COMBINATION AGREEMENT
dated as of August 31, 1995
among
ORBITAL SCIENCES CORPORATION,
3173623 CANADA INC.
and
XXXXXXXXX, XXXXXXXXX AND ASSOCIATES LTD.
ARTICLE 1 DEFINITIONS 1
1.1. CROSS REFERENCE TABLE OF CERTAIN DEFINED TERMS 1
1.2. DEFINITIONS OF CERTAIN ADDITIONAL TERMS 3
1.2.1. CODE 3
1.2.2. CONSOLIDATED TAX 3
1.2.3. EFFECTIVE DATE 3
1.2.4. EXCHANGE ACT 3
1.2.5. MDA MATERIAL ADVERSE EFFECT 3
1.2.6. ORBITAL MATERIAL ADVERSE EFFECT 3
1.2.7. RETURN 3
1.2.8. SECURITIES ACT 3
1.2.9. SEC 3
1.2.10. SUBSIDIARY 3
1.2.11. TAX 4
ARTICLE 2 GENERAL 4
2.1. PLAN OF ARRANGEMENT 4
2.2. VOTING AND EXCHANGE TRUST AGREEMENT 5
2.3. SUPPORT AGREEMENT 6
2.4. CLOSING, CLOSING DATE AND EFFECTIVE TIME 6
2.5. HOLDING COMPANY AGREEMENTS. 6
2.6. CONTEMPORANEOUS TRANSACTIONS 6
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF MDA 6
3.1. DUE ORGANIZATION, AUTHORIZATION AND GOOD STANDING
OF MDA 6
3.2. NO VIOLATION OR APPROVAL 7
3.3. CAPITAL STOCK 7
3.4. SUBSIDIARIES 8
3.5. SECURITIES LAW FILINGS. 8
3.6. FINANCIAL STATEMENTS, ETC. 9
3.7. ABSENCE OF CHANGES; OPERATIONS IN THE ORDINARY
COURSE 9
3.8. TAXES 11
3.9. PROPERTIES 12
3.10. CUSTOMERS, DISTRIBUTORS AND SUPPLIERS 12
3.11. OPERATIONS IN CONFORMITY WITH LAW, ETC 13
3.12. LITIGATION 13
3.13. EMPLOYEE MATTERS; BENEFIT PLANS 14
3.14. LABOR RELATIONS 15
3.15. GOVERNMENT CONTRACTS AND SUBCONTRACTS 15
3.16. LICENSES, ETC. 15
3.17. ENVIRONMENTAL MATTERS 16
3.18. CONTRACTUAL OBLIGATIONS, ETC 16
3.19. EARTHWATCH AGREEMENT. 17
3.20. AFFILIATED TRANSACTIONS 18
3.21. PATENTS, TRADEMARKS, ETC 18
3.22. INSURANCE 18
3.23. CUSTOMER WARRANTY COVERAGE 18
3.24. POOLING 18
3.25. CERTAIN AGREEMENTS 18
3.26. OPINION OF FINANCIAL ADVISOR 19
3.27. BROKERS, FINDERS, ETC 19
3.28. DISCLOSURE; PROVISION OF INFORMATION 19
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF ORBITAL AND
ACQUISITION 20
4.1. DUE ORGANIZATION, AUTHORIZATION AND GOOD STANDING
OF ORBITAL AND ACQUISITION 20
4.2. NO VIOLATION OR APPROVAL 21
4.3. CAPITAL STOCK 21
4.4. SEC REPORTS 22
4.5. FINANCIAL STATEMENTS, ETC. 22
4.6. ABSENCE OF CHANGES 23
4.7. POOLING 23
4.8. OPERATIONS IN CONFORMITY WITH LAW, ETC. 23
4.9. LITIGATION 23
4.10. GOVERNMENT CONTRACTS AND SUBCONTRACTS 23
4.11. ENVIRONMENTAL MATTERS 24
4.12. DISCLOSURE 24
ARTICLE 5 CERTAIN COVENANTS 25
5.1. PREPARATION OF PROXY STATEMENT AND NO ACTION
REQUEST; OTHER FILINGS AND SUBMISSIONS 25
5.2. SHAREHOLDERS' MEETING 26
5.3. EXCLUSIVITY; ACQUISITION PROPOSALS 26
5.4. AMENDMENT TO PLAN OF ARRANGEMENT 27
5.5. PUBLIC ANNOUNCEMENTS 27
5.6. NOTIFICATION OF CERTAIN MATTERS 27
5.7. OTHER LIMITATIONS ON CONDUCT OF BUSINESS PRIOR TO
THE EFFECTIVE TIME 28
5.8. EXERCISE OF CALL RIGHT 28
5.9. ACCESS TO INFORMATION 28
5.10. POST EFFECTIVE DATE REPORTING 28
5.11. NO ACTION REQUEST 29
5.12. INDEMNIFICATION 29
5.13. TAX FILINGS. 30
5.14. FURTHER ASSURANCES 30
ARTICLE 6 CONDITIONS PRECEDENT 31
6.1. CONDITIONS PRECEDENT TO MDA'S OBLIGATION TO
EFFECT THE ARRANGEMENT 31
6.1.1. REPRESENTATIONS; COVENANTS; CERTIFICATE 31
6.1.2. OPINION OF COUNSEL FOR ORBITAL 31
6.1.3. PRICE OF ORBITAL STOCK 31
6.2. CONDITIONS PRECEDENT TO OBLIGATIONS OF ORBITAL 31
6.2.1. REPRESENTATIONS; COVENANTS; CERTIFICATE 31
6.2.2. OPINION OF COUNSEL FOR MDA 32
6.2.3. MDA RIGHTS PLAN. 32
6.2.4. AFFILIATE AGREEMENTS 32
6.2.5. EMPLOYMENT AGREEMENTS 32
6.2.6. APPRAISAL RIGHTS 32
6.2.7. POOLING OF INTERESTS ACCOUNTING
TREATMENT 32
6.2.8. REQUIRED CONSENTS 32
6.2.9 PRICE OF ORBITAL STOCK 33
6.3. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF EACH
PARTY 33
6.3.1. SHAREHOLDER APPROVAL 33
6.3.2. GOVERNMENTAL AND COURT APPROVALS 33
6.3.3. NO ACTION REQUEST/REGISTRATION STATEMENT 33
6.3.4. INJUNCTIONS 34
6.3.5. NASDAQ/NMS LISTING APPROVAL 34
ARTICLE 7 MISCELLANEOUS 34
7.1. TERMINATION 34
7.2. AMENDMENTS AND SUPPLEMENTS 35
7.3. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS 36
7.4 OTHER PAYMENTS 36
7.5. EXPENSES 36
7.6. GOVERNING LAW 36
7.7. NOTICE 36
7.8A. ENTIRE AGREEMENT, ASSIGNABILITY, ETC 38
7.8. COUNTERPARTS 39
EXHIBITS
EXHIBIT 2.1 FORM OF PLAN OF ARRANGEMENT
EXHIBIT 2.1.2 FORM OF HOLDING COMPANY AGREEMENT
EXHIBIT 2.2 FORM OF VOTING AND EXCHANGE TRUST AGREEMENT
EXHIBIT 2.3 FORM OF SUPPORT AGREEMENT
EXHIBIT 3.18 FORM OF EMPLOYMENT AGREEMENTS
EXHIBIT 6.2.4(A) FORM OF AFFILIATES AGREEMENT -- GENERAL
EXHIBIT 6.2.4(B) FORM OF AFFILIATES AGREEMENT -- SPAR
AEROSPACE LIMITED
EXHIBIT 6.2.5 FORM OF CHANGE OF CONTROL AGREEMENT
EXHIBIT 7.1(H) FORM OF VOTING AGREEMENT AND IRREVOCABLE
PROXY
COMBINATION AGREEMENT
COMBINATION AGREEMENT (the "Agreement") dated as of August
31, 1995, among Orbital Sciences Corporation, a corporation
incorporated under the laws of the State of Delaware ("Orbital"),
3173623 Canada Inc., a corporation incorporated under the laws of
Canada and a wholly owned subsidiary of Orbital ("Acquisition"),
and XxxXxxxxx, Xxxxxxxxx and Associates Ltd., a corporation
incorporated under the laws of Canada ("MDA").
WHEREAS, the respective Boards of Directors of Orbital,
Acquisition and MDA have approved the transactions contemplated
by this Agreement and the Board of Directors of MDA has agreed to
submit the Plan of Arrangement (as defined in Section 2.1) and
the other transactions contemplated hereby to its shareholders
and holders of certain employee stock options for approval;
WHEREAS, Orbital, Acquisition and MDA intend the
transactions described in the Plan of Arrangement to be treated
as a "pooling of interests" under generally accepted accounting
principles in the United States; and
WHEREAS, it is the current intention of Orbital to operate
MDA as a separate division of Acquisition.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements set forth herein, and
intending to be legally bound hereby, Orbital, Acquisition and
MDA hereby agree as follows:
ARTICLE 1
DEFINITIONS
Certain terms are used in this Agreement as specifically
defined herein.
1.1 Cross Reference Table of Certain Defined Terms. The
following terms are defined in the Sections set forth below, and
shall have the respective meanings therein defined:
Term Section
"Acquisition" Preamble
"Acquisition Transaction" Section 5.3
"Affiliate" Section 6.2.4
"Affiliate Agreements" Section 6.2.4
"Agreement" Preamble
"Arrangement" Section 2.1
"Average Closing Price" Section 2.1.2
"CBCA" Section 2.1
"Canadian GAAP" Section 3.6
"Charter Documents" Section 3.1
"Class B Preferred Shares" Section 2.1.4
"Closing" Section 2.4
"Closing Date" Section 2.4
"Contract" Section 3.18
"Contractual Obligations" Section 3.18
"Court" Section 2.1
"EarthWatch Agreement" Section 3.19
"Effective Time" Section 2.4
"Employment Agreements" Section 3.18
"EOS" Section 3.3
"ERISA" Section 3.13
"Exchange Ratio" Section 2.1.2
"Exchangeable Shares" Section 2.1.1
"Final Order" Section 2.1
"Financial Statements" Section 3.5
"Government Contract" Section 3.16
"Government Subcontract" Section 3.16
"Hazardous Substance" Section 3.17
"Holding Company Agreement" Section 2.1.2
"Intellectual Property Rights" Section 3.21
"Interim Order" Section 2.1
"Lien" Section 3.4
"MDA" Preamble
"MDA Common Shares" Section 2.1.2
"MDA Disclosure Schedule" Section 3.1
"MDA Options" Section 2.1.3
"MDA 1988 Options" Section 2.1
"Multiemployer Plan" Section 3.13
"No Action Request" Section 3.28
"Orbital" Preamble
"Orbital Common Shares" Section 2.1.3
"Orbital Disclosure Schedule" Section 4.2
"Orbital Financial Statements" Section 4.5
"PCBs" Section 3.17
"PSC" Section 3.3
"Plans" Section 3.13
"Plan of Arrangement" Section 2.1
"Pooling of Interests" Preamble
"Proxy Circular" Section 3.28
"Registration Statement" Section 3.28
"Replacement Options" Section 2.1.3
"Rights" Section 2.1.2
"SEC Reports" Section 4.4
"Securities Reports" Section 3.5
"Shareholder Meeting" Section 5.2
"Shareholders' Meeting Date" Section 5.2
"Support Agreement" Section 2.3
"Trustee" Section 2.2
"US GAAP" Section 4.5
"Voting Trust Agreement" Section 2.2
1.2. Definitions of Certain Additional Terms. The
following terms shall have the meanings set forth below:
1.2.1. "Code" means the United States Internal Revenue
Code of 1986, as amended.
1.2.2. Consolidated Tax" means any Canadian and United
States Federal income Tax and any provincial, state, local
or foreign income or corporate franchise Tax imposed on any
affiliated, combined or unitary group of corporations (or
the common parent of any such group of corporations) that
included or was required to include MDA for any taxable year
ending on or before the Closing Date.
1.2.3. "Effective Date" shall mean the date on which
the Effective Time occurs.
1.2.4. "Exchange Act" shall mean the United States
Securities Exchange Act of 1934, as amended.
1.2.5. "MDA Material Adverse Effect" shall mean an
effect that does or would reasonably be expected to have a
material adverse effect on the financial condition or
results of operations of MDA and its Subsidiaries, taken as
a whole.
1.2.6. "Orbital Material Adverse Effect" shall mean an
effect that does or would reasonably be expected to have a
material adverse effect on the financial condition or
results of operations of Orbital and its Subsidiaries, taken
as a whole.
1.2.7. "Return" means any return, amended return,
declaration, report, estimate, information return (e.g.
United States Internal Revenue Service Form 1099 and 5500),
closing agreement, or statement required or permitted to be
filed under the laws of any jurisdiction in respect of any
Tax.
1.2.8. "Securities Act" shall mean the United States
Securities Act of 1933, as amended.
1.2.9. "SEC" shall mean the United States Securities
and Exchange Commission.
1.2.10. "Subsidiary" shall mean, with respect to any
corporation, any other corporation, association, or other
business entity a majority (by number of votes) of the
shares of capital stock (or other voting interests) of which
is owned directly or indirectly by such corporation.
1.2.11. "Tax" means any Canadian or United States
Federal, provincial, state or local tax or any foreign tax
(including, without limitation, any net income, gross
income, profits, premium, estimated, excise, sales, value
added, services, use, occupancy, gross receipts, franchise,
license, ad valorem, severance, capital levy, production,
stamp, transfer, withholding, employment, unemployment,
payroll or property tax, customs duty, or any other
governmental charge or assessment), together with any
interest, addition to tax, or penalty.
ARTICLE 2
GENERAL
2.1. Plan of Arrangement. MDA agrees that it shall, as
soon as reasonably practical, apply to the Supreme Court of
British Columbia (the "Court") pursuant to Section 192 of the
Canada Business Corporations Act, as amended (the "CBCA") for an
interim order in form and substance reasonably satisfactory to
Orbital (the "Interim Order") providing for, among other things,
the calling and holding of a special meeting of the shareholders
of MDA (voting together as one class) and the holders of options
to purchase MDA Common Shares pursuant to the MDA Key Employee
Stock Option Plan 1988 or the MDA Employee Stock Option Plan 1988
(collectively, the "MDA 1988 Options") (voting separately from
the shareholders of MDA as a second class) for the purpose of
considering and, if deemed advisable, approving a plan of
arrangement involving MDA and Acquisition substantially in the
form attached as Exhibit 2.1 (the "Arrangement" or "Plan of
Arrangement"), the principal terms of which include:
2.1.1. the designation and authorization of a class of
preferred stock of Acquisition (the "Exchangeable Shares")
that will have the rights, privileges and restrictions, and
be subject to the conditions, set forth in Appendix A of the
Plan of Arrangement;
2.1.2. an exchange of shares whereby (i) all
outstanding common shares of MDA ("MDA Common Shares"),
other than MDA Common Shares held by holding companies
referred to in clause (ii) of this subsection, together with
all rights (the "Rights") associated with such MDA Common
Shares under that certain Amended and Restated Shareholder
Protection Rights Plan Agreement dated as of August 27, 1992
as amended through the date hereof, between MDA and Montreal
Trust Company of Canada, shall be exchanged for the number
of Exchangeable Shares per MDA Common Share equal to the
quotient (the "Exchange Ratio") of U.S.$5.41 divided by the
average closing sales price of Orbital common stock, par
value U.S.$ .01 per share (the "Orbital Common Shares"), for
the twenty trading days ending on the date four trading days
prior to the Effective Date, as reported on the Nasdaq
National Market System (the "Average Closing Price"),
provided, however, that in no event shall the Exchange Ratio
be less than .2705 or greater than .3607; and (ii) all
outstanding shares of each newly formed holding company with
no assets other than MDA Common Shares (together with all
Rights) and all of the shares of which are owned by a party
who has entered into an agreement with Acquisition
substantially in the form of Exhibit 2.1.2 hereto (a
"Holding Company Agreement") pursuant to the provisions of
Section 2.5 hereof and has performed such agreement to the
satisfaction of Acquisition in its sole discretion, will be
exchanged for a number of Exchangeable Shares equal to the
product of the Exchange Ratio multiplied by the number of
MDA Common Shares owned by such holding company; in each
case such Exchangeable Shares to be thereafter exchangeable
for Orbital Common Shares on a one-for-one basis (subject to
certain adjustments pursuant to the Plan of Arrangement), at
the option of the holder, during the periods, at the times
and subject to the conditions set forth in Article 2 of the
Plan of Arrangement;
2.1.3. the conversion of each outstanding MDA employee
stock option, including the MDA 1988 Options, (collectively
the "MDA Options"), into an option (collectively, the
"Replacement Options") to purchase a number of Orbital
Common Shares determined by multiplying the number of MDA
Common Shares subject to such MDA Option times the Exchange
Ratio, each Replacement Option having an exercise price per
share equal to the exercise price per share of such MDA
Option immediately prior to the Effective Time divided by
the Exchange Ratio, and having the same vesting, expiration
and other terms as such MDA Option, all in accordance with
the terms of the plan governing such MDA Option or the Plan
of Arrangement; and
2.1.4. the issuance of 10,000 Class B Preferred Shares
of Acquisition (the "Class B Preferred Shares") to Canadian
Imperial Bank of Commerce as partial consideration for
investment banking services rendered in connection with the
Arrangement.
The foregoing is only a summary of the Plan of Arrangement.
The terms, conditions and procedures for accomplishing the
exchange of shares are set forth in the Plan of Arrangement and
the Appendices thereto and the foregoing is qualified by
reference thereto.
If approval of the Plan of Arrangement by the shareholders
of MDA and the holders of MDA 1988 Options is obtained, MDA shall
promptly take the necessary steps to submit the Arrangement to
the Court and apply for a final order of the Court approving such
Arrangement (the "Final Order").
2.2. Voting and Exchange Trust Agreement. Prior to the
Closing, Orbital, Acquisition and The First National Bank of
Boston or a bank or trust company to be selected by Orbital and
approved by Acquisition and MDA as trustee (the "Trustee"), shall
execute and deliver a Voting and Exchange Trust Agreement in
substantially the form set forth as Exhibit 2.2 hereto, with such
changes and additions thereto as may be reasonably requested by
the Trustee (as so executed, the "Voting Trust Agreement").
Orbital shall deposit with the Trustee one share of a newly
created class of Orbital preferred stock having such voting
rights, privileges and preferences as may be required to secure
the voting rights relating to the Orbital Common Shares granted
for the benefit of the holders of the Exchangeable Shares, such
share to be held by the Trustee in accordance with the Voting
Trust Agreement.
2.3. Support Agreement. Prior to the Closing, Orbital and
Acquisition shall execute and deliver the Support Agreement (the
"Support Agreement") in substantially the form set forth as
Exhibit 2.3.
2.4. Closing, Closing Date and Effective Time. The
execution and delivery of the documents required to effectuate
the transactions contemplated by this Agreement (the "Closing")
shall take place at the offices of Farris, Vaughan, Xxxxx &
Xxxxxx, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx,
Xxxxxx or at such other place and at such time as the parties
hereto may agree; provided, however, such Closing shall take
place no later than the fifth business day after satisfaction or
waiver of the last to be fulfilled of the conditions set forth in
ARTICLE 6 that by their terms are not to occur at the Closing
(the "Closing Date"). The Arrangement shall become effective as
provided for in the Plan of Arrangement (the "Effective Time").
2.5. Holding Company Agreements. The Proxy Circular shall
stipulate that those shareholders of MDA who wish to contribute
their MDA Common Shares (together with all Rights) to a holding
company and exchange the shares of such holding company for
Exchangeable Shares pursuant to clause (ii) of Section 2.1.2 must
notify MDA of their desire to do so not less than five business
days prior to the Shareholder Meeting and must have entered into
the Holding Company Agreement with Acquisition prior to the date
of the Shareholder Meeting. Acquisition shall enter into a
Holding Company Agreement with each shareholder of MDA who
provides the aforementioned notification to MDA. Any shareholder
of MDA who has not entered into a Holding Company Agreement with
Acquisition on or before the date of the Shareholder Meeting or
who has entered into such agreement but has failed to perform
such agreement to the satisfaction of Acquisition in its sole
discretion shall, subject to the Plan of Arrangement receiving
all necessary approvals, exchange his or her MDA Common Shares
and all Rights for Exchangeable Shares in accordance with clause
(i) of Section 2.1.2
2.6. Contemporaneous Transactions. The parties hereby
agree that each of the transactions contemplated by this
Agreement that is in fact consummated shall, to the extent
permitted by applicable law and not otherwise provided for herein
or in the Plan of Arrangement, be deemed consummated
substantially contemporaneously with any other transaction that
is in fact consummated pursuant to this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF MDA
In order to induce Orbital and Acquisition to enter into
this Agreement, MDA hereby represents and warrants as follows:
3.1. Due Organization, Authorization and Good Standing of
MDA. MDA is a corporation duly organized, validly existing and
in good standing under the CBCA and each Subsidiary of MDA is a
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation as listed
in Section 3.1 of the disclosure schedule prepared by MDA and
provided to Orbital concurrently with the execution of this
Agreement (the "MDA Disclosure Schedule"). MDA has the requisite
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and, upon receipt of any
approvals required by the Interim Order and receipt of the Final
Order, to consummate all transactions contemplated hereby. The
execution, delivery and performance by MDA of this Agreement, and
the consummation by MDA of the transactions contemplated hereby,
have been duly and validly authorized and approved by all
necessary corporate action in respect thereof on the part of MDA,
subject only to any approvals required by the Interim Order and
receipt of the Final Order. This Agreement constitutes the valid
and binding obligation of MDA, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, moratorium,
reorganization and similar laws of general applicability
affecting the rights and remedies of creditors and to general
principles of equity, regardless of whether enforcement is sought
in proceedings in equity or at law. Each of MDA and its
Subsidiaries has full corporate power and authority to carry on
its business as now conducted and to own or lease and to operate
its properties and assets where such properties and assets are
now owned, leased or operated by it and where such business is
now conducted by it. Each of MDA and its Subsidiaries is duly
qualified to do business and is in good standing as a foreign
corporation and licensed or qualified to transact business in the
jurisdictions set forth in Section 3.1 of the MDA Disclosure
Schedule, which are the only jurisdictions where such
qualification is required by reason of the nature of the business
conducted by it or the properties or assets owned, operated or
leased by it, other than such failures to be so licensed or
qualified that in the aggregate would not have a MDA Material
Adverse Effect. True, complete and correct copies of the
charter, By-laws and other analogous organizational documents
(the "Charter Documents") of MDA and each of its Subsidiaries as
in effect on the date hereof have heretofore been delivered to
Orbital.
3.2. No Violation or Approval. Except as set forth in
Section 3.2 of the MDA Disclosure Schedule, the execution,
delivery and performance by MDA of this Agreement and the
consummation of the transactions contemplated hereby will not
result in a breach or violation of, or a default under, or the
acceleration of any payment obligation pursuant to, any law, rule
or regulation applicable to MDA and its Subsidiaries, any
material agreement or instrument to which any of them is a party
or by which any of them or any of their properties are bound, or
any order, judgment or decree of any court or any governmental
agency or body having jurisdiction over any of them or their
properties or in a breach or a default under any of their Charter
Documents. No consent, approval, order or authorization of,
declaration or filing with, any governmental authority or entity
or other party is required to be obtained or made by MDA and its
Subsidiaries in connection with the execution and delivery of
this Agreement or the consummation by MDA of the transactions
contemplated hereby other than (i) any approvals required by the
Interim Order, (ii) the Final Order, (iii) filings with the
Director under the CBCA and filings with and approvals required
by provincial securities commissions and stock exchanges, (iv)
those approvals set forth in Section 3.2 of the MDA Disclosure
Schedule and (v) such failures to obtain or make such other
consents, approvals, orders, authorizations, declarations or
filings as in the aggregate would not have a MDA Material Adverse
Effect.
3.3. Capital Stock. The authorized capital stock of MDA
consists of an unlimited number of MDA Common Shares and 232,000
Preference Shares, of which 205,000 shares have been designated
as Class A Preference Shares and 27,000 shares have been
designated as Class B Preference Shares. As of July 31, 1995,
there were 11,103,296 MDA Common Shares outstanding, 1,073,856
MDA Common Shares reserved for issuance upon the exercise of
outstanding MDA Options, 79,215 MDA Common Shares issuable to
shareholders of Earth Observation Sciences Limited ("EOS") and
up to 250,000 MDA Common Shares issuable to former shareholders
of PSC Communications Group, Inc. ("PSC"). Since July 31, 1995,
MDA has not issued or obligated itself to issue (other than (i)
pursuant to MDA Options granted on or before July 31, 1995, (ii)
upon exchange of shares of common stock of EOS, or (iii) to
former shareholders of PSC in the event certain financial
performance targets are achieved), any shares of capital stock or
any outstanding options, warrants, rights, other agreements or
commitments obligating it to issue or sell shares of its capital
stock or any securities or obligations convertible into, or
exchangeable for, any shares of its capital stock. No MDA Common
Shares are held as treasury stock or by any Subsidiary of MDA,
and no Preference Shares are outstanding. All of the
outstanding MDA Common Shares have been, and any MDA Common
Shares issued upon exercise of any MDA Options or to shareholders
of EOS or former shareholders of PSC will be, validly issued,
fully paid and nonassessable and free of preemptive rights.
Except for the MDA Options (more fully described as to exercise
price and exercise period in Section 3.3 of the MDA Disclosure
Schedule) and the obligation to issue shares to EOS and to former
shareholders of PSC as described above, neither MDA nor any of
its Subsidiaries has any outstanding options, warrants, rights,
other agreements or commitments obligating it to issue or sell
shares of its capital stock or any securities or obligations
convertible into, or exchangeable for, any shares of its capital
stock. Neither MDA nor any of its Subsidiaries has outstanding
any bonds, debentures, notes or other indebtedness the holders of
which have the right to vote (or that are convertible or
exercisable into securities having the right to vote) with
holders of MDA Common Shares or holders of the MDA 1988 Options
on any matter. None of the outstanding shares of capital stock
of MDA or of its Subsidiaries was issued in violation of
Canadian provincial securities laws, the Securities Act or the
rules and regulations promulgated thereunder or the securities or
blue sky laws of any state or other jurisdiction, which
violations would have in the aggregate a MDA Material Adverse
Effect.
3.4. Subsidiaries. Except for the equity investments set
forth in Section 3.4 of the MDA Disclosure Schedule, MDA does not
own, directly or indirectly, any capital stock, any partnership
or equity or other ownership interest in, or any security issued
by, any other corporation, organization, association, entity or
business enterprise, and Section 3.4 of the MDA Disclosure
Schedule indicates which such equity investments are Subsidiaries
of MDA and which are minority ownership interests. Except as set
forth in Section 3.4 of the MDA Disclosure Schedule, MDA owns,
directly or indirectly, all of the outstanding shares of each of
the entities listed thereon and identified as Subsidiaries of MDA
(except for directors' qualifying shares or such shares as may be
required by local laws to be owned by residents of the
jurisdiction of incorporation) free and clear of all liens,
pledges, security interests, mortgages, claims, charges and
encumbrances ("Liens"). All shares of capital stock owned by MDA
in any of its Subsidiaries are duly authorized, validly issued,
fully paid and nonassessable.
3.5. Securities Law Filings. MDA has filed all proxy
circulars, reports and other documents required to be filed by it
after March 31, 1995 pursuant to the CBCA and all applicable
Canadian provincial securities laws or any rule or order of a
stock exchange on which MDA Common Shares are listed. MDA has
provided to Orbital copies of MDA's Annual Report and its Annual
Information Form for the fiscal year ended March 31, 1995, and
all final proxy circulars, reports and other documents filed by
MDA pursuant to all such securities laws and/or stock exchange
rules or orders (collectively, the "Securities Reports"). Each
Securities Report was, as of the date of filing such report, in
compliance in all material respects with all applicable
requirements of its respective form and none of the Securities
Reports, as of their respective filing dates, contained any
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading.
3.6. Financial Statements, etc. MDA has previously
furnished Orbital with true and complete copies of the following
financial statements (collectively, the "Financial Statements"):
(i) consolidated financial statements for the fiscal years ended
March 31, 1993, 1994 and 1995 audited by KPMG Peat Marwick
Xxxxxx, and (ii) unaudited statements of income and cash flows
for the fiscal quarter ended June 30, 1995 and the accompanying
balance sheet as of June 30, 1995, each prepared from the books
and records of MDA and its consolidated Subsidiaries. The
Financial Statements present fairly, in all material respects,
the consolidated financial position of MDA and the results of its
operations and its cash flows as of the respective dates and for
the periods presented therein in conformity with generally
accepted accounting principles in Canada as in effect on the
applicable dates of such financial statements ("Canadian GAAP")
and applied on a consistent basis, except as noted therein and
except that in the case of the unaudited financial statements, no
notes are included and such unaudited financial statements may be
subject to normal, recurring adjustments that would be made in
the course of an audit and that would not be material. Except as
and to the extent reflected or reserved against in the balance
sheet as of June 30, 1995 included in the Financial Statements
or as set forth in Section 3.6 of the MDA Disclosure Schedule,
MDA and its Subsidiaries, taken as a whole, do not have any
material liabilities or obligations of any nature.
3.7. Absence of Changes; Operations in the Ordinary Course.
Except as set forth in the Securities Reports or in Section 3.7
of the MDA Disclosure Schedule, since March 31, 1995 neither MDA
nor any of its Subsidiaries has undergone any adverse change in
its financial condition, or suffered any damage, destruction or
loss (whether or not covered by insurance) that adversely affects
its financial condition, the condition of its assets or the
ability to conduct its business other than such changes in
financial condition, damage, destruction or loss as in the
aggregate would not have a MDA Material Adverse Effect; and since
March 31, 1995, except as set forth in the Securities Reports or
in Section 3.7 of the MDA Disclosure Schedule, there has been no
adverse change in the condition of the business of MDA or any of
its Subsidiaries, whether as a result of any change as to
accounts receivable, inventory or other assets, any loss of
competitive position, any natural disaster, accident, strike,
sabotage, or confiscation of property, or any other event or
condition directly affecting or relating to MDA, whether or not
related to any of the foregoing, except for such changes as would
not in the aggregate have a MDA Material Adverse Effect and such
changes as are the result of changes in general economic or
industry wide conditions. Since March 31, 1995, with the
exception of actions taken at the request of Orbital or otherwise
necessary to the consummation of the transactions contemplated by
this Agreement or the Plan of Arrangement, and except as set
forth in the Securities Reports or in Section 3.7 of the MDA
Disclosure Schedule, MDA and each of its Subsidiaries has
operated its business in the ordinary course, consistent in all
material respects with past practice. Without limiting the
generality of the foregoing, since March 31, 1995, neither MDA
nor any of its Subsidiaries has:
(a) amended the terms of any outstanding indebtedness or
incurred any indebtedness for borrowed money that has not been
repaid in full, or issued or sold any of its debt or equity
securities, except in the ordinary course of business consistent
with past practice;
(b) subjected to any Lien or lease any of its properties,
tangible or intangible, except in the ordinary course of business
consistent with past practice;
(c) forgiven or canceled any debts owed to MDA or any of
its Subsidiaries or claims of MDA or any of its Subsidiaries, or
waived any rights, except in the ordinary course of business
consistent with past practice;
(d) incurred any liability or obligation (whether absolute,
accrued, contingent or otherwise) or made any payment in respect
of (i) any acquisition or disposition of any assets or properties
in any transaction with any officer, director, shareholder or
employee of MDA or any of its Subsidiaries, or any relative by
blood or marriage or any "affiliate" or "associate" of MDA or any
of its Subsidiaries (as such terms are defined in Rule 405
promulgated under the Securities Act), (ii) except as set forth
in Section 3.7 of the MDA Disclosure Schedule, any other
transaction with any such affiliate or associate of MDA or any of
its Subsidiaries, other than salaries paid to officers; or (iii)
any declaration, setting aside or payment of dividends or other
distributions in respect of, or purchases or redemptions
(directly or indirectly) of, any shares of its capital stock;
(e) proposed or adopted any amendments to its Charter
Documents except as contemplated by this Agreement or the Plan of
Arrangement;
(f) entered into or publicly announced an intention to
enter into any agreement (including, without limitation, an
agreement in principle) with respect to, any acquisition of a
material amount of assets or securities or any release or
relinquishment of any material contract rights not in the
ordinary course of business;
(g) made any capital expenditures other than in the
ordinary course of business consistent with past practice or as
necessary to maintain existing assets in good repair;
(h) entered into any line of business not described or
contemplated in MDA's Annual Report for the fiscal year ended
March 31, 1995;
(i) committed any act or omission that constitutes a
material breach or default by MDA or any of its Subsidiaries
under any material contract or material license to which MDA or
any of its Subsidiaries is a party or by which any of them or
their respective properties is bound;
(j) made any investment or commitment to make such an
investment in real estate or in any real estate development
project;
(k) except as disclosed in the Financial Statements or in
Section 3.7 of the MDA Disclosure Schedule: (i) granted to any
officer or employee any increase in compensation in any form
(including without limitation any increase in value of any
benefits) in excess of the amount thereof in effect as of March
31, 1995 other than increases in base salary or hourly wages of
employees other than officers of MDA in the ordinary course of
business in amounts consistent with past practice, or any
severance or termination pay, or entered into any employment
agreement with any employee that is not terminable by the
employer, without cause and without penalty, upon notice of 30
days or less, (ii) adopted or amended any bonus, profit-sharing,
compensation, stock option, pension, retirement, deferred
compensation or other plan, agreement, trust, fund or arrangement
for the benefit of employees (whether or not legally binding),
(iii) hired any employee who shall have total expected annual
compensation in excess of U.S.$100,000, or (iv) paid or incurred
any obligation to pay any bonus or fee to any employee (including
any officer) of MDA or any of its Subsidiaries or in connection
with the transactions contemplated by this Agreement; or
(l) agreed in writing or otherwise to do any of the
foregoing.
3.8. Taxes.
(a) For each of its taxation or taxable years or periods
ending on or prior to the date hereof : (i) all Tax Returns
that are required to have been filed by or with respect to MDA or
any of its Subsidiaries have been duly and timely filed and are
correct and complete in all material respects; (ii) all income,
capital and corporate franchise Taxes with respect to or required
to have been paid by MDA or any of its Subsidiaries or for which
MDA or any of its Subsidiaries is or may otherwise be liable
(including without limitation all Consolidated Taxes), whether or
not shown on any Tax Return, have been paid in full if due or
accrued for in accordance with Canadian GAAP in the Financial
Statements through the date thereof and in the books and records
of MDA or the relevant Subsidiary in respect of subsequent
periods; and (iii) all Taxes other than those described in
clause (ii) with respect to or required to have been paid by MDA
or any of its Subsidiaries or for which MDA or any of its
Subsidiaries is or may otherwise be liable, whether or not shown
on any Tax Return, have been paid in full if due or accrued for
in accordance with Canadian GAAP in the Financial Statements
through the date thereof and in the books and records of MDA or
the relevant Subsidiary in respect of subsequent periods except
for such amounts the nonpayment of which, in the aggregate, would
not result in a MDA Material Adverse Effect.
(b) Except as set forth in Section 3.8 of the MDA
Disclosure Schedule, (i) there are no audits, proceedings, or
litigation in respect of Taxes relating to MDA or any of its
Subsidiaries pending, in progress, or to MDA's knowledge,
threatened, (ii) there are no Tax Liens upon any property or
assets of MDA or any of its Subsidiaries other than Liens for
Taxes that are not yet due and payable, and (iii) neither MDA nor
any of its Subsidiaries has consented to any extension of any
statute of limitations pertaining to Taxes.
(c) Neither MDA nor any of its Subsidiaries is obligated as
a result of the transactions contemplated by this Agreement to
make a payment that would be a "parachute payment" to a
"disqualified individual" as those terms are defined in Section
280G of the Code without regard to whether such payment is
reasonable compensation for personal services performed or to be
performed in the future.
(d) MDA and each of its Subsidiaries has collected or
withheld all amounts required to be collected or withheld by it
on account of Taxes or otherwise, and has remitted the same to
the appropriate governmental authority in the manner and within
the time required under any applicable legislation or, if it is
not yet due, has set it aside in appropriate accounts for payment
when due.
(e) The liability for Taxes under the Income Tax Act
(Canada) of each of MDA and its Subsidiaries has been assessed by
Revenue Canada for all taxation years up to and including the
taxation years ending March 31, 1994. True and complete copies
of the federal and provincial Tax Returns for MDA and each
Subsidiary for the taxation year ending March 31, 1994 and copies
of all assessments and reassessments relating to the most recent
taxation year for which the same are available have been provided
to Orbital.
(f) There are no circumstances that exist and would result,
or that have existed and resulted, in section 80 of the Income
Tax Act (Canada) applying to MDA or any of its Subsidiaries.
3.9. Properties. MDA and each of its Subsidiaries do not
own any real property. MDA and each of its Subsidiaries has good
and marketable title to all tangible personal property reflected
in the March 31, 1995 balance sheet included in the Financial
Statements or acquired since such date (except for property
disposed of since such date in the ordinary course of business
consistent with past practice), and valid leasehold interests in
all real and tangible personal properties leased by it, in each
case free and clear of Liens, easements or title imperfections
except (a) Liens for current Taxes not yet due and payable, (b)
encumbrances and easements that do not materially detract from
the value or interfere with the use by MDA or any of its
Subsidiaries, as the case may be, of the properties affected
thereby, (c) Liens reflected in the Financial Statements, (d)
Liens of customers on property purchased by MDA in connection
with its performance of contracts to provide products or services
to such customers and which in the aggregate would not have a MDA
Material Adverse Effect, and (e) Liens set forth in Section 3.9
of the MDA Disclosure Schedule. MDA or its Subsidiary as lessee
thereof enjoys peaceful and undisturbed possession under all
material leases under which it operates. All tangible personal
property material for the conduct of the business of MDA and its
Subsidiaries as presently conducted is in satisfactory operating
condition and repair, subject to ordinary wear and tear.
3.10. Customers, Distributors and Suppliers. Except as set
forth in Section 3.10 of the MDA Disclosure Schedule, neither MDA
nor any of its Subsidiaries has received notice from any person
or entity with which it has an existing agreement, oral or
written, for the purchase or distribution of products or services
from MDA or any of its Subsidiaries that it intends to reduce
significantly such purchases or terminate such agreement, whether
as a result of the transactions contemplated hereby or otherwise,
other than such reductions and actions as in the aggregate would
not have a MDA Material Adverse Effect.
3.11. Operations in Conformity With Law, etc. Neither MDA
nor any of its Subsidiaries has been or is in violation of, or in
default under, any law, rule, regulation, order, judgment or
decree relating in any manner or applicable to the business or
assets of MDA or any of its Subsidiaries or any of their
respective employees, except for such violations or defaults that
in the aggregate would not have a MDA Material Adverse Effect.
Neither MDA or any of its Subsidiaries, nor, to the knowledge of
MDA or any of its Subsidiaries, any of their respective officers,
employees or agents has (a) directly or indirectly given or
agreed to give any illegal gift, contribution, payment or similar
benefit to any supplier, customer, governmental official or
employee or other person who was, is or may be in a position to
help or hinder MDA or any of its Subsidiaries (or assist in
connection with any actual or proposed transaction) or made or
agreed to make any illegal contribution, or reimbursed any
illegal political gift or contribution made by any other person,
to any candidate for Canadian or United States Federal,
provincial, state or local, or foreign public office
(collectively, a "Restricted Activity") that (i) would subject
MDA or any of its Subsidiaries to any damage or penalty in any
civil, criminal or governmental litigation or proceeding that
would have, in the aggregate, a MDA Material Adverse Effect,
(ii), if such Restricted Activity had occurred after the
Effective Date, would subject Orbital to any damage or penalty in
any civil, criminal or governmental litigation or proceeding that
would have, in the aggregate, a MDA Material Adverse Effect, or
(iii) if such Restricted Activities were to cease as of the date
hereof, such cessation would have a MDA Material Adverse Effect.
.
3.12. Litigation. Except as set forth in Section 3.12 of
the MDA Disclosure Schedule, there are no actions, claims, suits,
investigations or proceedings pending or to MDA's knowledge
threatened against MDA or any of its Subsidiaries pertaining to
the business or assets of MDA or any of its Subsidiaries that, in
the aggregate, if adversely determined, would have a MDA Material
Adverse Effect or that question the validity of this Agreement or
any action taken or to be taken pursuant to or in connection with
the provisions of this Agreement, nor to the knowledge of MDA or
its Subsidiaries is there any basis for any such action, claim,
suit, proceeding or investigation. There are no judgments,
orders, decrees, citations, fines or penalties heretofore
assessed (and not discharged or otherwise satisfied) against MDA
or any of its Subsidiaries under any Canadian or United States
Federal, provincial, state or local, or foreign law except for
such judgments, orders, decrees, citations, fines or penalties
that in the aggregate would not have a MDA Material Adverse
Effect.
3.13. Employee Matters; Benefit Plans.
(a) All plans, agreements, policies and arrangements
(including those sponsored by the Federal or any provincial
government of Canada), whether or not reduced to writing and
whether or not legally binding, to which MDA or any of its
Subsidiaries contributes or is obligated to contribute, or under
which MDA or any of its Subsidiaries has or may have any
liability for premiums or benefits, and which benefits any
active, former or retired employee, outside director, consultant
or other independent contractor who provides or provided services
to or for the benefit of MDA and its Subsidiaries, are listed in
Section 3.13 of the MDA Disclosure Schedule (the "Plans"). MDA
has delivered to Orbital, a true, correct and complete copy of
each written Plan (or a written summary of the material terms of
any Plan that has not been reduced to writing) any related trust
agreement and annuity or insurance contract, if any, each Plan's
most recent annual report filed with the Internal Revenue Service
or Revenue Canada, if any, and all summary plan descriptions,
employee handbooks, or other similar employee communications with
respect to the Plans.
(b) Each Plan has been maintained and administered in
material compliance with its terms and with the requirements
prescribed by any and all applicable statutes, orders, rules and
regulations, and is, to the extent required by applicable law or
contract, fully funded without having any deficit or unfunded
actuarial liability; all required employer contributions under
any such Plans have been made and the applicable funds have been
funded in accordance with the terms thereof and no past service
funding liabilities exist thereunder; and all material
contributions, reserves or premium payments required to be made
as of the date hereof to the Plans have been made or provided
for.
(c) Each Plan that is required or intended to be qualified
under applicable law (including to the extent applicable, the
Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and the Code, including without limitation Section
401(a) of the Code) or registered or approved by a government
agency or authority has been so qualified, registered or approved
by the appropriate governmental agency or authority, and nothing
has occurred since the date of the last qualification,
registration or approval to cause the appropriate governmental
agency or authority to revoke, or otherwise adversely affect,
such qualification, registration or approval.
(d) Except as set forth in Section 3.13 of the MDA
Disclosure Schedule, there are no pending or, to MDA's knowledge,
anticipated claims against or otherwise involving any of the
Plans and no suit, action or other litigation (excluding claims
for benefits incurred in the ordinary course of Plan activities)
has been brought against or with respect to any such Plan.
(e) No Plan currently maintained by MDA is covered by Title
IV of ERISA. Neither MDA nor any Subsidiary has incurred any
liability under Subtitle C or D of Title IV of ERISA with respect
to any "single-employer plan," within the meaning of Section
4001(a)(15) of ERISA, currently or formerly maintained by MDA,
any of its Subsidiaries or any entity that is considered one
employer with MDA under Section 4001 of ERISA. Neither MDA nor
any such Subsidiary has incurred any withdrawal liability under
Subtitle E of Title IV of ERISA with respect to any
"multiemployer plan" within the meaning of Section 4001(a)(3) of
ERISA.
(f) Except as set forth in Section 3.13 of the MDA
Disclosure Schedule, neither MDA nor any of its Subsidiaries has
any obligations for retiree health and life benefits under any
Plan, and there are no restrictions on the rights of MDA or any
of its Subsidiaries to amend or terminate any such Plan without
incurring any liability thereunder.
3.14. Labor Relations. There is no existing dispute or
controversy between MDA or any of its Subsidiaries and any of
MDA's or such Subsidiary's employees that would have a MDA
Material Adverse Effect. Neither MDA nor any of its Subsidiaries
is a party to any collective bargaining agreement with respect to
any of its employees, none of such employees is represented by a
labor union and, to MDA's knowledge, there is no labor union
organizing activity by or among such employees.
3.15. Government Contracts and Subcontracts. Except as and
to the extent reflected or reserved against in the balance sheet
dated as of March 31, 1995 included in the Financial Statements,
there are no claims, penalties, or causes of action against MDA
or any of its Subsidiaries the basis of which is an actual or
alleged violation of, or noncompliance with, any applicable law,
regulation or order (a) related to a contract between MDA or any
of its Subsidiaries and the Canadian or United States Federal
government or the province of British Columbia or any other
provincial, state or local, or foreign government or any division
or agency of any of the foregoing (a "Government Contract"), or
(b) related to a contract between MDA or any of its Subsidiaries
and any other party which contract renders MDA or any of its
Subsidiaries a subcontractor at any tier to a prime contract with
the Canadian or the United States Federal government or the
province of British Columbia or any other provincial, state or
local, or foreign government or any division or agency of any of
the foregoing (a "Government Subcontract"). To the knowledge of
MDA and its Subsidiaries, there is no basis for a claim, penalty,
or cause of action against MDA or any of its Subsidiaries
alleging a violation of, or noncompliance with, any applicable
law, regulation or order related to any Government Contract or
Government Subcontract to which MDA or any of its Subsidiaries is
a party, except for such claims, penalties or causes of action as
do not, in the aggregate, have a MDA Material Adverse Effect.
For purposes of this Section 3.15, claims, penalties, and causes
of action alleging a violation of, or noncompliance with, any
applicable law, regulation or order include, but are not limited
to, those purporting to be based on failure to comply with cost
accounting standards, allowable costs, allocation of costs,
omissions or errors in disclosure statements, or defective
pricing.
3.16. Licenses, etc. MDA and each of its Subsidiaries has
all governmental and regulatory licenses and permits necessary
for the conduct of its business as presently conducted except
where the failure to obtain or maintain such licenses and permits
would not, in the aggregate, have a MDA Material Adverse Effect.
All such licenses and permits are in full force and effect, and
no violations have been recorded in respect thereof. Neither MDA
nor any of its Subsidiaries is in violation of any such license
or permit, and no proceeding or investigation is pending or, to
MDA's or any of its Subsidiaries' knowledge, threatened that
would have the effect, directly or indirectly, of revoking or
limiting in any way any such licenses or permits.
3.17. Environmental Matters. MDA and each of its
Subsidiaries is and has at all times been in compliance in all
material respects with all applicable Canadian and United States
Federal, provincial, state and local, and foreign laws,
regulations, by-laws, ordinances, orders, directives and
decisions relating to environmental, natural resources, health
and safety matters. There is no suit, claim, action or
proceeding pending or threatened against MDA or any of its
Subsidiaries or, to MDA's and each Subsidiary's knowledge, any
basis therefor, in respect of (i) noncompliance by MDA or any of
its Subsidiaries with any such laws, regulations, by-laws,
ordinances, orders, directives or decisions (ii) personal injury,
wrongful death, other tortious conduct, or relating to materials,
commodities or products held, used, sold, transferred,
manufactured or disposed of by or on behalf of MDA or any of its
Subsidiaries, containing or incorporating any hazardous or toxic
materials, commodities or substances, or (iii) the presence or
release or threatened release into the environment of any
pollutant, contaminant, deleterious or toxic or hazardous
material, substance or waste, whether solid, liquid or gas (each
a "Hazardous Substance"), whether generated by MDA or any of its
Subsidiaries or located at or about a site leased or otherwise
used by MDA or any of its Subsidiaries or heretofore owned,
leased or otherwise used by MDA or any of its Subsidiaries or any
predecessor entity. To MDA's and each Subsidiary's knowledge,
there have been no Hazardous Substances of or generated by MDA or
any Subsidiary that have been disposed of or come to rest at any
site that has been included in any published United States
Federal, state or local "superfund" site list or any other list
of hazardous or toxic waste sites published by any governmental
authority in Canada or the United States. To MDA's and each
Subsidiary's knowledge there are and have been no underground
storage tanks located on, no polychlorinated biphenyls ("PCBs")
or PCB-containing equipment used or stored on, and no hazardous
waste, as defined by the Resource Conservation and Recovery Act,
as amended, stored on, any site, leased or otherwise used by MDA
or any Subsidiary. To MDA's and each Subsidiary's knowledge,
there have been no emissions or releases or threatened emissions
or releases of Hazardous Substances on, upon, into or from any
site leased or otherwise used by MDA or any of its Subsidiaries
or heretofore owned, leased or otherwise used by MDA or any of
its Subsidiaries or any predecessor entity.
3.18. Contractual Obligations, etc. Section 3.18 of the
MDA Disclosure Schedule contains a true and complete list of all
contracts, agreements, deeds, mortgages, leases (whether or not
capitalized), licenses, instruments, commitments, sales orders,
purchase orders, quotations, bids, undertakings, arrangements or
understandings, written or oral (each, a "Contract") to which or
by which MDA or any of its Subsidiaries is a party or otherwise
bound or to which or by which any of MDA's or its Subsidiaries'
assets are subject of the types described below and in effect on
the date hereof (Contracts of the type described below,
collectively, the "Contractual Obligations").
(a) All Contracts relating to noncompetition;
(b) All Contracts to which any employee is a party, other
than option agreements relating to the MDA Options and employment
offer letters that are terminable by MDA at will (subject only to
reasonable notice) and the employment agreements to be entered
into, pursuant to Section 6.2.5 hereof, in substantially the form
of Exhibit 3.18 (the "Employment Agreements");
(c) All Contracts relating to the provision of consulting
services that involve liabilities or obligations of MDA or any of
its Subsidiaries in excess of C$150,000 or that have a term
extending more than one year after the Closing Date;
(d) All Contracts (including without limitation options) to
sell (other than sales of products) or lease (as lessor) any
property or asset owned or leased by MDA or any of its
Subsidiaries, other than property or assets having individual
values less than C$50,000 and an aggregate value less than
C$300,000;
(e) All Contracts pursuant to which MDA or any of its
Subsidiaries possesses or uses (including as lessee) any
properties or assets in its business the loss of use of which
would have a MDA Material Adverse Effect, or pursuant to which
MDA pays, accrues expenses of or incurs charges of at least
C$50,000 per annum;
(f) All Contracts for the sale of products or provision of
services by MDA or any of its Subsidiaries that individually
involve products or services having a value of at least C$250,000
or that have a term extending more than one year after the
Closing Date;
(g) All Contracts with suppliers or providers of goods or
services (other than cleaning, trash removal, facilities
maintenance or repair, or similar services and other than agent
or representation agreements terminable upon no more than one
year's notice) to MDA or any of its Subsidiaries, including
without limitation purchase orders, that individually involve
liabilities in excess of C$100,000; and
(h) Each other Contract (other than Contracts of the type
described in (a) through (g) of this Section 3.18) that involves
liabilities or obligations of MDA or any of its Subsidiaries in
excess of C$150,000 or that has a term extending more than one
year after the Closing Date.
MDA shall make available to Orbital upon request a true and
complete copy of each of the Contractual Obligations referred to
in (a) through (h) except as otherwise provided in Section 3.19
below. Other than defaults resulting from claims, penalties or
causes of action disclosed in Section 3.15 or Section 3.18 of the
MDA Disclosure Schedule, neither MDA nor any of its Subsidiaries
nor, to the knowledge of MDA or its Subsidiaries, any other party
is in default under or in breach or violation of, nor has an
event occurred that (with or without notice, lapse of time or
both) would constitute a default by MDA or any of its
Subsidiaries or to MDA's knowledge by any other party, under any
Contractual Obligations which defaults, in the aggregate, have a
MDA Material Adverse Effect.
3.19. EarthWatch Agreement. MDA has executed one or more
contracts with EarthWatch, Inc. ("EarthWatch") (collectively, the
"EarthWatch Agreement") which provides, among other things, that
MDA shall make an equity investment in EarthWatch and build a
portion of EarthWatch's image data archival and processing
facility. In lieu of providing to Orbital a copy of the
EarthWatch Agreement, Section 3.19 of the Disclosure Schedule
describes, to MDA's belief, all of MDA's material obligations
(financial or otherwise) under the EarthWatch Agreement.
3.20. Affiliated Transactions. Except for Contracts
described in Section 3.18(b), none of the directors, officers,
shareholders or employees of MDA or any of its Subsidiaries, or
any relative by blood or marriage or any "affiliate" or
"associate" (as such terms are defined in Rule 405 promulgated
under the Securities Act) of any of the foregoing, is currently a
party to any Contractual Obligation.
3.21. Patents, Trademarks, etc. Section 3.21 of the MDA
Disclosure Schedule contains a complete and correct list of all
patents, patent applications, trade names, trademarks, trademark
applications, service marks, copyrights and copyright
applications owned or used by MDA or any of its Subsidiaries.
MDA and each of its Subsidiaries owns, or pursuant to license
agreements possesses adequate rights to use, all patents, trade
names, trademarks, copyrights, inventions, processes, designs,
formulas, trade secrets, know-how and other intellectual property
and proprietary rights (collectively, the "Intellectual Property
Rights") used in or necessary in all material respects for the
conduct of its business with no known conflict with or
infringement of the asserted rights of others. With respect to
any such Intellectual Property Right owned by MDA or any of its
Subsidiaries, MDA or such Subsidiary is the sole and exclusive
owner of, with all right, title and interest in and to, free and
clear of any Lien, such Intellectual Property Right and MDA and
its Subsidiaries have sole and exclusive rights (and except as
reflected in the Financial Statements, are not contractually
obligated to pay any compensation to any third party in respect
thereof) to the use thereof. To the best of MDA's knowledge (i)
all inventions, processes, designs, formulas, trade secrets, know-
how and other intellectual property that are material and have
not been patented or copyrighted have been kept confidential and
(ii) no third party is currently infringing or has infringed the
rights of MDA or any of its Subsidiaries under any patent, trade
name, trademark or copyright owned by MDA or any of its
Subsidiaries.
3.22. Insurance. Section 3.22 of the MDA Disclosure
Schedule contains a summary description of all insurance policies
maintained by MDA or its Subsidiaries, all of which policies are
in full force and effect.
3.23. Customer Warranty Coverage. Section 3.23 of the MDA
Disclosure Schedule contains a description of all warranty
coverages (including terms of such coverages, expiration dates,
and estimated amounts of liability) extended by MDA or any of its
Subsidiaries for repair or replacement of defective products or
service to its customers as of the date indicated thereon. The
estimated liability for warranty claims is fairly reflected in
the Financial Statements.
3.24. Pooling. Neither MDA nor, to MDA's knowledge, any of
its "affiliates" (as defined in Opinion No. 16, as amended, of
the Accounting Principles Board of the American Institute of
Certified Public Accountants and the interpretive rulings issued
thereunder) has taken or agreed to take any action that would
prevent Orbital from accounting for the business combination to
be effected by the Plan of Arrangement as a pooling-of-interests.
3.25. Certain Agreements. Except as set forth in Section
3.25 of the MDA Disclosure Schedule, neither the execution and
delivery of this Agreement nor the consummation of the
transactions contemplated hereby or by the Plan of Arrangement
will (i) result in any payment (including, without limitation,
severance, unemployment compensation, parachute payment, bonus or
otherwise) becoming due to any director, employee or independent
contractor of MDA or its Subsidiaries, from MDA or any of its
Subsidiaries under any Plan, agreement or otherwise, (ii) except
as contemplated by the Employment Agreements, increase any
benefits otherwise payable under any Plan or agreement, or (iii)
result in the acceleration of the time of payment or vesting of
any such benefits.
3.26. Opinion of Financial Advisor. MDA has received the
opinion of Xxxxxxx Xxxxx, dated the date hereof, to the effect
that, as of such date, the consideration to be received in the
Arrangement by MDA's shareholders and the holders of the MDA 1988
Options is fair to MDA's shareholders and the holders of the MDA
1988 Options from a financial point of view, a copy of which
opinion has been provided to Orbital.
3.27. Brokers, Finders, etc. All negotiations relating to
this Agreement and the transactions contemplated hereby have been
carried on without the intervention of any person acting on
behalf of MDA in such manner as to give rise to any valid claim
against MDA or Orbital for any brokerage or finder's commission,
fee or similar compensation, except for fees payable to Xxxxxxx
Xxxxx pursuant to the engagement letter between it and MDA, dated
June 16, 1995, a copy of which has been provided to Orbital.
3.28. Disclosure; Provision of Information. This Agreement,
including the Exhibits hereto and the MDA Disclosure Schedule,
the certificates delivered or to be delivered in connection
herewith and the Securities Reports, taken as a whole, do not
contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements herein or
therein not misleading. The proxy circular or other disclosure
document and any amendment or supplement thereto to be
distributed in connection with MDA's meeting of its shareholders
and the holders of the MDA 1988 Options to vote upon the
Arrangement (the "Proxy Circular") will, at the time of the
mailing thereof and at the time of such meeting, not contain any
misrepresentation (within the meaning of any applicable Canadian
or United States Federal, provincial or state securities laws) or
any untrue statement of a material fact or omit to state a
material fact necessary to be stated therein or necessary to make
the statements therein, in light of the circumstances in which
they are made, not misleading and comply as to form in all
material respects with the provisions of all applicable laws,
including the provisions of the CBCA and the rules and
regulations thereunder, except that no representation is made by
MDA with respect to information supplied by or on behalf of
Orbital or Acquisition specifically for inclusion therein. None
of the information supplied or to be supplied by or on behalf of
MDA or its Subsidiaries for inclusion in (i) the Plan of
Arrangement, (ii) the request for a "no action letter" submitted
by Orbital to the SEC seeking to confirm the availability of an
exemption under Section 3(a)(10) of the Securities Act for the
issuance of the Exchangeable Shares and an exemption under
Section 3(a)(9) or 3(a)(10) of the Securities Act for the
issuance of Orbital Common Shares in exchange for the
Exchangeable Shares and any requests to Canadian securities
regulators for rulings or orders to permit the Arrangement and
related transactions to be carried out without prospectus or
registration requirements (collectively, the "No Action
Request"); or (iii) any registration statement and any amendment
thereto required to be filed under the Securities Act by Orbital
in connection with the issuance of the Exchangeable Shares or the
Orbital Common Shares in or as a result of the Arrangement (a
"Registration Statement") will (a) in the case of the Plan of
Arrangement, at the time the Plan of Arrangement is considered by
the Court, (b) in the case of the No Action Request, at the time
the No Action Request, as amended or supplemented, is acted on by
the SEC or Canadian securities regulators, as the case may be, or
(c) in the case of any Registration Statement, at the time it
becomes effective and at the time of any post-effective amendment
thereto, contain any misrepresentation (within the meaning of any
applicable Canadian or United States Federal, provincial or state
securities laws) or any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances in which they are made, not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF ORBITAL
AND ACQUISITION
In order to induce MDA to enter into this Agreement, each of
Orbital and Acquisition jointly and severally represents and
warrants as follows:
4.1. Due Organization, Authorization and Good Standing of
Orbital and Acquisition. Orbital is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Delaware. Acquisition is a corporation duly
organized, validly existing and in good standing under the CBCA.
Each other Subsidiary of Orbital is a corporation or limited
partnership duly organized or formed, validly existing and in
good standing under the laws of the jurisdiction of its
organization or formation. Each of Orbital and Acquisition has
the requisite corporate power and authority to execute, deliver
and perform its obligations under this Agreement and to
consummate all transactions contemplated hereby. The execution,
delivery and performance of this Agreement by each of them, and
the consummation of the transactions contemplated hereby have
been duly and validly authorized and approved by all necessary
corporate action in respect thereof on the part of each of
Orbital and Acquisition. This Agreement constitutes the valid
and binding obligation of each of Orbital and Acquisition,
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, moratorium, reorganization and similar laws of
general applicability affecting the rights and remedies of
creditors and to general principles of equity, regardless of
whether enforcement is sought in proceedings in equity or at law.
Each of Orbital, Acquisition and each other Subsidiary of Orbital
has full corporate or partnership power and authority to carry on
its business as now conducted and to own or lease and to operate
its properties and assets where such properties and assets are
now owned, leased or operated by it and where such business is
now conducted by it. Each of Orbital, Acquisition and each other
Subsidiary of Orbital is duly qualified to do business and in
good standing as a foreign corporation or limited partnership and
licensed or qualified to transact business in each jurisdiction
in which the nature of the business conducted by it or the
properties or assets owned, operated or leased by it requires it
to be so licensed or qualified, other than such failures to be so
licensed or qualified that, in the aggregate, would not have an
Orbital Material Adverse Effect. True, complete and correct
copies of the Charter Documents of Orbital and Acquisition as in
effect on the date hereof have heretofore been delivered to MDA.
4.2. No Violation or Approval. Except as set forth in
Section 4.2 of the disclosure schedule prepared by Orbital and
provided to MDA concurrently with the execution of this Agreement
(the "Orbital Disclosure Schedule"),the execution, delivery and
performance by Orbital and Acquisition of this Agreement and the
consummation of the transactions contemplated hereby will not
result in a breach or violation of, or a default under, any law,
rule or regulation, order, judgment or decree applicable to
Orbital, Acquisition or any other Subsidiary of Orbital, any
material agreement or instrument to which any of them is a party
or by which any of them or any of their respective properties are
bound, or any order, judgment or decree of any court or any
governmental agency or body having jurisdiction over any of them
or their properties or in a breach or a default under their
Charter Documents other than any breach, violation or default
that would not have an Orbital Material Adverse Effect. No
consent, approval, order or authorization of, or declaration or
filing with, any governmental authority or entity or other party
is required of and has not been obtained or made by Orbital or
Acquisition in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated
hereby other than (i) any approvals required by the Interim
Order, (ii) the Final Order, (iii) filings with the Director
under the CBCA and filings with and approvals required by
provincial securities commissions and stock exchanges, (iv) the
filing and effectiveness of any required Registration Statement
and (v) such failures to obtain or make consents, approvals,
orders, authorizations, declarations or filings as in the
aggregate would not have an Orbital Material Adverse Effect.
4.3. Capital Stock. The authorized capital stock of
Orbital consists of (i) 40,000,000 shares of Orbital Common
Shares, of which, as of August 10, 1995, approximately 22,662,618
shares are outstanding; and (ii) 10,000,000 shares of Preferred
Stock, U.S.$.01 par value per share, of which, as of the date
hereof, no shares are outstanding. Upon issuance of the Orbital
Common Shares in exchange for the Exchangeable Shares as provided
in the Plan of Arrangement, such shares shall be validly issued,
fully paid and nonassessable, free of preemptive rights and free
of all Liens other than such as arise under applicable securities
laws. The Orbital Common Shares to be issued pursuant to the
Plan of Arrangement will be issued in full compliance with all
Canadian provincial securities laws and the Securities Act and
the rules and regulations promulgated thereunder and all other
relevant securities or blue sky laws of any state or other
jurisdiction. No class of capital stock of Orbital is entitled
to preemptive rights. As of the date hereof, there are no
outstanding options, warrants, rights or other agreements or
commitments obligating Orbital to issue or sell shares of its
capital stock or any securities or obligations convertible into
or exchangeable for any shares of its capital stock, except (i)
up to 3,895,692 shares of Common Stock issuable upon conversion
of Orbital's Convertible Subordinated Debentures due 2003; (ii)
the Orbital Common Shares to be issued in exchange for the
Exchangeable Shares and upon exercise of the Replacement Options
in accordance with the terms of this Agreement and the Plan of
Arrangement and (iii) up to 2,025,000 shares of Orbital Common
Shares authorized for issuance under Orbital's stock option plans
(true and complete copies of which plans have been made available
to MDA by Orbital). None of the outstanding shares of capital
stock of Orbital was issued in violation of the Securities Act or
the securities or blue sky laws of any state or jurisdiction
which violation would have an Orbital Material Adverse Effect.
The authorized capital stock of Acquisition consists of an
unlimited number of shares of common stock of which, as of the
date hereof, 1,000 shares are outstanding and all of which are
owned by Orbital. All of the outstanding shares of common stock
of Acquisition have been, and any Class B Preferred Shares and
Exchangeable Shares issued pursuant to the Plan of Arrangement
will be, validly issued, fully paid and nonassessable, and free
of preemptive rights. The Class B Preferred Shares and
Exchangeable Shares to be issued pursuant to the Plan of
Arrangement will be issued in full compliance with all applicable
Canadian provincial securities laws and with the Securities Act
and the rules and regulations promulgated thereunder and all
other relevant securities or blue sky laws of any state.
Acquisition does not have any outstanding options, warrants,
rights, other agreements or commitments obligating Acquisition to
issue or sell shares of its capital stock or any securities or
obligations convertible into, or exchangeable for, any shares of
its capital stock. None of the outstanding shares of capital
stock of Acquisition was issued in violation of any applicable
Canadian provincial securities laws, the Securities Act or the
rules and regulations promulgated thereunder or the securities or
blue sky laws of any state which violation would have an Orbital
Material Adverse Effect.
4.4. SEC Reports. Orbital has filed all proxy statements,
reports and other documents required to be filed by it under the
Exchange Act after December 31, 1994, and Orbital has made
available to MDA copies of Orbital's Annual Report on Form 10-K
for the fiscal year ended December 31, 1994, and all final proxy
statements and reports filed by Orbital under the Exchange Act
after such date, each as filed with the SEC (collectively, the
"SEC Reports"). Each SEC Report was, as of the date of filing of
such report, in compliance in all material respects with the
requirements of its respective form and none of the SEC Reports,
as of their respective dates, contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
4.5. Financial Statements, etc. Orbital has previously
furnished MDA with true and complete copies of the following
financial statements (collectively, the "Orbital Financial
Statements"): (i) consolidated financial statements for the
fiscal years ended December 31, 1992, 1993 and 1994 audited by
KPMG Peat Marwick, and (ii) unaudited statements of income and
cash flows for the fiscal quarters ended March 31 and June 30,
1995 and the accompanying balance sheets as of such dates each
prepared from the books and records of Orbital and its
consolidated Subsidiaries. The Orbital Financial Statements
present fairly, in all material respects, the consolidated
financial position of Orbital and the results of its operations
and its cash flows as of the respective dates and periods thereof
in conformity with generally accepted accounting principles in
the United States as in effect on the applicable dates of such
financial statements ("US GAAP") and applied on a consistent
basis, except as noted therein and except that in the case of the
unaudited financial statements, no notes are included and such
unaudited financial statements may be subject to normal,
recurring adjustments that would be made in the course of an
audit and that would not be material. Except as and to the
extent reflected or reserved against in the balance sheet as of
June 30, 1995 included in the Orbital Financial Statements,
Orbital and its Subsidiaries, taken as a whole, do not have any
material liabilities or obligations of any nature.
4.6. Absence of Changes. Since December 31, 1994, except
as set forth in the SEC Reports (copies of which have all been
provided by Orbital to MDA), neither Orbital nor any of its
Subsidiaries has undergone any adverse change in its financial
condition, or suffered any damage, destruction or loss (whether
or not covered by insurance) that adversely affects its financial
condition, the condition of its assets or the ability to conduct
its business other than such changes in condition, damage,
destruction or loss as in the aggregate would not have an Orbital
Material Adverse Effect or that are the result of changes in
general economic or industry wide conditions; and since December
31, 1994, except as set forth in the SEC Reports, there has been
no adverse change in the condition of the business of Orbital or
any of its Subsidiaries, whether as a result of any change as to
accounts receivable, inventory or other assets, any loss of
competitive position, any natural disaster, accident, strike,
sabotage, or confiscation of property, or any other event or
condition directly affecting or relating to Orbital, whether or
not related to any of the foregoing (including without limitation
labor disputes, environmental audits or disclosures, and
intellectual property disputes), except for such changes as would
not in the aggregate have an Orbital Material Adverse Effect and
such changes as are the result of changes in general economic or
industry wide conditions.
4.7. Pooling. Neither Orbital nor, to Orbital's knowledge,
any of its "affiliates" (as defined in Opinion No. 16, as
amended, of the Accounting Principles Board of the American
Institute of Certified Public Accountants and the interpretive
rulings issued thereunder) has taken or agreed to take any action
that would prevent the parties from accounting for the business
combination to be effected by the Plan of Arrangement as a
pooling of interest.
4.8. Operations in Conformity With Law, etc. Neither
Orbital nor any of its Subsidiaries has been or is in violation
of, or in default under, any law, rule, regulation, order,
judgment or decree relating in any manner or applicable to the
business or assets of Orbital or any of its Subsidiaries or any
of their respective employees, except for such violations or
defaults that in the aggregate would not have an Orbital Material
Adverse Effect.
4.9. Litigation. Except as set forth in the Section 4.9 of
the Orbital Disclosure Schedule, there are no actions, claims,
suits, investigations or proceedings pending or to Orbital's
knowledge threatened against Orbital or any of its Subsidiaries
pertaining to the business or assets of Orbital or any of its
Subsidiaries that, in the aggregate, if adversely determined,
would have an Orbital Material Adverse Effect or that question
the validity of this Agreement or any action taken or to be
taken pursuant to or in connection with the provisions of this
Agreement, nor to the knowledge of Orbital or its Subsidiaries is
there any basis for any such action, claim, suit, proceeding or
investigation. There are no judgments, orders, decrees,
citations, fines or penalties heretofore assessed (and not
discharged or otherwise satisfied) against Orbital or any of its
Subsidiaries under any Canadian or United States Federal,
provincial, state or local, or foreign law except for such
judgments, orders, decrees, citations, fines or penalties that in
the aggregate would not have an Orbital Material Adverse Effect.
4.10. Government Contracts and Subcontracts. Except as and
to the extent reflected or reserved against in the balance sheet
dated as of December 31, 1994 included in the Orbital Financial
Statements, there are no known claims, penalties, or causes of
action against Orbital or any of its Subsidiaries the basis of
which is an actual or alleged violation of, or noncompliance
with, any applicable law, regulation or order, related to a
Government Contract or a Government Subcontract to which Orbital
or any of its Subsidiaries is a party, except for such claims,
penalties or causes of action which would not, in the aggregate
have an Orbital Material Adverse Effect. To the knowledge of
Orbital and its Subsidiaries, there is no basis for a claim,
penalty, or cause of action against Orbital or any of its
Subsidiaries alleging a violation of, or noncompliance with, any
applicable law, regulation or order related to any Government
Contract or Government Subcontract to which Orbital or any of its
Subsidiaries is a party except for such claims, penalties or
causes of action as would not have in the aggregate an Orbital
Material Adverse Effect. For purposes of this Section 4.10,
claims, penalties, and causes of action alleging a violation of,
or noncompliance with, any applicable law, regulation or order
include, but are not limited to, those purporting to be based on
failure to comply with cost accounting standards, allowable
costs, allocation of costs, omissions or errors in disclosure
statements, or defective pricing.
4.11. Environmental Matters. Orbital and its Subsidiaries
have obtained all permits, licenses and other authorizations that
are required under all federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees, permits, concessions, grants, franchises,
licenses, agreements or other governmental restrictions relating
to the environment or to emissions, discharges or releases of
pollutants, contaminants, petroleum or petroleum products,
chemicals or industrial, toxic or hazardous substances or wastes
into the environment including, without limitation, ambient air,
surface water, ground water, or land, or otherwise relating to
the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants,
contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the clean-
up or other remediation thereof (the "Environmental Laws"),
except to the extent failure to have any such permit, license or
authorization would not have an Orbital Material Adverse Effect
and (ii) Orbital and its Subsidiaries are in compliance with the
terms and conditions of all such permits, licenses and
authorizations, and are also in compliance with all other
provisions of any applicable Environmental Law or any order,
judgment, injunction, notice or demand letter issued or entered
thereunder, except to the extent failure to comply would not have
an Orbital Material Adverse Effect.
4.12. Disclosure. This Agreement, including the Exhibits
hereto and the Orbital Disclosure Schedule, the certificates
delivered or to be delivered in connection herewith and the SEC
Reports referenced hereby, taken as a whole, does not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements herein or therein not
misleading. The Registration Statement will, at the time it
becomes effective and at the time of any post-effective amendment
thereto, not contain any misrepresentation (within the meaning of
any applicable Canadian or United States Federal, provincial or
state securities laws) or any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances in which they are made, not misleading, and comply
as to form in all material respects with the provisions of all
applicable laws, including the provisions of the Securities Act
and the Exchange Act and the rules and regulations of the SEC
thereunder, except that no representation is made by Orbital with
respect to information supplied by or on behalf of MDA
specifically for inclusion therein. None of the information
supplied or to be supplied by or on behalf of Orbital or its
Subsidiaries for inclusion in (i) the Plan of Arrangement, (ii)
the No Action Request; or (iii) the Proxy Circular, will (a) in
the case of the Plan of Arrangement, at the time the Plan of
Arrangement is considered by the Court, (b) in the case of the No
Action Request, at the time the No Action Request, as amended or
supplemented, is acted on by the SEC or Canadian securities
regulators, as the case may be, or (c) in the case of the Proxy
Circular and any amendment or supplement thereto, at the time of
the mailing of the Proxy Circular and any amendment or supplement
thereto, and at the time of the meeting of shareholders of MDA
and the holders of the MDA 1988 Options to vote upon the
Arrangement, contain any misrepresentation (within the meaning of
any applicable Canadian or United States Federal, provincial or
state securities laws) or any untrue statement of a material fact
or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances in which they are made, not misleading.
ARTICLE 5
CERTAIN COVENANTS
5.1. Preparation of Proxy Statement and No Action Request;
Other Filings and Submissions. Orbital, Acquisition and MDA
shall cooperate in (i) the preparation of the Proxy Statement,
the No Action Request and any required Registration Statement and
any other documents reasonably deemed by Orbital or MDA to be
necessary to discharge their respective obligations under United
States and Canadian securities laws in connection with the
Arrangement and the other transactions contemplated hereby, (ii)
the taking of all such action as may be required under any
applicable provincial or state securities laws (including "blue
sky laws") in connection with the issuance of the Exchangeable
Shares and the Orbital Common Shares in the Arrangement;
provided, however, that with respect to United States blue sky
and Canadian provincial qualifications none of Orbital,
Acquisition or MDA shall be required to register or qualify as a
foreign corporation or to take any action that would subject it
to service of process in any jurisdiction where any such entity
is not now so subject, except as to matters and transactions
arising solely from the offer and sale of the Exchangeable Shares
and the Orbital Common Shares, (iii) the taking of all such
action as may be required under the CBCA in connection with the
transactions contemplated by this Agreement and the Plan of
Arrangement, and (iv) the preparation of a Registration Statement
of Orbital on Form S-8 covering issuances of Orbital Common
Shares upon exercise of the Replacement Options. Orbital,
Acquisition and MDA shall each use all reasonable efforts to list
the Exchangeable Shares on a stock exchange in Canada, unless in
connection with obtaining a favorable response to the No Action
Request, Orbital is advised by the staff of the SEC that in their
view the listing of such shares will in and of itself preclude
the granting of the requested exemptions from registration
requested in the No Action Request. Orbital, Acquisition and MDA
shall each furnish to one another all such information as may be
required for the effectuation of the foregoing actions, and each
covenants that no information furnished in connection with such
actions or otherwise in connection with the consummation of the
Arrangement and the other transactions contemplated by this
Agreement will contain any untrue statement of a material fact or
omit to state a material fact required to be stated in order to
make any information so furnished not misleading. Orbital and
MDA shall each promptly notify the other if at any time before or
after the Effective Time it becomes aware that the Proxy Circular
or Registration Statement (or any prospectus related thereto), if
required, contains any untrue statement of a material fact or
omits to state a material fact required to be stated therein or
necessary to make the statements contained therein not
misleading. In any such event, Orbital and MDA shall cooperate
in the preparation of a supplement or amendment to the Proxy
Circular or Registration Statement (and any prospectus related
thereto), if required, as the case may be, that corrects such
misstatement or omission, and shall cause the same to be
distributed to shareholders of MDA or Acquisition, as the case
may be, and, if required, filed with (and shall use its best
efforts to have the same declared effective by) the SEC.
5.2. Shareholders' Meeting. MDA shall duly call, give
notice of, convene and hold a meeting of its shareholders and the
holders of the MDA 1988 Options as promptly as practicable for
the purpose of voting upon the Arrangement (the "Shareholder
Meeting"). Subject to Section 5.3, MDA shall, through its Board
of Directors, recommend to its shareholders and the holders of
the MDA 1988 Options approval of the Arrangement and shall use
all reasonable efforts to hold such meeting as soon as
practicable after the date hereof ("Shareholder Meeting Date"),
and shall use all reasonable efforts to secure the approval by
its shareholders, the holders of the MDA 1988 Options and the
Court of the Arrangement.
5.3. Exclusivity; Acquisition Proposals. Unless and until
this Agreement shall have been terminated by either party
pursuant to Section 7.1 hereof, except as required by law, MDA
shall not (and it shall use its best efforts to ensure that none
of its officers, directors, agents, representatives or
affiliates) take or cause or permit any Subsidiary to take,
directly or indirectly, any of the following actions with any
party other than Orbital and its designees or agents: (i)
solicit, encourage, initiate or participate in any negotiations,
inquiries or discussions with respect to any offer or proposal to
acquire all or any significant part of its business, assets or
capital shares whether by arrangement, amalgamation, merger,
consolidation, other business combination, purchase of assets,
tender or exchange offer or otherwise (each of the foregoing an
"Acquisition Transaction"); (ii) disclose any information not
customarily disclosed to any person concerning its business or
properties or afford to any person or entity access to its
properties, books or records, except in the ordinary course of
business consistent with past practice and as required pursuant
to a governmental request for information; (iii) enter into or
execute any agreement relating to an Acquisition Transaction,
plan of reorganization, or other agreement calling for the sale
of all or any significant part of its business and properties; or
(iv) make or authorize any public statement, recommendation or
solicitation with respect to any Acquisition Transaction or any
offer or proposal relating to an Acquisition Transaction other
than with respect to the Arrangement; provided, however, that
nothing contained herein shall limit the power of the MDA Board
of Directors to withdraw or modify any recommendation with
respect to the Plan of Arrangement if an adverse material change
occurs in the business or affairs of Orbital or in any of the
information provided by Orbital on which the MDA Board of
Directors has based any recommendation. Further, if any person
proposes an unsolicited bona fide Acquisition Transaction that in
the opinion of MDA's Board of Directors (having consulted its
financial advisors) offers terms that may be more favorable to
the MDA shareholders than pursuant to this Agreement or the Plan
of Arrangement, MDA shall have seven business days to consider
such proposal, following which time the MDA Board of Directors
may withdraw or modify any recommendation with respect to the
Plan of Arrangement only if to do so would, in the opinion of the
Board of Directors (having consulted outside counsel), acting
reasonably, be a proper exercise of the directors' fiduciary
duty. Notwithstanding the provisions of Section 5.2, if such
unsolicited bona fide Acquisition Transaction is proposed within
the seven-business-day period preceding the Shareholder Meeting,
then the MDA Board of Directors may recommend or support a
proposal to postpone or adjourn such meeting for not more than 10
business days, provided that nothing shall entitle MDA or its
Board of Directors to terminate this Agreement (except pursuant
to and in accordance with the provisions of Section 7.1 hereof),
not to proceed with the Shareholder Meeting or to withdraw from
the MDA shareholders the vote on the Plan of Arrangement. In the
event MDA shall be required by law to take any action described
in the two immediately preceding sentences or receives any offer
or proposal, directly or indirectly, of the type referred to in
clause (i) above, or any request for disclosure or access with
respect to information of the type referred to in clause (ii)
above, it shall immediately, and prior to taking any action in
response thereto, inform Orbital as to all material facts
concerning any such offer, proposal or request (to the extent not
otherwise restricted by confidentiality obligations), including
the identity of the party making the offer, proposal or request,
and will thereafter cooperate with Orbital by informing Orbital
of additional material facts as they arise and furnishing to
Orbital any additional information as is furnished to any third
party making such proposal or requesting information to the
extent not otherwise restricted by confidentiality obligations.
5.4 . Amendment to Plan of Arrangement. In the event a
favorable response to the No Action Request is received such that
it is not necessary for Orbital to maintain the effectiveness of
any Registration Statement covering the issuance of the Orbital
Common Shares upon exchange of the Exchangeable Shares, each of
MDA and Orbital shall take all necessary steps to amend the Plan
of Arrangement and the provisions of the Exchangeable Shares so
as to permit the Exchangeable Shares to be redeemed at the option
of the holder at any time before the fifth anniversary of the
Effective Date and so that the Automatic Redemption Date (as
defined in the Plan of Arrangement) will become the fifth
anniversary of the Effective Date.
5.5. Public Announcements. Neither Orbital nor MDA shall,
nor shall either permit any of its Subsidiaries to (and each such
party shall use all commercially reasonable efforts to cause its
affiliates, directors, officers, employees, agents and
representatives not to), issue any press release, make any public
announcement or public filing or furnish any written statement to
its employees or shareholders generally concerning the
transactions contemplated by this Agreement without the consent
of the other party (which consent shall not be unreasonably
withheld), except to the extent required by applicable law, rule
or regulation or the applicable requirements of the National
Association of Securities Dealers, Inc. with respect to issuers
whose securities are quoted on the Nasdaq National Market System,
or, in the case of MDA, the applicable requirements of the
Toronto Stock Exchange or the Vancouver Stock Exchange (and in
any such case such party shall, to the extent consistent with
timely compliance with such requirement, consult with the other
party prior to making the required release, announcement, filing
or statement).
5.6. Notification of Certain Matters. Between the date
hereof and the Effective Time, each party shall give prompt
notice in writing to the other parties of: (i) any information
that indicates that any of its representations or warranties
contained herein was not true and correct as of the date hereof
or will not be true and correct at and as of the Effective Time
with the same force and effect as if made at and as of the
Effective Time (except for changes permitted or contemplated by
this Agreement); (ii) the occurrence of any event that will
result, or has a reasonable prospect of resulting, in the failure
of any condition specified in ARTICLE 6 hereof to be satisfied
and; (iii) any notice or other communication from any third party
alleging that the consent of such third party is or may be
required in connection with the transactions contemplated by this
Agreement or that such transactions otherwise may violate the
rights of or confer remedies upon such third party.
5.7. Other Limitations on Conduct of Business Prior to the
Effective Time. MDA hereby covenants and agrees with Orbital
that, prior to the Effective Time: (i) unless the prior written
consent of Orbital shall have been obtained and except as
otherwise contemplated herein, it shall operate its business, and
it shall cause each of its Subsidiaries to operate its business,
only in the usual, regular and ordinary course of business
consistent with past practices; (ii) use its reasonable efforts
to preserve intact its and each of its Subsidiaries' business
organization and assets and maintain their rights and franchises;
(iii) not authorize for issuance, issue or obligate itself to
issue any shares of its capital stock or any options, warrants or
rights, or enter into any other agreements or commitments
obligating it to issue or sell shares of its capital stock or any
securities or obligations convertible into, or exchangeable for,
any shares of its capital stock, other than the issuance of MDA
Common Shares pursuant to MDA Options outstanding on July 31,
1995, to shareholders of EOS in accordance with Section 5.8 or to
former shareholders of PSC in the event certain financial
performance targets are achieved; and (iv) to take no action that
would (a) materially adversely affect the ability of Orbital or
MDA to obtain any necessary approvals of any third parties or any
governmental authorities required for the transactions
contemplated hereby or materially increase the period of time
necessary to obtain such approvals, or (b) materially adversely
affect its ability to perform its covenants and agreements under
this Agreement.
5.8. Exercise of Call Right. MDA shall, on or before the
Shareholder Meeting, exercise its right to call all options to
purchase MDA Common Shares granted pursuant to the Agreement
dated as of October 31, 1991 between MDA and certain shareholders
of EOS named therein, pursuant to Sections 2.2 and 3.2 of such
agreement.
5.9. Access to Information. MDA shall, subject to
applicable law, afford Orbital and its accountants, counsel and
other representatives reasonable access during the period prior
to the Effective Time to (a) all of MDA's and its Subsidiaries'
financial statements, properties, books, contracts, commitments
and records, and (b) all other information concerning the
business, properties and personnel of MDA and its Subsidiaries,
as Orbital may reasonably request. No information or knowledge
obtained after the date hereof in any investigation pursuant to
this Section 5.9 shall affect or be deemed to modify any
representation or warranty contained herein or the conditions to
the obligations of the parties to consummate the Arrangement.
5.10. Post Effective Date Reporting. Orbital shall use its
best efforts to release publicly the combined financial results
of Orbital and MDA for the first full month for which such
results are available not later than thirty days after the end of
such month, provided that Orbital shall have the right not to
release such financial results, if it determines in its sole
discretion that such release would not be in the best interests
of Orbital.
5.11. No Action Request; Registration. Unless the staff of
the SEC has confirmed the availability of an exemption from
registration under the Securities Act as to the issuance of the
Exchangeable Shares and/or the issuance of the Orbital Common
Shares in exchange for the Exchangeable Shares in response to the
No Action Request or Orbital has received an opinion of counsel
reasonably satisfactory to MDA to such effect, then in each case
in which no exemption is available, Orbital and Acquisition shall
cause such issuance to be registered under the Securities Act,
and shall file a Registration Statement covering such issuance
with the SEC and use all commercially reasonable efforts to cause
such registration statement to become effective as soon as
practicable and remain effective (i) in the case of a
registration statement covering the issuance of the Exchangeable
Shares, through the Effective Date, (ii) in the case of a
Registration Statement covering the issuance of the Orbital
Common Shares in exchange for the Exchangeable Shares, throughout
the period during which the Exchangeable Shares may be exchanged
in accordance with the Plan of Arrangement and (iii) in the case
of a Registration Statement covering the issuance of the Orbital
Common Shares upon exercise of the Replacement Options,
throughout the period that the Replacement Options are
exercisable. Orbital and Acquisition agree to file any such
required Registration Statement as soon as reasonably practicable
and, in the case of a registration statement covering the
issuance of the Orbital Common Shares, no later than one week
after the Proxy Circular is mailed to MDA's shareholders and the
holders of the MDA 1988 Options. Orbital and Acquisition shall
use all reasonable efforts to obtain all orders required from the
applicable Canadian securities authorities to permit the issuance
of the Exchangeable Shares and the Orbital Common Shares upon
exchange of the Exchangeable Shares without registration or
qualification with or approval of or the filing of any document
including any prospectus or similar document or the taking of any
proceeding with or the obtaining of any order, ruling or consent
from any governmental or regulatory authority under any Canadian
Federal, or provincial law or regulation or pursuant to the rules
and regulations of any regulatory authority or the fulfillment of
any other legal requirement before such shares may be issued and
delivered by Acquisition or Orbital to the holder thereof or in
order that such shares may be freely traded thereafter (other
than any restrictions on transfer by reason of a holder being a
"control person" of Acquisition or Orbital for purposes of
Canadian Federal or provincial securities law or an "affiliate"
for purposes of United States Federal or state securities law).
Notwithstanding the foregoing, Acquisition shall not be obligated
to list the Exchangeable Shares on a stock exchange in Canada if
in connection with obtaining a favorable response to the No
Action Request, Orbital is advised by the SEC that the listing of
such shares will in and of itself preclude the granting of the
requested exemptions from registration requested in the No Action
Request.
5.12. Indemnification. Orbital and Acquisition hereby
agree that after the Effective Date, (a) the provisions of the
Charter Documents of MDA providing for indemnification of
directors and officers shall not be amended, repealed or
otherwise modified for a period of six years from the Effective
Date in any manner that would adversely affect the rights
thereunder of directors and officers and former directors and
former officers who immediately prior to the Effective Date were
covered by such provisions, unless such modification is required
by law and (b) Orbital and Acquisition shall continue in effect
with respect to any claims arising out of conduct prior to the
Effective Date, for a period of six years following the Effective
Date, director and officer insurance policies providing coverage
of substantially the same scope as is maintained by MDA and
covering the same persons as are covered by such policies as in
effect on March 31, 1995; provided, however, Orbital may amend,
repeal or otherwise modify the Charter Documents of MDA and/or
terminate such director and officer liability insurance policies
if Orbital indemnifies and holds harmless each person covered by
the indemnification provisions of MDA's Charter Documents on the
Effective Date and MDA's director and officer liability insurance
policy as in effect on March 31, 1995 against all expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by reason of the fact
that such person was a director or officer of MDA, in connection
with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative provided that, such expenses were incurred by such
person in connection with such action, suit or proceeding and
provided that such person acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to MDA's best
interests and had no reasonable cause to believe his or her
conduct was unlawful.
5.13. Tax Filings. Orbital covenants to cause Acquisition
after the Effective Date to agree with each person who was a
holder of MDA Common Shares, or the holder of shares of a holding
company referred to in Section 2.1.2 hereof, immediately prior to
the Effective Time who wishes to do so to jointly make an
election under subsection 85(1) or 85(2) of the Income Tax Act
(Canada) in the prescribed form in respect of the exchange of the
MDA Common Shares or such holder's holding company shares, as the
case may be, and to specify therein as the holder's proceeds of
disposition and Acquisition's cost of the MDA Common Shares or
holding company shares such amount as is determined by the holder
, subject to the several limitations of subsection 85(1) or
85(2), as the case may be, of the Income Tax Act (Canada).
Acquisition shall complete the election form within 30 days of
receipt from such persons of an election form fully completed
other than with respect to information relating to Acquisition.
5.14. Further Assurances. Subject to the terms and
conditions herein provided, and subject to its fiduciary
obligations under law, each of the parties agrees to use all
reasonable efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and
make effective the Arrangement and the other transactions
contemplated by this Agreement, including without limitation the
taking of all reasonable actions necessary to satisfy each
condition precedent set forth in ARTICLE 6, to comply promptly
with all legal requirements that may be imposed on any of them
with respect to the Arrangement or to procure any consent,
approval, order or authorization of, or any exemption by, any
governmental entity, or other third party, required to be
obtained or made in connection with the Arrangement or the taking
of any action contemplated thereby or by this Agreement.
ARTICLE 6
CONDITIONS PRECEDENT
6.1. Conditions Precedent to MDA's Obligation to Effect the
Arrangement. The obligations of MDA to effect the Arrangement
and other transactions contemplated by this Agreement shall be
subject to the satisfaction, prior to or substantially
contemporaneously with the Effective Time, of the following
conditions, compliance with which, or the occurrence of which,
may be waived in whole or in part by MDA in writing.
6.1.1. Representations; Covenants; Certificate. The
representations and warranties of Orbital contained in
ARTICLE 4 hereof (except for clause (i) of the first
sentence of Section 4.3 to the extent it refers to the
number of issued and outstanding shares of Orbital Common
Shares and except that Orbital shall have authorized a newly
created class of preferred stock, one share of which shall
be issued to the Trustee on the Effective Date pursuant to
the Voting Trust Agreement) shall be true in all material
respects as of the date of this Agreement and as of the
Effective Date with the same effect as though made as of the
Effective Time; Orbital shall in all material respects have
performed all obligations and complied with all covenants
required by this Agreement to be performed or complied with
by it prior to the Effective Time; and Orbital shall have
delivered to MDA a certificate, dated the Effective Date and
signed by its President or a Vice President, to each such
effect.
6.1.2 Opinion of Counsel for Orbital. MDA shall have
received from Ropes & Xxxx, counsel for Orbital, a legal
opinion, dated the Effective Date, with respect to legal
matters related to this Agreement and the transactions
contemplated hereby and in form and substance reasonably
acceptable to MDA.
6.1.3. Price of Orbital Stock. The Average Closing
Price shall be equal to or greater than U.S.$12.775.
6.2. Conditions Precedent to Obligations of Orbital. The
obligations of Orbital to effect the Arrangement and the other
transactions contemplated by this Agreement shall be subject to
the satisfaction, prior to or substantially contemporaneously
with the Effective Time, of the following conditions, compliance
with which, or the occurrence of which, may be waived in whole or
in part by Orbital in writing:
6.2.1. Representations; Covenants; Certificate. The
representations and warranties of MDA contained in ARTICLE 3
hereof shall be true in all material respects as of the date
of this Agreement (except for clause (i) of the first
sentence of Section 3.3 to the extent the number of issued
and outstanding MDA Common Shares has increased solely
because of the exercise of any of the MDA Options and the
issuance of MDA Common Shares required by Section 5.8) and
the Effective Time with the same effect as though made as of
the Effective Time; MDA shall in all material respects have
performed all obligations and complied with all covenants
required by this Agreement to be performed or complied with
by it prior to the Effective Time; and MDA shall have
delivered to Orbital a certificate, dated the Effective Date
and signed by its President or a Vice President, to each
such effect.
6.2.2. Opinion of Counsel for MDA. Orbital shall have
received from Farris, Vaughan, Xxxxx & Xxxxxx, counsel for
MDA, a legal opinion, dated the Effective Date, with respect
to legal matters related to this Agreement and the
transactions contemplated hereby and in form and substance
reasonably acceptable to Orbital.
6.2.3. MDA Rights Plan. The Board of Directors of MDA
shall have waived the provisions of the Amended and Restated
Shareholder Protection Rights Plan Agreement, dated as of
August 27, 1992 as amended through the date hereof, between
MDA and Montreal Trust Company of Canada, pursuant to
Section 5.1(b) of such agreement, such that the Arrangement
and the other transactions contemplated hereby shall be
wholly exempt from such agreement.
6.2.4. Affiliate Agreements. Orbital shall have
received executed affiliate agreements (the "Affiliate
Agreements") (i) in substantially the form attached as
Exhibit 6.2.4(a), from each director, the President, the
Group Managers and the Controller of MDA, all holders of ten
percent or more of the MDA Common Shares issued and
outstanding on the date hereof (other than Spar Aerospace
Limited) and all entities controlled by any of the foregoing
(including without limitation, Ventures West) and (ii) in
substantially the form attached as Exhibit 6.2.4(b) from
Spar Aerospace Limited (together with those referenced in
clause (i), the "Affiliates").
6.2.5. Employment Agreements. MDA shall have entered
into an Employment Agreement and a Change of Control
Agreement in substantially the form attached as Exhibit
6.2.5 with the President, Chairman and each Group Manager of
MDA, and copies of such agreements shall have been delivered
to Orbital.
6.2.6. Appraisal Rights. The holders of MDA Common
Shares or MDA 1988 Options in the aggregate entitled to
receive no more than 10% of the sum of the Orbital Common
Shares issuable pursuant to the Plan of Arrangement and the
Orbital Common Shares reserved for issuance upon the
exercise of Replacement Options shall have dissented and be
entitled to be paid the fair value of their shares or
options, as the case may be, pursuant to the Plan of
Arrangement.
6.2.7. Pooling of Interests Accounting Treatment.
Orbital shall have been advised in writing by KPMG Peat
Marwick, its independent public accountants that in their
opinion the transactions contemplated herein meet the
requirements for pooling-of-interests treatment under U.S.
GAAP as set forth in Opinion No. 16, as amended, of the
Accounting Principles Board of the American Institute of
Certified Public Accountants.
6.2.8 Required Consents. MDA and Orbital shall have
received all necessary consents, waivers or amendments
listed by MDA and Orbital in Sections 3.2 and 4.2 of the MDA
Disclosure Schedule and Orbital Disclosure Schedule,
respectively, as being required (other than the consent of
EarthWatch). The representation made by MDA and Orbital in
the first sentence of Section 3.2 and 4.2, respectively,
hereof construed without reference to any exceptions noted
in the MDA or Orbital Disclosure Schedule (other than MDA's
failure to obtain the consent of EarthWatch) shall be true
and correct.
6.2.9. Price of Orbital Stock. The Average Closing
Price shall be equal to or less than U.S.$25.00.
6.3. Conditions Precedent to the Obligations of Each Party.
The obligations of the parties to effect the Arrangement and the
other transactions contemplated by this Agreement shall be
subject to the satisfaction prior to or substantially
contemporaneously with the Effective Time of the following
additional conditions, compliance with which, or the occurrence
of which, may be waived in whole or in part by a writing executed
by each of MDA and Orbital:
6.3.1. Shareholder Approval. The holders of the
requisite number, as specified by the Court in its Interim
Order, of outstanding shares of MDA Common Shares and the
MDA 1988 Options shall have duly approved the Plan of
Arrangement and the transactions contemplated thereby and
hereby, all in accordance with the requirements of the CBCA
and such Interim Order.
6.3.2. Governmental and Court Approvals. Consents
legally required from any governmental authority with
respect to the consummation of the Arrangement and the
transactions contemplated by this Agreement, including the
Final Order shall have been filed, occurred, or been
obtained, other than such consents, the failure to obtain
which would not have any MDA or Orbital Material Adverse
Effect or any material adverse effect on the consummation of
the Arrangement.
6.3.3. No Action Request/Registration Statement. The
staff of the SEC shall have confirmed the availability of an
exemption from registration to the issuance of the
Exchangeable Shares, Orbital Common Shares and Replacement
Options pursuant to the Arrangement in response to the No
Action Request or Orbital shall have received an opinion of
counsel reasonably satisfactory to it and MDA to such effect
or a Registration Statement with respect to such issuances
shall have become effective under the Securities Act and
shall not be the subject of any stop order or proceedings
seeking a stop order and the Proxy Circular shall not be at
the Effective Time subject to any proceedings commenced or
threatened by the SEC or any Canadian or provincial
securities authority. Canadian provincial securities
regulators in those provinces of Canada considered necessary
by Canadian counsel to MDA and Canadian counsel to Orbital
shall have granted rulings or orders, satisfactory to both
of such counsel acting reasonably, so that the registration
and prospectus provisions of applicable Canadian securities
laws will not be applicable to any of the issuance of
securities contemplated by the Arrangement and such
securities (other than the Class B Preferred Shares to be
issued to Canadian Imperial Bank of Commerce) will be freely
tradable by holders resident in such provinces.
6.3.4. Injunctions. No temporary restraining order,
preliminary or permanent injunction or other order by any
Canadian or United States Federal or provincial or state
court or governmental body prohibiting the consummation of
the transactions contemplated by this Agreement shall have
been issued and shall not have expired or been withdrawn or
reversed and there shall be no pendent or threatened
litigation or other proceeding seeking to prohibit or impose
any material limitations on the consummation of such
transactions.
6.3.5. Nasdaq/NMS Listing Approval. Orbital shall
have filed with the National Association of Securities
Dealers, Inc. a notice of listing of additional shares for
the Orbital Common Shares issuable pursuant to the
Arrangement.
ARTICLE 7
MISCELLANEOUS
7.1. Termination. Anything herein or elsewhere to the
contrary notwithstanding, this Agreement may be terminated and
abandoned at any time before the Effective Time, whether before
or after adoption and approval of the Arrangement by the
shareholders of MDA and the holders of the MDA 1988 Options as
herein provided:
(a) By the mutual consent of Orbital and MDA;
(b) By either MDA or Orbital, if (i) there has been a
material breach on the part of the other party of any
representation, warranty, covenant or agreement contained herein
that cannot be or has not been cured within ten days after
written notice of such breach to the breaching party or (ii)
MDA's shareholders or the holders of the MDA 1988 Options fail to
approve the Plan of Arrangement, provided, however such failure
is not due to MDA's breach of its covenants contained in Article
5;
(c) By Orbital, if the Board of Directors of MDA shall have
withdrawn or modified in a manner adverse to Orbital its support
of the transaction, or shall fail to affirm such support upon the
request of Orbital;
(d) By MDA, if MDA shall have received a bona fide offer to
consummate an Acquisition Transaction for consideration per MDA
Common Share having a fair market value of at least U.S.$5.95
(based on the currency exchange rate on the date the offer is
made);
(e) By MDA on or before the date on which the Proxy Circular
is mailed to MDA shareholders and holders of the MDA 1988
Options, if by such date Teleglobe Mobile Partners ("Teleglobe
Mobile") has not committed to increase its investment in ORBCOMM
Development Partners, L.P. on substantially the terms reflected
in the Master Agreement dated June 30, 1993 between Orbital,
Orbital Communications Corporation, Teleglobe, Inc. and Teleglobe
Mobile or on such other terms as do not have an Orbital Material
Adverse Effect.
(f) By the Board of Directors of MDA, if the Effective Time
shall not have occurred by December 31, 1995 other than as a
result of the failure of MDA to satisfy its obligations
hereunder.
(g) By the Board of Directors of Orbital, if the Effective
Time shall not have occurred by December 31, 1995 other than as a
result of the failure of Orbital to satisfy its obligations
hereunder.
(h) By Orbital, if Spar has not executed the voting
agreement and affiliate agreements, in substantially the forms
attached as Exhibits 7.1(h) and 6.2.4(b), respectively, by
September 6, 1995.
In the event of both (i) a termination by EarthWatch, in whole or
in part, of its agreement with MDA pursuant to which MDA is to
build a portion of EarthWatch's image data archival and
processing facility, which termination was solely as a result of
the public announcement of MDA's and Orbital's agreement to
consummate the Arrangement, and (ii) a termination of this
Agreement because of (a) the failure to satisfy the conditions
precedent to Closing set forth in Section 6.1.3 or Section 6.2.7,
or (b) either party has exercised its right to terminate pursuant
to paragraph (f) or (g) of this Section 7.1; then Orbital shall
(x) use all commercially reasonable efforts to notify MDA as soon
as practicable at any time Orbital (or any entity that was a
Subsidiary of Orbital on July 31, 1995) has determined to solicit
third party bids for the construction of satellite ground
stations and (y) afford MDA the opportunity to participate in
such bidding; provided, however, such actions would not be
required if to do so would result in the breach of a currently
existing contract or if otherwise prohibited by any applicable
rules or regulations, including, but not limited to, rules or
regulations governing bidding procedures with respect to
Government Contracts and export controls; and provided further
that this obligation to provide notice and afford MDA an
opportunity to bid shall terminate three years from the earlier
of (A) the date of termination of such EarthWatch agreement and
(B) December 31, 1995. In the event of termination and
abandonment under this Section 7.1, this Agreement shall
forthwith become null and void and there shall be no liability on
the part of any of MDA, Orbital or Acquisition or any of their
respective officers and directors; provided, however, that the
provisions of the immediately preceding sentence, Section 7.3 and
Section 7.4 hereof shall survive any termination of this
Agreement as provided therein and in the event of a termination
pursuant to Section 7.1(b)(i) the breaching party shall be liable
for all out-of-pocket costs and expenses incurred in connection
with the transactions contemplated hereby.
7.2. Amendments and Supplements. At any time before or
after approval and adoption of this Agreement and the Plan of
Arrangement by the shareholders of MDA and the holders of the MDA
1988 Options and prior to the Effective Time, this Agreement and
the Plan of Arrangement may be amended or supplemented (including
without limitation, any amendment to the Plan of Arrangement
required to be made pursuant to Section 5.4 hereof) by a written
instrument signed by MDA, Orbital and approved by their
respective Boards of Directors, except that, after the
shareholders of MDA and the holders of the MDA 1988 Options shall
have approved the Plan of Arrangement, there shall be no
amendment that (i) changes the consideration into which the MDA
Common Shares or the MDA Options are entitled to be converted
upon consummation of the Arrangement as provided in the Plan of
Arrangement or (ii) otherwise would require the approval of the
shareholders of MDA or the holders of the 1988 MDA Options in
accordance with the CBCA.
7.3. Survival of Representations, Warranties and
Agreements. The respective representations, warranties and
agreements of MDA, Orbital and Acquisition contained in Articles
3 and 4 hereof and except with respect to Sections 5.10, 5.11
5.12 and 5.13, their respective agreements contained in Article 5
hereof shall expire with, and be terminated by, the consummation
of the Arrangement, and neither Orbital nor MDA shall have any
liability whatsoever with respect to such representations,
warranties or agreements after the Effective Time.
7.4 Other Payments. MDA covenants and agrees that if MDA
terminates this Agreement pursuant to Section 7.1(d) hereof and
the transaction that gives rise to such termination is completed,
then MDA shall pay to Orbital a fee of $750,000.
7.5. Expenses. Subject to the provisions of Section 7.1
and 7.4, whether or not the Arrangement is consummated, all costs
and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party
incurring such expenses.
7.6. Governing Law. This Agreement shall be governed by
and construed in accordance with the domestic substantive laws of
the province of British Columbia without giving effect to any
choice or conflict of laws rule or provision that would cause the
application of the domestic substantive laws of any other
jurisdiction.
7.7. Notice. All notices and other communications required
or permitted hereunder shall be in writing (including any
facsimile transmission or similar writing), and shall be sent
either by telecopy, hand delivery, or reputable overnight
courier, addressed as follows or to such other address or
addresses of which the respective party shall have notified the
other party. Each such notice or other communication shall be
effective (i) if given by telecopy, when such telecopy is
transmitted and the appropriate answerback is received, (ii) if
given by reputable overnight courier, one business day after
being delivered to such courier or (iii) if given by any other
means, when received at the address specified in this Section.
To Orbital or Acquisition:
00000 Xxxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: General Counsel
With a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
To MDA:
00000 Xxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Xxxxxx
Telecopier: (000) 000-0000
Attention: President
With a copy to:
Farris, Vaughan, Xxxxx & Xxxxxx
26th Floor, 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Xxxxxx
Telecopier: (000) 000-0000
Attention: Xxxxxxxxx X. Xxxxxxxx, Q.C.
7.8a. Entire Agreement, Assignability, Etc. This Agreement
(including the Schedules and Exhibits attached hereto) and
together with the confidentiality agreement dated June 23, 1995
and paragraph 9 of the letter of intent dated July 31, 1995, each
entered into by Orbital and MDA, (i) constitutes the entire
agreement, and supersedes all other prior agreements and
understandings, both written and oral, among the parties, or any
of them, with respect to the Arrangement, (ii) is not intended to
confer upon any person other than the parties hereto any rights
or remedies hereunder and (iii) shall not be assignable by
operation of law or otherwise.
7.9. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original
but all of which together shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
Attest: ORBITAL SCIENCES CORPORATION
/s/ Xxxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxx Xxxxxxx Name: Xxxxxxx X. Xxxxxxxx
Title: Assistant Secretary Title: Senior Vice President/Finance
and Administration
Attest: 3173623 CANADA INC.
/s/ Xxxxx Xxxxxxx By /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxx Xxxxxxx Name: Xxxxxxx X. Xxxxxxxx
Title: Assistant Secretary Title: Vice President
Attest: XXXXXXXXX, XXXXXXXXX AND
ASSOCIATES LTD.
/s/ Xxxxxx X. Xxxxxx By /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxxxxx
Title: Secretary Title: President and Chief Executive
Officer
