the extent, but only
to the extent, that any such loss, liability, claim, damage or expense arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with information relating to such Initial Purchaser furnished to the Company in
writing by or on behalf of such Initial Purchaser expressly for use therein;
provided, however, that in no case shall either of the Initial Purchasers be
liable or responsible for any amount in excess of the discounts and commissions
received by such Initial Purchaser, as set forth on the cover page of the
Offering Memorandum.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under such subsection, notify each party
against whom indemnification is to be sought in writing of the commencement
thereof (but the failure so to notify an indemnifying party shall not relieve it
from any liability which it may have under this Section 6 except to the extent
that it has been prejudiced in any material respect by such failure or from any
liability which it may otherwise have). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by the indemnifying parties
in connection with the defense of such action, (ii) the indemnifying parties
shall not have employed counsel to take charge of the defense of such action
within a reasonable time after notice of commencement of the action, or (iii)
such indemnified party or parties shall have reasonably concluded that there may
be defenses available to it or them which are different from or additional to
those available to one or all of the indemnifying parties (in which case the
indemnifying party or parties shall not have the right to direct the defense of
such action on
<PAGE> 21
behalf of the indemnified party or parties), in any of which events such fees
and expenses of counsel shall be borne by the indemnifying parties; provided,
however, that the indemnifying party under subsection (a) or (b) above shall
only be liable for the legal expenses of one counsel (in addition to any local
counsel) for all indemnified parties in each jurisdiction in which any claim or
action is brought. Anything in this subsection to the contrary notwithstanding,
an indemnifying party shall not be liable for any settlement of any claim or
action effected without its prior written consent, provided that such consent
was not unreasonably withheld.
7. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 6 is for any
reason held to be unavailable to or is insufficient to hold harmless a party
indemnified thereunder, each indemnifying party shall contribute to the
aggregate losses, claims, damages, liabilities and expenses of the nature
contemplated by such indemnification provision (including any investigation,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims asserted,
but after deducting in the case of losses, claims, damages, liabilities and
expenses suffered by the Company, any contribution received by the Company from
persons, other than the Initial Purchasers, who may also be liable for
contribution, including persons who control the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act) to which the Company
and such Initial Purchaser may be subject, in such proportion as is appropriate
to reflect the relative benefits received by the Company, on one hand, and such
Initial Purchaser, on the other hand, from the offering of the Notes or, if such
allocation is not permitted by applicable law or indemnification is not
available as a result of the indemnifying party not having received notice as
provided in Section 6, in such proportion as is appropriate to reflect not only
the relative benefits referred to above but also the relative fault of the
Company, on one hand, and such Initial Purchaser, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company, on one
hand, and each Initial Purchaser, on the other hand, shall be deemed to be in
the same proportion as (i) the total proceeds from the offering of Notes (net of
discounts but before deducting expenses) received by the Company and (ii) the
discounts and commissions received by such Initial Purchaser, respectively, as
set forth on the cover page of the Offering Memorandum. The relative fault of
the Company, on one hand, and of each Initial Purchaser, on the other hand,
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or such
Initial Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to above. Notwithstanding the provisions
of this Section 7, (i) in no case shall either of the Initial Purchasers be
required to contribute any amount in excess of the amount by which the discounts
and commissions applicable to the Notes purchased by such Initial Purchaser
pursuant to this Agreement exceeds the amount of any damages which such Initial
Purchaser has otherwise been required to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission and (ii) no person guilty of
fraudulent
<PAGE> 22
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 7, (A) each person, if any, who
controls either of the Initial Purchasers within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act and (B) the respective officers,
directors, partners, employees, representatives and agents of each of the
Initial Purchasers or any controlling person shall have the same rights to
contribution as such Initial Purchaser, and (A) each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act and (B) the respective officers, directors, partners,
employees, representatives and agents of the Company shall have the same rights
to contribution as the Company, subject in each case to clauses (i) and (ii) of
this Section 7. Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against another party
or parties under this Section 7, notify such party or parties from whom
contribution may be sought, but the failure to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 7 or otherwise. No party
shall be liable for contribution with respect to any action or claim settled
without its prior written consent, provided that such written consent was not
unreasonably withheld.
8. Conditions of Initial Purchasers' Obligations. The obligations of
the Initial Purchasers to purchase and pay for the Notes, as provided herein,
shall be subject to the satisfaction of the following conditions:
(a) All of the representations and warranties of the Company
contained in this Agreement shall be true and correct on the date hereof and on
the Closing Date with the same force and effect as if made on and as of the date
hereof and the Closing Date, respectively. The Company shall have performed or
complied with all of the agreements herein contained and required to be
performed or complied with by it at or prior to the Closing Date.
(b) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers as promptly as practicable on the day
following the date of this Agreement or at such later date and time as to which
the Initial Purchasers may agree, and no stop order suspending the qualification
or exemption from qualification of the Notes in any jurisdiction referred to in
Section 4(e) shall have been issued and no proceeding for that purpose shall
have been commenced or shall be pending or threatened.
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date, prevent the issuance of
the Notes; no action, suit or proceeding shall have been commenced and be
pending or threatened against or affecting the Company before any court or
arbitrator or any governmental body, agency or official that, if adversely
determined, would result in a Material Adverse Effect; and no stop order shall
have been issued preventing the use of the Offering Memorandum, or any amendment
or supplement thereto, or which could reasonably be expected have a Material
Adverse Effect on the Company.
<PAGE> 23
(d) Since the dates as of which information is given in the
Offering Memorandum, (i) there shall not have been any material adverse change,
or any development that is reasonably likely to result in a material adverse
change, in the capital stock or the long-term debt, or increase in the
short-term debt, of the Company from that set forth in the Offering Memorandum,
(ii) no dividend or distribution of any kind shall have been declared, paid or
made by the Company on any class of its capital stock, and (iii) the Company
shall not have incurred any liabilities or obligations, direct or contingent,
that are material, individually or in the aggregate, to the Company, and that
are required to be disclosed on a balance sheet or notes thereto in accordance
with generally accepted accounting principles and are not disclosed on the
latest balance sheet or notes thereto included in the Offering Memorandum. Since
the date hereof and since the dates as of which information is given in the
Offering Memorandum, there shall not have occurred any Material Adverse Effect.
(e) The Initial Purchasers shall have received certificates,
dated the Closing Date, signed on behalf of the Company, in form and substance
satisfactory to the Initial Purchasers, confirming, as of the Closing Date, the
matters set forth in paragraphs (a), (b), (c) and (d) of this Section 8 and
that, as of the Closing Date, the obligations of the Company to be performed
hereunder on or prior thereto have been duly performed.
(f) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, (i) of Latham & Watkins, counsel for
the Company and (ii) of Alan Schwartz Ocio, Esquire, Vice President and General
Counsel for the Company; each in form and substance satisfactory to the Initial
Purchasers and counsel for the Initial Purchasers, covering such matters as are
customarily covered in such opinions.
(g) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, of Halprin, Temple, Goodman and Maher,
in form and substance satisfactory to the Initial Purchasers and counsel for the
Initial Purchasers, covering such matters as are customarily covered in such
opinions.
(h) At the time this Agreement is executed and at the Closing
Date, the Initial Purchasers shall have received from KPMG, independent public
accountants, dated as of the date of this Agreement and as of the Closing Date,
customary comfort letters addressed to the Initial Purchasers and in form and
substance satisfactory to the Initial Purchasers and counsel for the Initial
Purchasers with respect to the financial statements and certain financial
information of the Company contained in the Offering Memorandum and/or
incorporated therein by reference.
(i) The Initial Purchasers shall have received an opinion, dated
the Closing Date, in form and substance reasonably satisfactory to the Initial
Purchasers, of Fried, Frank, Harris, Shriver & Jacobson, counsel for the Initial
Purchasers, covering such matters as are customarily covered in such opinions.
(j) Fried, Frank, Harris, Shriver & Jacobson shall have been
furnished with such documents, in addition to those set forth above, as they may
reasonably require for the purpose of enabling them to review or pass upon the
matters referred to in this Section 8 and in
<PAGE> 24
order to evidence the accuracy, completeness or satisfaction of any of the
representations, warranties or conditions herein contained.
(k) Prior to the Closing Date, the Company shall have furnished
to the Initial Purchasers such further information, certificates and documents
as the Initial Purchasers may reasonably request.
(l) The Company and the Trustee shall have entered into the
Indenture and the Initial Purchasers shall have received counterparts, conformed
as executed, thereof.
(m) The Company shall have entered into the Registration Rights
Agreement and the Initial Purchasers shall have received counterparts, conformed
as executed, thereof.
(n) The Company shall have entered into the Pledge Agreement and
the Initial Purchasers shall have received counterparts, conformed as executed,
thereof.
(o) The Company shall have given irrevocable instructions to
purchase the Pledged Securities and deposit the Pledged Securities into the
Pledge Account, and the Initial Purchasers shall have received the written
opinion of a firm of nationally recognized independent certified accountants, in
form and substance satisfactory to the Initial Purchasers, to the effect that
the Pledged Securities, upon receipt of scheduled interest and principal
payments thereon, are sufficient to provide for the payment in full of the first
two scheduled interest payments due on the Notes.
(p) There shall not have been any announcement by any "nationally
recognized statistical rating organization," as defined for purposes of Rule
463(g) under the Securities Act, that (i) it is downgrading its rating assigned
to any class of securities of the Company or (ii) it is reviewing its rating
assigned to any class of securities of the Company with a view to possible
downgrading, or with negative implications, or direction not determined.
(q) The Notes shall have been approved for trading on PORTAL.
All opinions, certificates, letters and other documents required by
this Section 8 to be delivered by the Company will be in compliance with the
provisions hereof only if they are satisfactory in form and substance to the
Initial Purchasers. The Company shall furnish the Initial Purchasers with such
conformed copies of such opinions, certificates, letters and other documents as
they shall reasonably request.
9. Initial Purchasers' Information. The Company acknowledges that
the statements with respect to the offering of the Notes set forth in the last
paragraph on page ii of the Offering Memorandum and in the fifth paragraph under
the caption "Plan of Distribution" in the Offering Memorandum constitute the
only information relating to any of the Initial Purchasers furnished to the
Company in writing by or on behalf of any of the Initial Purchasers expressly
for use in the Offering Memorandum.
<PAGE> 25
10. Survival of Representations and Agreements. All representations
and warranties, covenants and agreements of the Initial Purchasers and the
Company contained in this Agreement, including the agreements contained in
Sections 4(f) and 11(d), the indemnity agreements contained in Section 6 and the
contribution agreements contained in Section 7, shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
either of the Initial Purchasers, any controlling person thereof, or by or on
behalf of the Company or any controlling person thereof, and shall survive
delivery of and payment for the Notes to and by the Initial Purchasers. The
representations contained in Section 5 and the agreements contained in Sections
4(f), 6, 7 and 11(d) shall survive the termination of this Agreement, including
any termination pursuant to Section 11.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon execution and
delivery of a counterpart hereof by each of the parties hereto.
(b) The Initial Purchasers shall have the right to terminate
this Agreement at any time prior to the Closing Date by notice to the Company
from the Initial Purchasers, without liability (other than with respect to
Sections 6 and 7) on the Initial Purchasers' part to the Company if, on or prior
to such date, (i) the Company shall have failed, refused or been unable to
perform any agreement in any material respect on their part to be performed
hereunder, (ii) any other condition to the obligations of the Initial Purchasers
hereunder as provided in Section 8 is not fulfilled when and as required in any
material respect, (iii) in the reasonable judgment of the Initial Purchasers,
any Material Adverse Effect shall have occurred since the respective dates as of
which information is given in the Offering Memorandum, other than as set forth
in the Offering Memorandum, or (iv)(A) any domestic or international event or
act or occurrence has disrupted, or in the opinion of the Initial Purchasers
will in the immediate future materially disrupt, the market for the Company's
securities or for securities in general; (B) trading in securities generally on
the New York or American Stock Exchange, or the Nasdaq National Market, shall
have been suspended or materially limited, or minimum or maximum prices for
trading shall have been established, or maximum ranges for prices for securities
shall have been required, on such exchange, or by such exchange or other
regulatory body or governmental authority having jurisdiction; (C) a banking
moratorium shall have been declared by federal or state authorities, or a
moratorium in foreign exchange trading by major international banks or persons
shall have been declared; (D) there is an outbreak or escalation of armed
hostilities involving the United States on or after the date hereof, or if there
has been a declaration by the United States of a national emergency or war, the
effect of which shall be, in the Initial Purchasers' reasonable judgment, to
make it inadvisable or impracticable to proceed with the offering or delivery of
the Notes on the terms and in the manner contemplated in the Offering
Memorandum; or (E) there shall have been such a material adverse change in
general economic, political or financial conditions or if the effect of
international conditions on the financial markets in the United States shall be
such as, in the Initial Purchasers' reasonable judgment, makes it inadvisable or
impracticable to proceed with the delivery of the Notes as contemplated hereby.
<PAGE> 26
(c) Any notice of termination pursuant to this Section 11 shall
be by telephone or telephonic facsimile and, in either case, confirmed in
writing by letter.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to clause (iii) or (iv) of Section
11(b), in which case each party will be responsible for its own expenses), the
Company shall reimburse the Initial Purchasers for all out-of-pocket expenses
(including the reasonable fees and expenses of the Initial Purchasers' counsel),
reasonably incurred by the Initial Purchasers in connection herewith.
12. Notice. All communications hereunder, except as may be otherwise
specifically provided herein, shall be mailed, delivered, telecopied and
confirmed in writing or sent by a nationally recognized overnight courier
service guaranteeing delivery on the next business day to, as follows:
if to the Initial Purchasers:
Bear, Stearns & Co. Inc.
245 Park Avenue, New York, NY 10167
Attention: Corporate Finance Department
Telecopy number: (212) 272-3092
with a copy to:
Fried, Frank, Harris, Shriver & Jacobson
1001 Pennsylvania Avenue, N.W., Suite 800
Washington, DC 20004
Attention: Stephen I. Glover
Telecopy number: (202) 639-7008
if to the Company:
Orbital Imaging Corporation
21700 Atlantic Boulevard, Dulles, VA 20166
Attention: Alan Schwartz Ocio, Vice President and
General Counsel
Telecopy number: (703) 406-5552
with a copy to:
Latham & Watkins
1001 Pennsylvania Ave., N.W, Suite 1300
Washington, DC 20004
Attention: Michael A. Bell
Telecopy number: (202) 637-2201.
<PAGE> 27
13. Parties. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Initial Purchasers and the Company and the
controlling persons and agents referred to in Sections 6 and 7, and their
respective successors and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained. The
term "successors and assigns" shall not include a purchaser, in its capacity as
such, of Notes from the Initial Purchasers.
14. Construction. This Agreement shall be construed in accordance
with the internal laws of the State of New York. TIME IS OF THE ESSENCE IN THIS
AGREEMENT.
15. Captions. The captions included in this Agreement are included
solely for convenience of reference and are not to be considered a part of this
Agreement.
16. Counterparts. This Agreement may be executed in various
counterparts which together shall constitute one and the same instrument.
[Signature Page to Follow]
<PAGE> 28
If the foregoing correctly sets forth the understanding among the
Initial Purchasers and the Company please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a binding
agreement among us.
Very truly yours,
ORBITAL IMAGING CORPORATION
By:
----------------------------
Name:
Title:
Accepted and agreed to as of
the date first above written:
BEAR, STEARNS & CO. INC.
By:
----------------------
Name:
Title:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
---------------------
Name:
Title:
<PAGE> 29
SCHEDULE I
Bear, Stearns & Co. Inc..............................................$52,500,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.............................................$22,500,000
<PAGE> 30
SCHEDULE 5(iv)
WeatherSat International Corp., a New Hampshire corporation
<PAGE> 31
SCHEDULE 5(xxix)
401(k) plan
<PAGE> 1
EXHIBIT 10.14
AMENDMENT NO. 1 TO
RADARSAT-2 MASTER AGREEMENT
This Amendment No. 1 to RadarSat-2 Master Agreement is entered into
as of the first day of April, 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 Master Agreement as of December 31, 1998 (the "Original Agreement"),
which agreement the parties now desire to amend.
NOW, THEREFORE, in consideration of the agreements and covenants
contained herein, the parties hereto agree as follows:
1. Title Change. The Original Agreement shall be renamed to be
called the "RadarSat-2 License Agreement."
2. "Whereas" Clauses.
(a) The first "whereas" clause is amended to delete the following
language that appears at the end of the paragraph: "under which CSA has
committed to provide C$217,585,529 for the purchase of RadarSat-2 data."
(b) A new, second "whereas" clause is added to read as follows:
"WHEREAS, MDA and CSA have agreed that CSA will arrange for the launch of the
RadarSat-2 satellite in consideration for the purchase of additional RadarSat-2
data of value equivalent to the cost of launching the RadarSat-2 satellite,
which data the CSA may then provide to third parties in accordance with the Data
Policy (Schedule D1) of the CSA Contract."
3. Amendment to Section 1.
(a) Section 1.4 is amended to add the following language after
the number "C$217,585,529": "plus the cost of launching the RadarSat-2
satellite"
4. Amendments to Section 2.
(a) The first sentence of Section 2 is amended by adding the
following language to the end of the sentence: ",as amended to cover the cost of
launching the RadarSat-2 satellite"
(b) The third sentence of Section 2 is amended to add the
following clause after the number "C$217,585,529": "plus the cost of launching
the RadarSat-2 satellite"
<PAGE> 2
5. Amendments to Section 5.
(a) The title of Section 5 is amended to be "Duties of
MDA/Orbital."
(b) The second sentence of Section 5.1 is amended to add the
words "the modified" after "use" and before "RadarSat-2 Data."
(c) The third sentence of Section 5.1.1 is amended to add the
following language after the word "strategies" and before the word "targets":
"pricing of basic and value-added products, terms and conditions governing
resales of value-added products by MDA and other third parties,"
(d) The last sentence of Section 5.1.1 is deleted and the
following substituted in its place: "The parties hereto acknowledge and agree
that pursuant to the license granted in Section 5.1 above and subject to the
terms of this Agreement and consistent with the terms of the CSA Contract, MDA
has and other third parties shall have the right to develop, at their expense,
value-added products using RadarSat-2 Data and to resell such products."
(e) A new Section 5.2.1 is added as follows:
"5.2.1 U.S. Department of Commerce. In the event the U.S.
Department of Commerce ("DoC") determines that Orbital, MDA and/or ORBIMAGE
shall require a license under the Land Remote Sensing Policy Act in connection
with the RadarSat-2 program, then each of Orbital, MDA and ORBIMAGE agrees that
it shall use all commercially reasonable efforts to obtain such license on terms
that will not have a material adverse impact on the commercial viability of the
RadarSat-2 program. If the applicable party is unable to obtain such license on
terms that are consistent with the commercial viability of the RadarSat-2
program, then the parties hereto shall negotiate in good faith an equitable
adjustment to the license fee set forth in Section 1.4 above."
(f) Section 5.3.1 is amended to add the following sentence as the
first sentence: "ORBIMAGE and MDA acknowledge that this Agreement is intended to
reflect a separate business arrangement that builds upon the CSA Contract and is
not intended to abrogate or modify the CSA Contract."
(g) A new Section 5.3.3.1 is added as follows:
"5.3.3.1 Additional Projects. ORBIMAGE acknowledges that CSA and
MDA may amend the CSA Contract (including the statement of work) or enter into
further agreements dealing with additional projects such as the Ground Target
Moving Indicator Project with the Canadian Department of National Defence, and
that such projects will be integrated into the RadarSat-2 program. Any such
project will be subject to ORBIMAGE's prior written approval, which shall not be
unreasonably withheld. To the extent MDA is not given any rights in the data
generated by such project, then such data shall not be considered RadarSat-2
Data under this
2
<PAGE> 3
Agreement. To the extent MDA is given rights in such data, MDA will transfer
those rights to ORBIMAGE on commercially reasonable terms. ORBIMAGE and MDA
shall negotiate in good faith an equitable adjustment to the license fee set
forth in Section 1.4 above if ORBIMAGE disapproves the project but MDA and CSA
proceed with it and there is a resulting material adverse impact on (a)
ORBIMAGE's ability to receive RadarSat-2 Data that conforms with the
specifications set forth in the RadarSat-2 SOW regarding capacity, resolution
and appropriate image quality parameters, or (b) the commercial viability of
ORBIMAGE's RadarSat-2 program."
(h) Section 5.4 is deleted and the following substituted in its
place:
"5.4 Access to Data. CSA's average monthly usage of the
RadarSat-2 satellite under the CSA Contract shall not exceed 12.5% of the
imaging capacity of the satellite per month per year, which average monthly
usage shall be calculated on the basis of a rolling one-year average over the
term of the CSA Contract, provided further that the CSA's actual monthly usage
of the RadarSat-2 satellite under the CSA Contract shall not exceed in any given
month 25% of the imaging capacity of the satellite. If CSA's usage exceeds
either of the foregoing limitations and such usage has a material adverse impact
on the commercial viability of the RadarSat-2 program, then the parties shall
negotiate an equitable adjustmen6t to the license fee set forth in Section 1.4
above."
6. Amendments to Section 7
(a) The title of Section 7.1 is amended to be as follows:
"Termination by ORBIMAGE for MDA's/Orbital's Default."
(b) The title of Section 7.2 is amended to be as follows:
"Termination by MDA for ORBIMAGE's Default or Convenience."
(c) Section 7.4 is amended to delete the reference to "February
15" and substitute "April 15" in its place.
(d) Section 7.7.2 is deleted in its entirety.
7. Amendments to Section 8. The following new clause "(b)" shall be
added to Section 8.1 and the subsequent clauses realphabetized accordingly: "(b)
that no additional Canadian government approvals or authorizations are necessary
for MDA to enter into this Agreement,".
8. Miscellaneous. The Original Agreement, as amended by this
Amendment No. 1, 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.
3
<PAGE> 4
IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 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:
4
<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 THREE MONTHS ENDED MARCH
31, 1999 AND IS QUALIFIED IN ITS ENTIREITY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 20,298
<SECURITIES> 33,072
<RECEIVABLES> 2,260
<ALLOWANCES> 53
<INVENTORY> 0
<CURRENT-ASSETS> 55,630
<PP&E> 232,730
<DEPRECIATION> (32,854)
<TOTAL-ASSETS> 296,706
<CURRENT-LIABILITIES> 17,558
<BONDS> 141,814
0
7
<COMMON> 252
<OTHER-SE> 112,238
<TOTAL-LIABILITY-AND-EQUITY> 296,706
<SALES> 3,316
<TOTAL-REVENUES> 3,316
<CGS> 4,025
<TOTAL-COSTS> 4,025
<OTHER-EXPENSES> 1,893
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (949)
<INCOME-PRETAX> (1,653)
<INCOME-TAX> (620)
<INCOME-CONTINUING> (1,033)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,033)
<EPS-PRIMARY> (0.06)
<EPS-DILUTED> (0.12)
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