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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 22, 1999
ORBITAL SCIENCES CORPORATION
Delaware 0-18287 06-1209561
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(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification No.)
21700 Atlantic Boulevard
Dulles, Virginia 20166
(703) 406-5000
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(Address of principal executive offices) (Zip Code)
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ITEM 5. OTHER EVENTS
MDA Transaction
On December 22, 1999, we sold approximately one-third of the stock of our
Canadian subsidiary, MacDonald, Dettwiler and Associates Ltd. ("MDA"), to third
party investors (the "Investors") for gross proceeds of $75,000,000. We continue
to own approximately 67% of MDA and will continue to control its operations and
consolidate its financial results. In connection with the transaction, the
Investors also received an option to purchase additional MDA shares, or to cause
a sale of MDA, in certain circumstances, including (i) if an initial public
offering of MDA does not occur on or before June 22, 2002 or (ii) if certain
bankruptcy events involving Orbital occur. In addition, under certain
circumstances, including clause (i) above, the Investors will have the right to
exchange their MDA stock for common stock of Orbital pursuant to a specified
formula as set forth in an Exchange and Registration Rights Agreement, a copy of
which is attached as an Exhibit hereto.
Bank Matters
On November 30, 1999, we amended and restated our security agreement and
entered into certain pledge and intellectual property security agreements with
the syndicate of banks under our primary credit facility and provided them with
additional collateral, including a pledge of the stock of certain subsidiaries,
such as MDA, and certain other assets.
In December 1999, we amended our primary credit facility to obtain the
banks' consent with respect to certain aspects of the MDA transaction. We agreed
to pay down the credit facility with $22,000,000 of the proceeds from the MDA
transaction, which reduced our total outstanding borrowings, and the total
committed amount, to $165,000,000. In addition, $10,000,000 of the proceeds from
the MDA transaction was deposited in a restricted account. That money is
available to Orbital to the extent Orbital's cash balances drop below
$10,000,000 and in certain other circumstances. We are required by the amendment
to reduce outstanding borrowings and the credit available to $125,000,000 by
August 1, 2000, and to apply toward this reduction a portion of the net proceeds
that we receive from any future asset sales or equity issuances by Orbital or
our U.S. wholly owned subsidiaries. We also agreed to use commercially
reasonable efforts to obtain all necessary consents to the pledge to the banks
of our shares in our subsidiary, Magellan Corporation.
The amendment also reset covenants on leverage, minimum consolidated net
worth and fixed charges and waived any defaults arising from our noncompliance
with those covenants. The waiver expires on February 22, 2000. We intend to
restructure the credit facility by that time, although there can be no assurance
that
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we will be successful. A copy of the amendment (as well as several previous
amendments) is attached as an Exhibit hereto.
ITEM 7. EXHIBITS
<TABLE>
<CAPTION>
Exhibit No.
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<S> <C> <C>
(c)(i) Exchange and Registration Rights Agreement dated as of December 22, 1999 10.25
(ii) Amendment No. 5 to Third Amended and Restated Credit and Reimbursement Agreement dated as
of September 30, 1999 10.26
(iii) Amendment No. 6 to Third Amended and Restated Credit and Reimbursement Agreement dated as
of December 21, 1999 10.27
(iv) Second Amended and Restated Security Agreement dated as of November 30, 1999 10.28
(v) Pledge Agreement dated as of November 30, 1999 10.29
(vi) Eighth Amendment, dated as of December 21, 1999, to Note Agreement, dated as of June 14,
1995 between Orbital and Northwestern Mutual Life Insurance Company 10.30
</TABLE>
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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 hereunto duly authorized.
ORBITAL SCIENCES CORPORATION
Date: January 7, 2000 By: /s/ Jeffrey V. Pirone
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Jeffrey V. Pirone
Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No.
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<S> <C>
Exchange and Registration Rights Agreement dated as of December 22, 1999 10.25
Amendment No. 5 to Third Amended and Restated Credit and Reimbursement Agreement dated as
of September 30, 1999 10.26
Amendment No. 6 to Third Amended and Restated Credit and Reimbursement Agreement dated as
of December 21, 1999 10.27
Second Amended and Restated Security Agreement dated as of November 30, 1999 10.28
Pledge Agreement dated as of November 30, 1999 10.29
Eighth Amendment, dated as of December 21, 1999, to Note Agreement, dated as of June 14,
1995 between Orbital and Northwestern Mutual Life Insurance Company 10.30
</TABLE>
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EXHIBIT 10.25
EXECUTION COPY
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
This EXCHANGE AND REGISTRATION RIGHTS AGREEMENT (this
"AGREEMENT"), is made as of the 22nd day of December, 1999, by and among Orbital
Sciences Corporation, a Delaware corporation ("ORBITAL"), and the investors
identified on the signature pages hereof (the "INVESTORS").
RECITALS
WHEREAS, on the date hereof MacDonald, Dettwiler & Associates,
Ltd. ("MDA"), a wholly owned subsidiary of Orbital, issued and sold an aggregate
of 10,000,001 shares of the common stock, no par value, of MDA to the Investors;
and
WHEREAS, in order to induce the Investors to purchase the MDA
Shares, Orbital has agreed to enter into an agreement pursuant to which the
Investors shall be entitled to exchange their MDA Shares for shares of the
common stock of Orbital, par value $.01 per share (the "ORBITAL Stock"), in
order to achieve liquidity of their investment in the event that an initial
public offering of MDA does not occur as specified herein.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual promises and covenants set forth herein and in the Unanimous Shareholders
Agreement and Subscription Agreement, the parties hereby agree as follows:
1. CERTAIN DEFINITIONS
"ACCEPTABLE IPO" shall have the meaning set forth in the Unanimous
Shareholders Agreement.
"ACCREDITED INVESTOR" shall have the meaning set forth in Rule 501
of the General Rules and Regulations promulgated under the Act.
"ACT" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder, all as the same shall be in
effect at the relevant time.
"AFFILIATE" shall have the meaning set forth in Rule 12b-2
promulgated under the Exchange Act, as such rule is in effect on the date
hereof.
"AGREEMENT" shall have the meaning set forth in the introductory
paragraph.
"BLACK-OUT PERIOD" shall have the meaning set forth in SECTION
6.1(c) of this Agreement.
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"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
a day on which state or federally chartered banking institutions in New York
City, New York are not required to be open.
"COMMISSION" shall mean the United States Securities and Exchange
Commission.
"CURRENT MARKET PRICE" of Orbital Stock for any day shall mean the
last reported sales price on such day, or, if no sale takes place on such day,
the average of the reported closing bid and asked prices on such day, in either
case as reported on the New York Stock Exchange ("NYSE") or, if such security is
not listed or admitted for trading on the NYSE, on the principal national
securities exchange on which such security is listed or admitted for trading or,
if not listed or admitted for trading on any national securities exchange, on
the Nasdaq National Market ("NASDAQ") or, if such security is not quoted on
Nasdaq, the average of the closing bid and asked prices on such day in the
over-the-counter market as reported by Nasdaq or, if bid and asked prices for
such security on such day shall not have been reported through Nasdaq, the
average of the bid and asked prices on such day as furnished by any NYSE member
firm regularly making a market in such security selected for such purpose by the
Board of Directors.
"DEMAND NOTICE" shall have the meaning set forth in SECTION 6.1(a)
of this Agreement.
"DEMAND REGISTRATION" shall have the meaning set forth in SECTION
6.1(a) of this Agreement.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in SECTION
6.1(b) of this Agreement.
"ELECTING INVESTORS" shall have the meaning set forth in SECTION
5.1(a).
"EMPLOYMENT TRIGGER DATE" means the date on or before June 22,
2002 and prior to the completion of an Acceptable IPO on which the employment of
either the Chief Executive Officer of MDA or Chief Financial Officer of MDA is
terminated (or constructively dismissed) (other than for cause) without the
approval, in writing or at a meeting, of one of the director nominees of the
Investors to the board of MDA, except as a result of death or voluntary
resignation (for greater certainty, excluding as a result of constructive
dismissal) by such officer.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the relevant time.
"EXCHANGE DATE" shall have the meaning set forth in SECTION
2.1(d).
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"EXCHANGE PERIOD" shall have the meaning set forth in SECTION 2.2.
"EXCHANGE RATE" shall have the meaning set forth in SECTION 2.3.
"EXCHANGE RIGHT" shall have the meaning set forth in SECTION 2.1.
"EXCHANGE" shall have the meaning set forth in SECTION 2.1(d).
"EXERCISING HOLDER" shall mean any Holder that has elected to
exercise its registration rights under SECTIONS 6.1 or 6.2 of this Agreement.
"FAIR MARKET PRICE" shall mean the average of the daily Current
Market Prices of one share of Orbital Stock on the five most recent consecutive
trading days ending on the trading day before the trading day in question.
"HOLDER" or "HOLDERS" shall mean (i) the Investors and (ii) each
person holding Registrable Shares as a result of a permitted transfer or
assignment to that person of Registrable Shares other than pursuant to an
effective Registration Statement or Rule 144 (or any successor provision) under
the Act.
"INDEMNIFIED PARTY" shall have the meaning set forth in SECTION
6.5(c) of this Agreement.
"INDEMNIFYING PARTY" shall have the meaning set forth in SECTION
6.5(c) of this Agreement.
"INITIAL CLOSING" shall mean the closing on the date hereof of the
consummation of the sale of Special Shares (as defined in the Subscription
Agreement) by MDA to the Investors pursuant to the Subscription Agreement, which
will then be converted immediately into the MDA Shares.
"INITIAL REQUESTING HOLDERS" shall have the meaning set forth in
SECTION 6.1(a) of this Agreement.
"INVESTORS" shall have the meaning set forth in the introductory
paragraph.
"IPO TRIGGER DATE" shall mean June 22, 2002; provided however,
that no IPO Trigger Date shall occur if (i) MDA shall have completed an
Acceptable IPO prior to such date; or (ii) the failure by MDA to complete an
Acceptable IPO by such date is a result of the Investors not using their
reasonable best efforts (as defined in the Unanimous Shareholders Agreement) to
effect such Acceptable IPO with Orbital required to support such a transaction.
"MDA SHARES" shall mean the 10,000,001 shares of common stock, no
par value, of MDA received by the Investors immediately following their
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subscription for Special Shares (as defined in the Subscription Agreement) of
MDA at the Initial Closing.
"MDA" shall have the meaning set forth in the Recitals.
"ORBITAL" shall have the meaning set forth in the introductory
paragraph.
"ORBITAL REGISTRATION STATEMENT" shall have the meaning set forth
in SECTION 6.2(a) of this Agreement.
"ORBITAL STOCK" shall have the meaning set forth in the Recitals.
"PERSON" shall mean any individual, corporation, partnership,
limited liability company, joint venture, trust, unincorporated organization, or
other form of business or legal entity.
"PROSPECTUS" shall mean the prospectus included in any
Registration Statement (including, without limitation, a prospectus that
discloses information previously omitted from a prospectus filed as part of an
effective Registration Statement in reliance upon Rule 430A under the Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Shares.
The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer to a
registration effected by preparing and filing a Registration Statement (and
Prospectus) in compliance with the Act providing for the sale by the Holders in
accordance with the method or methods of distribution designated by the Holders,
and the declaration or ordering of the effectiveness of such Registration
Statement by the Commission.
"REGISTRABLE SHARES" shall mean the Orbital Stock received by the
Investors pursuant to the exercise of the Exchange Right in accordance with the
terms of this Agreement; provided, however, that any such shares shall cease to
be Registrable Shares when (A) a Registration Statement with respect to the sale
of such shares shall have become effective under the Act and all such shares
shall have been disposed of in accordance with such Registration Statement; (B)
such shares shall have been resold by the Holder thereof in accordance with Rule
144; (C) such shares shall have been otherwise transferred and new certificates
not subject to transfer restrictions under the Act and not bearing any legend
restricting further transfer shall have been delivered by Orbital, and no other
applicable and legally binding restriction on transfer under the federal
securities laws shall exist; or (D) such shares are, in the written opinion of
counsel to the Holders, eligible for sale in accordance with Rule 144(k) under
the Act, if applicable.
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"REGISTRATION EXPENSES" shall mean all out-of-pocket expenses
(excluding Selling Expenses) incurred by Orbital in complying with SECTION 6.1
and SECTION 6.2 hereof, including, without limitation, the following: (a) all
registration and filing fees; (b) fees and expenses of compliance with federal
and state securities laws (including, without limitation, reasonable fees and
disbursements of counsel in connection with state securities qualifications of
the Registrable Shares under the laws of such jurisdictions as the Holders may
reasonably designate); (c) printing (including, without limitation, expenses of
printing or engraving certificates representing the Registrable Shares in a form
eligible for deposit with The Depository Trust Company and otherwise meeting the
requirements of any securities exchange on which they are listed and of printing
Registration Statements and prospectuses), messenger, telephone, shipping and
delivery expenses; (d) fees and disbursements of counsel for Orbital; (e) fees
and disbursements of the independent public accountants of Orbital; (f)
liability insurance (if Orbital so desires); (g) fees and expenses of other
persons reasonably necessary in connection with the registration, including any
experts, retained by Orbital; and (h) fees and expenses incurred in connection
with the listing of the Registrable Shares on each securities exchange on which
securities of the same class are then listed.
"REGISTRATION STATEMENT" shall mean either a registration
statement pursuant to a Demand Registration, which may be a Shelf Registration
Statement, or an Orbital Registration Statement, in any case, which includes the
Registrable Shares of an Exercising Holder.
"RIGHTS AGREEMENT" shall have the meaning set forth in SECTION
4.2.
"RULE 144" shall mean Rule 144 promulgated by the Commission under
the Act.
"SELLING EXPENSES" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to any sale of Registrable
Shares.
"SHELF REGISTRATION" shall mean a shelf registration effected
pursuant to SECTION 6.1 hereof.
"SHELF REGISTRATION STATEMENT" means a "shelf" Registration
Statement of Orbital pursuant to the provisions of SECTION 6.1 hereof filed with
the Commission which covers some or all of the Registrable Shares, as
applicable, on an appropriate form under Rule 415 under the Act, or any similar
rule that may be adopted by the Commission, amendments and supplements to such
Registration Statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
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"SUBSCRIPTION AGREEMENT" shall mean the Subscription Agreement
dated the date hereof (as amended, modified or supplemented from time to time),
by and among Orbital, MDA, and the Investors.
"SUSPENSION RIGHT" shall have the meaning set forth in Section
6.1(c) of this Agreement.
"TRIGGER DATE" shall mean either an Employment Trigger Date or an
IPO Trigger Date.
"UNANIMOUS SHAREHOLDERS AGREEMENT" shall mean the Unanimous
Shareholders Agreement dated the date hereof among the Investors, MDA and
Orbital, as it may be amended, modified or supplemented from time to time.
2. THE EXCHANGE
2.1. EXCHANGE OF SHARES.
(a) On the terms and subject to the conditions set forth
herein, (i) an Investor shall have the option, at any time and from time to
time, during the Exchange Period, to contribute and assign to Orbital, and
Orbital (or a wholly owned subsidiary of Orbital) shall accept from such
Investor, all or a portion (subject to the immediately succeeding sentence) of
the MDA Shares owned by such exchanging Investor, free and clear of all liens,
security interests or other encumbrances; and (ii) Orbital will issue to such
exchanging Investor, as consideration for the contribution of such MDA Shares,
shares of Orbital Stock, free and clear of all liens, security interests or
other encumbrances, in an amount determined in accordance with SECTION 2.3 below
(the "EXCHANGE RIGHT"). Any exercise by an Investor (or group of Investors
acting together) of its Exchange Right shall be for not less than two million
(2,000,000) MDA shares or, if less, the remaining number of MDA Shares then held
by such Investor (or group of Investors acting together).
(b) The Exchange Right is exercisable by an Investor by the
surrender of the Notice of Exchange attached as ANNEX I hereto duly completed
and executed by or on behalf of such Investor, at the principal office of
Orbital (or such other office or agency of Orbital as it may designate by notice
in writing to the Investors). The exercising Investor shall, within 10 days,
deliver a copy of such Notice of Exchange to all other Investors. All exercising
Investors shall surrender the stock certificates reflecting the MDA Shares to be
exchanged to Orbital on the Exchange Date against delivery of the Orbital Stock.
(c) The Exchange Right shall be deemed to have been exercised
as to an Investor immediately as of the time of the surrender of the Notice of
Exchange by such Investor as provided above, and the person entitled to receive
the shares of
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Orbital Stock issuable upon such exchange shall be treated for all purposes as
the holder of record of such shares as of such date and time and on and after
the Exchange Date such person shall cease to have any rights whatsoever with
respect to the MDA Shares to be exchanged unless Orbital Stock is not delivered
to such Investor on the Exchange Date as provided herein.
(d) The closing of the exchange of MDA Shares for Orbital Stock
(the "EXCHANGE") shall take place on a date (the "EXCHANGE DATE") designated by
Orbital, not later than 30 days after the date on which the first Notice of
Exchange is delivered to Orbital, at such location as the parties may mutually
agree upon and subject to the satisfaction or waiver of all conditions to the
Exchange set forth in ARTICLE 5 hereof. In the meantime, if there are dividends,
distributions, capital reorganizations, or similar events involving Orbital
Stock, the Investor shall receive the benefit thereof.
2.2. TERM OF EXCHANGE RIGHT.
Subject to the terms and conditions set forth herein (and except
as provided below), the Exchange Right shall be exercisable at any time during
the period commencing on the first Trigger Date to occur and ending on the two
year anniversary of such Trigger Date, and shall be terminated thereafter
(unless previously exercised) (such period, the "EXCHANGE PERIOD"). The Exchange
Right shall be void on June 23, 2002 in the event that a Trigger Date has not
occurred as of such date.
2.3. EXCHANGE RATE
The exchange rate for which the MDA Shares to be exchanged by an
Investor are exchangeable for Orbital Stock (the "EXCHANGE RATE") shall be as
follows:
X = A x B
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C
Where: X = the number of shares of Orbital Stock to be issued to an
Investor;
A = the number of MDA Shares to be exchanged by such Investor;
B = the price at which such Investor purchased the MDA Shares
at the Initial Closing; and
C = the lesser of (I) the Fair Market Price of one share of
Orbital Stock on the date of delivery of the applicable
Notice of Exchange and (II) U.S. $25.00; provided, however,
that the Fair Market Price of one share of Orbital Stock
shall in no event be less than U.S. $13.00 per share.
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In the event that the Fair Market Price of one share of Orbital Stock would have
been less than U.S. $13.00 per share (the "LOWER MARKET PRICE"), then Orbital,
at its option, shall either (i) provide additional shares of Orbital Stock to
the exchanging Investor as if such proviso were deleted or (ii) pay to the
exchanging Investor an amount in cash equal to the product of (x) the difference
between the number of shares of Orbital Stock that would have been received by
the exchanging Investor had the proviso been deleted and the number of shares of
Orbital Stock actually received (including any fractions), times (y) the Lower
Market Price.
2.4. ADJUSTMENTS TO ORBITAL STOCK.
The number of shares of Orbital Stock which may be exchanged
pursuant to SECTION 2.3 are subject to adjustment from time to time as follows:
2.4.1. MERGER, SALE OF ASSETS, ETC.
If at any time prior to the exercise or expiration of the Exchange
Right, there shall be (i) a reorganization of Orbital (other than a combination,
reclassification, exchange or subdivision of shares otherwise provided for
herein), (ii) a merger or consolidation of Orbital with or into another
corporation in which Orbital is not the surviving entity or a merger (including
a reverse triangular merger) in which Orbital is the surviving entity but the
shares of Orbital's capital stock outstanding immediately prior to the merger
are converted by virtue of the merger into other property, whether in the form
of securities, cash, or otherwise, or (iii) a sale or transfer of all or
substantially all of Orbital's properties and assets, then, as a part of such
reorganization, merger, consolidation, sale or transfer, lawful provision shall
be made so that the Investors shall thereafter be entitled to receive upon the
exchange of their MDA Shares, as specified herein, the number of shares of stock
or other securities or property of the successor corporation resulting from such
reorganization, merger, consolidation, sale or transfer that a holder of MDA
Shares exchangeable hereunder would have been entitled to receive in such
reorganization, consolidation, merger, sale or transfer if the exchange
contemplated by SECTION 2.1 of this Agreement had been consummated immediately
before such reorganization, consolidation, merger, sale or transfer, all subject
to further adjustment as provided in this SECTION 2.4. The foregoing provisions
of this SECTION 2.4.1 shall similarly apply to successive reorganizations,
consolidations, mergers, sales and transfers.
2.4.2. RECLASSIFICATION, ETC.
If Orbital, at any time prior to the exercise or expiration of the
Exchange Right, by reclassification of securities or otherwise, shall change any
of the securities as to which Exchange Rights exist into the same or a different
number of securities of any other class or classes, this Agreement shall
thereafter represent the right to exchange such number and kind of securities as
would have
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been issuable as the result of such change with respect to the securities that
were subject to the exchange rights under this Agreement immediately prior to
such reclassification, all subject to further adjustment as provided in this
SECTION 2.4.
2.4.3. SPLIT, SUBDIVISION OR COMBINATION OF SHARES.
If Orbital, at any time prior to the exercise or expiration of the
Exchange Right, shall split, subdivide or combine the securities as to which
Exchange Rights exist, into a different number of securities of the same class,
the number of shares of such securities that are exchangeable pursuant to this
Agreement may be exercised shall be proportionately increased, in the case of a
split or subdivision, or shall be proportionately decreased, in the case of a
combination.
2.4.4. CERTIFICATE AS TO ADJUSTMENTS.
Upon the occurrence of each adjustment or readjustment pursuant to
this SECTION 2.4, Orbital at its expense shall promptly compute such adjustment
or readjustment in accordance with the terms hereof and furnish to each Investor
a certificate setting forth such adjustment or readjustment and showing in
detail the facts upon which such adjustment or readjustment is based.
2.4.5. FRACTIONAL SHARES.
No fractional shares of Orbital Stock shall be issued upon
exchange of the MDA Shares. Instead of any fractional interest in a share of
Orbital Stock, Orbital shall calculate and pay to the holder of such share a
cash adjustment in respect of such fraction in an amount based on the Current
Market Price of the Orbital Stock on the trading day immediately preceding the
date of exchange.
2.5. ADJUSTMENTS TO MDA SHARES
If any of the events described in SECTION 2.4 of this Agreement
shall occur with respect to MDA, similar adjustments shall be made to the MDA
Shares for purposes of the Exchange Rate set forth in SECTION 2.3.
3. REPRESENTATIONS AND WARRANTIES
3.1. REPRESENTATIONS AND WARRANTIES OF ORBITAL.
The representations and warranties of Orbital contained in SECTION
2.2 of the Subscription Agreement are incorporated herein by reference. In
addition, Orbital further represents and warrants as follows:
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(a) The Orbital Stock, when exchanged, issued and delivered in
accordance with the terms hereof for the consideration expressed herein, will be
duly and validly authorized and issued, fully paid and nonassessable, and free
and clear of any liens, security interests or other encumbrances.
(b) As of the Exchange Date, Orbital's public record will not
contain any material misrepresentations.
3.2. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS.
The representations and warranties of the Investors contained in
SECTION 3.1 of the Subscription Agreement are incorporated herein by reference.
In addition, the Investors further represent and warrant as follows:
(a) From and after the date of delivery of a Notice of
Exercise, each Investor owns the MDA Shares to be exchanged by it free and clear
of any liens, security interests, or other encumbrances.
(b) Each Investor acknowledges that Orbital intends the offer
and issuance of the Orbital Stock to be received hereunder to be exempt from
registration under the Act, by virtue of Regulation D promulgated under Section
4(2) of the Act, and that no registration statement relating to the issuance of
the Orbital Stock hereunder has been or will be filed with the Commission or any
state securities commission, except as contemplated by this Agreement. Each
Investor, with respect to himself, further acknowledges that Orbital is relying
in part upon the representations, warranties and covenants made by such Investor
in this Agreement in making its determination that the offer and issuance of the
Orbital Stock qualifies for exemption under Regulation D.
(c) On or before the Exchange Date, all documents, records,
books, and due diligence materials pertaining to the issuance of Orbital Stock
to the Investors hereunder will have been made available for inspection by the
Investors. Each of the Investors has or will have had an opportunity to ask
questions of and receive information and answers from Orbital concerning Orbital
and the Orbital Stock and to assess and evaluate such information. Each of the
Investors will be acquiring the Orbital Stock solely upon the information
provided to the Investors, and the representations, warranties, and covenants of
Orbital, together with information obtained or to be obtained by the Investors
as of any Exchange Date through their independent investigation, and the
Investors will not have relied on any oral representation as to the risks or
merit of this investment.
(d) No Investor is receiving the Orbital Stock as a result of,
or subsequent to, any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or broadcast over
television or radio,
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or presented at any seminar or meeting, or any solicitation of a subscription by
a person not previously known to the Investors in connection with investments.
(e) Each of the Investors has sufficient knowledge and
experience in financial, tax, and business matters to enable the Investor to
utilize the information made available to it in connection with the transactions
contemplated by this Agreement in order to evaluate the merits and risks of an
investment in Orbital Stock and to make an informed investment decision with
respect thereto and is relying on no representations other than those set forth
in this Agreement.
(f) Each Investor is receiving Orbital Stock for investment and
liquidity purposes and not with a view toward making a public distribution of
such shares except in accordance with this Agreement.
(g) Each Investor understands and acknowledges and agrees that
the Orbital Stock issuable upon exchange of the MDA Shares has not been
registered under the Securities Act or any other applicable securities law and,
unless so registered, may not be offered, sold or otherwise transferred except
in compliance with the registration requirements of the Securities Act or any
other applicable securities law, pursuant to an exemption therefrom or in a
transaction not subject thereto. The Investor agrees to comply with the legends
set forth in the certificates representing such shares.
4. COVENANTS
4.1. RESERVATION OF STOCK.
Orbital covenants that throughout the Exchange Period, Orbital
shall reserve from its authorized and unissued shares of common stock a
sufficient number of shares to provide for the issuance of Orbital Stock upon
exercise of the Exchange Right. Orbital further covenants that all shares that
may be issued upon the exercise of the Exchange Rights pursuant to this
Agreement, as set forth herein, will be duly issued, fully paid and
nonassessable and will be free from all taxes, encumbrances, liens and charges
in respect of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously or otherwise specified herein).
4.2. AMENDMENT OF RIGHTS AGREEMENT
Orbital covenants that it shall amend the Rights Agreement, dated
as of October 22, 1998, between Orbital and Bank Boston, N.A., as rights agent,
as amended as of the date hereof (the "RIGHTS AGREEMENT") promptly after
delivery by an Investor of a Notice of Exchange pursuant to SECTION 2.1(b), if
necessary, as a result of Orbital's issuance of additional Orbital Stock
pursuant to the last
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sentence of SECTION 2.3, so that such Investor will not be deemed to be an
"Acquiring Person" under the Rights Agreement solely by reason of the holding or
exercise of the Exchange Right.
4.3. STANDSTILL PROVISIONS.
(a) During the Standstill Period (as defined below), the
Investors will not, and will cause each of its controlled Affiliates not to, and
will use its reasonable best efforts to cause each of its other Affiliates (as
defined below) not to, directly or indirectly:
(i) act in concert with any other person or Group (as
defined below) by becoming a member of a 13D Group (as defined below), other
than any 13D Group comprised exclusively of Investors and one or more of its
Affiliates (as defined below);
(ii) sell, except in compliance with the Act, pledge,
encumber or otherwise transfer ("Transfer") any Orbital Stock to any person;
provided that this SECTION 4.3 shall not prohibit Transfers (A) between the
Investors and an Affiliate of the Investors, (B) between one or more Affiliates
of the Investors, (C) in any transaction in compliance with Rule 144 under the
Act or any successor rule or regulation, (D) in a public offering, registered
under the Act, or (E) in a transaction exempt from the registration requirements
of the Act;
(iii) purchase or otherwise acquire or offer or agree to
acquire, directly or indirectly, any Orbital Stock or other capital stock, or
securities convertible into or exchangeable for capital stock, of Orbital if,
after giving effect to such purchase or acquisition, the Investors and its
Affiliates (and any persons that are members of a 13D Group of which the
Investors or any of its Affiliates may be a member, notwithstanding the
provisions of clause (i) above) collectively would Beneficially Own (as defined
below) more than 14.9% of the outstanding capital stock of Orbital; provided
that the Investors shall not be deemed to have breached this covenant as a
result of (A) the exercise of Exchange Rights pursuant to this Agreement, (B) a
decrease in the aggregate number of shares of Orbital Stock outstanding, (C) as
a result of the acquisition of capital stock of Orbital issued as dividends or
as a result of stock splits and similar reclassifications of shares held by the
Investors or any of its Affiliates at the time of such dividend, split or
reclassification, or (D) corporate action taken solely by Orbital and not caused
by any action taken by the Investors or any of its Affiliates, provided that
neither the Investors nor any of its Affiliates shall thereafter acquire any
capital stock of Orbital otherwise than in compliance with this SECTION
4.3(a)(III);
(iv) make any proposal or public announcement relating
to, or solicit, encourage or propose to effect or negotiate any merger,
consolidation, tender or exchange offer, other business combination,
liquidation, sale of Orbital or all or
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substantially all of the assets of Orbital and its Subsidiaries or any other
change of control of Orbital or similar extraordinary transaction;
(v) solicit, initiate, encourage or participate in any
"solicitation," of "proxies" or consents or become a "participant" in an
"election contest" (as such terms are defined or used in Regulation 14A under
the Exchange Act); seek to advise or influence any person or entity with respect
to the voting of any voting securities of Orbital, call, or in any way
participate in a call for, any special meeting of stockholders of Orbital (or
take any action with respect to acting by written consent of the stockholders of
Orbital); request, or take any action to obtain or retain any list of holders of
any securities of Orbital; or initiate or propose any stockholder proposal or
participate in the making of, or solicit stockholders of Orbital for the
approval of, one or more stockholder proposals; or induce others to do any of
the foregoing. Notwithstanding the foregoing, nothing contained herein shall be
deemed to prohibit the Investors from voting their shares of Orbital Stock or
exercising any voting rights with respect to their shares;
(vi) seek a change in the size of the Board of Directors;
(vii) assist, advise, encourage or act in concert with any
person with respect to any of the foregoing or enter into any discussions,
negotiations, arrangements or understandings with any other person with respect
to, or aid, abet or encourage, any action prohibited by any of the foregoing; or
(viii) make any public request or proposal to amend, waive
or terminate any provision of this SECTION 4.3 or any inquiry or statement
relating thereto.
The foregoing provisions shall not be construed to prevent the Investors from
voting any Orbital Stock or attending or participating in any meeting called by
Orbital or a person other than the Investors or an Affiliate of the Investors.
(b) Notwithstanding anything to the contrary in this SECTION
4.3, in the event Orbital publicly announces or invites any person other than
the Investors to make a proposal, or elects to enter into negotiations, with
respect to any merger, consolidation, other business combination, liquidation,
sale of Orbital or all or substantially all of the assets of Orbital, or any
tender or exchange offer, then the Investors and its Affiliates shall be
permitted to participate in any such process on terms that are substantially
comparable to those made available to other participants in such process in the
same jurisdiction.
(c) As used in this SECTION 4.3, the following terms have the
respective meanings set forth below:
"13D GROUP" shall mean any group of persons acquiring, holding,
voting, or disposing of capital stock of Orbital that would be required under
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Section 13(d) of the Exchange Act and the rules and regulations thereunder (as
in effect, and based on legal interpretations thereof existing, on the date
hereof) to file a statement on Schedule 13D or Schedule 13G with the Commission
as a "person" within the meaning of Section 13(d)(3) of the Exchange Act if such
group Beneficially Owned capital stock representing more than 5% of any class of
capital stock of Orbital then outstanding.
"AFFILIATE" shall have the meaning ascribed thereto in Rule 12b-2
promulgated under the Exchange Act, as such rule is in effect on the date
hereof.
"BENEFICIALLY OWN" shall mean, with respect to any security,
having direct or indirect (including through any Affiliate) "beneficial
ownership" of such security, as determined pursuant to Rule 13d-3 under the
Exchange Act, including pursuant to any agreement, arrangement or understanding,
whether or not in writing. "BENEFICIAL OWNERSHIP" and "BENEFICIAL OWNER" shall
have correlative meanings. As used with respect to the Orbital Stock of Orbital,
the term shall include any shares of Orbital Stock issuable, without regard to
any requirement of notice or the passage of time or the occurrence of any event,
pursuant to any options, warrants, or other convertible or exchangeable
securities held by the applicable person, its Affiliates, or any member of a 13D
Group of which such person is a member.
"GROUP" shall mean a "group" as such term is used in Section
13(d)(3) of the Exchange Act.
"PERSON" shall mean any individual, corporation, partnership,
limited liability company, joint venture, trust, unincorporated organization, or
other form of business or legal entity.
"STANDSTILL PERIOD" shall mean the period beginning on the Initial
Closing Date and ending on the first date following the date on which the
aggregate Beneficial Ownership by the Investors and its Affiliates (and any
persons that are members of a 13D Group of which the Investors or any of its
Affiliates are members, notwithstanding the provisions of clause (i) of SECTION
4.3(a)) of shares of Orbital Stock of Orbital shall have been less than 5% of
the number of outstanding shares of capital stock of Orbital for a continuous
period of 30 days (treating any shares of Orbital Stock issuable under options,
warrants, rights or other convertible or exchangeable securities Beneficially
Owned by the Investors, its Affiliates, and any member of such a 13D Group as
being Beneficially Owned for this purpose).
4.4. LOCK-UP.
The Investors agree to enter into a market standoff agreement (a
"LOCK-UP") whereby, if independently requested by Orbital's underwriters, for a
period of up to 180 days following the date of an underwritten sale of Orbital
Stock
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specified in any such request for a Lock-Up, the Investors and any of its
affiliates will not Transfer any of the Orbital Stock then held by the Investors
or such affiliates; provided, however, that no Lock-Up shall be required unless
a similar Lock-Up is imposed upon all other persons beneficially owning a
similar percentage (to that held by the Investors in the aggregate) or more of
the Orbital Stock with respect to which Orbital then has the power to request or
impose such Lock-Up.
4.5. SPECIFIC PERFORMANCE.
Each of Orbital and the Investors acknowledges and agrees that, in
view of the uniqueness of the arrangements contemplated by SECTIONS 4.3 AND 4.4
of this Agreement and the irreparable damage that the parties would suffer in
the event that any of the provisions of such Section is not performed by each of
the parties (or their respective directors, officers, employees, financial
advisors, legal advisors, accountants, agents or representatives, as the case
may be) in accordance with their specific terms or are otherwise breached, that
the parties would not have an adequate remedy at law for money damages in the
event that SECTIONS 4.3 AND 4.4 is not performed in accordance with its terms.
Accordingly, the parties shall be entitled, without the requirement of posting a
bond or other security, to equitable relief, including injunctive relief and
specific performance, in the event of any breach of the provisions of SECTIONS
4.3 AND 4.4 by the other party, in addition to all other remedies available at
law or in equity.
5. CONDITIONS TO CONSUMMATION OF EXCHANGE
5.1. CONDITIONS TO ORBITAL'S OBLIGATIONS.
The obligations of Orbital upon the exercise of an Exchange Right
at the applicable Exchange Date are subject to the satisfaction or waiver by
Orbital on or before the applicable Exchange Date of each of the following
conditions:
(a) The representations and warranties of the Investors
who are exercising their Exchange Right (the "ELECTING INVESTORS") set forth in
this Agreement shall be true and correct on and as of such Exchange Date with
the same effect as though such representations and warranties had been made on
and as of such date.
(b) The Electing Investors shall have performed and
complied in all material respects in accordance with their terms with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before such Exchange Date.
(c) The Electing Investors shall have delivered to
Orbital on the Exchange Date a certificate, signed by an executive officer,
general partner or other
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<PAGE> 16
authorized person of such Investors to the effect that the conditions set forth
in SECTIONS 5.1(a) and 5.1(b) have been satisfied as of such Exchange Date.
(d) The Electing Investors shall have executed and
delivered an instrument, in form and substance reasonably satisfactory to
Orbital, assigning to Orbital the MDA Shares to be exchanged by them free and
clear of any liens, security interests, or other similar encumbrances against
delivery of the Orbital Stock to be received therefor.
(e) There shall not be in effect any order, decree or
injunction of a court or agency of competent jurisdiction which enjoins or
prohibits consummation of the transactions contemplated hereby and there shall
be no actual or threatened action, suit, arbitration, inquiry, proceedings or
investigation by or before any governmental authority, court or agency of
competent jurisdiction, which would reasonably be expected to materially impair
the ability of Orbital or the Investors to consummate the transactions
contemplated hereby.
(f) Any required governmental approvals shall have been
obtained on terms reasonably satisfactory to Orbital and the Investors.
5.2. CONDITIONS TO THE INVESTORS' OBLIGATIONS.
The obligations of the Electing Investors upon the exercise of an
Exchange Right are subject to the satisfaction or waiver by the Investors on or
before the applicable Exchange Date of each of the following conditions:
(a) The representations and warranties of Orbital set
forth in this Agreement shall be true and correct on and as of such Exchange
Date with the same effect as though such representations and warranties had been
made on and as of such date.
(b) Orbital shall have performed and complied in all
material respects in accordance with its terms with all agreements, obligations
and conditions contained in this Agreement that are required to be performed or
complied with by it on or before such Exchange Date.
(c) Orbital shall have delivered to the Electing
Investors on such Exchange Date a certificate, signed by an executive officer of
Orbital to the effect that the conditions set forth in SECTIONS 5.2(a) and
5.2(b) have been satisfied as of the Exchange Date.
(d) There shall not be in effect any order, decree or
injunction of a court or agency of competent jurisdiction which enjoins or
prohibits consummation of the transactions contemplated hereby and there shall
be no actual or threatened action, suit, arbitration, inquiry, proceedings or
investigation by or before any governmental authority, court or agency of
competent jurisdiction, which would
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reasonably be expected to materially impair the ability of Orbital or the
Investors to consummate the transactions contemplated hereby.
(e) Any required governmental approvals shall have been
obtained on terms reasonably satisfactory to Orbital and the Investors.
6. REGISTRATION RIGHTS.
6.1. DEMAND REGISTRATION.
(a) The Holder or Holders of Registrable Shares constituting at
least 1,500,000 outstanding Registrable Shares (together with all other
Shareholders joining in such demand as provided below, the "INITIAL REQUESTING
HOLDERS"), may at any time make a written request to Orbital that Orbital file a
Registration Statement or similar document under the Act with respect to all or
any part of such Holder's or Holders' Registrable Shares (a "DEMAND
REGISTRATION"). Such Registration shall be a "shelf" Registration Statement
pursuant to Rule 415 under the Act (or a successor provision), if so requested
by a majority of the participating Holders and if Orbital is eligible therefore
at such time (for greater certainty, the Registration Statement need not be a
Shelf Registration Statement). Within 10 Business Days after receipt of such
request, Orbital shall give written notice of such Demand Registration request
(including therein the number of Registrable Shares included in such demand and
the parties making such demand) to all other Holders of Registrable Shares (the
"DEMAND NOTICE"). Such other Holders will have the right to join in making such
a demand by giving written notice to Orbital within 10 Business Days after the
date of the Demand Notice of such Holder's election to participate in such
Demand Registration and the number of such Holder's Registrable Shares to be
included therein. Subject to the provisions of SECTION 6.1(b), Orbital shall
cause such Registration Statement or similar document to be filed with the
Commission and shall include in such Registration Statement the Registrable
Shares which Orbital has been requested to register by the Initial Requesting
Holders, and to cause all such Registrable Shares to be registered under the Act
within 180 days of receipt of the Initial Requesting Holders' request. After
Orbital has effected three (3) such registrations pursuant to this SECTION
6.1(a), the related Registration Statements have been declared effective and the
distribution contemplated thereunder completed within the time frame specified
in Section 6.1(b), Orbital shall have no further obligation under this SECTION
6.1(a); provided, however, that no Holder shall be entitled to have the
Registrable Shares held by it covered by such Registration unless such Holder is
in compliance with SECTION 6.3(j) hereof. No Demand Registration shall be
effected pursuant to this SECTION 6.1(a) during any period in which a
Registration Statement shall have become and be maintained effective.
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(b) Orbital shall use its reasonable best efforts to keep each
such Shelf Registration continuously effective in order to permit the Prospectus
forming part thereof to be usable by the Holders until the earlier of (A) the
date when all the Registrable Shares have been sold pursuant to such Shelf
Registration Statement or Rule 144 and (B) the date on which, in the written
opinion of counsel to the Holders addressed to the Holders and to Orbital, all
outstanding Registrable Shares of Orbital are eligible for resale without
registration under the Act in accordance with Rule 144(k) or any successor
provision thereto (in any such case, such period being called the "EFFECTIVENESS
PERIOD"). Orbital shall be deemed not to have used their reasonable best efforts
to keep the Registration Statement effective during the requisite period if
Orbital voluntarily takes any action that would result in Holders covered
thereby not being able to offer and sell any such Registrable Shares during that
period, unless (x) such action is required by applicable law or the rules of any
national securities exchange or other market on which any of the Registrable
Shares are then listed or quoted, or (y) any event contemplated by SECTION
6.3(b)(2)(iii) below occurs and Orbital acts promptly in good faith and for
valid business reasons in suspending use of the Prospectus until the requisite
changes have been made and Orbital thereafter promptly complies with the
requirements of SECTION 6.3(h) below.
(c) Notwithstanding anything to the contrary contained in this
ARTICLE 6, Orbital shall have the right (the "SUSPENSION RIGHT") to defer such
filing (or suspend sales under any filed registration thereunder) for a period
of not more than 90 days during any 12-month period (a "BLACK-OUT PERIOD"), if
Orbital shall furnish to the Holders a certificate signed by the President or
any other executive officer of Orbital stating that, either (i) in the good
faith judgment of Orbital, the continued effectiveness of the Registration
Statement would require Orbital to disclose a material financing, acquisition or
other corporate transaction, and the Board of Directors shall have determined in
good faith that it would be detrimental to Orbital and its shareholders to file
such Registration Statement or amendment thereto at such time (or continue sales
under a filed Registration Statement) or (ii) Orbital plans to conduct an
underwritten offering of its equity securities during such Black-Out Period and,
in each case, therefore, Orbital has elected to defer the filing of such
Registration Statement (or suspend sales under a filed Registration Statement)
provided, however, that Orbital shall have the obligation (with respect to both
(i) and (ii) of this Section 6.1(c)) to file any such deferred Registration
Statement or lift any suspension of sales under a filed Registration Statement
as soon as such filing is no longer detrimental, and in such circumstances, the
Holder can withdraw the Demand Registration without prejudice to making it
again.
(d) Orbital agrees not to issue any Orbital Stock or any
securities convertible into or exchangeable or exercisable for Orbital Stock
(other than securities issued pursuant to Orbital's option or other benefit
plans, its 5% Convertible Subordinated Notes Due 2002, securities issued by
Orbital not
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involving a public offering or securities issued by Orbital included in any
Demand Registration), for the period commencing 15 days prior to the closing of
the offering of securities included in any Demand Registration and ending on the
90th day following such closing.
6.2. ORBITAL REGISTRATION
(a) If Orbital shall determine to register any shares of
Orbital Stock for its own account or for the account of a security holder or
holders or otherwise (other than a registration relating solely to employee
benefit plans, or a registration relating solely to a merger, exchange offer or
a transaction of the type specified in Rule 145(a) under the Act), Orbital will
promptly deliver to each of the Holders a written notice thereof of such
proposed transaction at least 10 Business Days prior to the filing of a
Registration Statement (the "ORBITAL REGISTRATION STATEMENT") and include in
such registration, and in any underwriting involved therein, all the Registrable
Shares specified in written requests made by Holders within 10 Business Days
after receipt of the written notice from Orbital described above. Each Holder
shall be entitled to have its shares included in an unlimited number of
registrations pursuant to this SECTION 6.2.
(b) If the registration of which Orbital gives notice is for a
registered public offering involving an underwriting, Orbital shall so advise
the Holders as a part of the written notice given pursuant to SECTION 6.2(a). In
such event, the right of each Holder to registration pursuant to SECTION 6.2(a)
shall be conditioned upon such Holder's participation in such underwriting and
the inclusion of the Registrable Shares in the underwriting to the extent
provided herein. If the Holders shall have elected to exercise their rights
under SECTION 6.2(a), they shall enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected for underwriting by Orbital. Notwithstanding any other provision of
this SECTION 6.2, if the underwriter determines and so advises Orbital in
writing that marketing factors require a limitation on the number of shares to
be underwritten, Orbital shall so advise the Holders. In such an event, the
number of Registrable Shares that may be included in the registration and
underwriting by the Holders shall be reduced, on a pro rata basis (based on the
number of shares of Orbital Stock held by each such Holder and each other person
(other than Orbital) registering shares under such registration), by such
minimum number of shares as is necessary to comply with such limitation. If a
Holder disapproves of the terms of any such underwriting, it may elect to
withdraw therefrom by written notice to Orbital and the underwriter. Any
Registrable Shares excluded or withdrawn from such underwriting shall be
withdrawn from such registration.
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6.3. REGISTRATION PROCEDURES.
(a) Orbital shall furnish to the Exercising Holders, prior to
the filing thereof with the Commission, a copy of any Registration Statement,
and each amendment thereof or supplement, if any, to the Prospectus included
therein and shall use its reasonable best efforts to reflect in each such
document, when so filed with the Commission, such comments that the Exercising
Holders reasonably may propose.
(b) (1) Orbital shall advise the Exercising Holders: (i)
when a Registration Statement and any amendment thereto has been filed with the
Commission and when the Registration Statement or any post-effective amendment
thereto has become effective; and (ii) of any request by the Commission for
amendments or supplements to the Registration Statement or the Prospectus
included therein or for additional information.
(2) Orbital shall advise the Exercising Holders of: (i)
the issuance by the Commission of any stop order suspending effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose;
(ii) the receipt by Orbital of any notification with respect to the suspension
of the qualification of the securities included therein for sale in any
jurisdiction or the initiation of any proceeding for such purpose; and (iii) the
happening of any event that requires the making of any changes in the
Registration Statement or the Prospectus so that, as of such date, the
Registration Statement and the Prospectus do not contain an untrue statement of
a material fact and do not omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made) not
misleading (which advice shall be accompanied by an instruction to suspend the
use of the Prospectus until the requisite changes have been made).
(c) Orbital shall use its reasonable best efforts to prevent
the issuance, and if issued to obtain the withdrawal, of any order suspending
the effectiveness of any Registration Statement at the earliest possible time.
(d) Orbital shall furnish to each Holder, without charge, at
least one copy of such Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, and, if the Holder so
requests in writing, all reports, other documents and exhibits (including those
incorporated by reference).
(e) Orbital shall, during the Effectiveness Period, deliver to
each Exercising Holder, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in such Registration Statement
and any amendment or supplement thereto as such Exercising Holder may reasonably
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request; and Orbital consents (except upon and during the continuance of any
event described in SECTION 6.3(b)(2)(iii) above) to the use of the Prospectus or
any amendment or supplement thereto by each of the selling Exercising Holders in
connection with the offering and sale of the Registrable Shares covered by the
Prospectus or any amendment or supplement thereto during the Effectiveness
Period.
(f) Prior to any offering of Registrable Shares pursuant to any
Registration Statement, Orbital shall register or qualify or cooperate with the
Exercising Holders included therein and their respective counsel in connection
with the registration or qualification of such Registrable Shares for offer and
sale under the securities or blue sky laws of such jurisdictions as any such
Exercising Holders reasonably request in writing and do any and all other acts
or things necessary or advisable to enable the offer and sale in such United
States jurisdictions of the Registrable Shares covered by such Registration
Statement; provided, however, that in no event shall Orbital be obligated to (i)
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be qualified or required to so qualify
but for this SECTION 6.3(f), (ii) file any general consent to service of process
in any jurisdiction where it is not as of the date hereof then so subject or
(iii) subject itself to taxation in any such jurisdiction if it is not then so
subject.
(g) Orbital shall cooperate with the Exercising Holders to
facilitate the timely preparation and delivery of certificates representing
Registrable Shares to be sold pursuant to any Registration Statement free of any
restrictive legends and in such permitted denominations and registered in such
names as Exercising Holders may request in connection with the sale of
Registrable Shares pursuant to such Registration Statement.
(h) Upon the occurrence of any event contemplated by SECTION
6.3(b)(2)(iii) above, Orbital shall promptly, and in any event within 30 days,
subject to SECTION 6.1(c), prepare a post-effective amendment to any
Registration Statement or an amendment or supplement to the related Prospectus
or file any other required document so that, as thereafter delivered to
purchasers of the Registrable Shares included therein, the Prospectus will not
include 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. If Orbital notifies the Exercising
Holders of the occurrence of any event contemplated by SECTION 6.3(b)(2)(iii)
above, the Exercising Holders shall suspend the use of the Prospectus until the
requisite changes to the Prospectus have been made.
(i) Orbital shall use its best efforts to comply with all
applicable rules and regulations of the Commission and shall make generally
available to their security holders or otherwise provide in accordance with
Section 11(a) of the Act as
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soon as practicable after the effective date of the applicable Registration
Statement an earnings statement satisfying the provisions of Section 11(a) of
the Act.
(j) Orbital agrees to use its reasonable best efforts
(including the payment of any listing fees) to obtain the listing of all
Registrable Shares covered by the Registration Statement on each securities
exchange on which securities of the same class are then listed.
(k) If the Exercising Holders propose to sell their Registrable
Shares pursuant to SECTION 6.1 in an underwritten public offering, Orbital shall
be entitled to select the underwriters for such offering, subject to the
reasonable approval of a majority of the participating Holders, and Orbital
shall make available members of the management of Orbital and its Affiliates for
reasonable assistance in selling efforts relating to such offering for a public
offering of such size and shall enter into underwriting agreements containing
usual and customary terms and conditions for such types of offerings; provided
that Orbital shall not be required to assist in an underwritten offering more
than once in any 12-month period.
6.4. EXPENSES OF REGISTRATION.
Orbital shall pay, or shall reimburse each Holder for paying, all
Registration Expenses incurred in connection with the registration of the
Registrable Shares in accordance with SECTIONS 6.1 and 6.2 hereof and the
reasonable fees and expenses of one special counsel, in each country and
province where the shares are being registered, for the Holders, which special
counsel(s) shall be designated by the Holders and subject to the approval of the
Company, in an amount not to exceed $35,000 per Registration pursuant to SECTION
6.1 and an aggregate of $150,000 for all Registrations under SECTIONS 6.1 and
6.2. All Selling Expenses incurred in connection with the offer and sale of
Registrable Shares by any of the Holders shall be borne by the Holder offering
or selling such Registrable Shares. Except as covered by the first sentence of
this SECTION 6.4, each Holder shall pay the expenses of its own counsel.
6.5. INDEMNIFICATION.
(a) In connection with any Registration Statement, Orbital
shall indemnify and hold harmless each Exercising Holder and each of their
respective directors and officers and each person controlling such Exercising
Holder within the meaning of Section 15 of the Act from and against any loss,
liability, claim, damage and expense whatsoever, including any amounts paid in
settlement of any investigation, litigation, proceeding or claim, joint or
several, as incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement (or any
amendment thereto) covering Registrable Shares, including all documents
incorporated therein by reference, or
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the omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
arising out of any untrue statement or alleged untrue statement of a material
fact contained in any Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, that Orbital shall not be liable under this
clause (a) for any settlement of any action effected without its written
consent, which consent shall not be unreasonably withheld or delayed; provided
further, that the indemnity provided for in this SECTION 6.5(a) shall not apply
to any loss, liability, claim, damage or expense to the extent arising out of an
untrue statement or omission or alleged untrue statement or omission (i) made in
reliance upon and in conformity with written information furnished to Orbital by
such Exercising Holder in writing expressly stating that such information is
being provided by such Exercising Holder for use in the Registration Statement
(or any amendment thereto) or any Prospectus (or any amendment or supplement
thereto) or (ii) contained in any preliminary prospectus or the Prospectus if
such Exercising Holder failed to send or deliver a copy of the Prospectus (or
any amendment or supplement thereto) to the person asserting such losses,
claims, damages or liabilities on or prior to the delivery of written
confirmation of any sale of securities covered thereby to such person in any
case where such Prospectus (or any amendment or supplement thereto) corrected
such untrue statement or omission. Any amounts advanced by Orbital to an
indemnified party pursuant to this SECTION 6.5 as a result of such losses shall
be returned to Orbital if it shall be finally determined by such a court in a
judgment not subject to appeal or final review that such indemnified party was
not entitled to indemnification by Orbital.
(b) Each Exercising Holder, severally and not jointly, shall
indemnify and hold harmless Orbital and the other Exercising Holders and each of
their respective directors and officers (including each officer of Orbital who
signed the Registration Statement) and each person, if any, who controls Orbital
or other selling Holder within the meaning of Section 15 of the Act, from and
against any loss, liability, claim, damage and expense whatsoever described in
the indemnity contained in SECTION 6.5(a) hereof, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to Orbital by such Exercising
Holder in writing expressly stating that such information is being provided by
such Holder for use in the Registration Statement (or any amendment thereto) or
any Prospectus (or any amendment or supplement thereto); provided that the
Exercising Holder shall not be liable under this clause for any settlement of
any action effected without its written consent, which consent shall not be
unreasonably withheld. Notwithstanding any provision of this Agreement or any
other agreement, in no event will any Investor be liable for indemnification
hereunder for an amount
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<PAGE> 24
greater than the amount of proceeds that such Investor receives in any
particular offering of Registrable Securities in which his securities were sold.
(c) Each party entitled to indemnification under this SECTION
6.5 (the "INDEMNIFIED PARTY") shall give notice to the party required to provide
indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, but the
omission to so notify the Indemnifying Party shall not relieve it from any
liability which it may have to the Indemnified Party pursuant to the provisions
of this SECTION 6.5 except to the extent of the actual damages suffered by such
delay in notification. The Indemnifying Party shall assume the defense of such
action, including the employment of counsel to be chosen by the Indemnifying
Party to be reasonably satisfactory to the Indemnified Party, and payment of
expenses. The Indemnified Party shall have the right to employ its own counsel
in any such case, but the legal fees and expenses of such counsel shall be at
the expense of the Indemnified Party, unless the employment of such counsel
shall have been authorized in writing by the Indemnifying Party in connection
with the defense of such action, or the Indemnifying Party shall not have
employed counsel to take charge of the defense of such action or the Indemnified
Party shall have reasonably concluded that there may be defenses available to it
or them which are different from or additional to those available to the
Indemnifying Party (in which case the Indemnifying Party shall not have the
right to direct the defense of such action on behalf of the Indemnified Party),
in any of which events such fees and expenses shall be borne by the Indemnifying
Party. No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
(d) If the indemnification provided for in this SECTION 6.5 is
unavailable to a party that would have been an Indemnified Party under this
SECTION 6.5 in respect of any expenses, claims, losses, damages and liabilities
referred to herein, then each party that would have been an Indemnifying Party
hereunder shall, in lieu of indemnifying such Indemnified Party, contribute to
the amount paid or payable by such Indemnified Party as a result of such
expenses, claims, losses, damages and liabilities in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the one
hand and such Indemnified Party on the other in connection with the statement or
omission which resulted in such expenses, claims, losses, damages and
liabilities, as well as any other relevant equitable considerations. The
relative fault 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
Indemnifying Party or such Indemnified Party and the parties' relative intent,
knowledge, access to information and opportunity to correct
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<PAGE> 25
or prevent such statement or omission. Orbital and each Exercising Holder agrees
that it would not be just and equitable if contribution pursuant to this Section
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this SECTION 6.5(d).
(e) No person guilty of 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.
6.6. INFORMATION TO BE FURNISHED BY HOLDERS.
Each Holder shall furnish to Orbital such information as Orbital
may reasonably request and as shall be required in connection with the
Registration and related proceedings referred to in SECTIONS 6.1 and 6.2 hereof.
If any Holder fails to provide Orbital with such information within 15 Business
Days of Orbital's request, Orbital's obligations under SECTIONS 6.1 and 6.2
hereof with respect to such Holder or the Registrable Shares owned by such
Holder shall be suspended until such Holder provides such information.
6.7. RULE 144 SALES.
(a) Orbital covenants that it will file the reports required to
be filed by Orbital under the Exchange Act, so as to enable any Holder to sell
Registrable Shares pursuant to Rule 144 under the Act.
(b) In connection with any sale, transfer or other disposition
by any Holder of any Registrable Shares pursuant to Rule 144 under the Act,
Orbital shall cooperate with such Holder to facilitate the timely preparation
and delivery of certificates representing Registrable Shares to be sold and not
bearing any Act legend, if deemed appropriate, and enable certificates for such
Registrable Shares to be for such number of shares and registered in such names
as the selling Holder may reasonably request, provided that such request is made
at least two Business Days prior to any sale of Registrable Shares.
7. MISCELLANEOUS
7.1. RIGHTS OF STOCKHOLDERS.
Until the Exchange Right shall have been exercised as provided
herein, the Investors, as such, shall not be entitled to vote or receive
dividends or any other securities of Orbital that may at any time be issuable on
the exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Investors, as such, any of the rights of a
stockholder of Orbital or any right
25
<PAGE> 26
to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value, or change of stock to no par
value, consolidation, merger, conveyance, or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise.
7.2. SUCCESSORS AND ASSIGNS.
Except as otherwise provided herein, the terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties hereto. Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the parties hereto
or their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement.
7.3. AMENDMENTS AND WAIVERS.
Any term of this Agreement may be amended, and the observance of
any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of each party.
7.4. NO WAIVER.
No delay or omission to exercise any right, power, or remedy
accruing to either party upon any breach or default under this Agreement, shall
be deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent, or approval of any kind or character on
the part of either party of any breach or default under this Agreement, or any
waiver on the part of either party of any provisions or conditions of this
Agreement, must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to either of the parties, shall be
cumulative and not alternative.
7.5. NOTICES.
Unless otherwise provided, any notice required or permitted under
this Agreement shall be given in writing and shall be deemed effectively given
(a) upon personal delivery to the party to be notified, (b) on the day of
receipt if delivered by registered or certified mail, (c) on the next Business
Day after dispatch via nationally recognized overnight courier or (d) upon
confirmation of transmission by facsimile, all addressed to the party to be
notified. Notices should be provided in accordance with this SECTION 7.5 at the
following addresses, or at such other address of which such party shall have
provided notice hereunder:
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<PAGE> 27
If to the Investors, to:
a. CAI Capital Partners And Company II, L.P.
c/o CAI Managers & Co., L.P.
767 Fifth Avenue
New York, New York
Attention: Manfred Yu
Telephone: (212) 319-3023
Facsimile: (212) 319-0232
with a copy (which shall not constitute notice) to:
Stikeman, Elliott
Commerce Court West
Suite 5300, 1900 Bay Street
Toronto, Ontario
M5L 1B9
Attention: Simon Romano
Telephone: (416) 869-5596
Facsimile: (416) 947-0860
b. CAI Capital Partners And Company II-C, L.P.
c/o CAI Managers & Co., L.P.
767 Fifth Avenue
New York, New York
Attention: Manfred Yu
Telephone: (212) 319-3023
Facsimile: (212) 319-0232
27
<PAGE> 28
with a copy (which shall not constitute notice) to:
Stikeman, Elliott
Commerce Court West
Suite 5300, 1900 Bay Street
Toronto, Ontario
M5L 1B9
Attention: Simon Romano
Telephone: (416) 869-5596
Facsimile: (416) 947-0860
c. CAI Partners And Company II, L.P.
c/o CAI Managers & Co., L.P.
767 Fifth Avenue
New York, New York
Attention: Manfred Yu
Telephone: (212) 319-3023
Facsimile: (212) 319-0232
28
<PAGE> 29
with a copy (which shall not constitute notice) to:
Stikeman, Elliott
Commerce Court West
Suite 5300, 1900 Bay Street
Toronto, Ontario
M5L 1B9
Attention: Simon Romano
Telephone: (416) 869-5596
Facsimile: (416) 947-0860
d. 597858 B.C. Ltd.
Randall Mullan
c/o McCullough O'Connor Irwin
1100 Dunsmuir Street
Vancouver, British Columbia Canada
V6C 3K4
Attention: Jonathon McCullough
Telephone: (604) 687-7077
Facsimile: (604) 687-7079
If to Orbital, to:
Orbital Sciences Corporation
21700 Atlantic Boulevard
Dulles, Virginia 20166
Attn.: Legal Department
Telephone: (703) 406-5500
Facsimile: (703) 406-5572
with a copy (which shall not constitute notice) to:
Hogan & Hartson L.L.P.
555 13th Street, N.W.
Washington, D.C. 20004-1109
Attn.: Eve N. Howard, Esq.
Facsimile: (202) 637-5910
29
<PAGE> 30
7.6. HEADINGS.
Section and subsection headings contained in this Agreement are
inserted for convenience of reference only, shall not be deemed to be a part of
this Agreement for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.
7.7. SEVERABILITY.
If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of this Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
7.8. ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement among the parties
with respect to the subject matter hereof and no party shall be liable or bound
to any other party in any manner by any warranties, representations or covenants
except as specifically set forth herein.
7.9. GOVERNING LAW.
This Agreement, the rights and obligations of the parties hereto
and any claims or disputes relating to such rights and obligations shall be
governed by and construed under the laws of the State of New York.
7.10. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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<PAGE> 31
IN WITNESS WHEREOF, each of the undersigned have caused this
Agreement to be executed by its respective officer thereunto duly authorized.
Dated: December 22, 1999
ORBITAL SCIENCES CORPORATION
By:
--------------------------------------------
Jeffrey Pirone, Executive Vice President and
Chief Financial Officer
CAI CAPITAL PARTNERS AND COMPANY II, L.P.
By: CAI Capital Partners GP & Co., L.P., its
general partner
By: 36 Pierrepont St. II Co., one of its
general partners
By:
----------------------------------
Peter Restler, President
31
<PAGE> 32
CAI CAPITAL PARTNERS AND COMPANY II-C, L.P.
By: CAI Capital Partners GP & Co., L.P., its
general partner
By: 36 Pierrepont St. II Co., one of its
general partners
By:
----------------------------------
Peter Restler, President
CAI PARTNERS AND COMPANY II, L.P.
By: CAI Capital Partners GP & Co., L.P., its
general partner
By: 36 Pierrepont St. II Co., one of its
general partners
By:
----------------------------------
Peter Restler, President
597858 B.C. LTD., AS AGENT
By:
--------------------------------------------
Randall Mullan, Director
32
<PAGE> 33
ANNEX I
NOTICE OF EXCHANGE
To: ORBITAL SCIENCES CORPORATION
(1) The undersigned hereby irrevocably elects to exercise its Exchange
Rights, pursuant to the terms of the attached Exchange and Registration Rights
Agreement, and tenders herewith certificates representing the MDA Shares to be
exchanged (as defined in the Exchange and Registration Rights Agreement).
(2) In exercising this Agreement, the undersigned hereby confirms and
acknowledges that the shares of Orbital Stock are being acquired solely for the
account of the undersigned and not as a nominee for any other party, and that
the undersigned shall not offer, sell or otherwise dispose of any such shares of
Orbital Stock except under circumstances that will not result in a violation of
the Securities Act of 1933, as amended, or any state securities laws.
(3) Please issue a certificate or certificates representing said
shares of Orbital Stock to:
Name Address No. Shares
---- ------- ----------
Dated: Investor:
---------------------- -------------------------------
By:
-------------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 10.26
[EXECUTION COPY]
AMENDMENT NO. 5
TO
THIRD AMENDED AND RESTATED
CREDIT AND REIMBURSEMENT AGREEMENT
AMENDMENT No. 5 dated as of September 30,1999 among ORBITAL
SCIENCES CORPORATION (the "COMPANY"), the BANKS listed on the signature pages
hereof and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent
(the "ADMINISTRATIVE AGENT") and as Collateral Agent (the "COLLATERAL AGENT").
WITNESSETH:
WHEREAS, the parties hereto have heretofore entered into a Third
Amended and Restated Credit and Reimbursement Agreement dated as of December 21,
1998 (as amended from time to time, the "CREDIT AGREEMENT"); and
WHEREAS, the Company has asked the Banks to waive compliance by
the Company with certain covenants set forth in the Credit Agreement for the
period from and including the Amendment No. 5 Effective Date (as defined below)
to and including December 30, 1999 (the "WAIVER PERIOD"), and the Banks are
willing to do so, subject to the terms and conditions set forth herein; and
WHEREAS, the parties hereto wish to amend certain terms of the
Credit Agreement as set forth herein,
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically defined
herein, each term used herein that is defined in the Credit Agreement shall have
the meaning assigned to such term in the Credit Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Credit Agreement shall from and after the Amendment No. 5
Effective Date (as defined in Section 14 below) refer to the Credit Agreement as
amended hereby.
SECTION 2. Additional Definitions. (a) Section 1.01 of the Credit
Agreement is amended by adding therein the following definitions in alphabetical
order:
<PAGE> 2
"AMENDMENT NO. 5 EFFECTIVE DATE" means the date of effectiveness
of Amendment No. 5 to this Agreement.
"LOWRANCE" has the meaning set forth in Section 5.07(n).
"NEW SUBSIDIARY" has the meaning set forth in Section 5.19.
"PLEDGE AGREEMENT" means the Pledge Agreement among the Company,
the subsidiaries of the Company party thereto and the Collateral Agent
delivered by the Company pursuant to Section 5.19(a), as amended from
time to time.
(b) The definition of "COLLATERAL" set forth in Section 1.01 of the
Credit Agreement is amended to read in its entirety as follows:
"COLLATERAL" means all of the collateral in which a security
interest is granted to the Collateral Agent on behalf of the Banks
pursuant to the Financing Documents.
(c) The definition of "CONSOLIDATED EBITDA" set forth in Section 1.01
of the Credit Agreement is amended to read in its entirety as follows:
"CONSOLIDATED EBITDA" means, for any period, Consolidated Net
Income for such period plus, to the extent deducted in determining such
Consolidated Net Income, without duplication, the aggregate amount of (i)
consolidated interest expense, (ii) income tax expense, (iii)
depreciation, amortization and other similar non-cash charges, (iv)
one-time accounting charges resulting in adjustments to earnings for each
of the fiscal quarters of the fiscal year ended December 31, 1998, up to
an aggregate amount equal to $35,600,000 and (v) write-offs with respect
to the investment made by the Company in CCI International N.V. for any
fiscal quarter ended prior to December 31, 1999, up to an aggregate
amount equal to $21,400,000.
(d) The definition of "EARNINGS AVAILABLE FOR FIXED CHARGES" set forth
in Section 1.01 of the Credit Agreement is amended to read in its entirety as
follows:
"EARNINGS AVAILABLE FOR FIXED CHARGES" means, for any period,
Consolidated Net Income for such period (excluding therefrom (i) any
extraordinary items of gain or loss, (ii) any gain or loss of any other
Person accounted for pursuant to the equity method, except in the case of
gain to the extent of cash distributions received from such Person during
the relevant period), plus the aggregate amounts deducted in determining
Consolidated Net Income for such period in respect of (i) interest and
rental expense, (ii) income taxes and
2
<PAGE> 3
(iii) write-offs with respect to the investment made by the Company in
CCI International N.V. for any fiscal quarter ended prior to December 31,
1999, up to an aggregate amount equal to $21,400,000.
(e) The definition of "FINANCING DOCUMENTS" set forth in Section 1.01
of the Credit Agreement is amended to read in its entirety as follows:
"FINANCING DOCUMENTS" means this Agreement, the Pledge Agreement,
the Security Agreements, the Notes, and any pledge agreement, security
agreement or other agreement delivered by the Company or any of its
Subsidiaries (including without limitation any New Subsidiary) from time
to time pursuant to Section 5.19 and pursuant to which a Lien on any
assets of the Company or any such Subsidiary is purported to be granted
to the Collateral Agent for the benefit of the Banks.
(f) The definition of "GUARANTOR" set forth in Section 1.01 of the
Credit Agreement. is amended to read in its entirety as follows:
"GUARANTOR" means, with respect to each Borrower, the other
Borrowers and each other Subsidiary of the Company (other than such
Borrower) that has agreed to be bound by the provisions of Article 9
hereof.
(g) The definition of "ASSET SALE" set forth in Section 1.01 of the
Credit Agreement is deleted in its entirety.
SECTION 3. Additional Representations Regarding Collateral. (a) Section
4.04(a) of the Credit Agreement is amended by adding the following sentence at
the end thereof as follows:
Each Financing Document entered into pursuant to Section 5.19
creates, in favor of the Collateral Agent for the ratable benefit
of the Secured Parties, a valid and binding first priority Lien on
the Collateral referred to therein subject only to Permitted Liens
(as such term is defined in each such Financing Document).
SECTION 4. Waiver of Compliance With Certain Covenants. (a) The Banks
waive (i) compliance by the Company with the provisions of Section 5.08 of the
Credit Agreement and (ii) any Default arising under Section 6.01 (c) of the
Credit Agreement by reason of such noncompliance; provided that the waivers
granted pursuant to this Section 5(a) shall be effective only so long as
Consolidated Net Worth at the last day of any fiscal quarter ended during the
Waiver Period will not be less than (i) $425,000,000 plus (ii) 50% of
Consolidated Net Income for each fiscal quarter of the Company ended on or after
September 30, 1999, for which Consolidated Net Income is positive
3
<PAGE> 4
(but with no deduction on account of any fiscal quarter for which Consolidated
Net Income is negative) plus (iii) 100% of the aggregate amount by which
Consolidated Net Worth shall have been increased by reason of the issuance and
sale after September 30, 1999 and on or prior to such date of any capital stock
or the conversion or exchange of any Debt of the Company into or with capital
stock of the Company consummated after September 30, 1999 and on or prior to
such day.
(b) The Banks waive (i) compliance by the Company with the provisions
of Section 5.09 of the Credit Agreement and (ii) any Default arising under
Section 6.01(c) of the Credit Agreement by reason of such noncompliance;
provided that the waivers granted pursuant to this Section 5(b) shall be
effective only so long as the Leverage Ratio will at no time during the Waiver
Period exceed 5.00: 1.
(c) The Banks waive (i) compliance by the Company with the provisions
of Section 5.10 of the Credit Agreement and (ii) any Default arising under
Section 6.0l(c) of the Credit Agreement by reason of such noncompliance;
provided that the waivers granted pursuant to this Section 5(c) shall be
effective only so long as the ratio of Earnings Available for Fixed Charges to
Consolidated Fixed Charges, on the last day of any fiscal quarter in each case
for the four consecutive fiscal quarters then ended, will at no time during the
Waiver Period be less than 1.15:1.
(d) Each of the waivers granted pursuant to this Section shall expire
on the close of business (New York City time) on the last day of the Waiver
Period.
(e) Except as provided in subsections (a), (b) and (c) above, this
Section 5 shall not operate as a waiver of any right, remedy, power or privilege
of the Banks under any Financing Document or of any other term or condition of
any Financing Document.
SECTION 5. Additional Reporting Requirements. Section 5.01 of the Credit
Agreement is amended by (i) deleting the "and" at the end of clause (h), (ii)
renumbering clause (i) thereof as clause (k) and (iii) adding new clauses (i)
and (j) immediately after clause (h) thereof, to read in their entirety as
follows:
(i) (x) no later than 10 Business Days after the Amendment
No. 5 Effective Date, a statement of projected cash flows of the
Company and its Consolidated Subsidiaries for each month in the
six month period from and including October 1, 1999 to and
including March 31, 2000 and (y) no later than the 15th day after
the end of each calendar month (starting with
4
<PAGE> 5
October 1999), a statement of projected cash flows of the Company
and its Consolidated Subsidiaries for each month in the
immediately succeeding six month period, setting forth (a) in each
case, at least the financial information set forth in the
projected statement of cash flows of the Company and its
Consolidated Subsidiaries for the third and fourth fiscal quarters
of the fiscal year 1999 and each fiscal quarter of the fiscal year
2000, a copy of which has been delivered to the Banks prior to the
Amendment No. 5 Effective Date, (b) accounts receivables at the
last day of the most recently ended calendar month, (c) available
cash on hand and amounts available for borrowing under this
Agreement at the last day of the most recently ended calendar
month and (d) in the case of any such statement delivered pursuant
to clause (y), the actual cash flows of the Company and its
Consolidated Subsidiaries for the most recently ended calendar
month;
(j) no later than (x) 10 Business Days after the Amendment
No. 5 Effective Date and (y) the 15th day after the end of each
calendar month (starting with October 1999), a summary report
setting forth (1)(i) total number of units sold by ORBCOMM Global,
(ii) total number of units installed by ORBCOMM Global and (iii)
revenues of ORBCOMM Global derived from subscriber airtime usage
(i.e., net of product sale revenues), in each case (a) for such
calendar month (or, in the case of the summary report delivered
within 10 Business Days after the Amendment No. 5 Effective Date,
for September 1999 (the "FIRST SUMMARY REPORT")) and (b) for the
period from creation of ORBCOMM Global to the last day of such
calendar month (or September 1999, in the case of the First
Summary Report), and (2) the numbers and revenues described in
subclauses (i), (ii) and (iii) of clause (1) projected for the
immediately succeeding calendar month (or, in the case of the
First Summary Report, for October 1999); and
SECTION 6. Additional Permitted Lien. Section 5.14(h) of the Credit
Agreement is amended to read in its entirety as follows:
(h) Liens created pursuant to any of the Financing Documents.
SECTION 7. Additional Permitted Investments. Section 5.07 of the Credit
Agreement is amended by:
(i) substituting the dollar amount "$154,000,000" for the dollar amount
"$134,000,000" set forth in clause (d) thereof;
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<PAGE> 6
(ii) redesignating clause (n) thereof as clause (o) and substituting a
reference to "this clause (o)" for the reference to "this clause (n)" contained
therein;
(iii) deleting the "and" at the end of clause (m) thereof; and
(iv) adding the following new clause (n) immediately after clause (m)
thereof:
"(n) an Investment by the Company or any of its
Subsidiaries in an aggregate amount not to exceed $49,000,000 and
consisting of the acquisition by the Company of all of the capital
stock of Lowrance Electronics, Inc. ("LOWRANCE") substantially on
the terms described by the Company to the Banks prior to the
Amendment No. 5 Effective Date, including the contribution by the
Company of the Debt of Magellan described in Section 5.07(j) in
exchange for equity of Magellan and the subsequent transfer by the
Company of the stock of Lowrance to Magellan in exchange for
additional equity of Magellan; provided that such Investment shall
be permitted by this clause (n) only so long as, prior to the
making of such Investment, the Company shall have issued common
equity for cash proceeds of at least $75,000,000 and shall have
delivered to the Administrative Agent a certificate of the chief
financial officer of the Company certifying that such issuance has
been made; and"
SECTION 8. Exception to the Subsidiary Debt Limitation. The
parenthetical set forth in the first sentence of Section 5.17 of the Credit
Agreement is amended to read in its entirety as follows: "(excluding (i) Loans
and Letter of Credit Liabilities hereunder, (ii) Debt of a Subsidiary to the
Company or to a Wholly-Owned Subsidiary of the Company and (iii) Debt of
Lowrance Corporation or any of its subsidiaries in an aggregate principal amount
not in excess of $20,000,000 in existence on the date any such Person becomes a
Subsidiary of the Company and not incurred in contemplation of such event)."
SECTION 9. Additional Covenant Regarding Collateral. A new Section
5.19 is added immediately after Section 5.18 of the Credit Agreement, to read in
its entirety as follows:
SECTION 5.19. Additional Collateral; Additional Guarantors; Further
Assurances. (a) On or prior to 45 days after the Amendment No. 5 Effective Date,
the Company will, and will cause each of its wholly-owned domestic Subsidiaries
to, (i) execute and deliver to the Collateral Agent a pledge
6
<PAGE> 7
agreement in form and substance reasonably satisfactory to the Collateral Agent
pursuant to which the Company and each such Subsidiary will grant a perfected
first priority Lien to the Collateral Agent for the benefit of the Banks on all
of the capital stock or other equity interests of each Person held by the
Company or such Subsidiary (other than (x) any such capital stock or other
equity interests of any Person the pledge of which is prohibited by the terms of
any agreement or instrument to which the Company or any such Subsidiary is a
party or is bound as in effect on the Amendment No. 5 Effective Date, (y) any
such capital stock or other equity interests of any Person that is a Subsidiary
but not a domestic Subsidiary to the extent the aggregate capital stock or other
equity interests of such Person subject to the Lien created by such pledge
agreement exceed 66% of the outstanding capital stock or other equity interests
of such Person and (z) any such capital of any Subsidiary of MacDonald Dettwiler
Holdings Inc. ("MDH")), (ii) execute and deliver to the Collateral Agent a
security agreement (or, in the case of the Company or any Borrower Subsidiary,
an amendment and restatement of the Company Security Agreement or the Subsidiary
Security Agreement to which such Borrower Subsidiary is a party) in form and
substance reasonably satisfactory to the Collateral Agent pursuant to which the
Company and each such Subsidiary (other than any Subsidiary of MDH) will grant a
perfected first priority Lien (subject only to Permitted Liens (as defined in
each such security agreement)) to the Collateral Agent for the benefit of the
Banks on all accounts, general intangibles, instruments, patents and trademarks
held by the Company or such Subsidiary, (iii) take all action necessary or (in
the opinion of the Collateral Agent or the Required Lenders) desirable to
perfect and protect the Liens intended to be created by the pledge agreement and
the security agreement described in this subsection and (iv) deliver to the
Collateral Agent and the Lenders such opinions of counsel, in form and substance
reasonably satisfactory to the Collateral Agent, as the Collateral Agent shall
reasonably request.
(b) If the Company or any wholly owned domestic Subsidiary (other than
any Subsidiary of MDH) at any time after the Amendment No. 5 Effective Date
creates or acquires any new direct wholly-owned Subsidiary (each, a "NEW
SUBSIDIARY"), the Company shall, within 10 days after such creation or
acquisition (or, in the case of any such New Subsidiary created or acquired
prior to 45 days after the Amendment No. 5 Effective Date, on the earlier of (x)
45 days after the Amendment No. 5 Effective Date and (y) the date on which the
pledge agreement and the security agreement described in subsection (a) are
executed and delivered to the Collateral Agent), (i) cause such New Subsidiary
to agree to be bound by the provisions of Article 9 hereof and be a "Guarantor"
(and be subject to all of the obligations of a Guarantor hereunder), (ii) cause
such New Subsidiary to become a party to the security agreement described in
clause (ii) of subsection (a), (iii) grant a perfected first priority Lien to
the Collateral Agent for the benefit of the Banks on all of the
7
<PAGE> 8
outstanding capital stock or other equity interests of such New Subsidiary and
(iv) take, and cause such New Subsidiary and each other Subsidiary to take, all
action necessary or (in the opinion of the Collateral Agent or the Required
Lenders) desirable to perfect and protect the Liens intended to be created by
the Financing Documents (including any Financing Documents delivered in
connection with such creation or acquisition pursuant to clauses (i), (ii) and
(iii) of this Section); provided that (1) the Company will not be required to
take the actions described in clauses (i) and (ii) of this subsection with
respect to any New Subsidiary that is not a domestic Subsidiary, (2) the Company
will not be required to take the actions described in clause (iii) with respect
to the capital stock or other equity interests of any New Subsidiary that is not
a domestic Subsidiary to the extent the aggregate capital stock or other equity
interests of such New Subsidiary subject to a Lien granted to the Collateral
Agent for the benefit of the Banks would exceed 66% of the outstanding capital
stock or other equity interests of such New Subsidiary, and (3) the Company will
not be required to take any of the actions described in clauses (i), (ii) or
(iii) of this subsection (b) with respect to any New Subsidiary to the extent
any such action is prohibited by the terms of any agreement or instrument to
which (aa) such New Subsidiary is a party or is bound as in effect on the date
such New Subsidiary becomes a Subsidiary of the Company, so long as such
agreement or instrument was not entered into in contemplation of such New
Subsidiary becoming a Subsidiary of the Company or (bb) the Company or any of
its wholly-owned domestic Subsidiaries (other than such New Subsidiaries) is a
party or is bound as in effect on the Amendment No. 5 Effective Date.
(c) On the date on which the security agreement described in clause
(ii) of subsection (a) is delivered to the Collateral Agent, Exhibit D hereto
shall be deemed to have been amended as set forth in such security agreement,
with such changes as shall be necessary to reflect the fact that such Exhibit
sets forth a form of security agreement.
SECTION 10. Additional Event of Default. Section 6.01(c) of the Credit
Agreement is amended to read in its entirety as follows:
(c) any Borrower shall fail to observe or perform any covenant or
agreement contained in Sections 5.01(g) and 5.07 to 5.19 inclusive;
SECTION 11. Temporary Increase in Pricing. The Pricing Schedule to the
Credit Agreement is amended by adding the following paragraph immediately after
the table set forth therein:
In addition, on any day from and including the Amendment No. 5 Effective
Date to and including December 30, 1999, each rate per annum set forth above
shall be increased by 0.75%, in the case of the Euro Dollar
8
<PAGE> 9
Margin, the Base Rate Margin or the Letter of Credit Commission Rate, or 0.125%,
in the case of the Commitment Fee Rate.
SECTION 12. Additional Guarantors. Simultaneously with the delivery by
each Subsidiary of the Financing Documents to be delivered pursuant to Section
5.19(a) each such Subsidiary shall execute an instrument in form and substance
satisfactory to the Collateral Agent pursuant to which it agrees to be bound by
the provisions of Article 9 of the Credit Agreement and to be a "Guarantor" (and
be subject to all of the obligations of a Guarantor) thereunder.
SECTION 13. New York Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 14. Counterparts, Effectiveness. This Amendment may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Amendment shall become effective on the date (the "AMENDMENT NO. 5
EFFECTIVE DATE") on which the Administrative Agent shall have received:
(i) duly executed counterparts hereof signed by the Company and
the Required Banks (or, in the case of any party as to which an executed
counterpart shall not have been received, the Administrative Agent shall
have received telegraphic, telex or other written confirmation from such
party of execution of a counterpart hereof by such party),
(ii) all documents the Administrative Agent may reasonably request
relating to the existence of the Company, the corporate authority for and
the validity of this Amendment and the Financing Documents, and any other
matters reasonably relevant hereto, all in form and substance reasonably
satisfactory to the Administrative Agent; and
(iii) for the account of each Bank with respect to which the
Administrative Agent has received a duly executed counterpart hereof (or
telegraphic, telex or other written confirmation from such Bank of
execution of a counterpart hereof by such Bank), an amendment fee in an
amount equal to 1/4 of 1% of such Bank's commitment as in effect on the
Amendment No. 5 Effective Date.
SECTION 15. Amendment No. 4. The parties hereto acknowledge that the
conditions to effectiveness of Amendment No. 4 to the Credit Agreement have not
been satisfied and that such Amendment has not become effective.
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<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
ORBITAL SCIENCES CORPORATION
By
------------------------------------------
Name:
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By
------------------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA
By
------------------------------------------
Name:
Title:
BANK OF AMERICA, N.A., f/k/a
NATIONSBANK, N.A.
By
------------------------------------------
Name:
Title:
FIRST UNION COMMERCIAL CORPORATION
By
------------------------------------------
Name:
Title:
DEUTSCHE BANK AG, NEW YORK
AND/OR CAYMAN ISLAND BRANCHES
By
------------------------------------------
Name:
Title:
10
<PAGE> 11
By
------------------------------------------
Name:
Title:
KEYBANK NATIONAL ASSOCIATION
By
------------------------------------------
Name:
Title:
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY
By
------------------------------------------
Name:
Title:
WACHOVIA BANK, N.A.
By
------------------------------------------
Name:
Title:
CHEVY CHASE BANK
By
------------------------------------------
Name:
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Administrative Agent and as
Collateral Agent
By
------------------------------------------
Name:
Title:
11
<PAGE> 1
EXHIBIT 10.27
AMENDMENT NO. 6
TO
THIRD AMENDED AND RESTATED
CREDIT AND REIMBURSEMENT AGREEMENT
AMENDMENT No. 6 dated as of December 21, 1999 among ORBITAL SCIENCES
CORPORATION (the "COMPANY"), the BANKS listed on the signature pages hereof and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent (the
"ADMINISTRATIVE AGENT") and as Collateral Agent (the "COLLATERAL AGENT").
WITNESSETH:
WHEREAS, the parties hereto have heretofore entered into a Third
Amended and Restated Credit and Reimbursement Agreement dated as of December 21,
1998 (as amended from time to time, the "CREDIT AGREEMENT"); and
WHEREAS, the Company has asked the Banks to waive compliance by the
Company with certain covenants set forth in the Credit Agreement for the period
from and including the Amendment No. 6 Effective Date (as defined in the Credit
Agreement as amended hereby) to and including February 22, 2000 (the "WAIVER
PERIOD"), and the Banks are willing to do so, subject to the terms and
conditions set forth herein; and
WHEREAS, the parties hereto wish to release certain collateral and
amend certain terms of the Credit Agreement as set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definition; References. Unless otherwise specifically defined
herein, each term used herein that is defined in the Credit Agreement shall have
the meaning assigned to such term in the Credit Agreement. Each reference to
"hereof', "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Credit Agreement shall from and after the Amendment No. 6
Effective Date (as defined in Section 17 below) refer to the Credit Agreement as
amended hereby.
<PAGE> 2
SECTION 2. Additional Definitions. (a) Section 1.01 of the Credit Agreement
is amended by adding therein the following definitions in alphabetical order:
"ASSET SALE" means any sale, lease or other disposition (including any
such transaction effected by way of merger or consolidation) by the Company
or any of its domestic wholly-owned Subsidiaries of any asset, but
excluding (i) dispositions in the ordinary course of business, (ii)
dispositions to the Company or a domestic wholly-owned Subsidiary and (iii)
dispositions of Temporary Cash Investments and cash payments otherwise
permitted under this Agreement.
"AMENDMENT NO. 6 EFFECTIVE DATE" means the date of effectiveness of
Amendment No. 6 to this Agreement.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
aggregate amount of expenditures by the Company and its Consolidated
Subsidiaries for plant, property and equipment during such period
(including any such expenditure by way of acquisition of a Person or by way
of assumption of indebtedness or other obligations of a Person, to the
extent reflected as plant, property and equipment).
"EQUITY ISSUANCE" means any issuance of equity securities by the
Company or any of its domestic wholly-owned Subsidiaries, other than (i)
any such issuance to the Company or any of its domestic wholly-owned
Subsidiaries, (ii) any such issuance pursuant to employee benefit
arrangements in the ordinary course of business and (iii) any such issuance
pursuant to the warrants contemplated by Section 16 of Amendment No. 6.
"EXCLUDED CHARGES" means the non-cash charges taken by the Company
with respect to certain matters as further described under "Pending
Matters" in Form 10-Q filed by the Company with the Securities and Exchange
Commission for the fiscal quarter ended September 30, 1999, a copy of which
has been delivered by the Company to each Bank prior to the Amendment No. 6
Effective Date.
"MDA TRANSACTION" means, collectively, the transactions contemplated
by the MDA Transaction Agreement.
"MDA TRANSACTION AGREEMENT" means the Subscription Agreement dated on
or about December 21, 1999 among CAI CAPITAL PARTNERS AND COMPANY II, a
limited partnership formed under the laws of the Province of Ontario, CAI
PARTNERS AND COMPANY II, a
2
<PAGE> 3
limited partnership formed under the laws of the Province of Ontario, CAI
CAPITAL PARTNERS AND COMPANY II-C, a limited partnership formed under the
laws of the Province of Ontario (collectively, the "CAI Entities"), a
newly-formed British Columbia corporation ("NEWCO" and, together with the
CAI Entities, the "PURCHASERS"), MDA and the Company, containing
substantially the terms set forth in the summary thereof heretofore
distributed to the Banks and otherwise in form and substance satisfactory
to the Administrative Agent.
"NET CASH PROCEEDS" means, with respect to any Reduction Event, an
amount equal to the cash proceeds received by the Company or any of its
domestic wholly-owned Subsidiaries from or in respect of such Reduction
Event (including any cash proceeds received as interest or similar income
or other proceeds of any noncash proceeds of any Asset Sale), less (i) any
fees, costs and expenses reasonably incurred by such Person in respect of
such Reduction Event and (ii) if such Reduction Event is an Asset Sale, any
taxes actually paid or to be paid by such Person (as estimated by a senior
financial or accounting officer of the Company, after giving effect to the
overall tax position of the Company) in respect of such Asset Sale and the
amount of any Debt secured by a Lien on an asset which is the subject of
such Asset Sale and required to be discharged in connection therewith.
"REDUCTION EVENT" means any Asset Sale or Equity Issuance.
"RESTRICTED ACCOUNT" means a bank account established pursuant to
arrangements satisfactory to the Collateral Agent which is subject to a
Lien in favor of the Agents and the Banks and from which disbursements of
funds may be authorized only by the Collateral Agent.
(b) The definition of "CONSOLIDATED EBITDA" set forth in Section 1.01 of
the Credit Agreement is amended to read in its entirety as follows:
"CONSOLIDATED EBITDA" means, for any period, Consolidated Net Income
for such period plus, to the extent deducted in determining such
Consolidated Net Income, without duplication, the aggregate amount of (i)
consolidated interest expense, (ii) income tax expense, (iii) depreciation,
amortization and other similar non-cash charges, (iv) one-time accounting
charges resulting in adjustments to earnings for each of the fiscal
quarters of the fiscal year ended December 31, 1998, up to an aggregate
amount equal to $35,600,000, (v) write-offs with respect to the investment
made by the Company in CCI International N.V. for any fiscal quarter ended
prior to December 31, 1999, up to an aggregate amount equal to
3
<PAGE> 4
$21,400,000 and (vi) solely for any period ended on or prior to February
22, 2000, Excluded Charges, up to an aggregate amount equal to $5,000,000.
(c) The definition of "CONSOLIDATED NET WORTH" set forth in Section 1.01 of
the Credit Agreement is amended to read in its entirety as follows:
"CONSOLIDATED NET WORTH" means, at any date, the consolidated
stockholders' equity of the Company and its Consolidated Subsidiaries as of
such date; provided that Consolidated Net Worth at any date on or prior to
February 22, 2000 shall be net of the lesser of (i) the effect of any
Excluded Charges recorded on or prior to such date and (ii) $40,000,000 in
the aggregate.
(d) The definition of "EARNINGS AVAILABLE FOR FIXED CHARGES" set forth in
Section 1.01 of the Credit Agreement is amended to read in its entirety as
follows:
"EARNINGS AVAILABLE FOR FIXED CHARGES" means, for any period,
Consolidated Net Income for such period (excluding therefrom (i) any
extraordinary items of gain or loss, (ii) any gain or loss of any other
Person accounted for pursuant to the equity method, except in the case of
gain to the extent of cash distributions received from such Person during
the relevant period), plus the aggregate amounts deducted in determining
Consolidated Net Income for such period in respect of (i) interest and
rental expense, (ii) income taxes, (iii) write-offs with respect to the
investment made by the Company in CCI International N.V. for any fiscal
quarter ended prior to December 31, 1999, up to an aggregate amount equal
to $21,400,000 and (iv) solely for any period ended on or prior to February
22, 2000, Excluded Charges, up to an aggregate amount equal to $5,000,000.
SECTION 3. Reductions in Commitments. The existing text of Section 2.10 is
redesignated subsection (a) thereof, and the following new subsections (b), (c)
and (d) are added to Section 2.10:
(b) On the Amendment No. 6 Effective Date, the Commitments shall be
automatically and ratably reduced to the aggregate amount of $187,000,000.
(c) The Commitments shall be automatically and ratably reduced on the
date of consummation of the MDA Transaction, by $22,000,000
4
<PAGE> 5
(d) If a Reduction Event shall occur, the Commitments shall be
automatically and ratably reduced by an amount equal to the lesser of (i)
40% of the Net Cash Proceeds of such Reduction Event and (ii) the amount
necessary to reduce the aggregate amount of the Commitments to
$125,000,000; provided that if such portion of such Net Cash Proceeds, when
aggregated with the corresponding portions of the Net Cash Proceeds of all
other Reduction Events not theretofore so applied, is less than $1,000,000,
such Net Cash Proceeds shall be deposited in the Restricted Account pending
application pursuant to this subsection (d) in connection with a subsequent
Reduction Event. Such reduction shall be effective as of the day of receipt
by the Company or any of its domestic wholly-owned Subsidiaries, as the
case may be, of the relevant Net Cash Proceeds.
(e) To the extent not theretofore reduced to the same or a lesser
amount, the Commitments shall be automatically and ratably reduced on
August 1, 2000 to the aggregate amount of $125,000,000.
(f)) On the date of each reduction of the Commitments pursuant to this
Section 2.10, the Borrowers shall prepay, together with accrued interest
thereon, the aggregate principal amount of the Loans in excess of the
aggregate amount of the Commitments as so reduced.
SECTION 4. Waiver of Compliance with Certain Covenants. (a) The Banks waive
(i) compliance by the Company with the provisions of Section 5.08 of the Credit
Agreement and (ii) any Default arising under Section 6.01 (c) of the Credit
Agreement by reason of such noncompliance; provided that the waivers granted
pursuant to this Section shall be effective only so long as Consolidated Net
Worth (as defined in the Credit Agreement as amended hereby) at the last day of
any fiscal quarter ended during the Waiver Period will not be less than (i)
$375,000,000 plus (ii) 50% of Consolidated Net Income for each fiscal quarter of
the Company ended on or after September 30, 1999, for which Consolidated Net
Income is positive (but with no deduction on account of any fiscal quarter for
which Consolidated Net Income is negative) plus (iii) 100% of the aggregate
amount by which Consolidated Net Worth shall have been increased by reason of
the issuance and sale after September 30, 1999 and on or prior to such date of
any capital stock or the conversion or exchange of any Debt of the Company into
or with capital stock of the Company consummated after September 30, 1999 and on
or prior to such day.
(b) The Banks waive (i) compliance by the Company with the provisions of
Section 5.09 of the Credit Agreement and (ii) any Default arising under Section
6.01(c) of the Credit Agreement by reason of such noncompliance; provided that
5
<PAGE> 6
the waivers granted pursuant to this Section 3(b) shall be effective only so
long as the Leverage Ratio will at no time during the Waiver Period exceed
5.00:1.
(c) The Banks waive (i) compliance by the Company with the provisions of
Section 5.10 of the Credit Agreement and (ii) any Default arising under Section
6.01(c) of the Credit Agreement by reason of such noncompliance; provided that
the waivers granted pursuant to this Section 3(c) shall be effective only so
long as the ratio of Earnings Available for Fixed Charges to Consolidated Fixed
Charges, on the last day of any fiscal quarter in each case for the four
consecutive fiscal quarters then ended, will at no time during the Waiver Period
be less than 1.15:1.
(d) Each of the waivers granted pursuant to this Section shall expire on
the earlier of (i) close of business (New York City time) on the last day of the
Waiver Period and (ii) the first date on which the Company shall, or shall
permit any other Borrower to, breach any of its obligations set forth in Section
11.
(e) Except as provided in subsections (a), (b) and (c) above, this Section
3 shall not operate as a waiver of any right, remedy, power or privilege of the
Banks under any Financing Document or of any other term or condition of any
Financing Document.
SECTION 5. Consent to MDA Transaction. The Banks hereby consent to the MDA
Transaction and agree to release the Lien on the capital stock of MacDonald
Dettwiler Holdings Inc. ("MDH") pledged to them under the Pledge Agreement, upon
and subject to the following terms and conditions:
(a) The MDA Transaction shall be consummated in accordance with the MDA
Transaction Agreement for gross cash proceeds not less than $75,000,000.
(b) Immediately prior to the merger between MDA and MDH contemplated by the
MDA Transaction Agreement, the Collateral Agent shall release the Lien of the
Banks on the capital stock of MDH so as to permit consummation of such merger
(which shall be consummated on the same day as such release), and immediately
following consummation of such merger and of the other principal components of
the MDA Transaction (all of which shall in any event be consummated on the same
day or the following day), the Company shall deliver to the Collateral Agent in
pledge under the Pledge Agreement all capital stock of MDA owned by the Company
following consummation of the MDA Transaction.
(c) Upon formation of the new holding company ("NEW MDH") contemplated by
the MDA Transaction Agreement, the Collateral Agent shall release the Lien of
the Pledge Agreement on the capital stock of MDA pledged pursuant to clause (b)
above, provided that (i) New MDH is a wholly owned
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<PAGE> 7
Domestic Subsidiary of the Company and (ii) prior to or substantially
simultaneously with the release of such lien, the Company shall have delivered
all capital stock of New MDH to the Collateral Agent in pledge under the Pledge
Agreement.
(d) The net cash proceeds to the Company of the MDA Transaction shall be
applied on the date of consummation of the MDA Transaction as follows: (i) an
amount equal to $22,000,000 shall be applied to prepayment of Loans outstanding
under the Credit Agreement (ratably amoung the Banks, to be applied to such
Group or Groups of Loans as the Administrative Agent may determine); (ii) an
amount equal to $10,000,000 shall be deposited in the Restricted Account and
(iii) the balance shall be released to the Company to be used for working
capital purposes. Amounts so deposited in the Restricted Account shall be
released therefrom from time to time upon request of the Company, so long as at
the time no Default shall have occurred and be continuing, as follows: (A) upon
consummation of the security arrangements contemplated by Section 5.19(d) of the
Credit Agreement, $5,000,000 shall be released; (B) at such time as the
aggregate amount of the Commitments shall have been reduced to $150,000,000 or
less, $10,000,000 shall be released; (C) amounts not theretofore released
pursuant to clause (A) or (B) shall be released from time to time, so long as
after giving effect to such release the Company's cash balances do not exceed
$10,000,000 and (D) any such request for release shall be accompanied by a
certificate signed by a duly authorized officer of the Company (on which the
Collateral Agent may conclusively rely) to the effect that the applicable
conditions set forth above have been satisfied in connection with such release.
(e) The Company agrees to cause the foregoing conditions to be satisfied in
the event that the MDA Transaction is consummated, and agrees that any failure
to do so shall constitute an Event of Default.
(f) The Banks hereby authorize the Collateral Agent to give the
acknowledgments contemplated by Sections 4.1(2) and (3) of the Unanimous
Shareholders' Agreement contemplated by the MDA Transaction Agreement.
(g) The Banks hereby waive (i) the requirement under Section 5.19(b) of the
Credit Agreement that New MDH become a Guarantor and (ii) the limitations of
Section 5.14 of the Credit Agreement to the extent, and only to the extent,
necessary to permit New MDH to grant the Lien on the shares of MDA pursuant to
Section 15 of the Secondary Option Agreement contemplated by the MDA Transaction
Agreement, provided that the documentation establishing such Lien is
satisfactory to the Collateral Agent.
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<PAGE> 8
(h) The figure "60 days" appearing in Section 6.01(i) of the Credit
Agreement is changed to "30 days".
SECTION 6. Additional Reporting Requirements. Subsections (i) and (j) of
Section 5.01 are amended to read in their entirety as follows:
(i) (x) no later than 10 Business Days after the Amendment No. 5
Effective Date, a statement of projected cash flows of the Company and its
Consolidated Subsidiaries for each month in the six month period from and
including October 1, 1999 to and including March 31, 2000 and (y) no later
than the 22nd day after the end of each calendar month (starting with
October 1999), a statement of projected cash flows of the Company and its
Consolidated Subsidiaries for each month in the immediately succeeding six
month period and for the period beginning on the first day after such
calender month and ending December 31, 2000, taken as a whole, setting
forth (a) in each case, at least the financial information set forth in the
projected statement of cash flows of the Company and its Consolidated
Subsidiaries for the third and fourth fiscal quarters of the fiscal year
1999 and each fiscal quarter of the fiscal year 2000, a copy of which has
been delivered to the Banks prior to the Amendment No. 5 Effective Date,
(b) accounts receivables at the last day of the most recently ended
calendar month, (c) available cash on hand and amounts available for
borrowing under this Agreement at the last day of the most recently ended
calendar month, and (d) in the case of any such statement delivered
pursuant to clause (y), the actual cash flows of the Company and its
Consolidated Subsidiaries for the most recently ended calendar month
setting forth the operating cash flows as a single line item and the
financing and investing activities as separate line items;
(j) no later than (x) 10 Business Days after the Amendment No. 5
Effective Date and (y) the 22nd day after the end of each calendar month
(starting with October 1999), a summary report setting forth (1)(i) total
number of units sold by ORBCOMM Global, (ii) total number of units
installed by ORBCOMM Global and (iii) revenues of ORBCOMM Global derived
from subscriber airtime usage (i.e. net of product sale revenues), in each
case (a) for such calendar month (or, in the case of the summary report
delivered within 10 Business Days after the Amendment No. 5 Effective Date,
for September 1999 (the "FIRST SUMMARY REPORT")) and (b) for the period
from creation of ORBCOMM Global to the last day of such calendar month (or
September 1999, in the case of the First Summary Report), and (2) the
numbers and revenues described in subclauses (i), (ii) and (iii) of clause
(1) projected for the immediately succeeding calendar month (or, in the
case of the First Summary Report, for October 1999) and
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<PAGE> 9
for the period beginning on the first day after such calender month and
ending December 31, 2000, taken as a whole; and
SECTION 7. Additional Permitted Investments. Section 5.07 of the Credit
Agreement is amended by:
(i) substituting the dollar amount "$157,500,000" for the dollar
amount "$154,000,000" set forth in clause (d) thereof; and
(ii) substituting the dollar amount "$45,500,000" for the dollar
amount "$35,000,000" set forth in subclause (y) under clause (j) thereof.
SECTION 8. Exception to the Subsidiary Debt Covenant. Section 5.17 of the
Credit Agreement is amended to read in its entirety as follows:
SECTION 5.17. Subsidiary Debt. Total Debt of all of the
Company's Subsidiaries (excluding (i) Loans and Letter of Credit
Liabilities hereunder, (ii) Debt of a Subsidiary to the Company or to a
Wholly-Owned Subsidiary of the Company and (iii) Debt consisting of
performance bonds and letters of credit issued for the account of MDA in an
aggregate amount not in excess of $30,000,000 to support certain
contractual obligations, including obligations in an aggregate amount of
approximately $10,000,000 for construction of the Radarsat 2 satellite, of
approximately $8,000,000 under a contract with respect to a Malaysian
ground station, of approximately $3,000,000 under a contract with respect
to a Taiwanese ground station and of approximately $9,000,000 with respect
to miscellaneous performance bonds) will at no time exceed 55% of
Consolidated Tangible Net Worth."
SECTION 9. Additional Covenants Regarding Collateral. New subsections (d)
and (e) are added immediately after subsection (c) of Section 5.19 of the Credit
Agreement, to read in their entirety as follows:
(d) The Company shall use its commercially reasonable efforts to
obtain all necessary consents for the pledge to the Collateral Agent for
the benefit of the Banks of all of the capital stock and other equity
interests of Magellan held directly or indirectly by the Company and,
within 5 days of obtaining such consents, shall (i) enter into, or such
cause its Subsidiaries to enter into, a pledge agreement in form and
substance reasonably satisfactory to the Collateral Agent pursuant to which
the Company or such Subsidiaries, as the case may be, shall grant a
perfected first priority Lien to the Collateral Agent for the benefit of
the Banks on all of such capital stock or other equity interests, (ii) take
all action necessary or (in
9
<PAGE> 10
the opinion of the Collateral Agent or the Required Lenders) desirable to
perfect and protect the Liens intended to be created by the pledge
agreement described in clause (i) and (iii) deliver to the Collateral Agent
and the Lenders such opinions of counsel, in form and substance reasonably
satisfactory to the Collateral Agent, as the Collateral Agent shall
reasonably request.
(e) On or prior to 30 days after the Amendment No. 6 Effective Date,
the Company shall (i) execute and deliver to the Collateral Agent a
mortgage in form and substance reasonably satisfactory to the Collateral
Agent pursuant to which the Company shall grant to the Collateral Agent for
the benefit of the Banks a perfected first priority Lien on (x)
approximately 11.5671 acres of real property, comprising lots 1 and 2 as
recorded in Deed Book 948, page 1041, among the land records of Loudoun
County, Virginia, and (y) approximately 9.2922 acres of real property,
comprising lots 3 and 4, as recorded in Deed Book 948, page 1041, among the
land records of Loudoun County, Virginia, (ii) deliver to the Collateral
Agent such surveys, title reports and title insurance as the Collateral
Agent shall reasonably request, (iii) take all action necessary or (in the
opinion of the Collateral Agent or the Required Lenders) desirable to
perfect and protect the Liens intended to be created by the mortgage
described in clause (i) and (iv) deliver to the Collateral Agent and the
Lenders such opinions of counsel, in form and substance reasonably
satisfactory to the Collateral Agent, as the Collateral Agent shall
reasonably request.
SECTION 10. Additional Covenant to Limit Consolidated Capital Expenditures.
A new Section 5.20 is added immediately after Section 5.19 of the Credit
Agreement, to read in its entirety as follows:
SECTION 5.20. Consolidated Capital Expenditure. At any date
the aggregate amount of Consolidated Capital Expenditures for the period
from and including December 1, 1999 to and including such date, will not
exceed $9,000,000.
SECTION 11. Bankers Meeting; Strategic Plan. A new section 5.21 to the
Credit Agreement is added immediately after Section 5.20 thereof, to read in its
entirety as follows:
SECTION 5.21 January 2000 Bankers Meeting. The Company
shall:
10
<PAGE> 11
(a) On or prior to January 27, 2000 (i) host a bankers meeting, at
which meeting the Company shall discuss with the Banks its detailed
strategic plan to address liquidity for the fiscal year 2000, and (ii)
provide the Banks in reasonable detail information regarding the strategic
plans of the Company and its Subsidiaries, as well as any other information
regarding the Company and its Subsidiaries as any Bank may reasonably
request.
(b) At least three Domestic Business Days prior to the date of the
bankers' meeting referred to in subsection (a) (but in any event no later
than January 24, 2000), deliver to each of the Lenders a strategic plan
setting forth in reasonable detail the strategic plans of the Company which
plan shall include the information set forth in clause (i) of subsection
(a) of this Section.
SECTION 12. Additional Events of Default. Section 6.01(c) of the Credit
Agreement is amended to read in its entirety as follows:
(c) any Borrower shall fail to observe or perform any covenant or
agreement contained in Sections 5.01(g) and 5.07 to 5.21 inclusive;
SECTION 13. Limitation on New Extensions of Credit. The Company agrees that
neither Company nor any other Borrower shall deliver a Notice of Borrowing under
the Credit Agreement or a request for issuance of a Letter of Credit under the
Credit Agreement or otherwise request any Bank (including the LC Bank) to extend
any credit to the Company or any other Borrower under the Credit Agreement, and
that, notwithstanding any provision of the Credit Agreement (including Sections
2.01, 2.03 and 3.02), on and after the date hereof, no Bank (including the LC
Bank) shall be required to make any Loan, or issue or participate in any Letter
of Credit (it being understood that nothing in this sentence shall be construed
to prohibit the Company from delivering a Notice of Interest Rate Election with
respect to any Loan outstanding prior to the date hereof and continuing or
converting such Loan on the terms set forth in such Notice of Interest Rate
Election).
SECTION 14. Amendment to Pricing Schedule. The Pricing Schedule to the
Credit Agreement is amended by substituting the date "February 22, 2000" for the
date "December 30, 1999" set forth in paragraph immediately after the table set
forth therein.
SECTION 15. New York Law. This Amendment shall be governed by and construed
in accordance with the laws of the State of New York.
11
<PAGE> 12
SECTION 16. Warrants. The Company will, not later than January 15, 2000,
deliver to the Administrative Agent for the account of the Approving Banks (as
defined below) ratably in proportion to their Commitments, warrants in form
satisfactory to the Administrative Agent entitling the holder to purchase up to
100,000 shares of Common Stock, par value $.01 per share, of the Company for a
period expiring on the fifth anniversary of the date of issuance thereof at an
exercise price of $0.01 per share, subject to customary antidilution protection
and registration rights.
SECTION 17. Counterparts, Effectiveness. This Amendment may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Amendment shall become effective on the date (the "AMENDMENT NO. 6
EFFECTIVE DATE") on which the Administrative Agent shall have received:
(a) duly executed counterparts hereof signed by the Company and the
Required Banks (or, in the case of any party as to which an executed
counterpart shall not have been received, the Administrative Agent shall
have received telegraphic, telex or other written confirmation from such
party of execution of a counterpart hereof by such party); and
(b) an amendment fee in the amount of $500,000, for the ratable
account of those Banks (the "APPROVING BANKS") from which approval of this
Amendment shall have been received at or prior to the later of (i) the time
the condition in clause (a) is satisfied and (ii) 12:00 noon, New York City
time, on December 22, 1999. The determination of the Administrative Agent
as to timing of the receipt of a Bank's approval shall be conclusive.
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<PAGE> 13
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
ORBITAL SCIENCES CORPORATION
By
-------------------------------------
Name:
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By
-------------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA
By
-------------------------------------
Name:
Title:
BANK OF AMERICA, N.A., f/k/a
NATIONSBANK, N.A.
By
-------------------------------------
Name:
Title:
FIRST UNION COMMERCIAL CORPORATION
By
-------------------------------------
Name:
Title:
13
<PAGE> 14
DEUTSCHE BANK AG, NEW YORK
AND/OR CAYMAN ISLAND BRANCHES
By
-------------------------------------
Name:
Title:
By
-------------------------------------
Name:
Title:
KEYBANK NATIONAL ASSOCIATION
By
-------------------------------------
Name:
Title:
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By
-------------------------------------
Name:
Title:
WACHOVIA BANK, N.A.
By
-------------------------------------
Name:
Title:
14
<PAGE> 15
CHEVY CHASE BANK
By
-------------------------------------
Name:
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Administrative Agent and as
Collateral Agent
By
-------------------------------------
Name:
Title:
15
<PAGE> 1
EXHIBIT 10.28
[EXECUTION COPY]
SECOND AMENDED AND RESTATED
SECURITY AGREEMENT
dated as of
June 30, 1992
amended and restated as of
August 5, 1997
and further amended and restated as of
November 30, 1999
among
ORBITAL SCIENCES CORPORATION,
EACH OF ITS SUBSIDIARIES PARTY HERETO,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Collateral Agent
and
BANK OF AMERICA, N.A.,
as Designated Lockbox Bank
<PAGE> 2
SECOND AMENDED AND RESTATED SECURITY AGREEMENT
SECOND AMENDED AND RESTATED SECURITY AGREEMENT dated as of June 30,
1992, amended and restated as of August 5, 1997 and further amended and
restated as of November 30, 1999 among ORBITAL SCIENCES CORPORATION (with its
successors, the "COMPANY") and each of the Subsidiaries of the Company listed
on the signature pages hereof and each other Subsidiary of the Company that may
from time to time become a party to this Agreement (each such Subsidiary, with
its successors, a "SUBSIDIARY DEBTOR" and together with the Company, the
"DEBTORS"), MORGAN GUARANTY TRUST COMPANY OF NEW YORK , as Collateral Agent
(with its successors, the "COLLATERAL AGENT") and BANK OF AMERICA, N.A., as
Designated Lockbox Bank (with its successors, the "DESIGNATED LOCKBOX BANK").
W I T N E S S E T H :
WHEREAS, the Company, certain banks (with their respective successors
and assigns, the "BANKS"), Morgan Guaranty Trust Company of New York, as
administrative agent (the "ADMINISTRATIVE AGENT") and the Collateral Agent have
entered into a Third Amended and Restated Credit Agreement dated as of December
21, 1998 (as amended from time to time, the "CREDIT AGREEMENT");
WHEREAS, the Company and The Northwestern Mutual Life Insurance
Company (with its successors and assigns, "NML") have entered into a Note
Agreement dated as of June 1, 1995 (as amended from time to time, the "NML NOTE
AGREEMENT"); and
WHEREAS, the Company, the Collateral Agent and the Designated Lockbox
Bank have entered into an Amended and Restated Security Agreement dated as of
June 30, 1992 and amended and restated as of August 5, 1997 (as amended from
time to time prior to the date hereof, the "ORIGINAL COMPANY SECURITY
AGREEMENT"); and
WHEREAS, pursuant to Section 5.19(a) of the Credit Agreement and
pursuant to the NML Note Agreement, the Company and the Subsidiary Debtors
party hereto are required to enter into a security agreement substantially in
the form hereof; and
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
<PAGE> 3
acknowledged, the Original Company Security Agreement is amended and restated
in its entirety as follows:
SECTION 1. Definitions. Terms defined in the Credit Agreement and not
otherwise defined herein have, as used herein, the respective meanings provided
for therein. The following additional terms, as used herein, have the following
respective meanings:
"ANCILLARY RIGHTS" means, with respect to each Debtor, rights
incidental or ancillary to the Receivables of such Debtor and the
administration, servicing and collection thereof, including, without
limitation, all collateral security and guarantees of any kind (including
without limitation letters of credit or other forms of credit enhancement)
given by any Person to such Debtor with respect to any Receivable of such
Debtor.
"BANK COLLATERAL" has the meaning set forth in Section 3(A).
"BANK SECURED OBLIGATIONS" means:
(x) with respect to the Company, (a) all principal of and interest
(including, without limitation, any interest which accrues after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Company, whether or not allowed
or allowable as a claim in any such proceeding) on any loan to the Company
under, or any note issued by the Company pursuant to, the Credit Agreement, (b)
all Reimbursement Obligations and all interest thereon (including, without
limitation, any interest which accrues after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency or
reorganization of the Company, whether or not allowed or allowable as a claim
in any such proceeding), (c) all other amounts payable by the Company under any
Financing Document, and (d) any renewals or extensions of any of the foregoing;
and
(y) with respect to each Subsidiary Debtor, all obligations of such
Subsidiary Debtor incurred by such Subsidiary Debtor pursuant to Section 22.
"COLLATERAL" means the Bank Collateral and the Shared Collateral.
"COLLATERAL ACCOUNT" has the meaning set forth in Section 5.
"COPYRIGHT LICENSE" means, with respect to each Debtor, any agreement
now or hereafter in existence granting to such Debtor, or pursuant to which
such Debtor has granted to any other Person, any right to use, copy, reproduce,
distribute, prepare derivative works, display or publish any records or other
2
<PAGE> 4
materials on which a Copyright is in existence or may come into existence,
including, without limitation, any agreement identified in Schedule 1 to a
Copyright Security Agreement.
"COPYRIGHTS" means all the following: (i) all copyrights under the
laws of the United States or any other country (whether or not the underlying
works of authorship have been published), all registrations and recordings
thereof, all copyrightable works of authorship (whether or not published), and
all applications for copyrights under the laws of the United States or any
other country, including, without limitation, registrations, recordings and
applications in the United States Copyright Office or any other country or any
political subdivision thereof, including, without limitation, those described
in Schedule 1 to any Copyright Security Agreement, (ii) all renewals thereof,
(iii) all claims for, and rights to sue for, past or future infringements of
any of the foregoing, and (iv) all income, royalties, damages and payments now
or hereafter due or payable with respect to any of the foregoing, including,
without limitation, damages and payments for past or future infringements
thereof.
"COPYRIGHT SECURITY AGREEMENT" means a Copyright Security Agreement,
substantially in the form of Exhibit B hereto, executed and delivered by a
Debtor in favor of the Collateral Agent, for the benefit of the Secured
Parties, as amended from time to time.
"DESIGNATED LOCKBOX BANK" means Bank of America, N.A.
"EXCLUDED MAGELLAN NOTE" means the Amended and Restated Unsecured
Subordinated Revolving Promissory Note dated November 29, 1999 in the principal
amount of $22,470,846.00 issued by Magellan to the Company.
"GENERAL INTANGIBLES" means, with respect to each Debtor, all "general
intangibles" (as defined in the UCC) now owned or hereafter acquired by such
Debtor (but excluding any partnership interests or limited liability company
interests of any Person held by such Debtor), including, without limitation,
(i) all obligations or indebtedness owing to such Debtor (other than (x)
Receivables of such Debtor, (y) limited liability company interests or
partnership interests of any Person held by such Debtor and (z) solely with
respect to the Company, any indebtedness evidenced by the Excluded Magellan
Note) from whatever source arising, (ii) Intellectual Property, goodwill, trade
names, service marks, trade secrets, inventions, permits and licenses, (iii)
all rights or claims in respect of refunds for taxes paid and (iv) all rights
in respect of any pension plan or similar arrangement maintained for employees
of any member of the ERISA Group.
3
<PAGE> 5
"INSTRUMENTS" means, with respect to each Debtor, all "instruments",
"chattel paper" or "letters of credit" (each as defined in the UCC) evidencing,
representing, arising from or existing in respect of, relating to, securing or
otherwise supporting the payment of, any of the Receivables of such Debtor,
including (but not limited to) promissory notes, drafts, bills of exchange and
trade acceptances, now owned or hereafter acquired by such Debtor but excluding
the Excluded Magellan Note.
"INSURANCE ACCOUNT" has the meaning set forth in Section 6.
"INSURANCE PAYMENTS" means all proceeds payable to the Collateral
Agent as loss payee under, or unearned premiums with respect to, the Insurance
Policies.
"INSURANCE POLICIES" means the insurance policies evidencing the
insurance the Company and its Subsidiaries are maintaining at any time pursuant
to Section 5.03 of the Credit Agreement other than any such policy solely with
respect to (i) "equipment" (as defined in the UCC) or (ii) real property which
secures a mortgage in favor of any Person other than the Collateral Agent.
"INTELLECTUAL PROPERTY" means (i) Patents, (ii) Patent Licenses, (iii)
Trademarks, (iv) Trademark Licenses, (v) Copyrights and (vi) Copyright
Licenses, and all rights in or under any of the foregoing.
"INTELLECTUAL PROPERTY FILING" means (i) with respect to any Patent,
Patent License, Trademark or Trademark License, the filing of the applicable
Patent Security Agreement or Trademark Security Agreement with the United
States Patent and Trademark Office, together with an appropriately completed
recordation form, and (ii) with respect to any Copyright or Copyright License,
the filing of the applicable Copyright Security Agreement with the United
States Copyright Office, together with an appropriately completed recordation
form, in each case sufficient to record the Security Interest granted to the
Collateral Agent in such Intellectual Property.
"INTELLECTUAL PROPERTY SECURITY AGREEMENT" means a Copyright Security
Agreement, a Patent Security Agreement or a Trademark Security Agreement.
"LETTER OF CREDIT OBLIGATION" means, at any time, any Reimbursement
Obligations or other obligation to make a payment in connection with a Letter
of Credit issued under the Credit Agreement, including contingent obligations
with respect to amounts which are then, or may thereafter become, available for
drawing under such Letter of Credit.
4
<PAGE> 6
"LIQUID INVESTMENTS" means, with respect to each Debtor, Temporary
Cash Investments; provided that (i) each Liquid Investment shall mature within
30 days after it is acquired by the Collateral Agent and (ii) in order to
provide the Collateral Agent, for the benefit of the Secured Parties (other
than NML), with a perfected security interest therein, each Liquid Investment
shall be either:
(i) evidenced by negotiable certificates or instruments, or
if non-negotiable then issued in the name of such Debtor, which
(together with any appropriate instruments of transfer) are delivered
to, and held by, the Collateral Agent or an agent thereof (which shall
not be such Debtor or any of its Affiliates) in the State of New York;
or
(ii) in book-entry form and issued by the United States and
subject to pledge under applicable state law and Treasury regulations
and as to which (in the reasonable opinion of counsel to the
Collateral Agent) appropriate measures shall have been taken for
perfection of the Security Interests.
"MAGELLAN NOTE" means the promissory note dated November 30, 1999 in
the principal amount of $23,000,000.00 issued by Magellan to the Company.
"MATERIAL GOVERNMENT CONTRACT" means, with respect to each Debtor, any
contract between such Debtor and any United States government agency under
which contract payments to such Debtor in an amount in excess of $3,000,000 may
be made.
"NML GUARANTY AGREEMENT" means the Guaranty to be entered into among
the Subsidiary Debtors and NML.
"NML SECURED OBLIGATIONS" means:
(x) with respect to the Company, (a) all principal of and interest on
any note issued by the Company pursuant to the NML Note Agreement (including,
without limitation, any interest which accrues after the commencement of any
case, proceeding or other action relating to the bankruptcy, insolvency or
reorganization of the Company, whether or not allowed or allowable as a claim
in any such proceeding), (b) all other amounts, including without limitation,
make-whole amount, if any, payable by the Company under the NML Note Agreement
and (c) any renewals or extensions of any of the foregoing; and
(y) with respect to each Subsidiary Debtor, all obligations of such
Subsidiary Debtor incurred by such Subsidiary Debtor pursuant to the NML
Guaranty Agreement.
5
<PAGE> 7
"PATENT LICENSE" means, with respect to each Debtor, any agreement now
or hereafter in existence granting such Debtor, or pursuant to which such
Debtor has granted to any other Person, any right with respect to any Patent,
now or hereafter in existence, including, without limitation, any agreement
identified in Schedule 1 to a Patent Security Agreement.
"PATENTS" means (i) all letters patent and design letters patent of
the United States or any other country and all applications for letters patent
and design letters patent of the United States or any other country, including,
without limitation, applications in the United States Patent and Trademark
Office or in any similar office or agency of any other country or any political
subdivision thereof, (ii) all reissues, divisions, continuations,
continuations-in-part, revisions and extensions thereof, (iii) all claims for,
and rights to sue for, past or future infringements of any of the foregoing and
(iv) all income, royalties, damages and payments now or hereafter due or
payable with respect to any of the foregoing, including, without limitation,
damages and payments for past or future infringements thereof.
"PATENT SECURITY AGREEMENT" means a Patent Security Agreement,
substantially in the form of Exhibit C hereto, executed and delivered by a
Debtor in favor of the Collateral Agent, for the benefit of the Secured
Parties, as amended from time to time.
"PERFECTION CERTIFICATE" means the certificate, substantially in the
form of Exhibit A, completed and supplemented with the schedules and
attachments contemplated thereby to the satisfaction of the Collateral Agent,
and duly executed by the Debtors.
"PERMITTED LIENS" means the Liens permitted under Section 5.14 of the
Credit Agreement.
"PROCEEDS" means all proceeds of, and all other profits, rentals or
receipts, in whatever form, arising from the collection, sale, lease, exchange,
assignment, licensing or other disposition of, or realization upon, Collateral,
including without limitation all claims of each Debtor against third parties
for loss of, damage to or destruction of, or for proceeds payable under, or
unearned premiums with respect to, policies of insurance in respect of, any
Collateral, rights to any returned or repossessed goods relating to any
Collateral, and any condemnation or requisition payments with respect to any
Collateral, in each case whether now existing or hereafter arising.
"RECEIVABLES" means, with respect to each Debtor, all "ACCOUNTS" (as
defined in the UCC) now owned or hereafter acquired by such Debtor, and shall
6
<PAGE> 8
also mean and include all accounts receivable, contract rights, book debts,
chattel paper, notes, drafts and other obligations or indebtedness owing to
such Debtor arising from the sale, lease or exchange of goods or other property
by it and/or performance of services by it (including, without limitation, any
such obligation which might be characterized as an account, contract right or
general intangible under the Uniform Commercial Code in effect in any
jurisdiction) and all of such Debtor's right in, to and under all purchase
orders for goods, services or other property to be provided or sold by it or
any Affiliate, and all of such Debtor's rights to any goods, services or other
property represented by any of the foregoing (including returned or repossessed
goods and unpaid sellers' rights of rescission, replevin, reclamation and
rights to stoppage in transit) and all monies due to or to become due to such
Debtor under all contracts for the sale (as seller), lease (as lessor) or
exchange of goods or other property and/or performance of services by it
(whether or not yet earned by performance on the part of such Debtor), in each
case whether now in existence or hereafter arising or acquired including,
without limitation, the right to receive the proceeds of said purchase orders
and contracts and all collateral security and guarantees of any kind given by
any Person with respect to any of the foregoing.
"SECURED OBLIGATIONS" means:
(x) with respect to the Company, (a) the Bank Secured Obligations of
the Company and (b) the NML Secured Obligations of the Company; and
(y) with respect to each Subsidiary Debtor, (a) the Bank Secured
Obligations of such Subsidiary Debtor and (b) the NML Secured Obligations of
such Subsidiary Debtor.
"SECURED PARTIES" means each of the Banks and the Agents and, solely
with respect to the Shared Collateral, NML.
"SECURITY EVENT" means any event, occurrence or condition which, in
the sole discretion of the Required Banks acting in good faith, "impairs the
prospect of payment" by the Debtors within the meaning of Section 1-208 of the
UCC.
"SECURITY INTERESTS" means the security interests in the Collateral
granted hereunder securing the Secured Obligations.
"SHARED COLLATERAL" has the meaning set forth in Section 3(B).
"TRADEMARK LICENSE" means, with respect to each Debtor, any agreement
now or hereafter in existence granting to such Debtor, or pursuant to which
such Debtor has granted to any other Person, any right to use any Trademark,
including,
7
<PAGE> 9
without limitation, any agreement identified in Schedule 1 to any Trademark
Security Agreement.
"TRADEMARKS" means: (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos, brand names, trade dress, prints and labels on which any of the
foregoing have appeared or appear, package and other designs, and any other
source or business identifiers, and general intangibles of like nature, and the
rights in any of the foregoing which arise under applicable law, (ii) the
goodwill of the business symbolized thereby or associated with each of them,
(iii) all registrations and applications in connection therewith, including,
without limitation, registrations and applications in the United States Patent
and Trademark Office or in any similar office or agency of the United States,
any State thereof or any other country or any political subdivision thereof,
including, without limitation, those described in Schedule 1 to any Trademark
Security Agreement, (iv) all renewals thereof, (v) all claims for, and rights
to sue for, past or future infringements of any of the foregoing and (vi) all
income, royalties, damages and payments now or hereafter due or payable with
respect to any of the foregoing, including, without limitation, damages and
payments for past or future infringements thereof.
"TRADEMARK SECURITY AGREEMENT" means a Trademark Security Agreement,
substantially in the form of Exhibit D hereto, executed and delivered by a
Debtor in favor of the Collateral Agent, for the benefit of the Secured
Parties, as amended from time to time.
"UCC" means the Uniform Commercial Code as in effect on the date
hereof in the State of New York; provided that if by reason of mandatory
provisions of law, the perfection or the effect of perfection or non-perfection
of the Security Interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than New York, "UCC" means
the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such perfection or effect of
perfection or non-perfection.
SECTION 2. Representations and Warranties. Each Debtor represents and
warrants as follows:
(A) Such Debtor has good title to all of the Collateral, free and
clear of any Liens other than the Permitted Liens. Such Debtor has taken all
actions necessary under the UCC to perfect its interest in any Receivables
purchased or otherwise acquired by it, as against its assignors and creditors
of its assignors.
8
<PAGE> 10
(B) Other than financing statements, mortgages, security agreements or
other similar or equivalent documents or instruments with respect to the
Security Interests and the Permitted Liens, no financing statement, mortgage,
security agreement or similar or equivalent document or instrument covering all
or any part of the Collateral is on file or of record in any jurisdiction in
which such filing or recording would be effective to perfect a Lien on such
Collateral. No Collateral is in the possession of any Person (other than such
Debtor) asserting any claim thereto or security interest therein, except that
the Collateral Agent or its designee may have possession of Collateral as
contemplated hereby.
(C) Such Debtor has delivered the Perfection Certificate to the
Collateral Agent. The information set forth therein is correct and complete in
all material respects. Promptly after the receipt thereof, such Debtor shall
furnish to the Collateral Agent acknowledgment copies of the filings set forth
in Schedule 7 to the Perfection Certificate.
(D) The Security Interests constitute valid security interests under
the UCC securing the Secured Obligations to the extent the UCC is applicable
thereto. Upon filing of the financing statements, the Security Interests will
constitute perfected security interests in the Collateral of each Debtor to the
extent that a security interest therein may be perfected by filing pursuant to
the UCC, subject to no Liens except for the Permitted Liens and prior to all
Liens except for the Permitted Liens (other than the Security Interests)
existing on and as of the date on which such Debtor becomes a party to this
Agreement. When, in addition to the filing of UCC financing statements, the
applicable Intellectual Property Filings have been made with respect to each
Debtor's Intellectual Property (including any future filings required pursuant
to Section 4(B)), the Security Interests will constitute perfected security
interests in all right, title and interest of each Debtor in its Intellectual
Property to the extent that security interests therein may be perfected by such
filings, subject to no Liens except for the Permitted Liens and prior to all
Liens except for the Permitted Liens (other than the Security Interests)
existing on and as of the date such Debtor becomes a party to this Agreement.
(E) Upon the delivery to the Collateral Agent by such Debtor of
assignments and notices of assignment substantially in the forms of Exhibits
E-1 and E-2 hereto, respectively, and the filing of each such notice with the
governmental authority or agency or other office described therein, the
Security Interests shall constitute valid assignments of the Receivables of
such Debtor due under Material Government Contracts of such Debtor to the
extent that such assignment is governed by the Assignment of Claims Act.
9
<PAGE> 11
(F) No Person other than the Collateral Agent has been named as a loss
payee on any of the Insurance Policies. No consent of any Person is required in
connection with the pledge of the Insurance Policies hereunder, other than the
consent of NML set forth in that certain waiver and consent letter, dated
November 30, 1999.
SECTION 3. The Security Interests. (A) In order to secure the full and
punctual payment of the Bank Secured Obligations in accordance with the terms
thereof, and to secure the performance of all of the obligations of each Debtor
hereunder and under the other Financing Documents, each Debtor hereby grants to
the Collateral Agent for the ratable benefit of the Secured Parties (other than
NML), a continuing security interest in and to all of the following property of
such Debtor, whether now owned or existing or hereafter acquired or arising and
regardless of where located (all being collectively referred to as the "BANK
COLLATERAL"):
(1) Receivables;
(2) Ancillary Rights;
(3) Insurance Payments;
(4) Insurance Policies;
(5) The Collateral Account, all cash deposited therein from
time to time, the Liquid Investments made pursuant to Section 5(D) and
other monies and property of any kind of such Debtor in the possession
or under the control of the Collateral Agent;
(6) The Insurance Account, all cash deposited therein from
time to time, and the Liquid Investments made pursuant to Section
6(C);
(7) The Magellan Note;
(8) All books and records (including, without limitation,
customer lists, credit files, computer programs, printouts and other
computer materials and records) of such Debtor pertaining to any of
the Collateral described in clauses 1 through 7 hereof; and
(9) All Proceeds of all or any of the Collateral described in
clauses 1 through 8 hereof.
10
<PAGE> 12
(B) In order to secure the full and punctual payment of the Secured
Obligations in accordance with the terms thereof, and to secure the performance
of all of the obligations of each Debtor hereunder, under the other Financing
Documents, under the NML Note Agreement and the NML Guaranty, each Debtor
hereby grants to the Collateral Agent for the ratable benefit of the Secured
Parties, a continuing security interest in and to all of following property of
such Debtor, whether now owned or existing or hereafter acquired or arising and
regardless of where located (all being collectively referred to as the "SHARED
COLLATERAL"):
(1) Copyrights;
(2) Copyright Licenses;
(3) Patents;
(4) Patent Licenses;
(5) Trademarks;
(6) Trademark Licenses;
(7) General Intangibles (other than Receivables, Ancillary
Rights, Insurance Payments and Insurance Policies);
(8) Instruments (other than the Magellan Note) ;
(9) All books and records (including, without limitation,
customer lists, credit files, computer programs, printouts and other
computer materials and records) of such Debtor pertaining to any of
the Collateral described in clauses 1 through 8 hereof; and
(10) All Proceeds of all or any of the Collateral described in
clauses 1 through 9 hereof.
(C) The Security Interests are granted as security only and shall not
subject the Collateral Agent or any other Secured Party to, or transfer or in
any way affect or modify, any obligation or liability of any Debtor with
respect to any of the Collateral or any transaction in connection therewith.
SECTION 4. Further Assurances; Covenants. (A) Each Debtor will not
change its name, identity or corporate structure in any manner or change the
location of (i) its chief executive office or chief place of business, or (ii)
the locations where it keeps or holds any Collateral from the applicable
location
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described in the Perfection Certificate unless it shall have given the
Collateral Agent thirty (30) days prior notice thereof, shall have taken all
such action as the Collateral Agent shall reasonably deem necessary to maintain
at all times the perfection of the Security Interests in the Collateral granted
hereunder and shall have delivered an opinion of counsel with respect thereto
in accordance with Section 4(H).
(B) Each Debtor will, from time to time, at its expense, execute,
deliver, file and record any statement, notice, assignment, instrument,
document, agreement or other paper and take any other action (including,
without limitation, any filings of financing or continuation statements under
the UCC and any Intellectual Property Filings, and, solely with respect to any
Material Government Contract, any such document or action in respect of the
Assignment of Claims Act) that from time to time may be necessary or desirable,
or that the Collateral Agent may reasonably request, in order to create,
preserve, perfect, confirm or validate the Security Interests or to enable the
Collateral Agent and the Secured Parties to obtain the full benefits of this
Agreement, or to enable the Collateral Agent to exercise and enforce any of its
rights, powers and remedies hereunder with respect to any of the Collateral. To
the extent permitted by applicable law, each Debtor hereby authorizes the
Collateral Agent to execute and file financing statements or continuation
statements or Intellectual Property Filings without such Debtor's signature
appearing thereon. Each Debtor agrees that a carbon, photographic, photostatic
or other reproduction of this Agreement or of a financing statement is
sufficient as a financing statement. Each Debtor shall pay the costs of, or
incidental to, any recording or filing of any financing or continuation
statements concerning the Collateral.
(C) Each Debtor will maintain its qualification to do business and all
necessary licenses, permits and other governmental authorizations necessary in
any jurisdiction to enable such Debtor to perform its obligations in respect of
the Receivables of such Debtor and to administer, service and collect such
Receivables.
(D) Each Debtor will not, without the consent of the Required Banks,
change its credit or collection policies in a manner that is reasonably likely
to impair the collectability of the Receivables of such Debtor.
(E) Each Debtor will keep full and accurate books and records relating
to the Collateral, and stamp or otherwise mark such books and records in such
manner as the Required Banks may reasonably require in order to reflect the
Security Interests.
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(F) Each Debtor shall use all commercially reasonable efforts to cause
to be collected from its account debtors, as and when due, any and all amounts
owing under or on account of each Receivable of such Debtor (including, without
limitation, Receivables which are delinquent, such Receivables to be collected
in accordance with lawful collection procedures) and shall apply forthwith upon
receipt thereof all such amounts as are so collected to the outstanding balance
of such Receivables. Subject to the rights of the Collateral Agent and the
Secured Parties hereunder if an Event of Default shall have occurred and be
continuing, each Debtor may allow in the ordinary course of business as
adjustments to amounts owing under the Receivables of such Debtor (i) an
extension or renewal of the time or times of payment, or settlement for less
than the total unpaid balance and (ii) a refund, credit or other adjustment due
as a result of returned, damaged, or non-conforming merchandise, products or
services, all in accordance with such Debtor's sound business judgment. The
costs and expenses (including, without limitation, reasonable attorney's fees)
of collection, whether incurred by such Debtor or the Collateral Agent, shall
be borne by such Debtor.
(G) Each Debtor will, promptly upon request, provide to the Collateral
Agent all information and evidence it may reasonably request concerning the
Collateral to enable the Collateral Agent to enforce the provisions of this
Agreement.
(H) Not more than six months nor less than 30 days prior to each date
on which any Debtor proposes to take any action in connection with which an
opinion of counsel is to be delivered pursuant to Section 4(A), such Debtor
shall, at its cost and expense, cause to be delivered to the Secured Parties an
opinion of counsel, reasonably satisfactory to the Collateral Agent, in form
and substance reasonably satisfactory to the Collateral Agent, to the effect
that all financing statements and amendments or supplements thereto,
continuation statements and other documents required to be recorded or filed in
order to continue the perfection of the Security Interests in the Collateral
following the proposed action by such Debtor have been filed in each filing
office necessary for such purpose and that all filing fees and taxes, if any,
payable in connection with such filings have been paid in full.
(I) Within 30 days after entering into any Material Government
Contract, such Debtor shall deliver to such government agency an instrument of
assignment duly completed and executed by such Debtor substantially in the form
of Exhibit E-1 hereto.
(J) If any Collateral of any Debtor is at any time in the possession
or control of any warehouseman, bailee or any of such Debtor's agents or
processors, such Debtor shall notify such warehouseman, bailee, agent or
processor of the
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Security Interests created hereby and to hold all such Collateral for the
Collateral Agent's account subject to the Collateral Agent's instructions.
(K) Each Debtor will immediately deliver and pledge each Instrument to
the Collateral Agent, appropriately endorsed to the Collateral Agent, provided
that so long as no Event of Default shall have occurred and be continuing, each
Debtor may retain for collection in the ordinary course any Instruments (other
than checks and drafts constituting payments in respect of Receivables of such
Debtor described in clauses (x) or (y) of Section 5(B), as to which the
provisions of such Section shall apply) received by it in the ordinary course
of business and the Collateral Agent shall, promptly upon request of such
Debtor, make appropriate arrangements for making any other Instrument pledged
by such Debtor available to it for purposes of presentation, collection or
renewal (any such arrangement to be effected, to the extent deemed appropriate
to the Collateral Agent, against trust receipt or like document).
(L) Each Debtor shall notify the Collateral Agent promptly if it knows
that any application or registration relating to any material Intellectual
Property owned or licensed by such Debtor may become abandoned or dedicated, or
of any adverse determination or development (including, without limitation, the
institution of, or any such determination or development in, any proceeding in
the United States Copyright Office, the United States Patent and Trademark
Office or any court) regarding such Debtor's ownership of such material
Intellectual Property, its right to register or patent the same, or its right
to keep and maintain the same. If any of such Debtor's rights to any material
Intellectual Property are infringed, misappropriated or diluted by a third
party, such Debtor shall notify the Collateral Agent within 30 days after it
learns thereof and shall take all actions as such Debtor shall reasonably deem
appropriate under the circumstances to protect such Intellectual Property.
(M) On the date on which each Debtor becomes a party to this
Agreement, such Debtor will execute and deliver to the Collateral Agent
Intellectual Property Security Agreements with respect to all Intellectual
Property then owned by it. Within 30 days after each March 31 and September 30
thereafter, each such Debtor will execute and deliver to the Collateral Agent
any Intellectual Property Security Agreement necessary to grant Security
Interests in any Intellectual Property owned by it on such March 31 or
September 30 that are not covered by the Security Interests granted in any
previous Intellectual Property Security Agreements so executed and delivered by
it. In each case, each such Debtor will promptly make all Intellectual Property
Filings necessary to record the Security Interests in such Intellectual
Property.
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SECTION 5. Collateral Account. (A) The Company has established with
the Collateral Agent a cash collateral account (the "COLLATERAL ACCOUNT") in
the name and under the control of the Collateral Agent into which there shall
be deposited from time to time (i) the cash proceeds of the Collateral of each
Debtor (other than any cash proceeds of the Insurance Payments or the Insurance
Policies) required to be delivered to the Collateral Agent pursuant to
subsection (B) of this Section 5 and (ii) the Borrower LC Amount received by
the Collateral Agent pursuant to Section 6.01 of the Credit Agreement. Any
income received by the Collateral Agent with respect to the balance from time
to time standing to the credit of the Collateral Account, including any
interest or capital gains on Liquid Investments, shall remain, or be deposited,
in the Collateral Account. The cash amounts on deposit from time to time in the
Collateral Account together with any Liquid Investments from time to time made
pursuant to subsection (D) of this Section shall constitute part of the
Collateral hereunder and shall not constitute payment of the Secured
Obligations until applied thereto as hereinafter provided.
(B) Each Debtor shall instruct all account debtors and other Persons
obligated in respect of (x) all Receivables of such Debtor in an amount in
excess of $1,000,000 and (y) all Receivables (regardless of the amount thereof)
of such Debtor payable pursuant to a contract under which the aggregate amount
of payments to be made exceeds $1,000,000 to make all payments in respect
thereof either (i) directly to the Collateral Agent (by instructing that such
payments be remitted to a post office box which shall be in the name and under
the control of the Collateral Agent) or (ii) to one or more other banks in any
state in the United States (by instructing that such payments be remitted to a
post office box which shall be in the name and under the control of such bank)
under a Lockbox Letter substantially in the form of Exhibit G hereto duly
executed by such Debtor and such bank or under other arrangements, in form and
substance reasonably satisfactory to the Collateral Agent, pursuant to which
such Debtor shall have irrevocably instructed such other bank (and such other
bank shall have agreed) to remit all proceeds of such payments directly to the
Collateral Agent for deposit into the Collateral Account or as the Collateral
Agent may otherwise instruct such bank. All such payments made to the
Collateral Agent shall be deposited in the Collateral Account. In addition to
the foregoing, each Debtor agrees that if the Proceeds of any Collateral
hereunder (including the payments made in respect of Receivables) shall be
received by it, such Debtor shall as promptly as possible deposit such Proceeds
into the Collateral Account. Until so deposited, all such Proceeds shall be
held in trust by such Debtor for the Collateral Agent and the other Secured
Parties and shall not be commingled with any other funds or property of such
Debtor.
(C) The balance from time to time standing to the credit of the
Collateral Account shall, except upon the occurrence and continuation of a
Security Event or
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an Event of Default, be distributed to the Company upon the order of the
Company. If immediately available cash on deposit in the Collateral Account is
not sufficient to make any distribution to the Company or referred to in the
previous sentence of this Section 5(C), the Collateral Agent shall liquidate as
promptly as practicable Liquid Investments as required to obtain sufficient
cash to make such distribution and, notwithstanding any other provision of this
Section 5, such distribution shall not be made until such liquidation has taken
place. Upon the occurrence and during the continuation of an Event of Default
the Collateral Agent shall, if so instructed by the Required Banks, apply or
cause to be applied (subject to collection) any or all of the balance from time
to time standing to the credit of the Collateral Account in the manner
specified in Section 10.
(D) Amounts on deposit in the Collateral Account aggregating
$1,000,000 or more shall be invested and re-invested from time to time in such
Liquid Investments as the Company shall determine, which Liquid Investments
shall be under the control of the Collateral Agent, provided that, if an Event
of Default has occurred and is continuing, the Collateral Agent shall, if
instructed by the Required Banks, liquidate any such Liquid Investment and
apply or cause to be applied the proceeds thereof to the payment of the Secured
Obligations in the manner specified in Section 10.
SECTION 6. Insurance Accounts. (A) The Company has established with
the Collateral Agent a cash collateral account (the "INSURANCE ACCOUNT") in the
name and under the control of the Collateral Agent into which there shall be
deposited from time to time any amounts received by the Collateral Agent
pursuant to Section 5.03(d) of the Credit Agreement. Any income received by the
Collateral Agent with respect to the balance from time to time standing to the
credit of the Insurance Account, including any interest or capital gains on
Liquid Investments, shall remain, or be deposited, in the Insurance Account.
The cash amounts on deposit from time to time in the Insurance Account together
with any Liquid Investments from time to time made pursuant to subsection (C)
of this Section shall constitute part of the Collateral hereunder and shall not
constitute payment of the Secured Obligations until applied thereto as
hereinafter provided.
(B) The balance from time to time standing to the credit of the
Insurance Account shall, except upon the occurrence and during the continuation
of a Security Event or an Event of Default, be distributed to the Company upon
the order of the Company. If immediately available cash on deposit in the
Insurance Account is not sufficient to make any distribution to the Company
referred to in the previous sentence of this Section 6(B), the Collateral Agent
shall liquidate as promptly as practicable Liquid Investments as required to
obtain sufficient cash to make such distribution and, notwithstanding any other
provision of this Section 6, such distribution shall not be made until such
liquidation has taken place. Upon
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the occurrence and during the continuation of an Event of Default, the
Collateral Agent shall, if so instructed by the Required Banks, apply or cause
to be applied (subject to collection) any or all of the balance from time to
time standing to the credit of the Insurance Account in the manner specified in
Section 10.
(C) Amounts on deposit in the Insurance Account aggregating $1,000,000
or more shall be invested and re-invested from time to time in such Liquid
Investments as the Company shall determine, which Liquid Investments shall be
under the control of the Collateral Agent, provided that, if an Event of
Default has occurred and is continuing, the Collateral Agent shall, if
instructed by the Required Banks, liquidate any such Liquid Investment and
apply or cause to be applied the proceeds thereof to the payment of the Secured
Obligations in the manner specified in Section 10.
SECTION 7. General Authority. Each Debtor hereby irrevocably appoints
the Collateral Agent its true and lawful attorney, with full power of
substitution, in the name of such Debtor, the Agents, any other Secured Parties
or otherwise, for the sole use and benefit of the Collateral Agent and the
Secured Parties, but at such Debtor's expense, to the extent permitted by law
(including, without limitation, applicable laws, rules, regulations and orders)
to exercise, at any time and from time to time while and only after an Event of
Default has occurred and is continuing, all or any of the following powers with
respect to all or any of the Collateral:
(i) to demand, sue for, collect, receive and give acquittance
for any and all monies due or to become due thereon or by virtue
thereof;
(ii) to settle, compromise, compound, prosecute or defend any
action or proceeding with respect thereto;
(iii) to sell, transfer, assign or otherwise deal in or with
the same or the proceeds or avails thereof, as fully and effectually
as if the Collateral Agent were the absolute owner thereof; and
(iv) to extend the time of payment of any or all thereof and
to make any allowance and other adjustments with reference thereto;
provided that the Collateral Agent shall give such Debtor not less than ten
days' prior written notice of the time and place of any sale or other intended
disposition of any of the Collateral of such Debtor, except any Collateral
which is perishable or threatens to decline speedily in value or is of a type
customarily sold on a recognized market. Each Debtor agrees that such notice
constitutes "reasonable notification" within the meaning of Section 9-504(3) of
the UCC.
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SECTION 8. Remedies upon Event of Default. (A) If any Event of Default
has occurred and is continuing, the Collateral Agent may at the direction of
the Required Banks, exercise on behalf of the Secured Parties all rights of a
secured party under the UCC (or, if the Uniform Commercial Code is not in
effect in the jurisdiction where such rights are exercised, the UCC as in
effect in the State of New York to the extent not prohibited by the laws of
such jurisdiction), and, in addition, the Collateral Agent may, at the
direction of the Required Banks, without being required to give any notice,
except as herein provided or as may be required by mandatory provisions of law,
(i) withdraw all cash and Liquid Investments in the Collateral Account and the
Insurance Account and apply such cash and Liquid Investments and other cash, if
any, then held by it as Collateral as specified in Section 10 and (ii) if there
shall be no such cash or Liquid Investments or if such cash and Liquid
Investments shall be insufficient to pay all the Secured Obligations in full,
sell the Collateral (subject to any applicable laws, rules, regulations and
orders) or any part thereof at public or private sale, for cash, upon credit or
for future delivery, and at such price or prices as the Collateral Agent may
reasonably deem satisfactory. The Collateral Agent or any other Secured Party
may be the purchaser of any or all of the Collateral (subject to any applicable
laws, rules, regulations and orders) so sold at any public sale (or, if the
Collateral is of a type customarily sold in a recognized market or is of a type
which is the subject of widely distributed standard price quotations, at any
private sale). Each Debtor will execute and deliver such documents and take
such other action as the Collateral Agent reasonably deems necessary or
advisable in order that any such sale may be made in compliance with law. Upon
any such sale the Collateral Agent shall have the right to deliver, assign and
transfer to the purchaser thereof the Collateral so sold (subject to any
applicable laws, rules, regulations and orders). Each purchaser at any such
sale shall (subject to any applicable laws, rules, regulations and orders) hold
the Collateral so sold to it absolutely and free from any claim or right of
whatsoever kind, including any equity or right of redemption of any Debtor
which may be waived, and each Debtor, to the extent permitted by law, hereby
specifically waives all rights of redemption, stay or appraisal which it has or
may have under any law now existing or hereafter adopted. The notice (if any)
of such sale required by Section 7 shall (1) in the case of a public sale,
state the time and place fixed for such sale, and (2) in the case of a private
sale, state the day after which such sale may be consummated. Any such public
sale shall be held at such time or times within ordinary business hours and at
such place or places as the Collateral Agent may fix in the notice of such
sale. At any such sale the Collateral may be sold in one lot as an entirety or
in separate parcels, as the Collateral Agent may determine. The Collateral
Agent shall not be obligated to make any such sale pursuant to any such notice.
The Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for the sale, and
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such sale may be made at any time or place to which the same may be so
adjourned. In case of any sale of all or any part of the Collateral on credit
or for future delivery, the Collateral so sold may be retained by the
Collateral Agent until the selling price is paid by the purchaser thereof, but
the Collateral Agent shall not incur any liability in case of the failure of
such purchaser to take up and pay for the Collateral so sold and, in case of
any such failure, such Collateral may again be sold upon like notice. The
Collateral Agent, instead of exercising the power of sale herein conferred upon
it (subject to any applicable laws, rules, regulations and orders) may, at the
direction of the Required Banks, proceed by a suit or suits at law or in equity
to foreclose the Security Interests and sell the Collateral, or any portion
thereof, under a judgment or decree of a court or courts of competent
jurisdiction.
(B) For the purpose of enforcing any and all rights and remedies under
this Agreement the Collateral Agent may (i) require each Debtor to, and each
Debtor agrees that it will, at its expense and upon the request of the
Collateral Agent, forthwith assemble all or any part of the Collateral as
directed by the Collateral Agent and make it available at a place reasonably
designated by the Collateral Agent which is, in its opinion, reasonably
convenient to the Collateral Agent and such Debtor, whether at the premises of
such Debtor or otherwise, (ii) to the extent permitted by applicable law,
enter, with or without process of law and without breach of the peace, any
premise where any of the Collateral is or may be located, and without charge or
liability to it seize and remove such Collateral from such premises, (iii) have
access to and use each Debtor's books and records relating to the Collateral
and (iv) prior to the disposition of the Collateral, store or transfer it
without charge in or by means of any storage or transportation facility owned
or leased by any Debtor, process, repair or recondition it or otherwise prepare
it for disposition in any reasonable manner and to the extent the Collateral
Agent deems reasonable, appropriate and, in connection with such preparation
and disposition, use without charge any trademark, trade name, copyright,
patent or technical process used by any Debtor.
(C) Without limiting the generality of the foregoing, if an Event of
Default shall have occurred and be continuing,
(i) the Collateral Agent may license, or sublicense, whether
general, special or otherwise, and whether on an exclusive or
non-exclusive basis, any Intellectual Property included in the
Collateral throughout the world for such term or terms, on such
conditions and in such manner as the Collateral Agent shall in its
sole discretion determine;
(ii) the Collateral Agent may (without assuming any
obligations or liability thereunder), at any time and from time to
time, in its sole and reasonable discretion, enforce (and shall have
the exclusive right to
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enforce) against any licensee or sublicensee all rights and remedies
of any Debtor in, to and under any of its Intellectual Property and
take or refrain from taking any action under any thereof, and each
Debtor hereby releases the Collateral Agent and each of the other
Secured Parties from, and agrees to hold the Collateral Agent and each
of the other Secured arties free and harmless from and against any
claims and expenses arising out of, any lawful action so taken or
omitted to be taken with respect thereto, except for claims and
expenses arising from the Collateral Agent's or such Secured Party's
gross negligence or willful misconduct; and
(iii) upon request by the Collateral Agent (which shall not be
construed as implying any limitation on the rights or powers of the
Collateral Agent), each Debtor will execute and deliver to the
Collateral Agent a power of attorney, in form and substance
satisfactory to the Collateral Agent, for the implementation of any
lease, assignment, license, sublicense, grant of option, sale or other
disposition of any Intellectual Property owned by such Debtor or any
action related thereto. In the event of any such disposition pursuant
to this Section, subject to confidentiality restrictions imposed on
such Debtor in any license or similar agreement, such Debtor shall
supply its know-how and expertise relating to or the products or
services made or rendered in connection with Patents, and its customer
lists and other records relating to such Intellectual Property and to
the distribution of said products or services, to the Collateral
Agent.
SECTION 9. Limitation on Duty of Collateral Agent in Respect of
Collateral. Beyond the exercise of reasonable care in the custody thereof, the
Collateral Agent shall have no duty as to any Collateral in its possession or
control or in the possession or control of any agent or bailee or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody of the Collateral in its possession if
the Collateral is accorded treatment substantially equal to that which it
accords its own property, and shall not be liable or responsible for any loss
or damage to any of the Collateral, or for any diminution in the value thereof,
by reason of the act or omission of any warehouseman, carrier, forwarding
agency, consignee or other agent or bailee selected by the Collateral Agent in
good faith.
SECTION 10. Application of Proceeds. (A) Upon the occurrence and
during the continuance of an Event of Default, the proceeds of any sale of, or
other realization upon, all or any part of the Collateral of each Debtor and
any cash held in the Collateral Account and Insurance Account shall be applied
by the Collateral Agent in the following order of priorities:
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first, to payment of the expenses of such sale or other
realization, including reasonable compensation to agents and counsel
for the Collateral Agent, and all expenses, liabilities and advances
incurred or made by the Collateral Agent in connection therewith, and
any other unreimbursed expenses for which the Collateral Agent, the
Administrative Agent, any Bank or NML is to be reimbursed pursuant to
the Credit Agreement or the NML Note Agreement, as the case may be,
and unpaid fees owing to the Agents under the Credit Agreement;
second, to the ratable payment of accrued but unpaid interest
on the Bank Secured Obligations (or, solely with respect to the
proceeds of any sale of, or other disposition or realization upon, the
Shared Collateral, to the ratable payment of accrued but unpaid
interest on the Bank Secured Obligations and the NML Secured
Obligations);
third, to the ratable payment of Bank Secured Obligations
consisting of unpaid principal of Loans and, subject to the second
sentence of subsection (B), Letter of Credit Obligations (or, solely
with respect to the proceeds of any sale of, or other disposition or
realization upon, the Shared Collateral, to the ratable payment of (x)
the Bank Secured Obligations consisting of unpaid principal of Loans
and, subject to the second sentence of subsection (B), Letter of
Credit Obligations and (y) the NML Secured Obligations);
fourth, to the ratable payment of all other Bank Secured
Obligations (or, solely with respect to the proceeds of any sale of,
or other disposition or realization upon, the Shared Collateral, to
the ratable payment of all other Bank Secured Obligations and NML
Secured Obligations), until all such Secured Obligations have been
repaid in full; and
finally, to payment to such Debtor or its successors or
assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining from such proceeds.
(B) The Collateral Agent may make distributions hereunder in cash or
in kind or, on a ratable basis, in any combination thereof. If at any time any
monies collected or received by the Collateral Agent are distributable pursuant
to this Section in respect of a Letter of Credit Obligation which is a
contingent obligation at such time, then the Collateral Agent shall invest such
amounts in Liquid Investments selected by it and shall hold all such amounts so
distributable and all such Liquid Investments and the net proceeds thereof in
trust for application to the payment of such Letter of Credit Obligation at
such time as such Letter of Credit
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Obligation is no longer a contingent obligation. If the Collateral Agent holds
any amounts which were distributable in respect of any Letter of Credit
Obligations after all Letters of Credit have expired and all amounts payable
with respect thereto have been paid, such amounts shall be applied in the order
set forth in subsection (A) above.
(C) In making the determinations and allocations required by this
Section, the Collateral Agent shall have no liability to any Secured Party for
actions taken in reliance on information supplied by such Secured Party as to
the amounts of the Secured Obligations held by them. All distributions made by
the Collateral Agent pursuant to this Section shall be final, and the
Collateral Agent shall have no duty to inquire as to the application by any
Secured Party of any amount distributed to them. However, if at any time the
Collateral Agent determines that an allocation or distribution previously made
pursuant to this Section was based on a mistake of fact (including, without
limiting the generality of the foregoing, mistakes based on any assumption that
principal or interest has been paid by payments which are subsequently
recovered from the recipient thereof through the operation of any bankruptcy,
reorganization, insolvency or other laws or otherwise), the Collateral Agent
may in its discretion, but shall not be obligated to, adjust subsequent
allocations and distributions hereunder so that, on a cumulative basis, the
Collateral Agent and the other Secured Parties receive the distributions to
which they would have been entitled if such mistake of fact had not been made.
SECTION 11. Appointment of Co-agents. At any time or times, in order
to comply with any legal requirement in any jurisdiction, the Collateral Agent
may appoint another bank or trust company or one or more other Persons, either
to act as collateral co-agent or collateral co-agents, jointly with the
Collateral Agent, or to act as separate collateral agent or collateral agents
on behalf of the Secured Parties with such power and authority as may be
necessary for the effectual operation of the provisions hereof and may be
specified in the instrument of appointment (which may, in the discretion of the
Collateral Agent, include provisions for the protection of each such collateral
co-agent or separate collateral agent similar to the provisions of Article 7 of
the Credit Agreement).
SECTION 12. Designated Lockbox Bank. The Designated Lockbox Bank shall
have the rights and obligations of the Collateral Agent in respect of the
Collateral Account specified in Section 5 of this Agreement, provided that if
an Event of Default has occurred and is continuing, the Designated Lockbox Bank
shall exercise such rights and perform such obligations at the direction of the
Collateral Agent. In exercising such rights and performing such obligations the
Designated Lockbox Bank shall have the benefit of all privileges, immunities
and
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indemnities provided for the Collateral Agent under this Agreement. The
Designated Lockbox Bank may resign as Designated Lockbox Bank in accordance
with the provisions of Section 7.08 of the Credit Agreement.
SECTION 13. Expenses. Each Debtor agrees that it will, on demand, pay
to the Collateral Agent the amount of any and all reasonable out-of-pocket
expenses, including the reasonable fees and disbursements of counsel and of any
other experts, which the Collateral Agent may incur in connection with (x) the
administration or enforcement of this Agreement, including such expenses as are
incurred to preserve the value of the Collateral and the validity, perfection,
rank and value of any Security Interest, (y) the collection, sale or other
disposition of any of the Collateral or (z) the exercise by the Collateral
Agent of any of the rights conferred upon it hereunder. The obligation to pay
any such amount shall be an additional Secured Obligation hereunder, and each
such amount shall bear interest from the time of demand at the rate applicable
to Base Rate Loans.
SECTION 14. Termination of Security Interests; Release of Collateral.
(A) Upon the repayment in full of all Bank Secured Obligations, the termination
of the Commitments under the Credit Agreement and the cancellation or
expiration of all Letters of Credit, the Security Interests and all obligations
of each Debtor under this Agreement shall terminate and all rights to and
interests in the Collateral shall revert to such Debtor.
(B) Subject to the rights of the Secured Parties hereunder if an Event
of Default shall have occurred and be continuing and subject always to the
rights of the Banks and the Administrative Agent under the Credit Agreement and
to the rights of NML under the NML Note Agreement, upon any sale or other
disposition of any Collateral permitted under Section 5.15 of the Credit
Agreement (any such sale or other disposition, a "PERMITTED COLLATERAL SALE"),
the Security Interests in the Collateral subject to such Permitted Collateral
Sale (but not in any Proceeds thereof) shall cease immediately without any
further action on the part of the Collateral Agent. The Collateral Agent shall
be fully protected in relying on a certificate from any Debtor stating that a
sale or other disposition of any Collateral constitutes a Permitted Collateral
Sale.
(C) In addition to releases of Collateral effected by subsection (B),
at any time and from time to time prior to the termination of the Security
Interests, the Collateral Agent may release any of the Collateral with the
prior written consent of the Required Banks; provided that the Collateral Agent
may release all or substantially all of the Collateral (for purposes of this
proviso only, as defined in the Credit Agreement) only with the prior written
consent of all of the Banks.
23
<PAGE> 25
(D) Upon the termination of the Security Interests or any release of
any Collateral effected or permitted by this Section, the Collateral Agent will
promptly, at the expense of each Debtor, execute and deliver to such Debtor
such documents as such Debtor shall reasonably request to evidence the
termination of the Security Interests or the release of such Collateral, as the
case may be, including UCC termination statements, and will duly assign,
transfer and deliver to such Debtor or to whomever lawfully shall be entitled
to receive the same, such of the Collateral as may be in the possession of the
Collateral Agent.
(E) Upon the repayment in full of all NML Secured Obligations, NML's
rights under this Agreement shall terminate. Upon any such termination, NML
will, at the expense of the Debtors, execute and deliver to the Debtors such
documents as any Debtor may reasonably request to evidence such termination.
SECTION 15. Notices. All notices, communications and distributions to any party
hereunder shall be given in accordance with Section 10.01 of the Credit
Agreement.
SECTION 16. Waivers, Non-Exclusive Remedies. No failure on the part of
the Collateral Agent to exercise, and no delay in exercising and no course of
dealing with respect to, any right under this Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise by the Collateral
Agent of any right under this Agreement preclude any other or further exercise
thereof or the exercise of any other right. The rights in the Financing
Documents are cumulative and are not exclusive of any other remedies provided
by law.
SECTION 17. Successors and Assigns. This Agreement is for the benefit
of the Collateral Agent and the other Secured Parties and their successors and
assigns, and in the event of an assignment of all or any of the Secured
Obligations, the rights hereunder, to the extent applicable to the indebtedness
so assigned, may be transferred with such indebtedness. This Agreement shall be
binding on each Debtor and the Collateral Agent and their respective successors
and assigns.
SECTION 18. Changes in Writing. Neither this Agreement nor any
provision hereof may be changed, waived, discharged or terminated orally, but
only in writing signed by each Debtor and the Collateral Agent with the consent
of the Required Banks (or, in the case of Section 14(A) or to the number of
Banks whose consent shall be required for the Collateral Agent to take any
action under this Section or any other provision of this Agreement, the consent
of all the Banks).
24
<PAGE> 26
SECTION 19. New York Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York, except as
otherwise required by mandatory provisions of law and except to the extent that
remedies provided by the laws of any jurisdiction other than New York are
governed by the laws of such jurisdiction.
SECTION 20. Severability. If any provision hereof is invalid or
unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (i) the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be liberally construed in favor of the Collateral
Agent and the other Secured Parties in order to carry out the intentions of the
parties hereto as nearly as may be possible; and (ii) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
SECTION 21. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
SECTION 22. Guaranty. Each Subsidiary Debtor hereby agrees to be bound
by the provisions of Article 9 of the Credit Agreement and to be subject to all
of the obligations of a "Guarantor" thereunder, and the limitations set forth
in Section 9.05 of the Credit Agreement shall apply to such obligations of such
Subsidiary Debtor.
SECTION 23. Additional Debtors. Any Subsidiary of the Company may
become a "Subsidiary Debtor" party hereto and bound hereby by executing a
counterpart hereof and delivering same to the Collateral Agent.
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<PAGE> 27
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
ORBITAL SCIENCES CORPORATION
By
-------------------------
Name:
Title:
ENGINEERING TECHNOLOGIES, INC.
By
-------------------------
Name:
Title:
ORBITAL SPACE SYSTEMS, INC.
By
-------------------------
Name:
Title:
ORBITAL COMMERCIAL SYSTEMS, INC.
By
-------------------------
Name:
Title:
ORBITAL INTERNATIONAL, INC.
By
-------------------------
Name:
Title:
26
<PAGE> 28
ORBITAL SERVICES CORPORATION
By
-------------------------
Name:
Title:
ORBITAL NAVIGATION CORPORATION
By
-------------------------
Name:
Title:
ORBLINK LLC
By
-------------------------
Name:
Title:
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK,
as Collateral Agent
By
-------------------------
Name:
Title:
BANK OF AMERICA, N.A.,
as Designated Lockbox Bank
By
-------------------------
Name:
Title:
27
<PAGE> 29
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
By
-------------------------
Name:
Title:
28
<PAGE> 1
EXHIBIT 10.29
[EXECUTION COPY]
PLEDGE AGREEMENT
PLEDGE AGREEMENT dated as of November 30, 1999 among ORBITAL SCIENCES
CORPORATION (with its successors, the "BORROWER"), each of the Subsidiaries of
the Borrower listed on the signature pages hereof and each other Subsidiary of
the Borrower that may from time to time become a party to this Agreement (each
such Subsidiary, with its successors, a "SUBSIDIARY PLEDGOR" and together with
the Borrower, the "PLEDGORS") MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
Collateral Agent (with its successors, the "COLLATERAL AGENT" ).
W I T N E S S E T H :
WHEREAS, the Borrower, certain banks (with their respective successors and
assigns, the "BANKS"), Morgan Guaranty Trust Company of New York, as
administrative agent (the "ADMINISTRATIVE AGENT") and the Collateral Agent have
entered into a Third Amended and Restated Credit Agreement dated as of December
21, 1998 (as amended from time to time, the "CREDIT AGREEMENT");
WHEREAS, the Borrower and The Northwestern Mutual Life Insurance Company
(with its successors and assigns, "NML") have entered into a Note Agreement
dated as of June 1, 1995 (as amended from time to time, the "NML NOTE
AGREEMENT"); and
WHEREAS, pursuant to Section 5.19(a) of the Credit Agreement and pursuant
to the NML Note Agreement, the Company and the Subsidiary Pledgors party hereto
are required to enter into a pledge agreement substantially in the form hereof;
and
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions. Terms defined in the Credit Agreement and not
otherwise defined herein have, as used herein, the respective meanings provided
for therein. The following additional terms, as used herein, have the following
respective meanings:
"BANK SECURED OBLIGATIONS" means:
<PAGE> 2
(x) with respect to the Company, (a) all principal of and interest
(including, without limitation, any interest which accrues after the
commencement of any case, proceeding or other action relating to the bankruptcy,
insolvency or reorganization of the Company, whether or not allowed or allowable
as a claim in any such proceeding) on any loan to the Company under, or any note
issued by the Company pursuant to, the Credit Agreement, (b) all Reimbursement
Obligations and all interest thereon (including, without limitation, any
interest which accrues after the commencement of any case, proceeding or other
action relating to the bankruptcy, insolvency or reorganization of the Company,
whether or not allowed or allowable as a claim in any such proceeding), (c) all
other amounts payable by the Company under any Financing Document, and (d) any
renewals or extensions of any of the foregoing; and
(y) with respect to each Subsidiary Pledgor, all obligations of such
Subsidiary Pledgor incurred by such Subsidiary Pledgor pursuant to that certain
waiver and consent letter dated as of November 30, 1999.
"COLLATERAL" has the meaning assigned to such term in Section 3(a).
"DOMESTIC ISSUER" means any Issuer that is incorporated in the United
States or any State thereof.
"EXCLUDED MAGELLAN NOTE" means the Amended and Restated Unsecured
Subordinated Revolving Promissory Note dated November 29, 1999 in the principal
amount of $22,470,846.00 issued by Magellan to the Company.
"EXISTING ISSUER" means each Person listed on Schedule I under the heading
"Existing Issuer".
"ISSUER" means (i) each Existing Issuer and (ii) each New Issuer.
"LETTER OF CREDIT OBLIGATION" means, at any time, any Reimbursement
Obligations or other obligation to make a payment in connection with a Letter of
Credit issued under the Credit Agreement, including contingent obligations with
respect to amounts which are then, or may thereafter become, available for
drawing under such Letter of Credit.
"NEW ISSUER" has the meaning assigned to such term in clause (i) of Section
3(b).
"NML GUARANTY AGREEMENT" means the Guaranty dated as of November 30, 1999
among the Subsidiary Pledgors and NML.
2
<PAGE> 3
"NML SECURED OBLIGATIONS" means:
(x) with respect to the Borrower, (a) all principal of and interest on
any note issued by the Borrower pursuant to the NML Note Agreement (including,
without limitation, any interest which accrues after the commencement of any
case, proceeding or other action relating to the bankruptcy, insolvency or
reorganization of the Borrower, whether or not allowed or allowable as a claim
in any such proceeding), (b) all other amounts, including without limitation,
make-whole amount, if any, payable by the Borrower under the NML Note Agreement
and (c) any renewals or extensions of any of the foregoing; and
(y) with respect to each Subsidiary Pledgor, all obligations of such
Subsidiary Pledgor incurred by such Subsidiary Pledgor pursuant to the NML
Guaranty Agreement.
"PLEDGED INSTRUMENTS" means any instrument required to be pledged to the
Collateral Agent pursuant to Section 3(b).
"PLEDGED SECURITIES" means the Pledged Instruments and the Pledged Stock.
"PLEDGED STOCK" means, with respect to each Pledgor, (i) the capital stock,
limited liability company interests, partnership interests or other equity
interests of each Existing Issuer described on Schedule I (attached hereto)
opposite the name of such Existing Issuer held by such Pledgor and (ii) any
other capital stock, limited liability company interests, partnership interests
or other equity interests of any Issuer required to be pledged by such Pledgor
to the Collateral Agent pursuant to Section 3(b).
"SECURED OBLIGATIONS" means:
(x) with respect to the Company, (a) the Bank Secured Obligations of the
Company and (b) the NML Secured Obligations of the Company; and
(y) with respect to each Subsidiary Pledgor, (a) the Bank Secured
Obligations of such Subsidiary Pledgor and (b) the NML Secured Obligations of
such Subsidiary Pledgor.
"SECURED PARTIES" means each of the Banks, the Agents and NML.
"SECURITY INTERESTS" means the security interests in the Collateral granted
hereunder securing the Secured Obligations.
3
<PAGE> 4
Unless otherwise defined herein, or unless the context otherwise requires,
all terms used herein which are defined in the New York Uniform Commercial Code
as in effect on the date hereof shall have the meanings therein stated.
SECTION 2. Representations and Warranties. Each Pledgor represents and
warrants as follows:
(a) Title to Pledged Securities. Such Pledgor owns all of the Pledged
Securities, free and clear of any Liens other than the Security Interests.
Other than with respect to MacDonald Dettwiler Holdings Inc., the Pledged
Stock includes all of the issued and outstanding capital stock or other
equity interests of each Issuer held by such Pledgor. All of the Pledged
Stock constituting capital stock or other equity interests of any Person
that is a Subsidiary of such Pledgor has been duly authorized and validly
issued, and is fully paid and non-assessable, and is subject to no options
to purchase or similar rights of any Person. Such Pledgor is not and will
not become party to or otherwise bound by any agreement (other than this
Agreement and the NML Note Agreement, which restricts in any manner the
rights of any present or future holder of any of the Pledged Securities
with respect thereto. The parties hereto acknowledge that the NML Note
Agreement contains restrictions on the ability of the Borrower and its
Subsidiaries to grant Liens on their respective assets. Each Pledgor
represents and warrants that the execution, delivery and performance by
such Pledgor of this Agreement (including without limitation the granting
by such Pledgor of the Security Interests on such Pledgor's Collateral)
does not contradict, or constitute a default under, the NML Note Agreement.
(b) Validity, Perfection and Priority of Security Interests. Upon the
delivery of the Pledged Instruments and certificates representing the
Pledged Stock to the Collateral Agent in accordance with Section 4 hereof,
the Collateral Agent will have valid and perfected security interests in
the Collateral (other than any Pledged Stock not evidenced by certificates)
subject to no prior Lien. Upon the filing of financing statements listing
such Pledgor as "debtor" and the Collateral Agent as "secured party" in the
locations where such filing must be made under the UCC in order to perfect
a security interest in collateral consisting of general intangibles, the
Collateral Agent will have valid and perfected security interests in the
Collateral of such Pledgor consisting of Pledged Stock not evidenced by
certificates, subject to no prior Lien. Except as set forth in the
immediately preceding sentence, no registration, recordation or filing with
any governmental body, agency or official is required in connection with
the execution or delivery of this Agreement or necessary for the validity
or enforceability hereof or for the perfection or enforcement of the
Security
4
<PAGE> 5
Interests. None of the Pledgor or any of their respective Subsidiaries has
performed or will perform any acts which might prevent the Collateral Agent
from enforcing any of the terms and conditions of this Agreement or which
would limit the Collateral Agent in any such enforcement.
(c) UCC Filing Locations. The chief executive office of each Pledgor
is located at the address set forth on Schedule II opposite the name of
such Pledgor (or on a counterpart of this Agreement executed by such
Pledgor and pursuant to which such Pledgor has become a party to this
Agreement). Under the Uniform Commercial Code as in effect in the State in
which such office is located, a local filing in the office set forth on
Schedule II opposite such Pledgor's name (or on such counterpart) is
required to perfect a security interest in collateral consisting of general
intangibles.
SECTION 3. The Security Interests. In order to secure the full and punctual
payment of the Secured Obligations in accordance with the terms thereof, and to
secure the performance of all the obligations of each Pledgor hereunder:
(a) Each Pledgor hereby assigns and pledges to and with the Collateral
Agent for the benefit of the Secured Parties and grants to the Collateral
Agent for the benefit of the Secured Parties security interests in the
Pledged Securities held by such Pledgor, and all of its rights and
privileges with respect to such Pledged Securities, and all income and
profits thereon, and all interest, dividends and other payments and
distributions with respect thereto, and all proceeds of the foregoing (the
"COLLATERAL"). Contemporaneously with the execution and delivery hereof,
such Pledgor is delivering certificates representing the Pledged Securities
held by such Pledgor in pledge hereunder (other than any Pledged Stock not
evidenced by certificates).
(b) In the event that (i) any Pledgor at any time after the date
hereof creates or acquires any new direct Subsidiary or acquires the
capital stock, limited liability company interests, partnership interests
or other equity interests of any other Person (any such Subsidiary or other
Person, a "NEW ISSUER") or (ii) any Issuer at any time issues any
additional or substitute shares of capital stock, limited liability company
interests, partnership interests or other equity interests of any class or
(iii) any Subsidiary of the Company (including any New Issuer) owes any
Debt to any Pledgor, such Pledgor will within 10 days thereafter pledge and
deposit with the Collateral Agent certificates (if any) representing all
such shares, limited liability company interests, partnership interests or
other equity interests or an instrument (if any) evidencing such other Debt
as additional security for the Secured Obligations; provided that (1) such
5
<PAGE> 6
Pledgor will not be required to take the actions described in this
subsection (b) with respect to the capital stock, limited liability company
interests, partnership interests or other equity interests of any New
Issuer that is not a Domestic Issuer to the extent the aggregate capital
stock, limited liability company interests, partnership interests or other
equity interests of such New Issuer subject to a Lien granted to the
Collateral Agent for the benefit of the Banks and NML would exceed 66% of
the outstanding capital stock, limited liability company interests,
partnership interests or other equity interests of such New Issuer, (2)
such Pledgor will not be required to take any of the actions described in
this subsection (b) with respect to the capital stock, limited liability
company interests, partnership interests or other equity interests of any
New Issuer to the extent any such action is prohibited by the terms of any
agreement or instrument to which (aa) such New Issuer is a party or is
bound as in effect on the date such New Issuer becomes a direct Subsidiary
of such Pledgor, so long as such agreement or instrument was not entered
into in contemplation of such New Issuer becoming a Subsidiary of such
Pledgor or (bb) such Pledgor or any of its wholly-owned Subsidiaries
incorporated in the United States or any State thereof (other than such New
Issuers) is a party or is bound as in effect on October 15, 1999 and (3)
the Company shall not be required to pledge the Excluded Magellan Note. All
such shares and other equity interests, notes and instruments constitute
Pledged Securities and are subject to all provisions of this Agreement.
(c) The Security Interests are granted as security only and shall not
subject the Collateral Agent, any Bank or NML to, or transfer or in any way
affect or modify, any obligation or liability of each Pledgor or any of its
Subsidiaries with respect to any of the Collateral or any transaction in
connection therewith.
SECTION 4. Delivery of Pledged Securities. All Pledged Instruments held by
each Pledgor shall be delivered to the Collateral Agent by such Pledgor pursuant
hereto indorsed to the order of the Collateral Agent, and accompanied by any
required transfer tax stamps, all in form and substance satisfactory to the
Collateral Agent. All certificates representing Pledged Stock delivered to the
Collateral Agent by each Pledgor pursuant hereto shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, with signatures appropriately guaranteed, and
accompanied by any required transfer tax stamps, all in form and substance
satisfactory to the Collateral Agent.
SECTION 5. Further Assurances. (a) Each Pledgor agrees that it will, at its
expense and in such manner and form as the Collateral Agent may require,
6
<PAGE> 7
execute, deliver, file and record any financing statement, specific assignment
or other paper and take any other action that may be necessary or desirable, or
that the Collateral Agent may request, in order to create, preserve, perfect or
validate any Security Interest or to enable the Collateral Agent to exercise and
enforce its rights hereunder with respect to any of the Collateral. To the
extent permitted by applicable law, each Pledgor hereby authorizes the
Collateral Agent to execute and file, in the name of such Pledgor or otherwise,
Uniform Commercial Code financing statements (which may be carbon, photographic,
photostatic or other reproductions of this Agreement or of a financing statement
relating to this Agreement) which the Collateral Agent in its sole discretion
may deem necessary or appropriate to further perfect the Security Interests.
(b) Each Pledgor agrees that it will not change (i) its name, identity or
corporate structure in any manner or (ii) the location of its chief executive
office unless it shall have given the Collateral Agent not less than 30 days'
prior notice thereof.
SECTION 6. Record Ownership of Pledged Stock. The Collateral Agent may at
any time or from time to time following the occurrence and during the
continuance of an Event of Default, in its sole discretion, cause any or all of
the Pledged Stock to be transferred of record into the name of the Collateral
Agent or its nominee. Each Pledgor will promptly give to the Collateral Agent
copies of any notices or other communications received by it with respect to
Pledged Stock registered in the name of such Pledgor and the Collateral Agent
will promptly give to such Pledgor copies of any notices and communications
received by the Collateral Agent with respect to Pledged Stock registered in the
name of the Collateral Agent or its nominee.
SECTION 7. Right to Receive Distributions on Collateral. The Collateral
Agent shall have the right to receive and, during the continuance of any
Default, to retain as Collateral hereunder all dividends, interest and other
payments and distributions made upon or with respect to the Collateral and each
Pledgor shall take all such action as the Collateral Agent may deem necessary or
appropriate to give effect to such right. All such dividends, interest and other
payments and distributions which are received by such Pledgor shall be received
in trust for the benefit of the Collateral Agent, the Banks and NML and, if the
Collateral Agent so directs during the continuance of a Default, shall be
segregated from other funds of such Pledgor and shall, forthwith upon demand by
the Collateral Agent during the continuance of a Default, be paid over to the
Collateral Agent as Collateral in the same form as received (with any necessary
endorsement). After all Defaults have been cured, the Collateral Agent's right
to retain dividends, interest and other payments and distributions under this
Section 7 shall cease and the Collateral Agent shall pay over to such Pledgor
any such Collateral retained by it during the continuance of a Default.
7
<PAGE> 8
SECTION 8. Right to Vote Pledged Stock. Unless a Default shall have
occurred and be continuing, each Pledgor shall have the right, from time to
time, to vote and to give consents, ratifications and waivers with respect to
the Pledged Stock.
If a Default shall have occurred and be continuing, the Collateral Agent
shall have the right to the extent permitted by law and such Pledgor shall take
all such action as may be necessary or appropriate to give effect to such right,
to vote and to give consents, ratifications and waivers, and take any other
action with respect to any or all of the Pledged Stock with the same force and
effect as if the Collateral Agent were the absolute and sole owner thereof.
SECTION 9. General Authority. Each Pledgor hereby irrevocably appoints the
Collateral Agent its true and lawful attorney, with full power of substitution,
in the name of such Pledgor, the Collateral Agent, the Banks, NML or otherwise,
for the sole use and benefit of the Collateral Agent, the Banks and NML, but at
the expense of such Pledgor, to the extent permitted by law to exercise, at any
time and from time to time while an Event of Default has occurred and is
continuing, all or any of the following powers with respect to all or any of the
Collateral:
(a) to demand, sue for, collect, receive and give acquittance for any
and all monies due or to become due upon or by virtue thereof,
(b) to settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto,
(c) to sell, transfer, assign or otherwise deal in or with the same or
the proceeds or avails thereof, as fully and effectually as if the
Collateral Agent were the absolute owner thereof, and
(d) to extend the time of payment of any or all thereof and to make
any allowance and other adjustments with reference thereto;
provided that the Collateral Agent shall give such Pledgor not less than ten
days' prior notice of the time and place of any sale or other intended
disposition of any of the Collateral except any Collateral which is perishable
or threatens to decline speedily in value or is of a type customarily sold on a
recognized market. The Collateral Agent and the Pledgors agree that such notice
constitutes "reasonable notification" within the meaning of Section 9-504(3) of
the Uniform Commercial Code.
SECTION 10. Remedies upon Event of Default. If any Event of Default shall
have occurred and be continuing, the Collateral Agent may exercise on
8
<PAGE> 9
behalf of the Secured Parties all the rights of a secured party under the
Uniform Commercial Code (whether or not in effect in the jurisdiction where such
rights are exercised) and, in addition, the Collateral Agent may, without being
required to give any notice, except as herein provided or as may be required by
mandatory provisions of law, (i) apply the cash, if any, then held by it as
Collateral as specified in Section 13 and (ii) if there shall be no such cash or
if such cash shall be insufficient to pay all the Secured Obligations in full,
sell the Collateral or any part thereof at public or private sale or at any
broker's board or on any securities exchange, for cash, upon credit or for
future delivery, and at such price or prices as the Collateral Agent may deem
satisfactory. Any Bank or NML may be the purchaser of any or all of the
Collateral so sold at any public sale (or, if the Collateral is of a type
customarily sold in a recognized market or is of a type which is the subject of
widely distributed standard price quotations, at any private sale). The
Collateral Agent is authorized, in connection with any such sale, if it deems it
advisable so to do, (A) to restrict the prospective bidders on or purchasers of
any of the Pledged Securities to a limited number of sophisticated investors who
will represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or sale of any of such
Pledged Securities, (B) to cause to be placed on certificates for any or all of
the Pledged Securities or on any other securities pledged hereunder a legend to
the effect that such security has not been registered under the Securities Act
of 1933 and may not be disposed of in violation of the provision of said Act,
and (C) to impose such other limitations or conditions in connection with any
such sale as the Collateral Agent deems necessary or advisable in order to
comply with said Act or any other law. Each Pledgor will execute and deliver
such documents and take such other action as the Collateral Agent deems
necessary or advisable in order that any such sale may be made in compliance
with law. Upon any such sale the Collateral Agent shall have the right to
deliver, assign and transfer to the purchaser thereof the Collateral so sold.
Each purchaser at any such sale shall hold the Collateral so sold absolutely and
free from any claim or right of whatsoever kind, including any equity or right
of redemption of such Pledgor which may be waived, and such Pledgor, to the
extent permitted by law, hereby specifically waives all rights of redemption,
stay or appraisal which it has or may have under any law now existing or
hereafter adopted. The notice (if any) of such sale required by Section 9 shall
(1) in the case of a public sale, state the time and place fixed for such sale,
(2) in the case of a sale at a broker's board or on a securities exchange, state
the board or exchange at which such sale is to be made and the day on which the
Collateral, or the portion thereof so being sold, will first be offered for sale
at such board or exchange, and (3) in the case of a private sale, state the day
after which such sale may be consummated. Any such public sale shall be held at
such time or times within ordinary business hours and at such place or places as
the Collateral Agent may fix in the notice of such sale. At any such sale the
Collateral may be sold in one lot as an entirety or in separate parcels, as the
Collateral Agent may determine. The Collateral Agent shall not be
9
<PAGE> 10
obligated to make any such sale pursuant to any such notice. The Collateral
Agent may, without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time and
place fixed for the sale, and such sale may be made at any time or place to
which the same may be so adjourned. In the case of any sale of all or any part
of the Collateral on credit or for future delivery, the Collateral so sold may
be retained by the Collateral Agent until the selling price is paid by the
purchaser thereof, but the Collateral Agent shall not incur any liability in the
case of the failure of such purchaser to take up and pay for the Collateral so
sold and, in the case of any such failure, such Collateral may again be sold
upon like notice. The Collateral Agent, instead of exercising the power of sale
herein conferred upon it, may proceed by a suit or suits at law or in equity to
foreclose the Security Interests and sell the Collateral, or any portion
thereof, under a judgment or decree of a court or courts of competent
jurisdiction.
SECTION 11. Expenses. Each Pledgor agrees that it will forthwith upon
demand pay to the Collateral Agent:
(a) the amount of any taxes which the Collateral Agent may have been
required to pay by reason of the Security Interests or to free any of the
Collateral from any Lien thereon, and
(b) the amount of any and all out-of-pocket expenses, including the
reasonable fees and disbursements of counsel and of any other experts,
which the Collateral Agent may incur in connection with (i) the
administration or enforcement of this Agreement, including such expenses as
are incurred to preserve the value of the Collateral and the validity,
perfection, rank and value of any Security Interest, (ii) the collection,
sale or other disposition of any of the Collateral, (iii) the exercise by
the Collateral Agent of any of the rights conferred upon it hereunder or
(iv) any Default or Event of Default.
Any such amount not paid on demand shall bear interest at the rate applicable to
Base Rate Loans and shall be an additional Secured Obligation hereunder.
SECTION 12. Limitation on Duty of Collateral Agent in Respect of Collateral.
Beyond the exercise of reasonable care in the custody thereof, the Collateral
Agent shall have no duty as to any Collateral in its possession or control or in
the possession or control of any agent or bailee or any income thereon or as to
the preservation of rights against prior parties or any other rights pertaining
thereto. 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 it accords
its own property, and shall not be liable or responsible for any loss or damage
to
10
<PAGE> 11
any of the Collateral, or for any diminution in the value thereof, by reason of
the act or omission of any Collateral Agent or bailee selected by the Collateral
Agent in good faith.
SECTION 13. Application of Proceeds. (a) Upon the occurrence and
during the continuance of an Event of Default, the proceeds of any sale of,
or other realization upon, all or any part of the Collateral and any cash
held shall be applied by the Collateral Agent in the following order of
priorities:
first, to payment of the expenses of such sale or other
realization, including reasonable compensation to agents and counsel
for the Collateral Agent, and all expenses, liabilities and advances
incurred or made by the Collateral Agent in connection therewith, and
any other unreimbursed expenses for which the Collateral Agent, the
Administrative Agent, any Bank or NML is to be reimbursed pursuant to
the Credit Agreement or the NML Note Agreement, as the case may be,
and unpaid fees owing to the Agents under the Credit Agreement;
second, to the ratable payment of accrued but unpaid interest on
the Bank Secured Obligations and the NML Secured Obligations;
third, to the ratable payment of (x) the Bank Secured Obligations
consisting of unpaid principal of Loans and, subject to the second
sentence of subsection (B), Letter of Credit Obligations and (y) the
NML Secured Obligations;
fourth, to the ratable payment of all other Bank Secured
Obligations and NML Secured Obligations, until all such Secured
Obligations shall have been paid in full; and
finally, to payment to each Pledgor or its successors or assigns,
or as a court of competent jurisdiction may direct, of any surplus
then remaining from such proceeds.
(b) The Collateral Agent may make distributions hereunder in cash or
in kind or, on a ratable basis, in any combination thereof. If at any time
any monies collected or received by the Collateral Agent are distributable
pursuant to this Section in respect of a Letter of Credit Obligation which
is a contingent obligation at such time, then the Collateral Agent shall
invest such amounts in Liquid Investments (as defined in the Company
Security Agreement) selected by it and shall hold all such amounts so
distributable and all such Liquid Investments and the net proceeds thereof
in trust for application to the payment of such Letter of Credit Obligation
at such time as such Letter of Credit Obligation is no longer a contingent
obligation. If the Collateral Agent holds any amounts which were
11
<PAGE> 12
distributable in respect of any Letter of Credit Obligations after all Letters
of Credit have expired and all amounts payable with respect thereto have been
paid, such amounts shall be applied in the order set forth in subsection (a)
above.
(c) In making the determinations and allocations required by this Section,
the Collateral Agent shall have no liability to any Secured Party for actions
taken in reliance on information supplied by such Secured Party as to the
amounts of the Secured Obligations held by them. All distributions made by the
Collateral Agent pursuant to this Section shall be final, and the Collateral
Agent shall have no duty to inquire as to the application by any Secured Party
of any amount distributed to them. However, if at any time the Collateral Agent
determines that an allocation or distribution previously made pursuant to this
Section was based on a mistake of fact (including, without limiting the
generality of the foregoing, mistakes based on any assumption that principal or
interest has been paid by payments which are subsequently recovered from the
recipient thereof through the operation of any bankruptcy, reorganization,
insolvency or other laws or otherwise), the Collateral Agent may in its
discretion, but shall not be obligated to, adjust subsequent allocations and
distributions hereunder so that, on a cumulative basis, the Collateral Agent and
the other Secured Parties receive the distributions to which they would have
been entitled if such mistake of fact had not been made.
SECTION 14. Concerning the Collateral Agent. The provisions of Article 7 of
the Credit Agreement shall inure to the benefit of the Collateral Agent in
respect of this Agreement and shall be binding upon the parties to the Credit
Agreement and the parties hereto in such respect. In furtherance and not in
derogation of the rights, privileges and immunities of the Collateral Agent
therein set forth:
(a) The Collateral Agent is authorized to take all such action as is
provided to be taken by it as Collateral Agent hereunder and all other
action reasonably incidental thereto. As to any matters not expressly
provided for herein (including, without limitation, the timing and methods
of realization upon the Collateral) the Collateral Agent shall act or
refrain from acting in accordance with written instructions from the
Required Banks or, in the absence of such instructions, in accordance with
its discretion.
(b) The Collateral Agent shall not be responsible for the existence,
genuineness or value of any of the Collateral or for the validity,
perfection, priority or enforceability of the Security Interests in any of
the Collateral, whether impaired by operation of law or by reason of any
action or omission to act on its part hereunder. The Collateral Agent shall
have no duty to ascertain or inquire as to the performance or observance of
any of the terms of this Agreement by each Pledgor.
12
<PAGE> 13
SECTION 15. Appointment of Co-Agents. At any time or times, in order to
comply with any legal requirement in any jurisdiction, the Collateral Agent may
appoint another bank or trust company or one or more other persons, either to
act as co-agent or co-agents, jointly with the Collateral Agent, or to act as
separate agent or agents on behalf of the Banks and NML with such power and
authority as may be necessary for the effectual operation of the provisions
hereof and may be specified in the instrument of appointment (which may, in the
discretion of the Collateral Agent, include provisions for the protection of
such co-agent or separate agent similar to the provisions of Section 14).
SECTION 16. Termination of Security Interests; Release of Collateral. (a)
Upon the repayment in full of all Bank Secured Obligations, the termination of
the Commitments under the Credit Agreement and the cancellation or expiration of
all Letters of Credit, the Security Interests shall terminate and all rights to
the Collateral shall revert to each Pledgor. At any time and from time to time
prior to such termination of the Security Interests, the Collateral Agent may
release any of the Collateral with the prior written consent of the Required
Banks; provided that the Collateral Agent may release all or substantially all
of the Collateral (for purposes of this proviso only, as defined in the Credit
Agreement) only with the prior written consent of all the Banks. Upon any such
termination of the Security Interests or release of Collateral, the Collateral
Agent will, at the expense of such Pledgor, execute and deliver to such Pledgor
such documents as such Pledgor shall reasonably request to evidence the
termination of the Security Interests or the release of such Collateral, as the
case may be.
(b) Upon the repayment in full of all NML Secured Obligations, NML's rights
under this Agreement shall terminate. Upon any such termination, NML will, at
the expense of the Pledgors, execute and deliver to the Pledgors such documents
as any Pledgor may reasonably request to evidence such termination.
SECTION 17. Notices. All notices hereunder shall be given in accordance
with Section 10.01 of the Credit Agreement or Section 9.6 of the NML Note
Agreement, as the case may be.
SECTION 18. Waivers, Non-Exclusive Remedies. No failure on the part of the
Collateral Agent to exercise, and no delay in exercising and no course of
dealing with respect to, any right under this Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise by the Collateral Agent
of any right under the Credit Agreement or this Agreement preclude any other or
further exercise thereof or the exercise of any other right. The rights in this
Agreement and the Credit Agreement are cumulative and are not exclusive of any
other remedies provided by law.
13
<PAGE> 14
SECTION 19. Successors and Assigns. This Agreement is for the benefit of
the Collateral Agent, the Banks and NML and their successors and assigns,
respectively, and in the event of an assignment of all or any of the Secured
Obligations, the rights hereunder, to the extent applicable to the indebtedness
so assigned, may be transferred with such indebtedness. This Agreement shall be
binding on each Pledgor and its successors and assigns.
SECTION 20. Changes in Writing. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally, but only in
writing signed by each Pledgor and the Collateral Agent with the consent of the
Required Banks (or, in the case of any change to the first sentence of Section
16 or to the number of Banks whose consent shall be required for the Collateral
Agent to take any action under this Section or any other provision of this
Agreement, the consent of all the Banks).
SECTION 21. New York Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of New York, except as otherwise
required by mandatory provisions of law and except to the extent that remedies
provided by the laws of any jurisdiction other than New York are governed by the
laws of such jurisdiction.
SECTION 22. Severability. If any provision hereof is invalid or
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Collateral Agent,
the Banks and NML in order to carry out the intentions of the parties hereto as
nearly as may be possible; and (ii) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
SECTION 23. Guaranty. Each Subsidiary Pledgor hereby agrees to be bound by
the provisions of Article 9 of the Credit Agreement and to be subject to all of
the obligations of a "Guarantor" thereunder, and the limitations set forth in
Section 9.05 of the Credit Agreement shall apply to such obligations of such
Subsidiary Pledgor.
SECTION 24. Additional Pledgors. Any Subsidiary of the Company may become a
"Subsidiary Pledgor" party hereto and bound hereby by executing a counterpart
hereof, setting forth the address of the chief executive office of such Pledgor,
and delivering same to the Collateral Agent.
14
<PAGE> 15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
ORBITAL SCIENCES CORPORATION
By:
-------------------------
Name:
Title:
ENGINEERING TECHNOLOGIES, INC.
By:
-------------------------
Name:
Title:
ORBITAL COMMERCIAL SYSTEMS, INC.
By:
-------------------------
Name:
Title:
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, as
Collateral Agent
By:
-------------------------
Name:
Title:
15
<PAGE> 16
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
By:
-------------------------
Name:
Title:
16
<PAGE> 17
SCHEDULE I
EXISTING ISSUERS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
PLEDGOR EXISTING JURISDICTION TYPE OF NUMBER PERCENTAGE CERTIFICATE
ISSUER OF SHARES OF OF SHARES NUMBER
INCORPORATION SHARES OUTSTANDING
BEING
PLEDGED
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Orbital Sciences Engineering Virginia Common 354,297 100% 40
Corporation Technologies, Inc. Class A
Voting
Common 21,500 12
Class B Non-
Voting
- ------------------------------------------------------------------------------------------------------------------
Engineering Orbital Space Virginia Common 100,000 100% 4
Technologies, Inc. Systems, Inc.
- ------------------------------------------------------------------------------------------------------------------
Orbital Sciences Orbital Virginia Common 1,000 100% 1
Corporation Commercial
Systems, Inc.
- ------------------------------------------------------------------------------------------------------------------
Orbital Orbital Virginia Common 100 100% 1
Commercial International, Inc.
Systems, Inc.
- ------------------------------------------------------------------------------------------------------------------
Orbital Sciences Orbital Services Delaware Common 100 100% 1
Corporation Corporation
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE> 18
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Orbital Sciences Orbital Delaware Common 100 100% 1
Corporation Navigation
Corporation
- ----------------------------------------------------------------------------------------------
Orbital Sciences Orblink LLC Delaware Uncertificated N/A 100% None
Corporation membership
interest
- ----------------------------------------------------------------------------------------------
Orbital Sciences MacDonald Canada Common 666 66% C-4
Corporation Dettwiler
Holdings Inc.
- ----------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE> 19
SCHEDULE II
Chief Executive Office
<TABLE>
<S> <C>
- --------------------------------------------------------------------
Pledgor Chief Executive Office Address
- --------------------------------------------------------------------
Orbital Sciences Corporation 21700 Atlantic Boulevard
Dulles, Virginia 20166
- --------------------------------------------------------------------
Engineering Technologies, Inc. 21700 Atlantic Boulevard
Dulles, Virginia 20166
- --------------------------------------------------------------------
Orbital Commercial Systems, Inc. 21700 Atlantic Boulevard
Dulles, Virginia 20166
- --------------------------------------------------------------------
</TABLE>
19
<PAGE> 1
EXHIBIT 10.30
EIGHTH AMENDMENT TO NOTE AGREEMENT
THIS EIGHTH AMENDMENT TO NOTE AGREEMENT ("EIGHTH AMENDMENT"), is made and
entered into as of the 20th day of December, 1999, between ORBITAL SCIENCES
CORPORATION, a Delaware corporation (the "COMPANY"), and THE NORTHWESTERN MUTUAL
LIFE INSURANCE COMPANY, a Wisconsin corporation (the "PURCHASER").
RECITALS:
A. The Purchaser is the holder of $13,333,333 12% Senior Notes of the
Company due June 14, 2001 (the "NOTES"). The Company and the Purchaser are
parties to that certain Note Agreement, dated as of June 1, 1995, the First
Amendment to Note Agreement dated as of June 30, 1995, the Second Amendment to
Note Agreement dated as of March 15, 1996, the Third Amendment to Note Agreement
dated as of July 31, 1996, the Fourth Amendment to Note Agreement dated as of
March 31, 1997, the Fifth Amendment to Note Agreement dated as of December 23,
1997, the Sixth Amendment to Note Agreement dated as of August 14, 1998 and the
Seventh Amendment to Note Agreement dated as of May 27, 1999 (as amended,
supplemented or otherwise modified, the "NOTE Agreement") whereby the Purchaser
purchased the Notes from the Company.
B. The Company, MacDonald, Dettwiler Holdings Inc. ("HOLDINGS"), a
direct wholly-owned subsidiary of the Company, MacDonald, Dettwiler and
Associates Ltd. ("MDA"), a direct wholly-owned subsidiary of Holdings, and CAI
Capital Partners and Company II, L.P., a limited partnership formed under the
laws of the Province of Ontario ("CAI"), entered into a Letter Agreement, dated
December 1, 1999 (the "LETTER AGREEMENT"), whereby CAI and B.C. Ltd., a
corporation organized under the laws of Province of British Columbia ("B.C.
LTD."), agreed to purchase from MDA, and MDA agreed to sell from MDA's treasury
to CAI, 10,000,001 shares of common stock of MDA (the "SUBJECT SHARES") for a
purchase price of U.S.$75,000,000. The Letter Agreement and the Term Sheet
attached thereto (the "TERM SHEET") contemplate that CAI, MDA, Holdings and the
Company will enter into certain definitive agreements in connection with the
purchase and sale of the Subject Shares, including, without limitation, a
Subscription Agreement, and an Unanimous Shareholders Agreement (the
"SHAREHOLDERS AGREEMENT"). The Company intends to complete the transactions with
CAI and B.C. Ltd. and enter into the agreements described in this Recital B on
or prior to December 20, 1999 (all such transactions described in this Recital B
will be referred to in this Eighth Amendment as the "MDA TRANSACTIONS").
C. In order to allow the Company, Holdings and MDA to enter into and
fulfill their obligations in connection with the MDA Transactions, the
fulfillment of which would otherwise violate the terms of the Note Agreement,
the Company has requested that the Purchaser amend certain provisions contained
in the Note Agreement as to allow for the MDA Transactions.
D. The Company and the Purchaser now desire to amend certain
provisions of the Note Agreement as of December 20, 1999 (the "EFFECTIVE DATE")
in the respects, but only in the respects, set forth in this Eighth Amendment.
E. Capitalized terms used in this Eighth Amendment have the
respective meanings ascribed thereto in the Note Agreement unless defined in
this Eighth Amendment or the context otherwise requires.
NOW, THEREFORE, upon full and complete satisfaction of the
conditions precedent to the effectiveness of this Eighth Amendment set forth in
Section 3 below, the Company and the Purchaser agree as follows:
SECTION 1. AMENDMENTS.
<PAGE> 2
1.1. Section 5.10(e) of the Note Agreement is amended by adding the
following at the end thereof, immediately preceding the period:
"provided, further, notwithstanding the foregoing, nothing contained in
this Agreement will prohibit any Lien or Liens consisting of the
Stockholders Agreement amongst the Company, MacDonald Dettwiler and
Associates, BC Ltd. and CAI, which such agreement shall contain
substantially the same terms and conditions as set forth in CAI Letter
Agreement"
1.2. Section 5.13(c) of the Note Agreement is hereby amended as
follows:
(a) Clause (3) is amended in its entirety to read as follows:
"(3) the issue or grant of any right, option or warrant to
purchase capital stock of a Subsidiary or other Securities
exchangeable for or convertible into capital stock of such
Subsidiary to any employee or employees of such Subsidiary;
provided, that after giving effect to the exercise of such
right, option, warrant or other convertible Security, such
holders of rights, options, warrants or convertible
Securities do not hold in the aggregate more than 10% of
the outstanding capital stock of such Subsidiary; provided,
further, that in the case of Magellan Corporation, a
Delaware corporation and a Subsidiary of the Company
("Magellan"), after giving effect to the exercise of such
right, option, warrant, or other convertible Security, such
holders of rights, options, warrants or convertible
Securities do not hold in the aggregate more than 25% of
the outstanding capital stock of Magellan Corporation;
provided, further, that in the case of MacDonald Dettwiler
and Associates, after giving effect to the exercise of any
such right, option, warrant, or other convertible Security
such holders of rights, options, warrants or convertible
Securities do not hold in the aggregate more than 16% on a
fully diluted basis of the outstanding common stock of
MacDonald Dettwiler and Associates; or"
(b) Clause (8) is amended by substituting a semi-colon for the
period and adding the word "or" at the end thereof;
(c) A new clause (9) is added at the end thereof:
"(9) the issue and sale of shares representing in the aggregate
not more than (i) approximately 33.3% (on a fully diluted
basis) of the outstanding common stock of MacDonald
Dettwiler and Associates, and (ii) up to 51% of the
outstanding common stock of MacDonald, Dettwiler and
Associates to CAI and BC Ltd, in each case, on
substantially the same terms as set forth in the CAI Letter
Agreement."
1.3. Section 5.15 of the Note Agreement is hereby amended by adding the
following at the end thereof immediately preceding the period:
"; provided, further, the Company, MacDonald Dettwiler Holdings
and MacDonald Dettwiler and Associates may enter into the transactions
contemplated by the CAI Letter Agreement"
1.4 Section 8.1 of the Note Agreement is amended by adding the
following definitions in their proper alphabetical order:
<PAGE> 3
""B.C. Ltd." shall mean B.C. Limited, a corporation organized
under the laws of Province of British Columbia."
""CAI" shall mean CAI Capital Partners and Company II, L.P.,
and/or its affiliated funds."
""CAI Letter Agreement" shall mean that certain Letter Agreement,
including the Term Sheet attached thereto, dated as of December 1, 1999,
amongst CAI, the Company, MacDonald Dettwiler Holdings and MacDonald
Dettwiler and Associates, regarding the purchase by CAI, and the sale to
CAI by MacDonald Dettwiler and Associates, of approximately 33.3% of the
common stock of MacDonald Dettwiler and Associates."
""MacDonald Dettwiler and Associates" shall mean MacDonald,
Dettwiler and Associates Limited, a corporation incorporated under the
laws of Canada and a Subsidiary of the Company.""
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
To induce the Purchaser to execute and deliver this Eighth Amendment, the
Company represents and warrants to the Purchaser (which representations will
survive the execution and delivery of this Eighth Amendment) that:
(a) this Eighth Amendment has been duly authorized, executed
and delivered by the Company and constitutes the legal, valid and binding
obligation of the Company, enforceable against it in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles
relating to fraudulent conveyance or limiting creditors' rights
generally;
(b) the Note Agreement, as modified by this Eighth Amendment,
constitutes the legal, valid and binding obligation of the Company,
enforceable against it in accordance with its terms, except as
enforcement may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium or similar laws or equitable
principles relating to or limiting creditors' rights generally;
(c) the execution, delivery and performance by the Company of
this Eighth Amendment (i) has been duly authorized by all requisite
corporate action and, if required, shareholder action, (ii) does not
require the consent or approval of any governmental or regulatory body or
agency, and (iii) will not (A) violate (1) any provision of law, statute,
rule or regulation or its certificate of incorporation or bylaws, (2) any
order of any court or any rule, regulation or order of any other agency
or government binding upon it, or (3) any material provision of any
material indenture, agreement or other instrument to which it is a party
or by which its properties or assets are or may be bound, or (B) result
in a material breach or constitute (alone or with due notice or lapse of
time or both) a default under any indenture, agreement or other
instrument referred to in clause (iii)(A)(3) of this Section 2(c); and
(d) as of the date hereof and after giving effect to this
Eighth Amendment, no Default or Event of Default has occurred which is
continuing.
SECTION 3. CONDITIONS AND AGREEMENTS.
Upon fulfillment or receipt of all of the following, as the case
may be, this Eighth Amendment will on the Effective Date become effective:
<PAGE> 4
(a) executed counterparts of this Eighth Amendment, duly
executed by the Company and the Purchaser, have been delivered to the
Purchaser;
(b) the representations and warranties of the Company set forth
in Section 2 of this Eighth Amendment will be true and correct on and
with respect to the date hereof; and
(c) the Company, Holdings and MDA have obtained any consents or
approvals required to be obtained from any holder or holders of any
outstanding security of the Company, Holdings or MDA and any amendments
of agreements pursuant to which any security may have been issued which
will be necessary to permit the consummation of the transactions
contemplated by this Eighth Amendment.
SECTION 4. MISCELLANEOUS.
4.1 This Eighth Amendment will be construed in connection with the
Note Agreement, and except as modified by this Eighth Amendment, all terms,
conditions and covenants contained in the Note Agreement and the Note are hereby
ratified and will be and remain in full force and effect.
4.2. The descriptive headings of the various Sections or parts of this
Eighth Amendment are for convenience only and will not affect the meaning or
construction of any of the provisions hereof.
4.3. This Eighth Amendment will be governed by and construed in
accordance with the internal laws of the State of Illinois.
4.4. This Eighth Amendment may be executed in any number of
counterparts, each executed counterpart constituting an original, but all
together only one agreement.
<PAGE> 5
IN WITNESS WHEREOF, the Company and the Purchaser have caused this Eighth
Amendment to be executed and delivered by their respective duly authorized
representatives.
ORBITAL SCIENCES CORPORATION
By:
--------------------------------
Title:
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
By:
--------------------------------
Its Authorized Representative
133168
