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ORION NEWCO SERVICES, INC.
$60,000,000
Convertible Junior Subordinated Debentures
Due February 1, 2012 (Interest Payable in Common Stock)
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DEBENTURE PURCHASE AGREEMENT
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Dated as of January 13, 1997
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Table of Contents
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Page
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1. Issuance of Debentures and the Subsidiary Guarantee.................................................... 1
1.1. The Debentures.............................................................................. 1
1.2. Sale of Debentures.......................................................................... 1
1.3. The Subsidiary Guarantee.................................................................... 2
2. Closing................................................................................................ 2
3. Use of Proceeds........................................................................................ 2
4. Conditions to Closing.................................................................................. 2
4.1. Representations and Warranties.............................................................. 2
4.2. Exchange Agreement.......................................................................... 3
4.3. Merger Transaction.......................................................................... 3
4.4. Financing Transaction....................................................................... 3
4.5. Termination of Your Prior Obligations....................................................... 3
4.6. Subsidiary Guarantee........................................................................ 4
4.7. Registration Rights......................................................................... 4
4.8. Opinions of Counsel......................................................................... 4
4.9. Matra Incentive Payments.................................................................... 5
4.10. Senior Notes................................................................................ 5
4.11. Terms of the Merger; Capitalization......................................................... 5
4.12. HSR Clearance............................................................................... 5
4.13. Investment by Each Purchaser................................................................ 5
4.14. Termination................................................................................. 5
5. Representations, Warranties and Agreements of the Company and ONS...................................... 6
5.1. Incorporation, Standing, etc................................................................ 6
5.2. Capital Stock............................................................................... 7
5.3. Subsidiaries................................................................................ 7
5.4. Qualification............................................................................... 8
5.5. Business; Financial Statements.............................................................. 8
5.6. Solvency.................................................................................... 8
5.7. Authorization of Agreement.................................................................. 8
5.8. Authorization of Common Stock............................................................... 9
5.9. Absence of Defaults and Conflicts........................................................... 9
5.10. Absence of Labor Dispute.................................................................... 10
5.11. Absence of Proceedings...................................................................... 10
5.12. Possession of Licenses and Permits.......................................................... 10
5.13. Environmental Laws.......................................................................... 11
(i)
Page
5.14. No Violations of Laws....................................................................... 12
5.15. Internal Accounting Controls................................................................ 12
5.16. Tax Returns and Payments.................................................................... 12
5.17. Indebtedness................................................................................ 12
5.18. Title to Properties; Liens.................................................................. 13
5.19. Patents, Trademarks, Authorizations, etc.................................................... 13
5.20. Governmental Consents; Exercise of Voting Rights, etc....................................... 13
5.21. Offer of Debentures......................................................................... 14
5.22. Federal Reserve Regulations................................................................. 14
5.23. Investment Company Act...................................................................... 14
5.24. Public Utility Holding Company Act.......................................................... 14
5.25. Compliance with ERISA....................................................................... 14
5.26. Disclosure.................................................................................. 15
5.27. HSR Act Filings............................................................................. 16
5.28. Certificate of Incorporation................................................................ 16
6. Representations, Warranties and Agreements of Purchasers............................................... 17
6.1. Investment Representations.................................................................. 17
6.2. ERISA....................................................................................... 17
6.3. HSR Act Filings............................................................................. 17
7. Accounting; Financial Statements; Other Information.................................................... 17
7.1. Accounting; Financial Statements and Other Information...................................... 17
7.2. Company Certificate......................................................................... 19
7.3. Accountant's Certificate.................................................................... 19
8. Inspection............................................................................................. 20
9. Confidential Treatment................................................................................. 21
10. ERISA.................................................................................................. 21
11. Redemption of Debentures; Repurchase Rights; Mandatory Sales........................................... 22
11.1. Right of Redemption......................................................................... 22
11.2. Company Right of Redemption................................................................. 22
11.3. Redemption and Repurchase Rights upon Change of Control Event............................... 22
11.4. Mandatory Sale.............................................................................. 23
11.5. Restriction on Conversion Rights; Withdrawal of Notice...................................... 24
12. Business Covenants..................................................................................... 26
12.1. Payment of Debentures and Maintenance of Office............................................. 26
12.2. Payment of Taxes and Claims................................................................. 26
(ii)
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12.3. Maintenance of Properties and Corporate Existence........................................... 27
12.4. Compliance with Law......................................................................... 28
12.5. [Reserved.]................................................................................. 28
12.6. When Company May Merge, Etc................................................................. 28
12.7. Listing..................................................................................... 28
12.8. Issuances of Guarantees by New Restricted Subsidiaries...................................... 29
12.9. Subsidiaries................................................................................ 29
12.10. Notice...................................................................................... 29
12.11. Waiver of Stay, Extension or Usury Laws..................................................... 29
13. Financial Covenants.................................................................................... 29
13.1. Merger and Sale of Assets................................................................... 29
13.2. Transactions with Affiliates................................................................ 31
13.3. Tax Consolidation........................................................................... 31
13.4. Compliance with ERISA....................................................................... 31
13.5. Limitation on Indebtedness.................................................................. 32
13.6. Limitation on Restricted Payments........................................................... 34
13.7. Limitation on the Issuance and Sale of Capital Stock of Restricted
Subsidiaries................................................................................ 36
13.8. Issuances of Guarantees by New Restricted Subsidiaries...................................... 36
13.9. Limitation on Liens......................................................................... 36
13.10. Limitation on Sale-Leaseback Transactions................................................... 37
13.11. Limitation on Asset Sales................................................................... 37
13.12. Insurance................................................................................... 38
14. Subordination of Debentures............................................................................ 39
14.1. Debentures Subordinated to Senior Indebtedness.............................................. 39
14.2. Liquidation; Dissolution; Bankruptcy........................................................ 39
14.3. Default on Senior Indebtedness.............................................................. 40
14.4. Payment Permitted If No Default............................................................. 42
14.5. Subrogation to Rights of Holders of Senior Indebtedness..................................... 42
14.6. Provisions Solely to Define Relative Rights................................................. 42
14.7. Enforcement of Subordination By Holders of Senior Notes; No Waiver
of Subordination Provisions................................................................. 43
14.8. Reliance on Judicial Order or Certificate of Liquidating Agent.............................. 44
14.9. Certain Conversions Deemed Payment.......................................................... 44
14.10. Not to Prevent Events of Default............................................................ 44
15. Conversion Rights...................................................................................... 44
15.1. Conversion Privilege and Conversion Rate.................................................... 44
15.2. Exercise of Conversion Privilege; Time Conversion Deemed Effected;
Delivery of Stock Certificates; Partial Conversions; Accrued Interest....................... 45
(iii)
Page
15.3. Fractions of Shares......................................................................... 45
15.4. Adjustments to Conversion Rate.............................................................. 46
15.5. Effect on Conversion Price of Certain Events................................................ 50
15.6. De Minimis Adjustments...................................................................... 53
15.7. Notice of Adjustments of Conversion Rate.................................................... 53
15.8. Notice of Certain Corporate Action.......................................................... 53
15.9. Company to Reserve Common Stock............................................................. 54
15.10. Taxes on Conversions........................................................................ 54
15.11. Agreements as to Common Stock; Listing...................................................... 54
15.12. Cancellation of Converted Debentures........................................................ 55
15.13. Provision in Case of Consolidation, Merger or Conveyance of Assets.......................... 55
15.14. Other Dilutive Events....................................................................... 56
15.15. Continuing Obligation of the Company........................................................ 57
16. Registration, Transfer and Substitution of Debentures.................................................. 57
16.1. Debenture Register; Ownership of Registered Debentures...................................... 57
16.2. Transfer and Exchange of Debentures......................................................... 57
16.3. Replacement of Debentures................................................................... 57
17. Payment................................................................................................ 58
17.1. Form of Payment............................................................................. 58
17.2. Place of Payment............................................................................ 58
17.3. Home Office Payment......................................................................... 58
18. Events of Default; Acceleration........................................................................ 59
18.1. Nature of Events and Acceleration of Debentures............................................. 59
18.2. Default Remedies............................................................................ 61
18.3. Notice of Default........................................................................... 62
18.4. Annulment of Acceleration of Debentures..................................................... 62
18.5. Accelerations and other Remedies Limited Prior to Senior Notes
Reduction Date.............................................................................. 62
19. Interpretation of Agreement and Debentures............................................................. 63
20. Expenses............................................................................................... 85
21. Survival............................................................................................... 86
22. Amendments and Waivers................................................................................. 86
23. Notices................................................................................................ 87
(iv)
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24. Substitution of Purchaser.............................................................................. 87
25. Execution in Counterparts.............................................................................. 87
27. GOVERNING LAW.......................................................................................... 87
28. Consent to Jurisdiction; Appointment of Agent to Accept Service of Process............................. 88
29. WAIVER OF JURY TRIAL................................................................................... 89
(v)
Schedule I - Schedule of Purchaser(s)
Schedule II - Exceptions to Section 5.11
Exhibit A - Form of Debenture
Exhibit B - Form of Subsidiary Guarantee
Exhibit C - Registration Rights Agreement
Exhibit D - Information Relating to Subsidiaries
(vi)
ORION NEWCO SERVICES, INC.
as of January 13 , 1997
British Aerospace Holdings, Inc.
00000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Matra Marconi Space UK Limited
Xxx Xxxxx
Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxx, XX0 0XX
England
Dear Sirs:
ORION NEWCO SERVICES, INC., a Delaware corporation (herein, together
with its successors and assigns, called the "Company"), and ORION NETWORK
SYSTEMS, INC., a Delaware corporation ("ONS"), agree with you as follows:
1. Issuance of Debentures and the Subsidiary Guarantee.
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1.1. The Debentures. The Company has duly authorized the issue
and sale of $60,000,000 in aggregate principal amount of its Convertible Junior
Subordinated Debentures Due February 1, 2012 (Interest Payable in Common Stock)
(such Debentures, together with all Debentures issued in substitution or
exchange therefor pursuant to this Agreement, are herein called the
"Debentures"). Each Debenture will bear interest from the date thereof on the
unpaid principal amount thereof at the rate specified therein, payable in Common
Stock semi-annually on the first day of February and the first day of August of
each year commencing with August 1, 1997, will mature on February 1, 2012, and
will be in substantially the form of Exhibit A attached hereto, with such
changes thereto, if any, as may be approved by you. Capitalized terms used and
not otherwise defined herein shall have the respective meanings assigned thereto
in Section 19.
1.2. Sale of Debentures.
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(a) The Company will issue and sell to BAe and, subject to the
terms and conditions hereof, BAe will purchase from the Company at the Closing
provided for in Section 2, Debentures in the aggregate principal amount of
$50,000,000 at the purchase price of one hundred percent (100%) of such
principal amount.
(b) The Company will issue and sell to Matra and, subject to
the terms and conditions hereof, Matra will purchase from the Company at the
Closing provided for in Section 2, Debentures in the aggregate principal amount
of $10,000,000 at the purchase price of one hundred percent (100%) of such
principal amount.
1.3. The Subsidiary Guarantee. The Guarantors, no later than
the Closing Date (as hereinafter defined), shall have taken all necessary action
to authorize the issuance of their unconditional guarantee of payment of the
Debentures as set forth in the Subsidiary Guarantee and to make their guarantee
of the Debentures the enforceable obligation it purports to be in accordance
with the terms of the Subsidiary Guarantee. The Subsidiary Guarantee is not
effective or enforceable against the Guarantors until the Senior Notes Reduction
Date. The Subsidiary Guarantee will become effective and enforceable against
each of the Guarantors on the Senior Notes Reduction Date without any further
action by any party.
2. Closing. The closing of the sale of the Debentures to be purchased
by each Purchaser (the "Closing") shall take place at the offices of Coudert
Brothers, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 a.m.,
New York City time, (or at such other time and place as the parties hereto may
agree) on the date on which the Financing Transaction is closed provided that
each of the conditions in Section 4 have been satisfied prior to such date or
are to be satisfied concurrently with the Closing (the "Closing Date"). At the
Closing the Company will deliver to each Purchaser the Debentures to be
purchased by such Purchaser, in the form of a single Debenture (or such greater
number of Debentures in denominations of at least $100,000 as such Purchaser may
request), dated the Closing Date and registered in such Purchaser's name (or the
name of such Purchaser's nominee), against delivery by such Purchaser to the
Company of the purchase price therefor by the same method of payment utilized in
the closing of the Financing Transaction. If at the Closing the Company shall
fail to tender such Debentures to a Purchaser as provided in this Section 2, or
any of the conditions specified in Section 4 shall not have been fulfilled to
such Purchaser's satisfaction, such Purchaser shall, at its election, be
relieved of all further obligations under this Agreement, without thereby
waiving any other rights such Purchaser may have by reason of such failure or
such non-fulfillment.
3. Use of Proceeds. The proceeds of the sale of the Debentures will be
used to pay amount under the contracts for the construction of Orion 2 and Orion
3 and to provide working capital to the Company.
4. Conditions to Closing. Each Purchaser's obligation to purchase and
pay for the Debentures to be purchased by such Purchaser is subject to the
fulfillment to such Purchaser's satisfaction, prior to or at the Closing, of
each of the following conditions:
4.1. Representations and Warranties. The representations and
warranties of the Company, ONS and their respective Subsidiaries contained in
this Agreement shall be correct as of the date hereof and at the time of the
Closing. Alternatively, the Company (and if applicable ONS) shall have made, in
writing, for the benefit of you and any other holder of
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Debentures, the same representations, warranties and agreements as made to
Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx") in the underwriting agreement with
respect to the sale of the Senior Notes (the "Underwriting Agreement"), except
that such representations, warranties and agreements shall be made in connection
with (and with reference to) the offer, sale, delivery and performance of the
Debentures and this Agreement (including, without limitation, the issuance and
delivery of Conversion Shares and Interest Shares as required under the
Debentures), rather than with respect to the offer, sale, delivery and
performance of the Senior Notes, as the context requires, and such
representations and warranties shall have been correct as of the date first made
and at the time of Closing. If the Company or ONS shall make for the benefit of
you and other holders of Debentures such representations, warranties and
agreements in the Underwriting Agreement, the representations, warranties and
agreements set forth in Sections 5.1 through 5.28 hereof shall not be updated
through the Closing Date. In either case, each Purchaser shall have received a
certificate, dated the Closing Date and signed by the Secretary of the Company,
certifying as to the correctness of the applicable representations and
warranties.
4.2. Exchange Agreement. The transactions provided for in the
Exchange Agreement shall be completed prior to or concurrently with the Closing.
4.3. Merger Transaction. The Merger Transaction shall be completed
prior to or concurrently with the Closing.
4.4. Financing Transaction. The Financing Transaction shall be
completed prior to or concurrently with the Closing.
4.5. Termination of Your Prior Obligations.
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(a) As a condition to BAe's obligation to purchase and pay for
the Debentures to be purchased by BAe, the obligations of (i) BAC under the
Communications Satellite Capacity Agreement dated as of December 20, 1991 by and
between Orion Atlantic and BAC, and the Contingent Communications Satellite
Capacity Agreement, dated as of December 20, 1991, by and between, Orion
Atlantic and BAC and (ii) British Aerospace Plc ("PLC") under the Guarantee
Agreement dated as of February 19, 1992 between and among PLC, Orion Atlantic
and The Chase Manhattan Bank (National Association), as agent, (including,
without limitation, all payment obligations, guarantees or other credit support
obligations under or related to each such agreement) shall have been terminated
and be of no further force or effect and a termination of guarantee agreement
and termination of capacity agreements contracts, substantially in the form of
the exhibits attached to the Exchange Agreement, in respect of the termination
of the obligations of PLC and BAC, respectively, shall be executed and delivered
prior to or concurrently with the Closing.
(b) As a condition to Matra's obligation to purchase and pay
for the Debentures to be purchased by Matra, the obligations of (i) MCN Sat
Service S.A. under the Communications Satellite Capacity Agreement dated as of
December 20, 1991 by and between Orion Atlantic and MCN Sat Service S.A., (ii)
MCN Sat
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US, Inc. under the Contingent Communications Satellite Capacity Agreement dated
as of December 20, 1991 by and between Orion Atlantic and MCN Sat US, Inc.,
(iii) Lagardere Groupe SCA (formerly Matra S.A.) under the Guarantee Agreement
dated as of February 19, 1992 between and among Lagardere Groupe SCA (formerly
Matra S.A.), Orion Atlantic and The Chase Manhattan Bank (National Association),
as agent, and (iv) Lagardere Groupe SCA under the Guaranty Agreement, dated
April 2, 1992 between Lagardere Groupe SCA (formerly Matra S.A.) and Orion
Atlantic (including, without limitation, all payment obligations, guarantees or
other credit support obligations under or related to each such agreement) shall
have been terminated and be of no further force or effect and a termination of
guarantee agreements and termination of capacity agreements, substantially in
the form of the exhibits attached to the Exchange Agreement, in respect of the
termination of the obligations of MCN Sat US, Inc. and MCN Sat Service S.A.,
respectively, shall be executed and delivered prior to or concurrently with the
Closing.
4.6. Subsidiary Guarantee. A Subsidiary Guarantee
substantially in the form of Exhibit B attached hereto, shall be executed and
delivered to each Purchaser by each of the Guarantors. The parties hereto agree
that the Subsidiary Guarantee may, at your sole option, be amended to
incorporate from any subsidiary guarantee provisions for the benefit of the
holders of the Senior Notes, any additional or, in your opinion, more favorable
terms than those appearing in the Subsidiary Guarantee, provided that, in no
event, will the Subsidiary Guarantee become effective prior to the Senior Notes
Reduction Date.
4.7. Registration Rights. (i) A Registration Rights Agreement
with respect to the Conversion Shares, the Interest Shares, and certain other
shares specified therein substantially in the form of Exhibit C attached hereto,
shall have been executed by each Purchaser and the Company and (ii) the Company
or ONS shall have obtained all agreements, amendments, consents or waivers, in
form and substance satisfactory to each Purchaser, from the holders of any
registration rights granted pursuant to any prior registration rights agreements
(or any such agreement entered into in connection with the Merger Transaction or
the Financing Transaction) with the Company or ONS as necessary to allow you
(and each other holder of Debentures) their registration rights in accordance
with the terms of the Registration Rights Agreement.
4.8. Opinions of Counsel. The Purchasers shall have received a
favorable opinion, dated the Closing Date and satisfactory in form and substance
to the Purchasers, from Xxxxx & Xxxxxxx L.L.P., special counsel for the Company,
which shall opine as to offer and sale of the Debentures. Such opinion shall be
deemed to be in form and substance satisfactory to the Purchasers if the opinion
provided is the same as the opinion provided by Xxxxx & Xxxxxxx L.L.P. to Xxxxxx
under the Underwriting Agreement in connection with the offer and sale of the
Senior Notes, except that the opinion delivered to the Purchasers shall opine as
to the Debentures (including, without limitation, as to the issuance of the
Conversion Shares and Interest Shares) and the Subsidiary Guarantee in addition
to or in place of the Senior Notes and the guarantee thereof and shall refer to
the Purchasers and the Debentures (including the Conversion Shares and Interest
Shares), rather than to Xxxxxx and the Senior Notes, as the context requires.
BAe shall also have received a favorable opinion, dated the Closing Date and
satisfactory in form and substance to BAe, from Xxxxx & Xxxxxxx L.L.P. which
shall opine as to the applicability of Section 16 of the Exchange Act to the
receipt of Conversion Shares and
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Interest Shares by BAe and the receipt by BAC of stock dividends on, and shares
issued upon conversion of, the Series C Preferred Stock.
4.9. Matra Incentive Payments. As a condition to Matra's
obligation to purchase and pay for the Debentures to be purchased by Matra, ONS,
shall, concurrently with the Closing, pay to Matra by wire transfer into a bank
account established by Matra in the United States of America, $13 million of the
payments required to be made under Articles 15.6.1 and 15.6.2 of the Second
Amended and Restated Purchase Contract, dated 26 September 1991, as amended, by
and between Orion Satellite Corporation, as general partner of Orion Atlantic
and Matra Marconi Space UK Limited.
4.10. Senior Notes. The material terms of the Senior Notes, as
set out on the Senior Notes Term Sheet, a copy of which has been furnished to
you, shall not have been amended or waived without your written approval. For
purposes of this Section 4.10, an increase in the size of the Senior Notes
offering shall not constitute an amendment or waiver requiring your written
approval.
4.11. Terms of the Merger; Capitalization. The material terms
of the Merger Transaction, as described in the Registration Statement, a copy of
which has been delivered to you and your special U.S. counsel, shall not have
been amended or waived without your written approval. Except for a proposed sale
of ONS Common Stock or Common Stock previously disclosed to you, and except as
specifically contemplated by the Registration Statement and the Senior Notes
Term Sheet, there shall have been no material changes to the capital structure
of either the Company or ONS and no material increase or decrease in the number
of outstanding shares of any class of capital stock of either ONS or the
Company, or in the number of (or terms of) any options, warrants, or other
rights to acquire any shares of any class of capital stock of either ONS or the
Company since January 10, 1997.
4.12. HSR Clearance. As a condition to BAe's obligation to
purchase and pay for the Debentures to be purchased by BAe, any waiting period
(including any extensions thereof) applicable to BAC's acquisition of Series C
Preferred Stock pursuant to the Exchange Agreement shall have expired or been
terminated.
4.13. Investment by Each Purchaser. The purchase of Debentures
by each Purchaser shall be completed concurrently with the purchase of
Debentures by the other Purchaser.
4.14. Termination.
(a) No Closing. Notwithstanding anything to the contrary
contained in this Agreement, this Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
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(i) By the mutual consent of all of the parties;
(ii) By a Purchaser at any time in the event of a
material breach or material default by the Company in the
observance or in the timely performance of any of its
obligations hereunder which is not waived by such Purchaser;
(iii) By the Company at any time in the event of a
material breach or material default by a Purchaser in the
observance or in the timely performance of any of such
Purchaser's obligations hereunder which is not waived by the
Company; or
(iv) If the Closing shall not have occurred on or
before April 30, 1997, without any further action by you or
the Company.
Except as provided in paragraph (iv) above, no termination under this Section
4.14 shall be effective unless and until the terminating party gives written
notice of such termination to the other parties.
(b) Failure to Notify. If the Closing shall not actually occur
on any date on which the Closing is scheduled to occur (the "Scheduled Closing
Date") (other than by reason of your failure to purchase Debentures duly
tendered), and the Company shall have failed to notify Coudert Brothers prior to
12:00 p.m., New York City time, on such Scheduled Closing Date that such Closing
has been postponed, the Company shall pay to each Purchaser by wire transfer of
immediately available funds to the bank account designated by such Purchaser (if
such Purchaser incurs any loss of funds or administrative costs, as compensation
for such loss of funds and administrative costs) an amount equal to interest on
the aggregate purchase price for the Debentures to have been purchased by such
Purchaser on such Scheduled Closing Date, at the effective rate of interest
equal to eight and three-quarters percent (8 3/4%) per annum, less the overnight
Federal funds rate, for each day from and including such Scheduled Closing Date
to and including the earlier of the date on which such Closing actually occurs
or the date on which the amount to be paid by such Purchaser as the purchase
price of such Debentures is available to such Purchaser for reinvestment,
provided, that the Company shall pay to such Purchaser in any case not less than
one day's interest at such specified rate.
5. Representations, Warranties and Agreements of the Company and ONS.
Each of ONS and the Company represents, warrants and agrees as follows:
5.1. Incorporation, Standing, etc. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
own and operate its properties, to carry on its business as now conducted and as
presently proposed to be conducted, to enter into this Agreement, to issue and
sell the Debentures, to issue the Conversion Shares and the Interest Shares and
to carry out the terms of this Agreement and the Debentures. The Company has, by
all necessary corporate action, duly authorized the execution and delivery of
this Agreement
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and of the Debentures and the performance of its obligations hereunder and under
the Debentures (including, without limitation, the issuance and sale of the
Debentures and the issuance of the Conversion Shares and the Interest Shares).
5.2. Capital Stock.
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(a) As of January 10, 1997, the authorized capital stock of
ONS consists of 40,000,000 shares of common stock, par value $0.01 per share
("ONS Common Stock"), and 1,000,000 shares of preferred stock, par value $0.01
per share ("ONS Preferred Stock"), of which 10,985,150 shares of ONS Common
Stock, 13,871 shares of ONS Series A 8% Cumulative Redeemable Convertible
Preferred Stock ("ONS Series A Preferred Stock") and 4,298 shares of ONS Series
B 8% Cumulative Redeemable Convertible Preferred Stock ("ONS Series B Preferred
Stock") are duly authorized and validly issued and outstanding, fully paid and
nonassessable. ONS has no other class of stock authorized or outstanding.
Options and warrants to purchase 947,330 shares of ONS Common Stock are
outstanding as of January 10, 1997, and when such options and warrants are
exercised and the prescribed exercise price paid, the shares of ONS Common Stock
issued with respect to such options and warrants will be duly authorized,
validly issued, fully paid and nonassessable. Options to purchase 350,666 shares
of ONS Preferred Stock, the terms of which are to be substantially identical to
the ONS Series A Preferred Stock and the ONS Series B Preferred Stock other than
the conversion price, are outstanding as of January 10, 1997. Except as set
forth above, or in the certificates of designations of the ONS Series A
Preferred Stock and ONS Series B Preferred Stock and related investment
agreements, as of January 10, 1997 there are no existing options, warrants or
rights to purchase or otherwise acquire from ONS Capital Stock of ONS of any
class, no outstanding securities of ONS that are convertible into shares of
Capital Stock of ONS of any class, and no options, warrants or rights to
purchase from ONS any such convertible securities, and ONS has no outstanding
contractual or other obligation to repurchase, redeem or otherwise acquire any
outstanding shares of its Capital Stock.
(b) ONS and the Company agree that prior to the Closing Date
there will be no material increase or decrease in the number of outstanding
shares of any class of Capital Stock of either ONS or the Company, or in the
number of (or terms of) any options, warrants, or other rights to acquire any
shares of any class of Capital Stock of either ONS or the Company except in
connection with a proposed sale of ONS Common Stock or Common Stock previously
disclosed to you, or as specifically contemplated by the Registration Statement
and the Senior Notes Term Sheet.
5.3. Subsidiaries. Attached hereto as Exhibit D is a complete
and correct list of the Subsidiaries of the Company and ONS, which Exhibit D
correctly sets forth as to each Subsidiary (a) its name, (b) the jurisdiction of
its organization and the jurisdictions, if any, in which it is qualified as a
foreign corporation or foreign partnership and (c) the percentage of its issued
and outstanding shares of common stock, shares of beneficial interest or general
and limited partnership interests owned by the Company, ONS or another
Subsidiary (specifying such
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other Subsidiary). Each corporate Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, and each limited partnership Subsidiary is duly formed, validly
existing and in good standing under the laws of its jurisdiction of
organization. Each Subsidiary has all requisite power and authority to own and
operate its properties and to carry on its business as now conducted and as
presently proposed to be conducted. All the outstanding equity interests or
partnership interests of, or shares of capital stock of, or shares of beneficial
interest in, each Subsidiary are duly authorized, validly issued, fully paid and
nonassessable, and all such equity interests, partnership interests or shares
indicated in Exhibit D as owned by the Company, ONS or by another Subsidiary are
so owned beneficially and of record by the Company or such other Subsidiary,
free and clear, except as described in the Registration Statement, of any Lien.
Upon the completion of the Merger Transaction, Exhibit D shall be amended to
include ONS as a Wholly Owned Subsidiary of the Company.
5.4. Qualification. The Company and ONS are, and each of the
Subsidiaries listed on Exhibit D is, duly qualified and in good standing as a
foreign corporation or partnership authorized to do business in the
jurisdictions indicated with respect to it in Exhibit D. Failure of the Company,
ONS or any of their respective Subsidiaries to so qualify in any other
jurisdiction would not, in any case or in the aggregate, have a Material Adverse
Effect.
5.5. Business; Financial Statements. The Company has delivered
to you complete and correct copies of (a) the annual report to stockholders of
ONS for the fiscal year ended December 31, 1995 (the "Annual Report"), (b) the
annual report to the Commission of ONS on Form 10-K for the fiscal year ended
December 31, 1995 (the "10-K") and (c) the report to the Commission on ONS for
the fiscal quarter ended September 30, 1996 (the "10-Q"). The Annual Report and
the 10-K correctly describe, as of their respective dates, the business then
conducted by ONS and its Subsidiaries and proposed to be conducted by the
Company, ONS and the Subsidiaries. The 10-K includes the consolidated financial
statements of ONS and the Subsidiaries for each of the fiscal years ended
December 31, 1994 and 1995 accompanied by the report thereon of Ernst & Young
LLP, certified public accountants. All of said financial statements (including
in each case the related schedules and notes) fairly present in all material
respects the consolidated financial position of ONS and the Subsidiaries as of
the respective dates specified in the 10-K and the consolidated results of their
operations and cash flows for the respective periods so specified and have been
prepared in accordance with GAAP consistently applied throughout the periods
involved except as set forth in the notes thereto and subject in the case of
unaudited financial statements to normal recurring audit adjustments.
5.6. Solvency. ONS and its Subsidiaries, considered as one enterprise,
are Solvent and immediately after the Closing Date, the Company and its
Subsidiaries, considered as one enterprise, will be Solvent.
5.7. Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by each of the Company and ONS.
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5.8. Authorization of Common Stock. Upon issuance and delivery of the
Debentures in accordance with this Agreement, the Debentures will be convertible
at the option of the holders thereof for shares of Common Stock in accordance
with the terms of the Debentures and this Agreement; the Conversion Shares and
the Interest Shares have been duly and validly authorized and reserved for
issuance upon payment of interest and upon conversion by all necessary corporate
action of the Company, and such shares, when issued upon such conversion or as a
payment of interest in accordance with the terms of the Debentures and this
Agreement, will be duly and validly issued and will be fully paid and
non-assessable; no holder of such shares will be subject to personal liability
solely by reason of being such a holder; and the issuance of such shares upon
conversion or as a payment of interest in accordance with the terms of the
Debentures and this Agreement will not be subject to the preemptive or other
similar rights of any security holder of the Company arising by operation of
law, or under the Certificate of Incorporation or bylaws of the Company or under
any agreement to which the Company is a party or by which the Company is bound.
5.9. Absence of Defaults and Conflicts. None of the Company,
ONS or any of their respective Subsidiaries are in violation of their respective
certificates of incorporation, bylaws or other charter documents or is in
default in the performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which any of them is a party or by
which any of them may be bound, or to which any of the property or assets of the
Company, ONS or any of their Subsidiaries is subject (collectively, "Agreements
and Instruments") except for such defaults that would not result in a Material
Adverse Effect; and the execution, delivery and performance of this Agreement
and any other Agreement or Instrument entered into or issued or to be entered
into or issued by the Company, ONS or any of their respective Subsidiaries in
connection with the transactions contemplated hereby or thereby, and the
consummation of the transactions contemplated herein or therein (including the
issuance and sale of the Debentures, the use of the proceeds from the sale of
the Debentures and the issuance of the Conversion Shares and Interest Shares)
and compliance by the Company with its obligations hereunder and thereunder,
have been duly authorized by all necessary corporate action and do not and will
not, whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company, ONS or any of
their respective Subsidiaries pursuant to the Agreements and Instruments, except
for such conflicts, breaches, defaults, Repayment Events or liens, charges or
encumbrances that would not result in a Material Adverse Effect, nor will such
action result in any violation of the provisions of the Certificate of
Incorporation, bylaws or other charter documents of the Company, ONS or any of
their respective Subsidiaries or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company, ONS or any of
their respective Subsidiaries or any of their assets or properties, except for
such violations of law, statutes, rules, regulations, judgments, orders, writs
or decrees that would not result in a Material Adverse Effect. As used herein, a
"Repayment Event" means any event or condition which gives the holder of any
note, debenture or other evidence of indebtedness (or
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any Person acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the Company,
ONS or any of the Subsidiaries.
5.10. Absence of Labor Dispute. No labor dispute with the
employees of the Company, ONS or any of the Subsidiaries exists or, to the best
of the Company's knowledge, is threatened and the Company has not received
notice of any existing or threatened labor disturbance by the employees of any
of the principal suppliers, manufacturers, customers or contractors of the
Company, ONS or any of their respective Subsidiaries, which, in either case, may
reasonably be expected to result in a Material Adverse Effect.
5.11. Absence of Proceedings. There is no action, suit or
proceeding before or by any court or governmental agency or body, domestic or
foreign, now pending or, to the best of the Company's knowledge, threatened,
against or affecting the Company, ONS or any of their respective Subsidiaries or
any of their respective officers or directors in their capacity as such or any
of their respective property or assets, that is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which might
reasonably be expected to result in any Material Adverse Effect, or which might
reasonably be expected to have a Material Adverse Effect on the properties or
assets thereof or the consummation of the Financing Transaction, the
transactions contemplated by this Agreement or the transactions contemplated in
the Registration Statement, or the performance by the Company, ONS or any of
their respective Subsidiaries of any obligation hereunder or thereunder; the
aggregate of all pending legal or governmental proceedings to which the Company,
ONS or any of their respective Subsidiaries is a party or of which any of their
respective property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a Material Adverse
Effect. Without limiting the foregoing, except as otherwise set forth in the
Registration Statement and in Schedule II hereto, there are no legal or
governmental proceedings, including rulemaking proceedings of general
applicability in the industry or industries in which the Company, ONS or any of
their Subsidiaries operate, by or before the Federal Communications Commission
(the "FCC"), any state public utility commission or similar state governmental
agency ("PUC") or any international body formed by treaty that is responsible
for coordinating and registering orbital slots to satellites, including but not
limited to, the International Telecommunication Union ("ITU"), now pending or,
to the Company's best knowledge, threatened or contemplated, which in each case
might reasonably be expected to result in any Material Adverse Effect. In
addition, all applications, reports and other filings required to be filed
through the Execution Date with the FCC, the PUC, the ITU or any other
governmental or international authority, have been duly and timely filed and all
such applications, reports and other filings required to be filed by the Closing
Date will have been filed prior to the Closing Date.
5.12. Possession of Licenses and Permits. The Company, ONS and
the Subsidiaries possess such permits, certificates, licenses, approvals,
consents, orders and other authorizations (collectively, "Governmental
Licenses") issued by the appropriate Federal, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now operated
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by them, except for such permits, certificates, licenses, approvals, consents,
orders and other authorizations the absence of which would not have a Material
Adverse Effect; the Company, ONS and their respective Subsidiaries are in
compliance with the terms and conditions of all such Governmental Licenses,
except where the failure so to comply would not, individually or in the
aggregate, have a Material Adverse Effect; all of the Governmental Licenses are
valid and in full force and effect, except where the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse Effect; and none of the
Company, ONS or any of their respective Subsidiaries has received any notice of
proceedings relating to the revocation, withdrawal, cancellation, modification,
suspension or non-renewal of any such Governmental Licenses which, individually
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
5.13. Environmental Laws. None of the Company, ONS or any of
their respective Subsidiaries is in violation of any Federal, state, local or
foreign statute, law, rule, regulation, ordinance, code, policy or rule of
common law and any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or wildlife, including, without limitation, laws and regulations
relating to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, "Environmental Laws"), except for
such violations as would not, individually or in the aggregate, result in a
Material Adverse Effect. None of the Company, ONS or any of their respective
Subsidiaries has received any notice from any governmental authority or third
party of an asserted claim under any Environmental Law. The Company, ONS and
their respective Subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in compliance with
their requirements, except for such permits, authorizations and approvals the
absence of which would not, individually or in the aggregate, result in a
Material Adverse Effect. There are no pending or, to the Company's knowledge,
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company, ONS or any of their respective Subsidiaries, except for such actions,
suits, demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings which if decided adversely to the
Company, ONS or any of their respective Subsidiaries would not, individually or
in the aggregate, result in a Material Adverse Effect. To the best of the
Company's knowledge, there are no events or circumstances that might reasonably
be expected to form the basis of any order for clean-up or remediation, or an
action, suit or proceeding by any private party or governmental body or agency,
against or affecting the Company, ONS or any of their respective Subsidiaries
relating to any Hazardous Materials or the violation of any Environmental Laws.
-11-
5.14. No Violations of Laws. None of the Company, ONS or any of their
respective Subsidiaries has violated any foreign, Federal or state law relating
to the discrimination in the hiring, promotion or pay of employees nor any
applicable Federal or state wages and hours laws nor any other Federal or State
law concerning the conditions or the terms of employment of employees by an
employer, nor any provisions of ERISA or the rules and regulations promulgated
thereunder nor any provisions of the U.S. Communications Act of 1934, as
amended, nor the rules or regulations promulgated thereunder, nor any applicable
state law or regulation concerning intra-state telecommunications nor any
foreign law or regulation concerning international communications (such state
and foreign laws and regulations, along with the U.S. Communications Act of
1934, as amended, and the regulations thereunder being referred to herein as the
"Communications Laws"), except for such violations as, individually or in the
aggregate, will not have a Material Adverse Effect.
5.15. Internal Accounting Controls. The books, records and
accounts of the Company, ONS and their respective Subsidiaries accurately and
fairly reflect, in all material respects, in reasonable detail, the transactions
in and dispositions of the assets of the Company, ONS and their respective
Subsidiaries. The Company, ONS and each of their respective Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain asset accountability; (iii) access to assets is permitted
only in accordance with management's general or specific authorization; and (iv)
the recorded amount for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
5.16. Tax Returns and Payments. The Company, ONS and each of
their respective Subsidiaries have filed all income tax returns required by law
to be filed by them and have paid all taxes shown to be due and payable on such
returns and all other taxes, assessments, fees and other governmental charges
levied upon them and their respective properties, assets, income and franchises
which are due and payable, to the extent such taxes and assessments have become
due and payable and before they have become delinquent, except for any taxes and
assessments (i) the amount of which is not individually or in the aggregate
Material or (ii) the amount, applicability or validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which the Company, ONS or any of their respective Subsidiaries, as the case may
be, has established adequate reserves in accordance with GAAP. The charges,
accruals and reserves on the books of the Company, ONS and any of their
respective Subsidiaries in respect of Federal, state and foreign income taxes
for all fiscal periods are adequate in the reasonable opinion of the Company
and, to the best of the Company's knowledge, there are no additional assessments
for such periods or any basis therefor.
5.17. Indebtedness. None of the Company, ONS or any of their
respective Subsidiaries is in default and no waiver of default is currently in
effect, in the payment of any principal, interest or premium on any Indebtedness
of the Company, ONS or any such Subsidiary and no event or condition exists with
respect to any Indebtedness of the Company,
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ONS or any such Subsidiary the outstanding principal amount of which exceeds
$1,000,000 that would permit (or that with notice or the lapse of time, or both,
would permit) one or more Per- sons to cause such Indebtedness to become due and
payable before its stated maturity or before its regularly scheduled dates of
payment.
5.18. Title to Properties; Liens. The Company, ONS and their
respective Subsidiaries each have good and marketable title to all of their
respective properties and assets, including such properties and assets which are
reflected in the financial statements as at December 31, 1995 referred to in
Section 5.5 (except for such properties and assets disposed of since such date
in the ordinary course of business and except as set forth in the Registration
Statement), free and clear of all Liens except as set forth in the Registration
Statement, except for minor imperfections of title and encumbrances, if any,
which do not materially impair the use thereof in the operation of the business
of the Company, ONS or any of their respective Subsidiaries and except for
Permitted Liens.
5.19. Patents, Trademarks, Authorizations, etc. The Company,
ONS and their respective Subsidiaries own, possess or have the right to use
(without any known conflict with the rights of others) all patents, trademarks,
service marks, trade names, copyrights, licenses and authorizations which are
necessary to the conduct of their respective businesses as conducted on the date
hereof and which the failure to own, possess or have the right to use might
result in a Material Adverse Effect.
5.20. Governmental Consents; Exercise of Voting Rights, etc.
(a) None of the nature of the Company, ONS or of any of their respective
Subsidiaries, nor any of their respective businesses or properties, nor any
relationship between the Company, ONS or any such Subsidiary and any other
Person, nor any circumstance in connection with the offer, issue, sale or
delivery of the Debentures, is such as to require any consent, approval or
authorization of, or any notice to, of filing, registration or qualification
with, any court or administrative or governmental body by or on behalf of the
Company, ONS or any Subsidiary in connection with the execution and delivery of
this Agreement or the offer, issue, sale or delivery of the Debentures, the
Interest Shares and the Conversion Shares or fulfillment of, or compliance with,
the terms and provisions of this Agreement or of the Debentures, except for (1)
filings of reports pursuant to Section 13 or 15(d) of the Exchange Act, (2)
filings under state securities or Blue Sky laws, (3) filings under the HSR Act.
(b) No Applicable Law and no provision of the certificate of
incorporation, bylaws or other governing documents of the Company, ONS or any of
their respective Subsidiaries is such as to require or would give rise to any
limitation of any type on your right to vote (or consent with respect to) any
securities of ONS or the Company owned by you as of the Execution Date or that
will be owned by you as a result of (A) the Merger Transaction, (B) consummation
of the transactions contemplated by the Exchange Agreement or (C) the Closing
under this Agreement (including any Conversion Shares or Interest Shares
received hereunder).
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5.21. Offer of Debentures. Neither ONS nor the Company has either
directly or indirectly or through an agent directly or indirectly offered the
Debentures or any part thereof or any similar securities for sale to, or
solicited any offer to buy any of the same from, or otherwise approached or
negotiated in respect thereof with, anyone other than you. None of ONS, the
Company nor anyone authorized or employed to act on its behalf of either of them
has taken or will take any action which would subject the issuance and sale of
the Debentures to the provisions of Section 5 of the Securities Act or to the
registration or qualification requirements of any securities or Blue Sky law of
any applicable jurisdiction.
5.22. Federal Reserve Regulations. Neither the Company nor any
of its Subsidiaries will, directly or indirectly, use any of the proceeds of the
sale of the Debentures for the purpose of purchasing or carrying any "margin
security" within the meaning of Regulation G of the Board of Governors of the
Federal Reserve System (12, C.F.R. 207, as amended), or any "security that is
publicly-held" within the meaning of Regulation T of such Board (12 C.F.R. 220,
as amended), or otherwise take or permit to be taken any action which would
involve a violation of such Regulation G or Regulation T or Regulation X (12
C.F.R. 224, as amended) or any other regulation of such Board. No Indebtedness
being reduced or retired out of the proceeds of the sale of the Debentures, if
any, was incurred for the purpose of purchasing or carrying any "margin
security" within the meaning of such Regulation G or any "security that is
publicly-held" within the meaning of such Regulation T. None of the Company, ONS
or any of their Subsidiaries owns or has any present intention of acquiring
directly or indirectly any such margin security or any such security that is
publicly-held.
5.23. Investment Company Act. The Company is not, and upon the
issuance and sale of the Debentures as herein contemplated and the application
of the net proceeds therefrom will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act"), nor
is the Company an "open-ended investment trust," "unit investment trust" or
"face-amount certificate company" that is or is required to be registered under
Section 8 of the Investment Company Act.
5.24. Public Utility Holding Company Act. The Company is not a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," as such terms are defined in the Public Utility Holding Company Act of
1935, as amended.
5.25. Compliance with ERISA. (a) The Company, ONS and each
ERISA Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected have in a Material Adverse Effect. None
of the Company, ONS or any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA), and no
event, transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company, ONS
or any ERISA Affiliate, or in the
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imposition of any Lien on any of the rights, properties or assets of the
Company, ONS or any ERISA Affiliate, in either case pursuant to Title I or IV of
ERISA or to such penalty or excise tax provisions or to Section 401(a)(29) or
412 of the Code, other than such liabilities or Liens as would not be
individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities
under each of the Plans (other than Multiemployer Plans), determined as of the
end of such Plan's most recently ended plan year on the basis of the actuarial
assumptions specified for funding purposes in such Plan's most recent actuarial
valuation report, did not exceed the aggregate current value of the assets of
such Plan allocable to such benefit liabilities. The term "benefit liabilities"
has the meaning specified in Section 4001 of ERISA and the terms "current value"
and "present value" have the meaning specified in Section 3 of ERISA.
(c) The Company, ONS and the ERISA Affiliates have not
incurred withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under Section 4201 or 4204 of ERISA in respect of Multiemployer
Plans that individually or in the aggregate are Material.
(d) The execution and delivery of this Agreement and the
issuance and sale of the Debentures hereunder will not involve any transaction
that is subject to the prohibitions of Section 406 of ERISA or in connection
with which a tax could be imposed pursuant to Section 4975(c)(1)(A)-(D) of the
Code. The representation by the Company and ONS in the first sentence of this
Section 5.25(d) is made in reliance upon and subject to (i) the accuracy of the
representation in Section 6.2 by each Purchaser as to the sources of the funds
to be used to pay the purchase price of the Debentures to be purchased by such
Purchaser and (ii) the assumption, made solely for the purpose of making such
representation, that Department of Labor Interpretive Bulletin 75-2 with respect
to prohibited transactions remains valid in the circumstances of the
transactions contemplated herein.
5.26. Disclosure. The Registration Statement, including the
financial statements included therein and any document incorporated therein by
reference, complies or will comply as to form with all applicable provisions of
the Securities Act in all material respects. As of its effective date, the
Registration Statement does not or will not contain any untrue statements of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein not misleading. This Agreement and the other
documents certificates, instruments or reports delivered to you under this
Agreement, taken as a whole, do not contain any untrue statements of material
facts or omit to state material facts necessary in order to make the statements
contained herein or therein, in the light of the circumstances under which they
were made, not misleading. There is no fact known to either ONS or the Company
which has had a Material Adverse Effect through the Execution Date or in the
future (so far as the Company and ONS can now reasonably foresee and excluding
the effect of general economic and industry conditions) may have a Material
Adverse Effect which has not been or will not be set forth or reflected in the
Registration Statement. The representations contained in this Section 5.26 shall
also apply to any amendments to the Registration Statement and to the
-15-
registration statement declared effective by the Commission with respect to the
Financing Transaction and to any amendments to any such registration statement.
5.27. HSR Act Filings. The Company hereby agrees to promptly
make such filings or other submissions under the HSR Act as may be required with
respect to the conversion of any Debenture, the payment of any Interest Shares
or with respect to the redemption or repurchase of any Debenture or in
connection with any Mandatory Sale of Underlying Shares. The Company hereby
agrees to use its best efforts to respond to requests for additional information
relating to such filings or submissions. Exercise by the Company of its rights
under Section 11 of this Agreement or otherwise hereunder shall be subject to
compliance with the HSR Act as applicable.
5.28. Certificate of Incorporation (a) The Company hereby
agrees that, notwithstanding its rights under its Certificate of Incorporation,
it shall not exercise whatever rights it may have under Article Tenth of its
Certificate of Incorporation (as presently in effect and as the same may be
amended, supplemented or otherwise changed, "Article Tenth"), to redeem (i) any
Debentures, (ii) any Conversion Shares, (iii) any Interest Shares, (iv) any
share of Series C Preferred Stock, (v) any securities received as stock
dividends or redemption payments on any share of Series C Preferred Stock
pursuant to the Certificate of Designations, Rights and Preferences with respect
to the Series C Preferred Stock (the "Series C Designation") or (vi) any
securities received upon any conversion of any share of Series C Preferred Stock
(collectively, the "Subject Securities") held by you unless (x) you shall have
received a copy of an opinion addressed to the Company, reasonably acceptable to
you, of Xxxxxx, Xxxxxxxx, Xxxxxxx, XxXxxxxxx and Hand Chartered or other U.S.
regulatory counsel reasonably acceptable to you, to the effect that such
redemption is necessary to prevent a loss or secure reinstatement of a franchise
of the type specified in Article Tenth and (y) you have received an Officers'
Certificate to the effect that such loss or failure to secure such reinstatement
would have a Material Adverse Effect. The Company agrees to exercise its right
of redemption only to the minimum extent necessary to avoid such loss or to
secure such reinstatement. The Company presently has no knowledge of any grounds
for requiring any redemption under Article Tenth with respect to you.
(b) If the Company exercises its right of redemption pursuant
to Article Tenth, in addition to paying you the redemption amount under Article
Tenth, it shall pay you the positive difference, if any of (i) the highest
dollar value (adding cash and the value of any securities received) you would
have received with respect to the Subject Securities had they been redeemed
under applicable provisions of this Agreement or the Series C Designation, as
the case may be, as at the date they were instead redeemed under Article Tenth
less (ii) the dollar value (adding cash and the value of any securities
received) actually received by you as a result of any redemption pursuant to
Article Tenth. For purposes of this Section 5.28, the "value of any securities
received" shall be equal to the "Closing Price" of such securities as "Closing
Price" is defined in Article Tenth. Notwithstanding Article Tenth, the payment
to be received by you with respect to any Subject Securities redeemed under
Article Tenth will be either (i) all in cash
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or (ii) otherwise in the form provided with respect to redemptions under this
Agreement or the Series C Designation, as applicable, for the Subject Securities
redeemed. Notwithstanding anything in this Agreement to the contrary, the
provisions of this Section 5.28 shall survive until the first date after the
Closing Date as of which you do not own any Subject Security.
6. Representations, Warranties and Agreements of Purchasers.
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6.1. Investment Representations. Each Purchaser represents and
warrants (for itself and not the other Purchaser) that it is purchasing the
Debentures for its own account for investment and not with a view to the resale
or distribution of the Debentures or any part thereof or any Conversion Shares
or Interest Shares, and that such Purchaser has no present intention of
distributing any of the same; provided, however, that the disposition of such
Purchaser's property shall at all times be within such Purchaser's control. Each
Purchaser understands that the Debentures have not been registered under the
Securities Act, and that upon issuance the Conversion Shares and the Interest
Shares will not be registered under the Securities Act, and that the Debentures,
the Conversion Shares and the Interest Shares may be resold only if registered
pursuant to the provisions of the Securities Act or if an exemption from
registration is available.
6.2. ERISA. Each Purchaser represents (for itself and not the
other Purchaser) that it is not acquiring the Debentures or any interest therein
with assets allocated to any separate account maintained by it in which any
employee benefit plan (or its related trust) has any interest. As used in this
Section 6.2, "separate account" and "employee benefit plan" shall have the
respective meanings assigned thereto in Section 3 of ERISA.
6.3. HSR Act Filings. You hereby agree to promptly make such
filings or other submissions under the HSR Act as may be required with respect
to the conversion of any Debenture, the receipt of any Interest Shares or with
respect to the redemption or repurchase of any Debenture or in connection with
any Mandatory Sale of Underlying Shares. You hereby agree to use your best
efforts to respond to requests for additional information relating to such
filings or submissions. Exercise by you of your rights under Section 11 of this
Agreement or otherwise hereunder shall be subject to compliance with the HSR Act
as applicable.
7. Accounting; Financial Statements; Other Information.
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7.1. Accounting; Financial Statements and Other Information. The
Company will maintain, and will cause each of its Subsidiaries to maintain, a
system of accounting established and administered in accordance with GAAP. The
Company will deliver (in duplicate) to you, so long as you shall hold any
Debentures:
(a) as soon as practicable, and, in any case, within
ninety (90) days after the close of each fiscal year, two (2) copies of
the consolidated balance sheet of the Company and its Subsidiaries
setting forth their consolidated financial condition as at the
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end of such fiscal year, together with consolidated statements of
income, stockholders' equity and cash flows of the Company and its
Subsidiaries for such fiscal year, all in reasonable detail, such
consolidated balance sheet and statements of income, stockholders'
equity and cash flows to be accompanied by an opinion with respect
thereto of independent public accountants of recognized national
standing, who may be the present regular auditors of the books of the
Company, which opinion (i) shall state that such financial statements
present fairly the consolidated financial position and the consolidated
results of operations and cash flows of the Company, in conformity with
GAAP applied on a consistent basis during the period (except for
changes in application in which such accountants concur), and that the
examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted auditing
standards and, accordingly, included such tests of the accounting
records and such other auditing procedures as were considered necessary
in the circumstances, or (ii) shall, using appropriate language that at
the time shall have been adopted by the American Institute of Certified
Public Accountants and generally employed by the accounting profession,
certify in substance that such financial statements present fairly the
consolidated financial position and the consolidated results of
operations and cash flows of the Company, in conformity with GAAP
applied on a consistent basis during the period (except for changes in
application in which such accountants concur), and that the examination
of such accountants in connection with such financial statements has
been made in accordance with generally accepted auditing standards,
and, accordingly, included such tests of the accounting records and
such other auditing procedures as were considered necessary in the
circumstances; provided that, the delivery within the time period
specified above (or, if later, within five (5) days of timely filing
with the Commission) of the Company's Annual Report on Form 10-K
(together with the Company's annual report to shareholders, if any,
prepared pursuant to Rule 14a-3 under the Exchange Act) for any fiscal
year prepared in compliance with the requirements therefor and filed
with the Commission shall be deemed to satisfy the requirements of this
Section 7.1(a) for such fiscal year;
(b) as soon as practicable and, in any case, within
sixty (60) days after the end of the first, second and third quarterly
accounting periods in each fiscal year, an unaudited consolidated
balance sheet of the Company and its Subsidiaries as at the end of such
accounting period, and unaudited consolidated statements of income,
stockholders' equity and cash flows of the Company and its Subsidiaries
for such period and for the fiscal year to date, setting forth in each
case in comparative form the figures for the corresponding periods a
year earlier, all in reasonable detail, prepared and certified by the
Treasurer or the Controller or any Vice President of the Company as
presenting fairly such financial condition and results of operations,
subject to changes resulting from year-end audit adjustments; provided
that, delivery within the time period specified above (or, if later,
within five (5) days of timely filing with the Commission) of copies of
the Company's Quarterly Report on Form 10-Q for any quarterly
accounting period prepared in compliance with the requirements thereof
and filed with the
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Commission shall be deemed to satisfy the requirements of this Section 7.1(b)
for such quarterly accounting period;
(c) promptly after the submission thereof to the
Company, copies of all communications prepared by independent
accountants regarding matters of material weakness of internal
accounting controls submitted to the Company's senior management, its
Board of Directors or the audit committee of its Board of Directors, as
contemplated by American Institute of Certified Public Accountants
Statement of Auditing Standards No. 60;
(d) promptly upon distribution thereof, copies of
all such financial or other statements, including proxy statements and
reports, as the Company shall send to the holders of its Common Stock
or the holders of the Senior Notes;
(e) promptly after filing thereof, copies of all
regular and periodic reports and registration statements which the
Company may file with the Commission, other than registration
statements on Form S-8;
(f) promptly upon receipt thereof, copies of any
notices received from any administrative official or agency relating to
any order, ruling, statute or other law or information which might have
or cause a Material Adverse Effect; and
(g) promptly upon request therefor, such information
as to the business and properties of the Company as you may from time
to time reasonably request.
Notwithstanding any other provision of this Section 7.1, the Company will be
required to deliver to BAe and Matra only, and not to any other holder of
Debentures, the materials specified in paragraphs (a), (b), (c), (f) and (g).
The Company will deliver (in duplicate) to each holder of Debentures (other than
BAe and Matra) the materials specified in paragraphs (d) and (e).
7.2. Company Certificate. Each set of financial statements
delivered pursuant to Section 7.1(a) or Section 7.1(b) will be accompanied by a
certificate, signed by one of the Responsible Officers, stating that a review of
the affairs and activities of the Company during the applicable period has been
made by authorized employees of the Company and that, to the knowledge and
belief of such officer, there did not exist at any time during such period any
condition or event which constitutes an Event of Default under any of the
provisions of this Agreement or the Debentures; provided, however, that if to
the knowledge of such officer any such Event of Default shall have occurred,
such certificate shall so specify and shall state whether such Event of Default
has been cured or is continuing and, if continuing, what steps the Company
proposes to take to cure such Event of Default and the time necessary to cure
such Event of Default.
7.3. Accountant's Certificate. Each set of annual financial
statements delivered pursuant to Section 7.1(a) will be accompanied by a report
of the independent public
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accountants who have certified or reported on such financial statements, stating
that in making their examination necessary to express an opinion on such
financial statements, such accountants have obtained no knowledge of any
condition or event which constitutes an Event of Default or a Potential Event of
Default or, if such accountants have any such knowledge that any such condition
or event then exists, specifying the nature and period of existence thereof.
Each suchreport may in addition state that such examination was not directed
primarily toward obtaining knowledge of any such condition or event referred to
in the preceding sentence.
8. Inspection.
----------
(a) Pre-Closing Access. From the Execution Date
through the Closing Date, the Company and ONS shall each: (i) upon
reasonable prior notice, permit each Purchaser and its authorized
representatives, counsel, accountants and agents to have reasonable
access to its properties, records and documents, and (ii) furnish to
each Purchaser and its authorized representatives, counsel, accountants
and agents such financial records and other documents with respect to
the Company, ONS or any Subsidiary as such Purchaser may reasonably
request; provided, however, that in no event shall the Company be
obligated to comply with any of the foregoing if such compliance will
give any Person access to any information which the Company, ONS or any
Subsidiary is required by contract or otherwise to keep confidential;
and provided, further, that with respect to such confidential
information, the Company or ONS shall, at its expense, upon a
Purchaser's specific request, use its best efforts to seek the consent
of such Persons as may be necessary to permit the requesting party
access to such information without violating the confidential nature
thereof.
(b) Post-Closing Access. While you hold any
Debentures, your representative or representatives may visit and
inspect any of the properties of the Company or any of its Subsidiaries
as follows:
(i) No Default. If no Potential Event of
Default or Event of Default exists, then at your expense and
upon reasonable prior notice to the Company, you may visit the
principal executive offices of the Company to discuss the
affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and, with the
consent of the Company (which consent will not be unreasonably
withheld), visit the other offices and properties of the
Company and each Subsidiary, all at such reasonable times and
as often as may be reasonably requested in writing; and
(ii) Default. If a Potential Event of
Default or Event of Default exists, then at the expense of the
Company you may visit and inspect any of the offices or
properties of the Company or any Subsidiary to examine all
their respective books of account, records, reports and other
papers, to make copies and extracts therefrom, and to discuss
their respective affairs, finances and accounts with their
respective officers and independent public accountants (and
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by this provision the Company authorizes said accountants to discuss
the affairs, finances and accounts of the Company and its
Subsidiaries), all at such reasonable times and as often as may be
requested.
The rights set forth in this Section 8(b) are granted to BAe and Matra only and
not to any other holders of Debentures.
9. Confidential Treatment. You agree that any information concerning
the Company, ONS or any of their respective Subsidiaries obtained by you under
the provisions of Section 7 or 8 or which was furnished to you in connection
with the negotiation of the transactions contemplated hereby and which in any
case is not contained in a report or other document filed with the Commission
(and which is not afforded confidential treatment by the Commission or such
other agency), distributed by ONS and, after consummation of the Merger
Transaction, by the Company to its public stockholders or otherwise available to
the public generally and which is or was designated by the Company in writing as
confidential, will, to the extent permitted by law or legal process, be treated
confidentially by you and will not be distributed or otherwise made available by
you to any Person, other than your employees or your authorized agents or
representatives; provided, however, that you may provide any such information to
any governmental agency or other Person to which you are required by law or
legal process to provide such information.
10. ERISA. The Company will deliver (in duplicate) to you, so long as
you shall hold any Debenture, and to each other holder of the outstanding
Debentures, promptly, and in any event within five (5) days after a Responsible
Officer becoming aware of any of the following, a written notice setting forth
the nature thereof and the action, if any, that the Company or an ERISA
Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable
event, as defined in Section 4043(b) of ERISA and the
regulations thereunder, for which notice thereof has not been
waived pursuant to such regulations as in effect on the date
hereof; or
(ii) the taking by the PBGC of steps to
institute, or the threatening by the PBGC of the institution
of, proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer,
any Plan, or the receipt by the Company or any ERISA Affiliate
of a notice from a Multiemployer Plan that such action has
been taken by the PBGC with respect to such Multiemployer
Plan; or
(iii) any event, transaction or condition
that could result in the incurrence of any liability by the
Company or any ERISA Affiliate pursuant to Title I or IV of
ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans, or in the imposition of
any Lien on any of the rights, properties or assets of the
Company or any ERISA Affiliate pursuant to
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Title I or IV of ERISA or such penalty or excise tax
provisions, if such liability or Lien, taken together with any
other such liabilities or Liens then existing, would
reasonably be expected to have a Material Adverse Effect.
11. Redemption of Debentures; Repurchase Rights; Mandatory Sales.
11.1. Right of Redemption. Any redemption or repurchase of the
Debentures at the election of the Company or otherwise, as permitted or required
by any provision of the Debentures or this Agreement, shall be made in
accordance with such provision and this Section 11.
11.2. Company Right of Redemption. Subject to Section 11.5,
the Company may, at any time other than during a Change of Control Period,
redeem all or part of the Debentures, subject to satisfaction of the following
conditions:
(a) The Company shall give a notice of redemption to
each holder in the manner provided in Section 23 not less than fifteen
(15) nor, subject to Section 11.5(a), more than sixty (60) days prior
to the applicable Redemption Date. Such notice shall disclose the
proposed source of funds for the redemption (e.g. private placement,
working capital, public offering).
(b) The amount to be redeemed must be (i) at least
$5,000,000, in principal amount of Debentures and (ii) at least
twenty-five percent (25%) of the then Outstanding Debentures (unless
the principal amount of then Outstanding Debentures is less than
$5,000,000, in which case the amount to be redeemed shall be such
principal amount). In the event that less than all of the then
Outstanding Debentures are to be redeemed, the Company shall redeem
Debentures pro rata from each holder of Debentures based upon the
respective principal amounts of the Debentures outstanding on the date
of redemption.
(c) The Company shall pay the applicable Redemption
Price to each holder of Debentures on the Redemption Date, in cash, in
immediately available funds. With respect to each holder of Debentures,
the Redemption Price shall be determined by multiplying (A) the sum of
(i) the number of Conversion Shares such holder would receive on the
Redemption Date with respect to the Debentures to be redeemed if such
Debentures were to be converted in accordance with the provisions of
Section 15 hereof and (ii) the number of Interest Shares representing
the accrued but unpaid interest on the Debentures to be redeemed, as of
the Redemption Date, by (B) the greater of (x) the average of the daily
Closing Prices per share of Common Stock for the twenty (20) Trading
Days immediately preceding the Redemption Date or (y) $17.50.
11.3. Redemption and Repurchase Rights upon Change of Control
Event.
(a) During any Change of Control Period either the
Company (subject to Section 11.5) or any holder of Debentures may give
notice to the other pursuant to
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which the Company shall be required to purchase all (but not less than
all) of the Debentures (if the notice is given by the Company) or all
of the Debentures held by a holder (if the notice is given by such ho
lder) in accordance with the provisions of this Section 11.3. The
Company shall give notice in accordance with Section 23 to each holder
of Debentures, within five (5) Business Days of the commencement of a
Change of Control Period.
(b) Notice of a redemption by the Company or the
exercise of a repurchase right by any holder of Debentures pursuant to
this Section 11.3 may be given (in the manner provided in Section 23)
at any time during the Change of Control Period. The repurchase date
(the "Repurchase Date") for any redemption or repurchase under this
Section 11.3 shall be a Business Day specified in the notice that is
not less than fifteen (15) nor, subject to Section 11.5(a), more than
sixty (60) days from the date notice is given. Any notice given by the
Company under this Section 11.3 shall disclose the proposed source of
funds for the Company's redemption (e.g. private placement, working
capital, public offering).
(c) The Company shall pay the applicable Repurchase
Price to each holder of Debentures from whom Debentures are to be
redeemed or repurchased on the Repurchase Date, in cash, in immediately
available funds. With respect to each holder of Debentures from whom
Debentures are to be redeemed or repurchased pursuant to this Section
11.3, the repurchase price (the "Repurchase Price") shall be determined
by multiplying (A) the sum of (i) the number of Conversion Shares such
holder would receive on the Repurchase Date with respect to the
Debentures to be repurchased if such Debentures were to be converted in
accordance with the provisions of Section 15 hereof and (ii) the number
of Interest Shares representing the accrued but unpaid interest on the
Debentures to be repurchased as of the Repurchase Date by (B) the
greatest of: (x) the average of the daily Closing Prices per share of
Common Stock for the twenty (20) Trading Days immediately preceding the
Repurchase Date, (y) $17.50, or (z) the price per share paid for the
Common Stock (whether in assets, cash, securities or any combination
thereof) in the Change of Control transaction to public holders of the
Common Stock generally.
11.4. Mandatory Sale. Subject to Section 11.5, the Company may
require each holder of Debentures to sell (a "Mandatory Sale") all or subject to
paragraph (b) below, a part of the Conversion Shares and Interest Shares such
holder would be entitled to receive if such holder converted, as of the
Mandatory Sale Date, all of the Debentures owned by such holder on the date such
holder receives the notice specified in paragraph (a) below (the "Underlying
Shares") provided all of the following terms and conditions are met:
(a) The Company shall give a notice of the Mandatory
Sale in the manner provided in Section 23 not less than fifteen (15)
nor, subject to Section 11.5(a), more than sixty (60) days prior to the
date specified in such notice (the "Mandatory Sale
-23-
Date"). Such notice shall disclose the proposed source of funds for the
Mandatory Sale (e.g. private placement, public offering).
(b) The Company may only exercise its right to
require a Mandatory Sale on one occasion. If less than all of the
Underlying Shares are to be subject to the Mandatory Sale, the
aggregate sale price (the "Mandatory Sale Price") with respect to such
Underlying Shares must be at least $10,000,000. In the event that the
Mandatory Sale shall apply to less than all of the Underlying Shares,
the Underlying Shares subject to the Mandatory Sale shall be allocated
pro rata among the holders of the Debentures based upon the respective
principal amounts of the Debentures of such holders outstanding on the
date of the Mandatory Sale.
(c) The Mandatory Sale may be accomplished by an
underwritten public offering of the Underlying Shares or by a private
placement of the Underlying Shares, in either case arranged by a
nationally recognized investment banking firm reasonably acceptable to
the holders of a majority of the Underlying Shares subject to the
Mandatory Sale.
(d) The Company will indemnify and hold each holder
of Debentures harmless with respect to any liability arising out of any
misstatement or omission in the registration statement or private
placement memorandum and other documents prepared by or on behalf of
the Company in connection with the Mandatory Sale transaction (other
than information provided by such holder expressly for inclusion
therein) and will pay all of the expenses of the Mandatory Sale,
including, any registration fees, any underwriting discount or
placement agent fees, and the reasonable fees of one legal counsel
selected by the holders of a majority of the Underlying Shares subject
to the Mandatory Sale in connection with the review of such
registration statement or private placement memorandum.
(e) The underwriters or the private placement
purchasers shall pay each holder of Debentures in connection with the
Mandatory Sale, the Mandatory Sale Price, in cash, in immediately
available funds. The Mandatory Sale Price for each holder of Debentures
shall be determined by multiplying the number of Underlying Shares of
such holder subject to the Mandatory Sale by the greater of (x) an
amount that is at least ninety-five percent (95%) of the average of the
daily Closing Prices per share of Common Stock for the twenty (20)
Trading Days immediately preceding the Mandatory Sale Date (plus such
percentage in excess of ninety-five percent (95%) of such average if
paid by the purchasers of the Underlying Shares) or (y) $17.50. In the
event that the underwriters or private placement purchasers do not for
any reason pay each holder of Debentures the full Mandatory Sale Price
to which such holder is entitled, the Company shall pay such holder
within one (1) Business Day of the Mandatory Sale Date the positive
difference (up to the full amount of the Mandatory Sale Price) between
the Mandatory Sales Price to which such holder was entitled and the
aggregate amount such holder actually received from the underwriters or
the private placement purchasers in connection with the Mandatory Sale.
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11.5. Restriction on Conversion Rights; Withdrawal of Notice.
------------------------------------------------------
(a) Following receipt from the Company of any notice of
redemption pursuant to Section 11.2 or Section 11.3 or any notice of Mandatory
Sale pursuant to Section 11.4 (each, a "Company Notice"), each holder of
Debentures shall have ten (10) Business Days after receipt of the Company Notice
(the "Decision Period") in which to notify the Company in accordance with the
provisions of Section 23 that such holder wishes to convert all or a part of
such holder's Debentures (the "Converted Debenture Portion") into shares of
Common Stock in accordance with the provisions of Section 15.2. If such notice
is given in a timely manner by such holder (a "Holder Notice"), the proposed
redemption of Debentures by the Company or proposed Mandatory Sale of Underlying
Shares arranged by the Company pursuant to Section 11.2, 11.3 or 11.4 shall not
impair the right of such holder to convert the Converted Debenture Portion into
shares of Common Stock pursuant to Section 15.2. Except as provided in the
preceding sentence, no amount of Debentures of any holder specified in the
Company Notice as subject to redemption pursuant to Section 11.2 or Section 11.3
or Mandatory Sale pursuant to Section 11.4 may be converted into shares of
Common Stock pursuant to Section 15.2 during the period commencing on the date
of the Company Notice and ending on the earliest of (x) the date of any
withdrawal of the Company Notice pursuant to Section 11.5(b), (y) subject to
Section 11.5(c), the sixty-first (61st) day following the earlier of (i) the
expiration of the Decision Period or (ii) the date of the Company's receipt of
the Holder Notice of such holder (the "Company Notice Expiration Date") or (2)
the applicable Redemption, Repurchase or Mandatory Sale Date. Each holder giving
a Holder Notice shall convert the Converted Debenture Portion specified in the
Holder Notice within fifteen (15) Business Days after the applicable Redemption,
Repurchase, or Mandatory Sale Date. Notwithstanding any other provision of this
Agreement, the Company shall have given notice of redemption in compliance with
Section 11.2(a) and Section 11.3(b) and notice of a Mandatory Sale in compliance
with Section 11.4(a) if the Redemption Date, the Repurchase Date or the
Mandatory Sale Date, as the case may be, occurs not later than the day
immediately preceding the Company Notice Expiration Date.
(b) The Company shall have the right to withdraw any Company
Notice by notifying the holders of the Debentures of such withdrawal in
accordance with the provisions of Section 23, but only if the notice of
withdrawal is accompanied by a copy of a written notice, to the effect set forth
in the following sentence from the underwriter, placement agent or proposed
private placement purchaser from whom the Company intended to raise the capital
necessary to complete the proposed redemption or with whom the Company intended
to place the Underlying Shares in a proposed Mandatory Sale. Such notice shall
state that the amount of Company securities included in the proposed offering
(which, in the case of a Mandatory Sale, shall be the Underlying Shares included
in such offering) would not be able to be sold at a price sufficient to yield
proceeds at least equal to the redemption price specified in Section 11.2 or
Section 11.3, as applicable, or the Mandatory Sale Price. If any Company Notice
is properly withdrawn pursuant to this Section 11.5(b), failure by the Company
to make any redemption payment pursuant to Section 11.2 or Section 11.3 or to
arrange for or make any payment in connection with a Mandatory Sale pursuant to
Section 11.4,
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in any case as proposed in such withdrawn Company Notice, (i) shall not
constitute an Event of Default under this Agreement and (ii) shall not
constitute the one-time exercise by the Company of its rights under Section
11.4(b).
(c) Notwithstanding any other provision of this Agreement,
following receipt of a Company Notice, if the HSR Act would require any filings
to be made with respect to the conversion of any Debenture subject to a Company
Notice, each holder of Debentures subject to the filing requirements of the HSR
Act upon any conversion of a Debenture subject to a Company Notice shall have
ten (10) Business Days after the expiration or early termination of any
applicable HSR Act waiting period to exercise the conversion privilege in
accordance with Section 15.2 with respect to such Debentures before any proposed
redemption of such Debentures by the Company or proposed Mandatory Sale of
Underlying Shares arranged by the Company pursuant to Section 11.2, 11.3 or 11.4
shall impair the right of such holder to convert such Debentures, and the
Company's right to redeem the Debentures of any such holder or to require the
Mandatory Sale of any Underlying Shares of any such holder shall be suspended
until ten (10) Business Days after the expiration or early termination of the
applicable HSR Act waiting period (an "HSR Suspension Period"). If any HSR Act
filing shall be required hereunder, the Company Notice Expiration Date shall be
the sixty-first (61st) day after the latest HSR Suspension Period applicable to
any Holder.
12. Business Covenants. From the Closing Date, and thereafter so long
as any of the Debentures are outstanding, the Company will perform or comply
with, as required, each of the following covenants:
12.1. Payment of Debentures and Maintenance of Office. The
Company will punctually pay or cause to be paid the principal, premium, if any,
and interest to become due in respect of the Debentures according to the terms
thereof and hereof and will maintain an office within the continental boundaries
of the United States of America where notices, presentations and demands in
respect of this Agreement and the Debentures may be made upon it and will notify
each holder of a Debenture of any change of location of such office. Such office
shall first be maintained at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx,
Xxxxxxxx 00000.
12.2. Payment of Taxes and Claims. The Company will, and will
cause each of its Subsidiaries to, pay and discharge promptly (a) all taxes,
assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its franchises, business, income or
profits before the same shall become delinquent and (b) all lawful claims of
materialmen, mechanics, carriers, warehousemen, landlords and other similar
Persons for labor, materials, supplies and rentals which, if unpaid, might by
law become a lien or charge upon its property, except to the extent that the
failure so to pay any amount pursuant to (a) or (b) would not have a Material
Adverse Effect; provided, however, that none of the foregoing need be paid while
being contested in good faith by appropriate proceedings initiated within the
period allowed by applicable law, rule or regulation and diligently conducted so
long as (i) adequate book reserves have been established in accordance with GAAP
with respect
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thereto and (ii) neither the Company's nor any such Subsidiary's title to or
right to the use of its properties is materially adversely affected thereby.
12.3. Maintenance of Properties and Corporate Existence. The Company
and its Subsidiaries will each:
(a) maintain its property in good condition and make
all needful and proper renewals, replacements, additions, betterments
and improvements thereto, all as in the judgment of the Company may be
necessary so that the business carried on in connection therewith may
be conducted properly and advantageously at all times; provided that
nothing in this Section 12.3 shall prevent the Company or any
Subsidiary from discontinuing the use, operation or maintenance of any
properties or disposing of any of them if such discontinuance or
disposal is, in the judgment of the Company, desirable in the conduct
of the business of the Company or such Subsidiary;
(b) subject to Section 13.12 (if and to the extent
in effect), keep adequately insured, by financially sound and reputable
insurers, all of its property of a character usually insured by
entities engaged in the same or a similar business similarly situated
against loss or damage of the kinds and in amounts customarily insured
against by such entities and with deductibles or co-insurance no
greater than is customary, and carry, with such insurers in customary
amounts and with deductibles or co-insurance no greater than is
customary, such other insurance, including public liability insurance
and liability insurance against claims for any violation of applicable
law, as is usually carried by entities engaged in the same or a similar
business similarly situated, provided that compliance with the
insurance covenants in the Senior Indentures will be satisfactory
compliance with this paragraph;
(c) keep proper books of record and account in which
full, true and correct entries will be made of all its business
transactions in accordance with GAAP;
(d) set aside on its books from its earnings for
each fiscal year, beginning with the first such year ending subsequent
to the date hereof and for each fiscal year thereafter, in amounts
deemed adequate in the opinion of the Company, all proper accruals and
reserves which, in accordance with GAAP, should be set aside from such
earnings in connection with its business, including, without
limitation, reserves for depreciation, obsolescence and/or amortization
and accruals for taxes for such period, including all taxes based on or
measured by income or profits; and
(e) except as otherwise permitted or contemplated
hereby, do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence and such rights,
patents, trademarks, copyrights, licenses, permits, franchises and
governmental authorizations as the Company determines to be necessary
for the present and presently planned future conduct of its business.
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12.4. Compliance with Law. Neither the Company nor any of its
Subsidiaries will:
(a) violate any laws, ordinances, governmental rules
or regulations to which it is, or might become, subject, unless the
same are being contested by the Company or such Subsidiary in good
faith and by appropriate proceedings which shall effectively prevent
the imposition of any penalty on the Company or such Subsidiary for
such noncompliance, or
(b) fail to use its best efforts to obtain any
patents, trademarks, service marks, trade names, copyrights, design
patents, licenses, permits, franchises or other governmental
authorizations necessary to the ownership of its property or to the
conduct of its business, which violation or failure would or might have
a Material Adverse Effect.
12.5. [Reserved.]
12.6. When Company May Merge, Etc. The Company shall not
consolidate with or merge into, or transfer all or substantially all of its
assets to, another Person unless: (i) such Person is a corporation, partnership
or limited liability company organized under the laws of the United States, one
of the States thereof or the District of Columbia; (ii) the resulting, surviving
or transferee corporation, partnership or limited liability company assumes by
written agreement all the obligations of the Company under the Debentures and
this Agreement; (iii) immediately after giving effect to such transaction no
Event of Default or Potential Event of Default shall have occurred and be
continuing; and (iv) the Company shall have delivered to you an Officers'
Certificate and an opinion of counsel of the Company acceptable to you, each
stating that such consolidation, merger or transfer and such supplemental
agreement comply with this Agreement, and thereafter all obligations of the
predecessor shall terminate.
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Company in accordance with this Section
12.6, the successor corporation, partnership or limited liability company formed
by such consolidation or into which the Company is merged or to which such
transfer is made shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Agreement, with the same effect
as if such successor had been named as the Company herein, all without any
further act or deed on the part of such successor being required.
Section 12.6 shall cease to apply after the Senior Notes Reduction
Date.
12.7. Listing. The Company will list on each national
securities exchange on which any Common Stock may at any time be listed and on
the Nasdaq National Market, if the Common Stock is authorized for quotation
thereon, subject to official notice of issuance upon
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the conversion of the Debentures or upon payment of interest, and will maintain
such listing of, (i) all Conversion Shares and (ii) all Interest Shares.
12.8. Issuances of Guarantees by New Restricted Subsidiaries.
On the date that any Person becomes a Restricted Subsidiary, the Company will
cause such additional Restricted Subsidiary to execute a supplemental Subsidiary
Guarantee, providing for a full and unconditional guarantee by such additional
Restricted Subsidiary of the Company's obligations under the Debentures and this
Agreement to the same extent as that set forth in the Subsidiary Guarantee.
12.9. Subsidiaries. The Company will provide to you a complete
and accurate list of its Subsidiaries each time Exhibit D attached hereto
becomes inaccurate and cause each Subsidiary which guarantees any Indebtedness
to promptly execute and deliver a Subsidiary Guarantee to you.
12.10. Notice. The Company will give prompt written notice to
you of any Event of Default or Potential Event of Default hereunder.
12.11. Waiver of Stay, Extension or Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other law
that would prohibit or forgive the Company from paying all or any portion of the
principal of, premium, if any, or interest on the Debentures as contemplated
herein, whenever enacted, now or at any time hereafter in force, or that may
affect the covenants or the performance of this Purchase Agreement; and (to the
extent that it may lawfully do so) the Company hereby expressly waives all
benefit or advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the holders of the
Debentures, but will suffer and permit the execution of every such power as
though no such law had been enacted.
13. Financial Covenants. From the Senior Notes Reduction Date, and
thereafter so long as any of the Debentures are outstanding, the Company will
perform or comply with, as required, each of the following covenants:
13.1. Merger and Sale of Assets.
-------------------------
(a) The Company will not consolidate with or merge
into any other Person or permit any other Person (other than a
Subsidiary as provided by paragraph (b) below) to consolidate with or
merge into it, or sell, lease, transfer or otherwise dispose of all or
substantially all of its assets (as an entirety or substantially an
entirety in one transaction or a series of related transactions),
unless:
(i) the entity which survives such merger or
results from such consolidation or the corporation to which
such sale, lease, transfer or other
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disposition is made (the "surviving corporation") is a
corporation organized under the laws of the United States of
America or a jurisdiction thereof;
(ii) the due and punctual payment of the
principal of and premium, if any, and interest on all of the
Debentures, according to their tenor, and of the covenants
therein, and the due and punctual performance and observance
of all the covenants in this Agreement to be performed or
observed by the Company, are expressly assumed in writing by
the surviving corporation;
(iii) before and immediately after the
consummation of the transaction, and after giving effect
thereto, no Event of Default or Potential Event of Default
exists or would exist;
(iv) immediately after giving effect to such
transaction on a pro forma basis, the Company or any Person
becoming the successor obligor of the Debentures shall have a
Consolidated Net Worth equal to or greater than the
Consolidated Net Worth of the Company immediately prior to
such transaction;
(v) immediately after consummation of the
transaction, and after giving effect thereto, the surviving
corporation would be permitted to incur at least $1.00 of
additional Indebtedness under the first paragraph of Section
13.5; provided that this clause (v) shall not apply to a
consolidation or merger with or into a Wholly Owned Restricted
Subsidiary with a positive net worth; provided that, in
connection with any such merger or consolidation, no
consideration (other than Common Stock in the surviving Person
or the Company) shall be issued or distributed to the
stockholders of the Company;
(vi) the provisions of Sections 15.8 and
15.13 shall have been in all respects complied with in
connection with such transaction; and
(vii) the Company delivers to each holder of
Debentures an Officers' Certificate (attaching the arithmetic
computations to demonstrate compliance with clauses (iv) and
(v)), in each case stating that such consolidation, merger or
transfer complies with this provision and that all conditions
precedent provided for herein relating to such transaction
have been complied with; provided, however, that clauses (iv)
and (v) above do not apply if, in the good faith determination
of the Board of Directors of the Company, whose determination
shall be evidenced by a Board Resolution, the principal
purpose of such transaction is to change the state of
incorporation of the Company; and provided further that any
such transaction shall not have as one of its purposes the
evasion of the foregoing limitations.
(b) No Subsidiary of the Company will consolidate
with or merge into any other Person or permit any other Person to
consolidate with or merge into it, except
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that a Subsidiary may consolidate with or merge into (i) the Company if
each of the provisions of paragraph (a) are satisfied or (ii) another
Subsidiary.
13.2. Transactions with Affiliates. The Company will not, and
will not permit any Restricted Subsidiary to, directly or indirectly, enter
into, renew or extend any transaction (including, without limitation, the
purchase, sale, lease or exchange of property or assets, or the rendering of any
service) with any holder (or any Affiliate of such holder) of five percent (5%)
or more of any class of Capital Stock of the Company or with any Affiliate of
the Company or any Restricted Subsidiary, except upon fair and reasonable terms
no less favorable to the Company or such Restricted Subsidiary than could be
obtained, at the time of such transaction or, if such transaction is pursuant to
a written agreement, at the time of the execution of the agreement providing
therefor, in a comparable arm's-length transaction with a Person that is not
such a holder or an Affiliate.
The foregoing limitation does not limit and shall not apply to (i)
transactions (A) approved by a majority of the disinterested members of the
Board of Directors or (B) for which the Company or a Restricted Subsidiary
delivers to you a written opinion of a nationally recognized investment banking
firm stating that the transaction is fair to the Company or such Restricted
Subsidiary from a financial point of view, (ii) any transaction solely between
the Company and any of its Wholly Owned Restricted Subsidiaries or solely
between Wholly Owned Restricted Subsidiaries, (iii) the payment of reasonable
and customary regular fees to directors of the Company who are not employees of
the Company, (iv) any payments or other transactions pursuant to any tax-sharing
agreement between the Company and any other Person with which the Company files
a consolidated tax return or with which the Company is part of a consolidated
group for tax purposes, (v) any Restricted Payments not prohibited by Section
13.6 or (vii) [other matters]. Notwithstanding the foregoing, any transaction
covered by the first paragraph of this Section 13.2 and not covered by clauses
(ii) through (v) of this paragraph, the aggregate amount of which exceeds $[___]
million in value, must be approved or determined to be fair in the manner
provided for in clause (i)(A) or (B) above.
13.3. Tax Consolidation. The Company will not, except as may
be required by any mandatory provision of applicable law, file or consent to the
filing of any consolidated income tax return with any Person other than a
Subsidiary.
13.4. Compliance with ERISA. The Company will not, and will
not permit any ERISA Affiliate to:
(a) engage in any transaction in connection with
which the Company or any Subsidiary could be subject to either a
material civil penalty assessed pursuant to Section 502(i) of ERISA or
a material tax imposed by Section 4975 of the Code;
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(b) terminate any Plan in a manner, or take any
other action, which could result in any material liability of the
Company or any ERISA Affiliate to the PBGC; or
(c) fail to make full payment when due of all
amounts (including any amounts because of an accumulated funding
deficiency) which, under the provisions of any Plan, the Code or ERISA,
the Company or any ERISA Affiliate is required to pay as contributions
to such Plan or otherwise.
As used in this Section 13.4, the term "accumulated funding deficiency" has the
meaning specified in Section 302 of ERISA and Section 412 of the Code.
13.5. Limitation on Indebtedness.
--------------------------
(a) The Company will not, and will not permit any of
its Restricted Subsidiaries to, Incur any Indebtedness (other than the Senior
Notes, the Debentures and Indebtedness existing on the Senior Notes Reduction
Date); provided that the Company may Incur Indebtedness if, after giving effect
to the Incurrence of such Indebtedness and the receipt and application of the
proceeds therefrom, the Consolidated Leverage Ratio would be greater than zero
and less than [_] to 1, for Indebtedness Incurred on or prior to [_________ __,
199_], or [_] to 1, for Indebtedness Incurred thereafter.
Notwithstanding the foregoing, the Company and any
Restricted Subsidiary (except as specified below) may Incur each and all of the
following: (i) Indebtedness outstanding at any time (A) Incurred to finance the
purchase, construction, launch, insurance for and other costs with respect to
Orion 2 and Orion 3 and (B) in an aggregate principal amount not to exceed (1)
until Orion 2 or Orion 3 has been successfully delivered in orbit, $50 million,
(2) after the first of Orion 2 or Orion 3 has been successfully delivered in
orbit, $100 million and (3) after the second of Orion 2 or Orion 3 has been
successfully delivered in orbit, $150 million, in each case under this clause
(i)(B), less any amount of Indebtedness permanently repaid as provided under
Section 13.11; (ii) Indebtedness (A) to the Company evidenced by an
unsubordinated promissory note or (B) to any of its Restricted Subsidiaries;
provided that any event which results in any such Restricted Subsidiary ceasing
to be a Restricted Subsidiary or any subsequent transfer of such Indebtedness
(other than to the Company or another Restricted Subsidiary) shall be deemed, in
each case, to constitute an Incurrence of such Indebtedness not permitted by
this clause (ii); (iii) Indebtedness issued in exchange for, or the net proceeds
of which are used to refinance or refund, then outstanding Indebtedness, other
than Indebtedness Incurred under clause (i)(B), (ii), (iv), (vi) or (viii) of
this paragraph, and any refinancings thereof in an amount not to exceed the
amount so refinanced or refunded (plus premiums, accrued interest, fees and
expenses); provided that Indebtedness the proceeds of which are used to redeem
or repurchase the Debentures or Indebtedness that is pari passu with, or
subordinated in right of payment to, the Debentures shall only be permitted
under this clause (iii) if (A) in case the Debentures are redeemed or
repurchased in part or the Indebtedness to be refinanced is pari passu with the
Debentures, such new Indebtedness, by its terms or by the terms of any
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agreement or instrument pursuant to which such new Indebtedness is outstanding,
is expressly made pari passu with, or subordinate in right of payment to, the
remaining Debentures, (B) in case the Indebtedness to be refinanced is
subordinated in right of payment to the Debentures, such new Indebtedness, by
its terms or by the terms of any agreement or instrument pursuant to which such
new Indebtedness is issued or remains outstanding, is expressly made subordinate
in right of payment to the Debentures at least to the extent that the
Indebtedness to be refinanced is subordinated to the Debentures and (C) such new
Indebtedness, determined as of the date of Incurrence of such new Indebtedness,
does not mature prior to the Stated Maturity of the Indebtedness to be
refinanced or refunded, and the Average Life of such new Indebtedness is at
least equal to the remaining Average Life of the Indebtedness to be refinanced
or refunded; and provided further that in no event may Indebtedness of the
Company be refinanced by means of any Indebtedness of any Restricted Subsidiary
pursuant to this clause (iii); (iv) Indebtedness (A) in respect of performance,
surety or appeal bonds provided in the ordinary course of business, (B) under
Currency Agreements and Interest Rate Agreements; provided that such agreements
(a) are designed solely to protect the Company or its Subsidiaries against
fluctuations in foreign currency exchange rates or interest rates and (b) do not
increase the Indebtedness of the obligor outstanding at any time other than as a
result of fluctuations in foreign currency exchange rates or interest rates or
by reason of fees, indemnities and compensation payable thereunder and (C)
arising from agreements providing for indemnification, adjustment of purchase
price or similar obligations, or from Guarantees or letters of credit, surety
bonds or performance bonds securing any obligations of the Company or any of its
Restricted Subsidiaries pursuant to such agreements, in any case Incurred in
connection with the disposition of any business, assets or Restricted Subsidiary
of the Company (other than Guarantees of Indebtedness Incurred by any Person
acquiring all or any portion of such business, assets or Restricted Subsidiary
of the Company for the purpose of financing such acquisition), in a principal
amount not to exceed the gross proceeds actually received by the Company or any
Restricted Subsidiary in connection with such disposition; (v) Indebtedness of
the Company, to the extent the net proceeds thereof are promptly (A) used to
purchase the Senior Notes in accordance with the redemption, repurchase and/or
change of control provisions of the Senior Note Indentures or (B) deposited to
defease the Senior Notes in accordance with the Senior Note Indentures; (vi)
Guarantees by any Restricted Subsidiary under the Subsidiary Guarantee or
permitted by and made in accordance with Section 13.8 or the Senior Indentures;
(vii) Indebtedness Incurred to finance the cost (including the cost of design,
development, construction, installation or integration) of equipment (other than
Orion 2 and Orion 3) or inventory acquired by the Company or a Wholly Owned
Restricted Subsidiary after the Closing Date; (viii) Indebtedness of the Company
not to exceed, at any one time outstanding, two (2) times the Net Cash Proceeds
received by the Company after the Closing Date from the issuance and sale of its
Capital Stock (other than Disqualified Stock) to a Person that is not a
Subsidiary of the Company (less the amount of such proceeds applied as provided
in clause (C)(2) of the first paragraph or clause (iii) or (iv) of the second
paragraph of Section 13.6), provided that such Indebtedness does not mature
prior to the Stated Maturity of the Debentures; and (ix) Redemption
Indebtedness.
(b) Notwithstanding any other provision of this
Section 13.5, the maximum amount of Indebtedness that the Company or a
Restricted Subsidiary may incur
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pursuant to this Section 13.5 shall not be deemed to be exceeded, with respect
to any outstanding Indebtedness, due solely to the result of fluctuations in the
exchange rates of currencies.
(c) For purposes of determining any particular
amount of Indebtedness under this Section 13.5, (1) Guarantees, Liens or
obligations with respect to letters of credit supporting Indebtedness otherwise
included in the determination of such particular amount shall not be included
and (2) any Liens granted pursuant to the equal and ratable provisions referred
to in Section 13.9 shall not be treated as Indebtedness. For purposes of
determining compliance with this Section 13.5, in the event that an item of
Indebtedness meets the criteria of more than one (1) of the types of
Indebtedness described in the above clauses, the Company, in its sole
discretion, shall classify such item of Indebtedness and only be required to
include the amount and type of such Indebtedness in one of such clauses.
13.6. Limitation on Restricted Payments. The Company will not,
and will not permit any Restricted Subsidiary, directly or indirectly, to (i)
declare or pay any dividend or make any distribution on or with respect to its
Capital Stock (other than (x) dividends or distributions payable solely in
shares of its Capital Stock (other than Disqualified Stock) or in options,
warrants or other rights to acquire shares of such Capital Stock and (y) pro
rata dividends or distributions on Common Stock of Restricted Subsidiaries held
by minority stockholders, provided that such dividends do not in the aggregate
exceed the minority stockholders' pro rata share of such Restricted
Subsidiaries' net income from the first day of the fiscal quarter beginning
immediately following the Closing Date) held by Persons other than the Company
or any of its Restricted Subsidiaries, (ii) purchase, redeem, retire or
otherwise acquire for value any shares of Capital Stock of the Company, any
Guarantor or an Unrestricted Subsidiary (including options, warrants or other
rights to acquire such shares of Capital Stock) held by Persons other than the
Company and its wholly-owned subsidiaries, (iii) make any voluntary or optional
principal payment, or voluntary or optional redemption, repurchase, defeasance,
or other acquisition or retirement for value, of Indebtedness of the Company
that is subordinated in right of payment to the Debentures or of any Guarantor
that is subordinated to the Subsidiary Guarantee (other than in each case the
purchase, repurchase or the acquisition of Indebtedness in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity,
in any case due within one (1) year of the date of acquisition) or (iv) make any
Investment, other than a Permitted Investment, in any Person (such payments or
any other actions described in clauses (i) through (iv) being collectively
"Restricted Payments") if, at the time of, and after giving effect to, the
proposed Restricted Payment: (A) a Potential Event of Default or Event of
Default shall have occurred and be continuing, (B) except with respect to
Investments and dividends on the Common Stock of any Guarantor, the Company
could not Incur at least $1.00 of Indebtedness under paragraph (a) of Section
13.5 or (C) the aggregate amount of all Restricted Payments (the amount, if
other than in cash, to be determined in good faith by the Board of Directors,
whose determination shall be conclusive and evidenced by a Board Resolution)
made after the Closing Date shall exceed the sum of (1) fifty percent (50%) of
the aggregate positive amount, if any, of the Adjusted Consolidated Net Income
(determined by excluding income resulting from transfers of assets by the
Company or a Restricted Subsidiary to an Unrestricted Subsidiary) accrued on a
cumulative basis during the
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period (taken as one (1) accounting period) beginning on the first day of the
fiscal quarter immediately following the Closing Date and ending on the last day
of the last fiscal quarter preceding the Transaction Date for which reports have
been filed with the Commission plus (2) the aggregate Net Cash Proceeds received
by the Company or any Guarantor after the Closing Date from the issuance and
sale of its Capital Stock (other than Disqualified Stock) to a Person who is not
a Subsidiary of the Company or any Guarantor or from the issuance to a Person
who is not a Subsidiary of the Company or any Guarantor of any options, warrants
or other rights to acquire Capital Stock of the Company (in each case, exclusive
of any other than Disqualified Stock, options, warrants or other rights that are
redeemable at the option of the holder, or are required to be redeemed, prior to
the Stated Maturity of the Debentures), in each case except to the extent such
Net Cash Proceeds are used to Incur Indebtedness pursuant to clause (viii) of
the second paragraph of Section 13.5, plus (3) an amount equal to the net
reduction in Investments (other than reductions in Permitted Investments) in any
Person resulting from payments of interest on Indebtedness, dividends,
repayments of loans or advances, or other transfers of assets, in each case to
the Company or any Restricted Subsidiary or from the Net Cash Proceeds from the
sale of any such Investment (except, in each case, to the extent any such
payment or proceeds are included in the calculation of Adjusted Consolidated Net
Income), or from redesignations of Unrestricted Subsidiaries as Restricted
Subsidiaries (valued in each case as provided in the definition of
"Investments"), not to exceed, in each case, the amount of Investments
previously made by the Company or any Restricted Subsidiary in such Person or
Unrestricted Subsidiary.
The foregoing provision shall not be violated by
reason of: (i) the payment of any dividend within sixty (60) days after the date
of declaration thereof if, at said date of declaration, such payment would
comply with the foregoing paragraph; (ii) the redemption, repurchase, defeasance
or other acquisition or retirement for value of Indebtedness that is
subordinated in right of payment to the Debentures including premium, if any,
and accrued and unpaid interest, with the proceeds of, or in exchange for,
Indebtedness Incurred under clause (iii) of the second paragraph of part (a) of
Section 13.5; (iii) the repurchase, redemption or other acquisition of Capital
Stock of the Company (or options, warrants or other rights to acquire such
Capital Stock) in exchange for, or out of the proceeds of a substantially
concurrent offering of shares of Capital Stock (other than Disqualified Stock)
of the Company; (iv) the making of any principal payment or the repurchase,
redemption, retirement, defeasance or other acquisition for value of
Indebtedness of the Company which is subordinated in right of payment to the
Debentures in exchange for, or out of the proceeds of, a substantially
concurrent offering of, shares of the Capital Stock of the Company (other than
Disqualified Stock); (v) payments or distributions to dissenting stockholders
pursuant to applicable law, pursuant to or in connection with a consolidation,
merger or transfer of assets that complies with the provisions of this Agreement
applicable to mergers, consolidations and transfers of all or substantially all
of the property and assets of the Company; (vi) the repurchase, redemption or
other acquisition of outstanding shares of Series A Preferred Stock or Series B
Preferred Stock, which shares were outstanding on the Closing Date, in exchange
for, or out of the proceeds of, an issuance of Indebtedness Incurred under
clause (ix) of the second paragraph of part (a) of Section 13.5; or (vii)
investments, to the extent the amount invested consists solely of Net Cash
Proceeds
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received by the Company or any Guarantor substantially currently with the making
of such Investment from the issuance and sale permitted by this Agreement of its
Capital Stock (other than Disqualified Stock) to a Person who is not a
Subsidiary of the Company or any Guarantor; provided that, except in the case of
clauses (i) and (iii), no Potential Event of Default or Event of Default shall
have occurred and be continuing or occur as a consequence of the actions or
payments set forth therein.
Each Restricted Payment permitted pursuant to the
preceding paragraph (other than the Restricted Payment referred to in clause
(ii) thereof and an exchange of Capital Stock for Capital Stock or Indebtedness
referred to in clause (iii) or (iv) thereof) and the Net Cash Proceeds from any
issuance of Capital Stock referred to in clauses (iii) and (iv) shall be
included in calculating whether the conditions of clause (C) of the first
paragraph of this Section 13.6 have been met with respect to any subsequent
Restricted Payments. In the event the proceeds of an issuance of Capital Stock
of the Company are used for the redemption, repurchase or other acquisition of
the Debentures, or Indebtedness that is pari passu with the Debentures, then the
Net Cash Proceeds of such issuance shall be included in clause (C) of the first
paragraph of this Section 13.6 only to the extent such proceeds are not used for
such redemption, repurchase or other acquisition of Indebtedness.
Any Restricted Payments made other than in cash
shall be valued at fair market value. The amount of any Investment "outstanding"
at any time shall be deemed to be equal to the amount of such Investment on the
date made, less the return of capital to the Company and its Restricted
Subsidiaries with respect to such Investment (up to the amount of such
Investment on the date made).
13.7. Limitation on the Issuance and Sale of Capital Stock of
Restricted Subsidiaries. The Company will not sell, and will not permit any
Restricted Subsidiary, directly or indirectly, to issue or sell, any shares of
Capital Stock of a Restricted Subsidiary (including options, warrants or other
rights to purchase shares of such Capital Stock) except (i) to the Company or a
Wholly Owned Restricted Subsidiary; (ii) issuances of director's qualifying
shares or sales to foreign nationals of shares of Capital Stock of foreign
Restricted Subsidiaries, to the extent required by applicable law; and (iii) if,
immediately after giving effect to such issuance or sale, such Restricted
Subsidiary would no longer constitute a Restricted Subsidiary, provided any
Investment in such Person remaining after giving effect to such issuance or sale
would have been permitted to be made under Section 13.6, if made on the date of
such issuance or sale.
13.8. Issuances of Guarantees by New Restricted Subsidiaries.
On the date that any Person becomes a Restricted Subsidiary the Company will
cause such additional Restricted Subsidiary to execute a supplemental Subsidiary
Guarantee, providing for a full and unconditional guarantee by such additional
Restricted Subsidiary of the Company's obligations under the Debentures and this
Agreement to the same extent as that set forth in the Subsidiary Guarantee.
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13.9. Limitation on Liens. The Company will not, and will not
permit any Restricted Subsidiary to, create, incur, assume or suffer to exist
any Lien of any kind securing Indebtedness that is pari passu with, or
subordinated in right of payment to, the Debentures on any of its assets or
properties of any character, or any shares of Capital Stock or Indebtedness of
any Restricted Subsidiary, without making effective provision for all of the
Debentures and all other amounts due under this Agreement to be directly secured
equally and ratably with (or, if the obligation or liability to be secured by
such Lien is subordinated in right of payment to the Debentures, prior to) the
obligation or liability secured by such Lien.
The foregoing limitation does not apply to (i) Liens
existing on the Closing Date; (ii) Liens granted after the Closing Date on any
assets or Capital Stock of the Company or its Restricted Subsidiaries created in
favor of the holders of Debentures; (iii) Liens with respect to the assets of a
Restricted Subsidiary granted by such Restricted Subsidiary to the Company or a
Wholly Owned Restricted Subsidiary to secure Indebtedness owing to the Company
or such other Restricted Subsidiary; (iv) Liens securing Indebtedness which is
Incurred to refinance secured Indebtedness which is permitted to be Incurred
under clause (iii) of the second paragraph of Section 13.5(a); provided that
such Liens do not extend to or cover any property or assets of the Company or
any Restricted Subsidiary other than the property or assets securing the
Indebtedness being refinanced; or (v) Permitted Liens.
The Company will not, and will not permit any
Restricted Subsidiary to, create, incur, assume or suffer to exist any Lien
(securing Indebtedness) on Orion 2 or Orion 3.
13.10. Limitation on Sale-Leaseback Transactions. The Company
will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, enter into any sale-leaseback transaction involving any of its
assets or properties, whether now owned or hereafter acquired, whereby the
Company or a Restricted Subsidiary sells or transfers such assets or properties
and then or thereafter leases such assets or properties or any part thereof or
any other assets or properties which the Company or such Restricted Subsidiary,
as the case may be, intends to use for substantially the same purpose or
purposes as the assets or properties sold or transferred.
The foregoing restriction does not apply to any
sale-leaseback transaction if (i) the lease is for a period, including renewal
rights, of not in excess of three (3) years; (ii) the lease secures or relates
to industrial revenue or pollution control bonds; (iii) the transaction is
solely between the Company and any Wholly Owned Restricted Subsidiary or solely
between Wholly Owned Restricted Subsidiaries; or (iv) the Company or such
Restricted Subsidiary, within twelve (12) months after the sale or transfer of
any assets or properties is completed, applies an amount not less than the net
proceeds received from such sale in accordance with clause (A) or (B) of Section
13.11.
13.11. Limitation on Asset Sales. The Company will not, and
will not permit any Restricted Subsidiary to, consummate any Asset Sale unless
(i) the consideration received by the Company or such Restricted Subsidiary is
at least equal to the fair market value of the assets sold or disposed of and
(ii) at least eighty-five percent (85%) of the consideration
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received consists of cash or Temporary Cash Investments. In the event and to the
extent that the Net Cash Proceeds received by the Company or any of its
Restricted Subsidiaries from one or more Asset Sales occurring on or after the
Senior Notes Reduction Date in any period of twelve (12) consecutive months
exceed ten percent (10%) of Adjusted Consolidated Net Tangible Assets
(determined as of the date closest to the commencement of such twelve (12) month
period for which a consolidated balance sheet of the Company and its
Subsidiaries has been filed with the Commission), then the Company shall or
shall cause the relevant Restricted Subsidiary to within twelve months after the
date Net Cash Proceeds so received exceed ten percent (10%) of Adjusted
Consolidated Net Tangible Assets (A) apply an amount equal to such excess Net
Cash Proceeds to permanently repay Senior Indebtedness of the Company or
Indebtedness of any Restricted Subsidiary, in each case owing to a Person other
than the Company or any of its Restricted Subsidiaries or (B) invest an equal
amount, or the amount not so applied pursuant to clause (A) (or enter into a
definitive agreement committing to so invest within twelve (12) months after the
date of such agreement), in property or assets (other than current assets) of a
nature or type or that are used in a business (or in a company having property
and assets of a nature or type, or engaged in a business) similar or related to
the nature or type of the property and assets of, or the business of, the
Company and its Restricted Subsidiaries existing on the date of such investment.
13.12. Insurance. The Company will maintain (a) in-orbit
insurance with respect to Orion 1 in an amount equal to or greater than $___
million, and (b) with respect to Orion 2, Orion 3, each other satellite to be
launched by the Company or any Restricted Subsidiary and each replacement
satellite therefor, (i) launch insurance with respect to each such satellite
covering the period from the launch of such satellite to one hundred eighty
(180) days following such launch in an amount equal to or greater than the sum
of (A) the cost to replace such satellite pursuant to the contract pursuant to
which a replacement satellite will be constructed, (B) the cost to launch a
replacement satellite pursuant to the contract pursuant to which a replacement
satellite will be launched and (C) the cost of launch insurance for such
satellite or, in the event that the Company has reason to believe that the cost
of obtaining comparable insurance for a replacement satellite would be
materially higher, the Company's best estimate of the cost of such comparable
insurance and (ii) at all times subsequent to one hundred eighty [(180) days
after] the launch (if it is a Successful Launch) of each such satellite,
in-orbit insurance in an amount at least equal to the cost to replace such
satellite with a satellite of comparable or superior technological capability
(as estimated by the Board of Directors) and having at least as much
transmission capacity as such satellite. The in-orbit insurance required by this
paragraph shall provide that if fifty percent (50%) or more of a satellite's
initial capacity is lost, the full amount of insurance will become due and
payable, and that if a satellite is able to maintain more than fifty percent
(50%) but less than ninety percent (90%) of its initial capacity, a pro rata
portion of such insurance will become due and payable. The insurance required by
this paragraph shall name the Company and/or any Guarantor as the sole loss
payee or payees, as the case may be, thereof.
In the event that the Company (or a Guarantor) receives proceeds from
insurance relating to any satellite, the Company (or a Guarantor) may use a
portion of such proceeds to repay any
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vendor or third-party purchase money financing pertaining to such satellite
(other than Orion 1) that is required to be repaid by reason of the loss giving
rise to such insurance proceeds. The Company (or a Guarantor) may use the
remainder of such proceeds to develop, construct, launch and insure a
replacement satellite (including components for a related ground station) if (i)
such replacement satellite is of comparable or superior technological capability
as compared with the satellite being replaced and has at least as much
transmission capacity as the satellite being replaced and (ii) the Company will
have sufficient funds to service the Company's projected debt service
requirements until the scheduled launch of such replacement satellite and for
one (1) year thereafter and to develop, construct, launch and insure (in the
amounts required by the preceding paragraph) such replacement satellite,
provided that such replacement satellite is scheduled to be launched within
fifteen (15) months of the receipt of such proceeds. Any such proceeds not used
as permitted by this paragraph shall be applied, within ninety (90) days, to
reduce Indebtedness of the Company.
Section 12.3(b) shall cease to apply after the Senior Notes Reduction
Date.
14. Subordination of Debentures.
---------------------------
14.1. Debentures Subordinated to Senior Indebtedness. The
Company covenants and agrees, and each holder of a Debenture, whether upon
original issue or upon transfer, assignment or exchange thereof by his
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Section 14, the payment of the
principal of and interest (except interest paid in the form of Junior
Securities) on each and all of the Debentures are hereby expressly made
subordinate and subject in right of payment to the prior payment in full in cash
or cash equivalents of all Senior Indebtedness.
14.2. Liquidation; Dissolution; Bankruptcy. In the event of
(a) any insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding in connection
therewith, relative to the Company or to its creditors, as such, or to its
assets, (b) any liquidation, dissolution or other winding up of the Company,
whether voluntary or involuntary and whether or not involving insolvency or
bankruptcy, or (c) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of the Company, then and in any such event
specified in (a), (b) or (c) above (each such event, if any, herein sometimes
referred to as a "Proceeding") the holders of Senior Indebtedness shall be
entitled to receive payment in full in cash or cash equivalents of all amounts
due or to become due on or in respect of all Senior Indebtedness, or provision
shall be made for such payment in cash or cash equivalents or otherwise in a
manner satisfactory to the holders of Senior Indebtedness, before the holders of
the Debentures are entitled to receive any payment or distribution of any kind
or character, whether in cash, property or securities (other than Junior
Securities paid as interest on the Debentures), on account of principal of or
interest on the Debentures or on account of any purchase or other acquisition of
Debentures by the Company or any Subsidiary of the Company (all such payments,
distributions, purchases and acquisitions herein referred to, individually and
collectively, as a "Debenture Payment"), and to that end the holders of all
Senior Indebtedness shall be entitled to receive, for application to
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the payment thereof, any Debenture Payment which may be payable or deliverable
in respect of the Debentures in any such Proceeding.
To the extent any payment of Senior Indebtedness
(whether by or on behalf of the Company, as proceeds of security or enforcement
of any right of setoff orotherwise) is declared to be fraudulent or
preferential, set aside or required to be paid to any receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar Person under any
bankruptcy, insolvency, receivership, fraudulent conveyance or similar law, then
if such payment is recovered by, or paid over to, such receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar Person, the Senior
Indebtedness or part thereof originally intended to be satisfied shall be deemed
to be reinstated and outstanding as if such payment had not occurred.
In the event that, notwithstanding the foregoing
provisions of this Section, the holder of any Debenture shall have received any
Debenture Payment before all Senior Indebtedness is paid in full or payment
thereof provided for in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Indebtedness, then and in such event such
Debenture Payment shall be received and held in trust for the benefit of, and
shall be paid over or delivered forthwith to the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee, agent or other Person making
payment or distribution of assets of the Company for application to the payment
of all Senior Indebtedness remaining unpaid, to the extent necessary to pay all
Senior Indebtedness in full, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
For purposes of this Section 14 only, the words "any
payment or distribution of any kind or character, whether in cash, property or
securities" shall not be deemed to include (a) any payment of interest on the
Debentures made solely in Junior Securities or (b) a payment or distribution of
stock or securities of the Company provided for by a plan of reorganization or
readjustment authorized by an order or decree of a court of competent
jurisdiction in a reorganization proceeding under any applicable bankruptcy law
or of any other corporation provided for by such plan of reorganization or
readjustment which stock or securities are subordinated in right of payment to
all then outstanding Senior Indebtedness at least to the same extent as the
Debentures are so subordinated as provided in this Section 14; provided that (1)
if a new corporation results from such reorganization or readjustment, such
corporation assumes the Senior Indebtedness and (2) the rights of the holders of
the Senior Indebtedness are not, without the consent of such holders, altered by
such reorganization or readjustment. The consolidation of the Company with, or
the merger of the Company into, another Person or the liquidation or dissolution
or the Company following the conveyance, transfer, sale or lease of all or
substantially all of its properties and assets to another Person upon the terms
and conditions set forth in either Section 12.6 or Section 13.1, as then
applicable, shall not be deemed a Proceeding for the purposes of this Section if
the Person formed by such consolidation or into which the Company is merged or
the Person which acquires by conveyance, transfer, sale or lease such properties
and assets, as the case may be, shall, as a part of such consolidation, merger,
conveyance, transfer, sale or lease comply with the conditions set forth in
either Section 12.6 or Section 13.1, as then applicable.
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14.3. Default on Senior Indebtedness. In the event that any
Senior Payment Default (as defined below) shall have occurred and be continuing,
then no Debenture Payment shall be made directly or indirectly unless and until
such Senior Payment Default shall have been cured or waived, such default or the
benefits of this sentence shall have been waived or shall have ceased to exist,
or all amounts then due and payable in respect of Senior Indebtedness to which
such Senior Payment Default relates shall have been paid in full, or provision
shall have been made for such payment in cash or cash equivalents or otherwise
in a manner satisfactory to the holders of Senior Indebtedness. "Senior Payment
Default" means any default in the payment of principal of or premium, if any, or
interest on all or any portion of the Senior Indebtedness.
In addition, in the event that any Senior
Nonmonetary Default (as defined below) shall have occurred and be continuing,
then, upon the receipt by the Company of written notice of such Senior
Nonmonetary Default from any holder, or a trustee on behalf of a holder of such
Senior Indebtedness, of the Senior Indebtedness to which such Senior Nonmonetary
Default relates, then the Company may not directly or indirectly, make any
payments in respect of the Debentures (other than payment of interest in shares
of Junior Securities or payment of other subordinated securities issued in a
reorganization proceeding, each as provided in the fourth paragraph of Section
14.2 or payments from funds previously segregated or deposited in trust to
redeem or repurchase the Debentures under this Purchase Agreement) during the
period (the "Payment Blockage Period") commencing on the date of such receipt by
the Company of such written notice and ending on the earlier of (i) the date, if
any, on which the Senior Indebtedness to which such Senior Nonmonetary Default
relates is discharged or such Senior Nonmonetary Default shall have been cured
or waived in writing or shall have ceased to exist and any acceleration of
Senior Indebtedness to which such Senior Nonmonetary Default relates shall have
been rescinded or annulled and (ii) the one hundred seventy-ninth (179th) day
after the date of such receipt of such written notice. Notwithstanding anything
in this Agreement to the contrary, no more than one Payment Blockage Period may
be commenced with respect to the Debentures during any period of three hundred
sixty (360) consecutive days and there shall be a period of at least one hundred
eighty (180) consecutive days in each period of three hundred sixty (360)
consecutive days when no Payment Blockage Period is in effect. Following the
commencement of any Payment Blockage Period, the holders of Senior Indebtedness
shall be precluded from commencing a subsequent Payment Blockage Period until
the conditions set forth in the preceding sentence shall have been satisfied.
For all purposes of this paragraph, no Senior Nonmonetary Default that existed
or was continuing (it being acknowledged that any subsequent action that would
give rise to an event of default pursuant to any provision under which an event
of default previously existed or was continuing shall constitute a new event of
default for this purpose) on the date of commencement of any Payment Blockage
Period with respect to the Senior Indebtedness initiating such Payment Blockage
Period shall be, or may be made, the basis for the commencement of a subsequent
Payment Blockage Period with respect to the Senior Indebtedness initiating such
blockage period unless such Senior Nonmonetary Default shall have been cured or
waived for a period of not less than ninety (90) consecutive days. "Senior
Nonmonetary Default" means any default (other than a Senior Payment Default) or
any event (other than a Senior Payment Default) which, after notice or lapse or
time (or
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both), would become an event of default, under the terms of any Senior
Indebtedness permitting one or more holders of such Senior Indebtedness or a
trustee or agent on behalf of a holder of Senior Indebtedness to declare such
Senior Indebtedness due and payable prior to the date on which it would
otherwise become due and payable.
In the event that, notwithstanding the foregoing,
the Company shall make any Debenture Payment to any holder prohibited by the
foregoing provisions of this Section 14.3, then and in such event the Company
shall promptly notify the holders of Senior Indebtedness of such prohibited
payment and such payment shall be held in trust for the benefit of, and such
Debenture Payment shall be paid over and delivered forthwith to the Company for
the benefit of the holders of Senior Indebtedness.
The provisions of this Section shall not apply to
any Debenture Payment with respect to which Section 14.2 would be applicable.
14.4. Payment Permitted If No Default. Nothing contained in
this Section 14 or in any of the Debentures insofar as they incorporate the
provisions of this Section 14 shall prevent the Company, at any time except
during the pendency of any Proceeding referred to in Section 14.2 or under the
conditions described in Section 14.3, from making Debenture Payments.
14.5. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all amounts due or to become due on or in
respect of Senior Indebtedness, or the provision for such payment in cash or
cash equivalents or otherwise in a manner satisfactory to the holders of Senior
Indebtedness, the holders of the Debentures shall be subrogated to the rights of
the holders of such Senior Indebtedness to receive payments and distributions of
cash, property and securities applicable to the Senior Indebtedness until the
principal of and interest on the Debentures shall be paid in full. For purposes
of such subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the holders of the
Debentures would be entitled except for the provisions of this Section 14, and
no payments over pursuant to the provisions of this Section 14 to the holders of
Senior Indebtedness by holders of the Debentures shall, as among the Company,
its creditors other than holders of Senior Indebtedness and the holders of the
Debentures, be deemed to be a payment or distribution by the Company to or on
account of the Senior Indebtedness.
14.6. Provisions Solely to Define Relative Rights. The
provisions of this Section 14 are and are intended solely for the purpose of
defining the relative rights of the holders of the Debentures on the one hand
and the holders of Senior Indebtedness on the other hand. Nothing contained in
this Section 14 or elsewhere in this Agreement or in the Debentures is intended
to or shall (a) impair, as among the Company, its creditors other than holders
of Senior Indebtedness and the holders of the Debentures, the obligation of the
Company, which is absolute and unconditional, to pay to the holders of the
Debentures the principal of and interest on the Debentures as and when the same
shall become due and payable in accordance
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with their terms; (b) affect the relative rights against the Company of the
holders of the Debentures and creditors of the Company other than the holders of
Senior Indebtedness; or (c) prevent the holder of any Debenture from exercising
all remedies otherwise permitted by applicable law upon default under this
Agreement subject to the rights, if any, under this Section 14 of the holders of
Senior Indebtedness to receive cash, property and securities otherwise payable
or deliverable to such holder.
14.7. Enforcement of Subordination By Holders of Senior Notes;
No Waiver of Subordination Provisions. Each holder of a Debenture by his
acceptance thereof, if and so long as a Debenture Payment is prohibited under
this Section 14, irrevocably authorizes and empowers (but without imposing any
obligation on, or any duty to such holder from) each holder of Senior Notes at
any time outstanding, and such holder's representatives, to demand, xxx for,
collect and receive such holder's ratable share of Debenture Payments which are
required to be paid or delivered to the holders of Senior Indebtedness as
provided in this Section 14 in any liquidation or reorganization of the Company
under the U.S. Federal Bankruptcy Code (an "Insolvency Proceeding"), (A) to file
a proof of claim or debt in the form required in an Insolvency Proceeding
respecting such holder of Senior Notes' ratable share of such Debenture Payments
in any Insolvency Proceeding in the name of such holders of Debentures, and to
prove the validity, amount and priority of such claim, and agrees that such
holder is an authorized agent for purposes of Federal Rule of Bankruptcy
Procedure 3001(b) (provided, however, if, and to the extent that, the holders of
the Senior Notes (or their representatives) have not filed a proof of claim or
interest with respect to the Debentures in any action or case under the Federal
Bankruptcy Code at least five (5) Business Days prior to the last date by which
all such proofs of claim or interest must be filed or forever barred, the
holders of the Debentures or their representatives may (but shall not be
obligated to) file proofs of claim or interest with respect to the Debentures);
(B) to vote the claim respecting such holder of Senior Notes' ratable share of
such Debenture Payments in any Insolvency Proceeding, including, without
limitation, in a proceeding under Chapter 11, Xxxxx 00, Xxxxxx Xxxxxx Code; and
(C) to take any such actions as such holder of Senior Notes, or such holder's
representatives, may determine to be reasonably necessary or appropriate for the
enforcement of the provisions set forth in (A) or (B) above.
No right of any present or future holder of any
Senior Indebtedness to enforce subordination as herein provided shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of the Company or by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by the Company with the terms, provisions and
covenants of this Agreement, regardless of any knowledge thereof any such holder
may have or be otherwise charged with.
Without in any way limiting the generality of the
foregoing paragraph, the holders of Senior Indebtedness may, at any time and
from time to time, without the consent of or notice to the holders of the
Debentures, without incurring responsibility to the holders of the Debentures
and without impairing or releasing the subordination provided in this Section 14
or the obligations hereunder of the holders of the Debentures to the holders of
Senior Indebtedness, do any one or more of the following: (i) amend or
supplement in any manner
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Senior Indebtedness or any instrument evidencing the same or any agreement under
which Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any Person liable in any manner for the collection
of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights
against the Company and any other Person.
14.8. Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Section 14, the holders of the Debentures shall be entitled to rely upon
any order or decree entered by any court of competent jurisdiction in which such
Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the holders of
Debentures, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of the Senior Indebtedness and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Section 14.
14.9. Certain Conversions Deemed Payment. For the purposes of
this Section 14 only, (i) the issuance and delivery of Junior Securities upon
conversion of Debentures in accordance with Section 15 hereof shall not be
deemed to constitute a Debenture Payment and (ii) the payment, issuance or
delivery of cash, property or securities (other than Junior Securities) upon
conversion of a Debenture shall be deemed to constitute a Debenture Payment. For
the purposes of this Section 14, the term "Junior Securities" means shares of
any Capital Stock. Nothing contained in this Section 14 or elsewhere in this
Agreement or in the Debentures is intended to or shall impair, as among the
Company, its creditors other than holders of Senior Indebtedness and the holders
of the Debentures, the right, which is absolute and unconditional, of the holder
of any Debenture to convert such Debenture in accordance with the provisions of
Section 15 hereof.
14.10. Not to Prevent Events of Default. The failure to make a
payment on account of principal of premium, if any, or interest on the
Debentures by reason of any provision of this Section 14 will not be construed
as preventing the occurrence of an Event of Default.
15. Conversion Rights.
-----------------
15.1. Conversion Privilege and Conversion Rate. Subject to and
upon compliance with the provisions of this Section 15, at the option of the
holder thereof, any Debenture may be converted into fully paid and nonassessable
shares (calculated as to each conversion to the nearest one one-hundredth
(1/100th) of a share) of Common Stock at the Conversion Rate, determined as
hereinafter provided, in effect at the time of conversion. Such conversion right
shall commence on the date of such Debenture and expire the later of (i) at the
close of business on February 1, 2012 or (ii) the date the full principal amount
of all of the Debentures and all accrued interest thereon have been paid in
full. In case any Debentures
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are called for redemption under Section 11.2 or 11.3 or the Company requires
holders of Notes to make a Mandatory Sale under Section 11.4, such conversion
right in respect of any such Debenture shall be subject to the provisions of
Section 11.5.
The rate at which shares of Common Stock shall be
delivered upon conversion (herein called the "Conversion Rate") shall be
initially 71.42857 shares of Common Stock for each $1,000 principal amount of
Debentures. The Conversion Rate shall be adjusted in certain instances as
provided in this Section 15.
15.2. Exercise of Conversion Privilege; Time Conversion Deemed
Effected; Delivery of Stock Certificates; Partial Conversions; Accrued Interest.
In order to exercise the conversion privilege, the holder of any Debenture to be
converted shall surrender such Debenture, duly endorsed or assigned to the
Company or in blank, at the Company's principal executive offices, 0000 Xxxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000 (or such other office or agency
of the Company as the Company may designate by notice in writing to each holder
of Debentures), accompanied by written notice to the Company at such office that
the holder elects to convert such Debenture or, if less than the entire
principal amount thereof is to be converted, the portion thereof to be
converted.
A Debenture shall be deemed to have been converted
immediately prior to the close of business on the day of surrender of such
Debenture for conversion in accordance with the foregoing provisions, and at
such time the rights of the holder of such Debenture, as a holder thereof, shall
cease to the extent of the portion of such Debenture converted, and the Person
or Persons entitled to receive the Conversion Shares shall be treated for all
purposes as the record holder or holders thereof at such time. As promptly as
practicable on or after the date of any conversion in full or in part of any
Debenture, but in no event later than five (5) Business Days thereafter, the
Company shall, at its expense (including the payment by it of any applicable
issue taxes), issue and deliver to the holder of such Debenture, or as such
holder may direct, a certificate or certificates for the number of full
Conversion Shares, together with (a) payment in lieu of any fraction of a share,
as provided in Section 15.3, and (b) interest (payable in the form of Interest
Shares as provided in the form of the Debenture) on the principal amount of such
Debenture, or the portion thereof converted, accrued and unpaid to and including
the date of such conversion, without any adjustment in respect of any dividend
or other distribution payable on the Conversion Shares.
Upon any partial conversion of a Debenture, the
Company will forthwith issue and deliver to or upon the order of the holder
thereof, at the expense of the Company, a new Debenture or Debentures in
aggregate principal amount equal to the unpaid and unconverted portion of the
principal amount of such partially converted Debenture. Such new Debenture or
Debentures shall be registered in the name of such holder and dated as of the
date of the converted Debenture.
15.3. Fractions of Shares. No fractional shares of Common
Stock shall be issued upon conversion of any Debenture or Debentures. If more
than one (1) Debenture shall
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be surrendered for conversion at one time (or substantially at the same time) by
the same holder, the number of full shares which shall be issuable upon
conversion thereof shall be computed on the basis of the aggregate principal
amount of the Debentures so surrendered. In place of any fractional share of
Common Stock which would otherwise be issuable upon conversion of any Debenture
or Debentures, the Company shall calculate and pay a cash adjustment in respect
of such fraction (calculated to the nearest one one-hundredth (1/100th) of a
share) in an amount equal to the same fraction of the current market price per
share of Common Stock (calculated in accordance with Section 15.4(8) below) at
the close of business on the day of conversion.
15.4. Adjustments to Conversion Rate. The Conversion Rate
shall be subject to adjustments from time to time as follows:
(1) In case at any time after the Closing Date the
Company shall pay or make a dividend or other distribution on any class
of Capital Stock of the Company (other than the Series C Preferred
Stock) in shares of its Common Stock, the Conversion Rate in effect at
the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or
other distribution shall be increased by dividing such Conversion Rate
by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for
such determination and the denominator shall be the sum of such number
of shares and the total number of shares constituting such dividend or
other distribution, such increase to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (1), the number of
shares of Common Stock at any time outstanding shall not include shares
held in the treasury of the Company but shall include shares issuable
in respect of scrip certificates issued in lieu of fractions of shares
of Common Stock. The Company will not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the
Company.
(2) In case at any time after the Closing Date, the
Company shall issue rights or warrants to all holders of its Common
Stock (not being available on an equivalent basis to holders of the
Debentures upon conversion) entitling them to subscribe for or purchase
shares of Common Stock at a price per share less than the current
market price per share (determined as provided in paragraph (8) of this
Section 15.4) of the Common Stock on the date fixed for the
determination of stockholders entitled to receive such rights or
warrants, the Conversion Rate in effect at the opening of business on
the day following the date fixed for such determination shall be
increased by dividing such Conversion Rate by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at
the close of business on the date
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fixed for such determination plus the number of shares of Common Stock
which the aggregate of the offering price of the total number of shares
of Common Stock so offered for subscription or purchase would purchase
at such current market price and the denominator shall be the number of
shares of Common Stock outstanding at the close of business on the date
fixed for such determination plus the number of shares of Common Stock
so offered for subscription or purchase, such increase to become
effective immediately after the opening of business on the day
following the date fixed for such determination. However, upon the
expiration of any right or warrant to purchase Common Stock the
issuance of which resulted in an adjustment in the Conversion Rate
pursuant to this subsection (2), if any such right or warrant shall
expire and shall not have been exercised, the Conversion Rate shall
immediately upon such expiration be recomputed and effective
immediately upon such expiration be increased to the price which it
would have been (but reflecting any other adjustments in the Conversion
Rate made pursuant to the provisions of this Section 15.4 after the
issuance of such rights or warrants) had the adjustment of the
Conversion Rate made upon the issuance of such rights or warrants been
made on the basis of offering for subscription or purchase only that
number of shares of Common Stock actually purchased upon the exercise
of such rights or warrants actually exercised. For the purposes of this
paragraph (2), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the
Company but will include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The
Company will not issue any rights or warrants in respect of shares of
Common Stock held in the treasury of the Company.
(3) In case at any time after the Closing Date,
outstanding shares of Common Stock shall be subdivided into a greater
number of shares of Common Stock, the Conversion Rate in effect at the
opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately increased and,
conversely, in case at any time after the date hereof, outstanding
shares of Common Stock shall each be combined into a smaller number of
shares of Common Stock, the Conversion Rate in effect at the opening of
business on the day following the day upon which such combination
becomes effective shall be proportionately reduced, such increase or
reduction, as the case may be, to become effective immediately after
the opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(4) In case at any time after the Closing Date, the
Company shall, by dividend or otherwise, distribute to all holders of
its Common Stock evidences of its indebtedness or assets (including
stock or other securities of the Company or any other issuer, but
excluding any rights or warrants referred to in paragraph (2) of this
Section 15.4, any dividend or distribution paid exclusively in cash and
any dividend or distribution referred to in paragraph (1) of this
Section 15.4), the Conversion Rate shall be adjusted so that the same
shall equal the rate determined by dividing the Conversion Rate in
effect immediately prior to the close of business on the date fixed for
the determination of stockholders entitled to receive such distribution
by a fraction of which the numerator shall be the current market price
per share (determined as provided in paragraph (8) of this Section
15.4) of the Common Stock on the date fixed for such determination less
the then fair market value (each reference to "fair market value" in
this Section 15.4 shall mean the fair market value as determined by the
Board of
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Directors of the Company in good faith, whose determination shall be
described in a Board Resolution, a copy of which shall be delivered to
each holder of Debentures within ten (10) days of the adoption of the
resolution) of the portion of the assets or evidences of indebtedness
so distributed applicable to one (1) share of Common Stock and the
denominator shall be such current market price per share of the Common
Stock, such adjustment to become effective immediately prior to the
opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such distribution.
(5) In case at any time after the Closing Date (A)
the Company shall, by dividend or otherwise, distribute to all holders
of its Common Stock cash (excluding any cash that is distributed upon a
merger or consolidation to which Section 15.13 applies or as part of a
distribution referred to in paragraph (4) of this Section 15.4) and
(B)(I) the total of (x) the aggregate amount of such cash distribution,
(y) the aggregate amount of any other distributions to all holders of
its Common Stock made exclusively in cash within the twelve (12) months
preceding the date of payment of such distribution and in respect of
which no adjustment pursuant to this paragraph (5) or paragraph (6) of
this Section 15.4 has been made and (z) the aggregate of any cash plus
the fair market value of other consideration payable in respect of any
tender offers by the Company or any of its Subsidiaries for all or any
portion of the Common Stock concluded within the twelve (12) months
preceding the date of payment of such distribution and in respect of
which no adjustment pursuant to this paragraph (5) or paragraph (6) of
this Section 15.4 has been made, exceeds (II) ten percent (10%) of the
product of the current market price per share (determined as provided
in paragraph (8) of this Section 15.4) of the Common Stock on the date
for the determination of holders of shares of Common Stock entitled to
receive such distribution times the number of shares of Common Stock
outstanding on such date, then, and in each such case, immediately
after the close of business on such date for determination, the
Conversion Rate shall be increased so that the same shall equal the
rate determined by dividing the Conversion Rate in effect immediately
prior to the close of business on the date fixed for determination of
the stockholders entitled to receive such distribution by a fraction
(i) the numerator of which shall be equal to such current market price
per share on the date fixed for such determination less an amount equal
to the quotient of (X) the sum of (I) the total of the amounts referred
to in subclauses (B)(I)(x) and (y) of this paragraph (5) and (II) the
aggregate of the excess of the amount referred to in subclause
(B)(I)(z) of this paragraph (5) for each tender offer so referred to
over the aggregate current market price of the shares of Common Stock
purchased in such tender offer as of the Expiration Time (as
hereinafter defined) for such tender offer divided by (Y) the number of
shares of Common Stock outstanding on such date for determination and
(ii) the denominator of which shall be equal to such current market
price per share on such date for determination.
(6) In case at any time after the Closing Date (A) a
tender offer made by the Company or any Subsidiary for all or any
portion of the Common Stock shall
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expire and (B)(I) the total of (x) the fair market value of the
aggregate consideration required to be paid pursuant to such tender
offer (as amended upon the expiration thereof) to stockholders (based
on the acceptance (up to any maximum specified in the terms of the
tender offer) of Purchased Shares (as defined below)), (y) the
aggregate of the cash plus the fair market value, as of the expiration
of such tender offer, of consideration payable in respect of any other
tender offer, by the Company or any Subsidiary for all or any portion
of the Common Stock expiring within the twelve (12) months preceding
the expiration of such tender offer and in respect of which no
adjustment pursuant to this paragraph (6) or paragraph (5) of this
Section 15.4 has been made and (z) the aggregate amount of any
distributions to all holders of the Company's Common Stock made
exclusively in cash within twelve (12) months preceding the expiration
of such tender offer and in respect of which no adjustment pursuant to
this paragraph (6) or paragraph (5) of this Section 15.4 has been made,
exceeds (II) ten percent (10%) of the product of the current market
price per share of the Common Stock (determined as provided in
paragraph (8) of this Section 15.4) on the date of the last time (the
"Expiration Time") tenders could have been made pursuant to such tender
offer (as it may be amended) times the number of shares of Common Stock
outstanding (including any tendered shares) on the Expiration Time,
then, and in each such case, immediately prior to the opening of
business on the day after the date of the Expiration Time, the
Conversion Rate shall be adjusted so that the same shall equal the
price determined by dividing the Conversion Rate immediately prior to
the close of business on the date of the Expiration Time by a fraction
(i) the numerator of which shall be equal to (a) the product of (I)
such current market price per share on the date of the Expiration Time
and (II) the number of shares of Common Stock outstanding (including
any tendered shares) as of the Expiration Time less (b) the total of
the amounts referred to in Clause (B)(I) of this paragraph (6), and
(ii) the denominator of which shall be equal to the product of (a) such
current market price per share on the date of the Expiration Time and
(b) the number of shares of Common Stock outstanding (including any
tendered shares) as of the Expiration Time less the number of all
shares validly tendered and not withdrawn as of the Expiration Time
(the shares deemed so accepted up to any such maximum, being referred
to as the "Purchased Shares").
(7) The reclassification of Common Stock into
securities other than Common Stock (other than any reclassification
upon a consolidation or merger to which Section 15.13 applies) shall be
deemed to involve (a) a distribution of such securities other than
Common Stock to all holders of Common Stock (and the effective date of
such reclassification shall be deemed to be "the date fixed for the
determination of stockholders entitled to receive such distribution"
and "the date fixed for such determination" within the meaning of
paragraph (4) of this Section 15.4), and (b) a subdivision or
combination, as the case may be, of the number of shares of Common
Stock outstanding immediately prior to such reclassification into the
number of shares of Common Stock outstanding immediately thereafter
(and the effective date of such reclassification shall be deemed to be
"the day upon which such subdivision becomes effective" or "the day
upon which such combination becomes effective", as the case may
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be, and "the day upon which such subdivision or combination becomes
effective" within the meaning of paragraph (3) of this Section 15.4).
(8) For the purpose of any computation under
paragraph (2), (4), (5) or (6) of this Section 15.4, the current market
price per share of Common Stock on any date shall be calculated by the
Company and be deemed to be the average of the daily Closing Price per
share of Common Stock for the five (5) consecutive Trading Days before,
and ending not later than, the earlier of (i) the day in question and
(ii) the day before the "ex" date with respect to the issuance or
distribution requiring such computation. For purposes of this
paragraph, the term "'ex' date", when used with respect to any issuance
or distribution, means the first date on which the Common Stock trades
regular way on the applicable securities exchange or in the applicable
securities market without the right to receive such issuance or
distribution.
(9) The Company may make such increases in the
Conversion Rate, for the remaining term of the Debentures or any
shorter term, in addition to those required by paragraphs (1), (2),
(3), (4), (5) and (6) of this Section 15.4, as it considers to be
advisable in order to avoid or diminish any income tax to any holders
of shares of Common Stock resulting from any dividend or distribution
of stock or issuance of rights or warrants to purchase or subscribe for
stock or from any event treated as such for income tax purposes or for
any other reasons.
15.5. Effect on Conversion Price of Certain Events. In order
to prevent dilution of the conversion rights granted under this Section 15, in
addition to the adjustments provided for in Section 15.4, the Conversion Rate
shall be subject to adjustment from time to time pursuant to this Section 15.5
as follows; provided, however, that no adjustments shall be made under this
Section 15.5 with respect to any issuance of securities or other event that
requires an adjustment of the Conversion Rate under Section 15.4.
(1) If and whenever on or after the Closing Date the
Company issues or sells, or in accordance with this Section 15.5 is
deemed to have issued or sold, other than in an Excluded Issuance, any
share of Common Stock for a consideration per share less than the
Trigger Price in effect immediately prior to such time (a "Dilutive
Event"), then forthwith upon such issue or sale in the Dilutive Event
the Conversion Rate shall be increased by dividing the Conversion Rate
in effect immediately before the Dilutive Event by a fraction, the
numerator of which is the number of shares of Common Stock that are
Outstanding on an As-Converted Basis (as defined below) immediately
before the Dilutive Event plus the number of shares of Common Stock
that could be purchased at the Trigger Price at the time of the
Dilutive Event for the aggregate consideration paid or payable upon the
sale or issuance of Common Stock in the Dilutive Event, and the
denominator of which is the number of shares of Common Stock that are
Outstanding on an As-Converted
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Basis immediately before the Dilutive Event plus the number of shares
that are acquired or to be acquired upon the sale or issuance of the
Common Stock in the Dilutive Event. For purposes of this paragraph (1),
"Outstanding on an As-Converted Basis immediately before the Dilutive
Event" means the sum of (i) all Common Stock issued and outstanding
immediately before the Dilutive Event plus (ii) all Common Stock
issuable upon the exercise of Options or conversion of Convertible
Securities outstanding immediately before the Dilutive Event (other
than the Debentures).
(2) If after the Closing Date the Company in any
manner grants any Options and the price per share for which shares of
Common Stock are issuable upon the exercise of any such Option is less
than the Trigger Price in effect immediately prior to the time of the
granting of such Option, then such shares of Common Stock shall be
deemed to have been issued and sold by the Company at the time of the
granting of such Options for such price per share and the Conversion
Rate shall be adjusted in accordance with paragraph (1) of this Section
15.5. For purposes of this paragraph, the "price per share" for which
shares of Common Stock are issuable upon the exercise of any Option
shall be equal to the sum of the amounts of consideration (if any)
received or receivable by the Company with respect to such shares of
Common Stock upon the granting of the Option and upon exercise of the
Option. No further adjustment of the Conversion Rate shall be made upon
the actual issue of such Common Stock upon the exercise of such
Options.
(3) If after the Closing Date the Company in any
manner issues or sells any Convertible Security (or Options to purchase
any Convertible Security) and the price per share for shares of Common
Stock that are issuable upon conversion or exchange thereof is less
than the Trigger Price in effect immediately prior to the time of such
issue or sale (or the granting of such Option), then such shares of
Common Stock shall be deemed to have been issued and sold by the
Company at the time of the issuance or sale of such Convertible
Securities (or the granting of such Option) for such price per share
and the Conversion Price shall be adjusted in accordance with paragraph
(1) of this Section 15.5. For the purposes of this paragraph (3), the
"price per share" for which shares of Common Stock are issuable upon
conversion or exchange of any Convertible Security (or exercise of any
Option therefor) shall be equal to the sum of the amounts of
consideration (if any) received or receivable by the Company upon the
issuance of the Convertible Security (or such Option) and upon the
conversion or exchange of such Convertible Security (or exercise of
such Option). No further adjustment of the Conversion Price shall be
made upon the actual issue of such Common Stock upon conversion or
exchange of any Convertible Security, and if any such issue or sale of
such Convertible Security is made upon exercise of any Options for
which adjustments of the Conversion Rate had been or are to be made
pursuant to other provisions of this Section 15, no further adjustment
of the Conversion Rate shall be made by reason of such issue or sale.
(4) If after the Closing Date the purchase price
provided for in any Option, the additional consideration (if any)
payable upon the issue, conversion or exchange of any Convertible
Security (other than the Debentures), or the rate at which any
Convertible Security (other than the Debentures) is convertible into or
exchangeable
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for Common Stock changes at any time, any Conversion Rate previously
adjusted with respect to such Option or Convertible Security (other
than the Debentures) and in effect at the time of such change shall be
readjusted to the Conversion Rate which would have been in effect at
such time had such Option or Convertible Security (other than the
Debentures) originally provided for such changed purchase price,
additional consideration or changed conversion rate, as the case may
be, at the time initially granted, issued or sold.
(5) Upon the expiration of any Option or the
termination of any right to convert or exchange any Convertible
Security (other than the Debentures), after the Closing Date, without
the exercise of any such Option or right, any Conversion Rate then in
effect hereunder shall be adjusted to the Conversion Rate which would
have been in effect at the time of such expiration or termination had
such Option or Convertible Security, to the extent outstanding
immediately prior to such expiration or termination, never been issued.
(6) For the purpose of this Section 15.5, if any
Common Stock, Option or Convertible Security is issued or sold or
deemed to have been issued or sold for cash, the consideration received
therefor shall be deemed to be the amount received by the Company
therefor. In case any Common Stock, Options or Convertible Securities
are issued or sold for a consideration other than cash, the amount of
the consideration other than cash received by the Company shall be the
fair value of such consideration, except where such consideration
consists of securities, in which case the amount of consideration
received by the Company shall be the Market Price thereof as of the
date of receipt. If any Common Stock, Option or Convertible Security is
issued to the owners of the non- surviving entity in connection with
any merger in which the Company is the surviving corporation, the
amount of consideration therefor shall be deemed to be the fair value
of such portion of the assets and business of the non-surviving entity
as is attributable to such Common Stock, Options or Convertible
Securities, as the case may be. The fair value of any consideration
other than cash and securities shall be as determined in good faith by
the Board of Directors of the Company. For purposes of this paragraph
(6), the term "Market Price" of a security means, with respect to a
specified date, the Closing Price of such security, averaged over a
period of the twenty (20) consecutive Business Days prior to such date;
provided that if during this period such security is not listed on any
securities exchange, quoted on the Nasdaq National Market, or quoted in
the over-the-counter market, the Market Price will be the fair value of
such security determined by agreement between the Company and the
holders of a majority of the Outstanding Debentures. If such parties
are unable to reach agreement within a reasonable period of time, the
fair value of such security shall be determined by an independent
appraiser experienced in valuing such type of consideration jointly
selected by the Company and the holders of a majority of the
Outstanding Debentures. The determination of such appraiser shall be
final and binding upon the parties, and the fees and expenses of such
appraiser shall be borne by the Company.
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(7) In case any Option is issued in connection with
the issue or sale of other securities of the Company, together
comprising one (1) integrated transaction in which no specific
consideration is allocated to such Option by the parties thereto, the
Option shall be deemed to have been issued for a consideration of $.0l.
15.6. De Minimis Adjustments. Notwithstanding any other
provisions of this Section 15, the Company shall not be required to make any
adjustment of the Conversion Rate unless such adjustment would require an
increase or decrease of at least one percent (1%) in the Conversion Rate as then
in effect. Any lesser adjustment shall be carried forward and shall be made no
later than the time of, and together with, the next subsequent adjustment which,
together with any adjustment or adjustments so carried forward, shall amount to
an increase or decrease of at least one percent (1%) of the Conversion Rate as
then in effect.
15.7. Notice of Adjustments of Conversion Rate. Whenever the
Conversion Rate is adjusted as provided in Section 15.4 or Section 15.5, the
Company shall promptly (and, in any event, not later than the fifteenth (15th)
day following the occurrence of the event requiring such adjustment) compute the
adjusted Conversion Rate in accordance with this Section 15 and shall prepare a
report setting forth such adjustment and showing in detail the method of
calculation and the facts upon which such adjustment is based, including a
statement of (a) the consideration received or to be received by the Company for
any additional shares of Common Stock issued or sold or deemed to have been
issued, (b) the number of shares of Common Stock outstanding or deemed to be
outstanding, and (c) the Conversion Rate in effect immediately prior to such
issue or sale and as adjusted on account therefor and, upon the request of any
holder of the Debentures, shall cause certified public accountants of recognized
national standing (which may be the regular auditors of the Company) selected by
the Company to verify such computation and report, if not previously verified at
the request of any holder. The Company will promptly (and, in any event, not
later than such fifteenth (15th) day) furnish a copy of each such report and
such verification to the holder of any Debenture, and will, upon the written
request at any reasonable time of the holder of any Debenture, furnish to such
holder a like report setting forth the Conversion Rate at the time in effect and
showing how it was calculated. The Company will also keep copies of all such
reports and such verifications at its principal office, and will cause the same
to be available for inspection at such office during normal business hours by
the holder of any Debenture or any prospective purchaser of any Debenture
designated by the holder of such Debenture.
15.8. Notice of Certain Corporate Action. In case:
(1) the Company shall declare a dividend (or any
other distribution) on its Common Stock payable otherwise than in cash
out of its earned surplus; or
(2) the Company shall authorize the granting to all
holders of its Common Stock of rights or warrants to subscribe for or
purchase any shares of Capital Stock or of any other rights; or
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(3) (a) of any reclassification of the Common Stock
of the Company, or (b) of any consolidation, merger or share exchange
to which the Company is a party and for which approval of any
stockholders of the Company is required, or (c) of any tender offer by
the Company or any Subsidiary for all or any portion of the Common
Stock, or (d) of the conveyance, transfer, sale or lease of all or
substantially all of the assets of the Company; or
(4) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then the Company, ten (10) Business Days prior to the applicable record,
expiration or effective date hereinafter specified, shall give to each holder of
Debentures a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution, rights or warrants, or, if a record
is not to be taken, the effective date as of which the holders of Common Stock
of record to be entitled to such dividend, distribution, rights or warrants are
to be determined, (y) the date on which the right to make tenders under such
tender offer expires or (z) the date on which such reclassification,
consolidation, merger, share exchange, conveyance, transfer, sale, lease,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, share
exchange, conveyance, transfer, sale, lease, dissolution, liquidation or winding
up.
15.9. Company to Reserve Common Stock. The Company shall at
all times reserve and keep available, free from preemptive rights, out of its
authorized but unissued Common Stock, for the purpose of effecting the
conversion of Debentures, the full number of Conversion Shares then issuable
upon the conversion of all outstanding Debentures.
15.10. Taxes on Conversions. The Company will pay any and all
taxes (other than taxes on income), liens and other charges that may be payable
in respect of the issue or delivery of Conversion Shares pursuant hereto.
15.11. Agreements as to Common Stock; Listing. The Company
agrees that all Conversion Shares, upon delivery thereof, will have been duly
authorized and validly issued and will be fully paid and nonassessable with no
liability on the part of holders thereof. The Company will take all such action
as may be necessary to insure that such Conversion Shares may be issued without
violation of any applicable law or regulation, or of any agreement, contract or
understanding applicable to the Company or its assets, or of any requirements of
any securities exchange or automated quotation system upon which any shares of
Common Stock may be listed or quoted.
No class of Capital Stock (other than any class that
has a preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
Company or that is subject to redemption by the
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Company) shall have voting rights that are proportionately greater per share
than those of any class of Capital Stock issuable on any conversion of the
Debentures pursuant hereto, and all classes of which shares are so issuable on
any such conversion shall have voting rights.
15.12. Cancellation of Converted Debentures. All
Debentures delivered for conversion shall be cancelled and no such Debenture
shall thereafter be reissued.
15.13. Provision in Case of Consolidation, Merger or
Conveyance of Assets.
(a) In case at any time after the Closing Date the
Company shall be a party to any transaction (including, without limitation, a
merger, consolidation, sale of all or substantially all of the Company's assets
or recapitalization of the Common Stock) in which the previously outstanding
Common Stock shall be changed into or exchanged for different securities of the
Company, common stock or other securities of another corporation or interests in
a noncorporate entity or other property (including cash) or any combination of
any of the foregoing (each such transaction being hereinafter referred to as a
"Reorganization Transaction," the date of the consummation of the Reorganization
Transaction being hereinafter referred to as the "Consummation Date," the
Company (in the case of a recapitalization of the Common Stock) or such other
corporation or entity (in each other case) being hereinafter referred to as the
"Acquiring Company," and the common stock (or equivalent equity interests) of
the Acquiring Company being hereinafter referred to as the "Acquirer's Common
Stock"), then, subject to the alternate rights of each holder of Debentures set
forth in Section 15.13(b), if then applicable as a condition to the consummation
of the Reorganization Transaction, lawful and adequate provisions shall be made
so that, upon the basis and the terms and in the manner provided in this Section
15, each holder of a Debenture, upon the conversion thereof at any time after
the consummation of the Reorganization Transaction, shall be entitled to
receive, in lieu of the Stock or Other Securities issuable upon such conversion
prior to such consummation, the stock and other securities, cash and property to
which such holder would have been entitled upon the consummation of the
Reorganization Transaction if such holder had converted such Debenture
immediately prior thereto (subject to adjustments from and after the
Consummation Date as nearly equivalent as possible to the adjustments provided
for in this Section 15 including, without limitation, this Section 15.13).
(b) In addition to the rights granted in Section
15.13(a), at the election of any holder of any Debenture pursuant to notice
given to the Company on or before the later of (x) the day on which the holders
of the Common Stock of the Company approve the Reorganization Transaction, and
(y) the sixtieth day (60th) following the date of delivery or mailing to such
holder of the last proxy statement relating to the vote on the Reorganization
Transaction by the holders of the Common Stock of the Company, such holder shall
have the right to elect to receive on the Consummation Date and, as a condition
precedent to the Reorganization Transaction, in full payment and in
consideration for the surrender of such Debenture, a cash amount equal to the
current market value (as determined in accordance with Section 15.4(8)) of the
number of shares of Stock (or Other Securities) to which the holder of such
Debenture would have been entitled had such holder converted such Debenture
immediately
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prior to the consummation of the Reorganization Transaction; provided, however,
that the provisions of this Section 15.13(b) shall not apply prior to the Senior
Notes Reduction Date.
(c) The Company will not enter into or be a party to
any Reorganization Transaction following the consummation of which any holder of
Debentures would be entitled in accordance with the foregoing provisions of this
Section 15.13 to receive Acquirer's Common Stock or other securities of the
Acquiring Company upon conversion of such Debentures unless, immediately
following the consummation thereof on the Consummation Date, all of the
following requirements are fulfilled as to the Acquiring Company:
(A) its common stock is listed on the New York Stock
Exchange or the American Stock Exchange or is authorized for
quotation on the Nasdaq National Market as a national market
security and such common stock continues to meet the
requirements for such listing or quotation, as the case may
be, and
(B) it is required to file reports with the
Commission pursuant to Section 13 or 15(d) of the Exchange
Act.
(d) Notwithstanding anything contained in this
Agreement to the contrary, the Company will not effect any Reorganization
Transaction unless, prior to the consummation thereof, each corporation or
entity (other than the Company) which may be required to deliver any stock,
securities, cash or property upon the conversion of any Debenture as provided
herein shall assume, by written instrument delivered to the holder of such
Debenture, the obligation to deliver to such holder such shares of stock,
securities, cash or property as, in accordance with the foregoing provisions,
such holder may be entitled to receive, and such corporation or entity shall
have similarly delivered to such holder an opinion of counsel for such
corporation or entity, which counsel shall be reasonably satisfactory to such
holder, stating that such Debenture shall thereafter continue in full force and
effect and the terms hereof (including, without limitation, all of the
provisions of this Section 15) shall be applicable to the stock, securities,
cash or property which such corporation or entity may be required to deliver
upon the exercise hereof. Nothing in this Section 15.13 shall be deemed to
authorize the Company to enter into any transaction not otherwise permitted by
either Section 12.6 or Section 13.1, as then applicable.
15.14. Other Dilutive Events. In case any event shall occur
which is substantially similar to the events described in the other provisions
of this Section 15, but as to which substantially similar event such provisions
of this Section 15 are not applicable and in respect of which substantially
similar event the failure to make any adjustment would not in the reasonable
opinion of any holder of a Debenture or the Company fairly protect the
conversion rights granted by this Section 15 in accordance with the essential
intent and principles hereof, then, in each such case, upon the written request
of such holder or on its own motion, the Company shall appoint a firm of
independent certified public accountants of recognized national standing (which
may be the regular auditors of the Company) which shall give their opinion as to
the adjustment, if any, on a basis consistent with the essential intent and
principles established
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in this Section 15, necessary to preserve, without dilution, such conversion
rights. Upon receipt of such opinion, the Company will promptly mail a copy
thereof to the holder of each Debenture and shall make the adjustments or
increases described therein.
15.15. Continuing Obligation of the Company. The Company will,
at the time of conversion of any Debenture in full or in part, upon the request
of any holder thereof, acknowledge in writing its continuing obligation to
afford such holder any rights (including, without limitation, any right of
registration of the Conversion Shares) to which such holder shall continue to be
entitled after such conversion in accordance with the provisions of this
Agreement; provided, however, that if any such holder shall fail to make any
such request, such failure shall not affect the continuing obligation of the
Company to afford to such holder all such rights.
16. Registration, Transfer and Substitution of Debentures.
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16.1. Debenture Register; Ownership of Registered Debentures.
The Company will keep at its principal office a register in which the Company
will provide for the registration of Debentures and the registration of
transfers of Debentures. The Company may treat the Person in whose name any
Debenture is registered on such register as the owner and holder thereof for the
purpose of receiving payment of the principal of and the premium, if any, and
interest on such Debenture and for all other purposes, whether or not such
Debenture shall be overdue, and the Company shall not be affected by any notice
to the contrary. The Company may treat the Person in whose name any Stock is
registered in the stock transfer records of the Company as the owner and holder
thereof for the purpose of receiving dividends and other distributions thereon
and for all other purposes, and the Company shall not be affected by any notice
to the contrary.
16.2. Transfer and Exchange of Debentures. Upon surrender of
any Debenture for registration of transfer or for exchange to the Company at its
principal office with evidence that all applicable transfer taxes have been
paid, the Company at its expense will execute and deliver in exchange therefor a
new Debenture or Debentures in denominations of at least $100,000 (except one
(1) Debenture may be issued in a lesser principal amount if the unpaid principal
amount of the surrendered Debenture is not evenly divisible by, or is less than,
$100,000), as requested by the holder or transferee, which aggregate the unpaid
principal amount of such surrendered Debenture. Each such new Debenture shall be
registered in the name of such Person, or its nominee, as such holder or
transferee may request, dated so that there will be no loss of interest on such
surrendered Debenture and otherwise of like tenor.
16.3. Replacement of Debentures. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of any Debenture and, in the case of any such loss, theft or
destruction, upon delivery of an indemnity bond in such reasonable amount and
form as the Company may determine (or, in the case of any Debenture held by you
or another holder of Debentures, of an indemnity agreement from you or such
other holder reasonably satisfactory to the Company), or, in the case of any
such mutilation, upon the
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surrender of such Debenture for cancellation to the Company at its principal
office, the Company at its expense will execute and deliver, in lieu thereof, a
new Debenture of like tenor, dated so that there will be no loss of interest on
such lost, stolen, destroyed or mutilated Debenture. Any Debenture in lieu of
which any such new Debenture has been so executed and delivered by the Company
shall not be deemed to be an outstanding Debenture for any purpose of this
Agreement.
17. Payment.
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17.1. Form of Payment. Payments of interest becoming due and
payable on any Debenture shall be made by issuing to the holder thereof fully
paid and nonassessable shares of Common Stock in an amount determined by
multiplying the principal amount of the Debenture by eight and three-fourths
percent (8.75%) per annum (computed on the basis of a 360-day year of twelve
(12) 30-day months) and dividing the resulting product by the Applicable
Divisor. All amounts of principal due on any Debenture and any premium (whether
at Stated Maturity, upon acceleration or otherwise) shall be paid in cash in
U.S. dollars in immediately available funds to the account or accounts specified
by the holder of the Debenture.
17.2. Place of Payment.
-----------------
(a) Payments of interest becoming due and payable on
the Debentures shall be made by delivering a certificate or certificates for
shares of Common Stock in such denomination as the holder may request at the
address specified by such holder to the Company from time to time, by notice
pursuant to Section 23 hereof.
(b) Except as otherwise provided in Section 17.3,
payments of principal or premium, if any, becoming due and payable on the
Debentures shall be made at the principal office of the Company, provided,
however, that if at any time the Company does not maintain its principal office
in Rockville, Maryland, the Company, by written notice to each holder of any
Debentures, shall designate the principal office of any bank or trust company in
New York County, State of New York, as the office or agency where such payments
shall be made.
17.3. Home Office Payment. So long as you or your nominee
shall be the holder of any Debenture, and notwithstanding anything contained in
Section 17.2 or in such Debenture to the contrary, the Company will pay all sums
becoming due on such Debenture for principal, or premium, if any, in the manner
and at the address specified for such purpose in Schedule I attached hereto, or
in such other manner and at such other address as you shall have from time to
time specified to the Company in writing for such purpose, without the
presentation or surrender of such Debenture or the making of any notation
thereon, except that any Debenture so paid or redeemed or repurchased in full
shall, following such payment, redemption or repurchase, be surrendered to the
Company at its principal office or at the place of payment maintained by the
Company pursuant to Section 17.2 for cancellation. The Company agrees to afford
the benefits of this Section 17.3 to any holder which is the direct or indirect
transferee of any Debenture purchased by you under this Agreement.
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18. Events of Default; Acceleration.
18.1. Nature of Events and Acceleration of Debentures. Subject
to Section 18.5, if any of the following events ("Events of Default") shall
occur and be continuing for any reason whatsoever (and whether such occurrence
shall be voluntary or involuntary or come about or be effected by operation of
law or otherwise):
(a) any payment of principal or premium, if any, on
any Debenture is not made when and as such payment becomes due at
maturity, upon acceleration, redemption or repurchase, or otherwise;
(b) any payment of interest on any Debenture is not
made when and as such payment becomes due and payable, and such default
continues for a period of fifteen (15) days;
(c) the Company fails to comply with the
requirements for consolidation, merger or conveyance, transfer or lease
of all or substantially all of the Company's assets, as set forth in
either Section 12.6 or Section 13.1, as then applicable;
(d) the Company fails to comply with or perform any
of the then-applicable covenants or other agreements set forth in this
Agreement or the Debentures (other than a default specified in clause
(a), (b) or (c) above) or any other provision of this Agreement, and
such failure continues for a period of thirty (30) days after the
earlier of (1) the day on which a Responsible Officer of the Company
first obtains knowledge of such failure, or of the events or conditions
that constitute such failure or (2) the day on which written notice
thereof is given to the Company by the holder of any Debenture;
(e) any warranty or representation by or on behalf
of the Company contained in this Agreement or in any instrument
furnished in compliance with this Agreement is false or incorrect in
any material respect on the date as of which made;
(f) any "Event of Default" under (and as defined in)
either of the Senior Indentures shall have occurred and be continuing;
(g) there occurs with respect to any issue or issues
of Indebtedness of the Company or any Significant Subsidiary having an
outstanding principal amount of $2 million or more in the aggregate for
all such issues of all such Persons, whether such Indebtedness now
exists or shall hereafter be created, (I) an event of default that has
caused the holder thereof to declare such Indebtedness to be due and
payable prior to its Stated Maturity and such Indebtedness has not been
discharged in full or such
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acceleration has not been rescinded or annulled within thirty (30) days
of such acceleration and/or (II) the failure to make a principal
payment at the final (but not any interim) fixed maturity and such
defaulted payment shall not have been made, waived or extended within
thirty (30) days of such payment default;
(h) any final judgment or order (not covered by
insurance) for the payment of money in excess of $2 million in the
aggregate for all such final judgments or orders against all such
Persons (treating any deductibles, self-insurance or retention as not
so covered) shall be rendered against the Company or any Significant
Subsidiary and shall not be paid or discharged, and there shall be any
period of sixty (60) consecutive days following entry of the final
judgment or order that causes the aggregate amount for all such final
judgments or orders outstanding and not paid or discharged against all
such Persons to exceed $2 million during which a stay of enforcement of
such final judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect;
(i) the Company or any of its Significant
Subsidiaries shall commence a voluntary case under any chapter of the
Federal Bankruptcy Code, or shall consent to (or fail to contest within
ten (10) days) the commencement of an involuntary case against the
Company or any of its Subsidiaries under the Federal Bankruptcy Code;
(j) the Company or any Significant Subsidiary shall
institute proceedings for liquidation, rehabilitation, readjustment or
composition (or for any related or similar purpose) under any law
(other than the Federal Bankruptcy Code) relating to financially
distressed debtors, their creditors or property, or shall consent to
(or fail to contest within ten (10) days) the institution of any such
proceedings against the Company or any of its Subsidiaries;
(k) the Company or any of its Significant
Subsidiaries shall be insolvent (within the meaning of any applicable
law), or shall be unable, or shall admit in writing its inability, to
pay its debts generally as they come due, or shall make an assignment
for the benefit of creditors or enter into any arrangement for the
adjustment or composition of debts or claims;
(l) a court or other governmental authority or
agency having jurisdiction in the premises shall enter a decree or
order (i) for the appointment of a receiver, liquidator, assignee,
trustee or sequestrator (or other similar official) of the Company or
any of its Significant Subsidiaries or of any part of the property of
such Person, or for the winding-up or liquidation of the affairs of
such Person, and such decree or order shall remain in force and
undischarged and unstayed for a period of more than thirty (30) days,
or (ii) for the sequestration or attachment of any property of the
Company or any of its Significant Subsidiaries without its
unconditional return to the possession of such Person, or its
unconditional release from such sequestration or attachment, within
thirty (30) days thereafter;
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(m) a court having jurisdiction in the premises
shall enter an order for relief in an involuntary case commenced
against the Company or any of its Significant Subsidiaries under the
Federal Bankruptcy Code, and such order shall remain in force
undischarged and unstayed for a period of more than thirty (30) days;
(n) a court or other governmental authority or
agency having jurisdiction in the premises shall enter a decree or
order approving or acknowledging as properly filed or commenced against
the Company or any of its Significant Subsidiaries a petition or
proceedings for liquidation, rehabilitation, readjustment or
composition (or for any related or similar purpose) under any law
(other than the Federal Bankruptcy Code) relating to financially
distressed debtors, their creditors or property, and any such decree or
order shall remain in force and undischarged and unstayed for a period
of more than thirty (30) days; or
(o) the Company or any of its Significant
Subsidiaries shall take corporate action for the purpose or with the
effect of authorizing, acknowledging or confirming the taking or
existence of any action or condition specified in paragraph (i), (j) or
(k) above;
then, in the case of any such Event of Default referred to in clause (i), (j),
(k), (1), (m) or (n) of this Section 18.1, automatically, or, in the case of any
other such Event of Default, at the option of the holder or holders of not less
than twenty-five percent (25%) in aggregate principal amount of the Debentures
at the time Outstanding, exercised by written notice to the Company, the
Debentures, together with the interest accrued thereon, shall forthwith become
and be due and payable, without any other presentment, demand, protest or notice
of any kind, all of which are hereby expressly waived; provided, however, that
in the case of any Event of Default specified in clause (a) or (b) of this
Section 18.1, such option may be exercised by the holder of any Debenture by
written notice to the Company and such Debenture, together with interest accrued
thereon, shall in such case forthwith become and be due and payable, without any
other presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived.
18.2. Default Remedies. If an Event of Default exists, the
holder of any Debenture then outstanding may exercise any right, power or remedy
permitted to it by law, either by suit in equity or by action at law or both,
whether for specific performance of any covenant or agreement contained in this
Agreement or in aid of the exercise of any power granted in this Agreement, or
the holder of any Debenture may proceed to enforce payment of such Debenture or
to enforce any other legal or equitable right of the holder of such Debenture.
No course of dealing on the part of any holder of any Debenture or any delay or
failure on the part of any holder of any Debenture to exercise any right shall
operate as a waiver of such right or otherwise prejudice such holder's, or any
other holder's rights, powers and remedies. If an Event of Default exists, the
Company will pay to the holders of the Debentures, to the extent not prohibited
by law, such further amount as shall be sufficient to cover the cost and
expenses of collection or other proceedings, including, but not limited to,
reasonable attorneys' fees.
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18.3. Notice of Default. If any one (1) or more of the Events
of Default specified in Section 18.1 above shall occur, or if the holder of any
Debenture or of any other evidence of Indebtedness of the Company gives any
notice or takes any other action with respect to a claimed default, the Company
will forthwith give written notice thereof to all holders of Debentures then
Outstanding describing the notice or action and the nature of the claimed
default, including any Event of Default.
18.4. Annulment of Acceleration of Debentures. If notice is
delivered pursuant to Section 18.1 by any holder or holders of the requisite
principal amount of the Debentures, then and in every such case, the holders of
at least fifty-one percent (51%) in aggregate principal amount of the Debentures
then Outstanding may, by written instrument filed with the Company, rescind and
annul such declaration and the consequences thereof; provided, however, that at
the time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the
payment of any monies due pursuant to the Debentures or this Agreement;
(b) all arrears of principal and interest upon all
of the Debentures and all other sums payable under the Debentures and
under this Agreement (including costs and expenses of the holders
incurred in connection with such notice under Section 18.1 and the
exercise of remedies under Section 18.2, but excluding any principal,
interest or premium on the Debentures which has become due and payable
by reason of such notice under Section 18.1) shall have been duly paid;
and
(c) each and every other default and Event of
Default shall have been waived pursuant to Section 22 or otherwise made
good or cured;
and provided, further, that no such rescission and annulment shall extend to or
affect any subsequent default or Event of Default or impair any right consequent
thereon.
18.5. Accelerations and other Remedies Limited Prior to Senior Notes
Reduction Date. Notwithstanding anything in Sections 18.1 through Section 18.4
to the contrary, prior to the Senior Notes Reduction Date no holder of any
Debenture shall have the right to accelerate any payments on such Debenture or
exercise any other remedies or rights against the Company, any Guarantor or any
other Subsidiary of the Company arising from any Event of Default as defined
herein except for (i) the Events of Default specified in paragraph (i), (j),
(k), (l), (m) or (n) of Section 18.1, (ii) the Event of Default specified in
paragraph (h) of Section 18.1, provided that the applicable amount of any final
judgments or orders for the payment of money thereunder is at least $50 million,
or (iii) any Event of Default under paragraph (f) or (g) of this Agreement that
results in the acceleration of payment with respect to Indebtedness (other than
the Debentures) in the aggregate principal amount of at least $50 million.
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19. Interpretation of Agreement and Debentures.
Acquired Indebtedness: means Indebtedness of a Person existing
at the time such Person becomes a Restricted Subsidiary or assumed in connection
with an Asset Acquisition by a Restricted Subsidiary and not Incurred in
connection with, or in anticipation of, such Person becoming a Restricted
Subsidiary or such Asset Acquisition; provided that Indebtedness of such Person
which is redeemed, defeased, retired or otherwise repaid at the time of or
immediately upon consummation of the transactions by which such Person becomes a
Restricted Subsidiary or such Asset Acquisition shall not be Acquired
Indebtedness.
Acquirer's Common Stock: the meaning specified in Section
15.13(a).
Acquiring Company: the meaning specified in Section 15.13(a).
Adjusted Consolidated Net Income: means, for any period, the
aggregate net income (or loss) of the Company and its Restricted Subsidiaries
for such period determined in conformity with GAAP; provided that the following
items shall be excluded in computing Adjusted Consolidated Net Income (without
duplication): (i) the net income of any Person (other than net income
attributable to a Restricted Subsidiary) in which any Person (other than the
Company or any of its Restricted Subsidiaries) has a joint interest and the net
income of any Unrestricted Subsidiary, except to the extent of the amount of
dividends or other distributions actually paid to the Company or any of its
Restricted Subsidiaries by such other Person or such Unrestricted Subsidiary
during such period; (ii) solely for the purposes of calculating the amount of
Restricted Payments that may be made pursuant to clause (C) of the first
paragraph of Section 13.6 (and in such case, except to the extent includable
pursuant to clause (i) above), the net income (or loss) of any Person accrued
prior to the date it becomes a Restricted Subsidiary or is merged into or
consolidated with the Company or any of its Restricted Subsidiaries or all or
substantially all of the property and assets of such Person are acquired by the
Company or any of its Restricted Subsidiaries; (iii) any gains or losses (on an
after-tax basis) attributable to Asset Sales; (iv) except for purposes of
calculating the amount of Restricted Payments that may be made pursuant to
clause (C) of the first paragraph of Section 13.6, any amount paid or accrued as
dividends on Preferred Stock of the Company or any Restricted Subsidiary owned
by Persons other than the Company and any of its Restricted Subsidiaries; (v)
all extraordinary gains and extraordinary losses; and (vi) any net income of any
Guarantor that is designated an Unrestricted Subsidiary.
Adjusted Consolidated Net Tangible Assets: means the total
amount of assets of the Company and its Restricted Subsidiaries (less applicable
depreciation, amortization and other valuation reserves), except to the extent
resulting from write-ups of capital assets (excluding write-ups in connection
with accounting for acquisitions in conformity with GAAP), after deducting
therefrom (i) all current liabilities of the Company and its Restricted
Subsidiaries
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(excluding intercompany items) and (ii) all goodwill, trade names, trademarks,
patents, unamortized debt discount and expense and other like intangibles, all
as set forth on the most recent quarterly or annual consolidated balance sheet
of the Company and its Restricted Subsidiaries, prepared in conformity with GAAP
and filed with the Commission.
Affiliate: means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise. The term "Affiliate"
when used as a reference to an Affiliate of the Company or any of its
Subsidiaries shall not mean or refer to (i) BAe, BAC, PLC or any of their
Affiliates (exclusive of the Company or its Subsidiaries) or (ii) Matra, the
Lagardere Groupe SCA, MCN Sat US Inc., MCN Sat Service S.A., or any of their
Affiliates (exclusive of the Company or its Subsidiaries).
Agreements and Instruments: the meaning specified in Section
5.9.
Annual Report: the meaning specified in Section 5.5.
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Applicable Divisor: means (i) $14 provided that the average of
the Closing Price per share of the Common Stock for the 20 Trading Days (the
"Twenty Day Average") immediately prior to the date as of which the Applicable
Divisor is determined (the "Divisor Date") is greater than $12.80, (ii) the
Twenty Day Average, if $12.80 or less but greater than $10.21 at the Divisor
Date, or (iii) $10.21 if the Twenty Day Average is $10.21 or less, at the
Divisor Date. The initial Applicable Divisor thresholds amounts ($14, $12.80,
$10.21) and any amount to which such thresholds are adjusted, shall be
proportionately decreased in the event that the Company at any time subdivides
(by any stock split, stock dividend, recapitalization or otherwise) the
outstanding shares of Common Stock into a greater number of shares or
proportionately increased in the event that the Company at any time combines (by
reverse stock split, recapitalization or otherwise) the outstanding shares of
Common Stock into a smaller number of shares.
Applicable Law: means any Federal, state, local or foreign
statute, law, ordinance, governmental rule or regulation or any judgment,
decree, rule or order of any court or governmental agency or authority
applicable to the Company or any of its Subsidiaries or any of their respective
properties, assets or operations.
Article Tenth: the meaning specified in Section 5.28.
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Asset Acquisition: means (i) an investment by the Company or
any of its Restricted Subsidiaries in any other Person pursuant to which such
Person shall become a Restricted Subsidiary or shall be merged into or
consolidated with the Company or any of its Restricted Subsidiaries; provided
that such Person's primary business is related, ancillary or
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complementary to the businesses of the Company and its Restricted Subsidiaries
on the date of such investment or (ii) an acquisition by the Company or any of
its Restricted Subsidiaries of the property and assets of any Person other than
the Company or any of its Restricted Subsidiaries that constitute substantially
all of a division or line of business of such Person; provided that the property
and assets acquired are related, ancillary or complementary to the businesses of
the Company and its Restricted Subsidiaries on the date of such acquisition.
Asset Disposition: means the sale or other disposition by the
Company or any of its Restricted Subsidiaries (other than to the Company or
another Restricted Subsidiary) of (i) all or substantially all of the Capital
Stock of any Restricted Subsidiary of the Company or (ii) all or substantially
all of the assets that constitute a division or line of business of the Company
or any of its Restricted Subsidiaries.
Asset Sale: means any sale, transfer or other disposition
(including by way of merger, consolidation or sale-leaseback transaction) in one
transaction or a series of related transactions by the Company or any of its
Restricted Subsidiaries to any Person other than the Company or any of its
Restricted Subsidiaries of (i) all or any of the Capital Stock of any Restricted
Subsidiary, (ii) all or substantially all of the property and assets of an
operating unit or business of the Company or any of its Restricted Subsidiaries
or (iii) any other property and assets of the Company or any of its Restricted
Subsidiaries outside the ordinary course of business of the Company or such
Restricted Subsidiary and, in each case, that is not governed by the provisions
of this Agreement applicable to mergers, consolidations and sales of assets of
the Company; provided that "Asset Sale" shall not include (a) sales or other
dispositions of inventory, receivables and other current assets or (b) sales or
other dispositions of assets for consideration at least equal to the fair market
value of the assets sold or disposed of, provided that the consideration
received would be invested in assets that satisfy clause (B) of Section 13.11.
Average Life: means, at any date of determination with respect
to any debt security, the quotient obtained by dividing (i) the sum of the
products of (a) the number of years from such date of determination to the dates
of each successive scheduled principal payment of such debt security and (b) the
amount of such principal payment by (ii) the sum of all such principal payments.
BAC: British Aerospace Communications, Inc., a Delaware
corporation.
BAe: British Aerospace Holdings, Inc., a Delaware corporation.
Board of Directors: means the Board of Directors of the
Company or a committee consisting of one or more directors lawfully exercising
the relevant powers of the Board.
Board Resolution: means a resolution duly adopted by the Board
of Directors, a copy of which, certified by the Secretary or an Assistant
Secretary of the Company to have been
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duly adopted by the Board of Directors and to be in full force and effect on the
date of such certification, shall have been delivered to each holder of
Debentures.
Business Day: means any day other than a Saturday, Sunday or
any other day on which commercial banks are authorized by law to be closed in
New York City or the District of Columbia.
Capital Stock: means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) in equity of such Person, whether now outstanding
or issued after the Closing Date, including, without limitation, all series and
classes of common stock and Preferred Stock.
Capitalized Lease: means, as applied to any Person, any lease
of any property (whether real, personal or mixed) of which the discounted
present value of the rental obligations of such Person as lessee, in conformity
with GAAP, is required to be capitalized on the balance sheet of such Person;
and "Capitalized Lease Obligations" means the discounted present value of the
rental obligations under such lease.
Change of Control: occurs when any "Person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act), is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have beneficial ownership of all shares
that any such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time) directly or indirectly, of a
majority in the aggregate of the total voting power of the Voting Stock of the
Company, whether as a result of issuance of securities of the Company, market or
private purchases, any merger, consolidation, liquidation or dissolution of the
Company, or otherwise.
Change of Control Period: means the ninety (90) day period
commencing on the date a Change of Control occurs; provided, however, that no
Change of Control Period may commence prior to the Senior Notes Reduction Date.
A Change of Control effected by a Purchaser or any of such Purchaser's
Affiliates shall not commence a Change of Control Period with respect to that
Purchaser and any of such Purchaser's Affiliates for purposes of Section 11.3 of
the Agreement.
Closing: the meaning specified in Section 2.
Closing Date: the meaning specified in Section 2.
Closing Price: means, with respect to each share of Common
Stock or other security, for any day, the reported last sales price regular way
per share or, in case no such reported sale takes place on such day, the average
of the reported closing bid and asked prices regular way, in either case (i) on
the New York Stock Exchange as reported in The Wall
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Street Journal (or other similar newspaper) for New York Stock Exchange
Composite Transactions or, if the Common Stock or other security is not listed
or admitted to trading on such Exchange, on the principal (as determined by the
Company's Board of Directors) national securities exchange on which the Common
Stock or other security is listed or admitted to trading or (ii) if not listed
or admitted to trading on any national securities exchange, on the Nasdaq
National Market, or, if the Common Stock or other security is not listed or
admitted to trading on any national securities exchange or quoted on the Nasdaq
National Market, the average of the closing bid and asked prices in the
over-the-counter market as furnished by any New York Stock Exchange member firm
selected from time to time by the Company for that purpose. If no such prices
are available, the Closing Price per share of Common Stock shall be the fair
value of a share as determined in good faith by the Board of Directors of the
Company.
Code: means the Internal Revenue Code of 1986, as amended from
time to time and the rules and regulations promulgated thereunder from time to
time.
Commission: means the Securities and Exchange Commission or
any other Federal agency at the time administering the Securities Act.
Common Stock: means the Common Stock, $.01 par value per
share, of the Company, any stock into which such Common Stock shall have been
changed or any stock resulting from any capital reorganization or
reclassification of such Common Stock, and all other stock of any class or
classes (however designated) of the Company the holders of which have the right,
without limitation as to amount, either to all or to a share of the balance of
current dividends and liquidating dividends after the payment of dividends and
distributions of any shares entitled to preference.
Communications Laws: the meaning specified in Section 5.14.
Company: the meaning specified in the first paragraph of the
Agreement.
Company Notice: the meaning specified in Section 11.5(a).
Company Notice Expiration Date: the meaning specified in
Section 11.5(a).
Consolidated EBITDA: means, for any period, the sum of the
amounts for such period of (i) Adjusted Consolidated Net Income, (ii)
Consolidated Interest Expense, to the extent such amount was deducted in
calculating Adjusted Consolidated Net Income, (iii) income taxes, to the extent
such amount was deducted in calculating Adjusted Consolidated Net Income (other
than income taxes (either positive or negative) attributable to extraordinary
and non-recurring gains or losses or sales of assets), (iv) depreciation
expense, to the extent such amount was deducted in calculating Adjusted
Consolidated Net Income, (v) amortization expense, to the extent such amount was
deducted in calculating Adjusted Consolidated Net Income, and (vi) all other
non-cash items reducing Adjusted Consolidated Net Income (other than items that
will require cash payments and for which an accrual or reserve is, or is
required by GAAP to be,
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made), less all non-cash items increasing Adjusted Consolidated Net Income, all
as determined on a consolidated basis for the Company and its Restricted
Subsidiaries in conformity with GAAP.
Consolidated Interest Expense: means, for any period, the
aggregate amount of interest in respect of Indebtedness (including, without
limitation, amortization of original issue discount on any Indebtedness and the
interest portion of any deferred payment obligation, calculated in accordance
with the effective interest method of accounting; all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing; the net costs associated with Interest Rate Agreements;
and Indebtedness that is Guaranteed or secured by the Company or any of its
Restricted Subsidiaries) and all but the principal component of rentals in
respect of Capitalized Lease Obligations paid, accrued or scheduled to be paid
or to be accrued by the Company and its Restricted Subsidiaries during such
period; excluding, however, any premiums, fees and expenses (and any
amortization thereof) payable in connection with the offering of the Debentures,
all as determined on a consolidated basis (without taking into account
Unrestricted Subsidiaries) in conformity with GAAP.
Consolidated Leverage Ratio: means, on any Transaction Date,
the ratio of (i) the aggregate amount of Indebtedness of the Company and its
Restricted Subsidiaries on a consolidated basis outstanding on such Transaction
Date to (ii) the aggregate amount of Consolidated EBITDA for the then most
recent four fiscal quarters for which financial statements of the Company have
been filed with the Commission (such four fiscal quarter period being the "Four
Quarter Period"); provided that (A) pro forma effect shall be given to (x) any
Indebtedness Incurred from the beginning of the Four Quarter Period through the
Transaction Date (the "Reference Period"), to the extent such Indebtedness is
outstanding on the Transaction Date and (y) any Indebtedness that was
outstanding during such Reference Period but that is not outstanding or is to be
repaid on the Transaction Date; (B) pro forma effect shall be given to Asset
Dispositions and Asset Acquisitions (including giving pro forma effect to the
application of proceeds of any Asset Disposition) that occur during such
Reference Period, as if they had occurred and such proceeds had been applied on
the first day of such Reference Period; and (C) pro forma effect shall be given
to asset dispositions and asset acquisitions (including giving pro forma effect
to the application of proceeds of any asset disposition) that have been made by
any Person that has become a Restricted Subsidiary or has been merged with or
into the Company or any Restricted Subsidiary during such Reference Period and
that would have constituted Asset Dispositions or Asset Acquisitions had such
transactions occurred when such Person was a Restricted Subsidiary as if such
asset dispositions or asset acquisitions were Asset Dispositions or Asset
Acquisitions that occurred on the first day of such Reference Period; provided
that to the extent that clause (B) or (C) of this sentence requires that pro
forma effect be given to an Asset Acquisition or Asset Disposition, such pro
forma calculation shall be based upon the four full fiscal quarters immediately
preceding the Transaction Date of the Person, or division or line of business of
the Person, that is acquired or disposed for which financial information is
available.
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Consolidated Net Worth: means, at any date of determination,
stockholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of the Company and its Restricted Subsidiaries
(which shall be as of a date not more than 90 days prior to the date of such
computation, and which shall not take into account Unrestricted Subsidiaries),
less any amounts attributable to Disqualified Stock or any equity security
convertible into or exchangeable for Indebtedness, the cost of treasury stock
and the principal amount of any promissory notes receivable from the sale of the
Capital Stock of the Company or any of its Restricted Subsidiaries, each item to
be determined in conformity with GAAP (excluding the effects of foreign currency
exchange adjustments under Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 52).
Consummation Date: the meaning specified in Section 15.13(a).
-----------------
Conversion Rate: the meaning specified in Section 15.1.
---------------
Conversion Shares: the shares of Common Stock to be received
upon conversion of any Debenture as provided in Section 15.
Converted Debenture Portion: the meaning specified in Section
11.5(a).
Convertible Securities means any stock or other securities of
the Company convertible into or exchangeable for Common Stock.
Currency Agreement: means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect the Company or any of its Restricted Subsidiaries against fluctuations
in currency values to or under which the Company or any of its Restricted
Subsidiaries is a party or a beneficiary on the Closing Date or becomes a party
or a beneficiary thereafter.
Debentures: the meaning specified in Section 1.1.
----------
Debenture Payment: the meaning specified in Section 14.2.
-----------------
Decision Period: the meaning specified in Section 11.5(a).
---------------
Dilutive Event: the meaning specified in Section 15.5(1).
-------------
Disqualified Stock: means any class or series of Capital Stock
of any Person that by its terms or otherwise is (i) required to be redeemed
prior to the Stated Maturity of the Debentures, (ii) redeemable at the option of
the holder of such class or series of Capital Stock at any time prior to the
Stated Maturity of the Debentures or (iii) convertible into or exchangeable for
Capital Stock referred to in clause (i) or (ii) above or Indebtedness having a
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scheduled maturity prior to the Stated Maturity of the Debentures; provided,
that any Capital Stock that would not constitute Disqualified Stock but for
provisions hereof giving holders thereof the right to require such Person to
repurchase or redeem such Capital Stock upon the occurrence of a "change of
control" occurring prior to the Stated Maturity of the Debentures shall not
constitute Disqualified Stock if the "change of control" provisions applicable
to such Capital Stock are no more favorable to the holders of such Capital Stock
than the provisions contained in Section 11.3 and such Capital Stock
specifically provides that such Person will not repurchase or redeem any such
stock pursuant to such provision prior to the Company's repurchase of such
Debentures as are required to be repurchased pursuant to Section 11.3.
Documents: means all documents delivered in connection with
the transactions contemplated by this Agreement, including without limitation,
the Debentures, the Subsidiary Guarantee and the Registration Rights Agreement,
collectively, or each of such documents singularly, and any documents or
instruments contemplated by or executed in connection with any of them or any of
the transactions contemplated hereby or thereby.
ERISA: means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the rules and regulations promulgated
thereunder from time to time in effect.
ERISA Affiliate: any trade or business (whether or not
incorporated) that is treated as a single employer together with either ONS or
the Company under Section 414 of the Code.
Environmental Laws: the meaning specified in Section 5.13
------------------
Event of Default: the meaning specified in Section 18.1.
Exchange Act: the Securities Exchange Act of 1934, as amended,
or any similar Federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
Exchange Agreement: the Section 351 Exchange Agreement and
Plan Conversion dated as of June 1996, as amended, between and among Orion
Atlantic, ONS, Orion Satellite Corporation, BAC, COM DEV Satellite
Communications Limited, Kingston Communications Limited, Lockheed Xxxxxx
Commercial Launch Services, Inc., MCN SAT U.S., Inc. and Trans- Atlantic
Satellite, Inc., pursuant to which each of the Exchanging Partners (as defined
therein) will transfer their limited partnership interests in Orion Atlantic to
the Company in exchange for shares of Series C Preferred Stock.
Excluded Issuance: means the issue or sale of (i) shares of
Common Stock by the Company pursuant to the exercise of Options and Convertible
Securities outstanding immediately prior to the Closing Date at exercise prices
that are greater than or equal to the respective exercise prices in effect as of
the Closing Date (as adjusted pursuant to the terms of such
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securities to give effect to stock dividends or stock splits or a combination of
shares in connection with a recapitalization, merger, consolidation or other
reorganization occurring after the Closing Date), (ii) up to an aggregate of one
hundred and fifty thousand (150,000) shares of Common Stock by the Company for
any purpose, (iii) Options to acquire Common Stock by the Company pursuant to a
resolution of, or a stock option plan approved by a resolution of, the Board of
Directors of the Company (or the compensation committee thereof) to the
Company's employees or directors, and (iv) shares of Common Stock, Options or
Convertible Securities (or shares of Common Stock pursuant to the exercise of
Options and Convertible Securities) as part of or in connection with the
Financing Transaction.
Execution Date: means the date on which the Agreement is
executed by the parties.
Expiration Time: the meaning specified in Section 15.4(6).
---------------
fair market value: means the price that would be paid in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to buy,
as determined in good faith by the Board of Directors, whose determination shall
be conclusive if evidenced by a Board Resolution.
Federal Bankruptcy Code: Xxxxx 00, Xxxxxx Xxxxxx Code.
-----------------------
Financing Transaction: means offer and sale by the Company of
the Senior Notes in an underwritten public offering registered with the
Commission or in a private placement transaction that results in the Company
receiving cash proceeds in the minimum amount of $225,000,000, after deduction
of all escrowed amounts, underwriting commissions, fees and expenses.
FCC: the Federal Communications Commission.
---------------
Four Quarter Period: the meaning specified in Section 19.1.
-------------------
GAAP: means generally accepted accounting principles in the
United States of America as in effect as of the Closing Date, including, without
limitation, those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession. All ratios and computations contained or referred
to in this Agreement or the Debentures shall be computed in conformity with GAAP
applied on a consistent basis, except that calculations made for purposes of
determining compliance with the terms of the covenants and with other provisions
of this Agreement or the Debentures shall be made without giving effect to (i)
the amortization of any expenses incurred in connection with the offering of the
Debentures and (ii) except as otherwise provided, the amortization of any
amounts required or permitted by Accounting Principles Board Opinion Nos. 16 and
17.
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Government Securities: means direct obligations of,
obligations fully guaranteed by, or participations in pools consisting solely of
obligations of or obligations guaranteed by, the United States of America for
the payment of which guarantee or obligations the full faith and credit of the
United States of America is pledged and which are not callable or redeemable at
the option of the issuer thereof.
Governmental Authority:
-----------------------
(a) the government of
(i) the United States of America or any State or
other political subdivi- sion thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or which
asserts jurisdiction over any properties of the Company or any
Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
Governmental Licenses: the meaning specified in Section 5.12.
---------------------
Guarantee: means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation of such other Person (whether
arising by virtue of partnership arrangements, or by agreements to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for purposes
of assuring in any other manner the obligee of such Indebtedness or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided that the term "Guarantee" shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
Guarantors: collectively, means (i) the Subsidiaries of the
Company that execute the Subsidiary Guarantee attached hereto as Exhibit B; and
(ii) any other Person that subsequently Guarantees the Company's obligations
under the Debentures pursuant to Section 12.8 or 13.8; provided that any Person
that becomes an Unrestricted Subsidiary in compliance with Section 13.5 shall
not be included in "Guarantors" after becoming an Unrestricted Subsidiary.
Hazardous Materials: the meaning specified in Section 5.13.
-------------------
-72-
holder: means with respect to any Debenture, the Person in
whose name such Debenture is registered in the register maintained by the
Company pursuant to Section 16.1.
"Holder Notice": the meaning specified in Section 11.5(a).
HSR Act: means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended to date.
HSR Suspension Period: the meaning specified in Section
11.5(c).
Incur: means, with respect to any Indebtedness, to incur,
create, issue, assume, Guarantee or otherwise become liable for or with respect
to, or become responsible for, the payment of, contingently or otherwise, such
Indebtedness, including an "Incurrence" of Indebtedness by reason of a Person
becoming a Restricted Subsidiary of the Company; provided that neither the
accrual of interest nor the accretion of original issue discount shall be
considered an Incurrence of Indebtedness.
Indebtedness: means, with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto, but excluding obligations with
respect to letters of credit (including trade letters of credit) securing
obligations (other than obligations described in (i) or (ii) above or (v), (vi)
or (vii) below) entered into in the ordinary course of business of such Person
to the extent such letters of credit are not drawn upon or, if drawn upon, to
the extent such drawing is reimbursed no later than the third Business Day
following receipt by such Person of a demand for reimbursement), (iv) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services, which purchase price is due more than six months after the
date of placing such property in service or taking delivery and title thereto or
the completion of such services, except Trade Payables, (v) all obligations of
such Person as lessee under Capitalized Leases, (vi) all Indebtedness of other
Persons secured by a Lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person; provided that the amount of such
Indebtedness shall be the lesser of (A) the fair market value of such asset at
such date of determination and (B) the amount of such Indebtedness, (vii) all
Indebtedness of other Persons Guaranteed by such Person to the extent such
Indebtedness is Guaranteed by such Person and (viii) to the extent not otherwise
included in this definition, obligations under Currency Agreements and Interest
Rate Agreements. The amount of Indebtedness of any Person at any date shall be
the outstanding balance at such date of all unconditional obligations as
described above and, with respect to contingent obligations, the maximum
liability upon the occurrence of the contingency giving rise to the obligation,
provided (A) that the amount outstanding at any time with respect to any
Indebtedness issued with original issue discount is the original issue price of
such Indebtedness, (B) Permitted Customer Advances and any money borrowed, at
the time of the Incurrence of any Indebtedness, in order to pre-fund the payment
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of interest on such Indebtedness, shall be deemed not to be "Indebtedness" and
(C) that Indebtedness shall not include any liability for federal, state, local
or other taxes.
Insolvency Proceeding: the meaning specified in Section 14.7.
--------------------- Interest Rate Agreement: means any interest rate swap
agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect the Company or any Restricted Subsidiary against
fluctuations in interest rates.
Interest Shares: means the shares of Common Stock to be
received by the holders of the Debentures as interest in accordance with the
terms of the Debentures and this Agreement.
Investment: in any Person means any direct or indirect
advance, loan or other extension of credit (including, without limitation, by
way of Guarantee or similar arrangement; but excluding advances to customers in
the ordinary course of business that are, in conformity with GAAP, recorded as
accounts receivable on the balance sheet of the Company or its Restricted
Subsidiaries) or capital contribution to (by means of any transfer of cash or
other property to others or any payment for property or services for the account
or use of others), or any purchase or acquisition of Capital Stock, bonds,
notes, debentures or other similar instruments issued by, such Person and shall
include (i) the designation of a Restricted Subsidiary as an Unrestricted
Subsidiary and (ii) the fair market value of the Capital Stock (or any other
Investment), held by the Company or any of its Restricted Subsidiaries, of (or
in) any Person that has ceased to be a Restricted Subsidiary, including without
limitation, by reason of any transaction permitted by clause (iii) of Section
13.7. For purposes of the definition of "Unrestricted Subsidiary" and Section
13.6, (i) "Investment" shall include the fair market value of the assets (net of
liabilities (other than liabilities to the Company or any of its Subsidiaries))
of any Restricted Subsidiary at the time that such Restricted Subsidiary is
designated an Unrestricted Subsidiary, (ii) the fair market value of the assets
(net of liabilities (other than liabilities to the Company or any of its
Subsidiaries)) of any Unrestricted Subsidiary at the time that such Unrestricted
Subsidiary is designated a Restricted Subsidiary shall be considered a reduction
in outstanding Investments and (iii) any property transferred to or from an
Unrestricted Subsidiary shall be valued at its fair market value at the time of
such transfer.
Investment Company Act: the meaning specified in Section 5.23.
----------------------
ITU: the International Telecommunication Union.
---
Junior Securities: the meaning specified in Section 14.9.
-----------------
Lien: means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including, without limitation, any
conditional sale or other title retention agreement or lease in the nature
thereof or any agreement to give any security interest).
Mandatory Sale: the meaning specified in Section 11.4.
--------------
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Mandatory Sale Date: the meaning specified in Section 11.4(a).
-------------------
Mandatory Sale Price: the meaning specified in Section 11.4.
--------------------
Market Price: the meaning specified in Section 15.5(6).
------------
Material: means material in relation to the business,
operations, affairs, financial condition, assets, or properties of the Company,
ONS and the Subsidiaries taken as a whole.
Material Adverse Effect: means a material adverse effect on
the properties, business, operations, earnings, assets, liabilities or financial
condition of the Company, ONS and the Subsidiaries, taken as a whole, or on the
ability of the Company, ONS or the Subsidiaries to perform their respective
obligations under this Agreement, the Debentures or any of the other Documents.
Matra: Matra Marconi Space UK Limited, a company organized and
existing under the laws of England and Wales.
Merger Documents: means (a) the Agreement and Plan of Merger
of Orion Merger Company, Inc. ("SUB") with and into ONS, by and among SUB, ONS
and the Company, and (b) the Certificate of Merger of SUB with and into ONS.
Merger Transaction: means the transaction described in the
Registration Statement and the Merger Documents pursuant to which outstanding
shares of the common stock and Preferred Stock of ONS are exchanged for shares
of the Common Stock and Preferred Stock of the Company on a one-for-one basis
and pursuant to which ONS shall become a wholly-owned subsidiary of the Company.
Moody's: means Xxxxx'x Investors Service, Inc. and its
successors.
Xxxxxx: the meaning specified in Section 4.1.
------
Multiemployer Plan: means any Plan which constitutes a
"multiemployer plan" (as such term is defined in Section 4001(a)(3) of ERISA).
Net Cash Proceeds: means, (a) with respect to any Asset Sale,
the proceeds of such Asset Sale in the form of cash or cash equivalents,
including payments in respect of deferred payment obligations (to the extent
corresponding to the principal, but not interest, component thereof) when
received in the form of cash or cash equivalents (except to the extent such
obligations are financed or sold with recourse to the Company or any Restricted
Subsidiary) and proceeds from the conversion of other property received when
converted to cash or cash equivalents, net of (i) brokerage commissions and
other fees and expenses (including fees and expenses of counsel and investment
bankers) related to such Asset Sale, (ii) provisions for all
-75-
taxes (whether or not such taxes will actually be paid or are payable) as a
result of such Asset Sale without regard to the consolidated results of
operations of the Company and its Restricted Subsidiaries, taken as a whole,
(iii) payments made to repay Indebtedness or any other obligation outstanding at
the time of such Asset Sale that either (A) is secured by a Lien on the property
or assets sold or (B) is required to be paid as a result of such sale and (iv)
appropriate amounts to be provided by the Company or any Restricted Subsidiary
of the Company as a reserve against any liabilities associated with such Asset
Sale, including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to compliance with Environmental Laws and other
environmental matters and liabilities under any indemnification obligations
associated with such Asset Sale, all as determined in conformity with GAAP and
(b) with respect to any issuance or sale of Capital Stock, the proceeds of such
issuance or sale in the form of cash or cash equivalents, including payments in
respect of deferred payment obligations (to the extent corresponding to the
principal, but not interest, component thereof) when received in the form of
cash or cash equivalents (except to the extent such obligations are financed or
sold with recourse to the Company or any Restricted Subsidiary of the Company)
and proceeds from the conversion of other property received when converted to
cash or cash equivalents, net of attorney's fees, accountants' fees,
underwriters' or placement agents' fees, discounts or commissions and brokerage,
consultant and other fees incurred in connection with such issuance or sale and
net of taxes paid or payable as a result thereof.
Officers' Certificate: means a certificate signed by the
Chairman of the Board, a Vice Chairman of the Board, the Chief Executive
Officer, the President or a Vice President and by the Chief Financial Officer,
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary
of the Company. One of the officers signing an Officers' Certificate shall be
the principal executive, financial or accounting officer of the Company.
ONS: Orion Network Systems, Inc., a Delaware corporation.
---
ONS Common Stock: the meaning specified in Section 5.2(a).
----------------
ONS Preferred Stock: the meaning specified in Section 5.2(a).
-------------------
ONS Series A Preferred Stock: the meaning specified in Section
5.2(a).
ONS Series B Preferred Stock: the meaning specified in Section
5.2(a).
Options: means any options, warrants or rights to subscribe
for or to purchase Common Stock or any Convertible Securities.
Orion Atlantic: International Private Satellite Partners,
L.P., a Delaware limited partnership.
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Orion 2 and Orion 3: mean, respectively, each of the first two
(2) satellites with respect to which the company has a Successful Launch after
the Closing Date, and any replacement for either of such satellites.
Other Securities: means any stock (other than Common Stock)
and other securities of the Company or any other Person (corporate or otherwise)
which the holders of the Debentures at any time shall be entitled to receive, or
shall have received, upon the conversion of the Debentures, in lieu of or in
addition to Common Stock, or which at any time shall be issuable or shall have
been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 15.13 or otherwise.
Outstanding: means when used with respect to Debentures or
Senior Notes means, as the case may be, as of the date of determination, all
Debentures theretofore delivered under this Agreement, or Senior Notes delivered
under the Senior Indentures, except:
(i) Debentures, or Senior Notes, theretofore canceled by the
Company or delivered to the Company for cancellation;
(ii) Debentures, or Senior Notes, for the payment or
redemption of which money in the necessary amount has been set aside
and segregated in trust by the Company for the holders of such
Debentures, or Senior Notes, provided that if such Debentures, or
Senior Notes, are to be redeemed, notice of such redemption has been
duly given pursuant to this Agreement, or Senior Indentures, as the
case may be;
(iii) Senior Notes owned by the Company or any Affiliate of
the Company, or BAe, BAC, PLC or any of their Affiliates, or Matra or
any of its Affiliates; and
(iv) Debentures that have been converted in accordance with
Section 15;
provided, however, that in determining whether the holders of the requisite
principal amount of Debentures have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Debentures owned by the Company
or any other obligor upon the Debentures or any Subsidiary or Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding.
Outstanding on an As-Converted Basis immediately before the
Dilutive Event: the meaning specified in Section 15.5(1).
Payment Blockage Period: the meaning specified in Section
14.3.
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PBGC: means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA or any successor thereto.
Permitted Customer Advances: means obligations of the Company
or any Restricted Subsidiary to repay money received by the Company or such
Restricted Subsidiary from customers as bona fide prepayment for services to be
provided by, or purchases to be made from, the Company or such Restricted
Subsidiary.
Permitted Investment: means (i) an Investment in the Company
or a Restricted Subsidiary or a Person which will, upon the making of such
Investment, become a Restricted Subsidiary or be merged or consolidated with or
into or transfer or convey all or substantially all its assets to, the Company
or a Restricted Subsidiary; provided that such person's primary business is
related, ancillary or complementary to the businesses of the Company and its
Restricted Subsidiaries on the date of such Investment; (ii) Temporary Cash
Investments; (iii) payroll, travel and similar advances to cover matters that
are expected at the time of such advances ultimately to be treated as expenses
in accordance with GAAP; and (iv) stock, obligations or securities received in
satisfaction of judgments.
Permitted Liens: means (i) Liens for taxes, assessments,
governmental charges or claims that are being contested in good faith by
appropriate legal proceedings promptly instituted and diligently conducted and
for which a reserve or other appropriate provision, if any, as shall be required
in conformity with GAAP shall have been made; (ii) statutory and common law
Liens of landlords and carriers, warehousemen, mechanics, suppliers,
materialmen, repairmen or other similar Liens arising in the ordinary course of
business and with respect to amounts not yet delinquent or being contested in
good faith by appropriate legal proceedings promptly instituted and diligently
conducted and for which a reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP shall have been made; (iii) Liens
incurred or deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security; (iv) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory or regulatory obligations, bankers'
acceptances, surety and appeal bonds, government contracts, performance and
return-of-money bonds and other obligations of a similar nature incurred in the
ordinary course of business (exclusive of obligations for the payment of
borrowed money); (v) easements, rights-of-way, municipal and zoning ordinances
and similar charges, encumbrances, title defects or other irregularities that do
not materially interfere with the ordinary course of business of the Company or
any of its Restricted Subsidiaries; (vi) Liens (including extensions and
renewals thereof) upon real or personal property acquired after the Closing
Date; provided that (a) such Lien is created solely for the purpose of securing
Indebtedness Incurred, in accordance with Section 13.5, (1) to finance the cost
(including the cost of improvement, launch (in the case of property that is a
satellite), insurance (in the case of property that is a satellite), development
and design, installation or construction) of the item of property or assets
subject thereto and such Lien is created prior to, at the time of or within six
(6) months after the later of the acquisition, the completion of construction or
the commencement of full operation of such property or (2)
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to refinance any Indebtedness previously so secured, (b) the principal amount of
the Indebtedness secured by such Lien does not exceed one hundred percent (100%)
of such cost, (c) any Lien permitted by this clause shall not extend to or cover
any property or assets other than such item of property or assets and any
improvements on such item and (d) such Liens may not relate to Orion 2 or Orion
3; (vii) leases or subleases granted to others that do not materially interfere
with the ordinary course of business of the Company and its Restricted
Subsidiaries, taken as a whole; (viii) Liens encumbering property or assets
under construction arising from progress or partial payments by a customer of
the Company or its Restricted Subsidiaries relating to such property or assets;
(ix) any interest or title of a lessor in the property subject to any
Capitalized Lease or operating lease; (x) Liens arising from filing Uniform
Commercial Code financing statements regarding leases; (xi) Liens on property
of, or on shares of Capital Stock or Indebtedness of, any Person existing at the
time such Person becomes, or becomes a part of, any Restricted Subsidiary;
provided that such Liens do not extend to or cover any property or assets of the
Company or any Restricted Subsidiary other than the property or assets acquired;
(xii) Liens in favor of the Company or any Restricted Subsidiary; (xiii) Liens
arising from the rendering of a final judgment or order against the Company or
any Restricted Subsidiary of the Company that does not give rise to an Event of
Default; (xiv) Liens securing reimbursement obligations with respect to letters
of credit that encumber documents and other property relating to such letters of
credit and the products and proceeds thereof; (xv) Liens in favor of customs and
revenue authorities arising as a matter of law to secure payment of customs
duties in connection with the importation of goods; (xvi) Liens encumbering
customary initial deposits and margin deposits, and other Liens that are within
the general parameters customary in the industry and incurred in the ordinary
course of business, in each case, securing Indebtedness under Interest Rate
Agreements and Currency Agreements and forward contracts, options, future
contracts, futures options or similar agreements or arrangements designed solely
to protect the Company or any of its Restricted Subsidiaries from fluctuations
in interest rates, currencies or the price of commodities; (xvii) Liens arising
out of conditional sale, title retention, consignment or similar arrangements
for the sale of goods entered into by the Company or any of its Restricted
Subsidiaries in the ordinary course of business in accordance with the past
practices of the Company and its Restricted Subsidiaries prior to the Closing
Date; (xviii) Liens on or sales of receivables; (xix) Liens on amounts of money
or Temporary Cash Investments that each represent bona fide prepayments of at
least $5 million on agreements for the long-term sale or lease of capacity on
any satellite owned by the Company or a Restricted Subsidiary, but only to the
extent that the amount of money or Temporary Cash Investments subject to any
such Lien does not exceed the amount of such prepayment and reasonable interest
thereon; and (xx) Liens encumbering contracts between the Company or any
Restricted Subsidiary and any third party customer relating to the use of a VSAT
owned by the Company or any Restricted Subsidiary but only if, and so long as,
the Indebtedness secured by any such Lien is also secured by a Lien permitted
under clause (vi) of this definition encumbering such VSAT.
Person: means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
-79-
Plan: means an "employee benefit plan" (as defined in Section
3(3) of ERISA) which is or has been established or maintained, or to which
contributions are or have been made or are required to be made, by the Company,
ONS or any ERISA Affiliate.
PLC: British Aerospace Plc, a company organized and existing
under the laws of England and Wales.
Potential Event of Default: means an event or condition which,
with notice or lapse of time or both, would become an Event of Default.
Preferred Stock: as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
Proceeding: the meaning specified in Section 14.2.
----------
Purchased Shares: the meaning specified in Section 15.4(6).
----------------
Purchaser: means either BAe or Matra (or any Affiliate of BAe
or Matra substituted as a purchaser of Debentures pursuant to Section 24) and
Purchasers means BAe and Matra or any such Affiliate.
PUC: the meaning specified in Section 5.11.
---
Redemption Date: means when used with respect to any Debenture
to be redeemed, means the date fixed for such redemption by or pursuant to this
Agreement.
Redemption Indebtedness: means Indebtedness of the Company
which is by its terms expressly subordinated in right of payment of the
Debentures and is incurred for the sole purpose of financing the redemption,
repurchase or acquisition of shares of Series A Preferred Stock or Series B
Preferred Stock.
Redemption Price: when used with respect to any Debenture to
be redeemed, means the price at which it is to be redeemed pursuant to this
Agreement.
Reference Period: the meaning specified in Section 19.1
----------------
Registration Statement: means the registration statement of
the Company on Form S-4 filed with the Commission in connection with the Merger
Transaction, including the proxy statement and the prospectus contained therein,
all exhibits thereto and all material incorporated by reference therein.
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Reorganization Transaction: the meaning specified in Section
15.13(a).
Repayment Event: the meaning specified in Section 5.9.
---------------
Repurchase Date: the meaning specified in Section 11.3 (b).
Repurchase Price: the meaning specified in Section 11.3 (b).
Responsible Officer: shall mean the President, Chief Executive
Officer or Chief Financial Officer of the Company.
Restricted Payments: the meaning specified in Section 13.6.
Restricted Subsidiary: means any Subsidiary of the Company
other than an Unrestricted Subsidiary.
S&P: means Standard & Poor's Ratings Group and its successors.
---
Scheduled Closing Date: the meaning specified in Section
4.14(b).
Securities Act: means the Securities Act of 1933, as amended,
or any similar Federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
Senior Indebtedness: means Indebtedness (including, without
limitation the Senior Notes) unless, in the instrument creating or evidencing
the same or pursuant to which the same is outstanding, it is provided that such
obligations are pari passu or junior or subordinate in right of payment to the
Debentures; provided, however, that Senior Indebtedness shall not be deemed to
include (1) any obligation of the Company to any Subsidiary, (2) any liability
for federal, state, local or other taxes owed or owing by the Company, (3) any
accounts payable or other liability to trade creditors arising in the ordinary
course of business (including guarantees thereof or instruments evidencing such
liabilities), (4) any indebtedness, guarantee or obligation of the Company which
is subordinate or junior in any respect to any other indebtedness, guarantee or
obligation of Company (including, without limitation, the Debentures), or (5)
the portion of any Indebtedness issued in violation of this Agreement.
Senior Indentures: means the indentures governing the Senior
Notes as originally executed or as amended or supplemented from time to time.
Senior Nonmonetary Default: the meaning specified in Section
14.3.
Senior Notes: means the Senior Unsecured Overfunded Cash Pay
Notes and the Senior Unsecured Discount Notes.
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Senior Notes Reduction Date: means the first date after the
Closing on which the aggregate principal amount of Senior Notes Outstanding is
less than $50,000,000.
Senior Payment Default: the meaning specified in Section 14.3.
----------------------
Senior Unsecured Discount Notes: means the Senior Discount
Notes due 2007 to be issued under an indenture, to be dated as of the Closing
Date, between the Company, as issuer, each of the Company's Restricted
Subsidiaries, as guarantors, and a trustee.
Senior Unsecured Overfunded Cash Pay Notes: means the Senior
Notes due 2007 to be issued under an indenture, to be dated as of the Closing
Date, between the Company, as issuer, each of the Company's Restricted
Subsidiaries, as guarantors, and a trustee.
Series A Preferred Stock: means the Company's Series A 8%
Cumulative Redeemable Convertible Preferred Stock, par value $0.01 per share.
Series B Preferred Stock: means the Company's Series B 8%
Cumulative Redeemable Convertible Preferred Stock, par value $0.01 per share.
Series C Designation: the meaning specified in Section
5.28(a).
Series C Preferred Stock: means the Series C 6% Cumulative
Convertible Redeemable Preferred Stock of the Company to be issued pursuant to
the Exchange Agreement.
Significant Subsidiary: means, at any date of determination,
any Restricted Subsidiary that, together with its Subsidiaries, (i) for the most
recent fiscal year of the Company, accounted for more than ten percent (10%) of
the consolidated revenues of the Company and its Restricted Subsidiaries or (ii)
as of the end of such fiscal year, was the owner of more than ten percent (10%)
of the consolidated assets of the Company and its Restricted Subsidiaries, all
as set forth on the most recently available consolidated financial statements of
the Company for such fiscal year.
Solvent: with respect to any Person on a particular date and,
to the extent applicable, after giving effect to the borrowing hereunder on such
date and to any other Indebtedness being incurred on such date (i) the amount of
the "present fair saleable value" of the assets of such Person and each of its
Subsidiaries will, as of such date, exceed the amount of all "liabilities of
such Person and each of its Subsidiaries, contingent or otherwise," as of such
date, as such quoted terms are determined in accordance with applicable federal
and state laws governing determinations of insolvency of debtors, (ii) the
present fair saleable value of the assets of such Person and each of its
Subsidiaries will, as of such date, be greater than the amount that will be
required to pay the liabilities of such Person and each of its Subsidiaries on
its debts as such debts become absolute and matured, (iii) such Person and each
of its Subsidiaries will not have as of such date, an unreasonably small amount
of capital with which
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to conduct their business, and (iv) such Person and each of its Subsidiaries
will be able to pay their debts as they mature. For purposes hereof, "debt"
means "liability on a claim," and "claim" means any (x) right to payment,
whether or nor such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured, or unsecured, or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or not such
right to an equitable remedy is reduced to judgment, fixed, contingent, matured,
unmatured, disputed, secured, or unsecured.
Stated Maturity: means, (i) with respect to any debt security,
the date specified in such debt security as the fixed date on which the final
installment of principal of such debt security is due and payable and (ii) with
respect to any scheduled installment of principal of or interest on any debt
security, the date specified in such debt security as the fixed date on which
such installment is due and payable.
Stock: means any Conversion Shares and any shares of Common
Stock issued subsequent to the conversion of any of the Debentures as a dividend
or other distribution with respect to, or in exchange for or in replacement of,
the Common Stock issued upon such conversion, or resulting from a subdivision of
the outstanding shares of Common Stock issued upon such conversion into a
greater number of shares by reclassification, stock splits or otherwise.
Subject Securities: the meaning specified in Section 5.28(a).
------------------
Subsidiary: means, with respect to any Person, any
corporation, association or other business entity of which more than fifty
percent (50%) of the voting power of the outstanding Voting Stock is owned,
directly or indirectly, by such Person or one (1) or more other Subsidiaries of
such Person. In addition, for purposes of this Agreement, prior to the Closing
Date the term "Subsidiary" when used in reference to Subsidiaries of ONS, shall
also mean and include Orion Atlantic.
Subsidiary Guarantee: means the Guarantee substantially in the
form of Exhibit B to be executed by each of the Guarantors.
Successful Launch: means with respect to any satellite, the
placing into orbit of such satellite in its assigned orbital position with at
least forty percent (40%) of its transponder capacity fully operational.
Temporary Cash Investment: means any of the following: (i)
direct obligations of the United States of America or any agency thereof or
obligations fully and unconditionally guaranteed by the United States of America
or any agency thereof, (ii) time deposit accounts, certificates of deposit and
money market deposits maturing within one hundred and eighty (180) days of the
date of acquisition thereof issued by a bank or trust company which is organized
under the laws of the United States of America, any state thereof or any foreign
country recognized by the United States, and which bank or trust company has
capital, surplus and
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undivided profits aggregating in excess of $50 million (or the foreign currency
equivalent thereof) and has outstanding debt which is rated "A" (or such similar
equivalent rating) or higher by at least one nationally recognized statistical
rating organization (as defined in Rule 436 under the Securities Act) or any
money-market fund sponsored by a registered broker dealer or mutual fund
distributor, (iii) repurchase obligations with a term of not more than thirty
(30) days for underlying securities of the types described in clause (i) above
entered into with a bank meeting the qualifications described in clause (ii)
above, (iv) commercial paper, maturing not more than ninety (90) days after the
date of acquisition, issued by a corporation (other than an Affiliate of the
Company) organized and in existence under the laws of the United States of
America, any state thereof or any foreign country recognized by the United
States of America with a rating at the time as of which any investment therein
is made of "P-1" (or higher) according to Moody's or "A-1" (or higher) according
to S&P, and (v) securities with maturities of six (6) months or less from the
date of acquisition issued or fully and unconditionally guaranteed by any state,
commonwealth or territory of the United States of America, or by any political
subdivision or taxing authority thereof, and rated at least "A" by S&P or
Moody's.
10-K: the meaning specified in Section 5.5.
----
10-Q: the meaning specified in Section 5.5.
----
this Agreement: means this Debenture Purchase Agreement
(including the annexed Schedule I and Exhibits), as it may from time to time be
amended, supplemented or modified in accordance with its terms.
Trade Payables: means, with respect to any Person, any
accounts payable or any other indebtedness or monetary obligation to trade
creditors created, assumed or Guaranteed by such Person or any of its
Subsidiaries arising in the ordinary course of business in connection with the
acquisition of goods or services.
Trading Days: means (i) if the Common Stock is listed or
admitted for trading on any national securities exchange, days on which such
national securities exchange is open for business or (ii) if the Common Stock is
quoted on the Nasdaq National Market or any similar system of automated
dissemination of quotations of securities prices, days on which trades may be
made on such system or (iii) if the Common Stock is not listed or admitted to
trading on any national securities exchange or quoted on the Nasdaq National
Market or similar system, days on which the Common Stock is traded in the
over-the-counter market and for which a closing bid and a closing asked price
for the Common Stock are available.
Transaction Date: means, with respect to the Incurrence of any
Indebtedness by the Company or any of its Restricted Subsidiaries, the date such
Indebtedness is to be Incurred and, with respect to any Restricted Payment, the
date such Restricted Payment is to be made.
Trigger Price: shall initially mean $14.00. The Trigger Price
and any adjustment to the Trigger Price shall be proportionately decreased in
the event the Company at any time
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subdivides (by any stock split, stock dividend, recapitalization or otherwise)
the outstanding shares of Common Stock into a greater number of shares or
proportionately increased in the event that the Company at any time combines (by
reverse stock split, recapitalization or otherwise) the outstanding shares of
Common Stock into a smaller number of shares.
Underlying Shares: the meaning specified in Section 11.4.
-----------------
Underwriting Agreement: the meaning specified in Section 4.1.
----------------------
Unrestricted Subsidiary: means (i) any Subsidiary of the
Company that at the time of determination shall be designated an Unrestricted
Subsidiary by the Board of Directors in the manner provided below and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate
any Restricted Subsidiary (including any newly acquired or newly formed
Subsidiary of the Company) to be an Unrestricted Subsidiary unless such
Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property
of, the Company or any Restricted Subsidiary; provided that (A) any Guarantee by
the Company or any Restricted Subsidiary of any Indebtedness of the Subsidiary
being so designated shall be deemed an "Incurrence" of such Indebtedness and an
"Investment" by the Company or such Restricted Subsidiary (or both, if
applicable) at the time of such designation; (B) either (I) the Subsidiary to be
so designated has total assets of $1,000 or less or (II) if such Subsidiary has
assets greater than $1,000, such designation would be permitted under Section
13.6 and (C) if applicable, the Incurrence of Indebtedness and the Investment
referred to in clause (A) of this proviso would be permitted under Section 13.5
and Section 13.6. The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that immediately after giving
effect to such designation (x) the Company could Incur $1.00 of additional
Indebtedness under the first paragraph of Section 13.5 and (y) no Potential
Event of Default or Event of Default shall have occurred and be continuing. Any
such designation by the Board of Directors shall be evidenced by a Board
Resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing provisions, copies
of which shall be sent to each holder of Debentures.
Vice President: when used with respect to the Company, means
any vice president, whether or not designated by a number or a word or words
added before or after the title "vice president".
Voting Stock: means with respect to any Person, Capital Stock
of any class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
Person.
VSAT: means very small aperture terminal.
----
Wholly Owned: means, with respect to any Subsidiary of any
Person, the ownership of all of the outstanding Capital Stock of such Subsidiary
(other than any director's
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qualifying shares or Investments by foreign nationals mandated by applicable
law) by such Person or one or more Wholly Owned Subsidiaries of such Person.
20. Expenses. Whether or not the transactions contemplated by this
Agreement shall be consummated, the Company will pay all expenses in connection
with such transactions and in connection with any amendments or waivers (whether
or not the same become effective) under or in respect of this Agreement or the
Debentures, including, without limitation: (a) the cost and expenses of
preparing and reproducing this Agreement and the Debentures, of furnishing all
opinions by counsel for the Company (including any opinions requested by your
special counsel as to any legal matter arising hereunder) and all certificates
on behalf of the Company, and of the Company's performance of and compliance
with all agreements and conditions contained herein on its part to be performed
or complied with; (b) the cost of delivering to your principal office, insured
to your satisfaction, the Debentures sold to you hereunder and any Debentures
delivered to you upon any substitution of Debentures or any Conversion Shares or
Interest Shares delivered pursuant hereto or thereto and of your delivering any
Debentures, insured to your satisfaction, upon any substitution or conversion;
(c) the fees, expenses and disbursements of your U.S. special counsel (Coudert
Brothers for BAe and Powell, Goldstein, Xxxxxx & Xxxxxx for Matra) and U.K.
special counsel (Xxxxx & Overy) to BAe in connection with all due diligence and
the documentation and negotiation of the Debentures, this Agreement and the
exhibits hereto and all ancillary documents and in connection with the
completion of this transaction; and (d) the reasonable out-of-pocket expenses
incurred by you in connection with this transaction. The Company also will pay,
and will save you and each holder of any Debentures harmless from, all claims in
respect of the fees, if any, of brokers and finders, other than any broker or
finder retained by you or any such other holder, and any and all liabilities
with respect to any taxes (including interest and penalties) which may be
payable in respect of the execution and delivery of this Agreement and the issue
of the Debentures hereunder and any amendment or waiver under or in respect of
this Agreement or the Debentures.
21. Survival. All express representations and warranties contained in
this Agreement or made in writing by or on behalf of the Company in connection
with the transactions contemplated by this Agreement shall survive the execution
and delivery of this Agreement, any investigation at any time made by you or on
your behalf, the purchase of the Debentures hereunder, any disposition or
payment of the Debentures or any conversion of the Debentures. All statements
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant to this Agreement or in connection with the transactions
contemplated hereby shall be deemed representations and warranties of the
Company under this Agreement.
22. Amendments and Waivers.
----------------------
Prior to the Closing Date, any term of this Agreement may be
amended, and the observance of any term of this Agreement may be waived, only
with the written consent of the Company, ONS, BAe and Matra. From and after the
Closing Date, any term of this Agreement or of the Debentures may be amended,
and the observance of any term of this Agreement or of the Debentures may be
waived (either generally or in a particular instance and either
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retroactively or prospectively), only with the written consent of the Company
and with the written consent of the holders of at least sixty-six and two-thirds
percent (66-2/3%) in principal amount of the then Outstanding Debentures;
provided, however, that without the prior written consent of the holders of all
the then Outstanding Debentures, no such amendment or waiver shall (a) extend
the fixed maturity or reduce the principal amount of, or reduce the rate or
extend the time of payment of interest on, or reduce the amount or extend the
time of payment of any principal or premium (if any) payable (whether as a
redemption, a repurchase or otherwise) on any Debenture, (b) reduce the
aforesaid percentage of the principal amount of the Debentures the holders of
which are required to consent to any such amendment or waiver, or (c) modify any
term of Section 14 or Section 15. Any amendment or waiver effected in accordance
with this Section 22 shall be binding upon each holder of any Debenture at the
time outstanding, each future holder of any Debenture and the Company.
23. Notices. Except as otherwise provided in this Agreement, notices
and other communications under this Agreement shall be in writing and shall be
deemed properly served if (i) mailed by registered or certified mail, return
receipt requested, (ii) delivered by a recognized overnight courier service,
(iii) delivered personally, or (iv) sent by facsimile transmission addressed (a)
if to you, at your address set forth at the beginning of this Agreement, or at
such other address as you shall have furnished to the Company in writing, except
as otherwise provided in Section 17.2 with respect to payments on Debentures
held by you, or (b) if to any other holder of any Debenture, at such address as
such other holder shall have furnished to the Company in writing, or, until any
such other holder so furnishes an address to the Company, then to and at the
address of the last holder of such Debenture who has so furnished an address to
the Company, or (c) if to the Company, at its address set forth at the beginning
of this Agreement, to the attention of the Chief Financial Officer, or at such
other address, or to the attention of such other officer, as the Company shall
have furnished to you and each such other holder in writing. Such notice shall
be deemed to have been received (w) three (3) days after the date of mailing if
sent by certified or registered mail, (x) one (1) day after the date of delivery
if sent by overnight courier, (y) the date of delivery if personally delivered,
or (z) the next succeeding business day after transmission by facsimile.
24. Substitution of Purchasers; References. (a) Each of BAe and Matra
shall have the right to substitute (in whole or in part) one (1) or more of its
Affiliates as a purchaser of Debentures hereunder, by written notice to the
Company, which notice shall be signed by BAe or Matra, as the case may be, and
each such Affiliate, shall contain each such Affiliate's agreement to be bound
by this Agreement and shall contain a confirmation by each such Affiliate of the
accuracy with respect to it of the representations set forth in Section 6.
(b) Wherever the word "you" is used in this Agreement, such word shall
be deemed to refer to BAe and Matra and/or any of the Affiliates of BAe or Matra
which is or at any time becomes the holder of any Debenture.
25. Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so
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executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
26. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns,
except that the Company shall not have the right to assign its rights or
obligations hereunder or any interest herein without your prior written consent
which may be withheld for any reason.
27. GOVERNING LAW. THIS AGREEMENT AND THE DEBENTURES SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO ANY CONFLICT OF LAW PROVISIONS THEREOF.
28. Consent to Jurisdiction; Appointment of Agent to Accept Service of
Process. (a) The Company irrevocably consents and agrees, for your benefit, that
any legal action, suit or proceeding against it with respect to its obligations,
liabilities or any other matter arising out of or in connection with this
Agreement or any Document or the transaction contemplated hereby or thereby may
be brought in the courts of the State of New York or the courts of the United
States of America located in The City of New York and, until all amounts due and
to become due in respect of this Agreement have been paid, or until any such
legal action, suit or proceeding commenced prior to such payment has been
concluded, hereby irrevocably consents and submits to the non-exclusive
jurisdiction of each such court in personam, generally and unconditionally with
respect to any action, suit or proceeding for itself and in respect of its
properties, assets and revenues.
(b) The Company appoints and empowers CT Corporation System,
with offices currently at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its
designee, appointee and agent to receive, accept and acknowledge for and on its
behalf, and its properties, assets and revenues, service of any and all legal
process, summons, notices and documents that may be served in any action, suit
or proceeding brought against it in any such United States or State court with
respect to its obligations, liabilities or any other matter arising out of or in
connection with this Agreement or any of the Documents or the transaction
contemplated hereby or thereby and that may be made on such designee, appointee
and agent in accordance with legal procedures prescribed for such courts. If for
any reason such designee, appointee and agent hereunder shall cease to be
available to act as such, the Company agrees to designate a new designee,
appointee and agent in The City of New York on the terms and for the purposes of
this Section 28 satisfactory to you. The Company further hereby irrevocably
consents and agrees to the service of any and all legal process, summons,
notices and documents in any such action, suit or proceeding against it by
serving a copy thereof upon the relevant agent for service of process referred
to in this Section 28 (whether or not the appointment of such agent shall for
any reason prove to be ineffective or such agent shall accept or acknowledge
such service) or by mailing copies thereof by registered or certified air mail,
postage prepaid, to the applicable party at its address specified in or
designated pursuant to this Agreement. The Company agrees that the failure of
any such designee, appointee and agent to give any notice of such service to it
shall
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not impair or affect in any way the validity of such service or any judgment
rendered in any action or proceeding based thereon. Nothing herein shall in any
way be deemed to limit your ability to serve any such legal process, summons,
notices and documents in any other manner permitted by applicable law or to
obtain jurisdiction over such party or bring actions, suits or proceedings
against such party in such other jurisdictions, and in such manner, as may be
permitted by law, any objection that they may now or hereafter have to the
laying of venue of any of the aforesaid actions, suits or proceedings arising
out of or in connection with this Agreement brought in the United States Federal
courts located in The City of New York or the courts of the State of New York
and hereby further irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
(c) The provisions of this Section 28 shall survive any
termination of this Agreement, in whole or in part.
29. WAIVER OF JURY TRIAL. THE COMPANY HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
If you are in agreement with the foregoing, please sign the form of
acceptance on the accompanying counterparts of this Agreement and return one (1)
of the same to the Company and ONS, whereupon this Agreement shall become a
binding agreement between you and the Company and ONS.
Very truly yours,
ORION NEWCO SERVICES, INC.
By:
------------------------------
Name:
Title:
ORION NETWORK SYSTEMS, INC.
By:
------------------------------
Name:
Title:
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The foregoing agreement is
hereby accepted as of
the date thereof.
BRITISH AEROSPACE HOLDINGS, INC.
By:
--------------------------
Name:
Title:
MATRA MARCONI SPACE
UK LIMITED
By:
---------------------------
Name:
Title:
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SCHEDULE I
Principal Amount of
Name and Address of Purchaser Debentures to be Purchased
----------------------------- --------------------------
BRITISH AEROSPACE HOLDINGS, INC.............................$ 50,000,000
(1) All payments on account of the Debentures shall be made by wire
transfer of immediately available funds not later than 11 a.m., New
York City time, to:
---------------------------------
---------------------------------
---------------------------------
(2) All notices of such payments and written
confirmation of such wire transfer shall be made
to:
---------------------------------
---------------------------------
---------------------------------
(3) All other communications shall be mailed to:
---------------------------------
---------------------------------
---------------------------------
MATRA MARCONI SPACE UK LIMITED..............................$ 10,000,000
(1) All payments on account of the Debentures shall be made by wire
transfer of immediately available funds not later than 11 a.m., New
York City time, to:
---------------------------------
---------------------------------
---------------------------------
(2) All notices of such payments and written
confirmation of such wire transfer shall be made
to:
---------------------------------
---------------------------------
---------------------------------
(3) All other communications shall be mailed to:
---------------------------------
---------------------------------
---------------------------------
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