Receivables Purchase Agreement - Orbital Sciences Corp. and Orbital Imaging Corp.
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Agreement") is entered into this 9th day
of February, 2001 between Orbital Sciences Corporation, a Delaware corporation
("Orbital") and Orbital Imaging Corporation, a Delaware corporation
("ORBIMAGE").
WHEREAS Orbital and ORBIMAGE are parties to that certain Termination of
Radarsat-2 License Agreement and Grant of Territorial License dated February 9,
2001 by and among Orbital, ORBIMAGE and MacDonald, Dettwiler and Associates
Ltd., a Canadian corporation ("MDA") (the "MDA Agreement") pursuant to which
Orbital has agreed to make certain accommodations to MDA in accordance with this
Agreement.
NOW, THEREFORE, in consideration of the agreements and covenants
contained herein, the parties hereto agree as follows:
1. AGREEMENT TO PURCHASE
(a) Subject to the conditions set forth in subparagraph (b) below
and pursuant to the terms set forth herein, Orbital hereby agrees to purchase
receivables from ORBIMAGE for an aggregate purchase price of up to $10,000,000,
which receivables amount would be discounted to the present value at the time of
purchase at a discount rate sufficient to enable Orbital to recover the purchase
price plus interest on the unrecovered amount of the purchase price at an annual
rate of 8% (assuming payment consistent with prior payment patterns). Orbital
will make up to two $5,000,000 cash purchases, due and payable in full no later
than the due date of any applicable license payment owed by ORBIMAGE under the
MDA Agreement,, of (i) receivables under contracts for satellite imagery or
other ORBIMAGE products and services generated by the ORBVIEW-2 satellite and
(ii) such other receivables of ORBIMAGE reasonably acceptable to each of
ORBIMAGE and Orbital, which, when added to the ORBVIEW-2 receivables, are
reasonably expected to generate payments in the aggregate of not less than $4
million in any given year. Receivables proposed to be sold to Orbital must be
reasonably satisfactory to Orbital.
(b) Orbital's obligation to make each purchase set forth in
subparagraph (a) above is conditioned upon the following:
(i) ORBIMAGE shall have notified Orbital in writing five
(5) business days before a license fee payment is due under the MDA Agreement
that ORBIMAGE will be unable to make such payment to MDA due to financial
hardship;
(ii) the Third Amended and Restated Credit and Reimbursement
Agreement between Orbital, Morgan Guaranty Trust Company of New York as
collateral agent and the other banks shall be matured in accordance with its
terms on July 1, 2002 and no loans or commitments to loan to Orbital shall
remain outstanding; and
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(iii) Such receivables shall be valid and of good quality
(including lack of any encumbrances continuing in effect on or after the
purchase date and free of claims of offset), and ORBIMAGE shall have taken all
actions necessary either to cause an assignment of the contracts or rights to
the receivables to Orbital to be effective concurrent with the installment
purchase or to make arrangements reasonably satisfactory to Orbital for the
continued collection of the receivables by ORBIMAGE and the prompt remission of
amounts collected by ORBIMAGE to Orbital. Orbital is entitled to make any
filings necessary under the Uniform Commercial Code with and submit notices to
account debtors as necessary with respect to the receivables.
(c) ORBIMAGE agrees that it shall take such actions that are
reasonably necessary to ensure that the contracts relating to the purchased
receivables continue in full force and effect in accordance with their terms, or
on terms no less favorable to Orbital.
(d) ORBIMAGE shall not enter into any agreement with MDA that
affects the amounts of the license fee payments or their due dates under the MDA
Agreement without Orbital's prior consent, unless such agreements cause such
payments to be decreased or postponed.
2. IRREVOCABLE DIRECTION TO PAY; ASSIGNMENT
(a) ORBIMAGE hereby irrevocably directs Orbital to remit any
payments to be made hereunder directly to MDA to be applied to ORBIMAGE's
Radarsat-2 license fee obligations under the MDA Agreement.
(b) ORBIMAGE hereby assigns to MDA all amounts to become due from
Orbital hereunder.
3. REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION; LIMITATION OF LIABILITY
(a) Each party represents and warrants to the other that it has full
right and authority to enter into this Agreement and to perform its obligations
hereunder.
(b) Each party agrees to indemnify and hold harmless the other, and
its officers, directors, employees, agents and representatives from and against
all claims, demands or liabilities (including reasonable attorneys' fees) of
third parties arising from or in connection with the other party's breach of any
representations, warranties, covenants or agreements contained herein.
(c) IN NO EVENT SHALL ORBITAL OR ORBIMAGE BE LIABLE TO EACH OTHER
UNDER THIS AGREEMENT FOR ANY INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL
DAMAGES, EVEN IF SUCH PARTY HAD OR SHOULD HAVE HAD KNOWLEDGE OF THE POSSIBILITY
OF SUCH DAMAGES.
4. CONSENT TO ASSUMPTION. Orbital acknowledges that it is aware (a) of
ORBIMAGE's current financial condition and results of operations and (b) that
ORBIMAGE is considering various alternatives to restructure its operations,
which alternatives include without limitation the filing of a petition under
Chapter 11 of Title 11 of the United States Code (together with the
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Federal Rules of Bankruptcy Procedure and all other rules and judicial decisions
and orders thereunder, the "Bankruptcy Law"). In the event ORBIMAGE files such a
petition, Orbital hereby expressly consents to the assumption of this Agreement
by ORBIMAGE (subject to applicable bankruptcy court approval under Bankruptcy
Code Sections 364 and 365, as applicable) in any proceeding under Bankruptcy
Law, notwithstanding the existence of any provisions under Bankruptcy Law that
would provide Orbital with a defense to such assumption.
5. MISCELLANEOUS
(a) Neither party shall assign its rights or obligations hereunder
without the prior written consent of the other party, which shall not be
unreasonably withheld.
(b) All notices, requests and other communications to any party
hereunder shall be in writing (including any facsimile transmission or similar
writing), and shall be sent either by telecopy, by reputable overnight courier
or delivered in person addressed as follows:
(i) If to Orbital, to it at:
21700 Atlantic Blvd.
Dulles, VA 20166
Telecopy: (703) 406-5572
Attention: General Counsel
(ii) If to ORBIMAGE, to it at:
21700 Atlantic Blvd.
Dulles, VA 20166
Telecopy: (703) 406-5552
Attention: Gil Rye
with a copy to General Counsel
or to such other persons or addresses as any party may designate by written
notice to any other. Each such notice, request or other communication shall be
effective (A) if given by telecopy, when such telecopy is transmitted and the
appropriate answerback is received; (B) if given by reputable overnight courier,
on one (1) business day after being delivered or (C) if given by any other
means, when received at the address specified in this paragraph.
(c) This Agreement shall be binding upon the parties, their
successors and permitted assigns.
(d) This Agreement contains the entire understanding between Orbital
and ORBIMAGE and supersedes all prior written and oral understandings relating
to the subject hereof. No representations, agreements, modifications or
understandings not contained herein shall be valid or effective unless agreed to
in writing and signed by both parties. Any modification or amendment of this
Agreement must be in writing and signed by all parties.
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(e) The construction, interpretation and performance of this
Agreement, as well as the legal relations of the parties arising hereunder,
shall be governed by and construed in accordance with the laws of the
Commonwealth of Virginia, without giving effect to the conflict or choice of law
provisions hereof. The parties agree that service of process may be made upon
each other in any such action in the same manner in which notice may be given
pursuant to this Agreement. No party may bring any action for a claim under this
Agreement later than one (1) year after the termination of this Agreement;
provided that claims under any provision of this Agreement that survive
termination of this Agreement may be brought within one (1) year of the later of
the occurrence of the event giving rise to the claim and actual knowledge
thereof by the party asserting such claim.
(f) It is understood and agreed that no failure or delay by any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise thereof preclude any
other or further exercise thereof, or the exercise of any other right, power or
privilege hereunder. No waiver of any terms or conditions of this Agreement
shall be deemed to be a waiver of any subsequent breach of any term or
condition. All waivers must be in writing and signed by the party sought to be
bound.
(g) If any part of this Agreement shall be held unenforceable, the
remainder of this Agreement will nevertheless remain in full force and effect,
unless such unenforceability impairs the fundamental purpose or expectations of
the parties hereto.
(h) Headings in this Agreement are included for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.
(i) ORBIMAGE and Orbital are independent contractors to one another,
and with respect to this Agreement, no party has the authority to bind any other
in any way or to any third party, and nothing in this Agreement shall be
construed as granting any party the right or authority to act as a
representative, agent, employee or joint venturer of any other.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first written above.
ORBITAL SCIENCES CORPORATION
By:
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David W. Thompson
Chairman and Chief Executive Officer
ORBITAL IMAGING CORPORATION
By:
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Gilbert D. Rye
President and Chief Executive Officer