Document:

exv4w1

 

Exhibit 4.1

NOTE AND SECURITY

AGREEMENT

FOR

$19,119,656

SENIOR NOTES DUE 2008

_______________________

by and among

ORBIMAGE Inc.,

Harbert Distressed Investment Master Fund, Ltd.,

Magten Group Trust,

Magten Partners, LP,

Redwood Master Fund, Ltd.,

Triage Offshore Fund, Ltd.,

and

Triage Capital Management, LP

____________________________________

Dated as of December 31, 2003

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	ARTICLE I. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
	 	 	1	 	 	 	 	 
	Section 1.1 Definitions
	 	 	1	 	 	 	 	 
	Section 1.2 Rules of Construction
	 	 	17	 	 	 	 	 
	ARTICLE II. THE NOTES
	 	 	18	 	 	 	 	 
	Section 2.1 Form and Dating
	 	 	18	 	 	 	 	 
	Section 2.2 Execution
	 	 	18	 	 	 	 	 
	Section 2.3 Registration of Note; Paying Agent
	 	 	18	 	 	 	 	 
	Section 2.4 Transfer and Exchange
	 	 	18	 	 	 	 	 
	Section 2.5 Replacement of Notes
	 	 	19	 	 	 	 	 
	Section 2.6 Persons Deemed Owners
	 	 	19	 	 	 	 	 
	ARTICLE III. REDEMPTION AND PREPAYMENT
	 	 	19	 	 	 	 	 
	Section 3.1 Notices to Holders
	 	 	19	 	 	 	 	 
	Section 3.2 Selection of Notes to Be Redeemed or Repurchased
	 	 	20	 	 	 	 	 
	Section 3.3 Notice of Redemption
	 	 	20	 	 	 	 	 
	Section 3.4 Effect of Notice of Redemption
	 	 	21	 	 	 	 	 
	Section 3.5 Notes Redeemed in Part
	 	 	21	 	 	 	 	 
	Section 3.6 Optional Redemption
	 	 	21	 	 	 	 	 
	Section 3.7 Mandatory Redemption
	 	 	21	 	 	 	 	 
	ARTICLE IV. REPRESENTATIONS AND WARRANTIES
	 	 	22	 	 	 	 	 
	Section 4.1 Corporate Existence
	 	 	22	 	 	 	 	 
	Section 4.2 Corporate Power: Authorization: Enforceable Obligations
	 	 	22	 	 	 	 	 
	Section 4.3 Ownership of Shares of Subsidiaries
	 	 	23	 	 	 	 	 
	Section 4.4 Financial Statements; Internal Controls
	 	 	23	 	 	 	 	 
	Section 4.5 Litigation; Observance of Agreements, Statutes and Orders
	 	 	23	 	 	 	 	 
	Section 4.6 Taxes
	 	 	23	 	 	 	 	 
	Section 4.7 Intellectual Property
	 	 	24	 	 	 	 	 
	Section 4.8 Title to Property; Leases
	 	 	25	 	 	 	 	 
	Section 4.9 Existing Indebtedness; Future Liens
	 	 	25	 	 	 	 	 
	Section 4.10 Status under Certain Statutes
	 	 	25	 	 	 	 	 
	Section 4.11 Insurance
	 	 	25	 	 	 	 	 
	Section 4.12 Environmental Matters
	 	 	26	 	 	 	 	 
	Section 4.13 Survival
	 	 	26	 	 	 	 	 
	ARTICLE V
	 	 	26	 	 	 	 	 
	Section 5.1 Payment of Notes
	 	 	26	 	 	 	 	 
	Section 5.2 Corporate Existence
	 	 	27	 	 	 	 	 
	Section 5.3 Access
	 	 	27	 	 	 	 	 
	Section 5.4 Payment of Taxes and Other Claims
	 	 	27	 	 	 	 	 
	Section 5.5 Maintenance of Properties and Insurance
	 	 	28	 	 	 	 	 
	Section 5.6 Compliance Certificate; Notice of Default
	 	 	29	 	 	 	 	 
	Section 5.7 Compliance with Laws
	 	 	30	 	 	 	 	 
	Section 5.8 Reports
	 	 	30	 	 	 	 	 

 

 

	 	 	 	 	 	 	 	 	 
	Section 5.9 Waiver of Stay, Extension or Usury Laws
	 	 	31	 	 	 	 	 
	Section 5.10 Limitation on Restricted Payments
	 	 	31	 	 	 	 	 
	Section 5.11 Limitation on Transactions with Affiliates
	 	 	31	 	 	 	 	 
	Section 5.12 Limitation on Incurrence of Indebtedness or Issuance of
Disqualified Stock
	 	 	32	 	 	 	 	 
	Section 5.13 Dividend and Other Payment Restrictions Affecting Subsidiaries
	 	 	34	 	 	 	 	 
	Section 5.14 Limitation on Change of Control
	 	 	35	 	 	 	 	 
	Section 5.15 Limitation on Sales of Assets and Subsidiary Interests
	 	 	36	 	 	 	 	 
	Section 5.16 Limitation on Liens
	 	 	39	 	 	 	 	 
	Section 5.17 Business Activities
	 	 	39	 	 	 	 	 
	Section 5.18 Limitations on Sale and Leaseback Transactions
	 	 	39	 	 	 	 	 
	Section 5.19 Limitation on Sale of Capital Stock of Subsidiaries
	 	 	39	 	 	 	 	 
	Section 5.20 Designation of Restricted and Unrestricted Subsidiaries
	 	 	39	 	 	 	 	 
	Section 5.21 Limitations on Capital Expenditures
	 	 	41	 	 	 	 	 
	Section 5.22 Preferred Terms
	 	 	41	 	 	 	 	 
	Section 5.23 Default on Notes
	 	 	41	 	 	 	 	 
	Section 5.24 Settlement of Insurance Claims
	 	 	41	 	 	 	 	 
	Section 5.25 Subsidiary Guarantees
	 	 	42	 	 	 	 	 
	Section 5.26 Collateral
	 	 	42	 	 	 	 	 
	Section 5.27 Limitation on Payments for Consent
	 	 	42	 	 	 	 	 
	ARTICLE VI. MERGER, CONSOLIDATION OR SALE OF ASSETS
	 	 	43	 	 	 	 	 
	Section 6.1 Mergers, Consolidations and Sales of Assets
	 	 	43	 	 	 	 	 
	Section 6.2 Successor Substituted
	 	 	44	 	 	 	 	 
	ARTICLE VII. EVENTS OF DEFAULT AND REMEDIES
	 	 	44	 	 	 	 	 
	Section 7.1 Events of Default
	 	 	44	 	 	 	 	 
	Section 7.2 Acceleration
	 	 	46	 	 	 	 	 
	Section 7.3 Remedies upon Event of Default
	 	 	47	 	 	 	 	 
	Section 7.4 Waiver of Past Defaults
	 	 	49	 	 	 	 	 
	Section 7.5 Limitation on Suits
	 	 	49	 	 	 	 	 
	Section 7.6 Rights of Holders To Receive Payment
	 	 	49	 	 	 	 	 
	Section 7.7 Priorities
	 	 	49	 	 	 	 	 
	Section 7.8 Undertaking for Costs
	 	 	50	 	 	 	 	 
	ARTICLE VIII. DEFEASANCE AND SATISFACTION AND DISCHARGE
	 	 	50	 	 	 	 	 
	Section 8.1 Legal Defeasance and Covenant Defeasance
	 	 	50	 	 	 	 	 
	Section 8.2 Satisfaction and Discharge
	 	 	52	 	 	 	 	 
	Section 8.3 Survival of Certain Obligations
	 	 	53	 	 	 	 	 
	Section 8.4 Application of Trust Moneys and Government Securities
	 	 	53	 	 	 	 	 
	ARTICLE IX. AMENDMENTS AND WAIVERS
	 	 	54	 	 	 	 	 
	Section 9.1 With Consent of Holders
	 	 	54	 	 	 	 	 
	Section 9.2 Revocation and Effect of Consents
	 	 	55	 	 	 	 	 
	ARTICLE X. SECURITY
	 	 	55	 	 	 	 	 
	Section 10.1 Pledge and Grant of Security Interest
	 	 	55	 	 	 	 	 

ii

 

 

	 	 	 	 	 	 	 	 	 
	Section 10.2 Security for Obligations
	 	 	56	 	 	 	 	 
	Section 10.3 Further Assurances
	 	 	56	 	 	 	 	 
	Section 10.4 Power of Attorney
	 	 	56	 	 	 	 	 
	Section 10.5 Collateral Agent May Perform
	 	 	58	 	 	 	 	 
	Section 10.6 No Assumption of Duties
	 	 	58	 	 	 	 	 
	Section 10.7 Indemnity
	 	 	58	 	 	 	 	 
	Section 10.8 Security Interest Absolute
	 	 	59	 	 	 	 	 
	Section 10.9 Authority of the Collateral Agent
	 	 	59	 	 	 	 	 
	ARTICLE XI. SENIORITY
	 	 	62	 	 	 	 	 
	Section 11.1 Agreement to Subordinate
	 	 	62	 	 	 	 	 
	Section 11.2 Liquidation; Dissolution; Bankruptcy
	 	 	62	 	 	 	 	 
	Section 11.3 Default on Senior Secured Indebtedness
	 	 	63	 	 	 	 	 
	Section 11.4 Acceleration of Securities
	 	 	64	 	 	 	 	 
	Section 11.5 When Distribution Must Be Paid Over
	 	 	64	 	 	 	 	 
	Section 11.6 Notice by Company
	 	 	64	 	 	 	 	 
	Section 11.7 Subrogation
	 	 	64	 	 	 	 	 
	Section 11.8 Relative Rights
	 	 	65	 	 	 	 	 
	Section 11.9 Subordination May Not Be Impaired by Company
	 	 	65	 	 	 	 	 
	Section 11.10 Distribution or Notice to Representative
	 	 	65	 	 	 	 	 
	Section 11.11 Authorization to Effect Subordination
	 	 	65	 	 	 	 	 
	ARTICLE XII. MISCELLANEOUS
	 	 	65	 	 	 	 	 
	Section 12.1 Notices
	 	 	66	 	 	 	 	 
	Section 12.2 Communication by Holders of Notes with Other Holders of Notes
	 	 	68	 	 	 	 	 
	Section 12.3 Acts of Holders; Registered Holders; Record Dates
	 	 	68	 	 	 	 	 
	Section 12.4 Successors and Assigns
	 	 	69	 	 	 	 	 
	Section 12.5 Severability
	 	 	69	 	 	 	 	 
	Section 12.6 No Third Party Benefits
	 	 	69	 	 	 	 	 
	Section 12.7 Governing Law; Jurisdiction
	 	 	69	 	 	 	 	 
	Section 12.8 Legal Holidays
	 	 	69	 	 	 	 	 
	Section 12.9 No Recourse Against Others; Limitation on Liability
	 	 	69	 	 	 	 	 
	Section 12.10 Non-Assignment
	 	 	70	 	 	 	 	 
	Section 12.11 Legal Fees
	 	 	70	 	 	 	 	 
	Section 12.12 Counterparts
	 	 	70	 	 	 	 	 

iii

 

 

     NOTE
AND SECURITY AGREEMENT, dated as of December 31, 2003 (this
“Agreement”), by and between ORBIMAGE Inc. (the “Company” or
“ORBIMAGE”) with its principal office at 21700 Atlantic Boulevard,
Dulles, Virginia 20166, and Harbert Distressed Investment Master Fund, Ltd.,
Magten Group Trust, Magten Partners, LP, Redwood Master Fund, Ltd., Triage
Offshore Fund, Ltd., and Triage Capital Management, LP (collectively, the
“Initial Holders”).

RECITALS:

     WHEREAS,
the Company has duly authorized the issuance of $19,119,656
 aggregate principal amount of its Senior Notes Due 2008 (the “Notes”)
of substantially the tenor and amount hereinafter set forth, and to provide
therefore the Company has duly authorized the execution and delivery of this
Agreement; and

     WHEREAS, all things necessary to make the Notes, when executed by the
Company and delivered hereunder, duly issued by the Company, the valid
obligations of the Company, and to make this Agreement a valid and binding
agreement of Company, in accordance with its terms, have been done.

     NOW, THEREFORE, WITNESSETH: for and in consideration of the premises and
the purchase of the Notes by the Holders (as hereinafter defined) thereof, each
party hereto hereby mutually covenants and agrees, for the equal and
proportionate benefit of all Holders of the Notes, as follows:

ARTICLE I.

DEFINITIONS AND OTHER PROVISIONS

OF GENERAL APPLICATION

     Section 1.1 Definitions.

     “Acceleration Notice” has the meaning set forth in Section 7.2(a).

     “Acquired Debt” means, with respect to any specified Person:

          (i) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Restricted Subsidiary of such
specified Person, including, without limitation, Indebtedness incurred in
connection with, or in contemplation of, such other Person merging with or into
or becoming a Restricted Subsidiary of such specified Person; and

          (ii) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.

     “Act” has the meaning set forth in Section 12.3(a).

     “Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified

1

 

Person. For purposes of this definition, “control” (including, with
correlative meanings, the terms “controlling,” “controlled by” and “under
common control with”), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of Voting Equity Interests, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the Voting Equity Interests (or the
equivalent) of a Person shall be deemed to be control.

     “Affiliate Transaction” has the meaning set forth in Section 5.11.

     “Agent-Related Person” means the Collateral Agent and its officers,
directors, employees and agents.

     “Asset Sale” means:

          (i) the sale, lease, license, conveyance or other disposition of any
assets or rights (including, without limitation, by way of a Sale and Leaseback
Transaction or similar arrangement) by the Company or a Restricted Subsidiary
of the Company (a “disposition”), provided that the disposition of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
taken as a whole will be governed by Sections 5.14 and/or 6.1 of this
Agreement, and not by Section 5.15; and

          (ii) except to the extent excluded by clause (i) above, the issuance or
disposition by the Company or any of its Restricted Subsidiaries of Equity
Interests of the Company’s Restricted Subsidiaries;

in the case of either clause (i) or (ii) above, whether in a single transaction
or a series of related transactions: (a) that has a Fair Market Value in excess
of $2.5 million; or (b) for net proceeds in excess of $2.5 million.

     Notwithstanding the foregoing, Asset Sales will not be deemed to include:
(i) sales of imagery, imagery distribution or satellite tasking rights,
software or rights in software for processing and storing imagery, license
grants to imagery value-added resellers or distributors and other associated
rights, and other sales of services, products or inventory, in each case, in
the ordinary course of business and consistent with industry practice; (ii) a
transfer of assets by the Company to any Guarantor or by a Restricted
Subsidiary of the Company to the Company; (iii) an issuance of Equity Interests
by a Restricted Subsidiary of the Company to the Company or to a Guarantor (iv)
an exchange of an asset held by the Company or a Restricted Subsidiary of the
Company for an asset of a third party upon a determination by the disinterested
members of the Board of Directors of the Company made in good faith (evidenced
by a resolution approved by a majority of the disinterested members of the
Board of Directors of the Company and set forth in an Officers’ Certificate
delivered to the Collateral Agent, for so long as the Holders hold the security
interest granted pursuant to Article X, and thereafter, to each Holder) that
the asset received by the Company or a Restricted Subsidiary of the Company in
such exchange (x) is a Related Asset, (y) has a Fair Market Value at least
equal to the fair market value of the asset transferred by the Company or such
Restricted Subsidiary of the Company and (z) is usable in the ordinary course
of the Company’s business to at least the same extent as the asset transferred

2

 

by the Company or such Restricted Subsidiary; and (v) sales or
dispositions of damaged, worn out or other obsolete property in the ordinary
course of business so long as such property is no longer necessary for the
proper conduct of the business of the Company or any of its Restricted
Subsidiaries.

     “Asset Sale Offer” has the meaning set forth in Section 5.15(a).

     “Asset Sale Offer Trigger Date” has the meaning set forth in Section
5.15(a).

     “Attributable Debt” means, with respect to any Sale and Leaseback
Transaction, the present value at the time of determination (discounted at a
rate consistent with accounting guidelines, as determined in good faith by the
Company) of the payments during the remaining term of the lease (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended) or until the earliest date on which the lessee may
terminate such lease without penalty or upon payment of a penalty (in which
case the rental payments shall include such penalty, after excluding all
amounts required to be paid on account of maintenance and repairs, insurance,
taxes, assessments, water, utilities and similar charges).

     “Bankruptcy Code” means title 11, United States Code, as amended from time
to time.

     “Bankruptcy Court” means the United States Bankruptcy Court for the
Eastern District of Virginia and any other court having competent jurisdiction
over the Reorganization Cases.

     “Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure and the
Local Rules of the Bankruptcy Court, each as amended from time to time.

     “Business Assets” means any hardware, software, technology, Intellectual
Property, or other rights in or assets (or, in the case of clause (vi),
inventory) relating to (i) the remote imaging satellites owned and/or operated
by ORBIMAGE on the Issue Date, (ii) the lease for the OrbView-2 satellite held
by ORBIMAGE, (iii) the OrbView Satellite, (iv) any other remote imaging
satellites developed, constructed or acquired by ORBIMAGE, (v) the ground
segment (or any components thereof) related to the operation of, and processing
of data from, the satellites described in clauses (i)-(iv) above, and (vi) the
Company’s imagery catalogue and archive.

     “Business Day” means any day other than a Saturday, Sunday or day on which
commercial banking institutions in The City of New York, New York are
authorized or obligated by law or executive order to close.

     “Capital Expenditures” means, for any period, expenditures (including the
aggregate amount of Capital Lease Obligations incurred during such period) made
by the Company or any of its Subsidiaries to acquire or construct fixed assets,
plant and equipment (including renewals, improvements and replacements, but
excluding maintenance and repairs) during such period computed in accordance
with GAAP; provided, however, that for purposes of Section 5.21, Capital
Expenditures shall include any acquisition of Business Assets.

3

 

     “Capital Lease Obligation” means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.

     “Capital Stock” means: (i) in the case of a corporation, corporate stock;
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock; (iii) in the case of a partnership, partnership interests
(whether general or limited); and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.

     “Cash Consideration” means any consideration received from an Asset Sale
in the form of cash or Cash Equivalents, in either case in U.S. dollars or
freely convertible into U.S. dollars.

     “Cash Equivalents” means:

          (i) United States dollars;

          (ii) Government Securities;

          (iii) certificates of deposit and euro dollar time deposits with
maturities of six months or less from the date of acquisition, bankers’
acceptances or money market deposit accounts with maturities not exceeding six
months and overnight bank deposits, in each case with any Eligible Institution;

          (iv) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (ii) and (iii) above
entered into with any Eligible Institution;

          (v) commercial paper having the highest rating obtainable from Moody’s or
S&P and in each case maturing within six months after the date of acquisition;
and

          (vi) mutual funds or other pooled investment vehicles investing solely in
investments of the types described in (i) through (v) above.

     “Change of Control” means:

          (i) the direct or indirect acquisition of beneficial ownership of Voting
Equity Interests of the Company by any Person or group of Persons acting in
concert, in an amount greater than the amount of Voting Equity Interests held
contemporaneously by the current holders of a majority of the Voting Equity
Interests of the Company.

          (ii) the acquisition of the Company, or the sale, lease, transfer,
conveyance or other disposition, in one transaction or a series of related
transactions, directly or indirectly, including through a liquidation or
dissolution, of all or substantially all of the assets of the Company and its
Restricted Subsidiaries or the combination of the Company or all or
substantially all its assets with another Person (other than any such transfer
to any Wholly
Owned Restricted Subsidiary of the Company), unless the acquiring or
surviving Person shall be

4

 

a corporation more than 50% of the combined voting
power of which corporation’s then outstanding Voting Equity Interests, after
giving effect to such acquisition or combination, are owned, immediately after
such acquisition or combination, by the owners of the Voting Equity Interests
of the Company outstanding immediately prior to such acquisition or
combination;

          (iii) the adoption of a plan relating to the liquidation or dissolution of
the Company (other than any such liquidation or dissolution to or for the
benefit of any Wholly Owned Restricted Subsidiary of the Company);

          (iv) the revocation of any License which revocation is not cured within 30
days of the occurrence thereof or such later date when all applicable appeals
have been finally determined, if during such appeal period the Company has
received regulatory approval to continue operations under the License pending
the outcome of such appeals; or

          (v) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election by such Board of Directors or
whose nomination for election by the shareholders of the Company was approved
by a vote of a majority of the directors of the Company then still in office
who were either directors at the beginning of such period or whose election or
nomination for election was previously so approved), cease for any reason to
constitute a majority of the Board of Directors of the Company then in office.

     “Change of Control Date” has the meaning set forth in Section 5.14(b).

     “Change of Control Offer” has the meaning set forth in Section 5.14(a).

     “Change of Control Payment” has the meaning set forth in Section 5.14(a).

     “Change of Control Payment Date” has the meaning set forth in Section
5.14(b).

     “Checkout” means that there has been a determination by the Company
(evidenced by a resolution approved by a majority of the disinterested members
of the Board of Directors of the Company as set forth in an Officer’s
Certificate delivered to the Collateral Agent (the “Checkout Notice”)) that (i)
the OrbView Satellite has achieved a performance capability such that it can be
pursuant to the terms of the Procurement Agreement, and (ii) there is no
further possibility of payment under the Initial Insurance Policy or the
Continuing Insurance Policy because the OrbView Satellite failed to achieve
such performance capability prior to the Company’s acceptance of the OrbView
Satellite pursuant to the terms of the Procurement Agreement.

     “Checkout Failure Event” means the occurrence of a Checkout failure with
respect to the OrbView-3 Satellite requiring a full or partial payment to the
Holders as loss payees out of the proceeds of the Initial Insurance Policy or
the Continuing Insurance Policy.

     “Collateral” means the Company’s right, title and interest in and to the
OrbView-3 Satellite, the Procurement Agreement, the Initial Insurance Policy,
the Continuing Insurance Policy and any and all proceeds of each of the
foregoing, including all proceeds from time to time received, receivable or
otherwise distributed or distributable in respect of or in exchange for

5

 

any or all of the Initial Insurance Policy, and all accessions to,
substitutions and replacements for, and rents, profits and products of, each of
the foregoing.

     “Collateral Agent” means Harbert Distressed Investment Master Fund, or its
successor upon its resignation in accordance with Section 10.4(f), in its
capacity as Collateral Agent under this Agreement.

     “Commission” means the U.S. Securities and Exchange Commission or any
successor body.

     “Common Stock” means the common stock, $.01 par value, of the Company.

     “Consolidated Net Worth” means, with respect to any Person as of any date:

          (i) the consolidated equity of the equity holders of such Person and its
consolidated Restricted Subsidiaries as of such date; plus

          (ii) the respective amounts reported on such Person’s balance sheet as of
such date with respect to any series of preferred Equity Interests (other than
Disqualified Stock) that by its terms is not entitled to the payment of
dividends unless such dividends may be declared and paid only out of net
earnings in respect of the year of such declaration and payment, but only to
the extent of any cash received by such Person upon issuance of such preferred
stock; minus

          (iii) all write-ups (other than write-ups resulting from foreign currency
translations and write-ups of tangible assets of a going-concern business made
within 12 months after the acquisition of such business) subsequent to the
Issue Date in the book value of any asset owned by such Person or a
consolidated Subsidiary of such Person; minus

          (iv) all investments as of such date in unconsolidated Subsidiaries and in
Persons that are not Restricted Subsidiaries; minus

          (v) all unamortized debt discount and expense and unamortized deferred
charges as of such date.

     “Continuing Insurance Policy” has the meaning set forth in Section 5.5(c).

     “Contractual Obligation” means, with respect to a Person, any obligation,
agreement, undertaking or similar provision of any security issued by such
Person or of any agreement, undertaking, contract, lease, indenture, mortgage,
deed of trust or other instrument (excluding this Agreement and the Notes) to
which such Person is a party or by which it or any of its property is bound or
to which any of its properties is subject.

     “Copyright” means (a) all copyrights arising under the laws of the United
States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished, all
registrations and recordings thereof, and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any foreign counterparts thereof and (b)
the right to obtain all renewals thereof.

6

 

     “Copyright Licenses” means any written agreement naming the Company as
licensor or licensee granting any right under any Copyright, including the
grant of rights to copy, publicly perform, create derivative works,
manufacture, distribute, exploit and sell materials derived from any Copyright.

     “Covenant Defeasance” has the meaning set forth in Section 8.1(c).

     “Default” means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.

     “Disqualified Stock” means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, at the option of the holder thereof), or upon the happening of
any event: (i) matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise at the option of the holder thereof; or (ii) is
redeemable or is convertible or exchangeable for Indebtedness at the option of
the holder thereof, in whole or in part, on or prior to the date on which the
Notes are repaid, redeemed or retired in full.

     “Eligible Institution” means a domestic commercial banking institution
that has combined capital and surplus of not less than $500 million or its
equivalent in foreign currency, whose debt is rated “A” or higher according to
S&P or Moody’s at the time as of which any investment or rollover therein is
made.

     “Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including but not limited to
those related to hazardous substances or wastes, air emissions and discharges
to waste or public systems.

     “Equity Interests” means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).

     “Event of Default” has the meaning specified in Section 7.1.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended (or
any successor act) and the rules and regulations thereunder.

     “Fair Market Value” means, with respect to any asset, the sale value that
would be obtained in an arm’s-length free market transaction, between a willing
seller and a willing buyer, neither of which is under pressure or compulsion to
complete the transaction; provided that the Fair Market Value of any such asset
or assets shall be determined by the Board of Directors of the Company, acting
in good faith and by unanimous resolution, and which determination shall be
evidenced by an Officers’ Certificate delivered to the Collateral Agent, for so
long as the Holders hold the security interest granted pursuant to Article X,
and thereafter, to each Holder.

     “GAAP” means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public

7

 

Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession and which are in
effect on the Issue Date.

     “Governmental Authority” means any nation, sovereign or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.

     “Government Securities” means securities that are direct obligations of,
or obligations fully guaranteed by, the United States of America for the
payment of which guarantee or obligations the full faith and credit of the
United States is pledged.

     “Guarantee” or “guarantee” means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.

     “Guarantor” means any Subsidiary of the Company that executes a Subsidiary
Guarantee in accordance with the provisions of this Agreement, and its
successors and assigns.

     “Hazardous Material” means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety,
the removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable Environmental
Laws (including, without limitation, asbestos, urea formaldehyde foam
insulation and polychlorinated biphenyls).

     “Holder” means each person in whose name the Notes are registered pursuant
to Section 2.1.

     “Hedging Obligations” means, with respect to any Person, the obligations
of such Person under: (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements; (ii) foreign currency hedge
obligations; and (iii) other agreements or arrangements designed to protect
such Person against fluctuations in interest and foreign currency rates.

     “Indebtedness” means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or bankers’ acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable to
the extent that any such accrued expense or trade payable is not more than 90
days overdue or is otherwise being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted, if and to the extent
any of the foregoing indebtedness (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP, as well as all indebtedness of others secured
by a Lien on any asset of such Person (whether or not such indebtedness is
assumed by such Person and, in

8

 

the event such indebtedness is not assumed by, and is otherwise
non-recourse to, such Person, the amount of such indebtedness shall be deemed
to equal the greater of book value or Fair Market Value of such assets), all
obligations to purchase, redeem, retire, defease or otherwise acquire for value
any Disqualified Stock or any warrants, rights or options to acquire such
Disqualified Stock valued, in the case of Disqualified Stock, at the greatest
amount payable in respect thereof on a liquidation (whether voluntary or
involuntary) plus accrued and unpaid dividends, the liquidation value of any
preferred stock issued by Subsidiaries of such Person, plus accrued and unpaid
dividends, and, to the extent not otherwise included, the Guarantee by such
Person of any indebtedness of any other Person; and provided, that
“Indebtedness” shall be calculated without duplication and after elimination of
Intercompany Indebtedness.

     “Independent Financial Advisor” means an accounting, appraisal or
investment banking firm of nationally recognized standing that is, in the good
faith judgment of the Board of Directors of the Company (evidenced by a
resolution of the majority of the Board of Directors of the Company as set
forth in an Officers’ Certificate delivered to the Collateral Agent, for so
long as the Holders hold the security interest granted pursuant to Article X,
and thereafter, to each Holder), qualified to perform the task for which it has
been engaged and is disinterested and independent with respect to the Company
and its Affiliates.

     “Initial Holders” has the meaning set forth in the first paragraph of this
Agreement.

     “Initial Insurance Policy” means the $51,000,000 combined risk insurance
policy purchased by the Company for insurance coverage for combined risk of
launch, satellite checkout and on-orbit satellite operations on the OrbView-3
Satellite.

     “Intellectual Property” means, collectively, all rights, priorities and
privileges of the Company relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark
Licenses and trade secrets, and all rights to sue at law or in equity for any
infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.

     “Intercompany Indebtedness” has the meaning set forth in Section 5.12(f).

     “Interest Payment Date” means, with respect to any installment of interest
on the Notes, June 30 and December 31 of each year.

     “Investments” means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans, guarantees, advances or capital contributions (excluding
commission, travel and similar advances to officers and employees made in the
ordinary course of business), purchases or other acquisitions for consideration
of Indebtedness, Equity Interests or other securities and all other items that
are or would be classified as investments on a balance sheet prepared in
accordance with GAAP. Notwithstanding the foregoing, Investments shall not
include advance payments for satellite capacity or imagery related services or
products in the ordinary course of business.

     “Issue
Date” means December 31, 2003, the date on which the Notes are first
delivered under this Agreement.

9

 

     “Legal Defeasance” has the meaning set forth in Section 8.1(b).

     “License” means any Federal Communications Commission license or
Department of Commerce license issued to the Company relating to the operation
of the OrbView Satellite (including the Department of Commerce license and the
Federal Communications Commission license currently owned by Orbital relating
to the operation of OrbView-2), in line with the Company’s current and planned
commercial operations, and any other existing or future license issued to the
Company or any of its Restricted Subsidiaries relating to the operation of any
existing or future satellites of the Company or any of its Restricted
Subsidiaries, the revocation of which would have a Material Adverse Effect.

     “Lien” means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease
in the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).

     “Majority Holders” means Holders of at least a majority in principal
amount of the Notes then outstanding.

     “Material” means material in relation to the business, operations,
affairs, financial condition, assets or properties of the Company and its
Subsidiaries taken as a whole.

     “Material Adverse Effect” means a material adverse effect on (a)
the business, operations, affairs, financial condition, assets or properties of
the Company and its Subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, or (b) the ability of
the Company to perform its obligations under this Agreement and the Notes, or
(c) the validity or enforceability of this Agreement or the Notes.

     “Moody’s” means Moody’s Investors Service, Inc. or its successors.

     “Net Income” means, with respect to any Person, the net income (or loss)
of such Person, determined in accordance with GAAP, excluding, however,

          (i) any gain (but not loss), together with any related provision for taxes
on such gain (but not loss), realized in connection with: (a) any sale of
assets (including, without limitation, dispositions pursuant to Sale and
Leaseback Transactions); or (b) the disposition of any securities by such
Person or any of its Restricted Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of its Restricted Subsidiaries; and

          (ii) any extraordinary or nonrecurring gain (but not loss), together with
any related provision for taxes on such extraordinary or nonrecurring gain (but
not loss).

     “Net Proceeds” means (a) with respect to any Asset Sale, the aggregate
cash proceeds received by the Company or any of its Restricted Subsidiaries in
respect of such Asset Sale (including, without limitation, any cash received
upon the sale or other disposition of any non-cash consideration received in
any Asset Sale), net of the direct costs relating to such Asset Sale

10

 

(including, without limitation, legal, accounting and investment banking
fees, and sales commissions) and any relocation expenses incurred as a result
thereof, taxes paid or payable as a result thereof (after taking into account
any available tax credits or deductions and any tax sharing arrangements and
provided that any such amount not so required to be paid for taxes shall be
deemed to constitute Net Proceeds at the time such amount is not retained for
such purpose), amounts required to be applied to the repayment of Indebtedness
secured by a Lien on the asset or assets (including Equity Interests) that were
the subject of such Asset Sale and any reserve for adjustment in respect of the
sale price of such asset or assets (including Equity Interests) established in
accordance with GAAP (provided that the amount of any such reserve shall be
deemed to constitute Net Proceeds at the time such reserve shall have been
released or is not otherwise required to be retained for such purpose) and (b)
with respect to any issuance or sale of Capital Stock, the proceeds of such
issuance or sale in the form of cash or Cash Equivalents, including payments in
respect of deferred payment obligations (to the extent corresponding to the
principal, but not interest, component thereof) when received in the form of
cash or Cash Equivalents (except to the extent such obligations are financed or
sold with recourse to the Company or any Restricted Subsidiary of the Company)
and proceeds from the conversion of other property received when converted to
cash or Cash Equivalents, net of legal, accounting and investment banking fees,
discounts and sales commissions and net of taxes paid or payable as a result
thereof.

     “Non-Recourse Debt” means Indebtedness:

          (i) as to which neither the Company nor any of its Restricted
Subsidiaries: (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Indebtedness); (b)
is directly or indirectly liable (as a guarantor or otherwise); or (c)
constitutes the lender;

          (ii) no default with respect to which (including any rights that the
Holders thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit (upon notice, lapse of time or both) any holder of any
other Indebtedness of the Company or any of its Restricted Subsidiaries to
declare a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its Stated Maturity; and

          (iii) as to which the lenders have been notified in writing that they will
not have any recourse to the stock or assets of any of the Company or any of
its Restricted Subsidiaries.

     “Note Register” has the meaning specified in Section 2.3.

     “Notes” means the Notes issued pursuant to this Agreement.

     “Obligations” means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.

     “Officer” means, with respect to any Person, the Chief Executive Officer,
the President, any Vice President or the chief financial and accounting officer
of such Person.

11

 

     “Officers’ Certificate” means, with respect to any Person, a certificate
signed by the Chief Executive Officer, President or a Vice-President and the
chief financial and accounting officer of such Person.

     “Opinion of Counsel” means a written opinion of legal counsel reasonably
acceptable to and addressed to each Holder.

     “Orbital” means Orbital Sciences Corporation, a Delaware corporation, or
any successor entity whether by merger, sale of all or substantially all its
assets or otherwise.

     “OrbView Satellite” means the high-resolution satellite designated as
OrbView-3 under the Amended and Restated Procurement Agreement between the
Company and Orbital dated February 25, 1998, as amended on December 31, 1998,
and any Replacement Satellite.

     “Paying Agent” has the meaning set forth in Section 2.3.

     “Patents” means (a) all letters patent of the United States, any other
country or any political subdivision thereof and all reissues and extensions
thereof, (b) all applications for letters patent of the United States or any
other country and all divisions, continuations and continuations-in-part
thereof, and (c) all rights to obtain any reissues or extensions of the
foregoing.

     “Patent License” means all agreements, whether written or oral, providing
for the grant by or to the Company of any right to manufacture, have
manufactured, use, import, sell or offer for sale any invention covered in
whole or in part by a Patent.

     “Permitted Investment” means:

               (i) any Investments in the Company or any Guarantor;

               (ii) any Investments in cash or Cash Equivalents;

               (iii) Investments by the Company or any Guarantor in a Person, provided
that (a) the primary business of such Person is a Related Business, (b) the
consideration paid by the Company or any of its Subsidiaries for such
Investment consists solely of common Equity Interests (other than Disqualified
Stock) of the Company, (c) immediately following such Investment, the Company’s
consolidated operating income, as determined in accordance with GAAP, for the
four full fiscal quarters (the “Four Quarter Period”) ending on or prior to the
date (the “Transaction Date”) of the Investment giving rise to the need to
calculate such operating income and for which financial statements are then
available and have been filed with the SEC pursuant to Section 54.8 hereof,
after giving effect to such Investment on a pro forma basis, would be at least
$1.00 greater than the Company’s consolidated operating income for the Four
Quarter Period immediately preceding such Investment, and (d) such Person
either (x) becomes a Guarantor ; or (y) is merged, consolidated or amalgamated
with or into, or transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or any Guarantor;

               (iv) Investments by the Company or any of its Unrestricted Subsidiaries in
a Person, provided that (a) the primary business of such Person is a Related

12

 

Business, (b) immediately following such Investment, the Company’s
consolidated operating income, as determined in accordance with GAAP, for the
Four Quarter Period ending on or prior to the Transaction Date of the
Investment giving rise to the need to calculate such operating income and for
which financial statements are then available and have been filed with the SEC
pursuant to Section 54.8 hereof, after giving effect to such Investment on a
pro forma basis, would be at least $1.00 greater than the Company’s
consolidated operating income for the Four Quarter Period immediately preceding
such Investment, (c) as a result of such Investment, such Person becomes an
Unrestricted Subsidiary of the Company and (d) the consideration paid for by
the Company or any of its Subsidiaries consists solely of common Equity
Interests (other than Disqualified Stock) of the Company, or Non-Recourse Debt
of any of its Unrestricted Subsidiaries;

               (v) any Investment made as a result of the receipt of non-Cash
Consideration from an Asset Sale that was made pursuant to and in compliance
with Section 5.15 of this Agreement or a transaction not constituting an Asset
Sale by reason of the $2.5 million threshold contained in the definition
therein; and

               (vi) any Investments constituting Capital Expenditures, which are
permitted by and in compliance with Section 5.21.

     “Permitted Liens” means:

               (i) Liens securing the Notes (including Permitted Refinancing Indebtedness
of the Notes);

               (ii) Liens in favor of the Company;

               (iii) Liens securing Senior Secured Indebtedness (including Permitted
Refinancing Indebtedness of the Senior Secured Indebtedness);

               (iv) Liens on property of a Person existing at the time such Person is
merged into or consolidated with the Company or any of its Restricted
Subsidiaries; provided that such Liens were in existence prior to the
contemplation of such merger or consolidation and were not incurred in
contemplation of such merger or consolidation and do not extend to any assets
other than those of the Person merged into or consolidated with the Company or
its Restricted Subsidiary;

               (v) Liens on property existing at the time of acquisition thereof by the
Company or any of its Restricted Subsidiaries; provided that such Liens were in
existence prior to the contemplation of such acquisition and were not incurred
in contemplation of such acquisition and following such acquisition do not
extend to any property other than that acquired;

               (vi) Liens to secure the performance of statutory obligations, surety,
appeal or performance bonds or other obligations of a like nature or mechanics’
or purchase money Liens incurred in the ordinary course of business and
consistent with industry practice; and

13

 

               (vii) Liens for taxes, assessments or governmental charges or claims that
are not yet delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded; provided that any
reserve or other appropriate provision as shall be required in conformity with
GAAP shall have been made therefore.

     “Permitted Refinancing Indebtedness” has the meaning set forth in Section
5.12.

     “Person” means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.

     “PIK Period” means any period in which interest is payable in kind
pursuant to Section 4.1 of this Agreement and Section 1 of the Notes.

     “Proceeds Purchase Date” has the meaning set forth in Section 5.15(b)(ii).

     “Procurement Agreement” means the Amended and Restated OrbImage System
Procurement Agreement dated February 26, 1998 (as subsequently amended) for,
among other things, the construction and launch of the OrbView Satellite, a
license for imagery from the OrbView-2 satellite, and the delivery of a
command, control, and data processing system.

     “Record Date” shall have the meaning set forth in the form of the Note
attached hereto as Exhibit A.

     “Refinanced Indebtedness” has the meaning set forth in Section 5.12(h).

     “Registrar” has the meaning set forth in Section 2.3.

     “Related Asset” means any asset used in connection with a Related Business
or Related Satellite Business.

     “Related Business” means any Related Satellite Business and any business
relating to the worldwide acquisition, marketing, processing and sales of
remote imagery-based products and services.

     “Related Satellite Business” means any business relating to the design,
development, and operation of remote imaging satellites and the worldwide
marketing and sales of satellite-based remote imagery-based products and
services.

     “Reorganization Case” means the case of the Company pursuant to chapter 11
of the Bankruptcy Code pending in the Bankruptcy Court.

     “Replacement Satellite” means any satellite constructed to replace the
OrbView-3 satellite in the event of a failure of the OrbView-3 satellite.

     “Representative” means the indenture trustee, if applicable, or other
trustee, agent or representative for any Senior Secured Indebtedness.

14

 

     “Requirement of Law” means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of
such Person, and all federal, state and local laws, rules and regulations, and
all orders, judgments, decrees or other determinations of any Governmental
Authority or arbitrator, applicable to or binding upon such Person or any of
its property or to which such Person or any of its property is subject.

     “Restricted Investment” means an Investment other than a Permitted
Investment.

     “Restricted Payment” means: (i) the declaration or payment of any dividend
or any distribution on account of the Equity Interests of the Company
(including, without limitation, any payment in connection with any merger or
consolidation involving the Company or any of its Restricted Subsidiaries),
other than dividends or distributions declared or payable (x) in Equity
Interests (other than Disqualified Stock) of the Company or any of its
Restricted Subsidiaries or (y) to the Company or any Wholly Owned Restricted
Subsidiary of the Company; (ii) the purchase, redemption, defeasance,
retirement for value or other acquisition or return for value of any Equity
Interests of the Company other than any such Equity Interests owned by the
Company or any Wholly Owned Restricted Subsidiary of the Company; (iii) any
principal payment on (except at maturity), or any unscheduled payment or
interest on, or purchase, redemption, defeasance or other acquisition or
retirement for value of any Indebtedness that is subordinated (whether pursuant
to its terms, by operation of law, structurally or otherwise) to the Notes,
including trade payables, which shall be paid only in accordance with customary
business practices; or (iv) any Restricted Investment.

     “Restricted Subsidiary” of a Person means any Subsidiary of such Person
that is not an Unrestricted Subsidiary.

     “S&P” means Standard & Poor’s Ratings Services, or its successors.

     “Sale and Leaseback Transaction” means any direct or indirect arrangement
pursuant to which any property (other than Capital Stock) or assets is sold or
transferred by a Person or a Subsidiary and is thereafter leased back from the
purchaser or transferee thereof by such Person or one or more of its
Subsidiaries.

     “Securities Act” means the Securities Act of 1933, as amended (or any
successor act) and the rules and regulations thereunder.

     “Senior Secured Indebtedness” means any Indebtedness (other than
Disqualified Stock or Preferred Stock) of the Company permitted to be incurred
under Section 5.12 of this Agreement or (i) that ranks senior in right of
payment to the Notes and (ii) that is secured by any assets or property of the
Company or any Restricted Subsidiary.

     “Senior Subordinated Notes” mean the unsecured notes due 2008 issued by
the Company with an aggregate principal amount of $54,000,000 governed by the
indenture between the Company, and HSBC Bank USA,
as trustee dated as of December 31, 2003.

15

 

     “Significant Subsidiary” means any Subsidiary that would be a “significant
subsidiary” as defined in Article I, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date
hereof.

     “Stated Maturity” means, when used with respect to any Note, June 30,
2008.

     “Subsidiary” means, with respect to any Person:

          (i) any corporation, association or other business entity of which more
than 50% of the total voting power of shares of Capital Stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries
of such Person (or a combination thereof); and

          (ii) any partnership (a) the sole general partner or the managing general
partner of which is such Person or a Subsidiary of such Person or (b) the only
general partners of which are such Person or one or more Subsidiaries of such
Person (or any combination thereof).

     “Subsidiary Guarantee” means, the Guarantee by each Guarantor of the
Company’s payment obligations under this Agreement and the Notes, executed
pursuant to the terms of this Agreement and in the form attached hereto as
Exhibit B.

     “Trademarks” means (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos and other source or business identifiers, and all goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof; and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, and all common-law
rights related thereto, and (b) the right to obtain all renewals thereof.

     “Trademark License” means any agreement, whether written or oral,
providing for the grant by or to the Company of any right to use any Trademark.

     “UCC” means, with respect to the validity and perfection and the effect of
perfection or non-perfection of the security interest, the Uniform Commercial
Code as in effect on the date hereof in the State of New York.

     “Unrestricted Cash” means cash or Cash Equivalents as set forth on the
balance sheet of the Company prepared in accordance with GAAP as of 5:00 p.m.
on the last day of the applicable fiscal period minus, without duplication, the
sum of cash or Cash Equivalents equal to (i) for fiscal periods up to and
including the fiscal period ending December 31, 2004, $15,000,000, and for all
fiscal periods thereafter, $10,000,000, (ii) amounts required to be shown as
restricted cash or Cash Equivalents in accordance with GAAP on such balance
sheet (or the notes thereto) and (iii) amounts required to be paid prior to or
at the end of the applicable fiscal period pursuant to any outstanding checks,
commercial paper or other instruments issued by the Company through the last
day of the applicable fiscal period.

16

 

     “Unrestricted Subsidiary” means:

          (i) any Subsidiary of the Company that is designated after the Issue Date
as an Unrestricted Subsidiary as permitted or required pursuant to Section 5.20
hereof and is not thereafter redesignated as a Restricted Subsidiary as
permitted pursuant thereto; and

          (ii) any Subsidiary of an Unrestricted Subsidiary.

     “Voting Equity Interests” means the Equity Interest in a corporation or
other Person with voting power under ordinary circumstances entitling the
holders thereof to elect or appoint the board of directors, executive committee
or other governing body of such Person, whether at all times or only so long as
no senior class of securities has such voting power by reason of any
contingency.

     “Wholly Owned Restricted Subsidiary” of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors’ qualifying shares) shall at
the time be owned by such Person and/or one or more other Wholly Owned
Restricted Subsidiaries of such Person.

     Section 1.2 Rules of Construction.

     For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:

               (a) the terms defined in this Article have the meanings assigned to them
in this Article and, where appropriate, words of the masculine gender shall
mean and include correlative words of the feminine and neutral genders and
where applicable words in the singular shall mean and include the plural, and
vice versa;

               (b) accounting terms used herein and not otherwise defined have the
meanings ascribed to them in accordance with GAAP;

               (c) the words “herein”, “hereof” and “hereunder” and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;

               (d) Articles and Sections referred to by number shall mean the
corresponding Articles and Sections of this Agreement;

               (e) any headings preceding the texts of the several Articles and Sections
of this Agreement, shall be solely for convenience of reference, and shall not
constitute a part of this Agreement, nor shall they affect its meaning,
construction or effect; and

               (f) any reference to a statute shall be construed to include any statutory
provision consolidating, amending or replacing the statute referred to.

17

 

ARTICLE II.

THE NOTES

     Section 2.1 Form and Dating.

               (a) General Form of Notes. The Notes shall be substantially in the form
of Exhibit A hereto, which Exhibit is part of this Agreement. The Notes may
have notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of this Agreement. The Notes shall
be issued only in registered form without coupons and only in minimum
denominations of $1,000 and integral multiples thereof. The terms and
provisions contained in the Notes shall constitute, and are hereby expressly
made, a part of this Agreement and the Company and the Holders, by their
execution and delivery of this Agreement, expressly agree to such terms and
provisions and to be bound thereby. However, to the extent any provision of
any Note conflicts with the express provisions of this Agreement, the
provisions of this Agreement shall govern and be controlling.

     Section 2.2 Execution.

     A duly authorized Officer of the Company shall sign the Notes for the
Company by manual or facsimile signature.

     Section 2.3 Registration of Note; Paying Agent.

     The Company shall keep at its principal executive office a register (the
“Note Register”) for the registration and registration of transfers of Notes.
The name and address of each Holder, each transfer of Notes and the name and
address of a transferee of one or more Notes shall be registered in the Note
Register. Prior to due presentment for registration of transfer, the Person in
whose name any Note shall be registered shall be deemed and treated as the
owner and holder thereof for all purposes hereof and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall act
initially as Registrar and Paying Agent for the Notes. The Company may also
from time to time appoint one or more co-registrars and one or more additional
paying agents. The term “Registrar” includes any co-registrar and the term
“Paying Agent” includes any additional paying agent. The Company may change
any Paying Agent or Registrar upon notice to each Holder and the Collateral
Agent.

     Section 2.4 Transfer and Exchange.

     Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a
surrender for registration of transfer, duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered holder of such
Note or its attorney duly authorized in writing and accompanied by the address
for notices of each transferee of such Note or part thereof), the Company shall
execute and deliver, at the Company’s expense (except as provided below), one
of more new Notes (as requested by the Holder thereof) in exchange therefore,
in an aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
Holder may request and shall be substantially in the form of Notes being
surrendered as
set forth in Exhibit A. Each such new Note shall be dated and bear interest
from the date to which interest shall have been paid on the surrendered Note or
dated the date of the surrendered

18

 

Note if no interest shall have been paid
thereon. No service charge shall be made for any registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
stamp tax or governmental charge imposed in respect of any such transfer of
Notes. No individual Note shall be transferred in denominations of less than
the entire face amount of such Note.

     Section 2.5 Replacement of Notes.

     Upon receipt by the Company of evidence reasonably satisfactory to it of
the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an institutional investor, notice from
such institutional investor of such ownership and such loss, theft, destruction
or mutilation), and

               (a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it, or

               (b) in the case of mutilation, upon surrender and cancellation thereof,

the Company at its own expense shall execute and deliver, in lieu thereof, a
new Note, dated and bearing interest from the date to which interest shall have
been paid on such lost, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.

     Section 2.6 Persons Deemed Owners.

     Prior to due presentment for the registration of a transfer of any Note,
the Company and any of its agents shall deem and treat the Person in whose name
any Note is registered as the absolute owner of such Note for all purposes
(including the purpose of receiving payment of principal of and interest on
such Notes; provided that defaulted interest shall be paid as set forth in
Section 4.1), and neither the Company nor any of its agents shall be affected
by notice to the contrary.

ARTICLE III.

REDEMPTION AND PREPAYMENT

     Section 3.1 Notices to Holders.

     If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.6 or is required to redeem Notes pursuant to Section
3.7, the Company shall furnish to each Holder, at least 30 days but not more
than 60 days before an optional redemption date pursuant to Section 3.6 or at
least five days but not more than ten days before a mandatory redemption date
pursuant to Section 3.7, an Officers’ Certificate setting forth (i) that the
redemption is an optional redemption pursuant to Section 3.6 or a mandatory
redemption
pursuant to Section 3.7, (ii) the redemption date, (iii) the principal
amount of Notes to be

19

 

redeemed, (iv) the redemption price and (v) in a
mandatory redemption pursuant to Section 3.7(a), the amount of Unrestricted
Cash of the Company for the applicable fiscal period.

     Section 3.2 Selection of Notes to Be Redeemed or Repurchased.

     Any payments made pursuant to this Article III shall be applied first to
unpaid charges or fees relating to the Notes, second to the accrued and unpaid
interest on the Notes, and third to redeem Notes at a price equal to 100% of
their principal amount.

     If less than all of the Notes are to be redeemed or purchased in an offer
to purchase at any time, the Company shall select the portions of Notes to be
redeemed or purchased among the Holders pro rata in accordance with the
outstanding principal amount of the Notes outstanding immediately prior to such
redemption or purchase. Notes and portions of Notes selected to be redeemed may
be in whole dollar amounts of less than $1,000. Provisions of this Agreement
that apply to Notes called for redemption also apply to portions of Notes
called for redemption.

     Section 3.3 Notice of Redemption.

     Subject to the provisions of Sections 3.6 and 3.7 hereof, at least 30 days
but not more than 60 days before an optional redemption date pursuant to
Section 3.6 or at least five days but not more than ten days before a mandatory
redemption date pursuant to Section 3.7, the Company shall mail or cause to be
mailed, by first class mail, a notice of redemption to each Holder at its
registered address.

     The notice shall identify the Notes to be redeemed and shall state:

          (i) the redemption date;

          (ii) the redemption price;

          (iii) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the redemption date upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion shall be issued upon cancellation of the original Note;

          (iv) the address to which the Notes are to be surrendered for redemption;

          (v) that Notes called for redemption must be surrendered to the Company to
collect the redemption price;

          (vi) that, unless the Company defaults in making such redemption payment,
interest on Notes (or a portion thereof) called for redemption ceases to accrue
on and after the redemption date; and

          (vii) the paragraph of the Notes and/or Section of this Agreement pursuant
to which the Notes called for redemption are being redeemed.

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     Section 3.4 Effect of Notice of Redemption.

     Once a notice of redemption is mailed in accordance with Section 3.3
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. Upon surrender, such Notes shall be
paid at the redemption price plus accrued and unpaid interest thereon to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the related Interest Payment Date). A
notice of redemption may not be conditional. Failure to give notice or any
defect in the notice to any Holder shall not affect the validity of the notice
to any other Holder.

     Section 3.5 Notes Redeemed in Part.

     Upon surrender of a Note that is redeemed in part, the Company shall issue
a new Note equal in principal amount to the unredeemed portion of the Note
surrendered.

     Section 3.6 Optional Redemption.

          (i) The Company may, at its option at any time after the Issue Date,
redeem the Notes, in whole or in part, on at least 30 days’ but not more than
60 days’ notice to each Holder in cash at its registered address, at a
redemption price equal to 100% of the principal amount thereof plus accrued and
unpaid interest thereon to the redemption date.

          (ii) Any redemption pursuant to this Section 3.6 shall be made pursuant to
the provisions of Section 3.1 through 3.5 hereof.

     Section 3.7 Mandatory Redemption.

               (a) The Company shall be required to make mandatory redemptions of the
Notes on or before the 10th day after the end of each six-month period ending
on June 30 and December 31 of each year. The Company will redeem the maximum
principal amount of Notes that may be purchased out of the Unrestricted Cash as
of the end of the immediately preceding six-month period. Any such mandatory
redemption shall be made on at least five days’ but not more than 10 days’
notice to each Holder in cash at its registered address, at a redemption price
equal to 100% of the principal amount thereof plus accrued and unpaid interest
thereon to the redemption date.

               (b) The Company shall be required to make mandatory redemptions of the
Notes out of all of the proceeds of any payments made under the Initial
Insurance Policy or the Continuing Insurance Policy. Any such mandatory
redemption shall be made on at least five days’ but not more than 30 days’
notice to each Holder in cash at its registered address, at a redemption price
equal to 100% of the principal amount thereof plus accrued and unpaid interest
thereon to the redemption date.

               (c) Any redemption pursuant to this Section 3.7 shall be made pursuant to
the provisions of Section 3.1 through 3.5 hereof.

21

 

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES.

The Company represents and warrants to the Holders that:

     Section 4.1 Corporate Existence

          The Company is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and is duly
qualified or licensed in each jurisdiction in which its ownership of properties
or the conduct of its business requires such qualification or licensing except
for failures to be so qualified or licensed which in the aggregate would not
reasonably be expected to have a Material Adverse Effect. The Company has all
corporate power and authority and the legal right to own, pledge, mortgage and
operate its properties, to lease the property it operates under lease and to
conduct its business as now or currently proposed to be conducted, to execute
and deliver this Agreement and the Notes and to perform the provisions hereof
and thereof. The Company is in compliance with its certificate of
incorporation and by-laws.

     Section 4.2 Corporate Power: Authorization: Enforceable Obligations.

     The execution, delivery and performance of this Agreement and the issuance
of the Notes are within the corporate powers of the Company, have been duly
authorized by all necessary corporate action on the part of the Company, and
this Agreement constitutes, and upon execution and delivery thereof each Note
will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and (ii) general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law). Except as set forth on Schedule 4.2, the execution, delivery and
performance of this Agreement and the issuance of the Notes do not and will not
(A) contravene the certificate of incorporation or by-laws of the Company, (B)
violate any applicable or enforceable Requirement of Law, or any applicable or
enforceable order or decree of any Governmental Authority or arbitrator, (C)
result in the breach of, or constitute a default under, or result in or permit
the termination or acceleration of, any Contractual Obligation of the Company
or (D) result in the creation or imposition of any Lien upon any of its
properties other than Liens permitted under this Agreement; and do not require
the consent of, authorization by, approval of, notice to, acts by or filing or
registration with, any Governmental Authority or any other Person, except as
otherwise ordered by the Bankruptcy Court or required by the Bankruptcy Code or
the Bankruptcy Rules. Except as set forth on Schedule 4.2, the Company
possesses all licenses, certificates, permits and other authorizations issued
by the appropriate Governmental Authority necessary to conduct its business,
except such as would not have a Material Adverse Effect; and the Company has
not received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which,
individually or in the aggregate, could likely result in an unfavorable
decision, ruling or finding or that could reasonably likely have a Material
Adverse Effect.

22

 

     Section 4.3 Ownership of Shares of Subsidiaries.

The Company has no Subsidiaries and does not own any Equity Interests of another Person.

     Section 4.4 Financial Statements; Internal Controls.

               (a) The Company has delivered to each Holder copies of the financial
statements of the Company listed on Schedule 4.4. All of said financial
statements (including in each case the related schedules and notes) fairly
present in all Material respects the financial position of the Company as of
the respective dates specified in such Schedule and the results of its
operations and cash flows for the respective periods so specified and have been
prepared in accordance with GAAP consistently applied throughout the periods
involved except as set forth in the notes thereto (subject, in the case of any
interim financial statements, to normal year-end adjustments). Since the date
of the most recent financial statements provided pursuant to this clause, there
has been no material adverse change in the condition (financial or otherwise),
earnings, business or properties of the Company, taken as a whole, whether or
not arising from transactions in the ordinary course of business.

               (b) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed
in accordance with management’s general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.

     Section 4.5 Litigation; Observance of Agreements, Statutes and Orders.

          (i) Except as set forth on Schedule 4.5, there are no actions, suits or
proceedings pending or, to the knowledge of the Company, threatened against or
affecting the Company or any property of the Company in any court or before any
arbitrator of any kind or before or by any Governmental Authority that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

          (ii) Except as set forth on Schedule 4.5, the Company is not in default
under any term of any agreement or instrument to which it is a party or by
which it is bound, or any order, judgment, decree or ruling of any court,
arbitrator or Governmental Authority or is in violation of any applicable law,
ordinance, rule or regulation (including without limitation Environmental Laws)
of any Governmental Authority, which default or violation, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.

     Section 4.6 Taxes.

          Except as set forth on Schedule 4.6, the Company has filed all tax returns
that are required to have been filed in any jurisdiction, and has paid all
taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon it or its properties, assets, income or franchises, to
the extent such taxes and assessments have become due and

23

 

payable and before they have become delinquent, except for any taxes and
assessments (i) the amount of which is not individually or in the
aggregate Material or (ii) the amount, applicability or validity of
which is currently being contested in good faith by appropriate proceedings and
with respect to which the Company has established adequate reserves in
accordance with GAAP. The Company knows of no basis for any other tax or
assessment that could reasonably be expected to have a Material Adverse Effect.
The charges, accruals and reserves on the books of the Company in respect of
Federal, state or other taxes for all fiscal periods are adequate. The Federal
income tax liabilities of the Company have been determined by the Internal
Revenue Service and paid for all fiscal years up to and including the fiscal
year ended December 31, 2002. There are no stamp or other issuance or transfer
taxes or duties or other similar fees or charges required to be paid in
connection with the execution, delivery and performance of this Agreement by
the Company or the issuance, execution and delivery of the Notes pursuant to
this Agreement.

     Section 4.7 Intellectual Property.

               (a) Except as set forth on Schedule 4.7, the Company owns or licenses or
otherwise has the right to use all Intellectual Property that is necessary for
the operation of its business, without infringement upon or conflict with the
rights of any other Person with respect thereto, except where the failure to so
own or license or otherwise obtain the right to use, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect
or where any such infringement or conflict, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect. Except as
set forth on Schedule 4.7, to the knowledge of the Company, no slogan or other
advertising device, product, process, method, substance, part or component, or
other material now employed, or now contemplated to be employed, in the
ordinary course of business by the Company infringes upon or conflicts with any
rights owned by any other Person, except where any such infringement or
conflict, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect, and no Material claim or litigation regarding
any of the foregoing is pending or threatened.

               (b) Except as set forth on Schedule 4.7, the Company does not own any
Material Trademarks, Patents or Copyrights and does not have any Material
Trademarks, Patents or Copyrights registered in, or the subject of pending
applications in, the United States Patent and Trademark Office or any similar
office or agency in any other country or any political subdivision thereof. The
registrations for the Collateral disclosed on Schedule 4.7 are valid and
subsisting and in full force and effect to the extent they are necessary and
Material for the operation of the business of the Company in the reasonable
business judgment of the Company, except where the failure to maintain a valid
and subsisting registration with respect to such Trademarks, Patents or
Copyrights, individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect. None of the Material Patents or Copyrights
necessary for the operation of the business of the Company in the reasonable
business judgment of the Company have been abandoned or dedicated, except where
such abandonment or dedication, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.

24

 

     Section 4.8 Title to Property; Leases.

          Except as set forth on Schedule 4.8, the Company has good and sufficient
title to or otherwise has the right to use its properties that individually or
in the aggregate are Material, including all such properties reflected in the
most recent audited balance sheet referred to in Section 4.4 or purported to
have been acquired by the Company after said date (except as sold or otherwise
disposed of in the ordinary course of business), in each case free and clear of
Liens prohibited by this Agreement. All leases that individually or in the
aggregate are Material are valid and subsisting and are in full force and
effect in all Material respects. Without limiting the foregoing, the Company
is the legal and beneficial owner of the Collateral. The Company has
sufficient rights in the Collateral to grant the Liens with respect thereto set
forth herein.

     Section 4.9 Existing Indebtedness; Future Liens.

               (a) Except for the Senior Secured Indebtedness, the Notes, the Senior
Subordinated Notes and the Indebtedness represented by trade creditors in the
ordinary course of business, the Company does not have any outstanding
Indebtedness. The Company is not in default and no waiver of default is
currently in effect, in the payment of any principal or interest on any
Indebtedness of the Company and no event or condition exists with respect to
any Indebtedness of the Company that would permit (or that with notice or the
lapse of time, or both, would permit) one or more Persons to cause such
Indebtedness to become due and payable before its Stated Maturity or before its
regularly scheduled dates of payment.

               (b) Except in respect of any Senior Secured Indebtedness and the Notes,
(a), the Company has not agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of its property, whether
now owned or hereafter acquired, to be subject to a Lien.

     Section 4.10 Status under Certain Statutes.

          The Company is not subject to regulation under the Investment Company Act
of 1940, as amended, the Public Utility Holding Company Act of 1935, as
amended, the Interstate Commerce Act, as amended, or the Federal Power Act, as
amended.

     Section 4.11 Insurance.

     There is in full force and effect one or more policies of insurance issued
by insurers of recognized responsibility, insuring the Company and its
properties and businesses against losses and risks as are customary in the case
of companies of established reputation engaged in the same or similar business
and similarly situated. The Company has not been refused any insurance
coverage sought or applied for, and the Company has no reason to believe that
it will be unable to renew its existing insurance coverage as and when the same
shall expire upon terms at least as favorable to those presently in effect,
other than possible increases in premiums that do not result from any act or
omission of the Company.

25

 

     Section 4.12 Environmental Matters.

               (a) The Company has no knowledge of any claim nor has it received any
notice of any claim, and no proceeding has been instituted raising any claim
against the Company or any of its real properties now or formerly owned, leased
or operated by any of them or other assets, alleging any damage to the
environment or violation of any Environmental Laws, except, in each case, such
as could not reasonably be expected to result in a Material Adverse Effect.

               (b) Except as set forth on Schedule 4.12, the Company has no knowledge of
any facts which would give rise to any claim, public or private, of violation
of Environmental Laws or damage to the environment emanating from, occurring on
or in any way related to real properties now or formerly owned, leased or
operated by any of them or to other assets or their use, except, in each case,
such as could not reasonably be expected to result in a Material Adverse
Effect.

               (c) The Company has not stored any Hazardous Materials on real properties
now or formerly owned, leased or operated by it and has not disposed of any
Hazardous Materials in a manner contrary to any Environmental Laws in each case
in any manner that could reasonably be expected to result in a Material Adverse
Effect.

               (d) All buildings on all real properties now owned, leased or operated by
the Company, are in compliance with applicable Environmental Laws, except where
failure to comply could not reasonably be expected to result in a Material
Adverse Effect.

     Section 4.13 Survival

     The representations and warranties contained herein shall survive until
the payment in full in cash of all Obligations due and owing under this
Agreement and the Notes.

ARTICLE V.

COVENANTS

     Section 5.1 Payment of Notes.

     Payments of principal and interest becoming due and payable on the Notes
shall be made no later than 10:00 a.m., New York City time on the day when due,
to each Holder at the address set forth in Section 12.1 or as otherwise
recorded in the Note Register. Upon written request of the Company made
concurrently with or reasonably promptly after payment or prepayment in full of
any Note, the Holder shall surrender its Note for cancellation, reasonably
promptly after any such request, to the Company at its principal executive
office. Prior to any sale or other disposition of any Note held by Holder,
such Holder will, at its election, either endorse thereon the amount of
principal paid thereon and the last date to which interest has been paid
thereon or surrender such Note to the Company in exchange for a new Note or
Notes pursuant to Section 2.4.

26

 

     The Company shall pay, to the extent such payments are lawful, interest on
overdue principal and on overdue installments of interest (without regard to
any applicable grace periods) from time to time on demand at the rate borne by
the Notes plus 2% per annum. Interest will be computed on the basis of a
360-day year comprised of twelve 30-day months.

     If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Holders in each case at the
rate provided in the Notes and in this Section 5.1. The Company shall notify
each Holder in writing of the amount of defaulted interest proposed to be paid
on each Note and the date of the proposed payment. The Company shall fix such
payment date. At least 15 days before the payment date, the Company shall mail
or cause to be mailed to each Holder a notice that states the payment date and
the amount of such defaulted interest to be paid.

     Notwithstanding anything to the contrary contained in this Agreement, the
Company may, to the extent it is required to do so by a Requirement of Law,
deduct or withhold income or other similar taxes imposed by the United States
of America from principal or interest payments hereunder.

     Section 5.2 Corporate Existence.

     Except as otherwise permitted by Articles V and VI, the Company shall do
or cause to be done, at its own cost and expense, all things necessary to
preserve and keep in full force and effect its corporate existence and the
corporate existence of each of its Subsidiaries (if any) in accordance with the
respective organizational documents of the Company and each such Subsidiary and
the material rights (charter and statutory) and franchises of the Company and
each such Subsidiary.

     Section 5.3 Access.

     The Company shall, at any reasonable time and from time to time, upon
prior reasonable notice, permit the Collateral Agent (a) to examine and make
copies of and abstracts from its records and books of account as they relate to
the Collateral, (b) reasonable access to visit its properties and inspect the
Collateral to the extent practicable, (c) to discuss its affairs, finances and
accounts with any Officer or director and (d) to communicate directly with its
independent certified public accountants. The Company shall keep proper books
of record and account, in which full and correct entries in all Material
respects shall be made of all of its financial transactions, assets and
business in conformity with GAAP and all Requirements of Law.

     Section 5.4 Payment of Taxes and Other Claims.

     The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon it or any of its Subsidiaries or
its properties or any of its Subsidiaries’ properties and (ii) all lawful
claims for labor, materials and supplies that, if unpaid, would by law become a
Lien upon its properties or any of its Subsidiaries’ properties; provided,
however, that the Company shall not

27

 

be required to pay or discharge or cause to be paid or discharged any such
tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith and by appropriate proceedings properly
instituted and diligently conducted and for which adequate reserves, to the
extent required under GAAP, have been taken.

     Section 5.5 Maintenance of Properties and Insurance.

               (a) The Company shall maintain its properties in good working order and
condition (subject to ordinary wear and tear) and make all reasonably necessary
repairs, renewals, replacements, additions and improvements required for it to
actively conduct and carry on its business. The Company shall do or cause to be
done, at its own cost and expense, all things necessary to preserve and keep in
full force and existence its Patents, Patent Licenses, Copyrights, Copyright
Licenses, Trademarks and Trademark Licenses, except in so far as failure to do
so could not reasonably be expected to result in a Material Adverse Effect.

               (b) The Company shall maintain insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the good faith
judgment of the Company, are adequate and appropriate for the conduct of the
business of the Company and its Subsidiaries in a prudent manner, with
reputable insurers or with the government of the United States of America or an
agency or instrumentality thereof, in such amounts, with such deductibles, and
by such methods as shall be customary, in the good faith judgment of the
Company, for companies similarly situated in the industry (provided that
insurance with respect to the OrbView Satellite shall be governed by clause (c)
below).

               (c) In addition to the foregoing, the Company shall obtain or maintain (as
applicable) in full force and effect insurance covering satellite Checkout and
on-orbit operations (the “Continuing Insurance Policy”) with respect to
the OrbView Satellite, at all times following the date the Initial Insurance
Policy terminates, for total coverage in the amount of the lesser of (x)
$50,000,000, (y) the maximum amount of coverage which the Company is able to
obtain at such time in the insurance market and (z) an amount equal to 70% of
the aggregate principal amount and accrued and unpaid interest of all Senior
Secured Indebtedness, Notes and Senior Subordinated Notes then outstanding.
Notwithstanding the foregoing, if the related premium to be paid by the Company
to obtain such coverage would exceed $3,000,000, then the total coverage shall
be the maximum amount of coverage which the Company can obtain at such time in
the insurance market by paying a premium of $3,000,000; provided, however, in
no event shall the total coverage be less than the amount of then outstanding
Senior Secured Indebtedness and Notes, including accrued and unpaid interest
thereon. Such insurance shall be payable in the event that the OrbView
Satellite fails to Checkout because it cannot be, or after Checkout it ceases
to be, used for commercial revenue producing service (provided that such
insurance may contain customary provisions for deductible payments and minimum
thresholds for satellite failure).

     Within 30 days following any date on which the Company is required to
obtain insurance pursuant to this clause (c), the Company will deliver to the
Collateral Agent, for so long as the Holders hold the security interest granted
pursuant to Article X, and thereafter, to each Holder, an insurance certificate
certifying the amount of insurance then carried, that the Collateral Agent (for
the benefit of the Holders) has been named loss payee thereunder, for so long
as the Holders

28

 

hold the security interest granted pursuant to Article X, and thereafter
that the Company shall be named loss payee, and that the insurance is in full
force and effect, and an Officers’ Certificate stating that such insurance,
together with any other insurance maintained by the Company, complies with this
Agreement. In addition, the Company will cause to be delivered to the
Collateral Agent, for so long as the Holders hold the security interest granted
pursuant to Article X, and thereafter, to each Holder, no less than once each
year an insurance certificate setting forth the amount of insurance then
carried, which insurance certificate shall entitle each Holder to (i) notice
of any claim under any such insurance policy; and (ii) at least 30 days’ notice
from the provider of such insurance prior to the cancellation of any such
insurance and an Officers’ Certificate that complies with the first sentence of
this paragraph.

     The Company shall not, directly or indirectly, amend, modify, cancel or
replace the Initial Insurance Policy or, if applicable, the Continuing
Insurance Policy, in any Material respect, without the consent of all of the
Holders for so long as the Holders hold the security interest in the Collateral
granted to the Holders herein.

     Section 5.6 Compliance Certificate; Notice of Default.

               (a) The Company shall deliver to the Collateral Agent, for so long as the
Holders hold the security interest granted pursuant to Article X, and
thereafter, to each Holder, within 90 days after the end of each of the
Company’s fiscal years, an Officers’ Certificate stating that a review of its
activities during the preceding fiscal year has been made under the supervision
of the signing officers with a view to determining whether it has kept,
observed, performed and fulfilled its obligations under this Agreement and
further stating, as to each such Officer signing such certificate, that to the
best of such officer’s knowledge, the Company during such preceding fiscal year
has kept, observed, performed and fulfilled each and every such covenant and no
Default or Event of Default occurred during such year and that, to each
Officer’s knowledge, at the date of such certificate there is no Default or
Event of Default that has occurred and is continuing or, if such signers do
know of such Default or Event of Default, the certificate shall describe the
Default or Event of Default and its status with particularity and that to the
best of his or her knowledge no event has occurred and remains in existence by
reason of which payments on account of the principal or interest, if any, on
the Notes is prohibited or if such event has occurred, a description of the
event and what action the Company is taking or proposes to take with respect
thereto.

               (b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the annual financial
statements delivered pursuant to Section 5.8 shall be accompanied by a written
report of the Company’s independent accountants (who shall be a firm of
established national reputation) that in conducting their audit of such
financial statements nothing has come to their attention that would lead them
to believe that the Company has violated any provisions of Article V, VI or VII
of this Agreement insofar as they relate to accounting matters or, if any such
violation has occurred, specifying the nature and period of existence thereof,
it being understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of any such
violation. In the event that such written report of the Company’s independent
accountants cannot be obtained, the Company shall deliver to the Collateral
Agent, for so long as the Holders hold the security

29

 

interest granted pursuant to Article X, and thereafter, to each Holder, an
Officers’ Certificate certifying that it has used its best efforts to obtain
such written report but was unable to do so.

               (c) If any Default or Event of Default has occurred and is continuing or
if any Holder seeks to exercise any remedy hereunder with respect to a claimed
Default under this Agreement or the Notes, the Company shall deliver to the
Collateral Agent, for so long as the Holders hold the security interest granted
pursuant to Article X, and thereafter, to each Holder, at its address set forth
in Section 12.1 hereof, by registered or certified mail or by telegram or
facsimile transmission followed by hard copy by registered or certified mail an
Officers’ Certificate specifying such event, notice or other action within five
Business Days of its becoming aware of such occurrence and what action the
Company is proposing to take with respect thereto. In addition, the Company
shall provide prompt written notice to the Collateral Agent, for so long as the
Holders hold the security interest granted pursuant to Article X, and
thereafter, to each Holder, of any Checkout Failure Event or any circumstances
which could reasonably lead to a Checkout Failure Event which in any event
shall be delivered not more than 24 hours after the Company discovers such
Checkout Failure Event or such circumstances which could reasonably lead to a
Checkout Failure Event.

     Section 5.7 Compliance with Laws.

     The Company shall, and shall cause each of its Subsidiaries to, comply
with all applicable Requirements of Law in respect of the conduct of its
businesses and the ownership of its properties. The Company shall notify the
Collateral Agent, for so long as the Holders hold the security interest granted
pursuant to Article X, and thereafter, to each Holder, in writing of any
violation of any Requirement of Law and which has or may have a Material
Adverse Effect.

     Section 5.8 Reports.

     Whether or not required by the rules and regulations of the Commission, so
long as any Notes are outstanding, the Company will furnish to each Holder
within the time periods specified in the Commission’s rules and regulation,
copies of:

          (i) all Forms 8-K, 10-Q and 10-K (including any amendments thereto) filed
with the Commission and, with respect to the annual information only, a report
thereon by the Company’s independent certified public accountants; and

          (ii) if the Company is not required to file such reports with the
Commission, all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q and 10-K
if the Company were required to file such Forms, including a “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” that
describes the financial condition and results of operations of the Company and
its Restricted Subsidiaries and, with respect to the annual information only, a
report thereon by the Company’s independent certified public accountants, and
all information that would be required to be filed with the Commission on Form
8-K if the Company were required to file such reports.

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     Section 5.9 Waiver of Stay, Extension or Usury Laws.

     The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law,
wherever enacted, now or at any time hereafter in force, or which may affect
the covenants or the performance of this Agreement; and (to the extent that it
may lawfully do so) the Company hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Holders, but will
suffer and permit the execution of every such power as though no such law had
been enacted.

     Section 5.10 Limitation on Restricted Payments.

     The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, make any Restricted Payment.

     Section 5.11 Limitation on Transactions with Affiliates.

               (a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, sell, lease transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make any contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate (each of the foregoing, an
“Affiliate Transaction”), unless:

                    (i) such Affiliate Transaction is on terms that are no less favorable to
the Company or such Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person; and

                    (ii) the Company delivers to the Collateral Agent, for so long as the
Holders hold the security interest granted pursuant to Article X, and
thereafter, to each Holder: (a) with respect to any Affiliate Transaction
involving aggregate consideration in excess of $2.5 million, (x) a
determination by the disinterested members of the Board of Directors of the
Company made in good faith (evidenced by a resolution approved by at least a
majority of the disinterested members of the Board of Directors of the Company
and set forth in an Officers’ Certificate delivered to the Collateral Agent,
for so long as the Holders hold the security interest granted pursuant to
Article X, and thereafter, to each Holder) or (y) an opinion as to the fairness
of such Affiliate Transaction to the Company or Restricted Subsidiary of the
Company involved in such Affiliate Transaction from a financial point of view
issued by an Independent Financial Advisor or, with respect to development,
launch and operations of satellites and remote imaging-related matters, a
nationally recognized expert in the respective applicable industry; and (b)
with respect to any Affiliate Transaction involving aggregate consideration in
excess of $10 million, an opinion as to the fairness of such Affiliate
Transaction to the Company or Restricted Subsidiary of the Company involved in
such Affiliate Transaction from a financial point of view issued by an
Independent Financial Advisor or, with respect to development, launch and
operations of satellites and remote imaging-related matters, a nationally
recognized expert in the respective applicable industry.

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               (b) The following shall not be deemed Affiliate Transactions:

                    (i) any employment agreement, stock option or stock purchase agreement
entered into by the Company or any of its Restricted Subsidiaries with any of
their respective employees in the ordinary course of business and approved by
the Board of Directors of the Company;

                    (ii) transactions between or among the Company and/or the Guarantors;

                    (iii) Permitted Investments of a type referred to in clauses (i), (iii)
and (iv) of the definition of Permitted Investments;

                    (iv) the sale of common Equity Interests (other than Disqualified Stock)
of the Company for cash to an Affiliate of the Company;

                    (v) transactions pursuant to agreements entered into with resellers (other
than any such reseller that is an Affiliate of any Person (other than the
Company or any of its Subsidiaries) who owns, directly or indirectly, 5% or
more of the Voting Equity Interests of any of the Company or its Subsidiaries
or possesses, directly or indirectly, the power to direct or cause the
direction of the management or policies of the Company or any of its
Subsidiaries, whether by agreement or otherwise) of the Company’s products and
services on terms no less favorable to the Company, in the aggregate taking the
totality of the circumstances into consideration, than the Company’s standard
agreements entered into with such parties in the ordinary course of business;

                    (vi) payment of reasonable directors fees to Persons who are not otherwise
Affiliates of the Company; and

                    (vii) the sale of securities (other than common Equity Interests) of the
Company for cash to an Affiliate of the Company; provided that: (A) an amount
of such securities at least equal to the amount sold to such Affiliate have
been or are being sold substantially simultaneously to Persons that are not
Affiliates of the Company; (B) the price per security paid by such Affiliate is
no less than the price paid by such non-Affiliates; and (C) the Company shall
not have entered into any other arrangement with such non-Affiliates to induce
such non-Affiliates to purchase such securities.

     Section 5.12 Limitation on Incurrence of Indebtedness or Issuance of
Disqualified Stock.

               The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guaranty
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, “incur”) any Indebtedness (including Acquired
Debt) or any Disqualified Stock except:

               (a) Senior Secured Indebtedness not to exceed $15,000,000 in aggregate
principal amount at any one time outstanding;

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               (b) Indebtedness represented by the Notes and this Agreement;

               (c) Indebtedness represented by Senior Subordinated Notes;

               (d) Indebtedness under (A) Hedging Obligations, provided that (1) the
notional principal amount of any interest rate protection agreement does not
significantly exceed the principal amount of payments due with respect to the
Indebtedness being hedged thereby and (2) any agreements related to
fluctuations in currency rates do not increase the outstanding Indebtedness
other than as a result of fluctuations in foreign currency exchange rates, and
(B) performance, surety and workers’ compensation bonds or other obligations of
a like nature incurred in the ordinary course of business;

               (e) Indebtedness of any Unrestricted Subsidiary of the Company that is
Non-Recourse Debt; provided that if any such Indebtedness ceases to be
Non-Recourse Debt of an Unrestricted Subsidiary such event shall be deemed to
constitute an incurrence of Indebtedness by a Restricted Subsidiary;

               (f) Indebtedness owed to and held by the Company or any Guarantors (the
Indebtedness incurred pursuant to this clause (f) being hereafter referred to
as “Intercompany Indebtedness”); provided that an incurrence of Indebtedness
shall be deemed to have occurred upon (x) any sale or other disposition of
Intercompany Indebtedness to a Person other than the Company or any Guarantors,
(y) any sale or other disposition of Equity Interests of the Company’s
Restricted Subsidiaries which holds Intercompany Indebtedness such that such
Restricted Subsidiary ceases to be a Restricted Subsidiary after such sale or
other disposition or (z) designation of a Restricted Subsidiary as an
Unrestricted Subsidiary;

               (g) Indebtedness of the Company or any of its Restricted Subsidiaries that
is Non-Recourse Debt to finance purchase money obligations;

               (h) Indebtedness of the Company or any of its Restricted Subsidiaries
(“Permitted Refinancing Indebtedness”) incurred to refinance, replace or
refund Indebtedness (“Refinanced Indebtedness”) incurred pursuant to
clauses (a) and (b), of this Section 5.12; provided that: (x) the aggregate
principal amount of such Permitted Refinancing Indebtedness does not exceed the
aggregate principal amount of the Refinanced Indebtedness (including accrued
and unpaid interest thereon and the amount of all expenses, discounts and
premiums incurred in connection therewith); and (y) the Permitted Refinanced
Indebtedness is on terms at least as favorable to the Holders as those
contained in the documentation governing the Refinanced Indebtedness;

               (i) Capital Lease Obligations in an aggregate amount for all such Persons
not to exceed $5 million at any one time outstanding; and

               (j) the incurrence by the Company or any of its Restricted Subsidiaries of
Indebtedness, in addition to that described in clauses (b) through (i) of this
Section 5.12, so long as the aggregate principal amount of all such
Indebtedness, together with any Senior Secured Indebtedness permitted to be
incurred pursuant to clause (a) shall not exceed $15 million outstanding at any
one time in the aggregate.

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     Section 5.13 Dividend and Other Payment Restrictions Affecting
Subsidiaries.

               (a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to:

                    (i) pay dividends or make any other distributions to the Company or any of
its Restricted Subsidiaries on its Capital Stock or with respect to any other
interest or participation in, or measured by, its profits;

                    (ii) pay any Indebtedness owed to the Company or any of its Restricted
Subsidiaries;

                    (iii) make loans or advances to the Company or any of its Restricted
Subsidiaries; or

                    (iv) transfer any of its properties or assets to the Company or any of its
Restricted Subsidiaries.

               (b) The restrictions set forth in clause (a) above shall not apply to
encumbrances or restrictions existing under or by reason of:

                    (i) this Agreement and the Notes;

                    (ii) Senior Secured Indebtedness;

                    (iii) applicable law;

                    (iv) any instrument governing Indebtedness or Capital Stock of a Person
acquired by the Company or any of its Restricted Subsidiaries as in effect at
the time of such acquisition (except to the extent such Indebtedness was
incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the properties
or assets of any Person, other than the Person, or the property or assets of
the Person, so acquired;

                    (v) customary non-assignment provisions in leases or other agreements
entered into in the ordinary course of business;

                    (vi) purchase money obligations for property acquired in the ordinary
course of business and consistent with industry practice that impose
restrictions of the nature described in clause (iii) above on the property so
acquired;

                    (vii) Permitted Refinancing Indebtedness; provided that the restrictions
contained in the agreements governing such Permitted Refinancing Indebtedness
are no more restrictive than those contained in the agreements governing the
Refinanced Indebtedness;

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                    (viii) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business;

                    (ix) restrictions relating to Permitted Liens that limit the right of the
debtor to transfer the asset or assets subject to such Permitted Lien; or

                    (x) in the case of clauses (i), (ii), (iv), (v), (vi), (vii), and (viii)
above, any amendments, modifications, restatements, renewals, increases,
supplements, modifications, restatements or refinancings thereof, provided that
such amendments, modifications, restatements or refinancings are not more
restrictive with respect to such dividend and other payment restrictions than
those contained in such instruments as in effect on the date of their
incurrence.

     Section 5.14 Limitation on Change of Control.

               (a) Upon the occurrence of a Change of Control, each Holder shall have the
right to require the Company to repurchase all or any part (equal to $1,000 or
an integral multiple thereof) of such Holder’s Notes pursuant to the offer
described below (the “Change of Control Offer”) at an offer price in
cash equal to 100% of the aggregate principal amount thereof, plus accrued and
unpaid interest thereon to the date of purchase (the “Change of Control
Payment”).

               (b) Within ten days following the date on which any Change of Control
occurs (the “Change of Control Date”), the Company shall send, by first
class mail, a notice to each Holder at its last registered address which notice
shall govern the terms of the Change of Control Offer. The notice to each
Holder shall contain all instructions and materials necessary to enable such
Holders to tender Notes pursuant to the Change of Control Offer. The notice
shall state:

                    (i) that the Change of Control Offer is being made pursuant to this
Section 5.14 and that all Notes tendered and not withdrawn shall be accepted
for payment;

                    (ii) the purchase price (including the amount of accrued interest) and the
purchase date (which shall be no earlier than 30 days nor later than 40 days
from the date such notice is mailed, other than as may be required by law) (the
“Change of Control Payment Date”);

                    (iii) that any Note not tendered will continue to accrue interest;

                    (iv) that, unless the Company defaults in making payment therefore, any
Note accepted for payment pursuant to the Change of Control Offer shall cease
to accrue interest after the Change of Control Payment Date;

                    (v) that Holders electing to have a Note purchased pursuant to a Change of
Control Offer will be required to surrender the Note, with the form entitled
“Option of Holder to Elect Purchase” on the reverse of the Note completed, to
the Paying Agent at the address specified in the notice prior to the close of
business on the third Business Day prior to the Change of Control Payment Date;

35

 

                    (vi) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than five Business Days prior to the Change of
Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Notes the
Holder delivered for purchase and a statement that such Holder is withdrawing
such Holder’s election to have such Notes purchased;

                    (vii) that Holders whose Notes are purchased only in part will be issued
new Notes in a principal amount equal to the unpurchased portion of the Notes
surrendered; provided that each Note purchased and each new Note issued shall
be in an original principal amount of $1,000 or integral multiples thereof; and

                    (viii) the circumstances and relevant facts regarding such Change of
Control.

               (c) On or before the Change of Control Payment Date, the Company shall, to
the extent lawful: (i) accept for payment all Notes or portions thereof
tendered pursuant to the Change of Control Offer; and (ii) deposit an amount
equal to the Change of Control Payment in respect of all Notes or portions
thereof so tendered into a segregated account for such purpose. The Company
shall promptly mail to each Holder the Change of Control Payment for such
Notes, and to each Holder a new Note equal in principal amount to any
unpurchased portion of the Note surrendered; provided that each such new Note
will be in a principal amount of $1,000 or an integral multiple thereof. Any
Notes not so accepted shall be promptly mailed by the Company to the Holder
thereof.

               (d) The Company will not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the time and otherwise in compliance with the requirements set
forth in this Agreement applicable to a Change of Control Offer made by the
Company and purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer.

     Section 5.15 Limitation on Sales of Assets and Subsidiary Interests.

               (a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to consummate an Asset Sale unless:

                    (i) the Company or such Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the
Fair Market Value of the assets sold or otherwise disposed of;

                    (ii) at least 75% of the consideration received in the Asset Sale by the
Company or such Restricted Subsidiary, as the case may be, consists of (a) cash
or Cash Equivalents or (b) the assumption of Indebtedness (other than
Indebtedness that is subordinated) of the Company or such Restricted Subsidiary
and the release of the Company and the Restricted Subsidiaries, as applicable,
from all liability on the Indebtedness assumed; and

                    (iii) the aggregate Fair Market Value of all non-Cash Consideration
received therefore by the Company or such Restricted Subsidiary, as the case
may be, when aggregated with the Fair Market Value of all other non-Cash
Consideration received by

36

 

the Company and its Restricted Subsidiaries from all other Asset Sales
since the Issue Date that has not yet been converted into cash or Cash
Equivalents (in either case, in U.S. dollars or freely convertible into U.S.
dollars), does not exceed (without duplication) 5% of the aggregate
Consolidated Tangible Net Assets of the Company at the time of such Asset Sale;
provided, however, that any securities, notes or similar obligations received
by any of the Company or such Restricted Subsidiaries from such transferees
that are contemporaneously (subject to ordinary settlement periods) converted
by the Company or such Restricted Subsidiaries into cash, shall be deemed to be
cash (to the extent of the net cash received) for purposes of clauses (ii) and
(iii).

     Within 270 days after the receipt of any Net Proceeds from an Asset Sale,
the Company may apply such Net Proceeds to: (i) make Capital Expenditures
permitted by Section 5.21 hereof, and (ii) repay Senior Secured Indebtedness.
Pending the final application of any such Net Proceeds, the Company may
temporarily invest such Net Proceeds in any manner that is not prohibited by
this Agreement. Any Net Proceeds from an Asset Sale that are not applied or
invested as provided in the first sentence of this paragraph will be deemed to
constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds
exceeds $7.5 million (the “Asset Sale Offer Trigger Date”), the Company will be
required to make an offer to all Holders of Notes (an “Asset Sale Offer”) to
purchase on a date not less than 30 nor more than 45 days following the Asset
Sale Offer Trigger Date the maximum principal amount of Notes that may be
purchased out of the Excess Proceeds (and not solely the amount in excess of
$7.5 million), at an offer price in cash in an amount equal to 100% of the
principal amount thereof, plus accrued and unpaid interest thereon to the date
of purchase, in accordance with the procedures set forth in clause (b) below.
To the extent that the aggregate amount of Notes tendered pursuant to an Asset
Sale Offer is less than the Excess Proceeds, the Company may use any remaining
Excess Proceeds for general business purposes. If the aggregate amount of Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Holders will select the Notes to be purchased on a pro rata basis in accordance
with the procedures set forth in Section 3.4.

     Upon completion of such offer to purchase, the amount of Excess Proceeds
will be reset at zero. The Asset Sale Offer shall remain open for a period of
20 Business Days or such longer period as may be required by law.

     If the Purchase Date is on or after a Record Date and on or before the
related Interest Payment Date, any accrued and unpaid interest shall be paid to
the Person in whose name a Note is registered at the close of business on such
Record Date, and no additional interest shall be payable to Holders who tender
Notes pursuant to the Asset Sale Offer.

               (b) Each notice of an Asset Sale Offer pursuant to this Section 5.15 shall
be mailed or caused to be mailed, by first class mail, by the Company not more
than 25 days after the Asset Sale Offer Trigger Date to each Holder at its last
registered addresses determined as of a date within 15 days of the mailing of
such notice. The notice shall contain all instructions and materials necessary
to enable such Holders to tender Notes pursuant to the Asset Sale Offer and
shall state the following terms:

                    (i) that the Asset Sale Offer is being made pursuant to Section 5.15 and
that all Notes tendered will be accepted for payment; provided, however, that
if the aggregate principal amount of Notes tendered in an Asset Sale Offer plus
accrued interest at the

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expiration of such offer exceeds the aggregate amount of the Excess
Proceeds, the Holders shall select the Notes to be purchased on a pro rata
basis (with such adjustments as may be deemed appropriate by the Holders so
that only Notes in denominations of $1,000 or multiples thereof shall be
purchased);

                    (ii) the purchase price (including the amount of accrued interest) and the
purchase date (which shall be 20 Business Days from the date of mailing of
notice of such Asset Sale Offer, or such longer period as required by law) (the
“Proceeds Purchase Date”);

                    (iii) that any Note not tendered will continue to accrue interest;

                    (iv) that, unless the Company defaults in making payment therefore, any
Note accepted for payment pursuant to the Asset Sale Offer shall cease to
accrue interest after the Proceeds Purchase Date;

                    (v) that Holders electing to have a Note purchased pursuant to an Asset
Sale Offer will be required to surrender the Note, with the form entitled
“Option of Holder to Elect Purchase” on the reverse of the Note completed, to
the Paying Agent at the address specified in the notice prior to the close of
business on the third Business Day prior to the Proceeds Purchase Date;

                    (vi) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than five Business Days prior to the Proceeds
Purchase Date, a telegram, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Notes the Holder delivered for
purchase and a statement that such Holder is withdrawing such Holder’s election
to have such Note purchased; and

                    (vii) that Holders whose Notes are purchased only in part will be issued
new Notes in a principal amount equal to the unpurchased portion of the Notes
surrendered; provided that each Note purchased and each new Note issued shall
be in an original principal amount of $1,000 or integral multiples thereof.

     On or before the Proceeds Purchase Date, the Company shall, to the extent
lawful, (i) accept for payment Notes or portions thereof tendered pursuant to
the Asset Sale Offer which are to be purchased in accordance with this Section
5.15, (ii) deposit an amount sufficient to pay the purchase price plus accrued
interest of all Notes to be purchased into a segregated account for such
purpose and (iii) deliver to each Holder Notes so accepted together with an
Officers’ Certificate stating the Notes or portions thereof being purchased by
the Company. The Company shall promptly mail to each Holder of Notes so
accepted payment in an amount equal to the purchase price plus accrued
interest.

     Any amounts remaining after the purchase of Notes pursuant to an Asset
Sale Offer shall be returned to the Company’s general account.

               (c) The foregoing provisions shall not apply to the sale, lease,
conveyance or other disposition of all or substantially all of the assets of
the Company, which shall be governed by the provisions of Article VI.

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     Section 5.16 Limitation on Liens.

     The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien (other than a Permitted Lien) on any asset or property now owned
or hereafter acquired, or any income or profits therefrom, or assign or convey
any right to receive income therefrom.

     Section 5.17 Business Activities.

     The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in any business other than that which is related to the
design, development and operation of remote imaging satellites and the
worldwide marketing and sales of remote imagery-based products and services.

     Section 5.18 Limitations on Sale and Leaseback Transactions.

     The Company shall not, and shall not permit any Restricted Subsidiary of
the Company to, directly or indirectly, enter into any Sale and Leaseback
Transaction with respect to any property or assets (whether now owned or
hereafter acquired), unless (i) the gross cash proceeds of the Sale and
Leaseback Transaction are at least equal to the Fair Market Value of the
property that is the subject of the Sale and Leaseback Transaction; (ii) the
sale or transfer of such property or assets to be leased is treated as an Asset
Sale and complies with the covenants contained in Section 5.15 hereof; and
(iii) the Company or such Restricted Subsidiary would be entitled under Section
5.12 hereof to incur Indebtedness (with the lease obligations being treated as
Indebtedness for purposes of ascertaining compliance with this covenant) in
respect of such Sale and Leaseback Transaction.

     Section 5.19 Limitation on Sale of Capital Stock of Subsidiaries.

     The Company shall not, and shall not permit any Restricted Subsidiary of
the Company to, issue, transfer, convey, lease or otherwise dispose of any
shares of Capital Stock or other ownership interests in a Restricted Subsidiary
of the Company or securities convertible or exchangeable into, or options,
warrants, rights or other interest with respect to, Capital Stock of or other
ownership interests in a Restricted Subsidiary of the Company to any Person
(other than to the Company or a Wholly Owned Restricted Subsidiary of the
Company) except in a transaction that consists of a sale of all of the Capital
Stock of or other ownership interests, such that the Subsidiary no longer
constitutes a Subsidiary, in such Subsidiary owned by the Company and any
Subsidiary of the Company that complies with the provisions contained in
Section 5.15 and Article VI hereof to the extent such provisions apply.

     Section 5.20 Designation of Restricted and Unrestricted Subsidiaries.

               (a) The Board of Directors of the Company may designate any Subsidiary of
the Company to be an Unrestricted Subsidiary if the Company could make an
Investment (other than a Restricted Investment) in such Subsidiary under
Section 5.10 hereof and the Subsidiary to be so designated:

                    (i) has no Indebtedness other than Non-Recourse Debt;

39

 

                    (ii) is not party to any agreement, contract, arrangement or understanding
with the Company or any Restricted Subsidiary of the Company unless the terms
of any such agreement, contract, arrangement or understanding are no less
favorable to the Company or such Restricted Subsidiary than those that might be
obtained at the time from Persons who are not Affiliates of the Company;

                    (iii) is a Person with respect to which neither the Company nor any of its
Restricted Subsidiaries has any direct or indirect obligation: (1) to subscribe
for additional Equity Interests; or (2) to maintain or preserve such Person’s
financial condition or to cause such Person to achieve any specified levels of
operating results;

                    (iv) has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of any of the Company or any of its
Restricted Subsidiaries;

                    (v) in the case of a corporate entity or limited liability company, has at
least one director on its board of directors and at least one executive
officer, in each case who is not a director or executive officer of the Company
or any of its Restricted Subsidiaries; and

                    (vi) has no Subsidiaries that are Restricted Subsidiaries.

provided, however, that in the case of a Restricted Subsidiary to be so
designated as an Unrestricted Subsidiary, neither the Company nor any
Restricted Subsidiary shall at the time of such designation or at any time
thereafter be directly or indirectly liable for any Indebtedness that provides
that the holder thereof may (with the passage of time or notice or both)
declare a default thereon or cause the payment thereof to be accelerated or
payable prior to its stated maturity upon the occurrence of a default with
respect to any Indebtedness, Lien or other Obligation of the Subsidiary to be
so designated (including any right to take enforcement action against such
Unrestricted Subsidiary).

     Unless so designated as an Unrestricted Subsidiary, any Person that
becomes a Subsidiary of the Company will be classified as a Restricted
Subsidiary. Upon designation of a Restricted Subsidiary as an Unrestricted
Subsidiary, in compliance with this Section 5.20, such Restricted Subsidiary
shall be released from any Subsidiary Guarantee previously made by such
Restricted Subsidiary.

               (b) The Board of Directors of the Company may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary if, immediately after giving pro forma
effect to such designation, such designation is permitted, and is compliance
with Section 5.12 hereof (with any Indebtedness of such Unrestricted Subsidiary
existing at the time of such designation being treated as an incurrence of such
Indebtedness for purposes of Section 5.12 hereof), and no default or Event of
Default shall have occurred and be continuing or would result therefrom.

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     Section 5.21 Limitations on Capital Expenditures.

     The Company shall not pay or cause to be paid, any amounts for Capital
Expenditures unless it has complied with this Section. For the year ended
December 31, 2003, the Company may make Capital Expenditures up to and
including $4,300,000. For the period from January 1, 2004 to December 31,
2004, the Company may make Capital Expenditures up to and including $4,000,000,
plus the amount, if any, by which Capital Expenditures in 2003 did not equal
the maximum amount allowed hereunder for such year. For every twelve-month
period thereafter, the Company may make Capital Expenditures up to and
including $2,500,000, plus the amount, if any, by which Capital Expenditures in
prior periods had not equaled the maximum amount allowed hereunder for such
periods. Notwithstanding the foregoing, the Company may make additional
Capital Expenditures during any period, provided that the funds for such
Capital Expenditures consist of proceeds from the sale of Equity Interests of
the Company.

     Section 5.22 Preferred Terms.

     In the event the indenture governing the Senior Subordinated Notes and/or
the Senior Subordinated Notes include, at any time, terms more favorable to the
holders of the Senior Subordinated Notes than the Holders, this Agreement and
the Notes shall be promptly modified by the parties hereto to include such
favorable terms.

     Section 5.23 Default on Notes.

     The Company shall not make any payment or distribution to the holders of
the Senior Subordinated Notes in respect of Obligations with respect to the
Senior Subordinated Notes and may not acquire from any such holder any Senior
Subordinated Notes for cash or property until all Obligations with respect to
the Notes have been paid in full if: a Default in the payment of any
Obligations with respect to the Notes occurs and is continuing that permits the
Holders to accelerate its maturity or the maturity of which has been
accelerated; the Company receives a notice of or has actual knowledge of a
Default, other than a payment default, under the Notes permitting an
acceleration thereof or that would permit an acceleration thereof with the
giving of notice or the passage of time or both; or any judicial proceeding
shall be pending with respect to a Default on the Notes. Without limiting the
foregoing, if an Event of Default occurs and is continuing and has not been
previously waived pursuant to Section 7.4, then the Majority Holders may
deliver a written notice to the Company (with which the Company shall comply)
restricting the Company from making any payments or distributions to each
holder of the Senior Subordinated Notes in respect of Obligations with respect
to the Senior Subordinated Notes and acquiring from any such holder any Senior
Subordinated Notes for cash or property until all Obligations with respect to
the Notes have been paid in full. The Company shall not modify any provisions
contained in the indenture governing the Senior Subordinate Notes relating to
the subordination of the Senior Subordinated Notes to the Notes.

     Section 5.24 Settlement of Insurance Claims.

     For so long as the Holders hold the security interest in the Collateral
granted by the Company herein, the Company shall not settle any claim with an
underwriter under the Initial

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Insurance Policy or, if applicable, the Continuing Insurance Policy
without the prior written consent of the Collateral Agent.

     Section 5.25 Subsidiary Guarantees.

     If the Company or any of its Subsidiaries acquires or creates another
Subsidiary after the date of this Agreement, excluding all Subsidiaries that
have been properly designated as Unrestricted Subsidiaries in accordance with
this Agreement for so long as they continue to constitute Unrestricted
Subsidiaries, then the Company shall cause such newly acquired or created
Subsidiary to become a Guarantor hereunder and to execute and deliver to the
Collateral Agent, for so long as the Holders hold the security interest granted
pursuant to Article X, and thereafter, to each Holder, a Subsidiary Guarantee
within five Business Days of such acquisition or creation.

     Section 5.26 Collateral

     Notwithstanding anything contained herein to the contrary, the Company
agrees from and after the date of this Agreement until the Holders no longer
hold the security interest in the Collateral granted in Article X:

               (a) The Company (i) will not sell or otherwise dispose of, or grant any
option or other interest with respect to, any of the Collateral, (ii) will not
create or permit to exist any Lien upon or with respect to any of the
Collateral, except for the Liens created pursuant to this Agreement or a Lien
in the OrbView Satellite in favor of the holders of the Senior Secured
Indebtedness, (iii) will defend the Collateral against all claims and demands
of all Persons at any time claiming the same or any interest therein (other
than with respect to any Lien in favor of the Holders of the Senior Secured
Indebtedness), and (iv) will at all times be the sole beneficial owner of the
Collateral.

               (b) The Company will not (i) enter into any agreement or understanding
that purports to or may restrict or inhibit the rights or remedies of the
Holders or the Collateral Agent hereunder, including, without limitation, the
Collateral Agent’s right to sell or otherwise dispose of the Collateral, or
(ii) with regard to the Collateral, fail to pay or discharge any tax,
assessment or levy of any nature due with respect thereto later than five days
prior to the date of any proposed sale under any judgment, writ or warrant of
attachment.

     (c) The Company will not use the Collateral in violation of any
Requirement of Law or rights to any third parties.

     Section 5.27 Limitation on Payments for Consent.

     The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to or for the benefit of any Holder for, or
as an inducement to, any consent, waiver or amendment of any of the terms or
provisions of this Agreement or the Notes unless such consideration is offered
to be paid to all Holders which so consent, waive or agree to amend.

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ARTICLE VI.

MERGER, CONSOLIDATION OR SALE OF ASSETS

     Section 6.1 Mergers, Consolidations and Sales of Assets.

               (a) The Company may not consolidate or merge with or into (whether or not
the Company is the surviving Person), or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its properties or assets in
one or more related transactions to, another Person unless:

                    (i) the Company is the surviving Person or the Person formed by or
surviving any such consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made is a corporation organized and existing under the laws of
the United States, any state thereof or the District of Columbia;

                    (ii) the Person formed by or surviving any such consolidation or merger
(if other than the Company) or the entity or Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made assumes all the Obligations of the Company under the Notes and this
Agreement;

                    (iii) immediately after such transaction, no Default or Event of Default
exists;

                    (iv) the Company, or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made will have Consolidated Net Worth immediately after the transaction equal
to or greater than the Consolidated Net Worth of the Company immediately
preceding the transaction; and

                    (v) the Company and the surviving entity shall have delivered to the
Collateral Agent, for so long as the Holders hold the security interest granted
pursuant to Article X, and thereafter, to each Holder, an Officers’ Certificate
and an Opinion of Counsel, each stating that such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition and, if a
Subsidiary Guarantee is required in accordance with this Agreement, such
Subsidiary Guarantee, comply with all applicable provisions of this Agreement
and that all conditions precedent in this Agreement relating to such
transaction have been satisfied.

               (b) The Company will not permit any Guarantor to consolidate with or merge
with or into, or convey, transfer or lease all or substantially all of its
assets to any Person unless:

                    (i) the resulting, surviving or transferee Person will be a corporation,
partnership or limited liability company organized and existing under the laws
of the United States of America, any State thereof or the District of Columbia,
and such Person (if not such Guarantor) will expressly assume all the
obligations of such Guarantor under its Subsidiary Guarantee; and

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                    (ii) immediately after giving effect to such transaction (and treating any
Indebtedness which becomes an obligation of the resulting, surviving or
transferee Person as a result of such transaction as having been incurred by
such Person at the time of such transaction), no Default or Event of Default
shall have occurred and be continuing;

provided, however, that the foregoing shall not apply to any such consolidation
or merger with or into, or conveyance, transfer or lease to, any Person if the
resulting, surviving or transferee Person will not be a Subsidiary of the
Company and the other terms of this Agreement are complied with.

               (c) For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Subsidiaries of
the Company, the Capital Stock of which constitutes all or substantially all of
the properties and assets of the Company, shall be deemed to be the transfer of
all or substantially all of the properties and assets of the Company.

     Section 6.2 Successor Substituted.

     Upon any consolidation of the Company with, or merger of either of the
Company with or into, any other Person or any conveyance, transfer or lease of
the properties and assets of the Company substantially as an entity in
accordance with Section 6.1, the successor Person formed by such consolidation
or into which the Company is merged or to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for (so that from and after
the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Agreement referring to the “Company” shall
refer to the successor corporation or entity and not the Company), and may
exercise every right and power of, the Company under this Agreement with the
same effect as if such successor Person had been named as the Company herein;
provided, however, that the predecessor Company shall not be relieved from the
obligation to pay the principal and interest on the Notes except in the case of
a sale of all of the Company’s assets in a transaction that is subject to, and
that complies with, the provisions of Section 6.1 hereof.

ARTICLE VII.

EVENTS OF DEFAULT AND REMEDIES

     Section 7.1 Events of Default.

     “Event of Default,” wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

                    (i) default for five days in the payment when due of interest on the
Notes;

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                    (ii) default in payment when due (whether at maturity, upon redemption or
repurchase or acceleration, or otherwise) of the principal of or premium (if
any) on the Notes;

                    (iii) default in the payment of principal or interest on the Notes
required to be redeemed pursuant to Section 3.7 or purchased pursuant to
Section 5.14 or Section 5.15 or failure by the Company to comply with the
provisions of Article VI;

                    (iv) failure by the Company or any of its Restricted Subsidiaries to
comply with any of their other covenants in this Agreement or the Notes or to
remedy a breach of a representation or warranty of the Company contained in
this Agreement, in each case within 30 days of the earlier of (A) receipt of
notice to the Company by the Majority Holders and (B) actual knowledge by the
Company of such failure;

                    (v) default under any indenture, mortgage or instrument (other than the
Senior Secured Indebtedness) under which there may be issued or by which there
may be secured or evidenced any Indebtedness for money borrowed by the Company
or any of its Restricted Subsidiaries (or the payment of which is guaranteed by
any the Company or any of its Restricted Subsidiaries), whether such
Indebtedness or guarantee now exists, or is created after the date of this
Agreement, which default:

                         (A) is caused by a failure to pay principal of, or premium, if any, or
interest on, such Indebtedness prior to the expiration of the grace period
provided in such Indebtedness on the date of such default (a “Payment
Default”); or

                         (B) results in the acceleration (which acceleration has not been
rescinded) of such Indebtedness prior to its express maturity;

and, in each case described in clause (A) and (B) of this paragraph, the
principal amount of any such Indebtedness, together with the principal amount
of any other such Indebtedness under which there has been a Payment Default or
the maturity of which has been so accelerated, in the case of clause (iii),
aggregates $1 million or more;

                    (vi) default under any instruments governing Senior Secured Indebtedness,
which default results in the acceleration (which acceleration has not been
rescinded) of such Indebtedness prior to its express maturity or the right of
the holders of the Senior Secured Indebtedness to delay payment or distribution
to each Holder pursuant to Article XI;

                    (vii) failure by the Company or any of its Restricted Subsidiaries to pay
final judgments (other than any judgments as to which a reputable insurance
company has accepted full liability and whose bond, premium or similar charge
therefore is not in excess of $1 million) aggregating in excess of $1 million,
which judgments are not paid, discharged or stayed within 60 days after their
entry;

                    (viii) any Subsidiary Guarantee is, or Subsidiary Guarantees are, held in
any judicial proceeding to be unenforceable or invalid, or ceases for any
reason to be in full force and effect, including any denial or disaffirmation
by a Guarantor or group of

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Guarantors of its or their Obligations under its or their Subsidiary
Guarantee(s), and such default continues for ten days after written notice, if
such Guarantor individually is a Significant Subsidiary or if such group of
Guarantors in the aggregate, would be considered a Significant Subsidiary if
taken together;

                    (ix) default by the Company in the performance of any covenant set forth
in Article X, or repudiation by the Company of any of its obligations under
Article X or the unenforceability of Article X against the Company for any
reason which in any one case or in the aggregate results in an impairment of
the rights intended to be afforded thereby;

                    (x) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company or any Restricted
Subsidiary of the Company in an involuntary case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization or other
similar law or (B) a decree or order adjudging the Company or any Restricted
Subsidiary of the Company bankrupt or insolvent, or approving as properly filed
a petition seeking reorganization, arrangement, adjustment or composition of or
in respect of the Company or any Restricted Subsidiary of the Company under any
applicable federal or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of either
of the Company or any Restricted Subsidiary of the Company or of any
substantial part of its property, or ordering the winding up or liquidation of
its affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 30
consecutive days; or

                    (xi) the commencement by the Company or any Restricted Subsidiary of the
Company of a voluntary case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by
it to the entry of a decree or order for relief in respect of the Company or
any Restricted Subsidiary of the Company in an involuntary case or proceeding
under any applicable federal or state bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or insolvency case
or proceeding against it, or the filing by it of a petition or answer or
consent seeking reorganization or relief under any applicable federal or state
law, or the consent by it to the filing of such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the either of Company or any
Restricted Subsidiary of the Company, or of any substantial part of its
property, or the making by it of an assignment for the benefit of creditors, or
the admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the Company or any
Restricted Subsidiary of the Company in furtherance of any such action.

     Section 7.2 Acceleration.

               (a) If an Event of Default, other than an Event of Default specified in
Section 7.1(x) or (xi) with respect to the Company, any Significant Subsidiary
of the Company or any group of Restricted Subsidiaries of the Company that, if
considered to be one entity when taken together, would constitute a Significant
Subsidiary, occurs and is continuing and has not been previously waived
pursuant to Section 7.4, then the Majority Holders may declare the

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principal of
and accrued interest on all the outstanding Notes to be due and payable by
notice in writing to the Company specifying the respective Event of Default,
such notice to be deemed a “notice of acceleration” (an “Acceleration Notice”),
and the same shall become immediately due and payable.

               (b) If an Event of Default specified in Section 7.1(x) or (xi) with
respect to the Company, any Significant Subsidiary or any group of Restricted
Subsidiaries that, if considered to be one entity when taken together, would
constitute a Significant Subsidiary occurs and is continuing, then all unpaid
principal of, and premium (if any) and accrued and unpaid interest on all of
the outstanding Notes shall become immediately due and payable without further
action or notice on the part of any Holder.

               (c) At any time after a declaration of acceleration with respect to the
Notes in accordance with Section 7.2(a), the Majority Holders may rescind and
cancel such declaration and its consequences, but only: (i) if the rescission
would not conflict with any judgment or decree, (ii) if all existing Events of
Default have been cured or waived except nonpayment of principal or interest
that has become due solely because of the acceleration, (iii) to the extent the
payment of such interest is lawful, interest on overdue installments of
interest and overdue principal, which has become due otherwise than by such
declaration of acceleration, has been paid, together with any other fees or
costs including attorneys’ fees incurred by the Collateral Agent or the Holders
in connection with such declaration, and (iv) if the Holders and the Collateral
Agent shall have received an Officers’ Certificate that such Event of Default
has been cured or waived. No such rescission shall affect any subsequent
Default or impair any right consequent thereto.

     Section 7.3 Remedies upon Event of Default.

     If an Event of Default shall have occurred:

               (a) Upon the acceleration of the Notes in accordance with the terms of
this Agreement, the Collateral Agent shall have and may exercise with reference
to the Collateral any or all of the rights and remedies of a secured party
under the UCC, and as otherwise granted herein or under any other applicable
law or under any other agreement executed by Company, including, without
limitation, the right and power to sell, at public or private sale or sales, or
otherwise dispose of, or otherwise utilize the Collateral and any part or parts
thereof, in any manner authorized or permitted under the UCC after default by a
debtor, and to apply the proceeds thereof toward payment of any costs and
expenses and attorneys’ fees and expenses (including, without limitation, any
costs incurred in connection with protection or assertion of their rights under
this Agreement or the Bankruptcy Code in a bankruptcy or reorganization of the
Company) thereby incurred by the Collateral Agent and toward payment of the
Obligations in such order or manner as the Collateral Agent may elect. The purchaser
of any or all Collateral so sold shall thereafter hold the same absolutely,
free from any claim, encumbrance or right of any kind whatsoever created by or
through the Company. Unless any of the Collateral threatens, in the reasonable
judgment of the Collateral Agent, to decline speedily in value or is or becomes
of a type sold in a recognized market, the Collateral Agent shall give the
Company reasonable notice of the time and place of any public sale thereof, or
of the time after which any private sale or other intended disposition is to be
made. Any sale of the Collateral conducted in conformity

47

 

with reasonable
commercial practices of banks, insurance companies, commercial finance
companies, or other financial institutions disposing of property similar to the
Collateral shall be deemed to be commercially reasonable. The Collateral Agent
or any Holder may, in its own name or in the name of a designee or nominee, buy
any of the Collateral at any public sale and, if permitted by applicable law,
at any private sale. To the maximum extent permitted by applicable law, the
Company waives all claims, damages, and demands against the Collateral Agent
arising out of the repossession, retention or sale of the Collateral except
such as arise out of the gross negligence or willful misconduct of the
Collateral Agent. The Collateral Agent and its agents shall have the right to
enter upon any real property owned or leased by the Company to exercise any of
its rights or remedies under this Agreement and the Company shall fully
cooperate and assist in obtaining any governmental approvals or clearances
necessary for such purposes. The Collateral Agent shall not be obligated to
make any sale of the Collateral regardless of notice of sale having been given.
The Collateral Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefore, and any such sale may,
without further notice, be made at the time and place to which it was
adjourned. The Company shall remain liable for any deficiency if the proceeds
of any sale or disposition of the Collateral are insufficient to pay its
Obligations under this Agreement and the Notes and all other amounts to which
the Collateral Agent is entitled, the Company also being liable for the fees
and expenses of any attorneys employed by the Collateral Agent to collect such
deficiency. Except as expressly set forth herein, the Company hereby waives
presentment, demand, protest or any notice (to the maximum extent permitted by
applicable law) of any kind in connection with this Agreement or any
Collateral.

               (b) The Company further agrees to use its best efforts to do or cause to
be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Collateral pursuant to this Section 7.3 valid and
binding and in compliance with any and all other applicable Requirements of
Law. The Company further agrees that a breach of any of the covenants
contained in this Section 7.3 will cause irreparable injury to the Collateral
Agent and the Holders, that the Collateral Agent and the Holders have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section 7.3 shall be specifically
enforceable against the Company, and the Company hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants, except for a defense that no Event of Default has occurred.

               (c) All rights to marshaling of assets of the Company, including any such
right with respect to the Collateral, are hereby waived by the Company. The
Company shall not contest or support any other Person in contesting the
validity or priority of the security interests created under this Agreement.

               (d) The Company, at the Collateral Agent’s request, will assemble the
Collateral and make it available to the Collateral Agent at places which the
Collateral Agent shall reasonably select, whether at the Company’s premises or
elsewhere.

     In addition to the foregoing, if an Event of Default occurs and is
continuing, the Majority Holders may pursue any available remedy by proceeding
at law or in equity to enforce the performance of any provision of the Notes or
this Agreement.

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     A delay or omission by the Collateral Agent or any Holder in exercising
any right or remedy accruing upon an Event of Default shall not impair the
right or remedy or constitute a waiver of or acquiescence in the Event of
Default. No remedy is exclusive of any other remedy. All available remedies
are cumulative to the extent permitted by law.

     Section 7.4 Waiver of Past Defaults.

     Subject to Sections 7.6 and 9.1, at any time prior to a declaration of
acceleration with respect to the Notes in accordance with Section 7.2(a), the
Majority Holders may, on behalf of the Holders of all the Notes, waive an
existing Default or Event of Default and its consequences, except a continuing
Default or Event of Default in the payment of principal or premium (if any) of
or interest on any Note as specified in clauses (i) and (ii) of Section 7.1.
Such waiver by the Holders shall not constitute a waiver by the Holders of any
subsequent Default or Event of Default.

     Section 7.5 Limitation on Suits.

     A Holder may not use this Agreement to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder, it being
understood and intended that no one or more Holders shall have any right by
virtue of any provision of this Agreement to affect, disturb or prejudice the
rights of any other Holders, or to obtain or to seek to obtain priority or
preference over any other Holders, or to enforce any right under this Agreement
except in the manner herein provided and for the equal and ratable benefit of
all the Holders.

     Nothing contained in this Agreement shall limit the rights of any Holder
to institute a suit for the enforcement of the payment of principal and premium
(if any) or interest on its Note on or after the respective due dates set forth
in such Note (including upon acceleration thereof) or the institution of any
proceeding with respect to this Agreement or any remedy hereunder, including,
without limitation, acceleration, by the Majority Holders, provided that upon
institution of any proceeding or exercise of any remedy, such Holder provide
the other Holders with prompt notice thereof. Upon any such payment of
principal and premium (if any) or interest on its Note, such Holder shall not
be required to deliver any of such monies to the other Holders of outstanding
Notes.

     Section 7.6 Rights of Holders To Receive Payment.

     Notwithstanding any other provision of this Agreement, the right of any
Holder to receive payment of principal of, and interest on a Note, on or after
the respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.

     Section 7.7 Priorities.

     If the Collateral Agent or any Holder, or group of Holders collects any
money or property pursuant to this Article VII, except in the case of a suit
for the enforcement of the payment of principal and premium (if any) or
interest on such Holder’s Note on or after the respective due dates set forth
in such Note, it shall pay out the money in the following order:

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     First: if the Holders are forced to proceed against the Company, to the
Collateral Agent and/or such Holders for their collection costs including,
without limitation, any costs incurred in connection with protection or
assertion of their rights under this Agreement or under the Bankruptcy Code in
a bankruptcy or reorganization of the Company;

     Second: to Holders for amounts due and unpaid on the Notes for principal
and premium (if any) and interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Notes for principal,
premium and interest, respectively; and

     Third: to the Company or any other obligor on the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.

     Section 7.8 Undertaking for Costs.

     In any suit for the enforcement of any right or remedy under this
Agreement, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys’ fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 7.8 does not apply to a suit by a Holder pursuant to Section 7.6,
or a suit by a Holder or Holders of more than 10% in principal amount of the
outstanding Notes.

ARTICLE VIII.

DEFEASANCE AND SATISFACTION AND DISCHARGE

     Section 8.1 Legal Defeasance and Covenant Defeasance.

               (a) Company’s Option to Effect Defeasance or Covenant Defeasance. The Company
may at its option, by an appropriate board resolution evidenced by an Officers’
Certificate, at any time (subject to ten-day prior written notification to the
Collateral Agent, while there is a security interest in such insurance pursuant
to Article X, and thereafter, to each Holder), elect to have the provisions of
either Section 8.1(b) or (c) applied to the outstanding Notes upon compliance
with the conditions set forth below in this Article VIII. At no time is the
Company permitted to defease the Senior Subordinated Notes unless and until the
Obligations represented by the Notes have been paid in full, including in
accordance with this Article VIII.

               (b) Legal Defeasance and Discharge Upon the Company’s exercise of the option
provided in Section 8.1(a)
applicable to this Section, the Company shall be deemed to have been discharged
from its obligations with respect to the outstanding Notes on the date the
conditions set forth below are satisfied (hereinafter, “Legal Defeasance”).
For this purpose, such Legal Defeasance means that the Company shall be deemed
to have paid and discharged the entire indebtedness represented by the
outstanding Notes and to have satisfied all its other Obligations under such
Notes and this Agreement insofar as such Notes are concerned, except for the
following which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders to receive, solely from the trust fund
described in Section 8.1(d) and as more fully set forth in such Section,
payments in respect of the principal and premium (if any) of and

50

 

interest on
such Notes when such payments are due, (ii) the Company’s obligations with
respect to such Notes under Sections 2.4, 2.5 and 5.2, and (iii) this Article
VIII. Subject to compliance with this Article VIII, the Company may exercise
its option under this Section 8.1(b) notwithstanding the prior exercise of its
option under Section 8.1(c).

               (c) Covenant Defeasance. Upon the Company’s exercise of the option
provided in Section 8.1(a) applicable to this Section and compliance with
Section 8.1(d), (i) the Company shall be released from its obligations under
Sections 5.5 through 5.26, inclusive, and (ii) the occurrence of an event
specified in Section 7.1(iv) shall not be deemed to be an Event of Default, on
and after the date the conditions set forth below are satisfied (hereinafter,
“Covenant Defeasance”). For this purpose, such Covenant Defeasance means that
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document, but the remainder of this Agreement
and such Notes shall be unaffected thereby.

               (d) Conditions to Legal Defeasance or Covenant Defeasance. The following
shall be the conditions to application of either Section 8.1(b) or 8.1(c) to
the outstanding Notes:

                    (i) The Company shall irrevocably have deposited or caused to be deposited
funds in an irrevocable trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to, the benefit of
the Holders of such Notes: (A) cash in U.S. dollars, or (B) non-callable
Government Securities which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment, money in an amount, or
(C) a combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent certified public accountants expressed in a
written certification thereof delivered to the trustee (the “Trustee”)
of such trust (with a copy to the Collateral Agent, for so long as the Holders
hold the security interest granted pursuant to Article X, and thereafter, to
each Holder), to pay and discharge, and which shall be applied by the Trustee
to pay and discharge, the principal and premium (if any) of, and interest on
the Notes at the Stated Maturity of such principal or installment of interest
on the day on which such payments are due and payable in accordance with the
terms of this Agreement and of such Notes;

                    (ii) No Default or Event of Default shall have occurred and be continuing
on the date of such deposit;

                    (iii) Such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, this Agreement or any
other agreement or instrument to which the Company is a party or by which it is
bound;

                    (iv) The Company shall have delivered to the Collateral Agent, for so long
as the Holders hold the security interest granted pursuant to Article X, and
thereafter, to each Holder, an Opinion of Counsel to the effect that after the
91st day (or such applicable date) following the deposit, the trust funds will
not be subject to the effect of any applicable

51

 

bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally including
avoidance as a preference under Section 547 of the Bankruptcy Code;

                    (v) The Company shall have delivered to the Collateral Agent, for so long
as the Holders hold the security interest granted pursuant to Article X, and
thereafter, to each Holder, an Officers’ Certificate stating that the deposit
was not made by the Company with the intent of preferring the Holders of Notes
over the other creditors of the Company with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or others;

                    (vi) The Company shall have delivered to the Collateral Agent, for so long
as the Holders hold the security interest granted pursuant to Article X, and
thereafter, to each Holder, an Officers’ Certificate and an Opinion of Counsel,
each stating that all conditions precedent provided for relating to either the
Legal Defeasance under Section 8.1(b) or the Covenant Defeasance under Section
8.1(c), as the case may be, have been complied with;

                    (vii) In the case of an election under Section 8.1(b), the Company shall
have delivered to the Collateral Agent, for so long as the Holders hold the
security interest granted pursuant to Article X, and thereafter, to each
Holder, an Opinion of Counsel stating that (x) the Company has received from,
or there has been published by, the Internal Revenue Service a ruling, or (y)
since the date of this Agreement there has been a change in the applicable
federal income tax law, in either case to the effect that, and based thereon
such opinion shall confirm that, the Holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit, defeasance and discharge and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as would have
been the case if such deposit, defeasance and discharge had not occurred;

                    (viii) In the case of an election under Section 8.1(c), the Company shall
have delivered to the Collateral Agent, for so long as the Holders hold the
security interest granted pursuant to Article X, and thereafter, to each
Holder, an Opinion of Counsel to the effect that the Holders of the outstanding
Notes will not recognize income, gain or loss for federal income tax purposes
as a result of such deposit and Covenant Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant defeasance had not occurred;
and

                    (ix) The Company shall have delivered to the Collateral Agent, for so long
as the Holders hold the security interest granted pursuant to Article X, and
thereafter, to each Holder, an Opinion of Counsel to the effect that such
deposit and Legal Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company as defined
in the Investment Company Act of 1940, as amended, or such trust shall be
qualified under such act or exempt from regulation thereunder.

     Section 8.2 Satisfaction and Discharge.

     In addition to the Company’s rights under Section 8.1, the Company may
terminate all of its obligations under this Agreement when:

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                    (a) all Notes theretofore delivered (other than Notes which have been
destroyed, lost or stolen and which have been replaced or paid as provided in
Section 2.5 and Notes for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter repaid to
the Company or discharged from such trust) have been delivered to each Holder
for cancellation or all such Notes not theretofore delivered to each Holder for
cancellation have become due and payable and the Company has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust
solely for that purpose an amount of money sufficient to pay and discharge the
entire principal and premium (if any) of and interest on the Notes not
theretofore delivered to the Company for cancellation;

                    (b) the Company has paid or caused to be paid all other sums payable
hereunder;

                    (c) the Company has delivered irrevocable instructions to the Trustee to
apply the deposited money toward the payment of the Notes at maturity or
redemption, as the case may be; and

                    (d) the Company has delivered to the Collateral Agent, for so long as the
Holders hold the security interest granted pursuant to Article X, and
thereafter, to each Holder, an Officers’ Certificate and an Opinion of Counsel,
stating that all conditions precedent specified herein relating to the
satisfaction and discharge of this Agreement have been complied with.

     Section 8.3 Survival of Certain Obligations.

     Notwithstanding the satisfaction and discharge of this Agreement and of
the Notes referred to in Section 8.1 or 8.2, the obligations of the Company
under Sections 2.2, 2.3, 2.4, 2.5, 5.1, 5.2, 7.6 and Section 8.4 shall survive
until no Notes are outstanding, and thereafter the obligations of the Company
under Section 8.4 shall survive.

     Section 8.4 Application of Trust Moneys and Government Securities.

     Subject to the provisions of Section 2.4, all money and Government
Securities (including the proceeds thereof) deposited with the Trustee pursuant
to Section 8.1(d)(i) in respect of the Notes shall be held in trust and applied
by the Collateral Agent, for so long as the Holders hold the security interest
granted pursuant to Article X, and thereafter, to each Holder, in accordance
with the provisions of such Notes and this Agreement, to the payment, either
directly or through
any Paying Agent as the Trustee may determine, to each Holder of such
Notes, of all sums due and to become due thereon in respect of principal and
premium (if any) of and interest on the Notes, but such money and Government
Securities need not be segregated from other funds except to the extent
required by law.

     The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Securities deposited
pursuant to Section 8.1(d)(i) or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of the outstanding Notes.

     Anything in this Article VIII to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon request by an
Officers’ Certificate any money or

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Government Securities held by it as provided
in Section 8.1(d)(i) which, in the opinion of a nationally recognized firm of
independent certified public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof which
would then be required to be deposited to effect an equivalent defeasance or
covenant defeasance.

ARTICLE IX.

AMENDMENTS AND WAIVERS

     Section 9.1 With Consent of Holders.

     Subject to Section 7.6, the Company, when authorized by an appropriate
board resolution evidenced by an Officers’ Certificate and by the Majority
Holders may amend this Agreement and the Notes with the consent of the Majority
Holders (including consents obtained in connection with a purchase of, or
tender offer or exchange offer for, Notes), and any existing default or
compliance with any provision of this Agreement, or the Notes may be waived
with the consent of the Majority Holders (including consents obtained in
connection with a purchase of, or tender offer or exchange offer for Notes).

     Without the consent of each Holder of each Note affected thereby, an
amendment or waiver may not (with respect to any Note held by a non-consenting
Holder):

                    (a) reduce the principal amount of Notes whose Holders must consent to an
amendment or waiver;

                    (b) reduce the principal of or change the fixed maturity of any Note, or
alter the provisions with respect to the redemption of the Notes (other than
provisions set forth in Sections 5.14 and 5.15 of this Agreement);

                    (c) reduce the rate of or change the time for payment of interest on any
Note or extend the PIK Period;

                    (d) waive a Default or Event of Default in the payment of principal and
premium (if any) of, and interest on, the Notes (except a rescission of
acceleration of the Notes by the Majority Holders and a waiver of the payment
default that resulted from such acceleration);

                    (e) make any Note payable in money other than that stated in the Notes;

                    (f) make any change in provisions of this Agreement relating to waivers of
past Defaults or the rights of Holders of Notes to receive payments of
principal and premium (if any) of, and interest on, the Notes;

                    (g) waive a redemption payment with respect to any Note (other than a
payment required by Section 5.14 and 5.15); or

54

 

                    (h) make any change in the amendment and waiver provisions of this
Section 9.1.

     Section 9.2 Revocation and Effect of Consents.

     Until an amendment or waiver becomes effective, a consent to it by a
Holder is a continuing consent by the Holder and every subsequent Holder of a
Note or portion of a Note that evidences the same debt as the consenting
Holder’s Note, even if notation of the consent is not made on any Note.
Subject to the following paragraph, any such Holder or subsequent Holder may
revoke the consent as to such Holder’s Note or portion of such Note by notice
to the Company received before the date on which the Holders receive an
Officers’ Certificate certifying that the Holders of the requisite principal
amount of Notes have consented (and not theretofore revoked such consent) to
the amendment or waiver.

     The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment or
waiver. If a record date is fixed, then notwithstanding the last sentence of
the immediately preceding paragraph, those Persons who were Holders at such
record date (or their duly designated proxies), and only those Persons, shall
be entitled to revoke any consent previously given, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid
or effective for more than 90 days after such record date.

     After an amendment or waiver becomes effective, it shall bind every
Holder, unless it makes a change described in any of clauses (a) through (h) of
Section 9.1, in which case, the amendment or waiver shall bind only each Holder
of a Note who has consented to it and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the consenting Holder’s Note;
provided that any such waiver shall not impair or affect the right of any
Holder to receive payment of principal of, and interest on, a Note, on or after
the respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates without the
consent of such Holder.

ARTICLE IV.

SECURITY

     Section 10.1 Pledge and Grant of Security Interest

               (a) The Company hereby pledges and grants to the Holders ratably, a
continuing first priority security interest in and to, and Lien upon, all of
the Company’s right, title and interest in the Collateral, free and clear of
any other Liens thereon (provided that the security interest granted in and to
the OrbView Satellite and the Procurement Agreement shall be a second priority
security interest if and only if and only for so long as holders of Senior
Secured Indebtedness hold a first priority security interest therein).
Immediately following the earlier of (i) receipt by the Collateral Agent of the
Checkout Notice and (ii) payment in full in cash of all Obligations due and
owing under this Agreement and the Notes or the day on which all of the Notes
have been defeased in accordance with this Agreement, if no Default or Event of
Default

55

 

is continuing, the security interest in the Collateral evidenced by
this Article X shall terminate and be of no further force and effect.

               (b) The Company shall have no right to transfer, pledge, sell, replace or
otherwise dispose of any financial asset, cash or other property now or
hereafter comprising Collateral without the prior written consent of the
Collateral Agent for so long as the security interest evidenced by this Article
X is in force and effect. If at any time the Collateral Agent shall receive
any entitlement order from the Majority Holders (including, without limitation,
any order directing the sale, transfer or redemption of any financial asset
relating to, or cash or other item credited to, Collateral), the Collateral
Agent shall comply with such entitlement order, without further consent by the
Company or any other Person and the Company hereby irrevocably appoints the
Collateral Agent as its attorney-in-fact as necessary to effect any such order,
including the filing of any claim under the Initial Insurance Policy.

     Section 10.2 Security for Obligations.

     The Collateral secures the prompt and complete payment and performance
when due (whether at stated maturity, by acceleration or otherwise) of all of
the Obligations.

     Section 10.3 Further Assurances.

     The Company agrees promptly to take such actions and to execute and
deliver or cause to be executed and delivered, or use its best efforts to
procure assignments, instruments and such other or different writings as the
Collateral Agent may reasonably request, all in form and substance satisfactory
to the Collateral Agent, deliver any instruments to the Collateral Agent and
take any other actions that are necessary to perfect, continue the perfection
of, confirm and assure the priority of the Holders’ security interest in the
Collateral, to protect the Collateral against the rights, claims or interests
of third Persons, or to otherwise effect the purposes of this Agreement. The
Company also hereby authorizes the Collateral Agent to file any financing or
continuation statements with respect to the Collateral without the signature of
the Company (to the extent permitted by applicable law). The Company will
promptly pay all costs (including, without limitation, any costs incurred in
connection with protection or assertion of their rights
under this Agreement or the Bankruptcy Code in a bankruptcy or
reorganization of the Company) incurred by the Collateral Agent in connection
with any of the foregoing.

     Section 10.4 Power of Attorney

               (a) The Company hereby appoints and constitutes the Collateral Agent as
the Company’s attorney-in-fact with full power of substitution to exercise to
the fullest extent permitted by law all of the following powers upon and at any
time after the occurrence and during the continuance of an Event of Default:

                    (i) collection of proceeds of any Collateral;

                    (ii) conveyance of any item of Collateral to any purchaser thereof as
specified herein;

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                    (iii) giving of any notices or recording of any Liens pursuant to Section
10.3 hereof;

                    (iv) making any payments or taking any acts pursuant to Section 10.5
hereof;

                    (v) paying or discharging taxes or Liens levied or placed upon or
threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by the Collateral
Agent in its sole discretion, and any such payments made by the Collateral
Agent shall become Obligations of the Company to the Collateral Agent, due and
payable immediately upon demand; and

                    (vi) taking any acts pursuant to Section 10.10 hereof.

               (b) Without limiting the foregoing, the Collateral Agent’s authority under
this Section 10.4 shall include the authority to take possession of and endorse
and negotiate any checks or instruments representing proceeds of Collateral in
the name of the Company, execute and give receipt for any certificate of
ownership or any document constituting Collateral, transfer title to any item
of Collateral, to the extent permitted by applicable law, sign the Company’s
names on all financing statements or any other documents deemed necessary or
appropriate by the Collateral Agent to preserve, process or perfect the
security interest in the Collateral, and to file the same, and to prepare, sign
the Company’s name and file any notice of Lien, to commence and prosecute any
suits, actions or proceedings at law or equity in any court of competent
jurisdiction to collect the Collateral or any part thereof and to enforce any
other right in respect of any Collateral, to defend any suit, action or
proceeding brought against the Company with respect to any Collateral, to
settle, compromise or adjust any suit, action or proceeding described above
and, in connection therewith, to give such discharges or releases as the
Collateral Agent may deem appropriate, to file any claim under the Initial
Insurance Policy or the Continuing Insurance Policy or to otherwise act on
behalf of the Company in the event of a loss event under the Initial Insurance
Policy or the Continuing Insurance Policy and to take any other actions arising
from or incident to the powers granted to the Collateral Agent in this
Agreement. This power of attorney is coupled with an interest and shall be
irrevocable by the Company.

               (c) The Company acknowledges that the rights and responsibilities of the
Collateral Agent under this Agreement with respect to any action taken by the
Collateral Agent or the exercise or non-exercise by the Collateral Agent of any
option, right, request, judgment or other right or remedy provided for herein
or resulting or arising out of this Agreement shall, as between the Collateral
Agent and the Holders, be governed by this Agreement, but, as between the
Collateral Agent and the Company, the Collateral Agent shall be conclusively
presumed to be acting as agent for the Holders with full and valid authority so
to act or refrain from acting, and the Company shall not be obligated or
entitled to make any inquiry respecting such authority.

               (d) The Collateral Agent undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement and no implied covenants
or obligations shall be read into this Agreement against the Collateral Agent.
The Collateral Agent shall not be

57

 

deemed to have knowledge of an Event of
Default under this Agreement unless informed in writing by the Company or by
any Holder.

               (e) The Collateral Agent shall not be required to exercise any remedies
hereunder unless requested in writing to do so by the Majority Holders and only
if furnished with indemnity reasonably satisfactory to the Collateral Agent.
The Collateral Agent may consult with counsel and shall not be liable for any
action taken in good faith in reliance upon advice of counsel except for gross
negligence or willful misconduct. The Collateral Agent makes no representation
or warranty and shall have not responsibility concerning the value or validity
of the Collateral or the validity or perfection of the pledge thereof or any
security interest therein.

               (f) The Collateral Agent may at any time on 30 days’ notice to the Company
and the Holders resign hereunder. Upon any such resignation the Majority
Holders shall promptly appoint another financial institution to act as
Collateral Agent hereunder and such resignation shall become effective upon the
acceptance of the appointment by the successor; provided, however, that if the
Majority Holders do not appoint a new Collateral Agent within 30 days’ of
receipt of the notice of resignation, the resigning Collateral Agent shall
appoint its successor.

               (g) The Collateral Agent shall be deemed to have exercised reasonable care
in the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which a prudent
financial institution similarly situated would accord its own property, it
being understood that neither the Collateral Agent nor the Holders shall have
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not any such Person has or is deemed to have knowledge
of such matters, or (ii) taking any necessary steps to preserve rights against
any parties with respect to any Collateral.

     Section 10.5 Collateral Agent May Perform.

     If the Company fails to perform any agreement contained herein, the
Collateral Agent may, but shall not be obligated to, itself perform or cause
performance of such agreement, and the expenses incurred by or on behalf of the
Collateral Agent in connection therewith shall be reimbursable by the Company.

     Section 10.6 No Assumption of Duties.

     The rights and powers granted to the Collateral Agent hereunder are being
granted in order to preserve and protect the security interest of the Holders
in and to the Collateral granted hereby and shall not be interpreted to, and
shall not, impose any duties on the Collateral Agent in connection therewith
other than those imposed under applicable law.

     Section 10.7 Indemnity.

     The Company agrees to pay, and hold harmless, the Holders, the Collateral
Agent and their respective directors, officers, agents and employees (each
“Indemnitee”) from and against any and all liabilities, losses, damages
and expenses of any kind, including the reasonable fees and disbursements of
counsel (including, without limitation, any costs incurred in connection

58

 

with
protection or assertion of their rights under this Agreement or the Bankruptcy
Code in a bankruptcy or reorganization of the Company), which are incurred by
such Indemnitee in connection with any investigative, administrative or
judicial proceeding (whether or not such Indemnitee shall be designated a party
thereto) brought or threatened relating to or arising out of this Agreement or
the Notes, including, without limitation (i) with respect to, or resulting
from, any delay in paying, any and all excise, sales or other taxes which may
be payable or determined to be payable with respect to any of the Collateral,
(ii) with respect to, or resulting from, any delay in complying with any
Requirement of Law applicable to any of the Collateral or (iii) in connection
with any of the transactions contemplated by this Agreement. The obligations
of the Company under this Section 10.7 shall survive the resignation or removal
of the Collateral Agent or the termination of this Agreement.

     Section 10.8 Security Interest Absolute.

     All rights of the Collateral Agent and the Holders, and the security
interests created hereunder, and all obligations of the Company hereunder,
shall be absolute and unconditional irrespective of:

               (a) any lack of validity or enforceability of any other agreement or
instrument relating thereto;

               (b) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations, or any other amendment or waiver of or
any consent to any departure from this Agreement;

               (c) any exchange, surrender, release or non-perfection of any Liens on any
other Collateral for all or any of the Obligations; or

               (d) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Company in respect of the Obligations or
of this Agreement.

     Section 10.9 Authority of the Collateral Agent.

               (a) Each Holder hereby irrevocably appoints, designates and authorizes the
Collateral Agent to take such action on its behalf and in its stead under the
provisions of this
Agreement and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement, together with such
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary contained elsewhere herein, the Collateral Agent shall not have
any duties or responsibilities, except those expressly set forth herein, nor
shall the Collateral Agent have or be deemed to have any fiduciary relationship
with any Holder, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or otherwise exist
against the Collateral Agent. Without limiting the generality of the foregoing
sentence, the use of the term “agent” herein with reference to the Collateral
Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law. Instead, such
term is used merely as a matter of market custom, and is intended to create or
reflect only an administrative relationship between independent contracting
parties.

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               (b) No Agent-Related Person shall (i) be liable for any action taken or
omitted to be taken by any of them under or in connection with this Agreement
or the transactions contemplated hereby (except for its own gross negligence or
willful misconduct in connection with its duties expressly set forth herein),
or (ii) be responsible in any manner to any Holder for any recital, statement,
representation or warranty made by the Company or any officer thereof,
contained herein, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Collateral Agent under or in
connection with, this Agreement, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, or for any failure of the
Company to perform its obligations hereunder. No Agent-Related Person shall be
under any obligation to any Holder to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement, or to inspect the properties, books or records of the
Company.

               (c) The Collateral Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, electronic mail message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel. Except as provided in (d) below, the
Collateral Agent shall be fully justified in failing or refusing to take any
action under this Agreement unless it shall first receive such required consent
of the Holders under this Agreement. The Collateral Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
in accordance with an appropriate request or consent of the Holders except if
it shall fail to exercise rights demanded after and during the continuation of
an Event of Default after receipt of the demand described in (d) below.

               (d) The Collateral Agent shall not be deemed to have knowledge or notice
of the occurrence of any Event of Default unless the Collateral Agent shall
have received written notice from a Holder or the Company referring to this
Agreement, describing such Event of Default and stating that such notice is a
“Notice of Event of Default.” The Collateral Agent will notify the Holders of
its receipt of any such notice. If an Event of Default occurs and is
continuing, and if Majority Holders demand it in writing, the Collateral Agent
shall, as soon as legally permitted, enforce the Holders’ rights to immediately
collect the sums due the Holders, and enforce all of their rights against the
Collateral, the Company or any other Persons. In th
event the Collateral Agent fails to take such action after such demand,
any of the Holders may take such action on behalf of the Holders. The
Collateral Agent or the Holder enforcing such rights shall have all the powers
given to such Holder in this Agreement or provided by law or equity to enforce
such rights.

               (e) Each Holder acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Collateral Agent
hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of the Company or any Affiliate thereof, shall be deemed
to constitute any representation or warranty by any Agent-Related Person to any
Holder as to any matter, including whether Agent-Related Persons have disclosed
material information in their possession. Each Holder represents to the
Collateral Agent that it has, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own

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appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Company and its respective Subsidiaries, and all
applicable regulatory laws relating to the transactions contemplated hereby,
and made its own decision to enter into this Agreement. Each Holder also
represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigations as it deems necessary to inform itself as to
the business, prospects, operations, property, financial and other condition
and creditworthiness of the Company. Except for notices, reports and other
documents expressly required to be furnished to the Holders by the Collateral
Agent herein, the Collateral Agent shall not have any duty or responsibility to
provide any Holder with any credit or other information concerning the
business, prospects, operations, property, financial and other condition or
creditworthiness of the Company or any of its respective Affiliates which may
come into the possession of any Agent-Related Person.

               (f) With respect to its Note, Harbert Distressed Investment Master Fund
shall have the same rights and powers under this Agreement as any other Holder
and may exercise such rights and powers as though it were not the Collateral
Agent and the terms “Holder” and “Holders” include Harbert Distressed
Investment Master Fund in its individual capacity.

               (g) In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company, the Collateral Agent (irrespective
of whether the principal of any Note shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the
Collateral Agent shall have made any demand on the Company) shall be entitled
and empowered, by intervention in such proceeding or otherwise: (A) to file and
prove a claim for the whole amount of the principal and interest owing and
unpaid in respect of the Notes, and all other Obligations that are owing and
unpaid and to file such other documents as may be necessary or advisable in
order to have the claims of the Holders and the Collateral Agent (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Holders and the Collateral Agent and their respective agents and counsel
and all other amounts due the Holders and the Collateral Agent) allowed in such
judicial proceeding; and (B) to collect and receive any monies or other
property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such
judicial proceeding is hereby authorized by each Holder to make such payments
to the Collateral Agent and, in the event that the Collateral Agent shall
consent to the making of such payments directly to the Holders, to pay to the
Collateral Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Collateral Agent and its agents and counsel,
and any other amounts due the Collateral Agent. Nothing contained herein shall
be deemed to authorize the Collateral Agent to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Obligations or the rights
of any Holder or to authorize the Collateral Agent to vote in respect of the
claim of any Holder in any such proceeding.

               (h) The Holders irrevocably authorize the Collateral Agent, upon written
approval of the Majority Holders: (A) to release any Lien on any property
granted to or held by

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the Collateral Agent under this Agreement; (B) to
subordinate any Lien on any property granted to or held by the Collateral Agent
under this Agreement; (C) to release any Collateral for value; and (D) to
collect, receive, appropriate or realize any Collateral upon an Event of
Default; and upon request by the Collateral Agent at any time, the Majority
Holders will confirm in writing the Collateral Agent’s authority to release or
subordinate its interest in particular types or items of property.

               (i) If, other than as expressly provided elsewhere herein, any Holder
shall obtain on account of its Note(s), any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) in
excess of its ratable share (or other share contemplated hereunder) thereof,
such Holder shall immediately (a) notify the Collateral Agent of such fact, and
cooperate to make the necessary payments so that each Holder shall have
received its pro rata share of payments on the Obligation and the Obligation of
the Company to each Holder shall be adjusted as necessary.

     The Collateral Agent may perform any of its duties hereunder or in
connection with the Collateral by or through agents or employees and shall be
entitled to retain counsel and to act in reliance upon the advice of counsel
concerning all such matters. None of the Collateral Agent, any director,
officer, shareholder, employee, attorney or agent of the Collateral Agent nor
any Holder shall be liable for any action taken or omitted to be taken by it or
them hereunder, except for its own gross negligence or willful misconduct, nor
shall the Collateral Agent be responsible for the legality, validity,
effectiveness or sufficiency hereof or of any document or security furnished
pursuant hereto.

ARTICLE XI.

SENIORITY

     Section 11.1 Agreement to Subordinate.

     The Company agrees, and each Holder by accepting a Note agrees, that the
Obligations under this Agreement and the Notes are subordinated in right of
payment, to the extent and in the
manner provided in this Article, to the prior payment in full of the
Senior Secured Indebtedness, and that the subordination is for the benefit of
the holders and owners of the Senior Secured Indebtedness.

     Section 11.2 Liquidation; Dissolution; Bankruptcy.

     Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property or
in an assignment for the benefit of creditors or any marshalling of the assets
and liabilities of the Company:

               (i) holders and owners of Senior Secured Indebtedness shall be entitled to
receive payment in full of all Obligations with respect to the Senior Secured

62

 

Indebtedness before Holders shall be entitled to receive any payment of any
Obligations with respect to the Notes; and

               (ii) until all Obligations with respect to Senior Secured Indebtedness (as
provided in subsection (1) above) are paid in full, any distribution to which
Holders would be entitled but for this Article XI shall be made to holders and
owners of Senior Secured Indebtedness, as their interests may appear, except
that Holders may receive securities that are subordinated to at least the same
extent as the Notes to (a) Senior Secured Indebtedness and (b) any securities
issued in exchange for Senior Secured Indebtedness.

     Section 11.3 Default on Senior Secured Indebtedness.

     The Company may not make any payment or distribution to each Holder in
respect of Obligations with respect to the Notes and may not acquire from any
Holder any Notes for cash or property (other than Indebtedness that is
subordinated to at least the same extent as the Notes to (a) Senior Secured
Indebtedness and (b) any securities issued in exchange for Senior Secured
Indebtedness) until all Obligations with respect to the Senior Secured
Indebtedness have been paid in full if:

               (i) a default in the payment of any Obligations with respect to the
Senior Secured Indebtedness occurs and is continuing that permits the
holders of such Senior Secured Indebtedness to accelerate its maturity or
the maturity of which has been accelerated;

               (ii) the Company receives a notice of or has actual knowledge of a
default, other than a payment default, under any Senior Secured
Indebtedness permitting an acceleration thereof or that would permit an
acceleration thereof with the giving of notice or the passage of time or
both, but payments may and shall thereafter be resumed if such payment is
then otherwise permitted by this Agreement and the maturity of such
Senior Secured Indebtedness has not been or does not remain accelerated;
or

               (iii) any judicial proceeding shall be pending with respect to a
default on Senior Secured Indebtedness.

     The Company may and shall resume payments on and distributions in respect
of the Notes and may acquire them when the default is cured or waived if this
Article otherwise permits the payment or acquisition at the time of such
payment or acquisition; provided that such payments and distributions with
respect to Notes will again be subject to the limitations of this Section 11.3
if a subsequent default under the same provisions of the instrument governing
Senior Secured Indebtedness occurs after a similar default has been cured or
waived, except that in no event shall the same set of facts give rise to more
than one 180-day period under clause (ii) above, and except that payments in
respect of the Notes may not be delayed by this Section 11.3 more than once in
respect of the same issue of Senior Secured Indebtedness or more than once
during any 360 consecutive days with respect to any or all issues of Senior
Secured Indebtedness.

63

 

     Section 11.4 Acceleration of Securities.

     If payment of the Notes is accelerated because of an Event of Default, the
Company shall promptly notify holders and owners of Senior Secured Indebtedness
of the acceleration. In such event, Holders will not be entitled to receive or
retain any payment before all the Senior Secured Indebtedness has been paid in
full.

     Section 11.5 When Distribution Must Be Paid Over.

     In the event that any Holder receives any payment of any Obligations with
respect to the Notes at a time when such Holder has actual knowledge such
payment is prohibited by Section 11.3 hereof, such payment shall be held by
such Holder, in trust for the benefit of, and shall be paid forthwith over and
delivered, upon written request, to the holders and owners of Senior Secured
Indebtedness as their interests may appear or the Representative, for
application to the payment of all Obligations with respect to Senior Secured
Indebtedness remaining unpaid to the extent necessary to pay such Obligations
in full in accordance with their terms, after giving effect to any concurrent
payment or distribution to or for the holders and owners of Senior Secured
Indebtedness.

     If a distribution is made to any Holder that because of this Article XI
should not have been made to it, such Holder who receives the distribution
shall hold it in trust for the benefit of, and, upon written request, pay it
over to, the holders and owners of Senior Secured Indebtedness as their
interests may appear, or the Representative for application to the payment of
all Obligations with respect to Senior Secured Indebtedness remaining unpaid to
the extent necessary to pay such Obligations in full in accordance with their
terms, after giving effect to any concurrent payment or distribution to or for
the holders and owners of Senior Secured Indebtedness.

     Section 11.6 Notice by Company.

     The Company shall promptly notify the Collateral Agent, for so long as the
Holders hold the security interest granted pursuant to Article X, and
thereafter, each Holder, of any facts known to the Company that would cause a
payment of any Obligations with respect to the Notes to violate this Article,
but failure to give such notice shall not affect the subordination of the Notes
to the Senior Secured Indebtedness provided in this Article.

     Section 11.7 Subrogation.

     After all Senior Secured Indebtedness is paid in full and until the Notes
are paid in full, Holders shall be subrogated to the rights of holders and
owners of Senior Secured Indebtedness to receive distributions applicable to
Senior Secured Indebtedness to the extent that distributions otherwise payable
to each Holder have been applied to the payment of Senior Secured Indebtedness.
A distribution made under this Article to holders of Senior Secured
Indebtedness that otherwise would have been made to Holders is not, as between
the Company and Holders, a payment by the Company on the Notes.

64

 

     Section 11.8 Relative Rights.

     This Article defines the relative rights of Holders and holders of Senior
Secured Indebtedness. Nothing in this Agreement shall:

               (a) impair, as between the Company and Holders, the obligation of the
Company, which is absolute and unconditional, to pay the Obligations under this
Agreement and the Notes;

               (b) affect the relative rights of Holders and creditors of the Company
other than their rights in relation to holders and owners of Senior Secured
Indebtedness; or

               (c) prevent any Holder from exercising its available remedies upon a
Default or Event of Default, subject to the rights of holders and owners of
Senior Secured Indebtedness to receive distributions and payments otherwise
payable to Holders.

     If the Company fails because of this Article to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.

     Section 11.9 Subordination May Not Be Impaired by Company.

     No right of any holder or owner of Senior Secured Indebtedness to enforce
the subordination of the indebtedness evidenced by the Notes shall be impaired
by any act or failure to act by the Company or by its failure to comply with
this Agreement.

     Section 11.10 Distribution or Notice to Representative.

     Whenever a distribution is to be made or a notice given to holders or
owners of Senior Secured Indebtedness, the distribution may be made and the
notice given to the Representative.

     Upon any payment or distribution of assets of the Company referred to in
this Article XI, the Holders shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction or upon any certificate of the
Representative or of the liquidating trustee or agent or other person making
any distribution to each Holder for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders and owners of the
Senior Secured Indebtedness and other Indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article XI.

     Section 11.11 Authorization to Effect Subordination.

     Each Holder of a Note by his acceptance thereof agrees to take such action
as may be necessary or appropriate to effectuate the subordination as provided
in this Article XI.

ARTICLE XII.

MISCELLANEOUS

65

 

     Section 12.1 Notices.

     Any notices or other communications required or permitted hereunder shall
be in writing, and shall be sufficiently given if made by hand delivery, by
facsimile, or by registered or certified mail, postage prepaid, return receipt
requested, and addressed as follows:

	 	 	 
	

	 	If to the Company:
	 
	 	 
	

	 	ORBIMAGE Inc.
	

	 	21700 Atlantic Boulevard
	

	 	Dulles, Virginia 20166
	

	 	Attn:Chief Financial Officer
	

	 	Facsimile: 703-480-7544
	 
	 

	 	If to the Holders:
	 
	 	 
	

	 	Harbert Distressed Investment Master Fund, Ltd.
	

	 	c/o Harbert Management Corp.
	

	 	555 Madison Avenue
	

	 	Suite 2800
	

	 	New York, NY 10022
	

	 	Attn: Philip Falcone
	

	 	Facsimile: 212-521-6972 
	 
	 	 
	

	 	and
	 
	 	 
	

	 	Magten Group Trust
	

	 	410 Park Avenue
	

	 	14th Floor
	

	 	New York, NY 10022
	

	 	Attn: Talton Embry
	

	 	Facsimile: 212-813-9058
	 
	 	 
	

	 	and
	 
	 	 
	

	 	Magten Partners, LP
	

	 	410 Park Avenue
	

	 	14th Floor
	

	 	New York, NY 10022
	

	 	Attn: Talton Embry
	

	 	Facsimile: 212-813-9058
	 
	 	 
	

	 	and
	 
	 	 
	

	 	Redwood Master Fund, Ltd.
	

	 	910 Sylvan Avenue
	

	 	Englewood Cliffs, NJ 07632

66

 

	 	 	 
	

	 	Attn: Ara Cohen
	

	 	Facsimile: 201-568-1340
	 
	 	 
	

	 	and
	 
	 	 
	

	 	Triage Offshore Fund, Ltd.
	

	 	401 City Avenue
	

	 	Suite 526
	

	 	Bala Cynwyd, PA 19004
	

	 	Attn: Mark Wittman
	

	 	Facsimile: 610-668-1919 
	 
	 	 
	

	 	and
	 
	 	 
	

	 	Triage Capital Management, LP
	

	 	401 City Avenue
	

	 	Suite 526
	

	 	Bala Cynwyd, PA 19004
	

	 	Attn: Mark Wittman
	

	 	Facsimile: 610-668-1919
	 
	 	 
	

	 	with a copy to:
	 
	 	 
	

	 	Katten Muchin Zavis Rosenman
	

	 	575 Madison Avenue
	

	 	New York, New York 10022-2585
	

	 	Attention: Jeff J. Friedman, Esq.
	

	 	Fax: (212) 940-8776
	 
	 	 
	

	 	If to the Collateral Agent:
	 
	 	 
	

	 	Harbert Distressed Investment Master Fund, Ltd.
	

	 	c/o Harbert Management Corp.
	

	 	555 Madison Avenue
	

	 	Suite 2800
	

	 	New York, NY 10022
	

	 	Attn: Philip Falcone
	

	 	Facsimile: 212-521-6972
	 
	 	 
	

	 	With a copy to:
	 
	 	 
	

	 	Katten Muchin Zavis Rosenman
	

	 	575 Madison Avenue
	

	 	New York, New York 10022-2585
	

	 	Attention: Jeff J. Friedman, Esq.
	

	 	Fax: (212) 940-8776

67

 

Each of the Company, the Collateral Agent and the Holders by written notice as
specified herein to each other Person may designate additional or different
addresses for notices to such Person. Any notice or communication to the
Company, the Collateral Agent or the Holders shall be deemed to have been given
or made: as of the date delivered, if personally delivered; when receipt is
confirmed, if sent by facsimile; and five calendar days after mailing, if sent
by registered or certified mail, postage prepaid; provided that a notice of
change of address shall not be deemed to have been given until actually
received by the addressee. Neither the failure to mail any such notice nor any
defect in any notice so mailed to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Notice may be waived
in writing by any Person entitled to receive such notice, either before or
after the event requiring notice.

     Section 12.2 Communication by Holders of Notes with Other Holders of
Notes.

     Holders may communicate with other Holders with respect to their rights
under this Agreement or the Notes.

     Section 12.3 Acts of Holders; Registered Holders; Record Dates.

               (a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by Holders may
be embodied in and evidenced by one or more written instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Company. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the “Act” of the
Holders signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Agreement and conclusive in favor of the Company, if made
in the manner provided in this Section.

               (b) The fact and date of the execution by any Person of any such
instrument or writing pursuant to this Section may be proved by the affidavit
of a witness of such execution or by a certificate of a notary public or other
officer authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the execution
thereof. Where such execution is by a signer acting in a capacity other than
his individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the execution of any
such instrument or
writing, or the authority of the Person executing the same, may also be
proved in any other manner which the Company deems sufficient.

               (c) The ownership of Notes shall be proved by the Note Register.

               (d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Note shall bind every future Holder of the
same Note and the Holder of every Note issued upon the registration of transfer
thereof or in exchange therefore or in lieu thereof in respect of anything
done, omitted or suffered to be done by the Company in reliance thereon,
whether or not notation of such action is made upon such Note.

68

 

               (e) Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Note may do so with regard
to all or any part of the principal amount of such Note or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.

     Section 12.4 Successors and Assigns.

     All covenants and agreements of the Company in this Agreement and the
Notes shall bind its successors.

     Section 12.5 Severability.

     In case any one or more of the provisions in this Agreement or in the
Notes shall be held invalid, illegal or unenforceable in any jurisdiction, in
any respect for any reason, the validity, legality and enforceability of any
such provision in every other jurisdiction and in every other respect, and of
the remaining provisions, shall not in any way be affected or impaired thereby,
it being intended that all of the provisions hereof shall be enforceable to the
full extent permitted by law.

     Section 12.6 No Third Party Benefits.

     Nothing in this Agreement or in the Notes, express or implied, shall give
to any Person, other than the parties hereto and their successors hereunder and
the Holders, any benefit or any legal or equitable right, remedy or claim under
this Agreement.

     Section 12.7 Governing Law; Jurisdiction.

     This Agreement and the Notes shall be governed by and construed in
accordance with the laws of the State of New York, as applied to contracts made
and performed entirely within the State of New York, without regard to
principles of conflict of laws. Each of the parties hereto agrees to submit to
the jurisdiction of the courts of the State of New York or the United States
federal courts sitting in the State of New York and the appellate courts having
jurisdiction of appeals in such courts in any action or proceeding arising out
of or relating to this Agreement.

     Section 12.8 Legal Holidays.

     In any case where any Interest Payment Date, Proceeds Purchase Date or
Change of Control Payment Date of any Note shall not be a Business Day, then,
notwithstanding any other provision of this Agreement or of the Notes, payment
of interest on or principal and premium (if any) of the Notes need not be made
on such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on such Interest Payment Date, Proceeds Purchase
Date or Change of Control Payment Date, as the case may be.

     Section 12.9 No Recourse Against Others; Limitation on Liability.

     Notwithstanding anything contained in this Agreement or the Notes to the
contrary, (i) except for the Company and the Guarantors to the extent provided
in clause (ii) below, no Person shall have any liability whatsoever with
respect to or arising out of this Agreement, the Notes, or

69

 

the Company’s
obligations thereunder or any agreements or documents executed by the Company
in connection therewith and (ii) claims with respect to this Agreement, the
Notes and any obligations thereunder or under any agreements or documents
executed in connection therewith shall be satisfied solely from the assets of
the Company and the Guarantors. Each Holder, by accepting a Note, waives and
releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes.

     Section 12.10 Non-Assignment.

     The Company may not assign this Agreement without the prior written
consent of all of the Holders. No Holder may assign its interest in this
Agreement to a competitor of the Company without the prior written consent of
Company provided that if an Event of Default has occurred and is continuing,
then any such Holder shall not be required to obtain the Company’s consent to
any assignment of this Agreement.

     Section 12.11 Legal Fees.

     The Company shall pay upon demand all reasonable, documented out-of-pocket
expenses of the Collateral Agent and the Holders (including legal fees and
disbursements of one lead counsel (and, where applicable, one local counsel)
representing the Holders and/or the Collateral Agent) in connection with the
preparation and administration of this Agreement and the documents related
thereto or amendment thereof (including requests for, amendments, waivers or
modifications, even if such amendments, waivers or modifications are not
finalized or executed), including enforcement of the Collateral Agent’s and
Holders’ rights and remedies under this Agreement and costs incurred in
connection with protection or assertion of their rights under this Agreement ,
the Notes or under the Bankruptcy Code in a bankruptcy or reorganization of the
Company.

     Section 12.12 Counterparts.

     This Agreement may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

70

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

	 	 	 	 	 
	 	ORBIMAGE INC.

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	HARBERT DISTRESSED INVESTMENT MASTERFUND
 
	 
	 	By:  	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	HARBERT DISTRESSED INVESTMENT MASTERFUND, as Collateral Agent

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	MAGTEN GROUP TRUST

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	MAGTEN PARTNERS, LP

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	REDWOOD MASTER FUND, LTD.

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

71

 

	 	 	 	 	 

	 	 	 	 	 
	 	TRIAGE OFFSHORE FUND, LTD.

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	TRIAGE CAPITAL MANAGEMENT, LP

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

72

 

	 	 	 	 	 

EXHIBIT A

(FORM OF FACE OF NOTE)

     THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THE NOTE
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. THE HOLDER
OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF ORBIMAGE INC. AND ITS
SUCCESSORS (THE “COMPANY”) THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY IN ACCORDANCE WITH AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY, (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE NOTE
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.

 

 

ORBIMAGE INC.

Senior Notes due 2008

No. ___

     ORBIMAGE INC., a Delaware corporation (the “Company”), promises to pay to
                                       or its registered assigns, the principal sum of $                                      
on June 30, 2008.

     Interest Payment Dates: June 30 and December 31, commencing on December
31, 2003.

     Interest will accrue from the most recent date on which interest has been
paid or, if no interest has been paid, from                                                           ,                   [insert Issue
Date].

     Record Dates: June 15 and December 15.

     Reference is made to the further provisions of this Note contained herein,
which will for all purposes have the same effect as if set forth at this place.

     IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officer.

	 	 	 	 	 
	 	ORBIMAGE INC.

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Dated:

 

 

(FORM OF Reverse Side of Note)

Senior Notes due 2008

     Capitalized terms used herein shall have the meanings ascribed to them in
the Agreement (as defined below) unless otherwise indicated.

     1. Interest. ORBIMAGE INC., a Delaware corporation (the
“Company”), promises to pay interest on the principal amount of this Note as
set forth herein. This Note will bear interest at the rate of 13.625% per
annum, commencing December 31, 2003 through December 31, 2004, which interest
shall be capitalized on each Interest Payment Date and added to the principal.
The Holder or the Collateral Agent is hereby authorized to endorse on the grid
attached to this Note the amount of interest capitalized and evidenced by this
Note. Commencing on January 1, 2005, this Note will bear interest at the rate
of 11.625% per annum, payable in cash, beginning on June 30, 2005. The Company
will pay interest semi-annually in arrears on each Interest Payment Date.

     The Company shall pay, to the extent such payments are lawful, interest on
overdue principal and on overdue installments of interest (without regard to
any applicable grace periods), from time to time on demand at the rate borne by
this Note plus 2 per annum. Interest will be computed on the basis of a
360-day year of twelve 30-day months.

     If the Company defaults in a payment of interest on this Note, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Holder in each case at the
rate provided in this Note and in Section 5.1 of the Agreement. The Company
shall notify the Holder in writing of the amount of defaulted interest proposed
to be paid on this Note and the date of the proposed payment. The Company
shall fix such payment date. At least 15 days before the payment date, the
Company shall mail or cause to be mailed to the Holder a notice that states the
payment date and the amount of such defaulted interest to be paid.

     2. Method of Payment. The Company shall pay the principal and
premium, if any, of or interest on, this Note on the dates and in the manner
provided herein and in the Agreement. Principal and premium, if any, of or
interest on, this Note will be payable, and this Note may be presented for
registration of transfer or exchange, at the office or agency of the Company
maintained for such purpose. Holders of Notes will be entitled to receive
interest payments by wire transfer in immediately available funds if
appropriate wire transfer instructions have been received in writing by the
Paying Agent not less than 15 days prior to the applicable Interest Payment
Date. Such wire instructions, upon receipt by the Paying Agent, shall remain
in effect until revoked by such Holder. If wire instructions have not been
received by the Paying Agent with respect to any Holder of a Note, payment of
interest may be made by check in immediately available funds mailed to such
Holder at the address set forth upon the Note Register maintained by the
Registrar.

 

 

     3. Paying Agent and Registrar. Initially, the Company will act as
Paying Agent and Registrar. The Company may change the Paying Agent or
Registrar without notice to or consent of the Holders.

     4. Agreement. The Company issued this Note under a Note and
Security Agreement, dated as of                                        , 2003 (the “Agreement”), between the
Company and the Initial Holders. The terms of this Note include those stated
in the Agreement. Notwithstanding anything to the contrary herein, this Note
is subject to all such terms, and Holders of Notes are referred to the
Agreement for a statement of such terms. Each Holder, by accepting a Note,
agrees to be bound by all of the terms and provisions of the Agreement, as the
same may be amended from time to time.

     The Agreement contains certain covenants that, among other things, limit
the ability of the Company and its Restricted Subsidiaries to incur additional
Indebtedness, pay dividends or make other distributions, repurchase any capital
stock or subordinated Indebtedness, make certain investments, create certain
Liens, enter into certain transactions with Affiliates, sell assets, enter into
certain mergers and consolidations, restrict such Restricted Subsidiaries from
making certain dividend and other payments, entering into Sale and Leaseback
Transactions, and issuing or selling capital stock of Restricted Subsidiaries
of the Company. Such limitations are subject to important qualifications and
exceptions. The Company must annually report to the Collateral Agent, for so
long as the Holders hold the security interest granted pursuant to Article X of
the Agreement, and thereafter, to each Holder, on compliance with such
limitations. The Agreement requires the Company to cause any Person that
becomes a Subsidiary of the Company, excluding all Subsidiaries that have
properly been designated as Unrestricted Subsidiaries for so long as they
continue to constitute Unrestricted Subsidiaries, after the Issue Date to
execute and deliver to the Collateral Agent, for so long as the Holders hold
the security interest granted pursuant to Article X of the Agreement, and
thereafter, to each Holder, a guarantee agreement pursuant to which such
Subsidiary will Guarantee the payment obligations of the Company under the
Agreement and the Notes.

     5. Mandatory Redemption; Offer to Purchase. Except as set forth in
Section 3.8 of the Agreement, the Company shall not be required to make
mandatory redemption or sinking fund payments with respect to the Notes.

     Section 3.7 of the Agreement provides that, subject to the conditions and
limitations contained in the Agreement, the Company will semi-annually use its
Unrestricted Cash to purchase Notes in accordance with the procedures set forth
in the Agreement at a purchase price equal to 100% of the principal amount
thereof plus accrued and unpaid interest to the date of purchase.

     Sections 5.14 and 5.15 of the Agreement provide that, after certain Asset
Sales and upon the occurrence of a Change of Control, and subject to the
conditions and limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Agreement at a purchase price equal to 100% of the principal
amount thereof plus accrued and unpaid interest to the date of purchase.

 

 

     6. Denominations, Transfer, Exchange. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Agreement. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Agreement. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a Record Date
and the corresponding Interest Payment Date.

     7. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.

     8. Discharge Prior to Redemption or Maturity. If the Company at
any time deposits into an irrevocable trust U.S. dollars or Government
Securities sufficient to pay all of the Obligations under the Agreement and
this Note, and complies with the other provisions of the Agreement relating
thereto, the Company will be discharged from certain provisions of the
Agreement and the Notes (including certain covenants, but excluding its
obligation to pay the principal of, and interest payable on, the Notes).

     9. Amendment; Waiver. Subject to certain exceptions as set forth
in Section 9.1 of the Agreement, the Agreement and the Notes may be amended
with the written consent of the Majority Holders, and certain existing Defaults
or Events of Default or noncompliance with any provision may be waived with the
written consent of the Majority Holders.

     10. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Majority Holders may declare all the Notes to be due and
payable in the manner, at the time and with the effect provided in the
Agreement.

     11. No Recourse Against Others; Limitation on Liability.
Notwithstanding anything contained in the Agreement or the Notes to the
contrary, (i) except for the Company and the Guarantors to the extent provided
in clause (ii) below, no Person shall have any liability whatsoever with
respect to or arising out of the Agreement, the Notes or any of the Company’s
obligations thereunder or any agreements or documents executed by the Company
in connection therewith and (ii) claims with respect to the Agreement, the
Notes and any Obligations thereunder or under any agreements or documents
executed in connection therewith shall be satisfied solely from the assets of
the Company and the Guarantors. Each Holder, by accepting a Note, waives and
releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes.

     12. Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (=Uniform Gifts
to Minors Act).

 

 

     13. Governing Law. THE AGREEMENT AND THIS NOTE SHALL BE GOVERNED
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAW OF THE
STATE OF NEW YORK AS APPLIED TO CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN
THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

     14. Agreement. Each Holder, by accepting a Note, agrees to be
bound by all of the terms and provisions of the Agreement, as the same may be
amended from time to time.

     The Company will furnish without charge to any Holder of a Note upon
written request a copy of the Agreement, which has the text of this Note
printed therein. Requests may be made c/o ORBIMAGE Inc., 21700 Atlantic
Boulevard, Dulles, Virginia 20166, Attn: Secretary.

 

 

EXHIBIT A

ASSIGNMENT FORM

     To assign this Note, fill in the form below and have your signature guaranteed:

     I or we assign and transfer this Note to:

     (Print or type name, address and zip code and social security or tax ID
number of assignee)

and irrevocably appoint, agent to transfer this Note on the books of the
Company. The agent may substitute another to act for it.

Date:

Signed:

(Signed exactly as your name appears on the other side of this Note)

Signature Guarantee:

 

 

     In connection with any transfer of this Note occurring prior to the date
which is the earlier of [(i) the date of the declaration by the Securities and
Exchange Commission of the effectiveness of a registration statement under the
Securities Act of 1933, as amended (the “Securities Act”) covering resales of
this Note (which effectiveness shall not have been suspended or terminated at
the date of the transfer) and (ii)]                                                           ,2004, the undersigned
confirms that it has not utilized any general solicitation or general
advertising in connection with the transfer and that this Note is being
transferred:

(Check One)

	(1)	 	      to the Company or a Subsidiary thereof; or
	 
	(2)	 	      pursuant to an effective registration statement under the Securities
Act; or
	 
	(3)	 	      pursuant to an available exemption from the registration requirements
of the Securities Act.

     Unless one of the boxes is checked, the Registrar will refuse to register
any of the Notes evidenced by this certificate in the name of any Person other
than the Holder thereof; provided that if box (3) is checked, the Company may
require, prior to registering any such transfer of the Notes, in its sole
discretion, such legal opinions, certifications and other information the
Company may reasonably request to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act.

     If none of the foregoing boxes is checked, the Registrar shall not be
obligated to register this Note in the name of any Person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Section 2.6 of the Agreement shall have been satisfied.

Date:

Signed:

(Signed exactly as your name appears on the other side of this Note)

Signature Guarantee:

     NOTICE: Your signature must be guaranteed by an Institution which is a
member of one of the following recognized signature Guarantee Programs: (i) The
Securities Transfer Agent Medallion Program; (ii) The New York Stock Exchange
Medallion Program; (iii) The Stock Exchange Medallion Program; or (iv) any
other guarantee program acceptable to the Company.

 

 

OPTION OF HOLDER TO ELECT PURCHASE

     If you elect to have this Note purchased by the Company pursuant to
Section 5.14 or Section 5.15 of the Agreement, check the appropriate box:

     Section 5.14 [     ]

     Section 5.15 [     ]

     If you elect to have only part of this Note purchased by the Company
pursuant to Section 4.14 or Section 4.15 of the Agreement, state the amount you
elect to have purchased:

$

Dated:

     NOTICE: The signature on this assignment must correspond with the name as
it appears upon the face of the within Note in every particular without
alteration or any change whatsoever and be guaranteed by the endorser’s bank or
broker.

     Signature Guarantee:

     

     NOTICE: Your signature must be guaranteed by an Institution which is a
member of one of the following recognized signature Guarantee Programs: (i) The
Securities Transfer Agent Medallion Program; (ii) The New York Stock Exchange
Medallion Program; (iii) The Stock Exchange Medallion Program; or (iv) any
other guarantee program acceptable to the Company.

 

 

CAPITALIZED INTEREST

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Amount of Interest	 	 	 	 
	Date
	 	Capitalized
	 	Principal Balance
	 	Notation Made Byexv4w3

 

EXHIBIT 4.3

REGISTRATION RIGHTS AGREEMENT

by and between

ORBIMAGE Inc.,

Crest Communications Holdings LLC,

and the other

Beneficiaries hereto

Dated as of December 31, 2003

 

 

	 	 	 	 	 
	REGISTRATION RIGHTS AGREEMENT
	 	 	3	 
	1. Definitions.
	 	 	3	 
	2. General Registration; Listing.
	 	 	5	 
	(a) General Registration on Form 10.
	 	 	5	 
	(b) Listing.
	 	 	5	 
	(c) NASD Rule 4350.
	 	 	5	 
	3. Demand Registration.
	 	 	6	 
	(a) Requests for Registration.
	 	 	6	 
	(b) Filing and Effectiveness.
	 	 	6	 
	(c) Priority in Demand Registrations.
	 	 	7	 
	4. Shelf Registration.
	 	 	7	 
	(a) Filing and Effectiveness.
	 	 	7	 
	(b) Continued Effectiveness.
	 	 	8	 
	(c) Effect on Demand Registration Obligation.
	 	 	8	 
	(d) Shelf Registration Other Than Form S-3.
	 	 	8	 
	5. Piggyback Registration.
	 	 	9	 
	(a) Right to Piggyback.
	 	 	9	 
	(b) Priority in Piggyback Registrations.
	 	 	9	 
	6. Holdback Agreements.
	 	 	10	 
	(a) Restrictions on Sale by Holders of Registrable Securities.
	 	 	10	 
	(b) Restrictions on the Sale by the Company.
	 	 	11	 
	7. Registration Procedures.
	 	 	11	 
	8. Registration Expenses.
	 	 	17	 
	9. Indemnification.
	 	 	18	 
	(a) Indemnification by the Company.
	 	 	18	 
	(b) Indemnification by Holders of Registrable Securities.
	 	 	18	 
	(c) Conduct of Indemnification Proceedings.
	 	 	19	 
	(d) Contribution.
	 	 	19	 
	10. Rule 144.
	 	 	20	 
	11. Miscellaneous.
	 	 	20	 
	(a) Remedies.
	 	 	20	 
	(b) No Inconsistent Agreements.
	 	 	21	 
	(c) Amendments and Waivers.
	 	 	21	 
	(d) Notices.
	 	 	21	 
	(e) Owner of Registrable Securities.
	 	 	22	 
	(f) Successors and Assigns.
	 	 	22	 
	(g) Counterparts; Effectiveness.
	 	 	22	 
	(h) Headings.
	 	 	22	 
	(i) Governing Law.
	 	 	23	 
	(j) Jurisdiction; Consent to Service of Process.
	 	 	23	 
	(k) WAIVER OF JURY TRIAL.
	 	 	23	 
	(l) Severability.
	 	 	23	 
	(m) Entire Agreement.
	 	 	23	 
	(n) No Strict Construction.
	 	 	24	 
	(o) Third Party Beneficiaries.
	 	 	24	 
	(p) Registration of Securities other than Registrable Securities.
	 	 	24	 
	(q) Termination.
	 	 	24	 
	Exhibit A
	 	 

 

 

REGISTRATION RIGHTS AGREEMENT

          REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of
December 31, 2003, among those holders of New Common Stock, New Senior
Subordinated Notes and Warrants signatory hereto who are Beneficiaries (as
defined below), Crest Communications Holdings LLC (“Crest
Communications”) and ORBIMAGE Inc., a Delaware corporation (the
“Company”).

          A. Pursuant to the Company’s Fourth Amended Plan of Reorganization, dated
as of September 15, 2003 (the “Chapter 11 Plan”), upon the satisfaction
of certain conditions, the Company will issue (i) New Common Stock and New
Senior Subordinated Notes to the Beneficiaries in respect of the Old Notes and
(ii) Warrants to the Beneficiaries in respect of the Existing Preferred Stock.

          B. In order to induce the Beneficiaries to agree to the Chapter 11 Plan,
the Company has agreed to grant certain registration rights with respect to the
New Common Stock to the Beneficiaries as set forth herein.

          NOW, THEREFORE, in consideration of the foregoing, the parties hereto
agree as follows:

1.          Definitions.

     In addition to the terms defined elsewhere herein and the terms set forth
in the Chapter 11 Plan that are not otherwise defined herein, which shall have
the same meanings herein as in the Chapter 11 Plan, the following terms shall
have the following meanings when used herein with initial capital letters:

          “Beneficiaries” means, at any time, (a) those Persons who receive
beneficial or record ownership of more than 10% of the shares of New Common
Stock distributed pursuant to the Chapter 11 Plan, (b) any Person who is a
director or officer of the Company at the time the Chapter 11 Plan is declared
effective to the extent such Person holds New Common Stock at such time, (c)
any holder of Registrable Securities who may reasonably be deemed an
“underwriter” for purposes of Section 2(11) of the Securities Act with respect
to the issuance of New Common Stock at such time, (d) any holder of New Senior
Subordinated Notes who may reasonably be deemed an “underwriter” for purposes
of Section 2(11) of the Securities Act with respect to or an “affiliate” as
defined under Rule 144 as a consequence of its holding Registrable Securities
upon the effectiveness of the Chapter 11 Plan, (e) Crest Communications, for so
long as, and only to the extent that, it is a holder of Registrable Securities,
and (f) in regards to the piggyback rights granted by Section 5 only, those
beneficial or record owners of Warrants distributed pursuant to the Chapter 11
Plan, for so long as and only to the extent that they hold such Warrants or the
underlying New Common Stock issued upon exercise thereof (the “Underlying
Common Stock”); provided, however, in each case, upon the
request of the Company, such Persons submits a written statement to the Company
substantially in the form

 

 

attached hereto as Exhibit
A. Beneficiaries pursuant to clauses (a), (b) and (c) are referred to
herein as “Common Stock Beneficiaries.”

          “Exchange Act” means the Securities Exchange Act of 1934, as
amended.

          “Person” means a natural person, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or other entity, or a
governmental entity or any department, agency or political subdivision thereof.

          “Prospectus” means 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 promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement and all other amendments and
supplements to the Prospectus, including amendments thereto after the effective
date of the related Registration Statement, and all material incorporated by
reference or deemed to be incorporated by reference in such Prospectus.

          “Registrable Securities” means (a) the shares of New Common Stock
acquired by the Beneficiaries on or after the date hereof, pursuant to the
Chapter 11 Plan or otherwise, and any shares of New Common Stock or other
securities that may be received by the Beneficiaries (x) as a result of a stock
dividend, stock split or other distribution of New Common Stock or (y) on
account of New Common Stock in a recapitalization or other transaction
involving the Company, in each case upon the respective original issuance
thereof, and at all times subsequent thereto, (b) the New Senior Subordinated
Notes held by the Beneficiaries, and (c) in regards to the piggyback rights
granted by Section 5 only, the Underlying Common Stock held by Beneficiaries;
provided, however, that the foregoing securities referenced in
(a), (b) and (c) above shall cease to be “Registrable Securities” to the extent
that (i) such securities have been effectively registered under the Securities
Act and disposed of in accordance with the Registration Statement covering them
or (ii) such securities are then saleable by the holder thereof pursuant to
Rule 144(k).

          “Registration Statement” means any registration statement of the
Company under the Securities Act that covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including the related Prospectus,
all amendments and supplements to such registration statement (including
post-effective amendments), all exhibits and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement.

          “Rule 144” means Rule 144 under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.

          “SEC” means the Securities and Exchange Commission.

          “Securities Act” means the Securities Act of 1933, as amended.

 

 

          “Subsidiary” when used with respect to any party, means any
corporation or other organization, whether incorporated or unincorporated, of
which such party directly or indirectly owns or controls more than 50% of the
securities or other interests having by their terms ordinary voting power to
elect a majority of the board of directors or others performing similar
functions.

          “Underwritten Offering” means a distribution, registered pursuant
to the Securities Act, in which securities of the Company are sold to an
underwriter for reoffering to the public.

2.           General Registration; Listing .

     (a)   General Registration on Form 10.

     As soon as practicable, but in no event later than such date as the
Company would have been required to file with the SEC its annual report
pursuant to Section 13(a) or 15(d) of the Exchange Act on Form 10-K for the
fiscal year of the Company ended December 31, 2003 were the Company, at the end
of such fiscal year, subject to the requirement to file a Form 10-K, the
Company shall file with the SEC a general form for the registration of its New
Common Stock pursuant to Rule 12(b) and/or 12(g) of the Exchange Act on Form 10
(the “Form 10”). The Company shall use its reasonable best efforts to
have the Form 10 declared effective under the Exchange Act as soon as
practicable after the filing thereof. The Company shall be deemed not to have
satisfied its obligations pursuant to the preceding sentence if it has not
requested the effectiveness of the Form 10 within five business days following
the resolution of any and all comments from staff of the SEC with respect to
the Form 10. Until the Form 10 is declared effective, the Company shall, as
soon as practicable after the end of each fiscal quarter of the Company
following the filing of the Form 10 but in no event later than such date as the
Company would have been required to file with the SEC its quarterly report
pursuant to Section 13(a) or 15(d) of the Exchange Act on Form 10-Q for such
fiscal quarter were the Company, at the end of such fiscal quarter, subject to
the requirement to file a Form 10-Q, file with the SEC an amended Form 10 with
such additional information as the Company would have been required to provide
in such Form 10-Q.

     (b)   Listing.

          The Company shall use its reasonable best efforts to cause its New Common
Stock to be listed on The NASDAQ National Market or, if the New Common Stock
does not qualify to be so listed, on a national securities exchange or other
national trading market, concurrently with, or as soon as practicable after,
the Form 10 is declared effective.

     (c)   NASD Rule 4350.

          For the period beginning on the date hereof until the date the New Common
Stock is listed and admitted and authorized for trading on The Nasdaq National
Market or a national securities exchange, the Company shall comply with the
requirements of NASD Rule 4350 as if it were subject thereto, other than those
set forth in subsections (b), (j) and (k) thereof.

 

 

3.          Demand Registration.

     (a)   Requests for Registration.

          Subject to Section 4(c), at any time and from time to time after the Form
10 is declared effective, the Common Stock Beneficiaries holding at least 20%
of the total number of Registrable Securities held by Common Stock
Beneficiaries then outstanding will have the right by written notice delivered
to the Company (a “Demand Notice”), to require the Company to register,
under and in accordance with the provisions of the Securities Act on a
Registration Statement filed on Form S-1 (a “Demand Registration
Statement”), a number of Registrable Securities the estimated market value
of which is not less than $5 million; provided, however, that no
Demand Notice may be given until at least 90 calendar days after the effective
date of the immediately preceding Demand Registration Statement.

          Within five calendar days after receipt of such Demand Notice, the Company
will serve written notice thereof (the “Company Notice”) to all other
Beneficiaries. Subject to the provisions of Section 3(c) hereof, the Company
shall include in such Demand Registration Statement all Registrable Securities
with respect to which the Company receives written requests for inclusion
within 20 calendar days after the delivery of the Company Notice.

          The number of Demand Registration Statements required to be filed pursuant
to this Section 3(a) shall not exceed three; provided, however,
that in determining the number of Demand Registration Statements to which the
Beneficiaries are entitled, there shall be excluded (1) any Demand Registration
Statement involving an Underwritten Offering if the managing underwriter or
underwriters have advised the Beneficiaries that the total number of
Registrable Securities requested to be included therein exceeds the number of
Registrable Securities that can be sold in such offering in accordance with the
provisions of this Agreement without materially and adversely affecting the
success of such offering and (2) any Demand Registration Statement that does
not become effective or is not maintained effective for the period required
pursuant to Section 3(b) hereof, unless in the case of this clause (2) such
Demand Registration Statement does not become effective after being filed by
the Company solely by reason of the refusal to proceed by the Beneficiaries.

     (b)  Filing and Effectiveness.

          The Company will (subject to Section 7(a)) file a Demand Registration
Statement within 30 calendar days of receipt of a Demand Notice, and will use
its reasonable best efforts to cause the same to be declared effective under
the Securities Act as soon as practicable thereafter but in any event within 75
calendar days of receipt of a Demand Notice pursuant to Section 3(a).

          The Demand Notice shall specify the number of Registrable Securities to be
registered and the intended methods of disposition thereof. If the
Beneficiaries holding not less than a majority of the Registrable Securities to
be included in any offering pursuant to a Demand Registration Statement so
elect by written request to the Company, such offering shall be in the form of
an Underwritten Offering. Beneficiaries holding a majority of the Registrable
Securities
to be included in such Underwritten Offering shall have the right to
select the managing

 

 

underwriter or underwriters for the offering, subject to
the right of the Company to approve such managing underwriter or underwriters
(which approval shall not be unreasonably withheld) and to select one
co-managing underwriter reasonably acceptable to such Beneficiaries.

          The Company will keep the Registration Statement filed in respect of a
Demand Registration Statement effective for a period of up to 180 calendar days
from the date the Registration Statement is declared effective (subject to
extensions pursuant to the last paragraph of Section 7 hereof) or such shorter
period that will terminate when all Registrable Securities included in such
Registration Statement have been sold in accordance with the intended methods
of disposition thereof set forth in such Registration Statement.

          The Beneficiaries will be permitted to withdraw Registrable Securities
from a Demand Registration Statement at any time prior to the effective date of
such Registration Statement.

     (c)  Priority in Demand Registrations.

          If any of the Registrable Securities registered pursuant to a Demand
Registration Statement are to be sold in one or more firm commitment
Underwritten Offerings, the Company may also provide written notice to holders
of securities of the Company other than Beneficiaries, if any, who have
piggyback registration rights with respect thereto and will permit all such
holders who request to be included in the Demand Registration Statement to
include any or all securities of the Company held by such holders in such
Demand Registration Statement on the same terms and conditions as the
Registrable Securities. Notwithstanding the foregoing, if the managing
underwriter or underwriters of the offering to which such Demand Registration
Statement relates advises the Beneficiaries that the total amount of
Registrable Securities and securities that such holders of securities of the
Company (other than Beneficiaries) intend to include in such Demand
Registration Statement is in the aggregate such as to materially and adversely
affect the success of such offering, then (i) first, the amount of securities
to be offered for the account of the holders of such other securities of the
Company will be reduced, to zero if necessary (pro rata among
such holders on the basis of the amount of such other securities to be included
therein by each such holder), and (ii) second, the number of Registrable
Securities included in such Demand Registration Statement will, if necessary,
be reduced and there will be included in such firm commitment Underwritten
Offering only the number of Registrable Securities that, in the opinion of such
managing underwriter or underwriters, can be sold without materially and
adversely affecting the success of such offering, allocated pro
rata among the Beneficiaries on the basis of the number of Registrable
Securities held by each such holder. For the purposes of subsection 3(c)(ii)
the pro rata allocation of New Common Stock and New Senior
Subordinated Notes held by the Beneficiaries shall be calculated treating each
class of securities separately.

4.          Shelf Registration.

     (a)  Filing and Effectiveness.

          The Company, as soon as it is eligible to file a Registration Statement on
Form S-3, shall (subject to Section 7(a)) file with the SEC a Registration
Statement on Form S-3 (the

 

 

“Shelf Registration Statement”) to register
all Registrable Securities then held by Beneficiaries (for the avoidance of
doubt, not including Persons that are Beneficiaries solely by virtue of clause
(f) of the definition of such term) and not previously registered under the
Securities Act pursuant to Section 3 or Section 5 hereof and shall use its
reasonable best efforts to cause such Shelf Registration Statement to be
declared effective under the Securities Act as soon as practicable thereafter.
The Company will not permit any securities other than Registrable Securities or
New Common Stock to be sold for its own account to be included in the Shelf
Registration Statement.

          If the Beneficiaries holding not less than a majority of the Registrable
Securities included in any offering pursuant to a Shelf Registration Statement
so elect by written request to the Company, such offering shall be in the form
of an Underwritten Offering. Beneficiaries holding a majority of the
Registrable Securities included in such Underwritten Offering shall, after
consulting with the Company, have the right to select the managing underwriter
or underwriters for the offering, subject to the right of the Company to
approve such managing underwriter or underwriters (which approval shall not be
unreasonably withheld) and to select one co-managing underwriter reasonably
acceptable to such Beneficiaries. In no event will the Beneficiaries be
entitled to request the Company to effect more than an aggregate of two
Underwritten Offerings pursuant to the Shelf Registration Statement.

     (b)   Continued Effectiveness.

          The Company shall use its reasonable best efforts to keep the Shelf
Registration Statement continuously effective in order to permit any Prospectus
that forms a part thereof to be usable by Beneficiaries until the earlier of
(i) such time as all of the Registrable Securities offered in such underwritten
offering have been disposed of in accordance with the intended methods of
disposition thereof set forth in such Shelf Registration Statement and (ii) the
date on which there cease to be any Registrable Securities outstanding.

     (c)  Effect on Demand Registration Obligation.

          The provisions of Section 3 of this Agreement shall not apply at any time
that the Company maintains the effectiveness of a Shelf Registration Statement
and is otherwise complying with its obligations under this Section 4;
provided, however, this Section 4(c) shall not be effective
unless the Shelf Registration Statement has become effective and remained
effective in compliance with the provisions of the Securities Act until such
time as all of the Registrable Securities offered in such Underwritten Offering
have been disposed of in accordance with the intended methods of disposition
thereof set forth in such Shelf Registration Statement.

     (d)  Shelf Registration Other Than Form S-3.

          If the book-runner(s) for any Underwritten Offering pursuant to this
Section 4 advises the Company that it is of material importance to the success
of the proposed offering that either (i) the offering be effected pursuant to a
Registration Statement other than the Shelf
Registration Statement or (ii) information be included in the Shelf
Registration Statement that is not required by Form S-3, then the Company shall
file a Registration Statement on such other

 

 

form, or shall include such other
information in the Shelf Registration Statement, as the case may be, as the
book-runner(s) for such Offering shall so request. All references in this
Agreement to a “Shelf Registration Statement” shall also be deemed to refer to
any other Registration Statement filed in accordance with this Section 4(d).

5.           Piggyback Registration.

     (a)  Right to Piggyback.

          If the Company proposes to file a Registration Statement under the
Securities Act with respect to an offering of any class of securities (other
than a Registration Statement (i) pursuant to the Company’s obligations under
Section 4 hereof, (ii) on Form S-4 or S-8 or any successor form to such forms,
or (iii) filed solely in connection with a rights offering made to all of the
holders of New Common Stock or an offering made solely to employees of the
Company), whether or not for its own account, then the Company will give
written notice of such proposed filing to all Beneficiaries at least 30
calendar days before the anticipated filing date. Such notice will offer
Beneficiaries the opportunity to register under the Company’s Registration
Statement (a “Piggyback Registration Statement”) such amount of
Registrable Securities as each Beneficiary may request. Subject to Section
5(b) hereof, the Company will include in each such Piggyback Registration
Statement all Registrable Securities with respect to which the Company has
received written requests for inclusion therein no later than five calendar
days before the anticipated filing date. The Beneficiaries will be permitted
to withdraw all or part of the Registrable Securities from a Piggyback
Registration Statement at any time prior to the effective date of such
Piggyback Registration Statement. The Company will be permitted to withdraw
any proposed Piggyback Registration Statement at any time without liability to
any Beneficiary, in which case the Company will not be required to effect a
registration of the requested Registrable Securities, unless the requisite
percentage of Common Stock Beneficiaries notifies the Company that they wish to
convert the request into a Demand Notice, in which case the provisions of
Section 3 shall apply. No registration affected under this Section 5 will
relieve the Company of its obligations under Section 3 or Section 4 hereof with
respect to Registrable Securities not registered and sold pursuant to this
Section 5.

     (b)  Priority in Piggyback Registrations.

          The Company will cause the managing underwriter or underwriters of a
proposed Underwritten Offering to permit Beneficiaries requested to be included
in the registration for such offering to include therein all such Registrable
Securities requested to be so included on the same terms and conditions as any
similar securities, if any, of the Company included therein. Notwithstanding
the foregoing, if the managing underwriter or underwriters of such offering
advises the Beneficiaries to the effect that the total amount of securities
which such Beneficiaries, the Company and any other Persons having rights to
participate in such registration propose to include in such offering is such as
to materially and adversely affect the success of such offering, then:

	(i)	 	if such registration is a primary registration on
behalf of the Company, the Company will include therein: (x)
first up to the full amount of securities to be included
therein for the account of the Company that in the opinion

 

 

	 	 	of such managing underwriter or underwriters can be sold, and (y)
second, up to the full amount of Registrable Securities which
such Beneficiaries propose to include in such registration
that in the opinion of such managing underwriter or
underwriters can be sold without adversely affecting the
success of the offering (allocated pro rata in
proportion to the number of Registrable Securities held by
such Beneficiaries to the extent necessary to reduce the total
amount of securities to be included in such offering to the
amount recommended by such managing underwriter or
underwriters); and
	 
	(ii)	 	if such registration is an underwritten secondary
registration on behalf of holders of securities of the Company
other than Registrable Securities, the Company will include
therein: (x) first, up to the full number of securities of
such Persons exercising “demand” registration rights that, in
the opinion of such managing underwriter or underwriters, can
be sold (allocated pro rata among such Persons
in proportion to the number of securities held by such
Persons, or as the Company may otherwise determine), (y)
second, up to the full amount of Registrable Securities that,
in the opinion of such managing underwriter or underwriters,
can be sold (allocated pro rata among the
Beneficiaries in proportion to the number of Registrable
Securities held by such Beneficiaries), and (z) third, all
other securities proposed to be sold by any other Persons
that, in the opinion of such managing underwriter or
underwriters can be sold (allocated pro rata
among such Persons in proportion to the number of securities
held by such Persons, or as the Company may otherwise
determine).
	 
	(iii)	 	If any Holder advises the book-runner(s) of any
underwritten offering that the Registrable Securities covered
by the Registration Statement cannot be sold in such offering
within a price range acceptable to such Holder, then such
Holder shall have the right to exclude its Registrable
Securities from registration.
	 
	(iv)	 	For the purposes of this subsection 5(b), the
pro rata allocation of New Common Stock and New
Senior Subordinated Notes held by the Beneficiaries shall be
calculated for treating each class of securities separately.

6.           Holdback Agreements.

     (a) Restrictions on Sale by Holders of Registrable Securities.

          Each Beneficiary whose Registrable Securities are covered by a
Registration Statement filed pursuant to Section 3, 4 or 5 hereof, agrees, and
will confirm such agreement in
writing, if such Beneficiary is so requested (pursuant to a timely written
notice) by the managing underwriter or underwriters in an Underwritten
Offering, not to effect any public sale or distribution of any of the Company’s
equity securities (except as part of such Underwritten Offering), including a
sale pursuant to Rule 144, (a) during the seven-calendar day period prior

 

 

to the closing date of each Underwritten Offering made pursuant to such
Registration Statement and (b) during such period of time, not to exceed 90
calendar days, as any managing underwriter or underwriters may reasonably
request beginning on the closing date of each Underwritten Offering made
pursuant to such Registration Statement, or, in either case, such other shorter
period to which the Beneficiaries and such managing underwriter or underwriters
may agree.

     (b) Restrictions on the Sale by the Company.

          In connection with any underwritten public offering pursuant to Section 3,
4 or 5 hereof, the Company agrees (i) not to effect any public sale or
distribution of any securities substantially similar to the Registrable
Securities (other than in connection with an employee stock option or other
benefit plan) during the 15 days prior to, and during such period as the
book-runner(s) may request (not to exceed 90 days) beginning on, the offering
date of the Registrable Securities pursuant to an effective Registration
Statement (except as part of such registration) and (ii) that any agreement
entered into after the date of this Agreement pursuant to which the Company
issues or agrees to issue any privately placed New Common Stock or other
securities substantially similar to the Registrable Securities shall contain a
provision under which holders of such securities agree not to effect any sale
or distribution of any such securities during the period referred to in the
foregoing clause (i), including any sale pursuant to Rule 144 under the
Securities Act (except as part of such registration, if permitted).

7.          Registration Procedures.

          In connection with the Company’s registration obligations pursuant to
Sections 3, 4 and 5 hereof, the Company will effect such registrations to
permit the sale of such Registrable Securities in accordance with the intended
method or methods of disposition thereof, and pursuant thereto the Company will
as expeditiously as possible:

	(a)	 	Prepare and file with the SEC a Registration Statement or
Registration Statements on any appropriate form under the Securities
Act available for the sale of the Registrable Securities by the
holders thereof in accordance with the holders’ notice to the
Company as to the intended method or methods of distribution thereof
(including, without limitation, distributions in connection with
transactions with broker-dealers or others for the purpose of
hedging Registrable Securities, involving possible sales, short
sales, options, pledges or other transactions which may require
delivery and sale to broker-dealers or others of Registrable
Securities), and cause each such Registration Statement to become
effective and remain effective as provided herein; provided,
however, that before filing a Registration Statement or
Prospectus or any amendments or supplements thereto (including
documents that would be incorporated or deemed to be incorporated
therein by reference) the Company will furnish to the holders of the
Registrable Securities covered by such Registration Statement and
the managing underwriters, if any, copies of all such
documents proposed to be filed, which documents will be subject to
the review of such holders and such underwriters. The Company will
not file pursuant to Section 3(b) or 4(a) any such Registration
Statement or amendment thereto or any Prospectus or any supplement
thereto (including such documents which, upon filing, would or
would be incorporated or

 

 

	 	 	deemed to be incorporated by reference
therein) to which the holders of a majority of the Registrable
Securities covered by such Registration Statement or the managing
underwriter, if any, shall reasonably object.
	 
	(b)	 	Prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement continuously effective
for the applicable period specified in Section 3 or 4, as
applicable; cause the related Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424(b) (or any similar provisions then in force)
under the Securities Act; and comply with the provisions of the
Securities Act with respect to the disposition of all securities
covered by such Registration Statement during the applicable period
in accordance with the intended methods of disposition by the
sellers thereof set forth in such Registration Statement as so
amended or in such Prospectus as so supplemented.
	 
	(c)	 	Notify the selling Beneficiaries and the managing
underwriters, if any, promptly, and (if requested by any such
Person) confirm such notice in writing, (i) when a Prospectus or
post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the
same has become effective, (ii) of the receipt of any comments from
the SEC with respect to any such document or a document incorporated
by reference therein, (iii) of any request by the SEC or any other
federal or state governmental authority for amendments or
supplements to a Registration Statement or related Prospectus or for
additional information, (iv) of the issuance by the SEC or any other
federal or state governmental authority of any stop order suspending
the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose, (v) if at any time the
representations and warranties of the Company contained in any
agreement contemplated by Section 7(m) hereof (including, without
limitation, any underwriting agreement) cease to be true and
correct, (vi) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose, (vii) of the occurrence of any event which makes any
statement made in such Registration Statement or related Prospectus
or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or which requires the
making of any changes in a Registration Statement, Prospectus or
documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary
to make the statements therein not misleading and, in the case of
the Prospectus, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be
stated or is necessary
to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and (viii) of the
Company’s reasonable determination that a post-effective amendment
to a Registration Statement would be appropriate.

 

 

	(d)	 	Use its best efforts to prevent the issuance, and obtain the
withdrawal, of any order suspending the effectiveness of a
Registration Statement, and prevent the issuance, and obtain the
lifting, of any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest possible moment.
	 
	(e)	 	If requested by the managing underwriters, if any, or the
holders of a majority of the Registrable Securities being
registered, (i) promptly incorporate in a Prospectus supplement or
amendment such information as the managing underwriters, if any, and
such holders agree should be included therein, including, without
limitation, information relating to the plan of distribution with
respect to such Registrable Securities or information with respect
to the number or amount of Registrable Securities being sold to such
underwriters, the purchase price being paid therefor by such
underwriters and any other terms of the underwritten (or best
efforts underwritten) offering of the Registrable Securities, and
(ii) make all required filings of such Prospectus supplement or such
amendment as soon as practicable after the Company has received
notification of the matters to be incorporated in such Prospectus
supplement or amendment.
	 
	(f)	 	Furnish to each selling Beneficiary and each managing
underwriter, if any, without charge, at least one conformed copy of
the Registration Statement and any post-effective amendment thereto,
including financial statements, schedules, all documents
incorporated or deemed incorporated therein by reference and all
exhibits and copies of any correspondence with the SEC or its staff
relating to the Registration Statement.
	 
	(g)	 	Promptly furnish to each selling Beneficiary and each
underwriter, if any, of Registrable Securities covered by such
Registration Statement such number of copies of the Prospectus
included in such Registration Statement (including each preliminary
Prospectus), in conformity with the requirements of the Securities
Act and such other documents as such Persons may reasonably request
in order to facilitate the disposition of the Registrable
Securities; and the Company hereby consents to the use of such
Prospectus or each amendment or supplement thereto by each of the
selling Beneficiaries and the underwriters, if any, in connection
with the offering and sale of the Registrable Securities covered by
such Prospectus or any amendment or supplement thereto.
	 
	(h)	 	Prior to any public offering of Registrable Securities, to
register or qualify or cooperate with the selling Beneficiaries, the
underwriters, if any, and their respective counsel in connection
with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for
offer and sale under the securities or blue sky laws of such
jurisdictions within the United States as any seller or underwriter
reasonably requests in writing to the
extent such registration or qualification would be required taking
into account federal securities laws; keep each such registration
or qualification (or exemption therefrom) effective during the
period such Registration Statement is required to be kept effective
and do any and all other acts or things necessary or advisable to

 

 

	 	 	enable the disposition in such jurisdiction of the Registrable
Securities covered by the applicable Registration Statement;
provided, however, that the Company will not be
required to (i) qualify generally to do business in any
jurisdiction in which it is not then so qualified or (ii) take any
action that would subject it to general service of process in any
such jurisdiction in which it is not then so subject.
	 
	(i)	 	Cooperate with the selling Beneficiaries and the managing
underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be
sold, which certificates will not bear any restrictive legends; and
enable such Registrable Securities to be in such denominations and
registered in such names as the managing underwriters, if any, or
the selling holders shall request at least two business days prior
to any sale of Registrable Securities to the underwriters or
otherwise.
	 
	(j)	 	Use reasonable best efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be
registered with or approved by such other governmental agencies or
authorities within the United States as may be required to comply
with laws governing the sale of securities, except that if such
registration or approval is required solely as a consequence of the
nature of such selling Beneficiary’s business, such registration or
approval shall be at the expense of such selling Beneficiary, and to
obtain approvals from any such governmental agencies or authorities
to the extent necessary to enable the seller or sellers thereof or
the underwriters, if any, to consummate the disposition of such
Registrable Securities.
	 
	(k)	 	Upon the occurrence of any event contemplated by Section
7(c)(vi) or 7(c)(vii) hereof, prepare a supplement or post-effective
amendment to each Registration Statement or a supplement to the
related Prospectus or any document incorporated therein by reference
or file any other required document so that, as thereafter delivered
to the Beneficiary being sold thereunder, such Prospectus will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading.
	 
	(l)	 	Use its reasonable best efforts to cause all Registrable
Securities covered by such Registration Statement to be listed on
each securities exchange or other national trading market, if any,
on which similar securities issued by the Company are then listed
or, if the Registrable Securities do not qualify to be so listed, on
another national securities exchange or other national trading
market, to provide a transfer agent and registrar for such
Registrable Securities covered by such Registration Statement no
later than the effective date of such Registration Statement and to
maintain such listing for the period of effectiveness of such
Registration Statement.
	 
	(m)	 	If the registration is an Underwritten Offering or as
reasonably requested in writing by Beneficiaries constituting at
least 20% of the total number of Registrable Securities then
outstanding, enter into such agreements (including an 

 

 

	 	 	underwriting
agreement in form, scope and substance as is customary in
Underwritten Offerings) and take all such other actions in
connection therewith (including those reasonably requested by the
holders of a majority of the Registrable Securities being sold or
those reasonably requested by the managing underwriters) in order to
expedite or facilitate the disposition of such Registrable
Securities and in such connection, (i) make such representations and
warranties to the underwriters, if any, with respect to the business
of the Company and its subsidiaries, the Registration Statement,
Prospectus and documents incorporated by reference or deemed
incorporated by reference, if any, in each case, in form, substance
and scope as are customarily made by issuers to underwriters in
Underwritten Offerings and confirm the same if and when requested;
(ii) obtain opinions of counsel to the Company and updates thereof
(which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the managing underwriters, if any, and
the holders of a majority of the Registrable Securities being sold)
addressed to such selling Beneficiaries and each of the
underwriters, if any, covering the matters customarily covered in
opinions requested in Underwritten Offerings and such other matters
as may be reasonably requested by such holders and underwriters,
including, without limitation, the matters referred to in clause (i)
of this Section 7(m); (iii) use its reasonable best efforts to
obtain “comfort” letters and updates thereof from the independent
certified public accountants of the Company (and, if necessary, any
other certified public accountants of any subsidiary of the Company
or of any business acquired by the Company for which financial
statements and financial data is, or is required to be, included in
the Registration Statement), addressed to each selling Beneficiary
and each of the underwriters, if any, such letters to be in
customary form and covering matters of the type customarily covered
in “comfort” letters in connection with Underwritten Offerings; (iv)
deliver such documents and certificates as may be requested by the
holders of a majority of the Registrable Securities being sold and
the managing underwriters, if any, to evidence the continued
validity of the representations and warranties of the Company and
its subsidiaries made pursuant to clause (i) above and to evidence
compliance with any customary conditions contained in the
underwriting agreement or similar agreement entered into by the
Company; (v) provide customary indemnification; (vi) support each
selling Beneficiary’s efforts to execute block trades with
institutional buyers; and (vii) cooperate with any reasonable
request by holders of a majority of the Registrable Securities
offered for sale, including by ensuring participation by the
executive management of the Company in road shows, so long as such
participation does not materially interfere with the operation of
the Company’s business. The foregoing actions will be taken in
connection with each closing under such underwriting or similar
agreement as and to the extent required thereunder.
	 
	(n)	 	Make available for inspection by a representative of the
selling Beneficiaries, any underwriter participating in any
disposition of Registrable Securities, and any attorney or
accountant retained by such selling holders or underwriter, all
financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries, and cause the
officers, directors and employees of 

 

 

	 	 	the Company and its
subsidiaries to supply all information reasonably requested by any
such representative, underwriter, attorney or accountant in
connection with such Registration Statement; provided,
however, that any records, information or documents that are
designated by the Company in writing as confidential at the time of
delivery of such records, information or documents will be kept
confidential by such Persons unless (i) such records, information or
documents are in the public domain or otherwise publicly available,
(ii) disclosure of such records, information or documents is
required by court or administrative order or is necessary to respond
to inquires of regulatory authorities, or (iii) disclosure of such
records, information or documents, in the opinion of counsel to such
Person, is otherwise required by law (including, without limitation,
pursuant to the requirements of the Securities Act).
	 
	(o)	 	Comply with all applicable rules and regulations of the SEC
and make generally available to its security holders earning
statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act) no later than 45 calendar days
after the end of any 12-month period (or 90 calendar days after the
end of any 12-month period if such period is a fiscal year) (i)
commencing at the end of any fiscal quarter in which Registrable
Securities are sold to underwriters in a firm commitment or best
efforts Underwritten Offering, and (ii) if not sold to underwriters
in such an offering, commencing on the first day of the first fiscal
quarter of the Company after the effective date of a Registration
Statement, which statements shall cover said 12-month period.
	 
	(p)	 	Cooperate with each selling Beneficiary and each underwriter
or agent participating in the disposition of such Registrable
Securities and their respective counsel in connection with any
filings required to be made with the NASD or any other applicable
securities exchange.

               The Company may require each seller of Registrable Securities as to which
any registration is being effected to furnish to the Company such information
regarding the distribution of such Registrable Securities as the Company may,
from time to time, reasonably request in writing, and the Company may exclude
from such registration the Registrable Securities of any seller who
unreasonably fails to furnish such information within a reasonable time after
receiving such request.

               Each Beneficiary will be deemed to have agreed by virtue of its
acquisition of Registrable Securities that, upon receipt of any notice from the
Company of the occurrence of any event of the kind described in Section
7(c)(ii), 7(c)(iii), 7(c)(v), 7(c)(vi) or 7(c)(vii) hereof (a “Black-Out
Notice”), such Beneficiary will (but in the case of an event described in
7(c)(v), only with respect to the applicable jurisdictions) forthwith
discontinue disposition of such Registrable Securities covered by such Registration Statement or
Prospectus (a “Black-Out”) until such Beneficiary’s receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 7(k)
hereof, or until it is advised in writing (the “Advice”) by the Company
that the use of the applicable Prospectus may be resumed and has received
copies of any additional or supplemental filings that are incorporated or
deemed to be incorporated by reference in such

 

 

Prospectus; provided,
however, that in no event shall the aggregate number of days during
which a Black-Out is effective during any period of twelve consecutive months
exceed 45 calendar days. In the event the Company shall give a Black-Out
Notice, the time period prescribed in Section 3(b) hereof or the Shelf Period,
as the case may be, will be extended by the number of days during the time
period from and including the date of the giving of the Black-Out Notice to and
including the date when each seller of Registrable Securities covered by such
Registration Statement shall have received (x) the copies of the supplemented
or amended Prospectus contemplated by Section 7(k) hereof or (y) the Advice.

8.          Registration Expenses.

     All Registration Expenses will be borne by the Company whether or not any
of the Registration Statements become effective. “Registration
Expenses” means all fees and expenses incident to the performance of, or
compliance with, this Agreement by the Company, including, without limitation,
(i) all registration and filing fees (including, without limitation, fees and
expenses (x) with respect to filings required to be made with the National
Association of Securities Dealers, Inc. and (y) of compliance with securities
or “blue sky” laws (including, without limitation, fees and disbursements of
counsel for the underwriters or selling holders in connection with “blue sky”
qualifications of the Registrable Securities and determination of the
eligibility of the Registrable Securities for investment under the laws of such
jurisdictions as the managing underwriters, if any, or holders of a majority of
the Registrable Securities being sold may designate)), (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities in a form eligible for deposit with The Depository Trust
Company and of printing Prospectuses if the printing of Prospectuses is
requested by the holders of a majority of the Registrable Securities included
in any Registration Statement), (iii) messenger, telephone and delivery
expenses, (iv) fees and disbursements of counsel for the Company and one single
special counsel for the Beneficiaries, (v) fees and disbursements of all
independent certified public accountants referred to in Section 7(m)(iii)
hereof (including the expenses of any special audit and “comfort” letters
required by or incident to such performance), (vi) fees and expenses of any
“qualified independent underwriter” or other independent appraiser
participating in an offering pursuant to Section 3 of Schedule E to the By-laws
of the National Association of Securities Dealers, Inc., (vii) Securities Act
liability insurance if the Company so desires such insurance, (viii) all fees
and expenses of listing the Registrable Securities pursuant to Section 2(b) and
7(l), and (ix) fees and expenses of all other Persons retained by the Company
in connection with this Agreement; provided, however, that
Registration Expenses shall not include fees and expenses of any counsel for
the Beneficiaries except as provided in clause (iv) above and any local counsel
that are not included in the definition of Registration Expenses nor shall it
include underwriting fees, discounts or commissions relating to the offer and
sale of Registrable Securities, which shall be borne by the Beneficiaries
included in such registration pro rata in proportion to the number of
Registrable Securities of such Beneficiary included in such registration. In
addition, the Company will pay its internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit, the fees and expenses incurred in connection with the listing
of the securities to be registered on any securities exchange on which similar
securities issued by the Company are then listed and the fees and expenses of
any Person, including special experts, retained by the Company.

 

 

9.          Indemnification.

     (a) Indemnification by the Company.

          The Company will, without limitation as to time, indemnify and hold
harmless, to the fullest extent permitted by law, each Beneficiary whose
Registrable Securities are registered pursuant to this Agreement, the officers,
directors, agents and employees of each of them, each Person who controls such
Beneficiary (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) and the officers, directors, agents and employees of
any such controlling Person, from and against all losses, claims, damages,
liabilities, costs (including, without limitation, the costs of investigation
and attorneys’ fees) and expenses (collectively, “Losses”), as incurred,
arising out of or based upon any untrue or alleged untrue statement of a
material fact contained in any Registration Statement, preliminary Prospectus,
Prospectus or form of Prospectus or in any amendment or supplement thereto, or
arising out of or based upon 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 the same are based solely
upon information furnished in writing to the Company by such Beneficiary
expressly for use therein; provided, however, that the Company
will not be liable to any Beneficiary to the extent that any such Losses arise
out of or are based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any preliminary Prospectus if either (A)
(i) such Beneficiary failed to send or deliver a copy of the Prospectus with or
prior to the delivery of written confirmation of the sale by such Beneficiary
to the Person asserting the claim from which such Losses arise and (ii) the
Prospectus would have corrected in all material respects such untrue statement
or alleged untrue statement or such omission or alleged omission; or (B) such
untrue statement or alleged untrue statement, omission or alleged omission is
corrected in all material respects in an amendment or supplement to the
Prospectus previously furnished by or on behalf of the Company with copies of
the Prospectus as so amended or supplemented, and such Beneficiary thereafter
fails to deliver such Prospectus as so amended or supplemented prior to or
concurrently with the sale of a Registrable Security to the Person asserting
the claim from which such Losses arise.

     (b) Indemnification by Holders of Registrable Securities.

          In connection with any Registration Statement in which a Beneficiary is
participating, such Beneficiary will furnish to the Company in writing such
information as the Company reasonably requests for use in connection with any
Registration Statement or Prospectus and will severally indemnify, to the
fullest extent permitted by law, the Company, its directors and officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and
the directors, officers, agents or employees of such controlling Persons, from
and against all Losses arising out of or based upon (i) any disposition of
Registrable Securities after receiving notice of
a Black-Out and prior to receiving Advice under Section 7 that use of the
Prospectus may be resumed or (ii) any untrue statement of a material fact
contained in any Registration Statement, Prospectus or preliminary Prospectus
or arising out of or based upon any omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, to
the extent, but only to the extent, that such untrue statement or omission is
finally judicially determined by a court of competent jurisdiction to have been
contained in any information so

 

 

furnished in writing by such Beneficiary to the
Company expressly for use in such Registration Statement or Prospectus and to
have been relied upon by the Company in the preparation of such Registration
Statement, Prospectus or preliminary Prospectus. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf
of the Company or any officer, director, agent or employee of the Company. In
no event will the liability of any selling Beneficiary under this Section 9(b)
be greater in amount than the excess of the amount by which the total price at
which the Registrable Securities sold by such Indemnifying Party and
distributed to the public pursuant to the applicable Registration Statement
(net of all related expenses and underwriters’ discounts and commissions) over
the amount of any damages which such Indemnifying Party has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission.

     (c) Conduct of Indemnification Proceedings.

          If any Person shall become entitled to indemnity hereunder (an
“Indemnified Party”), such Indemnified Party shall give prompt notice to
the party from which such indemnity is sought (the “Indemnifying Party”)
of any claim or of the commencement of any action or proceeding with respect to
which such Indemnified Party seeks indemnification or contribution pursuant
hereto; provided, however, that the failure to so notify the
Indemnifying Party will not relieve the Indemnifying Party from any obligation
or liability except to the extent that the Indemnifying Party has been
prejudiced materially by such failure. All Losses (including any fees and
expenses incurred in connection with investigating or preparing to defend such
action or proceeding) will be paid to the Indemnified Party, as incurred,
within five calendar days of written notice thereof to the Indemnifying Party
upon receipt of an undertaking to repay such amount if it is ultimately
determined that an Indemnified Party is not entitled to indemnification
hereunder. The Indemnifying Party will not consent to entry of any judgment or
enter into any settlement or otherwise seek to terminate any action or
proceeding in which any Indemnified Party is or could be a party and as to
which indemnification or contribution could be sought by such Indemnified Party
under this Section 9, unless such judgment, settlement or other termination
includes, as an unconditional term thereof, the giving by the claimant or
plaintiff to such Indemnified Party of a release, in form and substance
reasonably satisfactory to the Indemnified Party, from all liability in respect
of such claim or litigation for which such Indemnified Party would be entitled
to indemnification hereunder.

     (d) Contribution.

          If the indemnification provided for in this Section 9 is unavailable to an
Indemnified Party under Section 9(a) or 9(b) hereof in respect of any Losses or
is insufficient to hold such Indemnified Party harmless, then each applicable
Indemnifying Party, in lieu of or in addition to indemnifying such Indemnified
Party, as applicable, will, jointly and severally, contribute to the amount
paid or payable by such Indemnified Party as a result of such Losses, in
such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party or Indemnifying Parties, on the one hand, and such
Indemnified Party, on the other hand, in connection with the actions,
statements or omissions that resulted in such Losses as well as any other
relevant equitable considerations. The relative fault of such Indemnifying
Party or Indemnifying Parties, on the one hand, and such Indemnified Party, on
the other hand, will be determined by reference to, among other things, whether
any action in question, including any

 

 

untrue or alleged untrue statement of a
material fact or omission or alleged omission of a material fact, has been
taken or made by, or related to information supplied by, such Indemnifying
Party or Indemnified Party, and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses will
be deemed to include any legal or other fees or expenses incurred by such party
in connection with any action or proceeding.

          The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 9(d) were determined by pro
rata allocation or by any other method of allocation that does not take
into account the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding the provisions of this Section 9(d), an
Indemnifying Party that is a selling Beneficiary will not be required to
contribute any amount in excess of the amount by which the total price at which
the Registrable Securities sold by such Indemnifying Party and distributed to
the public pursuant to the applicable Registration Statement (net of all
related expenses) exceeds the amount of any damages which such Indemnifying
Party 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) will be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.

          The indemnity, contribution and expense reimbursement obligations of the
Company hereunder will be in addition to any liability the Company may
otherwise have hereunder or otherwise.

10.          Rule 144.

          The Company will file all reports required to be filed by it under the
Securities Act and the Exchange Act in a timely manner, or, during the period
prior to the date the Form 10 is declared effective, all other information, and
will cooperate with any Beneficiary (including, without limitation, by making
such representations as any such Beneficiary may reasonably request), all to
the extent required from time to time to enable such Beneficiary to sell
Registrable Securities without registration under the Securities Act within the
limitations of the exemptions provided by Rule 144. Upon the request of any
Beneficiary, the Company will deliver to such Beneficiary a written statement
as to whether it has complied with such filing requirements.

11.          Miscellaneous.

          (a) Remedies.

          In the event of a breach by the Company of its obligations under this
Agreement, each Beneficiary, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company agrees
that monetary damages would not be adequate compensation for any loss incurred
by reason of a breach by it of any of the provisions of this Agreement and
hereby further agrees that, in the event of any action for specific performance
in respect of such breach, it will waive the defense that a remedy at law would
be adequate.

 

 

     (b) No Inconsistent Agreements.

          The Company has not, as of the date hereof, and will not, on or after the
date hereof, except as provided in Section 11(p), enter into any agreement with
respect to its securities which conflicts with the rights granted to the
Beneficiaries in this Agreement or otherwise conflicts with the provisions
hereof.

     (c) Amendments and Waivers.

	(i)	 	The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given except
as described in the following sentence, unless the Company has
obtained the written consent of holders of a majority of the
then-outstanding Registrable Securities. A waiver or consent
to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of Beneficiaries whose
securities are being sold pursuant to a particular
Registration Statement and that does not directly or
indirectly affect the rights of other Beneficiaries may be
given by holders of at least 51% of the Registrable Securities
being sold by such holders pursuant to such Registration
Statement.
	 
	(ii)	 	No failure or delay by any party in exercising
any right, power or privilege hereunder will operate as a
waiver thereof, nor will any single or partial exercise
thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights
and remedies herein provided will be cumulative and not
exclusive of any rights or remedies provided by law.

     (d) Notices.

          All notices, requests and other communications to either party hereunder
must be in writing (including telecopy or similar writing) and must be given:

	(i)	 	if to a signatory hereto, to the address set
forth opposite such signatory’s name on the signature pages
hereto;
	 
	(ii)	 	if to a Beneficiary other than a signatory
hereto, to the address set forth on the stock record books of
the Company; and
	 
	(iii)	 	If to the Company, to:
	 
	 	 	ORBIMAGE Inc.

21700 Atlantic Boulevard

Dulles, VA 20166

Attention: General Counsel

Fax: (703) 480-7544

 

 

	 	 	with a copy to:
	 
	 	 	Jones Day

222 East 41st Street

New York, New York 10017

Attention: Marilyn W. Sonnie, Esq.

Fax: (212) 755-7306

or such other address or telecopier number as such Person may hereafter specify
by notice to the other parties hereto and/or Beneficiaries. Each such notice,
request or other communication will be effective only when actually delivered
at the address specified in this Section 11(d), if delivered prior to 5 p.m.
(local time) and such day is a business day, and if not, then such notice,
request or other communication will not be effective until the next succeeding
business day.

     (e) Owner of Registrable Securities.

          The Company will maintain, or will cause its registrar and transfer agent
to maintain, a stock book with respect to the New Common Stock, in which all
transfers of Registrable Securities of which the Company has received notice
will be recorded. The Company may deem and treat the Person in whose name
Registrable Securities are registered in the stock book of the Company as the
owner thereof for all purposes, including, without limitation, the giving of
notices under this Agreement.

     (f) Successors and Assigns.

          Subject to this paragraph (f), this Agreement will inure to the benefit of
and be binding upon the successors and permitted assigns of each of the parties
and will inure to the benefit of each of the Beneficiaries. The Company may
not assign its rights or obligations hereunder. Beneficiaries may not assign
their rights and obligations under this Agreement; provided,
however, that a Beneficiary may, with the prior written consent of the
Company, assign its rights and obligations under this Agreement to a third
party in connection with any transfer of 10% or more of the aggregate
Registrable Securities (a “Permitted Transferee”). Notwithstanding the
foregoing, no Permitted Transferee shall be entitled to any of the transferring
Beneficiary’s rights under this Agreement (i) unless and until such Permitted
Transferee shall have acknowledged in writing its acceptance of such
obligations hereunder or (ii) if the transferring Beneficiary notifies the
Company in writing on or prior to such transfer that the Permitted Transferee
shall not have such rights.

     (g) Counterparts; Effectiveness.

          This Agreement may be signed in any number of counterparts, each of which
will be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument. This Agreement will become effective when each party hereto
receives a counterpart hereof signed by the other party hereto.

     (h) Headings.

 

 

          The headings in this Agreement are for convenience of reference only and
will not limit or otherwise affect the meaning hereof.

     (i) Governing Law.

          This Agreement will be construed in accordance with and governed by the
laws of the State of New York, without giving effect to the principles of
conflict of laws thereof.

     (j) Jurisdiction; Consent to Service of Process.

          Each party hereby irrevocably submits, for itself and its property, to the
non-exclusive jurisdiction of the Supreme Court of the State of New York
located in New York, New York or the United States District Court for the
Southern District of New York, and any appellate court from any such court (as
applicable, a “New York Court ”), in any suit, action or proceeding arising out of or relating to
this Agreement, or for recognition or enforcement of any judgment resulting
from any such suit, action or proceeding, and each party hereby irrevocably and
unconditionally agrees that all claims in respect of any such suit, action or
proceeding may be heard and determined in the New York Court. Each party
hereby irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, (i) any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement in the New York Court, (ii) the defense of an
inconvenient forum to the maintenance of such suit, action or proceeding in any
such court, and (iii) the right to object, with respect to such suit, action or
proceeding, that such court does not have jurisdiction over such party. Each
party irrevocably consents to service of process in any manner permitted by
law.

     (k) WAIVER OF JURY TRIAL.

EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM,
WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF OR
IN ANY WAY RELATED TO THIS AGREEMENT.

     (l) Severability.

          In the event that any one or more of the provisions contained herein, or
the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein will not be in any way impaired thereby,
it being intended that all of the rights and privileges of the parties hereto
will be enforceable to the fullest extent permitted by law.

     (m) Entire Agreement.

          This Agreement constitutes the entire agreement among the parties with
respect to the subject matter hereof and supersedes all prior agreements,
understandings and negotiations, both written and oral, between the parties
with respect thereto.

 

 

     (n) No Strict Construction.

          The parties hereto have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement will be construed as if drafted jointly
by the parties hereto, and no presumption or burden of proof will arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement.

     (o) Third Party Beneficiaries.

          It is expressly contemplated hereby that Beneficiaries which are not
signatories hereto shall be third party beneficiaries of this Agreement,
subject to any and all limitations, restrictions and obligations provided
herein. This Agreement and all of its provisions and conditions are for the
benefit of the parties to this Agreement and each Beneficiary which is not a
signatory hereto as an intended third party beneficiary.

     (p) Registration of Securities other than Registrable Securities.

          Without the written consent of the holders of a majority of the
then-outstanding Registrable Securities, the Company will not grant to any
Person the right to request the Company to register any securities of the
Company under the Securities Act unless the rights so granted are subject to
the prior rights of the Beneficiaries set forth herein, and, if exercised,
would not otherwise conflict or be inconsistent with the provisions of this
Agreement.

     (q) Termination.

          This Agreement shall terminate on the date on which there cease to be any
Registrable Securities outstanding. The provisions of Section 9 and Section
11(o) shall survive the termination of this Agreement.

[Signature page follows]

 

 

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

	 	 	 	 	 
	 	 	ORBIMAGE INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Name: Matthew M. O’Connell

Title: Chief Executive Officer
	 
	 	 	 	 
	 	 	CREST ADVISORS LLC
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Name:
	

	 	 	 	Title:

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