EXHIBIT 4
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (this "Agreement") is entered into as
of January 8, 1997, between and among Orion Network Systems, Inc., a Delaware
corporation ("ONS"), and British Aerospace Satellite Investments, Inc., a
Delaware corporation ("BASpace").
WHEREAS, ONS wishes to acquire, in exchange for shares of
common stock, par value $.01 per share, of ONS ("ONS Common Stock"), the
remaining shares of common stock ("APSC Common Stock"), par value $.01 per
share, of Asia Pacific Space and Communications, Ltd., a Delaware corporation
("APSC"), not presently owned by ONS, all of which shares of APSC Common Stock
are held by BASpace;
WHEREAS, BASpace wishes to transfer its shares of APSC Common
Stock to ONS in exchange for shares of ONS Common Stock; and
WHEREAS, the exchange is intended to qualify as a tax free
reorganization pursuant to Section 368(a)(1)(B) of the Internal Revenue Code of
1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements hereinafter set forth, the parties hereto hereby
agree as follows:
1. EXCHANGE OF SHARES
On the basis of the representations, warranties and agreements
contained herein, and subject to the terms and conditions hereof, BASpace hereby
agrees to transfer to ONS at the Closing (as defined below) the 422,347 shares
of APSC Common Stock held by it (the "BASpace APSC Shares") in exchange for
85,715 shares of ONS Common Stock (the "ONS New Shares").
2. REPRESENTATIONS AND WARRANTIES OF BASPACE
BASpace hereby represents and warrants to ONS as follows:
2.1. Title to APSC Common Stock. BASpace is, and on the
Closing Date (as defined below) will be, the lawful owner of the BASpace APSC
Shares. BASpace has, and on the Closing Date BASpace will have, good, valid and
marketable title, free and clear of any mortgage, lien, pledge, encumbrance,
security interest, deed of trust, option, encroachment, reservation, order,
decree, judgment, condition, restriction, charge, agreement, claim or equity of
any kind ("Encumbrances"), to the BASpace APSC Shares, with full right and
lawful authority to transfer the BASpace APSC Shares to ONS pursuant to this
Agreement.
2.2. Organization and Standing; Capacity. BASpace is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction, and has the full corporate power and authority to carry on
its business as currently conducted. BASpace has full legal right, capacity,
power and authority (corporate or otherwise) to execute and deliver this
Agreement and to consummate the transactions contemplated hereby.
2.3. Authorization. The execution, delivery and performance by
BASpace of this Agreement and all other documents contemplated hereby, the
fulfillment of and the compliance with the respective terms and provisions
hereof and thereof, and the consummation of the transactions contemplated hereby
and thereby have been duly authorized by all necessary corporate action of
BASpace (which authorization has not been modified or rescinded and is in full
force and effect), and will not: (a) conflict with, or materially violate any
provision of, any law having applicability to BASpace or any person or entity
under common control (an "Affiliate") with BASpace which is a party to any
agreement with or relating to ONS or any term or provision of the articles of
incorporation or organization, or bylaws or operating agreement of BASpace or
any of such Affiliates, as applicable; or (b) conflict with, or result in any
material breach of, or constitute a material default under, any agreement to
which BASpace or any of such Affiliates is a party or by which BASpace or any of
such Affiliates may be bound.
2.4. Restrictions and Consents. There are no agreements, laws
or other restrictions of any kind to which BASpace is party or subject that
would prevent or restrict the execution, delivery or performance of this
Agreement.
2.5. Binding Obligation. This Agreement constitutes a valid
and binding obligation of BASpace, enforceable in accordance with its terms.
Each document to be executed by BASpace pursuant hereto, when executed and
delivered in accordance with the provisions hereof, will be a valid and binding
obligation of BASpace, enforceable in accordance with its terms.
2.6. Transfer of Title. At the Closing, ONS will acquire good,
valid and marketable title to the BASpace APSC Shares, free and clear of all
Encumbrances, other than restrictions on resale contained in federal and state
securities laws.
2.7. Accredited Investors. BASpace is an "accredited investor"
as such term is defined in Rule 501 of the Securities Act of 1933, as amended,
and all laws promulgated pursuant thereto or in connection therewith (the
"Securities Act").
3. REPRESENTATIONS AND WARRANTIES OF ONS
ONS hereby represents and warrants to BASpace as follows:
3.1. Organization and Standing. ONS is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has
the full corporate power and authority to carry on its business as currently
conducted. ONS has the full legal right, capacity, power and authority
(corporate or otherwise) to execute and deliver this Agreement and the other
documents called for herein and to consummate the transactions contemplated
hereby. ONS is qualified as a foreign corporation in the State of Maryland, and
in every other jurisdiction in which the failure to so qualify would have a
material adverse effect on the business, results of operations, liabilities,
properties, assets or financial condition of ONS and its subsidiaries, taken as
a whole, or a material adverse effect on the transactions contemplated by this
Agreement.
3.2. Authorization. The execution, delivery and performance by
ONS of this Agreement and the other documents contemplated hereby, the
fulfillment of and the compliance with the respective terms and provisions
hereof and thereof, and the consummation of the transactions contemplated hereby
and thereby have been duly authorized by all necessary corporate action of ONS
(which authorization has not been modified or rescinded and is in full force and
effect), and will not: (a) conflict with, or materially violate any provision
of, any law having applicability to ONS or any of its Affiliates or any term or
provision of the articles of incorporation or organization, or bylaws or
operating agreement of ONS, as applicable; or (b) conflict with, or result in
any material breach of, or constitute a material default under, any agreement to
which ONS or any of its Affiliates is a party or by which ONS or any of its
Affiliates may be bound.
3.3. Restrictions and Consents. There are no agreements, laws
or other restrictions of any kind to which ONS is a party or subject that would
prevent or restrict the execution, delivery or performance of this Agreement.
3.4. Binding Obligation. This Agreement constitutes a valid
and binding obligation of ONS, enforceable in accordance with its terms. Each
document to be executed by ONS pursuant hereto, when executed and delivered in
accordance with the provisions hereof, will be a valid and binding obligation of
ONS, enforceable in accordance with its terms.
3.5. Issuance of Shares. Upon consummation of the transactions
contemplated by this Agreement at Closing, the ONS New Shares will be duly and
validly issued, fully paid and nonassessable and no personal liability attaches
to the ownership thereof, and BASpace will acquire the legal, valid and
marketable title to the ONS New Shares, free and clear of all Encumbrances.
3.6. Capitalization. As of the date hereof, the authorized
capital stock of ONS consists of 40,000,000 shares of ONS Common Stock and
1,000,000 shares of preferred stock, par value $.01 per share, of which
10,974,121 shares of ONS Common Stock, 13,871 shares of ONS Series A Preferred
Stock and 4,298 shares of 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
948,074 shares of ONS Common Stock are outstanding on the date hereof, and when
such options are exercised and the prescribed exercise price paid, the shares of
ONS Common Stock issued with respect to such options will be duly
authorized, validly issued, fully paid and nonassessable. Options to purchase
351 shares of ONS preferred stock are outstanding on the date hereof, 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. The ONS
New Shares to be issued to BASpace hereunder will not be issued in violation of
any preemptive or other rights of any person, whether arising by statute, under
the Certificate of Incorporation or By-Laws of ONS or in any other manner.
4. RESTRICTED SECURITIES
BASpace hereby severally represents, warrants and covenants to
ONS as follows:
4.1. No Registration Under the Securities Act. BASpace
understands that the ONS New Shares to be acquired by it under this Agreement
have not been registered under the Securities Act, in reliance upon exemptions
contained in the Securities Act or interpretations thereof, and cannot be
offered for sale, sold or otherwise transferred unless subsequently so
registered or qualify for exemption from registration under the Securities Act.
The ONS New Shares will not be offered for sale, sold or otherwise transferred
by BASpace without either registration or exemption from registration under the
Securities Act.
4.2. Acquisition for Investment. The ONS New Shares being
acquired under this Agreement by BASpace are being acquired in good faith solely
for BASpace's own account, for investment and not with a view toward
distribution within the meaning of the Securities Act. BASpace has, and at the
time of Closing BASpace will have, no present plan or intention to sell or
otherwise dispose of the ONS New Shares being acquired under this Agreement
provided, however, that BASpace may decide, from time to time, to sell some or
all of such stock based upon a change in the investment policy of BASpace.
4.3. Evaluation of Merits and Risks of Investment. BASpace has
such knowledge and experience in financial and business matters that BASpace is
capable of evaluating the merits and risks of its investment in the ONS New
Shares being acquired hereunder. BASpace understands and is able to bear any
economic risks associated with such investment (including, without limitation,
the necessity of holding the ONS New Shares for an indefinite period of time,
inasmuch as the ONS New Shares have not been registered under the Securities
Act).
4.4. Review of Documents. BASpace and its advisers, if any,
have received, and have had a reasonable opportunity to review, the following
documents (collectively, the "Disclosure Materials"): (i) Annual Report on Form
10-K for ONS for the fiscal year ended December 31, 1995; (ii) Quarterly Reports
on Form 10-Q for ONS for the fiscal quarters ended March 31, June 30, and
September 30, 1996; and (iii) Proxy Statement of ONS relating to the Annual
Meeting of Stockholders held on May 23, 1996.
4.5. Opportunity to Request Information. BASpace and its
advisers, if any, have had a reasonable opportunity to ask questions of and
receive information and answers from a person or persons acting on behalf of ONS
concerning the transactions contemplated by this Agreement and all such
questions have been answered and all such information has been provided to their
full satisfaction. In making their investment, BASpace will be relying solely on
their review of the Disclosure Materials (other than any projections included
therein, which are not being relied upon), the representations and warranties
set forth herein, and the documents made available for inspection and the
answers to questions referred to in this Section.
5. CONDITIONS PRECEDENT TO OBLIGATIONS OF BASPACE
The obligations of BASpace under this Agreement are subject to
the fulfillment, at or prior to the Closing, of each of the following
conditions, and failure to satisfy any such condition shall excuse and discharge
all obligations of BASpace to carry out the provisions of this Agreement, unless
such failure is agreed to in writing by BASpace:
5.1. Representations and Warranties. The representations and
warranties made by ONS in this Agreement shall be true and complete in all
material respects when made, and on and as of the Closing Date as though such
representations and warranties were made on and as of such date.
5.2. Performance. ONS shall have performed and complied in all
material respects with all agreements and covenants required by this Agreement
to be performed or complied with by ONS and prior to the Closing Date.
5.3. Documents at Closing. All documents required to be
furnished by ONS to BASpace prior to or at the Closing shall have been so
furnished.
5.4. Consents. ONS shall have received all material consents,
authorizations and approvals of governmental, supragovernmental and private
parties which are required to be obtained in order to consummate the
transactions contemplated hereby.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF ONS
The obligations of ONS under this Agreement are subject to the
fulfillment, at or prior to the Closing, of each of the following conditions,
and failure to satisfy any such condition shall excuse and discharge all
obligations of ONS to carry out the provisions of this Agreement, unless such
failure is agreed to in writing by ONS :
6.1. Representations and Warranties. The representations and
warranties made by BASpace in this Agreement shall be true and complete in all
material respects
when made, and on and as of the Closing Date as though such representations and
warranties were made on and as of such date, except for any changes expressly
permitted by this Agreement.
6.2. Performance. BASpace shall have performed and complied
with all material agreements and covenants required by this Agreement to be
performed or complied with prior to the Closing Date.
6.3. Documents at Closing. All documents required to be
furnished by BASpace to ONS prior to or at the Closing shall have been so
furnished.
6.4. Consents. BASpace shall have received all material
consents, authorizations and approvals of governmental, supragovernmental and
private parties which are required to be obtained in order to consummate the
transactions contemplated hereby.
7. CLOSING
7.1. Closing. Subject to the terms and conditions of this
Agreement, the closing of the exchange of interests (the "Closing") shall take
place at the offices of Xxxxx & Xxxxxxx L.L.P., 000 Xxxxxxxxxx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000 on such time and date as shall be as proposed by ONS not
more than ten days after satisfaction or waiver of all the conditions specified
in Sections 5 and 6 (the "Closing Date").
7.2. Deliveries by BASpace. At the Closing, BASpace shall
deliver to ONS certificates representing the BASpace APSC Shares being issued to
ONS pursuant to Section 1 and such other documents as ONS may reasonably
request.
7.3. Deliveries by ONS. At or prior to the Closing, ONS shall
deliver to BASpace certificates representing the ONS New Shares being issued to
BASpace pursuant to Section 1 and such other documents as BASpace may reasonably
request.
8. SURVIVAL OF REPRESENTATIONS; REMEDIES; RELEASE
8.1. Survival of Representations. All representations,
warranties, covenants, indemnities and other agreements made by any party to
this Agreement herein or pursuant hereto shall also be deemed made on and as of
the Closing Date as though such representations, warranties, covenants,
indemnities and other agreements were made on and as of such date, and all such
representations, warranties, covenants, indemnities and other agreements shall
survive the Closing and any investigation, audit or inspection at any time made
by or on behalf of any party hereto, including the review of the Disclosure
Materials.
8.2. Specific Performance; No Consequential Damages. In
addition to any other remedies which the parties hereto may have at law or in
equity, the parties
hereto hereby acknowledge that the APSC Common Stock and the ONS New Shares are
unique, and that the harm to ONS and BASpace resulting from breaches by the
other party of their respective obligations cannot be adequately compensated by
damages. Accordingly, the parties hereto agree that each party shall have the
right to have all obligations, undertakings, agreements, covenants and other
provisions of this Agreement specifically performed by the other parties, and
that the parties hereto shall have the right to obtain an order or decree of
such specific performance in any of the courts of the United States or of any
state or other political subdivision thereof. Notwithstanding any other
provision of this Agreement to the contrary, in no event shall remedies for
breach of this Agreement include a party's incidental or consequential damages.
8.3. Release of Claims. Concurrently with the Closing, each of
ONS and BASpace agrees to release and forever discharge the other party and each
of its Affiliates, from and after the Closing, from and against any and all
rights, causes of action, claims, suits, obligations, liabilities, and demands
whatsoever (other than those arising from fraud or misrepresentation), in law or
in equity, whether presently known or unknown, to the fullest extent permitted
by law by reason of, related to, or arising out of any one or more of the
agreements or arrangements that either party may have with APSC (other than this
Agreement).
9. TERMINATION
9.1. Termination. This Agreement may be terminated at any time
before the Closing Date under any one or more of the following circumstances:
(a) by the mutual written consent of the parties hereto; or
(b) by ONS or BASpace by written notice of termination to the
other parties hereto, if the Closing has not occurred by April 30, 1997;
provided, however, that the terminating party is not in breach of any
obligations or agreements hereunder that are causing any of the conditions
precedent to Closing not to be satisfied.
9.2. Effect of Termination. In the event this Agreement is
terminated as provided herein, this Agreement shall forthwith become wholly void
and of no effect, and the parties shall be released from all future obligations
hereunder; provided, however, that the provisions of Section 10.3 relating to
the payment of expenses, shall not be extinguished but shall survive such
termination; provided, further, however, that no party shall be relieved from
its liabilities for breach of representations, warranties, obligations or
agreements prior to termination of this Agreement. The parties hereto shall have
any and all remedies to enforce such obligations provided at law or in equity
(including, without limitation, specific performance).
10. MISCELLANEOUS
10.1. Additional Actions and Documents. Each of the parties
hereto hereby agrees to take or cause to be taken such further actions, to
execute, deliver and file or cause to be executed, delivered and filed such
further documents, and will obtain such consents, as may be necessary or as may
be reasonably requested in order to fully effectuate the purposes, terms and
conditions of this Agreement.
10.2. Broker's Fees and Liabilities. Each party agrees to
indemnify, defend and hold harmless each of the other parties from and against
any and all claims asserted against such parties for any unpaid liability to any
broker, finder or agent for any brokerage fees, finders' fees or commissions,
with respect to the transactions contemplated by this Agreement.
10.3. Expenses. Subject to the provisions of Section 10.2,
each party hereto shall pay its own expenses incident to this Agreement and the
transactions contemplated hereunder.
10.4. Assignment. BASpace shall have the right to assign its
rights under the Agreement, in whole or in part, to any of its Affiliates or to
designate any of its Affiliates to receive directly the ONS New Shares to be
acquired hereunder (in each case, to the extent permitted by applicable law).
ONS shall have the right to assign its rights under the Agreement, in whole or
in part, to any of its respective Affiliates (to the extent permitted by
applicable law). In no event shall the assignment by ONS or BASpace of its
respective rights under this Agreement, whether before or after the Closing,
release ONS or BASpace from its respective liabilities and obligations
hereunder.
10.5. Notices. All notices, demands, requests, or other
communications which may be or are required to be given, served, or sent by any
party to any other party pursuant to this Agreement shall be in writing and
shall be hand delivered, sent by overnight courier or mailed by first-class,
registered or certified mail, return receipt requested, postage prepaid, or
transmitted by telegram, telecopy or telex, addressed as follows:
(i) If to ONS :
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxx, Esq.
(ii) If to BASpace:
British Aerospace
Holding, Inc.
Washinton Technology Park
00000 Xxxxxxxxxx Xxxxxx Xxxxx, xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxxx Gaba, Esq.
Each party may designate by notice in writing a new address to which any notice,
demand, request or communication may thereafter be so given, served or sent.
Each notice, demand, request, or communication which shall be hand delivered,
sent, mailed, telecopied or telexed in the manner described above, or which
shall be delivered to a telegraph company, shall be deemed sufficiently given,
served, sent, received or delivered for all purposes at such time as it is
delivered to the addressee (with the return receipt, the delivery receipt, or
(with respect to a telecopy or telex) the answerback being deemed conclusive,
but not exclusive, evidence of such delivery) or at such time as delivery is
refused by the addressee upon presentation.
10.6. Miscellaneous. This Agreement, including the other
documents referred to herein or furnished pursuant hereto constitute the entire
agreement among the parties hereto with respect to the transactions contemplated
herein and therein, and supersede all prior oral or written agreements,
commitments or understandings with respect to the matters provided for herein
and therein. No amendment or modification of this Agreement shall be valid or
binding unless set forth in writing and duly executed and delivered by the party
against whom enforcement is sought. No delay or failure on the part of any party
hereto in exercising any right under this Agreement shall impair any such right
or be construed as a waiver of any default or any acquiescence therein. No
single or partial exercise of any such right shall preclude the further exercise
of such right. No waiver shall be valid against any party hereto unless made in
writing and signed by the party against whom enforcement of such waiver is
sought and then only to the extent expressly specified therein. This Agreement
and the duties and obligations of ONS and BASpace hereunder and under each of
the documents referred to herein shall be enforceable against ONS or BASpace, as
the case may be, in the courts of the United States and of the State of
Delaware. For such purpose, ONS and BASpace hereby irrevocably submit to the
non-exclusive jurisdiction of such courts, and agrees that all claims in respect
of this Agreement and such other documents may be heard and determined in any of
such courts. If any part of any provision of this Agreement or any
other agreement or document given pursuant to or in connection with this
Agreement shall be invalid or unenforceable in any respect, such part shall be
ineffective to the extent of such invalidity or unenforceability only, without
in any way affecting the remaining parts of such provision or the remaining
provisions of this Agreement. The covenants, undertakings and agreements set
forth in this Agreement shall be solely for the benefit of, and shall be
enforceable only by, the parties hereto and their respective successors, heirs,
executors, administrators, legal representatives and permitted assigns. Subject
to any provisions hereof restricting assignment, this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors, heirs, executors, administrators, legal representatives and assigns.
10.7. Governing Law. This Agreement, the rights and
obligations of the parties hereto, and any claims or disputes relating thereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware (excluding the choice of law rules thereof).
10.8. Execution in Counterparts. To facilitate execution, this
Agreement may be executed in as many counterparts as may be required. It shall
not be necessary that the signatures of, or on behalf of, each party, or that
the signatures of all persons required to bind any party, appear on each
counterpart; but it shall be sufficient that the signature of, or on behalf of,
each party, or that the signatures of the persons required to bind any party,
appear on one or more of the counterparts. All counterparts shall collectively
constitute a single agreement. It shall not be necessary in making proof of this
Agreement to produce or account for more than a number of counterparts
containing the respective signatures of, or on behalf of, all of the parties
hereto.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, or have caused this Agreement to be duly executed on their behalf, as
of the day and year first above written.
ORION NETWORK SYSTEMS, INC.
By: Xxxxxxx X. Xxxx
____________________________
Title: Vice President/Secretary
_______________________________
BRITISH AEROSPACE SATELLITE
INVESTMENTS, INC.
By: Xxxxxxx X. Gaba
____________________________
Title: Vice President/Assistant Secretary
__________________________________
