1
EXHIBIT 10.25
EXECUTION COPY
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
This EXCHANGE AND REGISTRATION RIGHTS AGREEMENT (this
"AGREEMENT"), is made as of the 22nd day of December, 1999, by and among Orbital
Sciences Corporation, a Delaware corporation ("ORBITAL"), and the investors
identified on the signature pages hereof (the "INVESTORS").
RECITALS
WHEREAS, on the date hereof XxxXxxxxx, Xxxxxxxxx & Associates,
Ltd. ("MDA"), a wholly owned subsidiary of Orbital, issued and sold an aggregate
of 10,000,001 shares of the common stock, no par value, of MDA to the Investors;
and
WHEREAS, in order to induce the Investors to purchase the MDA
Shares, Orbital has agreed to enter into an agreement pursuant to which the
Investors shall be entitled to exchange their MDA Shares for shares of the
common stock of Orbital, par value $.01 per share (the "ORBITAL Stock"), in
order to achieve liquidity of their investment in the event that an initial
public offering of MDA does not occur as specified herein.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual promises and covenants set forth herein and in the Unanimous Shareholders
Agreement and Subscription Agreement, the parties hereby agree as follows:
1. CERTAIN DEFINITIONS
"ACCEPTABLE IPO" shall have the meaning set forth in the Unanimous
Shareholders Agreement.
"ACCREDITED INVESTOR" shall have the meaning set forth in Rule 501
of the General Rules and Regulations promulgated under the Act.
"ACT" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder, all as the same shall be in
effect at the relevant time.
"AFFILIATE" shall have the meaning set forth in Rule 12b-2
promulgated under the Exchange Act, as such rule is in effect on the date
hereof.
"AGREEMENT" shall have the meaning set forth in the introductory
paragraph.
"BLACK-OUT PERIOD" shall have the meaning set forth in SECTION
6.1(c) of this Agreement.
2
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
a day on which state or federally chartered banking institutions in New York
City, New York are not required to be open.
"COMMISSION" shall mean the United States Securities and Exchange
Commission.
"CURRENT MARKET PRICE" of Orbital Stock for any day shall mean the
last reported sales price on such day, or, if no sale takes place on such day,
the average of the reported closing bid and asked prices on such day, in either
case as reported on the New York Stock Exchange ("NYSE") or, if such security is
not listed or admitted for trading on the NYSE, on the principal national
securities exchange on which such security is listed or admitted for trading or,
if not listed or admitted for trading on any national securities exchange, on
the Nasdaq National Market ("NASDAQ") or, if such security is not quoted on
Nasdaq, the average of the closing bid and asked prices on such day in the
over-the-counter market as reported by Nasdaq or, if bid and asked prices for
such security on such day shall not have been reported through Nasdaq, the
average of the bid and asked prices on such day as furnished by any NYSE member
firm regularly making a market in such security selected for such purpose by the
Board of Directors.
"DEMAND NOTICE" shall have the meaning set forth in SECTION 6.1(a)
of this Agreement.
"DEMAND REGISTRATION" shall have the meaning set forth in SECTION
6.1(a) of this Agreement.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in SECTION
6.1(b) of this Agreement.
"ELECTING INVESTORS" shall have the meaning set forth in SECTION
5.1(a).
"EMPLOYMENT TRIGGER DATE" means the date on or before June 22,
2002 and prior to the completion of an Acceptable IPO on which the employment of
either the Chief Executive Officer of MDA or Chief Financial Officer of MDA is
terminated (or constructively dismissed) (other than for cause) without the
approval, in writing or at a meeting, of one of the director nominees of the
Investors to the board of MDA, except as a result of death or voluntary
resignation (for greater certainty, excluding as a result of constructive
dismissal) by such officer.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the relevant time.
"EXCHANGE DATE" shall have the meaning set forth in SECTION
2.1(d).
2
3
"EXCHANGE PERIOD" shall have the meaning set forth in SECTION 2.2.
"EXCHANGE RATE" shall have the meaning set forth in SECTION 2.3.
"EXCHANGE RIGHT" shall have the meaning set forth in SECTION 2.1.
"EXCHANGE" shall have the meaning set forth in SECTION 2.1(d).
"EXERCISING HOLDER" shall mean any Holder that has elected to
exercise its registration rights under SECTIONS 6.1 or 6.2 of this Agreement.
"FAIR MARKET PRICE" shall mean the average of the daily Current
Market Prices of one share of Orbital Stock on the five most recent consecutive
trading days ending on the trading day before the trading day in question.
"HOLDER" or "HOLDERS" shall mean (i) the Investors and (ii) each
person holding Registrable Shares as a result of a permitted transfer or
assignment to that person of Registrable Shares other than pursuant to an
effective Registration Statement or Rule 144 (or any successor provision) under
the Act.
"INDEMNIFIED PARTY" shall have the meaning set forth in SECTION
6.5(c) of this Agreement.
"INDEMNIFYING PARTY" shall have the meaning set forth in SECTION
6.5(c) of this Agreement.
"INITIAL CLOSING" shall mean the closing on the date hereof of the
consummation of the sale of Special Shares (as defined in the Subscription
Agreement) by MDA to the Investors pursuant to the Subscription Agreement, which
will then be converted immediately into the MDA Shares.
"INITIAL REQUESTING HOLDERS" shall have the meaning set forth in
SECTION 6.1(a) of this Agreement.
"INVESTORS" shall have the meaning set forth in the introductory
paragraph.
"IPO TRIGGER DATE" shall mean June 22, 2002; provided however,
that no IPO Trigger Date shall occur if (i) MDA shall have completed an
Acceptable IPO prior to such date; or (ii) the failure by MDA to complete an
Acceptable IPO by such date is a result of the Investors not using their
reasonable best efforts (as defined in the Unanimous Shareholders Agreement) to
effect such Acceptable IPO with Orbital required to support such a transaction.
"MDA SHARES" shall mean the 10,000,001 shares of common stock, no
par value, of MDA received by the Investors immediately following their
3
4
subscription for Special Shares (as defined in the Subscription Agreement) of
MDA at the Initial Closing.
"MDA" shall have the meaning set forth in the Recitals.
"ORBITAL" shall have the meaning set forth in the introductory
paragraph.
"ORBITAL REGISTRATION STATEMENT" shall have the meaning set forth
in SECTION 6.2(a) of this Agreement.
"ORBITAL STOCK" shall have the meaning set forth in the Recitals.
"PERSON" shall mean any individual, corporation, partnership,
limited liability company, joint venture, trust, unincorporated organization, or
other form of business or legal entity.
"PROSPECTUS" shall mean the prospectus included in any
Registration Statement (including, without limitation, a prospectus that
discloses information previously omitted from a prospectus filed as part of an
effective Registration Statement in reliance upon Rule 430A under the Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Shares.
The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer to a
registration effected by preparing and filing a Registration Statement (and
Prospectus) in compliance with the Act providing for the sale by the Holders in
accordance with the method or methods of distribution designated by the Holders,
and the declaration or ordering of the effectiveness of such Registration
Statement by the Commission.
"REGISTRABLE SHARES" shall mean the Orbital Stock received by the
Investors pursuant to the exercise of the Exchange Right in accordance with the
terms of this Agreement; provided, however, that any such shares shall cease to
be Registrable Shares when (A) a Registration Statement with respect to the sale
of such shares shall have become effective under the Act and all such shares
shall have been disposed of in accordance with such Registration Statement; (B)
such shares shall have been resold by the Holder thereof in accordance with Rule
144; (C) such shares shall have been otherwise transferred and new certificates
not subject to transfer restrictions under the Act and not bearing any legend
restricting further transfer shall have been delivered by Orbital, and no other
applicable and legally binding restriction on transfer under the federal
securities laws shall exist; or (D) such shares are, in the written opinion of
counsel to the Holders, eligible for sale in accordance with Rule 144(k) under
the Act, if applicable.
4
5
"REGISTRATION EXPENSES" shall mean all out-of-pocket expenses
(excluding Selling Expenses) incurred by Orbital in complying with SECTION 6.1
and SECTION 6.2 hereof, including, without limitation, the following: (a) all
registration and filing fees; (b) fees and expenses of compliance with federal
and state securities laws (including, without limitation, reasonable fees and
disbursements of counsel in connection with state securities qualifications of
the Registrable Shares under the laws of such jurisdictions as the Holders may
reasonably designate); (c) printing (including, without limitation, expenses of
printing or engraving certificates representing the Registrable Shares in a form
eligible for deposit with The Depository Trust Company and otherwise meeting the
requirements of any securities exchange on which they are listed and of printing
Registration Statements and prospectuses), messenger, telephone, shipping and
delivery expenses; (d) fees and disbursements of counsel for Orbital; (e) fees
and disbursements of the independent public accountants of Orbital; (f)
liability insurance (if Orbital so desires); (g) fees and expenses of other
persons reasonably necessary in connection with the registration, including any
experts, retained by Orbital; and (h) fees and expenses incurred in connection
with the listing of the Registrable Shares on each securities exchange on which
securities of the same class are then listed.
"REGISTRATION STATEMENT" shall mean either a registration
statement pursuant to a Demand Registration, which may be a Shelf Registration
Statement, or an Orbital Registration Statement, in any case, which includes the
Registrable Shares of an Exercising Holder.
"RIGHTS AGREEMENT" shall have the meaning set forth in SECTION
4.2.
"RULE 144" shall mean Rule 144 promulgated by the Commission under
the Act.
"SELLING EXPENSES" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to any sale of Registrable
Shares.
"SHELF REGISTRATION" shall mean a shelf registration effected
pursuant to SECTION 6.1 hereof.
"SHELF REGISTRATION STATEMENT" means a "shelf" Registration
Statement of Orbital pursuant to the provisions of SECTION 6.1 hereof filed with
the Commission which covers some or all of the Registrable Shares, as
applicable, on an appropriate form under Rule 415 under the Act, or any similar
rule that may be adopted by the Commission, amendments and supplements to such
Registration Statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
5
6
"SUBSCRIPTION AGREEMENT" shall mean the Subscription Agreement
dated the date hereof (as amended, modified or supplemented from time to time),
by and among Orbital, MDA, and the Investors.
"SUSPENSION RIGHT" shall have the meaning set forth in Section
6.1(c) of this Agreement.
"TRIGGER DATE" shall mean either an Employment Trigger Date or an
IPO Trigger Date.
"UNANIMOUS SHAREHOLDERS AGREEMENT" shall mean the Unanimous
Shareholders Agreement dated the date hereof among the Investors, MDA and
Orbital, as it may be amended, modified or supplemented from time to time.
2. THE EXCHANGE
2.1. EXCHANGE OF SHARES.
(a) On the terms and subject to the conditions set forth
herein, (i) an Investor shall have the option, at any time and from time to
time, during the Exchange Period, to contribute and assign to Orbital, and
Orbital (or a wholly owned subsidiary of Orbital) shall accept from such
Investor, all or a portion (subject to the immediately succeeding sentence) of
the MDA Shares owned by such exchanging Investor, free and clear of all liens,
security interests or other encumbrances; and (ii) Orbital will issue to such
exchanging Investor, as consideration for the contribution of such MDA Shares,
shares of Orbital Stock, free and clear of all liens, security interests or
other encumbrances, in an amount determined in accordance with SECTION 2.3 below
(the "EXCHANGE RIGHT"). Any exercise by an Investor (or group of Investors
acting together) of its Exchange Right shall be for not less than two million
(2,000,000) MDA shares or, if less, the remaining number of MDA Shares then held
by such Investor (or group of Investors acting together).
(b) The Exchange Right is exercisable by an Investor by the
surrender of the Notice of Exchange attached as ANNEX I hereto duly completed
and executed by or on behalf of such Investor, at the principal office of
Orbital (or such other office or agency of Orbital as it may designate by notice
in writing to the Investors). The exercising Investor shall, within 10 days,
deliver a copy of such Notice of Exchange to all other Investors. All exercising
Investors shall surrender the stock certificates reflecting the MDA Shares to be
exchanged to Orbital on the Exchange Date against delivery of the Orbital Stock.
(c) The Exchange Right shall be deemed to have been exercised
as to an Investor immediately as of the time of the surrender of the Notice of
Exchange by such Investor as provided above, and the person entitled to receive
the shares of
6
7
Orbital Stock issuable upon such exchange shall be treated for all purposes as
the holder of record of such shares as of such date and time and on and after
the Exchange Date such person shall cease to have any rights whatsoever with
respect to the MDA Shares to be exchanged unless Orbital Stock is not delivered
to such Investor on the Exchange Date as provided herein.
(d) The closing of the exchange of MDA Shares for Orbital Stock
(the "EXCHANGE") shall take place on a date (the "EXCHANGE DATE") designated by
Orbital, not later than 30 days after the date on which the first Notice of
Exchange is delivered to Orbital, at such location as the parties may mutually
agree upon and subject to the satisfaction or waiver of all conditions to the
Exchange set forth in ARTICLE 5 hereof. In the meantime, if there are dividends,
distributions, capital reorganizations, or similar events involving Orbital
Stock, the Investor shall receive the benefit thereof.
2.2. TERM OF EXCHANGE RIGHT.
Subject to the terms and conditions set forth herein (and except
as provided below), the Exchange Right shall be exercisable at any time during
the period commencing on the first Trigger Date to occur and ending on the two
year anniversary of such Trigger Date, and shall be terminated thereafter
(unless previously exercised) (such period, the "EXCHANGE PERIOD"). The Exchange
Right shall be void on June 23, 2002 in the event that a Trigger Date has not
occurred as of such date.
2.3. EXCHANGE RATE
The exchange rate for which the MDA Shares to be exchanged by an
Investor are exchangeable for Orbital Stock (the "EXCHANGE RATE") shall be as
follows:
X = A x B
-----
C
Where: X = the number of shares of Orbital Stock to be issued to an
Investor;
A = the number of MDA Shares to be exchanged by such Investor;
B = the price at which such Investor purchased the MDA Shares
at the Initial Closing; and
C = the lesser of (I) the Fair Market Price of one share of
Orbital Stock on the date of delivery of the applicable
Notice of Exchange and (II) U.S. $25.00; provided, however,
that the Fair Market Price of one share of Orbital Stock
shall in no event be less than U.S. $13.00 per share.
7
8
In the event that the Fair Market Price of one share of Orbital Stock would have
been less than U.S. $13.00 per share (the "LOWER MARKET PRICE"), then Orbital,
at its option, shall either (i) provide additional shares of Orbital Stock to
the exchanging Investor as if such proviso were deleted or (ii) pay to the
exchanging Investor an amount in cash equal to the product of (x) the difference
between the number of shares of Orbital Stock that would have been received by
the exchanging Investor had the proviso been deleted and the number of shares of
Orbital Stock actually received (including any fractions), times (y) the Lower
Market Price.
2.4. ADJUSTMENTS TO ORBITAL STOCK.
The number of shares of Orbital Stock which may be exchanged
pursuant to SECTION 2.3 are subject to adjustment from time to time as follows:
2.4.1. MERGER, SALE OF ASSETS, ETC.
If at any time prior to the exercise or expiration of the Exchange
Right, there shall be (i) a reorganization of Orbital (other than a combination,
reclassification, exchange or subdivision of shares otherwise provided for
herein), (ii) a merger or consolidation of Orbital with or into another
corporation in which Orbital is not the surviving entity or a merger (including
a reverse triangular merger) in which Orbital is the surviving entity but the
shares of Orbital's capital stock outstanding immediately prior to the merger
are converted by virtue of the merger into other property, whether in the form
of securities, cash, or otherwise, or (iii) a sale or transfer of all or
substantially all of Orbital's properties and assets, then, as a part of such
reorganization, merger, consolidation, sale or transfer, lawful provision shall
be made so that the Investors shall thereafter be entitled to receive upon the
exchange of their MDA Shares, as specified herein, the number of shares of stock
or other securities or property of the successor corporation resulting from such
reorganization, merger, consolidation, sale or transfer that a holder of MDA
Shares exchangeable hereunder would have been entitled to receive in such
reorganization, consolidation, merger, sale or transfer if the exchange
contemplated by SECTION 2.1 of this Agreement had been consummated immediately
before such reorganization, consolidation, merger, sale or transfer, all subject
to further adjustment as provided in this SECTION 2.4. The foregoing provisions
of this SECTION 2.4.1 shall similarly apply to successive reorganizations,
consolidations, mergers, sales and transfers.
2.4.2. RECLASSIFICATION, ETC.
If Orbital, at any time prior to the exercise or expiration of the
Exchange Right, by reclassification of securities or otherwise, shall change any
of the securities as to which Exchange Rights exist into the same or a different
number of securities of any other class or classes, this Agreement shall
thereafter represent the right to exchange such number and kind of securities as
would have
8
9
been issuable as the result of such change with respect to the securities that
were subject to the exchange rights under this Agreement immediately prior to
such reclassification, all subject to further adjustment as provided in this
SECTION 2.4.
2.4.3. SPLIT, SUBDIVISION OR COMBINATION OF SHARES.
If Orbital, at any time prior to the exercise or expiration of the
Exchange Right, shall split, subdivide or combine the securities as to which
Exchange Rights exist, into a different number of securities of the same class,
the number of shares of such securities that are exchangeable pursuant to this
Agreement may be exercised shall be proportionately increased, in the case of a
split or subdivision, or shall be proportionately decreased, in the case of a
combination.
2.4.4. CERTIFICATE AS TO ADJUSTMENTS.
Upon the occurrence of each adjustment or readjustment pursuant to
this SECTION 2.4, Orbital at its expense shall promptly compute such adjustment
or readjustment in accordance with the terms hereof and furnish to each Investor
a certificate setting forth such adjustment or readjustment and showing in
detail the facts upon which such adjustment or readjustment is based.
2.4.5. FRACTIONAL SHARES.
No fractional shares of Orbital Stock shall be issued upon
exchange of the MDA Shares. Instead of any fractional interest in a share of
Orbital Stock, Orbital shall calculate and pay to the holder of such share a
cash adjustment in respect of such fraction in an amount based on the Current
Market Price of the Orbital Stock on the trading day immediately preceding the
date of exchange.
2.5. ADJUSTMENTS TO MDA SHARES
If any of the events described in SECTION 2.4 of this Agreement
shall occur with respect to MDA, similar adjustments shall be made to the MDA
Shares for purposes of the Exchange Rate set forth in SECTION 2.3.
3. REPRESENTATIONS AND WARRANTIES
3.1. REPRESENTATIONS AND WARRANTIES OF ORBITAL.
The representations and warranties of Orbital contained in SECTION
2.2 of the Subscription Agreement are incorporated herein by reference. In
addition, Orbital further represents and warrants as follows:
9
10
(a) The Orbital Stock, when exchanged, issued and delivered in
accordance with the terms hereof for the consideration expressed herein, will be
duly and validly authorized and issued, fully paid and nonassessable, and free
and clear of any liens, security interests or other encumbrances.
(b) As of the Exchange Date, Orbital's public record will not
contain any material misrepresentations.
3.2. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS.
The representations and warranties of the Investors contained in
SECTION 3.1 of the Subscription Agreement are incorporated herein by reference.
In addition, the Investors further represent and warrant as follows:
(a) From and after the date of delivery of a Notice of
Exercise, each Investor owns the MDA Shares to be exchanged by it free and clear
of any liens, security interests, or other encumbrances.
(b) Each Investor acknowledges that Orbital intends the offer
and issuance of the Orbital Stock to be received hereunder to be exempt from
registration under the Act, by virtue of Regulation D promulgated under Section
4(2) of the Act, and that no registration statement relating to the issuance of
the Orbital Stock hereunder has been or will be filed with the Commission or any
state securities commission, except as contemplated by this Agreement. Each
Investor, with respect to himself, further acknowledges that Orbital is relying
in part upon the representations, warranties and covenants made by such Investor
in this Agreement in making its determination that the offer and issuance of the
Orbital Stock qualifies for exemption under Regulation D.
(c) On or before the Exchange Date, all documents, records,
books, and due diligence materials pertaining to the issuance of Orbital Stock
to the Investors hereunder will have been made available for inspection by the
Investors. Each of the Investors has or will have had an opportunity to ask
questions of and receive information and answers from Orbital concerning Orbital
and the Orbital Stock and to assess and evaluate such information. Each of the
Investors will be acquiring the Orbital Stock solely upon the information
provided to the Investors, and the representations, warranties, and covenants of
Orbital, together with information obtained or to be obtained by the Investors
as of any Exchange Date through their independent investigation, and the
Investors will not have relied on any oral representation as to the risks or
merit of this investment.
(d) No Investor is receiving the Orbital Stock as a result of,
or subsequent to, any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or broadcast over
television or radio,
10
11
or presented at any seminar or meeting, or any solicitation of a subscription by
a person not previously known to the Investors in connection with investments.
(e) Each of the Investors has sufficient knowledge and
experience in financial, tax, and business matters to enable the Investor to
utilize the information made available to it in connection with the transactions
contemplated by this Agreement in order to evaluate the merits and risks of an
investment in Orbital Stock and to make an informed investment decision with
respect thereto and is relying on no representations other than those set forth
in this Agreement.
(f) Each Investor is receiving Orbital Stock for investment and
liquidity purposes and not with a view toward making a public distribution of
such shares except in accordance with this Agreement.
(g) Each Investor understands and acknowledges and agrees that
the Orbital Stock issuable upon exchange of the MDA Shares has not been
registered under the Securities Act or any other applicable securities law and,
unless so registered, may not be offered, sold or otherwise transferred except
in compliance with the registration requirements of the Securities Act or any
other applicable securities law, pursuant to an exemption therefrom or in a
transaction not subject thereto. The Investor agrees to comply with the legends
set forth in the certificates representing such shares.
4. COVENANTS
4.1. RESERVATION OF STOCK.
Orbital covenants that throughout the Exchange Period, Orbital
shall reserve from its authorized and unissued shares of common stock a
sufficient number of shares to provide for the issuance of Orbital Stock upon
exercise of the Exchange Right. Orbital further covenants that all shares that
may be issued upon the exercise of the Exchange Rights pursuant to this
Agreement, as set forth herein, will be duly issued, fully paid and
nonassessable and will be free from all taxes, encumbrances, liens and charges
in respect of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously or otherwise specified herein).
4.2. AMENDMENT OF RIGHTS AGREEMENT
Orbital covenants that it shall amend the Rights Agreement, dated
as of October 22, 1998, between Orbital and Bank Boston, N.A., as rights agent,
as amended as of the date hereof (the "RIGHTS AGREEMENT") promptly after
delivery by an Investor of a Notice of Exchange pursuant to SECTION 2.1(b), if
necessary, as a result of Orbital's issuance of additional Orbital Stock
pursuant to the last
11
12
sentence of SECTION 2.3, so that such Investor will not be deemed to be an
"Acquiring Person" under the Rights Agreement solely by reason of the holding or
exercise of the Exchange Right.
4.3. STANDSTILL PROVISIONS.
(a) During the Standstill Period (as defined below), the
Investors will not, and will cause each of its controlled Affiliates not to, and
will use its reasonable best efforts to cause each of its other Affiliates (as
defined below) not to, directly or indirectly:
(i) act in concert with any other person or Group (as
defined below) by becoming a member of a 13D Group (as defined below), other
than any 13D Group comprised exclusively of Investors and one or more of its
Affiliates (as defined below);
(ii) sell, except in compliance with the Act, pledge,
encumber or otherwise transfer ("Transfer") any Orbital Stock to any person;
provided that this SECTION 4.3 shall not prohibit Transfers (A) between the
Investors and an Affiliate of the Investors, (B) between one or more Affiliates
of the Investors, (C) in any transaction in compliance with Rule 144 under the
Act or any successor rule or regulation, (D) in a public offering, registered
under the Act, or (E) in a transaction exempt from the registration requirements
of the Act;
(iii) purchase or otherwise acquire or offer or agree to
acquire, directly or indirectly, any Orbital Stock or other capital stock, or
securities convertible into or exchangeable for capital stock, of Orbital if,
after giving effect to such purchase or acquisition, the Investors and its
Affiliates (and any persons that are members of a 13D Group of which the
Investors or any of its Affiliates may be a member, notwithstanding the
provisions of clause (i) above) collectively would Beneficially Own (as defined
below) more than 14.9% of the outstanding capital stock of Orbital; provided
that the Investors shall not be deemed to have breached this covenant as a
result of (A) the exercise of Exchange Rights pursuant to this Agreement, (B) a
decrease in the aggregate number of shares of Orbital Stock outstanding, (C) as
a result of the acquisition of capital stock of Orbital issued as dividends or
as a result of stock splits and similar reclassifications of shares held by the
Investors or any of its Affiliates at the time of such dividend, split or
reclassification, or (D) corporate action taken solely by Orbital and not caused
by any action taken by the Investors or any of its Affiliates, provided that
neither the Investors nor any of its Affiliates shall thereafter acquire any
capital stock of Orbital otherwise than in compliance with this SECTION
4.3(a)(III);
(iv) make any proposal or public announcement relating
to, or solicit, encourage or propose to effect or negotiate any merger,
consolidation, tender or exchange offer, other business combination,
liquidation, sale of Orbital or all or
12
13
substantially all of the assets of Orbital and its Subsidiaries or any other
change of control of Orbital or similar extraordinary transaction;
(v) solicit, initiate, encourage or participate in any
"solicitation," of "proxies" or consents or become a "participant" in an
"election contest" (as such terms are defined or used in Regulation 14A under
the Exchange Act); seek to advise or influence any person or entity with respect
to the voting of any voting securities of Orbital, call, or in any way
participate in a call for, any special meeting of stockholders of Orbital (or
take any action with respect to acting by written consent of the stockholders of
Orbital); request, or take any action to obtain or retain any list of holders of
any securities of Orbital; or initiate or propose any stockholder proposal or
participate in the making of, or solicit stockholders of Orbital for the
approval of, one or more stockholder proposals; or induce others to do any of
the foregoing. Notwithstanding the foregoing, nothing contained herein shall be
deemed to prohibit the Investors from voting their shares of Orbital Stock or
exercising any voting rights with respect to their shares;
(vi) seek a change in the size of the Board of Directors;
(vii) assist, advise, encourage or act in concert with any
person with respect to any of the foregoing or enter into any discussions,
negotiations, arrangements or understandings with any other person with respect
to, or aid, abet or encourage, any action prohibited by any of the foregoing; or
(viii) make any public request or proposal to amend, waive
or terminate any provision of this SECTION 4.3 or any inquiry or statement
relating thereto.
The foregoing provisions shall not be construed to prevent the Investors from
voting any Orbital Stock or attending or participating in any meeting called by
Orbital or a person other than the Investors or an Affiliate of the Investors.
(b) Notwithstanding anything to the contrary in this SECTION
4.3, in the event Orbital publicly announces or invites any person other than
the Investors to make a proposal, or elects to enter into negotiations, with
respect to any merger, consolidation, other business combination, liquidation,
sale of Orbital or all or substantially all of the assets of Orbital, or any
tender or exchange offer, then the Investors and its Affiliates shall be
permitted to participate in any such process on terms that are substantially
comparable to those made available to other participants in such process in the
same jurisdiction.
(c) As used in this SECTION 4.3, the following terms have the
respective meanings set forth below:
"13D GROUP" shall mean any group of persons acquiring, holding,
voting, or disposing of capital stock of Orbital that would be required under
13
14
Section 13(d) of the Exchange Act and the rules and regulations thereunder (as
in effect, and based on legal interpretations thereof existing, on the date
hereof) to file a statement on Schedule 13D or Schedule 13G with the Commission
as a "person" within the meaning of Section 13(d)(3) of the Exchange Act if such
group Beneficially Owned capital stock representing more than 5% of any class of
capital stock of Orbital then outstanding.
"AFFILIATE" shall have the meaning ascribed thereto in Rule 12b-2
promulgated under the Exchange Act, as such rule is in effect on the date
hereof.
"BENEFICIALLY OWN" shall mean, with respect to any security,
having direct or indirect (including through any Affiliate) "beneficial
ownership" of such security, as determined pursuant to Rule 13d-3 under the
Exchange Act, including pursuant to any agreement, arrangement or understanding,
whether or not in writing. "BENEFICIAL OWNERSHIP" and "BENEFICIAL OWNER" shall
have correlative meanings. As used with respect to the Orbital Stock of Orbital,
the term shall include any shares of Orbital Stock issuable, without regard to
any requirement of notice or the passage of time or the occurrence of any event,
pursuant to any options, warrants, or other convertible or exchangeable
securities held by the applicable person, its Affiliates, or any member of a 13D
Group of which such person is a member.
"GROUP" shall mean a "group" as such term is used in Section
13(d)(3) of the Exchange Act.
"PERSON" shall mean any individual, corporation, partnership,
limited liability company, joint venture, trust, unincorporated organization, or
other form of business or legal entity.
"STANDSTILL PERIOD" shall mean the period beginning on the Initial
Closing Date and ending on the first date following the date on which the
aggregate Beneficial Ownership by the Investors and its Affiliates (and any
persons that are members of a 13D Group of which the Investors or any of its
Affiliates are members, notwithstanding the provisions of clause (i) of SECTION
4.3(a)) of shares of Orbital Stock of Orbital shall have been less than 5% of
the number of outstanding shares of capital stock of Orbital for a continuous
period of 30 days (treating any shares of Orbital Stock issuable under options,
warrants, rights or other convertible or exchangeable securities Beneficially
Owned by the Investors, its Affiliates, and any member of such a 13D Group as
being Beneficially Owned for this purpose).
4.4. LOCK-UP.
The Investors agree to enter into a market standoff agreement (a
"LOCK-UP") whereby, if independently requested by Orbital's underwriters, for a
period of up to 180 days following the date of an underwritten sale of Orbital
Stock
14
15
specified in any such request for a Lock-Up, the Investors and any of its
affiliates will not Transfer any of the Orbital Stock then held by the Investors
or such affiliates; provided, however, that no Lock-Up shall be required unless
a similar Lock-Up is imposed upon all other persons beneficially owning a
similar percentage (to that held by the Investors in the aggregate) or more of
the Orbital Stock with respect to which Orbital then has the power to request or
impose such Lock-Up.
4.5. SPECIFIC PERFORMANCE.
Each of Orbital and the Investors acknowledges and agrees that, in
view of the uniqueness of the arrangements contemplated by SECTIONS 4.3 AND 4.4
of this Agreement and the irreparable damage that the parties would suffer in
the event that any of the provisions of such Section is not performed by each of
the parties (or their respective directors, officers, employees, financial
advisors, legal advisors, accountants, agents or representatives, as the case
may be) in accordance with their specific terms or are otherwise breached, that
the parties would not have an adequate remedy at law for money damages in the
event that SECTIONS 4.3 AND 4.4 is not performed in accordance with its terms.
Accordingly, the parties shall be entitled, without the requirement of posting a
bond or other security, to equitable relief, including injunctive relief and
specific performance, in the event of any breach of the provisions of SECTIONS
4.3 AND 4.4 by the other party, in addition to all other remedies available at
law or in equity.
5. CONDITIONS TO CONSUMMATION OF EXCHANGE
5.1. CONDITIONS TO ORBITAL'S OBLIGATIONS.
The obligations of Orbital upon the exercise of an Exchange Right
at the applicable Exchange Date are subject to the satisfaction or waiver by
Orbital on or before the applicable Exchange Date of each of the following
conditions:
(a) The representations and warranties of the Investors
who are exercising their Exchange Right (the "ELECTING INVESTORS") set forth in
this Agreement shall be true and correct on and as of such Exchange Date with
the same effect as though such representations and warranties had been made on
and as of such date.
(b) The Electing Investors shall have performed and
complied in all material respects in accordance with their terms with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before such Exchange Date.
(c) The Electing Investors shall have delivered to
Orbital on the Exchange Date a certificate, signed by an executive officer,
general partner or other
15
16
authorized person of such Investors to the effect that the conditions set forth
in SECTIONS 5.1(a) and 5.1(b) have been satisfied as of such Exchange Date.
(d) The Electing Investors shall have executed and
delivered an instrument, in form and substance reasonably satisfactory to
Orbital, assigning to Orbital the MDA Shares to be exchanged by them free and
clear of any liens, security interests, or other similar encumbrances against
delivery of the Orbital Stock to be received therefor.
(e) There shall not be in effect any order, decree or
injunction of a court or agency of competent jurisdiction which enjoins or
prohibits consummation of the transactions contemplated hereby and there shall
be no actual or threatened action, suit, arbitration, inquiry, proceedings or
investigation by or before any governmental authority, court or agency of
competent jurisdiction, which would reasonably be expected to materially impair
the ability of Orbital or the Investors to consummate the transactions
contemplated hereby.
(f) Any required governmental approvals shall have been
obtained on terms reasonably satisfactory to Orbital and the Investors.
5.2. CONDITIONS TO THE INVESTORS' OBLIGATIONS.
The obligations of the Electing Investors upon the exercise of an
Exchange Right are subject to the satisfaction or waiver by the Investors on or
before the applicable Exchange Date of each of the following conditions:
(a) The representations and warranties of Orbital set
forth in this Agreement shall be true and correct on and as of such Exchange
Date with the same effect as though such representations and warranties had been
made on and as of such date.
(b) Orbital shall have performed and complied in all
material respects in accordance with its terms with all agreements, obligations
and conditions contained in this Agreement that are required to be performed or
complied with by it on or before such Exchange Date.
(c) Orbital shall have delivered to the Electing
Investors on such Exchange Date a certificate, signed by an executive officer of
Orbital to the effect that the conditions set forth in SECTIONS 5.2(a) and
5.2(b) have been satisfied as of the Exchange Date.
(d) There shall not be in effect any order, decree or
injunction of a court or agency of competent jurisdiction which enjoins or
prohibits consummation of the transactions contemplated hereby and there shall
be no actual or threatened action, suit, arbitration, inquiry, proceedings or
investigation by or before any governmental authority, court or agency of
competent jurisdiction, which would
16
17
reasonably be expected to materially impair the ability of Orbital or the
Investors to consummate the transactions contemplated hereby.
(e) Any required governmental approvals shall have been
obtained on terms reasonably satisfactory to Orbital and the Investors.
6. REGISTRATION RIGHTS.
6.1. DEMAND REGISTRATION.
(a) The Holder or Holders of Registrable Shares constituting at
least 1,500,000 outstanding Registrable Shares (together with all other
Shareholders joining in such demand as provided below, the "INITIAL REQUESTING
HOLDERS"), may at any time make a written request to Orbital that Orbital file a
Registration Statement or similar document under the Act with respect to all or
any part of such Holder's or Holders' Registrable Shares (a "DEMAND
REGISTRATION"). Such Registration shall be a "shelf" Registration Statement
pursuant to Rule 415 under the Act (or a successor provision), if so requested
by a majority of the participating Holders and if Orbital is eligible therefore
at such time (for greater certainty, the Registration Statement need not be a
Shelf Registration Statement). Within 10 Business Days after receipt of such
request, Orbital shall give written notice of such Demand Registration request
(including therein the number of Registrable Shares included in such demand and
the parties making such demand) to all other Holders of Registrable Shares (the
"DEMAND NOTICE"). Such other Holders will have the right to join in making such
a demand by giving written notice to Orbital within 10 Business Days after the
date of the Demand Notice of such Holder's election to participate in such
Demand Registration and the number of such Holder's Registrable Shares to be
included therein. Subject to the provisions of SECTION 6.1(b), Orbital shall
cause such Registration Statement or similar document to be filed with the
Commission and shall include in such Registration Statement the Registrable
Shares which Orbital has been requested to register by the Initial Requesting
Holders, and to cause all such Registrable Shares to be registered under the Act
within 180 days of receipt of the Initial Requesting Holders' request. After
Orbital has effected three (3) such registrations pursuant to this SECTION
6.1(a), the related Registration Statements have been declared effective and the
distribution contemplated thereunder completed within the time frame specified
in Section 6.1(b), Orbital shall have no further obligation under this SECTION
6.1(a); provided, however, that no Holder shall be entitled to have the
Registrable Shares held by it covered by such Registration unless such Holder is
in compliance with SECTION 6.3(j) hereof. No Demand Registration shall be
effected pursuant to this SECTION 6.1(a) during any period in which a
Registration Statement shall have become and be maintained effective.
17
18
(b) Orbital shall use its reasonable best efforts to keep each
such Shelf Registration continuously effective in order to permit the Prospectus
forming part thereof to be usable by the Holders until the earlier of (A) the
date when all the Registrable Shares have been sold pursuant to such Shelf
Registration Statement or Rule 144 and (B) the date on which, in the written
opinion of counsel to the Holders addressed to the Holders and to Orbital, all
outstanding Registrable Shares of Orbital are eligible for resale without
registration under the Act in accordance with Rule 144(k) or any successor
provision thereto (in any such case, such period being called the "EFFECTIVENESS
PERIOD"). Orbital shall be deemed not to have used their reasonable best efforts
to keep the Registration Statement effective during the requisite period if
Orbital voluntarily takes any action that would result in Holders covered
thereby not being able to offer and sell any such Registrable Shares during that
period, unless (x) such action is required by applicable law or the rules of any
national securities exchange or other market on which any of the Registrable
Shares are then listed or quoted, or (y) any event contemplated by SECTION
6.3(b)(2)(iii) below occurs and Orbital acts promptly in good faith and for
valid business reasons in suspending use of the Prospectus until the requisite
changes have been made and Orbital thereafter promptly complies with the
requirements of SECTION 6.3(h) below.
(c) Notwithstanding anything to the contrary contained in this
ARTICLE 6, Orbital shall have the right (the "SUSPENSION RIGHT") to defer such
filing (or suspend sales under any filed registration thereunder) for a period
of not more than 90 days during any 12-month period (a "BLACK-OUT PERIOD"), if
Orbital shall furnish to the Holders a certificate signed by the President or
any other executive officer of Orbital stating that, either (i) in the good
faith judgment of Orbital, the continued effectiveness of the Registration
Statement would require Orbital to disclose a material financing, acquisition or
other corporate transaction, and the Board of Directors shall have determined in
good faith that it would be detrimental to Orbital and its shareholders to file
such Registration Statement or amendment thereto at such time (or continue sales
under a filed Registration Statement) or (ii) Orbital plans to conduct an
underwritten offering of its equity securities during such Black-Out Period and,
in each case, therefore, Orbital has elected to defer the filing of such
Registration Statement (or suspend sales under a filed Registration Statement)
provided, however, that Orbital shall have the obligation (with respect to both
(i) and (ii) of this Section 6.1(c)) to file any such deferred Registration
Statement or lift any suspension of sales under a filed Registration Statement
as soon as such filing is no longer detrimental, and in such circumstances, the
Holder can withdraw the Demand Registration without prejudice to making it
again.
(d) Orbital agrees not to issue any Orbital Stock or any
securities convertible into or exchangeable or exercisable for Orbital Stock
(other than securities issued pursuant to Orbital's option or other benefit
plans, its 5% Convertible Subordinated Notes Due 2002, securities issued by
Orbital not
18
19
involving a public offering or securities issued by Orbital included in any
Demand Registration), for the period commencing 15 days prior to the closing of
the offering of securities included in any Demand Registration and ending on the
90th day following such closing.
6.2. ORBITAL REGISTRATION
(a) If Orbital shall determine to register any shares of
Orbital Stock for its own account or for the account of a security holder or
holders or otherwise (other than a registration relating solely to employee
benefit plans, or a registration relating solely to a merger, exchange offer or
a transaction of the type specified in Rule 145(a) under the Act), Orbital will
promptly deliver to each of the Holders a written notice thereof of such
proposed transaction at least 10 Business Days prior to the filing of a
Registration Statement (the "ORBITAL REGISTRATION STATEMENT") and include in
such registration, and in any underwriting involved therein, all the Registrable
Shares specified in written requests made by Holders within 10 Business Days
after receipt of the written notice from Orbital described above. Each Holder
shall be entitled to have its shares included in an unlimited number of
registrations pursuant to this SECTION 6.2.
(b) If the registration of which Orbital gives notice is for a
registered public offering involving an underwriting, Orbital shall so advise
the Holders as a part of the written notice given pursuant to SECTION 6.2(a). In
such event, the right of each Holder to registration pursuant to SECTION 6.2(a)
shall be conditioned upon such Holder's participation in such underwriting and
the inclusion of the Registrable Shares in the underwriting to the extent
provided herein. If the Holders shall have elected to exercise their rights
under SECTION 6.2(a), they shall enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected for underwriting by Orbital. Notwithstanding any other provision of
this SECTION 6.2, if the underwriter determines and so advises Orbital in
writing that marketing factors require a limitation on the number of shares to
be underwritten, Orbital shall so advise the Holders. In such an event, the
number of Registrable Shares that may be included in the registration and
underwriting by the Holders shall be reduced, on a pro rata basis (based on the
number of shares of Orbital Stock held by each such Holder and each other person
(other than Orbital) registering shares under such registration), by such
minimum number of shares as is necessary to comply with such limitation. If a
Holder disapproves of the terms of any such underwriting, it may elect to
withdraw therefrom by written notice to Orbital and the underwriter. Any
Registrable Shares excluded or withdrawn from such underwriting shall be
withdrawn from such registration.
19
20
6.3. REGISTRATION PROCEDURES.
(a) Orbital shall furnish to the Exercising Holders, prior to
the filing thereof with the Commission, a copy of any Registration Statement,
and each amendment thereof or supplement, if any, to the Prospectus included
therein and shall use its reasonable best efforts to reflect in each such
document, when so filed with the Commission, such comments that the Exercising
Holders reasonably may propose.
(b) (1) Orbital shall advise the Exercising Holders: (i)
when a Registration Statement and any amendment thereto has been filed with the
Commission and when the Registration Statement or any post-effective amendment
thereto has become effective; and (ii) of any request by the Commission for
amendments or supplements to the Registration Statement or the Prospectus
included therein or for additional information.
(2) Orbital shall advise the Exercising Holders of: (i)
the issuance by the Commission of any stop order suspending effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose;
(ii) the receipt by Orbital of any notification with respect to the suspension
of the qualification of the securities included therein for sale in any
jurisdiction or the initiation of any proceeding for such purpose; and (iii) the
happening of any event that requires the making of any changes in the
Registration Statement or the Prospectus so that, as of such date, the
Registration Statement and the Prospectus do not contain an untrue statement of
a material fact and do not omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made) not
misleading (which advice shall be accompanied by an instruction to suspend the
use of the Prospectus until the requisite changes have been made).
(c) Orbital shall use its reasonable best efforts to prevent
the issuance, and if issued to obtain the withdrawal, of any order suspending
the effectiveness of any Registration Statement at the earliest possible time.
(d) Orbital shall furnish to each Holder, without charge, at
least one copy of such Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, and, if the Holder so
requests in writing, all reports, other documents and exhibits (including those
incorporated by reference).
(e) Orbital shall, during the Effectiveness Period, deliver to
each Exercising Holder, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in such Registration Statement
and any amendment or supplement thereto as such Exercising Holder may reasonably
20
21
request; and Orbital consents (except upon and during the continuance of any
event described in SECTION 6.3(b)(2)(iii) above) to the use of the Prospectus or
any amendment or supplement thereto by each of the selling Exercising Holders in
connection with the offering and sale of the Registrable Shares covered by the
Prospectus or any amendment or supplement thereto during the Effectiveness
Period.
(f) Prior to any offering of Registrable Shares pursuant to any
Registration Statement, Orbital shall register or qualify or cooperate with the
Exercising Holders included therein and their respective counsel in connection
with the registration or qualification of such Registrable Shares for offer and
sale under the securities or blue sky laws of such jurisdictions as any such
Exercising Holders reasonably request in writing and do any and all other acts
or things necessary or advisable to enable the offer and sale in such United
States jurisdictions of the Registrable Shares covered by such Registration
Statement; provided, however, that in no event shall Orbital be obligated to (i)
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be qualified or required to so qualify
but for this SECTION 6.3(f), (ii) file any general consent to service of process
in any jurisdiction where it is not as of the date hereof then so subject or
(iii) subject itself to taxation in any such jurisdiction if it is not then so
subject.
(g) Orbital shall cooperate with the Exercising Holders to
facilitate the timely preparation and delivery of certificates representing
Registrable Shares to be sold pursuant to any Registration Statement free of any
restrictive legends and in such permitted denominations and registered in such
names as Exercising Holders may request in connection with the sale of
Registrable Shares pursuant to such Registration Statement.
(h) Upon the occurrence of any event contemplated by SECTION
6.3(b)(2)(iii) above, Orbital shall promptly, and in any event within 30 days,
subject to SECTION 6.1(c), prepare a post-effective amendment to any
Registration Statement or an amendment or supplement to the related Prospectus
or file any other required document so that, as thereafter delivered to
purchasers of the Registrable Shares included therein, the Prospectus will not
include an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. If Orbital notifies the Exercising
Holders of the occurrence of any event contemplated by SECTION 6.3(b)(2)(iii)
above, the Exercising Holders shall suspend the use of the Prospectus until the
requisite changes to the Prospectus have been made.
(i) Orbital shall use its best efforts to comply with all
applicable rules and regulations of the Commission and shall make generally
available to their security holders or otherwise provide in accordance with
Section 11(a) of the Act as
21
22
soon as practicable after the effective date of the applicable Registration
Statement an earnings statement satisfying the provisions of Section 11(a) of
the Act.
(j) Orbital agrees to use its reasonable best efforts
(including the payment of any listing fees) to obtain the listing of all
Registrable Shares covered by the Registration Statement on each securities
exchange on which securities of the same class are then listed.
(k) If the Exercising Holders propose to sell their Registrable
Shares pursuant to SECTION 6.1 in an underwritten public offering, Orbital shall
be entitled to select the underwriters for such offering, subject to the
reasonable approval of a majority of the participating Holders, and Orbital
shall make available members of the management of Orbital and its Affiliates for
reasonable assistance in selling efforts relating to such offering for a public
offering of such size and shall enter into underwriting agreements containing
usual and customary terms and conditions for such types of offerings; provided
that Orbital shall not be required to assist in an underwritten offering more
than once in any 12-month period.
6.4. EXPENSES OF REGISTRATION.
Orbital shall pay, or shall reimburse each Holder for paying, all
Registration Expenses incurred in connection with the registration of the
Registrable Shares in accordance with SECTIONS 6.1 and 6.2 hereof and the
reasonable fees and expenses of one special counsel, in each country and
province where the shares are being registered, for the Holders, which special
counsel(s) shall be designated by the Holders and subject to the approval of the
Company, in an amount not to exceed $35,000 per Registration pursuant to SECTION
6.1 and an aggregate of $150,000 for all Registrations under SECTIONS 6.1 and
6.2. All Selling Expenses incurred in connection with the offer and sale of
Registrable Shares by any of the Holders shall be borne by the Holder offering
or selling such Registrable Shares. Except as covered by the first sentence of
this SECTION 6.4, each Holder shall pay the expenses of its own counsel.
6.5. INDEMNIFICATION.
(a) In connection with any Registration Statement, Orbital
shall indemnify and hold harmless each Exercising Holder and each of their
respective directors and officers and each person controlling such Exercising
Holder within the meaning of Section 15 of the Act from and against any loss,
liability, claim, damage and expense whatsoever, including any amounts paid in
settlement of any investigation, litigation, proceeding or claim, joint or
several, as incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement (or any
amendment thereto) covering Registrable Shares, including all documents
incorporated therein by reference, or
22
23
the omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
arising out of any untrue statement or alleged untrue statement of a material
fact contained in any Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, that Orbital shall not be liable under this
clause (a) for any settlement of any action effected without its written
consent, which consent shall not be unreasonably withheld or delayed; provided
further, that the indemnity provided for in this SECTION 6.5(a) shall not apply
to any loss, liability, claim, damage or expense to the extent arising out of an
untrue statement or omission or alleged untrue statement or omission (i) made in
reliance upon and in conformity with written information furnished to Orbital by
such Exercising Holder in writing expressly stating that such information is
being provided by such Exercising Holder for use in the Registration Statement
(or any amendment thereto) or any Prospectus (or any amendment or supplement
thereto) or (ii) contained in any preliminary prospectus or the Prospectus if
such Exercising Holder failed to send or deliver a copy of the Prospectus (or
any amendment or supplement thereto) to the person asserting such losses,
claims, damages or liabilities on or prior to the delivery of written
confirmation of any sale of securities covered thereby to such person in any
case where such Prospectus (or any amendment or supplement thereto) corrected
such untrue statement or omission. Any amounts advanced by Orbital to an
indemnified party pursuant to this SECTION 6.5 as a result of such losses shall
be returned to Orbital if it shall be finally determined by such a court in a
judgment not subject to appeal or final review that such indemnified party was
not entitled to indemnification by Orbital.
(b) Each Exercising Holder, severally and not jointly, shall
indemnify and hold harmless Orbital and the other Exercising Holders and each of
their respective directors and officers (including each officer of Orbital who
signed the Registration Statement) and each person, if any, who controls Orbital
or other selling Holder within the meaning of Section 15 of the Act, from and
against any loss, liability, claim, damage and expense whatsoever described in
the indemnity contained in SECTION 6.5(a) hereof, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to Orbital by such Exercising
Holder in writing expressly stating that such information is being provided by
such Holder for use in the Registration Statement (or any amendment thereto) or
any Prospectus (or any amendment or supplement thereto); provided that the
Exercising Holder shall not be liable under this clause for any settlement of
any action effected without its written consent, which consent shall not be
unreasonably withheld. Notwithstanding any provision of this Agreement or any
other agreement, in no event will any Investor be liable for indemnification
hereunder for an amount
23
24
greater than the amount of proceeds that such Investor receives in any
particular offering of Registrable Securities in which his securities were sold.
(c) Each party entitled to indemnification under this SECTION
6.5 (the "INDEMNIFIED PARTY") shall give notice to the party required to provide
indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, but the
omission to so notify the Indemnifying Party shall not relieve it from any
liability which it may have to the Indemnified Party pursuant to the provisions
of this SECTION 6.5 except to the extent of the actual damages suffered by such
delay in notification. The Indemnifying Party shall assume the defense of such
action, including the employment of counsel to be chosen by the Indemnifying
Party to be reasonably satisfactory to the Indemnified Party, and payment of
expenses. The Indemnified Party shall have the right to employ its own counsel
in any such case, but the legal fees and expenses of such counsel shall be at
the expense of the Indemnified Party, unless the employment of such counsel
shall have been authorized in writing by the Indemnifying Party in connection
with the defense of such action, or the Indemnifying Party shall not have
employed counsel to take charge of the defense of such action or the Indemnified
Party shall have reasonably concluded that there may be defenses available to it
or them which are different from or additional to those available to the
Indemnifying Party (in which case the Indemnifying Party shall not have the
right to direct the defense of such action on behalf of the Indemnified Party),
in any of which events such fees and expenses shall be borne by the Indemnifying
Party. No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
(d) If the indemnification provided for in this SECTION 6.5 is
unavailable to a party that would have been an Indemnified Party under this
SECTION 6.5 in respect of any expenses, claims, losses, damages and liabilities
referred to herein, then each party that would have been an Indemnifying Party
hereunder shall, in lieu of indemnifying such Indemnified Party, contribute to
the amount paid or payable by such Indemnified Party as a result of such
expenses, claims, losses, damages and liabilities in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the one
hand and such Indemnified Party on the other in connection with the statement or
omission which resulted in such expenses, claims, losses, damages and
liabilities, as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Indemnifying Party or such Indemnified Party and the parties' relative intent,
knowledge, access to information and opportunity to correct
24
25
or prevent such statement or omission. Orbital and each Exercising Holder agrees
that it would not be just and equitable if contribution pursuant to this Section
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this SECTION 6.5(d).
(e) No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
6.6. INFORMATION TO BE FURNISHED BY HOLDERS.
Each Holder shall furnish to Orbital such information as Orbital
may reasonably request and as shall be required in connection with the
Registration and related proceedings referred to in SECTIONS 6.1 and 6.2 hereof.
If any Holder fails to provide Orbital with such information within 15 Business
Days of Orbital's request, Orbital's obligations under SECTIONS 6.1 and 6.2
hereof with respect to such Holder or the Registrable Shares owned by such
Holder shall be suspended until such Holder provides such information.
6.7. RULE 144 SALES.
(a) Orbital covenants that it will file the reports required to
be filed by Orbital under the Exchange Act, so as to enable any Holder to sell
Registrable Shares pursuant to Rule 144 under the Act.
(b) In connection with any sale, transfer or other disposition
by any Holder of any Registrable Shares pursuant to Rule 144 under the Act,
Orbital shall cooperate with such Holder to facilitate the timely preparation
and delivery of certificates representing Registrable Shares to be sold and not
bearing any Act legend, if deemed appropriate, and enable certificates for such
Registrable Shares to be for such number of shares and registered in such names
as the selling Holder may reasonably request, provided that such request is made
at least two Business Days prior to any sale of Registrable Shares.
7. MISCELLANEOUS
7.1. RIGHTS OF STOCKHOLDERS.
Until the Exchange Right shall have been exercised as provided
herein, the Investors, as such, shall not be entitled to vote or receive
dividends or any other securities of Orbital that may at any time be issuable on
the exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Investors, as such, any of the rights of a
stockholder of Orbital or any right
25
26
to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value, or change of stock to no par
value, consolidation, merger, conveyance, or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise.
7.2. SUCCESSORS AND ASSIGNS.
Except as otherwise provided herein, the terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties hereto. Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the parties hereto
or their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement.
7.3. AMENDMENTS AND WAIVERS.
Any term of this Agreement may be amended, and the observance of
any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of each party.
7.4. NO WAIVER.
No delay or omission to exercise any right, power, or remedy
accruing to either party upon any breach or default under this Agreement, shall
be deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent, or approval of any kind or character on
the part of either party of any breach or default under this Agreement, or any
waiver on the part of either party of any provisions or conditions of this
Agreement, must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to either of the parties, shall be
cumulative and not alternative.
7.5. NOTICES.
Unless otherwise provided, any notice required or permitted under
this Agreement shall be given in writing and shall be deemed effectively given
(a) upon personal delivery to the party to be notified, (b) on the day of
receipt if delivered by registered or certified mail, (c) on the next Business
Day after dispatch via nationally recognized overnight courier or (d) upon
confirmation of transmission by facsimile, all addressed to the party to be
notified. Notices should be provided in accordance with this SECTION 7.5 at the
following addresses, or at such other address of which such party shall have
provided notice hereunder:
26
27
If to the Investors, to:
a. CAI Capital Partners And Company II, L.P.
c/o CAI Managers & Co., L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Attention: Xxxxxxx Xx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Stikeman, Xxxxxxx
Commerce Court West
Suite 5300, 0000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
x. XXX Capital Partners And Company II-C, L.P.
c/o CAI Managers & Co., L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Attention: Xxxxxxx Xx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
27
28
with a copy (which shall not constitute notice) to:
Stikeman, Xxxxxxx
Commerce Court West
Suite 5300, 0000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
x. XXX Partners And Company II, L.P.
c/o CAI Managers & Co., L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Attention: Xxxxxxx Xx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
28
29
with a copy (which shall not constitute notice) to:
Stikeman, Xxxxxxx
Commerce Court West
Suite 5300, 0000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
d. 597858 B.C. Ltd.
Xxxxxxx Xxxxxx
c/o McCullough O'Xxxxxx Xxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx Xxxxxx
X0X 0X0
Attention: Xxxxxxxx XxXxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Orbital, to:
Orbital Sciences Corporation
00000 Xxxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Attn.: Legal Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxx & Xxxxxxx L.L.P.
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attn.: Xxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
29
30
7.6. HEADINGS.
Section and subsection headings contained in this Agreement are
inserted for convenience of reference only, shall not be deemed to be a part of
this Agreement for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.
7.7. SEVERABILITY.
If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of this Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
7.8. ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement among the parties
with respect to the subject matter hereof and no party shall be liable or bound
to any other party in any manner by any warranties, representations or covenants
except as specifically set forth herein.
7.9. GOVERNING LAW.
This Agreement, the rights and obligations of the parties hereto
and any claims or disputes relating to such rights and obligations shall be
governed by and construed under the laws of the State of New York.
7.10. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
30
31
IN WITNESS WHEREOF, each of the undersigned have caused this
Agreement to be executed by its respective officer thereunto duly authorized.
Dated: December 22, 1999
ORBITAL SCIENCES CORPORATION
By:
--------------------------------------------
Xxxxxxx Xxxxxx, Executive Vice President and
Chief Financial Officer
CAI CAPITAL PARTNERS AND COMPANY II, L.P.
By: CAI Capital Partners GP & Co., L.P., its
general partner
By: 00 Xxxxxxxxxx Xx. II Co., one of its
general partners
By:
----------------------------------
Xxxxx Xxxxxxx, President
31
32
CAI CAPITAL PARTNERS AND COMPANY II-C, L.P.
By: CAI Capital Partners GP & Co., L.P., its
general partner
By: 00 Xxxxxxxxxx Xx. II Co., one of its
general partners
By:
----------------------------------
Xxxxx Xxxxxxx, President
CAI PARTNERS AND COMPANY II, L.P.
By: CAI Capital Partners GP & Co., L.P., its
general partner
By: 00 Xxxxxxxxxx Xx. II Co., one of its
general partners
By:
----------------------------------
Xxxxx Xxxxxxx, President
597858 B.C. LTD., AS AGENT
By:
--------------------------------------------
Xxxxxxx Xxxxxx, Director
32
33
ANNEX I
NOTICE OF EXCHANGE
To: ORBITAL SCIENCES CORPORATION
(1) The undersigned hereby irrevocably elects to exercise its Exchange
Rights, pursuant to the terms of the attached Exchange and Registration Rights
Agreement, and tenders herewith certificates representing the MDA Shares to be
exchanged (as defined in the Exchange and Registration Rights Agreement).
(2) In exercising this Agreement, the undersigned hereby confirms and
acknowledges that the shares of Orbital Stock are being acquired solely for the
account of the undersigned and not as a nominee for any other party, and that
the undersigned shall not offer, sell or otherwise dispose of any such shares of
Orbital Stock except under circumstances that will not result in a violation of
the Securities Act of 1933, as amended, or any state securities laws.
(3) Please issue a certificate or certificates representing said
shares of Orbital Stock to:
Name Address No. Shares
---- ------- ----------
Dated: Investor:
---------------------- -------------------------------
By:
-------------------------------------
Name:
Title:
