S&S DRAFT
1/20/97
ORION NETWORK SYSTEMS, INC.
ORION NEWCO SERVICES, INC.
[_____] Units, each Unit consisting of
One % Senior Note Due 2007
and One Warrant to Purchase [______] Shares of Common Stock
[_____] Units, each Unit consisting of
One % Senior Discount Note Due 2007
and One Warrant to Purchase [______] Shares of Common Stock
UNDERWRITING AGREEMENT
[__________], 1997
[__________], 1997
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx, Incorporated
c/o Morgan Xxxxxxx & Co.
Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Orion Newco Services, Inc., a newly formed Delaware
corporation ("Newco") that is a wholly owned subsidiary of Orion Network
Systems, Inc., a Delaware corporation (collectively, with its successors and
assigns, "Orion"), proposes to issue and sell to the Underwriters named in
Schedule I hereto (the "Underwriters") [_____] Senior Note Units (collectively,
the "Senior Note Units") and [_____] Senior Discount Note Units (collectively,
the "Senior Discount Note Units"; and together with the Senior Note Units, the
"Units"). Each Senior Note Unit will consist of (i) one [____]% Senior Note due
2007 with a principal amount of $1,000 (collectively, the "Senior Notes") to be
issued pursuant to the provisions of a Senior Note Indenture (the "Senior Note
Indenture") to be dated as of the Closing Date (as defined below) between Newco,
certain subsidiaries of Orion, as guarantors (the "Guarantors") and Bankers
Trust Company, as trustee (the "Trustee") and (ii) a Warrant (collectively, the
"Warrants"), each Warrant entitling the holder thereof to purchase [______]
shares of Common Stock, par value $.01 per share (the "Common Stock"), of Newco,
to be issued pursuant to the provisions of a Warrant Agreement to be dated as of
the Closing Date (the "Warrant Agreement") between Newco and Bankers Trust
Company, as warrant agent (the "Warrant Agent"). Each Senior Discount Note Unit
will consist of (i) one [___]% Senior Unsecured Discount Note due 2007 with a
principal amount at maturity of $1,000 (collectively, the "Senior Discount
Notes"; and together with the Senior Notes, the "Notes") to be issued pursuant
to the provisions of a Senior Discount Note Indenture to be dated as of the
Closing Date (the "Senior Discount Note Indenture") between Newco, the
Guarantors, as guarantors, and Bankers Trust Company, as trustee and (ii) a
Warrant.
Pursuant to the Section 351 Exchange Agreement and Plan of
Conversion dated as of June [__], 1996, and amended as of December [__], 1996,
(as amended, the "Exchange Agreement"), among Orion, International Private
Satellite Partners, L.P., a Delaware limited partnership ("Orion Atlantic"),
Orion Satellite Corporation, a Delaware corporation ("OrionSat") that is a
wholly owned subsidiary of Orion and the sole general partner of Orion Atlantic,
and each of the existing limited partners of Orion Atlantic other than Orion
(the "Exchanging Partners"), the Exchanging Partners have agreed to transfer
their limited partnership interests in Orion Atlantic and other rights relating
thereto to Newco in exchange (collectively, the "Exchange") for 121,988 shares
of a newly created class of Newco's Series C 6% Cumulative Convertible
Redeemable Preferred Stock. Upon consummation of the Exchange, Xxxxx will own
all of the limited partnership interests in Orion Atlantic (directly and
indirectly through Orion). In addition, Xxxxx will acquire certain rights held
by certain of the Exchanging Partners, including certain of the Exchanging
Partners' rights to receive repayment of various advances. Simultaneously with
the Exchange, under an Agreement and Plan of Merger dated as of January 8, 1997
(the "Merger Agreement"), among Orion, Newco and Orion Merger Company, Inc., a
newly formed Delaware corporation that is a wholly owned subsidiary of Newco
("Merger Sub"), Orion will merge with and into Merger Sub in a tax-free
reorganization (the "Merger"). Orion will be the surviving corporation in the
Merger and will thereby become the wholly owned subsidiary of Newco, and the
holders of preferred and common stock of Orion will receive substantially
identical preferred and common stock of Newco in exchange for such stock.
Effective upon consummation of the Merger, Newco will change its name to Orion
Network System, Inc. and Orion will change its name to __________. The Merger
and the Exchange will close concurrently with the closing of the offering of the
Units (the "Offering").
Newco has filed with the Securities and Exchange Commission
(the "Commission") a registration statement, including a prospectus, relating to
the Units, Notes, Warrants and Common Stock underlying the Warrants.* The
registration statement as amended at the time it becomes effective, including
the exhibits thereto and the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933 (the "Securities Act"), is hereinafter referred to as
the "Original Registration Statement;" any registration statement filed pursuant
to Rule 462(b) under the Securities Act is hereinafter referred to as the "Rule
462(b) Registration Statement;" the Original Registration Statement and any Rule
462(b) Registration Statement are hereinafter referred to collectively as the
"Registration Statement;" and the prospectus in the form first used to confirm
sales of Units is hereinafter referred to as the "Prospectus."
I.
Each of Orion and Newco (collectively, the "Orion Entities")
jointly and severally represents and warrants to each of the Underwriters that:
(a) The Original Registration Statement has become effective
and, if Xxxxx has elected to rely upon Rule 462(b) under the Securities
Act, the Rule 462(b) Registration Statement shall have become effective
not later than the earlier of (i) 10:00 p.m. Eastern time on the date
hereof and (ii) the time confirmations are sent or given, as specified
by Rule 462(b)(2) under the Securities Act; no stop order suspending
the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) Each part of the Registration Statement, when such
part became effective, did not contain and each such part, as amended
or supplemented, if applicable, will not contain 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 not
misleading, (ii) the Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iii) the Prospectus does
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that
the representations and warranties set forth in this paragraph I(b) do
not apply (A) to statements or omissions in the Registration Statement
or the Prospectus based upon information relating to any Underwriter
furnished to either of the Orion Entities in writing by such
Underwriter expressly for use therein or (B) to that part of the
Registration Statement that constitutes the Statement of Eligibility
and Qualification (Form T-1) under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), of each of the Senior Note Trustee
and the Senior Discount Note Trustee.
(c) Each of the Orion Entities has been duly incorporated, is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on either Orion and
its subsidiaries or Newco and its subsidiaries, in each case taken as a
whole.
(d) Each of the subsidiaries of the Orion Entities has been
duly incorporated, or in the case of a partnership, duly organized, is
validly existing as a corporation or partnership, as the case may be,
in good standing under the laws of the jurisdiction of its
organization, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on either Orion and its subsidiaries or
Newco and its subsidiaries, in each case taken as a whole; all of the
issued shares of capital stock of each subsidiary of the Orion Entities
have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly by either Orion, Newco or a
subsidiary of Orion or Newco, free and clear of all liens,
encumbrances, equities or claims. Each of the Significant Subsidiaries,
as defined in Regulation S-X under the Securities Act, of the Orion
Entities is identified on Schedule II hereto.
(e) This Agreement has been duly authorized, executed and
delivered by each of the Orion Entities.
(f) Each of the Senior Note Indenture and the Senior Discount
Note Indenture has been duly qualified under the Trust Indenture Act
and has been duly authorized by Newco and each of the Guarantors, and
when executed and delivered by Newco and each of the Guarantors, will
be a valid and binding agreement of Newco and each of the Guarantors,
enforceable in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability.
(g) The Warrant Agreement has been duly authorized and when
executed and delivered by Newco will be a valid and binding agreement
of Newco, enforceable in accordance with its terms except as (i) the
enforceability thereof may be limited by the effect of applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws now
or hereafter in effect relating to or affecting creditors' rights
generally and (ii) the availability of equitable remedies may be
limited by equitable principles of general applicability.
(h) Each of the Senior Notes and the Senior Discount Notes
have been duly authorized by Newco and each of the Guarantors and, when
executed and authenticated in accordance with the terms of the Senior
Note Indenture and the Senior Discount Note Indenture, respectively,
and delivered to and paid for by the Underwriters in accordance with
the terms of this Agreement, will be entitled to the benefits of the
Senior Note Indenture and the Senior Discount Note Indenture,
respectively, and will be valid and binding obligations of Newco and
each of the Guarantors, enforceable in accordance with their terms
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
(ii) rights of acceleration and the availability of equitable remedies
may be limited by equitable principles of general applicability.
(i) The Warrants have been duly authorized and when executed
and countersigned in accordance with the provisions of the Warrant
Agreement, and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be entitled to the
benefits of the Warrant Agreement and will be valid and binding
obligations of Newco enforceable in accordance with their terms, except
as (A) the enforceability thereof may be limited by the effect of
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and (B) the availability of equitable
remedies may be limited by equitable principles of general
applicability.
(j) The shares of Common Stock issuable upon exercise of the
Warrants (the "Warrant Shares") have been duly authorized and reserved
by Newco and, when issued and delivered upon exercise of the Warrants
in accordance with the terms of the Warrant Agreement, will be validly
issued, fully paid and non-assessable and will not be subject to any
preemptive or similar rights or taxes, liens, charges and security
interests.
(k) The Exchange, the Merger, the issuance and sale of
approximately $50 million of Newco's convertible subordinated
debentures (the "BA Debentures") to British Aerospace Public Limited
Company (the "British Aerospace Offering"), the issuance and sale of
approximately $10 million of Newco debentures (the "MMS Debentures") to
Matra Marconi Space (or an affiliate) ("the MMS Offering"), the
acquisition by Orion of the only outstanding minority interest (17%) in
Orion Asia Pacific, a Delaware corporation ("Orion Asia Pacific") for
86,000 shares of Orion common stock (the "OAP Minority Interest
Acquisition"), the repayment of the Orion 1 Credit Facility (as defined
in the Preliminary Prospectus) and the satisfaction of the interest
rate hedging obligations with respect thereto [LIST ADDITIONAL
TRANSACTIONS, AS APPROPRIATE] (collectively, the "Transactions") and
delivery and performance of the Exchange Agreement, the Merger
Agreement, the Orion 2 Satellite Contract (as hereinafter defined), the
Orion 3 Satellite Contract (as hereinafter defined) and the other
agreements necessary to consummate the Transactions (collectively, the
"Transaction Agreements") have been duly and validly authorized by the
Orion Entities and each of their direct and indirect subsidiaries (and
Orion Atlantic) that is a party thereto, and to the knowledge of the
Orion Entities (based on representations made therein), by the other
parties thereto, all action necessary to approve the Transactions has
been accomplished and no consent, approval, authorization or order of,
or qualification with, any governmental body or agency is required for
the consummation of the Transactions, except such as may have been
obtained, including any consents or approvals required by the
Communications Act of 1934, as amended, and the rules, regulations and
policies of the United States Federal Communications Commission (the
"FCC") thereunder and the Merger and the Exchange were duly approved by
the stockholders of Orion owning not less than a majority of the shares
of the capital stock of Orion entitled to vote thereon at a meeting
held on January 30, 1997.
(l) The execution and delivery by Xxxxx and the Guarantors (as
applicable) of, and the performance by Newco and the Guarantors (as
applicable) of their obligations under, this Agreement, the Senior Note
Indenture, the Senior Discount Note Indenture, the Notes, the Warrant
Agreement, the Warrants, the Transaction Agreements, the issuance, sale
and delivery of the Notes, the Warrants, the BA Debentures, the MMS
Debentures and the Warrant Shares upon exercise of the Warrants and the
consummation of the Transactions will not contravene any provision of
applicable law or the certificate of incorporation or by-laws of Newco
or any of the Guarantors or any agreement or other instrument binding
upon Newco or any of the Guarantors or any of their subsidiaries that
is material to Newco and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over Newco, any subsidiary of Newco or any of the
Guarantors, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by Newco and the Guarantors (as applicable) of their
obligations under this Agreement, the Senior Note Indenture, the Senior
Discount Note Indenture, the Notes, the Warrant Agreement, the
Warrants, the Transaction Agreements, the issuance, sale and delivery
of the Notes, the BA Debentures, the MMS Debentures, the Warrants, the
Warrant Shares upon exercise of the Warrants in accordance with the
terms of the Warrant Agreement or any of the Transaction Agreements,
except such as have been obtained or such as may be required by the
securities or Blue Sky laws of the various states in connection with
the offer and sale of the Units, Notes, Warrants, BA Debentures, MMS
Debentures or Warrant Shares.
(m) The execution and delivery by Orion of, and the
performance by Orion of its obligations under, this Agreement and the
Transaction Agreements and the consummation of the Transactions will
not contravene any provision of applicable law or the certificate of
incorporation or by-laws of Orion or any agreement or other instrument
binding upon Orion or any of its subsidiaries that is material to Orion
and its subsidiaries, taken as a whole, or any judgment, order or
decree of any governmental body, agency or court having jurisdiction
over Orion or any subsidiary, and no consent, approval, authorization
or order of, or qualification with, any governmental body or agency is
required for the performance by Orion of its obligations under this
Agreement or any of the Transaction Agreements, except such as have
been obtained or such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the
Units, Notes, Warrants, BA Debentures, MMS Debentures or Warrant
Shares.
(n) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of either Orion and its subsidiaries or Newco and its
subsidiaries, in each case taken as a whole, from that set forth in the
Prospectus.
(o) There are no legal or governmental proceedings pending or
threatened to which either of the Orion Entities or any of their
subsidiaries is a party or to which any of the properties of either
Orion Entity or any of its subsidiaries is subject that are required to
be described in the Registration Statement or the Prospectus and are
not so described or any statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(p) Each of the Orion Entities and its subsidiaries has all
necessary consents, authorizations, approvals, orders, certificates and
permits of and from, and has made all declarations and filings with,
all federal, state, local and other governmental, administrative or
regulatory authorities, all self-regulatory organizations and all
courts and other tribunals, to own, lease, license and use its
properties and assets and to conduct its business in the manner
described in the Prospectus, except to the extent that the failure to
obtain such consents, authorizations, approvals, orders, certificates
and permits or make such declarations and filings would not have a
material adverse effect on either Orion and its subsidiaries or Newco
and its subsidiaries, in each case taken as a whole.
(q) Each preliminary prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 or Rule 462 under the Securities
Act, complied when so filed in all material respects with the
Securities Act and the rules and regulations of the Commission
thereunder.
(r) Neither Newco nor Orion is and, after the giving effect to
the offering and sale of the Units and the application of the proceeds
thereof as described in the Prospectus, neither Newco nor Orion will be
an "investment company" as such term is defined in the Investment
Company Act of 1940, as amended.
(s) Each of the Orion Entities and its subsidiaries are (i) in
compliance with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have received
all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses
and (iii) are in compliance with all terms and conditions of any such
permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on such Orion Entity and its
subsidiaries, taken as a whole.
(t) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate,
have a material adverse effect on either Orion and its subsidiaries or
Newco and its subsidiaries, in each case taken as a whole.
(u) The Orion Entities have complied with all provisions of
Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
(v) Each of the parties to the Transaction Agreements has
waived the conditions to the performance of its obligations under such
Transaction Agreements (other than the conditions that the Notes be
issued and that the Orion 1 Credit Facility be repaid) and attached as
Exhibits [___ through ___] are such waivers.
(w) The Escrow Agreement has been amended to [remove any
discretion of the limited partners of Orion Atlantic to stop the
release of payment from the escrow account].
(x) Orion Asia Pacific will be a wholly owned subsidiary of
Newco immediately after consummation of the Transactions.
(y) Orion has entered into, and delivered to you, satellite
procurement contracts with Matra Marconi Space for Orion 2 (the "Orion
2 Satellite Contract") and Xxxxxx Space and Communications
International for Orion 3 (the "Orion 3 Satellite Contract").
II.
Newco hereby agrees to sell to the Underwriters, and the
Underwriters, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agree, severally
and not jointly, to purchase from Newco the respective number of Senior Note
Units and Senior Discount Note Units set forth in Schedule I hereto opposite
their names at $[____] per Senior Note Unit and $[____] per Senior Discount Note
Unit -- the "Senior Note Unit purchase price" and the "Senior Discount Note Unit
purchase price," respectively -- plus (i) accrued interest on the Senior Notes,
if any, and (ii) accrued amortization of original issue discount on the Senior
Discount Notes, if any, in each case from [_____], 1997 to the date of payment
and delivery.
III.
Each of the Orion Entities is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Units as soon after the Original Registration Statement and this Agreement
have become effective as in your judgment is advisable. Each of the Orion
Entities is further advised by you that the Units are to be offered to the
public initially at $[____] per Senior Note Unit and $[____] per Senior Discount
Note Unit -- the "Senior Note Unit public offering price" and the "Senior
Discount Note Unit offering price," respectively -- plus (i) accrued interest on
the Senior Notes, if any, and (ii) accrued amortization of original issue
discount on the Senior Discount Notes, if any, and to certain dealers selected
by you at a price that represents a concession not in excess of $[____] per
Unit, and that any Underwriter may allow, and such dealers may reallow, a
concession, not in excess of $[____] per Unit, to any Underwriter or to certain
other dealers.
IV.
Payment for the Units shall be made against delivery of the
Units as described in the paragraph below at a closing (the "Closing") to be
held at the office of Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, 00000, at 10:00 A.M., local time, on [___________], 1997, or at such other
time on the same or such other date, not later than [______], 1997, as shall be
designated in writing by you (the "Closing Date"). Payment for the Units shall
be made to the account or accounts specified by Xxxxx in writing delivered to
you.
At the closing, the Units shall be delivered to you for the
respective accounts of the Underwriters of the Units registered in such names
and in such denominations as you shall request in writing not later than two
full business day prior to the date of delivery, with any transfer taxes payable
in connection with the transfer of the Units to the Underwriters duly paid.
V.
The obligations of the Orion Entities and the several
obligations of the Underwriters hereunder are subject to the condition that the
Registration Statement shall have become effective not later than the date
hereof.
The several obligations of the Underwriters hereunder are
subject to the following further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date,
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any of Orion's securities by any
"nationally recognized statistical rating organization", as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations, of either Orion and its subsidiaries or Newco and
its subsidiaries, in each case taken as a whole, from that set
forth in the Registration Statement, that, in your judgment,
is material and adverse and that makes it, in your judgment,
impracticable to market the Units on the terms and in the
manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of Orion, on behalf of Orion, to the effect set forth in clause (a)(i)
above and to the effect that the representations and warranties of the
Orion Entities contained in this Agreement are true and correct as of
the Closing Date and that the Orion Entities have complied with all of
the agreements and satisfied all of the conditions contained in this
Agreement on their part to be performed or satisfied on or before the
Closing Date.
The officer signing and delivering such certificate
may rely upon the best of his knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of Newco, on behalf of such entity, to the effect that the
representations and warranties of the Orion Entities contained in this
Agreement are true and correct in all material respects as of the
Closing Date and that the Orion Entities have complied with all of the
agreements and satisfied all of the conditions contained in this
Agreement on their part to be performed or satisfied on or before the
Closing Date.
The officer signing and delivering such certificate
may rely upon the best of his knowledge as to proceedings threatened.
(d) No stop order suspending the effectiveness of the
Registration Statement shall be in effect and no proceedings for such
purpose shall be pending before or, to the knowledge of the Orion
Entities or the Underwriters, threatened by the Commission.
(e) You shall have received on the Closing Date an opinion of
Xxxxx & Xxxxxxx L.L.P., counsel for the Orion Entities, dated the
Closing Date, in the form attached hereto as Exhibit A.
The opinion of Xxxxx & Xxxxxxx L.L.P. shall be rendered to you
at the request of the Orion Entities and shall so state therein.
(f) You shall have received on the Closing Date an opinion of
Xxxx, Xxxxxxx, Xxxxx & Xxxxxxxxxx, special FCC counsel for the Orion
Entities, dated the Closing Date, in the form attached hereto as
Exhibit B.
(g) You shall have received on the Closing Date an opinion of
[___________], special Delaware counsel for the Orion Entity, dated the
Closing Date, in the form attached hereto as Exhibit C.
(h) You shall have received on the Closing Date an opinion of
Xxxxxxxx & Xxxxxxxx, counsel for the Underwriters, dated the Closing
Date with respect to the Registration Statement and the Prospectus and
such other related matters as you may reasonably request, and such
counsel shall have received such documents and information as they may
reasonably request to enable them to pass upon such matters.
(i) You shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to you, from
Xxxxx & Xxxxx, L.L.P., independent public accountants for Orion,
containing statements and information of the type ordinarily included
in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
(j) The Orion Entities shall have complied with the provisions
of Section VI(a) hereof with respect to the furnishing of Prospectuses
on the business day next succeeding the date of this Agreement, in such
quantities as you shall have reasonably requested.
(k) The Exchange, the Merger, the BA Offering, the MMS
Offering, the OAP Minority Interest Acquisition, the repayment of the
Orion 1 Credit Facility and satisfaction of the interest rate hedging
obligations with respect thereto and [LIST ADDITIONAL TRANSACTIONS, AS
APPROPRIATE] shall have occurred, or shall occur concurrently with the
Closing, as provided in the Proxy Statement/Prospectus, dated January
___, 1997, of Orion.
(l) The Certificate of Merger shall have been, or concurrently
with the Closing shall be, filed with the Secretary of State of the
State of Delaware.
(m) You shall have received such other documents and
certificates as are reasonably requested by you or your counsel.
VI.
In further consideration of the agreements of the Underwriters
herein contained, each of the Orion Entities covenants as follows:
(a) To furnish to you, without charge, three signed copies of
the Registration Statement (including exhibits thereto) and, during the
period mentioned in paragraph (c) below, as many copies of the
Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request. In the case of
the Prospectus, to furnish to you copies of the Prospectus in New York
City, prior to 3:00 p.m., on the business day next succeeding the date
of this Agreement, in such quantities as you reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object.
(c) If, during such period after the first date of the public
offering of the Units as in the opinion of your counsel the Prospectus
is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus
in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of your counsel, it is necessary to
amend or supplement the Prospectus to comply with law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to
the Underwriters and to the dealers (whose names and addresses you will
furnish to Newco) to which Units may have been sold by you on behalf of
the Underwriters and to any other dealers upon request, either
amendments or supplements to the Prospectus so that the statements in
the Prospectus as so amended or supplemented will not, in the light of
the circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To endeavor to qualify the Units, Notes and Warrants for
offer and sale under the securities or Blue Sky laws of such
jurisdictions as you shall reasonably request and to pay all expenses
(including fees and disbursements of counsel) in connection with such
qualification and in connection with (i) the determination of the
eligibility of the Units, Notes and Warrants for investment under the
laws of such jurisdiction as you may designate and (ii) any review of
the Offering by the National Association of Securities Dealers, Inc.
(e) If the Orion Entities elect to rely on Rule 462(b) under
the Securities Act, the Orion Entities shall file a Rule 462(b)
Registration Statement with the Commission in compliance with Rule
462(b) under the Securities Act no later than the earlier of (i) 10:00
p.m. Eastern time on the date hereof and (ii) the time confirmations
are sent or given, as specified by Rule 462(b)(2) under the Securities
Act, and shall pay the applicable fees in accordance with Rule 111
under the Securities Act.
(f) To make generally available to Newco's security holders
and to you, as soon as practicable but not later than 60 days after the
end of the twelve-month period beginning at the end of Newco's fiscal
quarter during which the effective date of the Original Registration
Statement occurs, an earnings statement of Newco covering such
twelve-month period that satisfies the provisions of Section 11(a) of
the Securities Act and the rules and regulations of the Commission
thereunder.
(g) During the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell,
contract to sell or otherwise dispose of any debt securities of Newco
or warrants to purchase securities of Newco substantially similar to
the Units, Notes, Warrants or Common Stock (other than (i) the Units,
Notes and Warrants, (ii) securities of Newco to be issued in connection
with the Exchange and the Merger as described in the Proxy
Statement/Prospectus, (iii) the issuance and sale of the BA Debentures
pursuant to the British Aerospace Offering and (iv) the issuance and
sale of the MMS Debentures pursuant to the MMS Offering, without your
prior written consent.
(h) To use its best efforts to maintain the effectiveness of
the Registration Statement covering the issuance of the Warrant Shares
until the earlier of (i) such time as all Warrants have been exercised
and (ii) [_____], 2007.
(i) To use its best efforts to have the Warrant Shares
included for trading on the Nasdaq National Market prior to the time
the Warrants first become exercisable and to use its best efforts to
have the Warrant Shares included for trading on any other exchange or
quotation system where the Common Stock is included for trading.
(j) To use the net proceeds received by Newco from the sale of
(i) Units hereunder, (ii) the BA Debentures pursuant to the British
Aerospace Offering and (iii) the MMS Debentures pursuant to the MMS
Offering, in the manner specified in the Prospectus under the caption
"Use of Proceeds."
(k) Whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, the Orion Entities agree
to pay, or reimburse if paid by or on behalf of you, all costs and
expenses incident to the public offering of the Units and the
performance of the obligations of the Orion Entities under this
Agreement including those relating to: (i) the fees, disbursements and
expenses of the Orion Entities' counsel and accountants in connection
with the issuance of the Units, the preparation, printing, filing and
distribution of the Registration Statement including financial
statements and all exhibits, each preliminary prospectus, the
Prospectus, all amendments and supplements to the Registration
Statement, and the Prospectus, and the printing, filing and
distribution of this Agreement (including all document production
charges and expenses of counsel for the Underwriters in connection with
the preparation of this Agreement); (ii) the preparation and delivery
of any certificates for the Units to the Underwriters; (iii) all
expenses in connection with the registration or qualification of the
Units, Notes, Warrants and Warrant Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall request,
including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such registration and qualification and
the preparation, printing, distribution and shipment of preliminary and
supplementary Blue Sky memoranda; (iv) the furnishing (including costs
of shipping and mailing) to you and to the Underwriters of copies of
each preliminary prospectus, the Prospectus and all amendments or
supplements to the Prospectus, and of the several documents required by
this paragraph to be so furnished, as may be reasonably requested for
use in connection with the offering and sale of the Units by the
Underwriters or by dealers to whom Units may be sold; (v) the filing
fees and expenses (including the reasonable fees and disbursements of
counsel to the Underwriters), if any, incurred with respect to any
filing with the National Association of Securities Dealers, Inc. in
connection with its review of the terms of the public offering; (vi)
any expenses incurred by the Orion Entities in connection with a "road
show" presentation to potential investors; and (vii) all transfer
taxes, if any, with respect to the sale and delivery of the Units by
the Orion Entities to the Underwriters.
(l) To use the net proceeds of the British Aerospace Offering
and the MMS Offering to make payments to the manufacturers under the
Orion 2 Satellite Contract and the Orion 3 Satellite Contract.
VII.
Each of the Orion Entities agrees, jointly and severally, to
indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred by any Underwriter or any such controlling person in
connection with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any amendment thereof, any preliminary prospectus
or the Prospectus (as amended or supplemented if Newco shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to any Underwriter furnished to either of the Orion Entities in writing
by such Underwriter through you expressly for use therein.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless each of the Orion Entities, their respective
directors, their respective officers who sign the Registration Statement and
each person, if any, who controls the Orion Entities within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act to the
same extent as the foregoing indemnity from the Orion Entities to such
Underwriter, but only with reference to information relating to such Underwriter
furnished to the Orion Entities in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either of the two preceding paragraphs, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Xxxxxx Xxxxxxx & Co. Incorporated, in the case of
parties indemnified pursuant to the second preceding paragraph, and by the Orion
Entities, in the case of parties indemnified pursuant to the first preceding
paragraph. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
If the indemnification provided for in the first or second
paragraph of this Article VII is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Orion Entities on the one hand and the
Underwriters on the other hand from the offering of the Units or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Orion
Entities on the one hand and of the Underwriters on the other hand in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Orion Entities on the one hand and the
Underwriters on the other hand in connection with the offering of the Units
shall be deemed to be in the same respective proportions as the net proceeds
from the offering of the Units (before deducting expenses) received by the Orion
Entities and the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate public offering price of the Units. The
relative fault of the Orion Entities on the one hand and of the Underwriters on
the other hand shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Orion Entities or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Underwriters' respective obligations to contribute
pursuant to this Article VII are several in proportion to the respective
principal amounts of Units they have purchased hereunder, and not joint.
The Orion Entities and the Underwriters agree that it would
not be just or equitable if contribution pursuant to this Article VII were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Article VII, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Units underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Article VII are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this
Article VII and the representations and warranties of the Orion Entities
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
by or on behalf of either Orion Entity, its officers or directors or any person
controlling either Orion Entity and (iii) acceptance of and payment for any of
the Units.
VIII.
This Agreement shall be subject to termination by notice given
by you to Newco, if (a) after the execution and delivery of this Agreement and
prior to the Closing Date (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, the National Association of Securities
Dealers, Inc., the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) trading of any securities of Orion
or Newco shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New York
shall have been declared by either Federal or New York State authorities or (iv)
there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in your judgment, is
material and adverse and (b) in the case of any of the events specified in
clauses (a)(i) through (iv), such event singly or together with any other such
event makes it, in your judgment, impracticable to market the Units on the terms
and in the manner contemplated in the Prospectus.
IX.
This Agreement shall become effective upon the later of (x)
execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Original Registration Statement by the
Commission.
If, on the Closing Date, any one of the Underwriters shall
fail or refuse to purchase Units that it has agreed to purchase hereunder on
such date, and the number of Units which such defaulting Underwriter agreed but
failed or refused to purchase is not more than one-tenth of the total number of
the Units to be purchased on such date, the other Underwriter shall be obligated
to purchase the Units which such defaulting Underwriter agreed but failed or
refused to purchase on such date; provided that in no event shall the number of
Units that any Underwriter has agreed to purchase pursuant to Article II be
increased pursuant to this Article IX by an amount in excess of one-ninth of
such number of Units without the written consent of such Underwriter. If, on the
Closing Date, any Underwriter shall fail or refuse to purchase Units and the
aggregate number of Units with respect to which such default occurs is more than
one-tenth of the number of Units to be purchased on such date, and arrangements
satisfactory to you and the Orion Entities for the purchase of such Units are
not made within 36 hours after such default, this Agreement shall terminate
without liability on the part of any nondefaulting Underwriter or the Orion
Entities. In any such case either you or the Orion Entities shall have the right
to postpone the Closing Date but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and in
the Prospectus or in any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
If this Agreement shall be terminated by the Underwriters, or
any one of them, because of any failure or refusal on the part of either of the
Orion Entities to comply with the terms or to fulfill any of the conditions of
this Agreement, or if for any reason either of the Orion Entities shall be
unable to perform its obligations under this Agreement, the Orion Entities will
reimburse the Underwriters, or such Underwriter as has so terminated this
Agreement with respect to itself, severally, for all out-of-pocket expenses
(including the fees and disbursements of their counsel) reasonably incurred by
such Underwriters in connection with this Agreement or the offering contemplated
hereunder.
This Agreement may be signed in two or more counterparts, each
of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
This Agreement shall be governed by the laws of the State of
New York.
Very truly yours,
ORION NETWORK SYSTEMS, INC.
By
ORION NEWCO SERVICES, INC.
By
Accepted, [_________], 1997
Xxxxxx Xxxxxxx & Co.
Incorporated
Xxxxxxx Xxxxx & Co.
By Xxxxxx Xxxxxxx & Co.
Incorporated
By_______________________
SCHEDULE I
Underwriter Number of Senior Note Number of Senior
Units to Be Purchased Discount Note Units to
be Purchased
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Xxxxx & Co. __________ __________
Total . . . . . . . . . . . . . __________ __________
---------- ----------
SCHEDULE II
List of Significant Subsidiaries
[TO BE PROVIDED BY XXXXX]
EXHIBIT A
Form of Opinion of Xxxxx & Xxxxxxx L.L.P.
(i) Each of the Orion Entities has been duly incorporated, is
validly existing as a corporation in good standing under the laws of
Delaware, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on either Orion and
its subsidiaries or Newco and its subsidiaries, in each case taken as a
whole.
(ii) Each of the subsidiaries of the Orion Entities has been
duly incorporated, or in the case of a partnership, duly organized, is
validly existing as a corporation or partnership, as the case may be, in good
standing under the laws of the jurisdiction of its organization, has the
power and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing would
not have a material adverse effect on either Orion and its subsidiaries or
Newco and its subsidiaries, in each case taken as a whole; all of the issued
shares of capital stock of each subsidiary of the Orion Entities have been
validly authorized and issued, are fully paid and non-assessable and are
owned directly by either Orion, Newco or a subsidiary of Orion or Newco, free
and clear of all liens, encumbrances, equities or claims.
(iii) The authorized capital stock of the Orion Entities
conforms in all material respects to the description thereof set forth in the
Prospectus under the caption "Description of Capital Stock."
(iv) The Underwriting Agreement has been duly authorized,
executed and delivered by each of the Orion Entities.
(v) Each of the Senior Note Indenture and the Senior Discount
Note Indenture has been duly qualified under the Trust Indenture Act and has
been duly authorized by Newco and each of the Guarantors, and when executed
and delivered by Newco and each of the Guarantors, will be a valid and
binding agreement of Newco and each of the Guarantors, enforceable in
accordance with its terms except as (i) the enforceability thereof may
belimited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability.
(vi) The Warrant Agreement has been duly authorized and when
executed and delivered by Newco will be a valid and binding agreement of
Newco, enforceable in accordance with its terms except as (i) the
enforceability thereof may be limited by the effect of applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect relating to or affecting creditors' rights generally and (ii) the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(vii) Each of the Senior Notes and the Senior Discount Notes
have been duly authorized and, when executed and authenticated in accordance
with the terms of the Senior Note Indenture and the Senior Discount Note
Indenture, respectively, and delivered to and paid for by the Underwriters in
accordance with the terms of the Underwriting Agreement, will be entitled to
the benefits of the Senior Note Indenture and the Senior Discount Note
Indenture, respectively, and will be valid and binding obligations of Newco,
enforceable in accordance with their terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(viii) The Warrants have been duly authorized and when executed
and countersigned in accordance with the provisions of the Warrant Agreement,
and delivered to and paid for by the Underwriters in accordance with the
terms of the Underwriting Agreement, will be entitled to the benefits of the
Warrant Agreement and will be valid and binding obligations of Newco
enforceable in accordance with their terms, except as (A) the enforceability
thereof may be limited by the effect of applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect
relating to or affecting creditors' rights generally and (B) the availability
of equitable remedies may be limited by equitable principles of general
applicability.
(ix) The Warrant Shares have been duly authorized and reserved
by Newco and, when issued and delivered upon exercise of the Warrants in
accordance with the terms of the Warrant Agreement, will be validly issued,
fully paid and non-assessable and will not be subject to any preemptive or
similar rights or taxes, liens, charges and security interests.
(x) The Transactions and delivery and performance of the
Transaction Agreements have been duly and validly authorized by the Orion
Entities and each of their direct and indirect subsidiaries (and Orion
Atlantic) that is a party thereto, and to the knowledge of the Orion Entities
(based on representations made therein), by the other parties thereto , all
action necessary to approve the Transactions has been accomplished and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the consummation of the
Transactions, except such as may have been obtained, including any consents
or approvals required by the Communications Act of 1934, as amended, and the
rules, regulations and policies of the United States Federal Communications
Commission thereunder and the Exchange and the Merger were duly approved by
the stockholders of Orion owning not less than a majority of the shares of
the capital stock of Orion entitled to vote thereon at a meeting held on
January __, 1997.
(xi) The execution and delivery by Xxxxx and the Guarantors (as
applicable) of, and the performance by Newco and the Guarantors (as
applicable) of their obligations under, the Underwriting Agreement, the
Senior Note Indenture, the Senior Discount Note Indenture, the Notes, the
Warrant Agreement, the Warrants, the Transaction Agreements, the issuance,
sale and delivery of the Notes, the Warrants, the BA Debentures, the MMS
Debentures and the Warrant Shares upon exercise of the Warrants and the
consummation of the Transactions will not contravene any provision of
applicable law or the certificate of incorporation or by-laws of Newco or any
of the Guarantors or any agreement or other instrument binding upon Newco or
any of the Guarantors or any of their subsidiaries that is material to Newco
and its subsidiaries, taken as a whole, or any judgment, order or decree of
any governmental body, agency or court having jurisdiction over Newco, any
subsidiary of Newco or any of the Guarantors, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by Newco and the Guarantors (as
applicable) of their obligations under the Underwriting Agreement, the Senior
Note Indenture, the Senior Discount Note Indenture, the Notes, the Warrant
Agreement, the Warrants, the Transaction Agreements, the issuance, sale and
delivery of the Notes, the BA Debentures, the MMS Debentures, the Warrants,
the Warrant Shares upon exercise of the Warrants in accordance with the terms
of the Warrant Agreement or any of the Transaction Agreements, except such as
have been obtained or such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the
Units, Notes, Warrants, BA Debentures, the MMS Debentures or Warrant Shares.
(xii) The execution and delivery by Orion of, and the
performance by Orion of its obligations under, the Underwriting Agreement,
the Transaction Agreements and the consummation of the Transactions will not
contravene any provision of applicable law or the certificate of
incorporation or by-laws of Orion or any agreement or other instrument
binding upon Orion or any of its subsidiaries that is material to Orion and
its subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over Orion or any
subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by Orion of its obligations under the Underwriting Agreement or
any of the Transaction Agreements, except such as have been obtained or such
as may be required by the securities or Blue Sky laws of the various states
in connection with the offer and sale of the Units, Notes, Warrants, BA
Debentures, MMS Debentures or the Warrant Shares.
(xiii) The Original Registration Statement has become effective
and, if Xxxxx has elected to rely upon Rule 462(b) under the Securities Act,
the Rule 462(b) Registration Statement shall have become effective not later
than the earlier of (i) 10:00 p.m. Eastern time on the date hereof and (ii)
the time confirmations are sent or given, as specified by Rule 462(b)(2)
under the Securities Act; no stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for such purpose are
pending before or threatened by the Commission.
(xiv) (i) Each part of the Registration Statement, when such
part became effective, did not contain and each such part, as amended or
supplemented, if applicable, will not contain 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 not misleading, (ii) the
Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and (iii) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that the representations and warranties set forth in
this paragraph (xiv) do not apply (A) to statements or omissions in the
Registration Statement or the Prospectus based upon information relating to
any Underwriter furnished to either of the Orion Entities in writing by such
Underwriter expressly for use therein or (B) to that part of the Registration
Statement that constitutes the Statement of Eligibility and Qualification
(Form T-1) under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), of each of the Senior Note Trustee and the Senior Discount
Note Trustee.
(xv) The information in the Prospectus under the captions "The
Merger and the Exchange," "Certain Transactions," "Description of Units,"
"Description of Notes," "Description of Warrants," "Description of Capital
Stock," "Description of Other Indebtedness of the Company," and "Certain
United States Federal Income Tax Consequences," to the extent that such
information constitutes matters of law or legal conclusions, or purports to
describe certain provisions of specified documents, has been reviewed by us
and is correct in all material respects. The statements in the Prospectus
under the captions "Risk Factors - - Approvals Needed; Regulation of
Industry," and "United States Regulatory Restrictions," insofar as such
statements purport to describe certain provisions of the Communications Act
and rules and regulations of the FCC promulgated thereunder, have been
reviewed by us and are correct in all material respects. The information in
Item 14 of the Registration Statement, to the extent such information
constitutes matters of law or legal conclusions or purports to describe
certain provisions of specified documents, has been reviewed by us and is
correct in all material respects.
(xvi) Neither Newco nor Orion is an "investment company" or an
entity "controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended.
(xvii) The deposit of the pledged securities in the pledged
account in favor of the trustee on behalf of the holders of the Senior Notes
will constitute a perfected first priority interest in the pledged securities
and the proceeds thereof.
EXHIBIT B
Form of FCC Counsel Opinion
(i) (A) the execution and delivery of the Underwriting Agreement
by the Orion Entities and the consummation of the transactions contemplated
thereby do not violate (1) the Federal Communications Act of 1934, as amended
(the "Communications Act"), (2) any rules or regulations of the Federal
Communications Commission ("FCC") applicable to the Orion Entities, (3) any
state telecommunications law, rules or regulations ("State Law") applicable to
the Orion Entities, and (4) to the best of such counsel's knowledge, any decree
from any court, and (B) no authorization of or filing with the FCC or any state
authority overseeing telecommunications matters ("State Authority"), is
necessary for the execution and delivery of the Underwriting Agreement by the
Orion Entities and the consummation of the transactions contemplated thereby in
accordance with the terms thereof;
(ii) the Orion Entities and certain of their subsidiaries (named
on Schedule I hereto) are nondominant carriers authorized by the FCC to provide
interstate interexchange telecommunications services. The Orion Entities and
certain of their subsidiaries (named on Schedule II hereto) have been granted
Section 214 authority by the FCC to provide international message
telecommunications services through the resale of international switched voice
and private line services and each of the Orion Entities and such subsidiaries
has on file with the FCC tariffs applicable to its domestic interstate and
international services. No further FCC authority is required by the Orion
Entities or any of such subsidiaries to conduct its business as described in
the Prospectus;
(iii) the Orion Entities and certain of their subsidiaries (named
on Schedule III hereto) are certified and/or registered to resell intrastate
interexchange telecommunications services in, and are not required to be
certified to resell intrastate interexchange telecommunications services in,
the respective states listed on Schedule IV hereto. Each of the Orion Entities
and such subsidiaries has a tariff on file in each of the states. No further
authority is required from any of the State Authorities by the Orion Entities
to conduct their business as described in the Prospectus,
(iv) (A) each of the Orion Entities and its subsidiaries (1) has
made all reports and filings, and paid all fees, required by the FCC and the
State Authorities; and (2) has all certificates, orders, permits, licenses,
authorizations, consents and approvals of and from, and has made all filings
and registrations, with the FCC and the State Authorities necessary to own,
lease, license and use its properties and assets and to conduct its business in
the manner described in the Prospectus; and (B) neither of the Orion Entities
nor any of their subsidiaries has received any notice of proceedings relating
to the revocation or modification of any such certificates, orders, permits,
licenses, authorizations, consents or approvals, or the qualification or
rejection of any such filing or registration, the effect of which, singly or in
the aggregate, would have a material adverse effect on the prospects,
condition, financial or otherwise, or in the earnings, business or operations
of either Orion and its subsidiaries or Newco and its subsidiaries, in each
case taken as a whole;
(v) neither of the Orion Entities nor any of its subsidiaries is
in violation of, or in default under the Communications Act, the
telecommunications rules or regulations of the FCC or State Law, the effect of
which, singly or in the aggregate, would have a material adverse effect on the
prospects, condition, financial or otherwise, or in the earnings, business or
operations of either Orion and its subsidiaries or Newco and its subsidiaries,
in each case taken as a whole;
(vi) to the best of such counsel's knowledge after due inquiry
(A) no decree or order of the FCC or any State Authority has been issued
against either of the Orion Entities or any of its subsidiaries and (B) no
litigation, proceeding, inquiry or investigation has been commenced or
threatened, and no notice of violation or order to show cause has been issued,
against either of the Orion Entities or any of its subsidiaries before or by
the FCC or any State Authority. To the best of such counsel's knowledge after
due inquiry, there are no rulemakings or other administrative proceedings
pending before the FCC or any State Authority which (A) are generally
applicable to telecommunications services or the resale thereof and (B) which,
if decided adversely to the Orion Entities' interests, would have a material
adverse effect on either Orion and its subsidiaries or Newco and its
subsidiaries, in each case taken as a whole; and
(vii) the statements in the Prospectus under the captions "Risk
Factors -- Approvals Needed; Regulation of Industry," and "United States
Regulatory Restrictions," insofar as such statements constitute a summary of
the legal matters, documents or proceedings referred to therein, are accurate
in all material respects and fairly summarize all matters referred to therein.
EXHIBIT C
Form of Delaware Counsel Opinion
(i) Upon the filing of the Certificate of Merger in
accordance with the Merger Agreement and the General Corporation Law of the
State of Delaware, the Merger will become effective, Orion will become the
surviving corporation of the Merger and each share of Orion preferred and
common stock outstanding immediately prior to the Merger will be converted
into the right to receive substantially identical preferred and common stock
of Newco.
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* Because Newco believed that it would be more informative and less
confusing for potential investors and existing stockholders, the
Original Registration Statement and the prospectus included therein
refer to the registrant as Orion Network Systems, Inc.
