-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AOdF4ppxfpPsHiSInJ7w0ushG+TRmhV6y3XHUObgspb1frP4DwsMwovu/b0w4kZQ XBLkWisu7PVcuhLKQBmP5w== 0001005150-97-000056.txt : 19970203 0001005150-97-000056.hdr.sgml : 19970203 ACCESSION NUMBER: 0001005150-97-000056 CONFORMED SUBMISSION TYPE: 8-B12G PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19970131 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ORION NEWCO SERVICES INC CENTRAL INDEX KEY: 0001029850 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-B12G SEC ACT: 1934 Act SEC FILE NUMBER: 000-22085 FILM NUMBER: 97515394 BUSINESS ADDRESS: STREET 1: 2440 RESEARCH BLVD SUITE 400 CITY: ROCKVILLE STATE: MD ZIP: 20850 BUSINESS PHONE: 3012588101 MAIL ADDRESS: STREET 1: 2440 RESEARCH BLVD STREET 2: SUITE 400 CITY: ROCKVILLE STATE: MD ZIP: 20850 8-B12G 1 FORM 8-B PURSUANT TO SECTION 12(G) SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------ FORM 8-B FOR REGISTRATION OF SECURITIES OF CERTAIN SUCCESSOR ISSUERS FILED PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 Orion Newco Services, Inc. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 52-2008654 - ----------------------- ------------------ (State of incorporation (I.R.S. Employer or organization) Identification No.) 2440 Research Boulevard, Rockville, Maryland 20850 - -------------------------------------------- -------------------- (Address of principal executive offices) (ZIP Code) Securities to be registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which to be so registered each class is to be registered ------------------- ------------------------------ none none ------------------- ------------------------------ Securities to be registered pursuant to Section 12(g) of the Act: All of the Issued and Outstanding Shares of (i) Common Stock of Orion Newco Services, Inc. and (ii) Preferred Stock of Orion Newco Services, Inc. - -------------------------------------------------------------------------------- (Title of Class) Item 1. General Information. (a) The Registrant was organized as a Delaware Corporation on June 26, 1996. (b) The Registrant's fiscal year ends on December 31 of each year. Item 2. Transaction of Succession. (a) The Registrant is the successor to Orion Network Systems, Inc., a Delaware corporation organized in 1982 ("Old Orion") and a registrant under Section 12(g) of the Securities Exchange Act of 1934 (File No. -026450). (b) Prior to the succession, the Registrant was a wholly owned subsidiary of Old Orion. The Registrant was organized by Old Orion for the purpose of effecting (i) a merger in which a wholly owned subsidiary of the Registrant was merged with and into Old Orion in a tax-free reorganization, and Old Orion became a wholly owned subsidiary of the Registrant (the "Merger"), and (ii) an exchange of shares of the Registrant's Series C 6% Cumulative Redeemable Convertible Preferred Stock (the "Registrant's Series C Preferred Stock") for limited partnership interests in International Private Satellite Partners, L.P., a Delaware limited partnership ("Orion Atlantic"), held by each of the existing limited partners of Orion Atlantic other than Old Orion (the "Exchange"). In the Merger, each share of Old Orion's common stock, par value $.01 per share, Old Orion's Series A 8% Cumulative Redeemable Convertible Preferred Stock and Series B 8% Cumulative Redeemable Convertible Preferred Stock was converted, without any action on the part of the holder thereof, into the right to receive one share of the Registrant's common stock, par value $.01 per share (the "Registrant's Common Stock"), the Registrant's Series A 8% Cumulative Redeemable Convertible Preferred Stock (the "Registrant's Series A Preferred Stock") and Series B 8% Cumulative Redeemable Convertible Preferred Stock (the "Registrant's Series B Preferred Stock," and together with the Registrant's Series A Preferred Stock, the "Registrant's Preferred Stock"), respectively. Following the Merger, the Registrant has a certificate of incorporation, bylaws, management and capital structure (other than the Registrant's Series C Preferred Stock issued in the Exchange described above) substantially identical in all material respects to those of Old Orion. As a result of the Merger, (i) the Registrant became a public holding company that owns all of the capital stock of Old Orion, which continues its business and operations, and (ii) the stockholders of Old Orion have substantially the same securities and rights in the Registrant that they had in Old Orion, except that their percentage ownership in the Registrant is diluted as a result of the Exchange. Item 3. Securities to be Registered. (a) Registrant's Common Stock. (i) 40,000,000 shares of the Registrant's Common Stock are presently authorized under the Registrant's Restated Certificate of Incorporation, (ii) at the effective time of the Merger, approximately 10,974,121 shares of the Registrant's Common Stock will be issued and outstanding, none of which will be held by or for the account of the Registrant either directly or by its subsidiaries. (b) Registrant's Preferred Stock. (i) 1,000,000 shares of the Registrant's Preferred Stock are presently authorized under the Registrant's Restated Certificate of Incorporation, (ii) at the effective time of the Merger, approximately 13,871 shares of the Registrant's Series A Preferred Stock and 4,298 shares of the Registrant's Series B Preferred Stock will be issued, none of which are held by or for the account of the Registrant. Item 4. Description of Registrant's Securities to be Registered. The information set forth under the caption "Description of Capital Stock" in the Registrant's Registration Statement on Form S-4 (Registration No. 333-19795) is incorporated herein by reference. Item 5. Financial Statements and Exhibits. (a) No financial statements need to be filed since the capital structure and balance sheet of the Registrant immediately after the succession were substantially the same as those of Old Orion. (b) Exhibits. (i) The Agreement and Plan of Merger, dated January 8, 1997, by and among Orion Network Systems, Inc., Orion Newco Services, Inc. and Orion Merger Company, Inc. (Incorporated by reference to exhibit number 2.1 in Registration Statement No. 333-19795 on Form S-4 of Orion Newco Services, Inc.). (ii) The Registrant's Registration Statement on Form S-4 (Registration No. 333-19795), of which Orion Network Systems, Inc. Proxy Statement/Orion Newco Services, Inc. Prospectus is a part, is incorporated herein by reference. (iii) Other exhibits: Exhibit Number Description - ------ ----------- 3.1 Restated Certificate of Incorporation of Orion Newco Services, Inc. 3.2 Amended and Restated Bylaws of Orion Newco Services, Inc. 3.3 Certificate of Incorporation of Orion Network Systems, Inc. (Incorporated by reference to exhibit number 3.1 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 3.4 Bylaws of Orion Network Systems, Inc. (Incorporated by reference to exhibit number 3.2 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 4.1 Forms of Warrant issued by Orion. (Incorporated by reference to exhibit number 4.1 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 4.2 Forms of Warrant issued by Orion to holders of Preferred Stock. (Incorporated by reference to exhibit number 4.2 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 4.3 Certificates of Designation of Series A 8% Cumulative Redeemable Convertible Preferred Stock, Series B 8% Cumulative Redeemable Convertible Preferred Stock and Form of Series C 6% Cumulative Redeemable Convertible Preferred Stock of Orion Newco Services, Inc. 4.4 Forms of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock Certificates of Orion (Incorporated by reference to exhibit number 4.4 in Registration Statement No. 333-19795 on Form S-4 of Orion Newco Services, Inc.) 4.5 Form of Common Stock Certificate of Orion (Incorporated by reference to exhibit number 4.5 in Registration Statement No. 333-19795 on Form S-4 of Orion Newco Services, Inc.) 4.6 Form of Warrant issued to DACOM Corp (Incorporated by reference to exhibit number 4.6 in Registration Statement No. 333-19795 on Form S-4 of Orion Newco Services, Inc.). 4.7 Debenture Purchase Agreement, dated January 13, 1997, with British Aerospace and Matra Marconi Space (Incorporated by reference to exhibit number 4.7 in Registration Statement No. 333-19795 on Form S-4 of Orion Newco Services, Inc.) 10.1 Second Amended and Restated Purchase Agreement, dated September 26, 1991, ("Satellite Contract") by and between OrionSat and British Aerospace PLC and the First Amendment, dated as of September 15, 1992, Second Amendment, dated as of November 9, 1992, Third Amendment, dated as of March 12, 1993, Fourth Amendment, dated as of April 15, 1993, Fifth Amendment, dated as of September 22, 1993, Sixth Amendment, dated as of April 6, 1994, Seventh Amendment, dated as of August 9, 1994, Eighth Amendment, dated as of December 8, 1994, and Amendment No. 9 dated October 24, 1995, thereto. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THESE Exhibit Number Description - ------ ----------- DOCUMENTS.] (Incorporated by reference to exhibits number 10.13 and 10.14 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.2 Restated Amendment No. 10 dated December 10, 1996, between Orion Atlantic and Matra Marconi Space to the Second Amended and Restated Purchase Agreement, dated September 26, 1991 by and between OrionSat and British Aerospace PLC (which contract and prior exhibits thereto were incorporated by reference as exhibit number 10.1). [CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to exhibit number 10.2 in Registration Statement No. 333-19795 on Form S-4 of Orion Newco Services, Inc.) 10.3 Ground Support System Agreement, dated as of August 2, 1991, by and between Orion Atlantic and Telespazio S.p.A. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to exhibit number 10.25 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.4 Italian Facility and Services Agreement, dated as of August 2, 1991, by and between OrionSat and Telespazio S.p.A. as amended by the amendment thereto, dated March 19, 1994. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THESE DOCUMENTS.] (Incorporated by reference to exhibit number 10.26 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.5 Contract for a Satellite Control System, dated December 7, 1992, by and between Orion Atlantic, Telespazio S.p.A. and Martin Marietta Corporation. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to exhibit number 10.31 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.6 Credit Agreement, dated as of November 23, 1993, by and between Orion Atlantic, OrionSat and General Electric Capital Corporation ("GECC"). [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to exhibit number 10.32 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.7 Security Agreement, dated as of November 23, 1993, by and between Orion Atlantic, OrionSat and GECC. (Incorporated by reference to exhibit number 10.33 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.8 Assignment and Security Agreement, dated as of November 23, 1993, by and between Orion Atlantic, OrionSat and GECC. (Incorporated by reference to exhibit number 10.34 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.9 Consent and Agreement, dated as of November 23, 1993, by and between Orion Atlantic, Martin Marietta Corporation and GECC. (Incorporated Exhibit Number Description - ------ ----------- by reference to exhibit number 10.35 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.10 Deed of Trust, dated as of November 23, 1993, by and between Orion Atlantic, W. Allen Ames, Jr. and Michael J. Schwel, as Trustees, and GECC. (Incorporated by reference to exhibit number 10.37 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.11 Lease Agreement, dated as of November 23, 1993, by and between OrionNet, Inc. and Orion Atlantic, as amended by an Amendment, dated January 3, 1995. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THESE DOCUMENTS.] (Incorporated by reference to exhibit number 10.38 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.12 Note for Interim Loans, dated as of November 23, 1993, by and between Orion Atlantic and GECC. (Incorporated by reference to exhibit number 10.42 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.13 Sales Representation Agreement and Ground Operations Service Agreement, each dated as of May 1, 1994 and June 30, 1994, by and between each of OrionNet, Inc. and Kingston Communications, respectively, and Orion Atlantic, as amended by side agreements, dated May 1, 1994, July 12, 1994 and February 1, 1995. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THESE DOCUMENTS.] (Incorporated by reference to exhibit number 10.43 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.14 Lease Agreement, dated as of October 2, 1992, by and between OrionNet and Research Grove Associates, as amended by Amendment No. 1, dated March 26, 1993, Amendment No. 2, dated August 23, 1993, and Amendment No. 3, dated December 20, 1993. (Incorporated by reference to exhibit number 10.38 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.15 Sales Representation Agreement and Ground Operations Service Agreement, dated as of June 30, 1995, by and between MCN Sat Service, S.A. and Orion Atlantic. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to exhibit number 10.69 in Orion's Registration Statement No. 33-80518 on Form S-1.) 10.16 Volume Purchase Agreement, dated January 18, 1995, by and between the Company and Dornier GmbH. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to exhibit number 10.66 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.17 Product Development, License and Marketing Agreement, dated January 18, 1995, by and between the Company and Dornier GmbH. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to Exhibit Number Description - ------ ----------- exhibit number 10.65 in Orion's Registration Statement No. 33-80518 on Form S-1.) 10.18 Sales Representation Agreement, dated as of June 8, 1995, by and between Nortel Dasa Network Systems GmbH & Co. KG and Orion Atlantic. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to exhibit number 10.70 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.19 Orion 2 Spacecraft Purchase Contract, dated July 31, 1996, between Orion Atlantic and Matra Marconi Space. [CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to exhibit number 10.19 in Registration Statement No. 333-19795 on Form S-4 of Orion Newco Services, Inc.) 10.20 Orion's Amended and Restated 1987 Stock Option Plan as amended. (Incorporated by reference to exhibit number 10.23 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.21 Purchase Contract, dated December 4, 1991, by and between OrionNet, Inc., Shenandoah Valley Leasing Company and MCI Telecommunications Corporation. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTION OF THIS DOCUMENT.] (Incorporated by reference to exhibit number 10.30 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.22 Amended and Restated Partnership Agreement of Orion Financial Partnership, dated as of April 15, 1994, by and between OrionNet and Computer Leasing Inc. ("CLI"). (Incorporated by reference to exhibit number 10.44 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.23 Continuing Guaranty, dated as of April 15, 1994, of the Company of the obligations of OrionNet Finance Corporation. (Incorporated by reference to exhibit number 10.45 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.24 Release of Continuing Guaranty, dated as of December 29, 1994, by the Orion Financial Partnership. (Incorporated by reference to exhibit number 10.46 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.25 Confirmation of Continuing Guaranty, dated as of December 29, 1994, of the Company of the obligation of OFC. (Incorporated by reference to exhibit number 10.47 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.26 Continuing Guarantee, dated as of December 29, 1994, by Lessor Capital Funding Limited Partnership in favor of Orion Financial Partnership. (Incorporated by reference to exhibit number 10.48 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.27 Master Lease Agreement, dated as of April 15, 1994, by and between OrionNet and Orion Financial Partnership. (Incorporated by reference to Exhibit Number Description - ------ ----------- exhibit number 10.49 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.28 Collateral Assignment and Pledge and Security Agreement, dated April 22, 1994, by and between CLI and Orion Financial Partnership. (Incorporated by reference to exhibit number 10.50 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.29 Purchase Agreement, dated as of April 22, 1994, by and between OrionNet and Orion Financial Partnership. (Incorporated by reference to exhibit number 10.51 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.30 Stock Purchase Agreement, dated as of April 29, 1994, by and between the Company and SS/L. (Incorporated by reference to exhibit number 10.53 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.31 Registration Rights Agreement, dated as of April 29, 1994, by and between the Company and SS/L. (Incorporated by reference to exhibit number 10.54 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.32 Purchase Agreement, dated as of June 17, 1994, by and between the Company, CIBC, Fleet and Chisholm. (Incorporated by reference to exhibit number 10.55 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.33 Stockholders Agreement, dated as of June 17, 1994, by and between the Company, CIBC, Fleet, Chisholm and certain principal stockholders of the Company. (Incorporated by reference to exhibit number 10.56 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.34 Registration Rights Agreement, dated as of June 17, 1994, by and between the Company, CIBC, Fleet and Chisholm. (Incorporated by reference to exhibit number 10.57 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.35 Purchase Agreement, dated as of June 19, 1995, by and among the Company, CIBC, Fleet and an affiliate of Fleet. (Incorporated by reference to exhibit number 10.58 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.36 Definitive Agreement, dated April 26, 1990, by and between Orion Asia Pacific and the Republic of the Marshall Islands and a Stock Option Agreement related thereto. [CONFIDENTIAL TREATMENT HAS BEEN GRANTED FOR PORTIONS OF THESE DOCUMENTS.] (Incorporated by reference to exhibit number 10.60 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.) 10.37 Option Agreement, dated December 10, 1996, by and between Orion Atlantic and Matra Marconi Space. [CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to exhibit number 10.37 in Registration Statement No. 333-19795 on Form S-4 of Orion Newco Services, Inc.) Exhibit Number Description - ------ ----------- 10.38 Memorandum of Agreement for the Procurement of Orion 2 Spacecraft, dated December 10, 1996, by and between Orion Atlantic and Matra Marconi Space. [CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to exhibit number 10.38 in Registration Statement No. 333-19795 on Form S-4 of Orion Newco Services, Inc.) 10.39 TT&C Earth Station Agreement, dated as of November 11, 1996, by and between Orion Asia Pacific and DACOM Corp. [CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to exhibit number 10.39 in Registration Statement No. 333-19795 on Form S-4 of Orion Newco Services, Inc.) 10.40 Joint Investment Agreement, dated as of November 11, 1996, by and between Orion Asia Pacific and DACOM Corp. [CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to exhibit number 10.40 in Registration Statement No. 333-19795 on Form S-4 of Orion Newco Services, Inc.) 10.41 Orion Network Systems, Inc. Employee Stock Purchase Plan (Incorporated by reference to exhibit number 4.4 in Registration Statement No. 333-19021 on Form S-8 of Orion Network Systems, Inc.) 10.42 Orion Network Systems, Inc. 401(k) Profit Sharing Plan (Incorporated by reference to exhibit number 4.5 in Registration Statement No. 333-19021 on Form S-8 of Orion Network Systems, Inc.) 10.43 Orion Network Systems, Inc. Non-Employee Director Stock Option Plan (Incorporated by reference to exhibit number 10.43 in Registration Statement No. 333-19795 on Form S-4 of Orion Newco Services, Inc.) 10.44 Exchange Agreement dated June , 1996 among Orion Network Systems, Orion Atlantic, OrionSat and the Limited Partners (Incorporated by reference to exhibit 10 in Current Report on Form 8-K dated December 20, 1995 of Orion Network Systems, Inc.) 10.45 First Amendment to Exchange Agreement dated December ___, 1996 among Orion Network Systems, Orion Atlantic, OrionSat, and the Limited Partners. (Incorporated by reference to exhibit number 10.45 in Registration Statement No. 333-19795 on Form S-4 of Orion Newco Services, Inc.) 10.46 Redemption Agreement dated November 21, 1995, by and between STET and Orion Atlantic, the promissory notes delivered thereunder and Instrument of Redemption relating thereto (Incorporated by reference to exhibit number 10.1 in Current Report on Form 8-K dated November 21, 1995 of Orion Network Exhibit Number Description - ------ ----------- Systems, Inc.) 10.47 IPSP-Telecom Italia Agreement dated November 21, 1995, by and between Telecom Italia and Orion Atlantic. [CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT.] (Incorporated by reference to exhibit number 10.2 in Current Report on Form 8-K dated November 21, 1995 of Orion Network Systems, Inc.) 10.48 Indemnity Agreement dated November 21, 1995, by and among Telecom Italia, Orion Atlantic, Orion and STET (Incorporated by reference to exhibit number 10.3 in Current Report on Form 8-K dated November 21, 1995 of Orion Network Systems, Inc.) 10.49 Subscription Agreement dated November 21, 1995, by and between Orion and Orion Atlantic, and the promissory note delivered thereunder (Incorporated by reference to exhibit number 10.5 in Current Report on Form 8-K dated November 21, 1995 of Orion Network Systems, Inc.) 10.50 First Amendment to the Italian Facility and Services Agreement dated November 21, 1995, by and between Orion Atlantic and Nuova Telespazio (Incorporated by reference to exhibit number 10.7 in Current Report on Form 8-K dated November 21, 1995 of Orion Network Systems, Inc.) 10.51 Cancellation of Consulting Agreement dated November 16, 1995, by and between Orion Atlantic and Nuova Telespazio (Incorporated by reference to exhibit number 10.8 in Current Report on Form 8-K dated November 21, 1995 of Orion Network Systems, Inc.) 10.52 Orion 3 Spacecraft Purchase Contract, dated January 15, 1997, by and among Hughes Space and Communications International, Inc., Orion Asia Pacific Corporation and Orion Network Systems. [CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT. THE CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.] (Incorporated by reference to exhibit number 10.52 in Registration Statement No. 333-19795 on Form S-4 of Orion Newco Services, Inc.) 21.1 List of subsidiaries of Orion Newco Services, Inc. 99.1 Orders of FCC regarding OrionSat. (Incorporated by reference to exhibit number 99.1 in Registration Statement No. 33-80518 on Form S-1 of Orion Network Systems, Inc.). 99.2 Opinion of Salomon Brothers Inc. (Incorporated by reference to exhibit number 99.2 in Registration Statement No. 333-19795 on Form S-4 of Orion Newco Services, Inc.) SIGNATURE Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the Registrant has duly caused this Registration Statement on Form 8-B to be signed on its behalf by the undersigned, thereunto duly authorized. ORION NEWCO SERVICES, INC. (Registrant) By: /s/ W. Neil Bauer ----------------------- Name: W. Neil Bauer Title: President Dated: January 31, 1997 EX-3.1 2 EXHIBIT 3.1 EXHIBIT 3.1 RESTATED CERTIFICATE OF INCORPORATION OF ORION NEWCO SERVICES, INC. Orion Newco Services, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the "Corporation"), does hereby certify that: 1. The present name of the Corporation is Orion Newco Services, Inc. The Corporation was originally incorporated under the same name, and its original certificate of incorporation was filed with the Secretary of State of the State of Delaware on June 26, 1996. 2. This Restated Certificate of Incorporation restates and integrates and further amends the certificate of incorporation of the Corporation (the "Certificate of Incorporation"), and has been duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware (the "DGCL"). 3. The text of the Certificate of Incorporation is hereby restated and integrated and further amended to read in its entirety as set forth on Exhibit A attached hereto and incorporated herein by this reference. IN WITNESS WHEREOF, the Corporation has caused this Certificate to be duly executed and acknowledged in accordance with Section 103 of the DGCL. ORION NEWCO SERVICES, INC. By: -------------------------------- Name: ------------------------------ Title: ------------------------------ RESTATED CERTIFICATE OF INCORPORATION OF ORION NEWCO SERVICES, INC. FIRST: The name of the Corporation is Orion Newco Services, Inc. (hereinafter called the "Corporation"). SECOND: The registered office of the Corporation in the State of Delaware is 1209 Orange Street, Wilmington, Delaware 19801, County of New Castle. The name of the Corporation's registered agent at said address is The Corporation Trust Company. THIRD: The purpose of the Corporation is to engage in any lawful acts or activities for which corporations may be organized under the General Corporation Law of Delaware. FOURTH: The total number of shares of all classes of stock that the Corporation shall have authority to issue is Forty-One Million (41,000,000) shares, consisting of Forty Million (40,000,000) shares of common stock, par value $.01 per share, and One Million (1,000,000) shares of preferred stock, par value $.01 per share. A. Common Stock. Each holder of shares of common stock shall be entitled to one vote for each share of common stock held of record on all matters on which the holders of common stock are entitled to vote. There shall be no cumulative voting rights for the election of directors. B. Preferred Stock. The Board of Directors is authorized, subject to limitations prescribed by the Delaware General Corporation Law and the provisions of this Article FOURTH to provide, by resolution or resolutions from time to time adopted without further stockholder approval, and filing a Certificate pursuant to the applicable provision of the Delaware General Corporation Law, for the issuance of the shares of Preferred Stock in series, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and such rights of the shares of each such series and the qualifications, limitations and restrictions thereof. The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following: 1. The number of shares constituting that series and the distinctive designation of that series. 2. The dividend rate on the shares of that series, whether dividends shall be cumulative, and, if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of that series; 3. Whether that series shall have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights; 4. Whether that series shall have conversion privileges, and, if so, the terms and conditions of such conversion, including provision for adjustment of the conversion rate in such events as the Board of Directors shall determine; 5. Whether or not the shares of that series shall be redeemable, and, if so, the terms and conditions of such redemption, including the dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates; 6. Whether that series shall have a sinking fund for the redemption or purchase of shares of that series, and, if so, the terms and amount of such sinking fund; 7. The rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and the relative rights of priority, if any, of payment of shares of that series; and 8. Any other relative rights, preferences and limitations of that series. FIFTH: The name and mailing address of the incorporator (the "Incorporator") are Daniel M. Pattarini, 555 Thirteenth Street, NW, Washington, D.C. 20004. The powers of the Incorporator shall terminate upon the filing of this Certificate of Incorporation, and the names and mailing addresses of the persons who are to serve as the directors of the Corporation until the first annual meeting of the stockholders of the Corporation or until their successors are elected and qualified are as follows: NAME MAILING ADDRESS W. Neil Bauer 2440 Research Boulevard Rockville, MD 20850 David J. Frear 2440 Research Boulevard Rockville, MD 20850 Richard H. Shay 2440 Research Boulevard Rockville, MD 20850 SIXTH: The authorized number of directors of this corporation shall be not less than 3 and not more than 15. The number of directors within this range shall be stated in the Corporation's Bylaws, as may be amended from time to time. When the number of directors is changed the Board of Directors shall determine the class or classes to which the increased or decreased number of directors shall be apportioned; provided that the directors in each class shall be as nearly equal in number as possible. No decrease in the number of directors shall have the effect of shortening the term of any incumbent director. The Board of Directors shall be divided into three classes, designated as Class I, Class II, and Class III, as nearly equal in number as possible, and the term of office of directors of one class shall expire at each annual meeting of stockholders, and in all cases until their successors shall be elected and shall qualify, or until their earlier resignation, removal from office, death or incapacity. The initial term of office of Class I shall expire at the annual meeting of stockholders in 1997, that of Class II shall expire at the annual meeting in 1998, and that of Class III shall expire at the annual meeting in 1999, and in all cases as to each director until his successor shall be elected and shall qualify, or until his earlier resignation, removal from office, death or incapacity. Subject to the foregoing, at each annual meeting of stockholders the successors to the class of directors whose term shall then expire shall be elected to hold office for a term expiring at the third succeeding annual meeting and until their successors shall be elected and qualified. The directors remaining in office acting by a majority vote, or a sole remaining director, although less than a quorum, are hereby expressly delegated the power to fill any vacancies in the Board of Directors, however occurring, whether by an increase in the number of directors, death, resignation, retirement, disqualification, removal from office or otherwise, and any director so chosen shall hold office until the next election of the class for which such director shall have been chosen and until his successor shall have been elected and qualified, or until his earlier resignation, removal from office death or incapacity. SEVENTH: In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors of the Corporation is expressly authorized and empowered to adopt, amend and repeal bylaws of the Corporation. EIGHTH: No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach or fiduciary duty as a director, provided that nothing contained in this Article EIGHTH shall eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. NINTH: The Corporation reserves the right at any time and from time to time, to amend, alter, change or repeal any provision contained in this Certificate of Incorporation and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner now or hereafter prescribed by law, except that Articles FOURTH, SIXTH, TENTH, ELEVENTH, TWELFTH, THIRTEENTH, FOURTEENTH and this Article NINTH may not be altered, amended, or repealed except by the affirmative vote of at least two-thirds (2/3) of the shares entitled to vote thereon and the affirmative vote of the Board of Directors; and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other persons whomsoever by and pursuant to this Certificate of Incorporation in its present form or as hereafter amended are granted subject to the rights reserved in this Article NINTH. TENTH: Notwithstanding any other provision of this Amended and Restated Certificate of Incorporation to the contrary, outstanding shares of stock of the Corporation shall always be subject to redemption by the Corporation, by action of the Board of Directors, if in the judgment of the Board of Directors such action should be taken, pursuant to Section 151(b) of the Delaware General Corporation Law or any other applicable provision of law, to the extent necessary to prevent the loss or secure the reinstatement of any license or franchise from any governmental agency held by the Corporation or any of its subsidiaries to conduct any portion of the business of the Corporation or any of its subsidiaries, which license or franchise is conditioned upon some or all of the holders of the Corporation's stock possessing prescribed qualifications. The terms and conditions of such redemption shall be as follows: (a) the redemption price of the shares to be redeemed pursuant to this Article TENTH shall be determined by the Board of Directors and shall be at least equal to the lesser of (i) the Redemption Value or (ii) if such stock was purchased by such Disqualified Holders within one year of the Redemption Date, such Disqualified Holder's purchase price for such shares; (b) the redemption price of such shares may be paid in cash, Redemption Securities or any combination thereof; (c) if less than all the shares held by Disqualified Holders are to be redeemed, the shares to be redeemed shall be selected in such manner as shall be determined by the Board of Directors, which may include selection first of the most recently purchased shares thereof, selection by lot or selection in any other manner determined by the Board of Directors; (d) at least 30 days' written notice of the Redemption Date shall be given to the record holders of the shares selected to be redeemed (unless waived in writing by any such holder), provided that the Redemption Date may be the date on which written notice shall be given to record holders if the cash or Redemption Securities necessary to effect the redemption shall have been deposited in trust for the benefit of such record holders and subject to immediate withdrawal by them upon surrender of the stock certificates of their shares to be redeemed; (e) from and after the Redemption Date, any and all rights of whatever nature which may be held by the owners of shares selected for redemption (including without limitation any rights to vote or participate in dividends declared on stock of the same class or series as such shares) shall cease and terminate and such owners shall thenceforth be entitled only to receive the cash or Redemption Securities payable upon redemption; and (f) such other terms and conditions as the Board of Directors shall determine. For purposes of this Article TENTH: (i) "Disqualified Holder" shall mean any holder of shares of stock of the Corporation whose holding of such stock, either individually or when taken together with the holding of shares of stock of the Corporation by any other holders, may result, in the judgment of the Board of Directors, in the loss of, or the failure to secure the reinstatement of, any license or franchise from any governmental agency held by the Corporation on any of its subsidiaries to conduct any portion of the business of the Corporation or any of its subsidiaries. (ii) "Redemption Value" of a share of the Corporation's stock of any class or series shall mean the average Closing Price for such a share for each of the 45 most recent days on which shares of stock of such class or series shall have been traded preceding the day on which notice of redemption shall be given pursuant to paragraph (d) of this Article TENTH; provided, however, that if shares of stock of such class or series are not traded on any securities exchange or in the over-the-counter market, "Redemption Value" shall be determined by the Board of Directors in good faith. "Closing Price" on any day means the reported closing sales price or, in case no such sale takes place, the average of the reported closing bid and asked prices on the principal United States securities exchange registered under the Securities Exchange Act of 1934 on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing sales price or bid quotation for such stock on the National Association of Securities Dealers, Inc. Automated Quotations System or any system then in use, or if no such prices or quotations are available, the fair market value on the day in question as determined by the Board of Directors in good faith. (iii) "Redemption Date" shall mean the date fixed by the Board of Directors for the redemption of any shares of stock of the Corporation pursuant to this Article TENTH. (iv) "Redemption Securities" shall mean any debt or equity securities of the Corporation, any of its subsidiaries or any other corporation, or any combination thereof, having such terms and conditions (including, without limitation, in the case of debt securities, repayment over a period of up to thirty years, or a longer period) as shall be approved by the Board of Directors and which, together with any cash to be paid as part of the redemption price, in the opinion of any nationally recognized investment banking firm selected by the Board of Directors (which may be a firm which provides other investment banking, brokerage or other services to the Corporation), has a value, at the time notice of redemption is given pursuant to paragraph (d) of this Article, at least equal to the price required to be paid pursuant to paragraph (a) of this Article TENTH (assuming, in the case of Redemption Securities to be publicly traded, such Redemption Securities were fully distributed and subject only to normal trading activity). ELEVENTH: Control Share Acquisitions A. Control Shares. As used in this Article ELEVENTH, "control share" means shares of the Corporation that would have voting power that when added to all the other shares of the Corporation owned by a person or in respect to which that person may exercise or direct the exercise of voting power, would entitle that person, immediately after acquisition of the shares (directly or indirectly, alone or as part of a group), to exercise or direct the exercise of the voting power of the Corporation in the election of directors within any of the following ranges of voting power: (1) One-fifth or more but less that a third of all voting power. (2) One-third or more but less than a majority of all voting power. (3) A majority or more of all voting power. B. Control Share Acquisition. 1. As used in this Article ELEVENTH, "control share acquisition" means the acquisition (directly or indirectly) by any person of ownership of, or the power to direct the exercise of voting power with respect to, issued and outstanding control shares. 2. For purposes of this Article ELEVENTH, shares acquired within ninety (90) days or shares acquired pursuant to a plan to make a control share acquisition are considered to have been acquired in the same acquisition. 3. For purposes of this Article ELEVENTH, a person who acquires shares in the ordinary course of business for the benefit of others in good faith and not for the purpose of circumventing this Article ELEVENTH has voting power only of shares in respect of which that person would be able to exercise or direct the vote without further instruction from others. 4. The acquisition of any shares of the Corporation does not constitute a control share acquisition if the acquisition is consummated in any of the following circumstances: (1) Before April 1, 1992. (2) Pursuant to a binding contract existing before April 1, 1992. (3) Pursuant to the laws of descent and distribution. (4) Pursuant to the satisfaction of a pledge or other security interest created in good faith and not for the purpose of circumventing this Article ELEVENTH. (5) Pursuant to a merger or plan of share exchange if the Corporation is a party to the agreement of merger or plan of share exchange. (6) Pursuant to a tender or exchange offer that is made pursuant to an agreement to which the Corporation is a party. (7) Directly from the Corporation, or from any of its wholly owned subsidiaries. 5. The acquisition of any shares of the Corporation in good faith and not for the purpose of circumventing this Article ELEVENTH by or from (1) any person whose voting rights had previously been authorized by stockholders in compliance with this Article ELEVENTH, or (2) any person whose previous acquisition of shares of the Corporation would have constituted a control share acquisition but for the circumstances specified in the paragraph above, does not constitute a control share acquisition, unless the acquisition entitles the person (directly or indirectly, alone or as a part of a group) to exercise or direct the exercise of voting power of the Corporation in the election of directors in excess of the voting power otherwise authorized. C. Interested Shares. As used in this Article ELEVENTH, "interested shares" mean the shares of the Corporation in respect of which any of the following persons may exercise or direct the exercise of the voting power of the Corporation in the election of directors: (1) An acquiring person or member of a group with respect to a control share acquisition. (2) Any officer of the Corporation. (3) Any employee of the Corporation who is also a director of the Corporation. D. Acquiring Person Statement. Any person who proposes to make or has made a control share acquisition may at the person's election deliver an acquiring person statement to the Corporation at the Corporation's principal office. The acquiring person statement must set forth all of the following: (1) The identity of the acquiring person and each other member of any group of which the person is a part for purposes of determining control shares. (2) A statement that the acquiring person statement is given pursuant to this Article ELEVENTH. (3) The number of shares of the Corporation owned (directly or indirectly) by the acquiring person and each other member of the group. (4) The range of voting power under which the control share acquisition falls or would, if consummated, fall. (5) If the control share acquisition has not taken place: (a) a description in reasonable detail of the terms of the proposed control share acquisition; and (b) representations of the acquiring person, together with a statement in reasonable detail of the facts upon which they are based, that the proposed control share acquisition, if consummated, will not be contrary to law and that the acquiring person has the financial capacity to make to proposed control share acquisition. E. Special Meeting of Stockholders. 1. If the acquiring person so requests at the time of delivery of an acquiring person statement and gives an undertaking to pay the Corporation's expenses of a special meeting, within ten (10) days thereafter, the directors of the Corporation shall call a special meeting of the stockholders of the Corporation for the purpose of considering the voting rights to be accorded to the shares acquired or to be acquired in the control share acquisition. 2. Unless the acquiring person agrees in writing to another date, the special meeting of the stockholders shall be held within fifty (50) days after the receipt by the Corporation of the request. 3. If no request is made, the voting rights to be accorded the shares acquired in the control share acquisition shall be presented at the next special or annual meeting of stockholders. 4. If the acquiring person so requests in writing at the time of the delivery of the acquiring person statement, the special meeting must not be held sooner than thirty (30) days after the receipt by the Corporation of the acquiring person's statement. F. Notice. 1. If a special meeting is requested, notice of the special meeting of stockholders shall be given as promptly as reasonably practicable by the Corporation to all stockholders of record as of the record date set for the meeting, whether or not entitled to vote at the meeting. 2. Notice of the special or annual stockholder meeting at which the voting rights are to be considered must include or be accompanied by both of the following: (1) a copy of the acquiring person statement delivered to the Corporation pursuant to this Article ELEVENTH. (2) A statement by the Board of the Directors of the Corporation, authorized by its directors, of its position or recommendation, or that it is taking no position or making no recommendation, with respect to the proposed control share acquisition. G. Voting Rights. 1. Control shares acquired in a control share acquisition have the same voting rights as were accorded the shares before the control share acquisition only to the extent granted by resolutions approved by the stockholders of the Corporation. 2. To be adopted under this section, the resolutions shall be approved by a majority of all the votes which could be cast in a vote on the election of directors by all the outstanding shares other than interested shares. Interested shares shall not be entitled to vote on the matter, and in determining whether a quorum exists, all interested shares shall be disregarded. For the purpose of this subsection, the interested share shall be determined as of the record date for determining the stockholders entitled to vote at the meeting. H. Redemption. 1. Control shares acquired in a control share acquisition with respect to which no acquiring person statement has been filed with the Corporation may, at any time during the period ending sixty (60) days after the last acquisition of control shares by the acquiring person, be subject to redemption by the Corporation at the redemption price specified in paragraph 3 of this subsection. 2. Control shares acquired in a control share acquisition are not subject to redemption after an acquiring person statement has been filed unless the shares are not accorded full voting rights by the stockholders as provided above. 3. The redemption price for shares to be redeemed under this section shall be the number of such shares multiplied by the dollar amount (rounded to the nearest cent) equal to the average per share price, including any brokerage commissions, transfer taxes and soliciting dealer's fees, paid by the acquiring person for such shares. The Corporation may rely conclusively on public announcements by, or filings with the Securities and Exchange Commission by, the acquiring person as to the prices so paid. I. Dissenters Rights. 1. In the event control shares acquired in a control share acquisition are accorded full voting rights and the acquiring person has acquired control shares with a majority or more of all voting power, all shareholders of the Corporation, other than the acquiring person, have the right to dissent from the granting of voting rights and to demand payment of the fair value of their shares under Section 262 of the Delaware General Corporation Law as though such granting of voting rights were a corporate action described in paragraph (b) of Section 262, except that the provisions of subsection (1) of paragraph (b) of Section 262 shall not be applicable. 2. For purposes of this section "fair value" of shares under Section 262 of the Delaware General Corporation Law shall in no event be less than the highest price per share paid in the control share acquisition, as adjusted for any subsequent stock dividends or reverse stock splits or similar changes. TWELFTH: Certain Business Combinations A. Vote Required for Certain Business Combinations. 1. Higher Vote for Certain Business Combinations. In addition to any affirmative vote required by law or this Certificate of Incorporation, and except as otherwise expressly provided in subsection B of this Article TWELFTH: (a) any merger or consolidation of the Corporation or any Subsidiary (as hereinafter defined) with (i) any Interested Stockholder (as hereinafter defined) or (ii) any other corporation (whether or not itself an Interested Stockholder) which is, or after such merger or consolidation would be, an Affiliate (as hereinafter defined) of an Interested Stockholder; or (b) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) to or with any Interested Stockholder or any Affiliate of any Interested Stockholder of any assets of the Corporation or any Subsidiary having an aggregate Fair Market Value (as hereinafter defined) of $1,000,000 or more, or (c) the issuance or transfer by the Corporation or any Subsidiary (in one transaction or a series of transactions) of any securities of the Corporation or any Subsidiary to any Interested Stockholder or any Affiliate of any Interested Stockholder in exchange for cash, securities or other property (or a combination thereof) having an aggregate Fair Market Value of $1,000,000 or more; or (d) the adoption of any plan or proposal for the liquidation or dissolution of the Corporation proposed by or on behalf of an Interested Stockholder or any Affiliate of any Interested Stockholder; or (e) any reclassification of securities (including any reverse stock split), or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its Subsidiaries or any other transaction (whether or not with or into or otherwise involving an Interested Stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or convertible securities of the Corporation or any Subsidiary which is directly or indirectly owned by any Interested Stockholder or any Affiliate of any Interested Stockholder; shall require the affirmative vote of (A) the holders of at least a majority of the voting power of the then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (the "Voting Stock"), voting together as a single class and (B) the holders of at least a majority of the Voting Stock, voting together as a single class, excluding for purposes of calculating both the affirmative vote and the number of outstanding shares of Voting Stock all shares of Voting Stock of which the beneficial owner is an Interested Stockholder or any Affiliate of an Interested Stockholder referred to in clauses (a) through (e) in this paragraph 1. Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage may be specified, by law. 2. "Definition of "Business Combination." The term "Business Combination" as used in this Article TWELFTH shall mean any transaction which is referred to in any one or more of clauses (a) through (e) of paragraph 1 of this subsection A. B. When Higher Vote is Not Required. The provisions of subsection A of this Article TWELFTH shall not be applicable to any particular Business Combination, and such Business Combination shall require only such affirmative vote as is required by law and any other provision of this Certificate of Incorporation, if all of the conditions specified in either of the following paragraphs 1 and 2 are met: 1. Approval by Continuing Directors. The Business Combination shall have been approved by a majority of the Continuing Directors (as hereinafter defined). 2. Price and Procedure Requirements. All of the following conditions shall have been met: (a) The aggregate amount of the cash and the Fair Market Value (as hereinafter defined) as of the date of the consummation of the Business Combination of consideration other than cash to be received per share by holders of common stock in such Business Combination shall be at least equal to the highest of the following: (i) (if applicable) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers' fees) paid by the Interested Stockholder for any shares of common stock acquired by it (A) within the two-year period immediately prior to the first public announcement of the proposal of the Business Combination (the "Announcement Date") or (B) in the transaction in which it became an Interested Stockholder, whichever is higher; or (ii) the Fair Market Value per share of common stock on the Announcement Date or on the date on which the Interested Stockholder became an Interested Stockholder (such latter date is referred to in this Article TWELFTH as the "Determination Date"), whichever is higher. (b) The aggregate amount of the cash and the Fair Market Value as of the date of the consummation of the Business Combination of consideration other than cash to be received per share by holders of shares of any other class of outstanding Voting Stock shall be at least equal to the highest of the following (it being intended that the requirements of this paragraph 2(b) shall be required to be met with respect to every class of outstanding Voting Stock, whether or not the Interested Stockholder has previously acquired any shares of a particular class of Voting Stock): (i) (if applicable) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers' fees) paid by the Interested Stockholder for any shares of such class of Voting Stock acquired by it (A) within the two-year period immediately prior to the Announcement Date or (B) in the transaction in which it became an Interested Stockholder, whichever is higher; (ii) (if applicable) the highest preferential amount per share to which the holders of shares of such class of Voting Stock are entitled in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation; and (iii) The Fair Market Value per share of such class of Voting Stock on the Announcement Date or on the Determination Date, whichever is higher. (c) The consideration to be received by holders of a particular class of Voting Stock (including common stock) in the Business Combination shall be in cash or in the same form as the Interested Stockholder has previously paid for shares of such Voting Stock. If the Interested Stockholder has paid for shares of any class of Voting Stock with varying forms of consideration, the form of consideration for such Voting Stock shall be either cash or the form used to acquire the largest number of shares of such Voting Stock previously acquired by it. (d) After such Interested Stockholder has become an Interested Stockholder and prior to the consummation of such Business Combination: (i) there shall have been (A) no reduction in the annual rate of dividends paid on the capital stock (except as necessary to reflect any subdivision of the capital stock), except as approved by a majority of the Continuing Directors, and (B) an increase in such annual rate of dividends as necessary to reflect any reclassification (including any reverse stock split), recapitalization, reorganization or any similar transaction which has the effect of reducing the number of outstanding shares of common stock, unless the failure so to increase such annual rate is approved by a majority of the Continuing Directors; and (ii) such Interested Stockholder shall have not become the beneficial owner of any additional shares of Voting Stock except as part of the transaction which results in such Interested Stockholder becoming an Interested Stockholder. (e) After such Interested Stockholder has become an Interested Stockholder, such Interested Stockholder shall not have received the benefit, directly or indirectly (except proportionately as a stockholder), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided by the Corporation, whether in anticipation of or in connection with such Business Combination or otherwise. (f) A proxy or information statement describing the proposed Business Combination and complying with the requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and the rules and regulations thereunder (or any subsequent provisions replacing such Act, rules or regulations) shall be mailed to public stockholders of the Corporation at least 20 days prior to the consummation of such Business Combination (whether or not such proxy or information statement is required to be mailed pursuant to such Act or subsequent provisions). C. Certain Definitions. For the purposes of this Article TWELFTH: 1. A "person" shall mean any individual, firm, corporation or other entity. 2. "Interested Stockholder" shall mean any person (other than the Corporation or any Subsidiary) who or which: (a) is the beneficial owner, directly or indirectly, of more than 20% of the voting power of the outstanding Voting Stock; or (b) is an Affiliate of the Corporation and at any time within the two-year period immediately prior to the date in question was the beneficial owner, directly or indirectly, of 20% or more of the voting power of the then outstanding Voting Stock; or (c) is an assignee of or has otherwise succeeded to any shares of Voting Stock which were at any time within the two-year period immediately prior to the date in question beneficially owned by any Interested Stockholder, if such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933. 3. A person shall be a "beneficial owner" of any Voting Stock: (a) which such person or any of its Affiliates or Associates (as hereinafter defined) beneficially owns, directly or indirectly; or (b) which such person or any of its Affiliates or Associates has (i) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (ii) the right to vote pursuant to any agreement, arrangement or understanding; or (c) which are beneficially owned, directly or indirectly, by any other person with which such person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of Voting Stock. 4. For the purposes of determining whether a person is an Interested Stockholder pursuant to paragraph 2 of this subsection C, the number of shares of Voting Stock deemed to be outstanding shall include shares deemed owned through application of paragraph 3 of this subsection C but shall not include any other shares of Voting Stock which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise. 5. "Affiliate" or "Associate" shall have the respective meanings ascribed to such terms in Rule l2b-2 of the General Rules and Regulations under the Exchange Act. 6. "Subsidiary" means any corporation of which a majority of any class of equity security is owned, directly or indirectly, by the Corporation; provided, however, that for the purposes of the definition of Interested Stockholder set forth in paragraph 2 of this subsection C, the term "Subsidiary" shall mean only a corporation of which a majority of each class of equity security is owned, directly or indirectly, by the Corporation. 7. "Continuing Director" means any member of the Board of Directors of the Corporation who is unaffiliated with the Interested Stockholder and was a member of the Board of Directors of the Corporation prior to the time that the Interested Stockholder became an Interested Stockholder, and any successor of a Continuing Director who is unaffiliated with the Interested Stockholder and is recommended to succeed a Continuing Director by a majority of Continuing Directors then on the Board of Directors of the Corporation. 8. "Fair Market Value" means: (a) in the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of such stock on the principal United States securities exchange registered under the Exchange Act on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing bid quotation with respect to a share of such stock during the 30-day period preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotations System or any system then in use, or if no such quotations are available, the fair market value on the date in question of a share of such stock as determined by the Board of Directors of the Corporation in good faith; and (b) In the case of property other than cash or stock, the fair market value of such property on the date in question as determined by the Board of Directors of the Corporation in good faith. D. Powers of the Board of Directors. A majority of the directors of the Corporation shall have the power and duty to determine for the purposes of this Article TWELFTH, on the basis of information known to them after reasonable inquiry, (1) whether a person is an Interested Stockholder, (2) the number of shares of Voting Stock beneficially owned by any person, (3) whether a person is an Affiliate or Associate of another, and (4) whether the assets which are the subject of any Business Combination have, or the consideration to be received for the issuance or transfer of securities by the Corporation or any Subsidiary in any Business Combination has an aggregate Fair Market Value of $1,000,000 or more. E. No Effect on Fiduciary Obligations of Interested Stockholders. Nothing contained in this Article TWELFTH shall be construed to relieve any Interested Stockholder from any fiduciary obligation imposed by law. THIRTEENTH: Indemnification. A. Authorization of Indemnification. Each person who was or is a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative and whether by or in the right of the corporation or otherwise (a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, shall be (and shall be deemed to have a contractual right to be) indemnified and held harmless by the corporation (and any successor to the corporation by merger or otherwise) to the fullest extent authorized by, and subject to the conditions and (except as provided herein) procedures set forth in the Delaware General Corporation Law, as the same exists or may hereafter be amended (but any such amendment shall not be deemed to limit or prohibit the rights of indemnification hereunder for past acts or omissions of any such person insofar as such amendment limits or prohibits the indemnification rights that said law permitted the corporation to provide prior to such amendment), against all expenses, liabilities and losses (including attorney's fees, judgments, fines, ERISA taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith; provided, however, that the corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person (except for a suit or action pursuant to subsection B only if such proceeding (or part thereof) was authorized by the board of directors of the corporation. Persons who are not directors or officers of the corporation may be similarly indemnified in respect of such service to the extent authorized at any time by the board of directors of the corporation. The indemnification conferred in this subsection A also shall include the right to be paid by the corporation (and such successor) the expenses (including attorney's fees) incurred in the defense of or other involvement in any such proceeding in advance of its final disposition (including in the case of a director or former director expenses of separate legal counsel, up to a maximum of $50,000, but only in the event that the director or former director as the indemnified party reasonably determines, assuming an outcome unfavorable to such indemnified party, that there is a reasonable probability that such proceeding may materially and adversely affect such indemnified party, or that there may be legal defenses available to such indemnified party that are different from or in addition to those available to the corporation); provided, however, that, if and to the extent the Delaware General Corporation Law requires, the payment of such expenses (including attorney's fees) incurred by a director or officer in advance of the final disposition of a proceeding shall be made only upon delivery to the corporation of an undertaking by or on behalf of such director or officer to repay all amounts so paid in advance if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this subsection A or otherwise; and provided further, that, such expenses incurred by other employees and agents may be so paid in advance upon such terms and conditions, if any, as the board of directors deems appropriate. B. Right of Claimant to Bring Action against the Corporation. If a claim under subsection A of this section is not paid in full by the corporation within sixty days after a written claim has been received by the corporation, the claimant may at any time thereafter bring an action against the corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expenses of prosecuting such action. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in connection with any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the corporation) that the claimant has not met the standards of conduct which make it permissible under the Delaware General Corporation Law for the corporation to indemnify the claimant for the amount claimed or is otherwise not entitled to indemnification under subsection A of this section but the burden of proving such defense shall be on the corporation. The failure of the corporation (in the manner provided under the Delaware General Corporation Law) to have made a determination prior to or after the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the Delaware General Corporation Law shall not be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. An actual determination by the corporation (in the manner provided under the Delaware General Corporation Law) after the commencement of such action that the claimant has not met such applicable standard of conduct shall not be a defense to the action, but shall create a presumption that the claimant has not met the applicable standard of conduct. C. Non-exclusivity. The rights to indemnification and advance payment of expenses provided by subsection A of this section shall not be deemed exclusive of any other rights to which those seeking indemnification and advance payment of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office. D. Survival of Indemnification. The indemnification and advance payment of expenses and rights thereto provided by, or granted pursuant to, subsection A of this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the personal representatives, heirs, executors and administrators of such person. E. Insurance. The corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, against any liability asserted against such person or incurred by such person in any such capacity, or arising out of such person's status as such, and related expenses, whether or not the corporation would have the power to indemnify such person against such liability under the provisions of the Delaware General Corporation Law. FOURTEENTH: Any actions required or permitted to be taken by the stockholders must be effected at a duly called annual or special meeting of such stockholders and may not be effected by any consent in writing by such stockholders. EX-3.2 3 EXHIBIT 3.2 Exhibit 3.2 AMENDED AND RESTATED BYLAWS OF ORION NEWCO SERVICES, INC. 1. Offices. 1.1 Registered Office. The registered office of the corporation shall be in the City of Wilmington, County of New Castle, State of Delaware, and the registered agent in charge thereof shall be The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801. 1.2 Other Offices. The corporation may also have offices at such other places, both within and without the State of Delaware, as the board of directors may from time to time determine or the business of the corporation may require. 2. Meetings of Stockholders. 2.1 Place of Meetings. All meetings of the stockholders for the election of directors shall be held in the City of Washington, District of Columbia, at such place as may be fixed from time to time by the board of directors, or at such other place, within or without the State of Delaware, as shall be designated from time to time by the board of directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof. 2.2 Annual Meetings. Annual meetings of stockholders, commencing with the year 1997, shall be held on the first Thursday of May, if not a legal holiday, and if a legal holiday, then on the next secular day following, at 10:00 a.m., or at such other date and time as shall be designated from time to time by the board of directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof, at which stockholders shall elect a board of directors and transact such other business as may properly be brought before the meeting. 2.3 Special Meetings. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the certificate of incorporation, may be called by the board of directors or by the president, and shall be called by the president or secretary at the request in writing of two or more stockholders owning at least 35% in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote if no special meeting of stockholders has been called and held at the request of stockholders within the six months preceding such written request. Such request shall include a statement of the purpose or purposes of the proposed meeting. 2.4 Notice of Meetings. Written notice of the annual meeting, stating the place, date and hour of the meeting, shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than sixty days before the date of the meeting. Written notice of a special meeting of stockholders, stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than sixty days before the date of the meeting. 2.5 Business at Special Meetings. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. 2.6 List of Stockholders. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by this section or the books of the corporation, or to vote in person or by proxy at any meeting of stockholders. 2.7 Quorum at Meetings. Except as otherwise provided by statute or by the certificate of incorporation, the holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business. If, however, such quorum shall not be present or represented at any such meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time to another time and place, without notice other than announcement at the meeting of such other time and place. At the adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. 2.8 Voting and Proxies. Unless otherwise provided in the certificate of incorporation, and subject to the provisions of Section 6.4 of these Bylaws, each stockholder shall be entitled to one vote on each matter, in person or by proxy, for each share of the corporation's capital stock having voting power which is held by such stockholder. No proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally. 2.9 Required Vote. When a quorum is present at any meeting of stockholders, all matters shall be determined, adopted and approved by the vote (which need not be by ballot) of the holders of a majority of the stock having voting power, present in person or represented by proxy, unless the proposed action is one upon which, by express provision of statutes or of the certificate of incorporation, a different vote is specified and required, in which case such express provision shall govern and control the decision of such question. Notwithstanding the foregoing, candidates for election as members of the board of directors who receive the highest number of votes, up to the number of directors to be chosen, shall stand elected, and an absolute majority of the votes cast shall not be a prerequisite to the election of any candidate to the board of directors. 2.10. Stockholder Actions. Any action required or permitted to be taken by the stockholders must be effected at a duly called annual or special meeting of such stockholders and may not be effected by any consent in writing by such stockholders. 2.11. Nominating Committee. Only persons who are nominated in accordance with the procedures set forth in this Section 2.11 shall be eligible for election as directors. Nominations of persons for election to the Board of Directors of the corporation may be made at a meeting of stockholders by or at the direction of the Board of Directors or by any stockholder of the corporation entitled to vote for the election of directors at the meeting who complies with the notice procedures set forth in this Section 2.11. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely, a stockholder's notice shall be delivered to or mailed and received at the principal executive offices of the corporation not less than 50 days nor more than 90 days prior to the meeting; provided, however, that in the event that less than 60 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. Such stockholder's notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or re-election as a director, (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) the class and number of shares of the corporation which are beneficially owned by such person, and (iv) any other information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including without limitation such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and (b) as to the stockholder giving the notice (i) the name and address, as they appear on the corporation's books, of such stockholder and (ii) the class and number of shares of the corporation which are beneficially owned by such stockholder. At the request of the Board of Directors, any person nominated by the Board of Directors for election as a director shall furnish to the Secretary of the Corporation that information required to be set forth in a stockholder's notice of nomination which pertains to the nominee. No later than the tenth day following the date of receipt of a stockholder nomination submitted pursuant to this Section 2.11, the president of the corporation shall, if the facts warrant, determine and notify in writing the stockholder making such nomination that such nomination was not made in accordance with the time limits and/or other procedures prescribed by the Bylaws. If no such notification is mailed to such stockholder within such ten-day period, such nomination shall be deemed to have been made in accordance with the provisions of this Section 2.11. No person shall be eligible for election as a director of the corporation unless nominated in accordance with the procedures set forth in this Section 2.11. 2.12. Business at Annual Meeting. At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (b) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (c) otherwise properly brought before the meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder's notice must be delivered to or mailed and received at the principal executive offices of the corporation not less than 50 days nor more than 90 days prior to the meeting; provided, however, that in the event that less than 60 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made. A stockholder's notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (a) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (b) the name and address, as they appear on the corporation's books, of the stockholder proposing such business, (c) the class and number of shares of the corporation which are beneficially owned by the stockholder, and (d) any material interest of the stockholder in such business. No later than the tenth day following the date of receipt of a shareholder notice pursuant to this Section 2.12, the president of the corporation shall, if the facts warrant, determine and notify in writing the stockholder submitting such notice that such notice was not made in accordance with the time limits and/or other procedures prescribed by the Bylaws. If no such notification is mailed to such shareholder within such ten-day period, such stockholder notice containing a matter of business shall be deemed to have been made in accordance with the provisions of this Section 2.12. Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at an annual meeting except in accordance with the procedures set forth in this Section 2.12. 3. Directors. 3.1 Powers. The business and affairs of the corporation shall be managed by or under the direction of the board of directors, which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the certificate of incorporation or by these Bylaws directed or required to be exercised or done by the stockholders. 3.2. Number and Election. The number of directors which shall constitute the whole board shall be eleven members and shall be divided into three classes as specified or determined pursuant to the Certificate of Incorporation of the corporation as in effect from time to time. 3.3. Vacancies. Vacancies and newly created directorships resulting from any increase in the authorized number of directors shall be filled in the manner specified in the Certificate of Incorporation of the corporation as in effect from time to time. 3.4 Place of Meetings. The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of Delaware. 3.5 First Meeting of Each Board. The first meeting of each newly elected board of directors shall be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver of notice signed by all of the directors. 3.6 Regular Meetings. Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board of directors. 3.7 Special Meetings. Special meetings of the board may be called by the president on one day's notice to each director, either personally or by telephone, by mail or by telegram; special meetings shall be called by the chairman or secretary in like manner and on like notice on the written request of one-third of the total number of directors. 3.8 Quorum and Vote at Meetings. At all meetings of the board, one director if a board of one director is authorized, or such greater number of directors as is not less than a majority of the total number of directors, shall constitute a quorum for the transaction of business. The vote of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by statute or by the certificate of incorporation. If a quorum shall not be present at any meeting of the board of directors, the directors present thereat may adjourn the meeting to another time and place, without notice other than announcement at the meeting of such other time and place. 3.9 Telephone Meetings. Members of the board of directors or any committee designated by the board may participate in a meeting of such board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this section shall constitute presence in person at such meeting. 3.10 Action Without Meeting. Unless otherwise restricted by the certificate of incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board of directors or committee. 3.11 Committees of Directors. The board of directors may by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation. The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. If a member of a committee shall be absent from any meeting, or disqualified from voting thereat, the remaining member or members present and not disqualified from voting, whether or not such member or members constitute a quorum, may, by unanimous vote, appoint another member of the board of directors to act at the meeting in the place of such absent or disqualified member. Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the certificate of incorporation (except that a committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the board of directors pursuant to Section 151(a) of the General Corporation Law of the State of Delaware (hereinafter the "GCL"), fix any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the corporation or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the corporation), adopting an agreement of merger or consolidation pursuant to Sections 251 or 252 of the GCL, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, or amending the Bylaws of the corporation; and, unless otherwise expressly provided in the resolution, no such committee shall have the power or authority to declare a dividend, to authorize the issuance of stock, or to adopt a certificate of ownership and merger pursuant to Section 253 of the GCL. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors. Unless otherwise specified in the resolution of the board of directors designating the committee, at all meetings of each such committee of directors, a majority of the total number of members of the committee shall constitute a quorum for the transaction of business, and the vote of a majority of the members of the committee present at any meeting at which there is a quorum shall be the act of the committee. Each committee shall keep regular minutes of its meetings and report the same to the board of directors, when required. 3.12 Compensation of Directors. Unless otherwise restricted by the certificate of incorporation, the board of directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be paid like compensation for attending committee meetings. 4. Notices of Meetings. 4.1 Notice Procedure. Whenever, whether under the provisions of any statute or of the certificate of incorporation or of these Bylaws, notice is required to be given to any director or stockholder, such requirement shall not be construed to require the giving of personal notice. Such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same is deposited in the United States mail. Notice to directors may also be given by telex, telegram or telephone. 4.2 Waivers of Notice. Whenever the giving of any notice is required by statute, the certificate of incorporation or these Bylaws, a waiver thereof, in writing, signed by the person or persons entitled to said notice, whether before or after the event as to which such notice is required, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors or members of a committee of directors need be specified in any written waiver of notice, unless so required by the certificate of incorporation, by statute or by these Bylaws. 5. Officers. 5.1 Positions. The officers of the corporation shall be a president and a secretary, and such other officers as the board of directors may appoint, including one or more vice presidents, a treasurer, assistant secretaries and assistant treasurers, who shall exercise such powers and perform such duties as shall be determined from time to time by the board. Any number of offices may be held by the same person, unless the certificate of incorporation or these Bylaws otherwise provide; provided, however, that in no event shall the president and the secretary be the same person. 5.2 Appointment. The officers of the corporation shall be chosen by the board of directors at its first meeting after each annual meeting of stockholders. 5.3 Compensation. The compensation of all officers of the corporation shall be fixed by the board of directors. 5.4 Term of Office. The officers of the corporation shall hold office until their successors are chosen and qualify or until their earlier resignation or removal. Any officer may resign at any time upon written notice to the corporation. Any officer elected or appointed by the board of directors may be removed at any time, with or without cause, by the affirmative vote of a majority of the board of directors. Any vacancy occurring in any office of the corporation shall be filled by the board of directors. All officers of the corporation shall be required to retire at the end of the month during which they attain 65 years of age. 5.5 Fidelity Bonds. The corporation may secure the fidelity of any or all of its officers or agents by bond or otherwise. 5.6 Chairman. The chairman shall preside at all meetings of the stockholders and board of directors and shall be ex officio a member of all standing committees of the board of directors. 5.7 President. The president shall be the chief executive officer of the corporation, shall be ex officio a member of all standing committees, shall assume all responsibility for the management and operation of the business of the corporation, and shall ensure that all orders and resolutions of the board of directors are carried into effect. The president shall have the authority to execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some officer or agent of the corporation. 5.8 Vice Chairman or Vice Presidents. If the directors shall appoint one or more vice presidents, such vice chairman or vice presidents shall perform such duties and have such powers as may be vested in such vice presidents by the board of directors or by the president. One of such vice presidents may be designated the chief operating officer of the corporation and have general management of the day-to-day operations of the corporation, subject to the authority of the president. 5.9 Secretary. The secretary shall attend all meetings of the board of directors and all meetings of the stockholders, and shall record all the proceedings of the meetings of the stockholders and of the board of directors in a book to be kept for that purpose, and shall perform like duties for the standing committees, when required. The secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or by the president, under whose supervision the secretary shall be. The secretary shall have custody of the corporate seal of the corporation, and the secretary, or an assistant secretary, shall have authority to affix the same to any instrument requiring it, and when so affixed it may be attested by the signature of the secretary or by the signature of such assistant secretary. The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by such officer's signature. The secretary or an assistant secretary may also attest all instruments signed by the president or any vice president. 5.10 Assistant Secretary. The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors (or if there shall have been no such determination, then in the order of their election), shall, in the absence of the secretary or in the event of the secretary's inability or refusal to act, perform the duties and exercise the powers of the secretary, and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe. 5.11 Treasurer. 5.11.1 Duties. The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation, and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors. The treasurer shall disburse the funds of the corporation as ordered by the board of directors, taking proper vouchers for such disbursements, and shall render to the president, and to the board of directors at its regular meetings, or when the board of directors so requires, an account of all transactions as treasurer and of the financial condition of the corporation. 5.11.2 Bond. If required by the board of directors, the treasurer shall give the corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of the treasurer's office and for the restoration to the corporation, in case of the treasurer's death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind, in the treasurer's possession or under the treasurer's control and belonging to the corporation. 5.12 Assistant Treasurer. The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors (or if there shall have been no such determination, then in the order of their election), shall, in the absence of the treasurer or in the event of the treasurer's inability or refusal to act, perform the duties and exercise the powers of the treasurer, and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe. 6. Capital Stock. 6.1 Certificates of Stock; Uncertificated Shares. The shares of the corporation shall be represented by certificates, provided that the board of directors may provide by resolution or resolutions that some or all of any or all classes or series of the corporation's stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation. Notwithstanding the adoption of such a resolution by the board of directors, every holder of stock represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the corporation by the president or vice president, and by the treasurer and/or assistant treasurer, or the secretary or an assistant secretary of such corporation representing the number of shares registered in certificate form. Any or all the signatures on the certificate may be facsimile. In case any officer, transfer agent or registrar whose signature or facsimile signature appears on a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue. 6.2 Lost Certificates. The board of directors may direct a new certificate or certificates of stock or uncertificated shares to be issued in place of any certificate or certificates theretofore issued by the corporation and alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming that the certificate of stock has been lost, stolen or destroyed. When authorizing such issuance of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or such owner's legal representative, to advertise the same in such manner as the board shall require and/or to give the corporation a bond, in such sum as the board may direct, as indemnity against any claim that may be made against the corporation on account of the certificate alleged to have been lost, stolen or destroyed or on account of the issuance of such new certificate or uncertificated shares. 6.3 Transfers. The transfer of stock and certificates that represent the stock and the transfer of uncertificated shares shall be effected in accordance with the laws of the State of Delaware. Any restriction on the transfer of a security imposed by the corporation shall be noted conspicuously on the security. 6.4 Fixing Record Date. In order that the corporation may determine the stockholders entitled to notice of, or to vote at, any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of, or to vote at, a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting. 6.5 Registered Stockholders. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, to receive notifications, to vote as such owner, and to exercise all the rights and powers of an owner; and the corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Delaware. 7. Indemnification. Indemnification of certain persons by the corporation shall be as specified in or determined pursuant to the Certificate of Incorporation of the Corporation as is in effect from time to time. 8. General Provisions. 8.1 Dividends. Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation and the laws of the State of Delaware, may be declared by the board of directors at any regular or special meeting. Subject to the provisions of the General Corporation Law of the State of Delaware, such dividends may be paid either out of surplus, as defined in the General Corporation Law of the State of Delaware, or in the event that there shall be no such surplus, out of the net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. Dividends may be paid in cash, in property, or in shares of the corporation's capital stock, subject to the provisions, if any, of the certificate of incorporation. 8.2 Reserves. The directors of the corporation may set apart, out of the funds of the corporation available for dividends, a reserve or reserves for any proper purpose and may abolish any such reserve. 8.3 Execution of Instruments. All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate. 8.4 Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the board of directors. 8.5 Seal. The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced. Section 9. Amendments. These Bylaws may be altered, amended or repealed and new bylaws may be adopted by a majority of the Board of Directors, except that Sections 2.3, 2.10, 2.11, 2.12, 3.2, 3.3 and this Section 9 may not be altered, amended, or repealed except by at the affirmative vote of at least two-thirds the shares entitled to vote thereon or the affirmative vote of the Board of Directors. * * * * The foregoing Bylaws were adopted by the Board of Directors on January __, 1997. --------------------------------- Secretary EX-4.3 4 EXHIBIT 4.3 Exhibit 4.3 CERTIFICATE OF DESIGNATIONS, RIGHTS AND PREFERENCES OF SERIES A 8% CUMULATIVE REDEEMABLE CONVERTIBLE PREFERRED STOCK OF ORION NEWCO SERVICES, INC. - -------------------------------------------------------------------------------- Pursuant to Section 151 of the General Corporation Law of the State of Delaware - -------------------------------------------------------------------------------- The undersigned DOES HEREBY CERTIFY that, pursuant to the authority contained in Article FOURTH of the Restated Certificate of Incorporation of Orion Newco Services, Inc., a Delaware corporation (the "Corporation"), and in accordance with Section 151 of the General Corporation Law of the State of Delaware, the Board of Directors of the Corporation has authorized the creation of Series A 8% Cumulative Redeemable Convertible Preferred Stock having the designations, rights and preferences as are set forth in Exhibit A hereto and made a part hereof and that the following resolution was duly adopted by the Board of Directors of the Corporation: RESOLVED, that a series of authorized Preferred Stock, par value $.01 per share, of the Corporation be, and it hereby is, created; that the shares of such series shall be, and they hereby are, designated as "Series A 8% Cumulative Redeemable Convertible Preferred Stock"; that the number of shares constituting such series shall be, and it hereby is, 15,000; and that the designations, rights and preferences of the shares of such series are as set forth in Exhibit A attached hereto and made a part hereof. IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be hereunto affixed and this Certificate to be signed by its President and Chief Executive Officer and attested to by its Vice President, Corporate and Legal Affairs, and Secretary this ____ day of __________, 199__. ORION NEWCO SERVICES, INC. By: ------------------------------ [SEAL] Name: W. Neil Bauer Title: President/Chief Executive Officer ATTEST: - ---------------------------------------- Name: Richard H. Shay, Esq. Title: Vice President, Corporate and Legal Affairs/Secretary EXHIBIT A SERIES A 8% CUMULATIVE REDEEMABLE CONVERTIBLE PREFERRED STOCK The following sections set forth the designations, rights and preferences of the Corporation's Series A Preferred. Capitalized terms used herein are defined in Section 12 below. Section 1. Dividends. 1A. General Obligation. When and as declared by the Corporation's board of directors and to the extent permitted under the General Corporation Law of Delaware, the Corporation shall pay preferential dividends to the holders of the Preferred Stock as provided in this Section 1. Except as otherwise provided herein, dividends on each Preferred Share shall accrue on a daily basis at the rate of 8% per annum of the sum of the Liquidation Value thereof plus all accumulated and unpaid dividends thereon, from and including the Date of Issuance of such Preferred Share to and including the date on which the Liquidation Value of such Preferred Share (plus all accrued and unpaid dividends thereon) is paid or the date on which such Preferred Share is converted into shares of Common Stock hereunder. Such dividends shall accrue whether or not they have been declared and whether or not there are profits, surplus or other funds of the Corporation legally available for the payment of dividends. 1B. Dividend Reference Dates. To the extent not paid on a Dividend Reference Date, with the initial Dividend Reference Date being February 28, 1997, all dividends which have accrued on each Preferred Share outstanding since the latest preceding Dividend Reference Date (or the Date of Issuance of such Preferred Share, if later) ending upon each such Dividend Reference Date, and, in the case of each Preferred Share outstanding that was issued upon the Old ONS Preferred Share Conversion, all dividends that were accrued, accumulated, and unpaid at the time of the Old ONS Preferred Share Conversion on the Old ONS Preferred Share that was converted into such Preferred Share, shall be accumulated and shall remain accumulated dividends with respect to such Preferred Share until paid. 1C. Distribution of Partial Dividend Payments. Except in connection with redemptions or repurchases (i) pursuant to paragraph 4A or 4B below, (ii) in compliance with paragraph 4H below, or (iii) as provided in the Purchase Agreement, if at any time the Corporation pays less than the total amount of dividends then accrued with respect to the Preferred Stock, such payment shall be distributed ratably among the holders thereof based upon the aggregate accrued but unpaid dividends on the Preferred Shares held by each such holder and such payment shall be applied first to dividends which have accrued on such Preferred Shares during the period since the latest preceding Dividend Reference Date and second to reduce any accumulated dividends with respect to such Preferred Shares. Section 2. Liquidation. Upon any Liquidation, each holder of Preferred Stock shall be entitled to be paid, before any distribution or payment is made upon any Junior Securities, an amount in cash equal to the greater of (a) the aggregate Liquidation Value (plus all accrued and unpaid dividends) of all shares of Preferred Stock held by such holder or (b) the amount which would be distributed with respect to the shares of Common Stock (including fractional shares for purposes of this calculation) into which such shares of Preferred Stock are convertible (assuming conversion of all outstanding Preferred Stock) immediately prior to the record date for such distribution (or, if there is no such record date, then the date as of which the holders of Common Stock entitled to such distribution are determined); and the holders of Preferred Stock shall not be entitled to any further payment. If upon any such Liquidation the Corporation's assets to be distributed among the holders of the Preferred Stock are insufficient to permit payment to such holders of the aggregate amount which they are entitled to be paid, then the entire assets to be distributed shall be distributed ratably among such holders based upon the aggregate Liquidation Value (plus all accrued and unpaid dividends) of the Preferred Shares held by each such holder. Prior to such Liquidation, the Corporation shall declare for payment all accrued and unpaid dividends with respect to the Preferred Stock. (Payment of the greater of the amounts specified in clauses (a) and (b) of this Section 2 in respect of such Preferred Shares shall constitute payment of such declared dividends.) The Corporation shall mail written notice of such Liquidation, not less than 60 days prior to the payment date stated therein, to each record holder of Preferred Stock. Section 3. [Reserved.] Section 4. Redemptions. 4A. Redemption at Option of Corporation. (i) The Corporation may at any time redeem all or, subject to paragraph 4E below, any of the Preferred Shares then outstanding at the Redemption Price, provided that no redemption pursuant to this paragraph 4A shall be for Preferred Shares with an aggregate Liquidation Value of less than $1,000,000 (or such lesser number of Preferred Shares then outstanding). (ii) The Corporation may in connection with a Reorganization redeem all or any of the Preferred Shares then outstanding at the Redemption Price, payable at the time of the consummation of the Reorganization as follows: (a) first, in Freely Tradeable Securities in an amount not to exceed the lesser of (1) the Redemption Price of such Preferred Shares and (2) the amount of Freely Tradeable Securities that, if such holder had converted such Preferred Shares into Common Stock immediately prior to such Reorganization, would have been issued to such holder in connection with such Reorganization in respect of such shares of Common Stock; and (b) second, the balance of the Redemption Price (if any) in cash. Notwithstanding paragraph 4H hereof, if the Corporation seeks the consent of the holders of Preferred Stock to any Reorganization under subparagraph 3D(iv) of the Purchase Agreement, and the affirmative consent of the holders required thereunder is not obtained, the Corporation may redeem at or prior to the time of the consummation of such Reorganization and pursuant to this paragraph 4A(ii), all (but not less than all) of the Preferred Shares held by those holders that did not affirmatively consent to such transaction. 4B. Redemptions at the Option of the Holder. (i) At any time after the fifth anniversary of the Closing, subject to subparagraph 4B(ii) below, each holder of Preferred Stock may request redemption of all or a portion of the Preferred Shares owned by such holder for a price equal to the Redemption Price. Within five Business Days after receipt of such request, the Corporation shall give written notice to all other holders of Preferred Stock, and such other holders may request redemption of their Preferred Shares by delivering written notice to the Corporation within 10 Business Days after receipt of the Corporation's notice. The Corporation shall pay the Redemption Price of all Preferred Shares whose redemption has been duly requested pursuant to this paragraph 4B within 30 days after its receipt of the initial request for such redemption. Notwithstanding the above, the Corporation shall not be obligated pursuant to this paragraph 4B to redeem any Preferred Share initially issued to a Small Business Investment Company licensed by the U.S. Small Business Administration before the fifth anniversary of the Date of Issuance of such Preferred Share, provided that all such outstanding Preferred Shares shall be counted as held by their holders for purposes of all pro rata and other calculations. (ii) Notwithstanding the provisions of subparagraph 4B(i) above, the Corporation shall not be obligated to repurchase, pursuant to this paragraph 4B: (a) on a cumulative basis, (x) before the sixth anniversary of the Closing, a number of shares of Preferred Stock in excess of one-third of all shares of Preferred Stock issued by the Corporation at any time (for purposes of such calculation, taking into account both repurchases under this paragraph 4B and repurchases under paragraph 6A of the Purchase Agreement), and (y) before the seventh anniversary of the Closing, a number of shares of Preferred Stock in excess of two-thirds of all shares of Preferred Stock issued by the Corporation at any time (for purposes of such calculation, taking into account both repurchases under this paragraph 4B and repurchases under paragraph 6A of the Purchase Agreement) (and at no time shall any initial holder and its transferees be entitled to sell shares of Preferred Stock to the Corporation pursuant to this paragraph 4B to the extent that the aggregate number of such shares of Preferred Stock sold by such Persons at or before that time pursuant to this paragraph 4B or pursuant to paragraph 6A of the Purchase Agreement (limited in the case of a transferee to shares of Preferred Stock acquired directly or indirectly from, or acquired in respect of Preferred Stock acquired directly or indirectly from, such initial holder) would, on a cumulative basis, exceed an amount equal to (I) the maximum cumulative number of shares which the Corporation may be required to redeem under this subparagraph 4B(ii)(a) at such time, multiplied by (II) a fraction (x) the numerator of which is the aggregate number, without duplication, of shares of Preferred Stock issued by the Corporation at any time that was held by such holders (limited in the case of a transferee to shares of Preferred Stock acquired directly or indirectly from, or acquired in respect of Preferred Stock acquired directly or indirectly from, such initial holder), and (y) the denominator of which is the aggregate number, without duplication, of shares of Preferred Stock issued by the Corporation at any time); and (b) for a period of 180 days after the date the Corporation redeems shares of Preferred Stock pursuant to paragraph 4B(i), any shares of Preferred Stock pursuant to a request for redemption under paragraph 4B(i) that is requested subsequent to, and not as part of, such prior redemption. 4C. Redemption Payment. For each Preferred Share which is to be redeemed (and except as otherwise provided in paragraph 4A(ii) above), the Corporation shall be obligated on the Redemption Date to pay to the holder thereof (upon surrender by such holder at the Corporation's principal office of the certificate representing such Preferred Share) an amount in immediately available funds equal to the Redemption Price of such Preferred Share. If the funds of the Corporation legally available for redemption of Preferred Shares on any Redemption Date are insufficient to redeem the total number of Preferred Shares to be redeemed on such date, those funds which are legally available shall be used to redeem the maximum possible number of Preferred Shares ratably among the holders of the Preferred Shares to be redeemed based upon the aggregate Redemption Price of the Preferred Shares held by each such holder and the remaining Preferred Shares will remain outstanding. At any time thereafter when additional funds of the Corporation are legally available for the redemption of Preferred Shares, such funds shall immediately be used to redeem the balance of the Preferred Shares which the Corporation has become obligated to redeem on any Redemption Date but which it has not redeemed. In connection with any redemption of Preferred Stock pursuant to this Section 4, the Corporation shall declare for payment all dividends that are accrued and unpaid as of the Redemption Date with respect to the Preferred Shares which are to be redeemed on such Redemption Date. (Payment of the Redemption Price in respect of such Preferred Shares shall constitute payment of such declared dividends.) 4D. Notice of Redemption. The Corporation shall mail written notice of each redemption of any Preferred Stock to each record holder thereof not more than 60 nor less than 30 days prior to the date on which such redemption is to be made in the case of a redemption pursuant to paragraph 4A, and not less than 5 Business Days prior to the date on which such redemption is to be made in the case of a redemption pursuant to paragraph 4B. Upon mailing any such notice of redemption, the Corporation shall become obligated to redeem the total number of Preferred Shares specified in such notice at the time of redemption specified therein. In case fewer than the total number of Preferred Shares represented by any certificate are redeemed, a new certificate representing the number of unredeemed Preferred Shares shall be issued to the holder thereof without cost to such holder within three Business Days after surrender of the certificate representing the redeemed Preferred Shares. 4E. Determination of the Number of Each Holder's Preferred Shares to be Redeemed. The number of Preferred Shares to be redeemed from each holder thereof in redemptions pursuant to paragraph 4A(i) shall be the number of Preferred Shares determined by multiplying the total number of Preferred Shares to be redeemed by a fraction, the numerator of which shall be the total Redemption Price of Preferred Shares then held by such holder and the denominator of which shall be the aggregate Redemption Price of Preferred Shares then outstanding. 4F. Dividends After Redemption Date. No Preferred Share is entitled to any dividends accruing after the Redemption Date. On the Redemption Date of any Preferred Share, all rights of the holder of such Preferred Share shall cease, and such Preferred Share shall not be deemed to be outstanding. 4G. Redeemed or Otherwise Acquired Preferred Shares. Any Preferred Shares which are redeemed or otherwise acquired by the Corporation thereupon shall be retired. All such shares shall upon their retirement become authorized but unissued shares of preferred stock of the Corporation and may not be reissued as Preferred Stock but may be reissued as part of a new series of preferred stock to be created by resolution or resolutions of the board of directors, subject to the conditions or restrictions on issuance set forth in the certificate of incorporation of the Corporation. 4H. Other Redemptions or Acquisitions. Neither the Corporation nor any Subsidiary shall redeem or otherwise acquire any Preferred Stock, except as expressly authorized herein or pursuant to the Purchase Agreement or pursuant to a purchase offer made pro rata to all holders of Preferred Stock on the basis of the aggregate Redemption Price of the Preferred Shares owned by each such holder. Section 5. Voting Rights. The holders of the Preferred Stock shall be entitled to notice of all stockholders meetings in accordance with the Corporation's bylaws, and except as otherwise required by law, the holders of the Preferred Stock shall be entitled to vote on all matters submitted to the stockholders for a vote together with the holders of the Common Stock voting together as a single class with each share of Common Stock entitled to one vote per share, and each Preferred Share (including fractional shares) entitled to one vote for each share of Common Stock that would be issuable upon conversion of such Preferred Share at the time the vote is taken. Section 6. Conversion. 6A. Conversion Procedure. (i) At any time and from time to time after the issuance thereof, any holder of Preferred Stock may convert all or any of the Preferred Shares (including any fraction of a Preferred Share) held by such holder into a number of shares of Common Stock computed by multiplying the number of Preferred Shares to be converted by the Liquidation Value and dividing the result by the Conversion Price then in effect. (ii) Each conversion of Preferred Stock shall be deemed to have been effected as of the close of business on the date on which the certificate or certificates representing the Preferred Shares to be converted have been surrendered at the principal office of the Corporation. At such time as such conversion has been effected, the rights of the holder of such Preferred Shares as such holder shall cease, all accrued and unpaid dividends on such Preferred Shares shall be deemed to have been forfeited immediately prior to such conversion, and the Person or Persons in whose name or names any certificate or certificates for shares of Common Stock are to be issued upon such conversion shall be deemed to have become the holder or holders of record of the shares of Common Stock represented thereby. (iii) The conversion rights of any Preferred Share subject to redemption hereunder shall terminate on the Redemption Date for such Preferred Share unless the Corporation has failed to pay to the holder thereof the Redemption Price thereof. (iv) Notwithstanding any other provision hereof, if a conversion of any Preferred Shares is to be made in connection with a Public Offering, such conversion may, at the election of the holder of such Preferred Shares, be conditioned upon the consummation of the Public Offering, in which case such conversion shall not be deemed to be effective until the consummation of the Public Offering. (v) As soon as possible after a conversion has been effected (but in any event within five Business Days in the case of subparagraph (a) below), the Corporation shall deliver to the converting holder: (a) a certificate or certificates representing the number of shares of Common Stock issuable by reason of such conversion in such name or names and such denomination or denominations as the converting holder has specified; (b) payment of the amount payable under subparagraph (viii) below with respect to such conversion; and (c) a certificate representing any Preferred Shares which were represented by the certificate or certificates delivered to the Corporation in connection with such conversion but which were not converted. (vi) The issuance of certificates for shares of Common Stock upon conversion of Preferred Stock shall be made without charge to the holders of such Preferred Stock for any issuance tax in respect thereof or other cost incurred by the Corporation in connection with such conversion and the related issuance of shares of Common Stock. (vii) The Corporation shall not close its books against the transfer of Preferred Stock or of Common Stock issued or issuable upon conversion of Preferred Stock in any manner which interferes with the timely conversion of Preferred Stock. The Corporation shall assist and cooperate (but the Corporation shall not be required to expend substantial efforts or funds) with any holder of Preferred Shares required to make any governmental filings or obtain any governmental approval prior to or in connection with any conversion of Preferred Shares hereunder (including, without limitation, making any filings required to be made by the Corporation). (viii) If any fractional interest in a share of Common Stock would, except for the provisions of this subparagraph, be deliverable upon any conversion of a holder's Preferred Stock, the Corporation, in lieu of delivering the fractional share therefor, shall pay an amount to the holder thereof equal to the Market Price of such fractional interest as of the date of conversion. (ix) The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of issuance upon the conversion of the Preferred Stock or exercise of the Warrants, such number of shares of Common Stock issuable upon the conversion of all outstanding Preferred Stock and exercise of all outstanding Warrants which may then be exercised. All shares of Common Stock which are so issuable shall, when issued, be duly and validly issued, fully paid and nonassessable and free from all taxes, liens and charges. The Corporation shall take all such actions as may be necessary to ensure that all such shares of Common Stock may be so issued without violation of any applicable law or governmental regulation (excluding Investment Regulations) or any requirements of any domestic securities exchange upon which shares of Common Stock may be listed (except for official notice of issuance which shall be immediately delivered by the Corporation upon each such issuance). 6B. Conversion Price. (i) In order to prevent dilution of the conversion rights granted under this subdivision, the Conversion Price shall be subject to adjustment from time to time pursuant to this Section 6. (ii) If and whenever on or after the Date of Issuance of any Preferred Share the Corporation issues or sells, or in accordance with paragraph 6C is deemed to have issued or sold, other than in an Excluded Issuance, any share of Common Stock for a consideration per share less than the Conversion Price in effect immediately prior to such time with respect to any such Preferred Share, then forthwith upon such issue or sale the Conversion Price of such Preferred Share shall be reduced to the lowest net price per share at which any such share of Common Stock has been issued or sold or is deemed to have been issued or sold. 6C. Effect on Conversion Price of Certain Events. Solely for purposes of determining the adjusted Conversion Price under paragraph 6B, the following shall be applicable: (i) Issuance of Rights or Options. If the Corporation in any manner grants any Options and the lowest price per share for which any one share of Common Stock is issuable upon the exercise of any such Option or upon conversion or exchange of any Convertible Security is less than any Conversion Price in effect immediately prior to the time of the granting of such Option, then such share of Common Stock shall be deemed to have been issued and sold by the Corporation at the time of the granting of such Options for such price per share and such Conversion Price shall be adjusted in accordance with paragraph 6B(ii) above. For purposes of this paragraph, the "lowest price per share for which any one share of Common Stock is issuable" shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Corporation with respect to any one share of Common Stock upon the granting of the Option, upon exercise of the Option and upon conversion or exchange of the Convertible Security. No further adjustment of such Conversion Price shall be made upon the actual issue of such Common Stock or of such Convertible Security upon the exercise of such Options or upon the actual issue of such Common Stock upon conversion or exchange of such Convertible Security. (ii) Issuance of Convertible Securities. If the Corporation in any manner issues or sells any Convertible Security and the lowest price per share for which any one share of Common Stock is issuable upon conversion or exchange thereof is less than any Conversion Price in effect immediately prior to the time of such issue or sale, then such share of Common Stock shall be deemed to have been issued and sold by the Corporation at the time of the issuance or sale of such Convertible Securities for such price per share and such Conversion Price shall be adjusted in accordance with paragraph 6B(ii) above. For the purposes of this paragraph, the "lowest price per share for which any one share of Common Stock is issuable" shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Corporation with respect to any one share of Common Stock upon the issuance of the Convertible Security and upon the conversion or exchange of such Convertible Security. No further adjustment of such Conversion Price shall be made upon the actual issue of such Common Stock upon conversion or exchange of any Convertible Security, and if any such issue or sale of such Convertible Security is made upon exercise of any Options for which adjustments of such Conversion Price had been or are to be made pursuant to other provisions of this Section 6, no further adjustment of such Conversion Price shall be made by reason of such issue or sale. (iii) Change in Option Price or Conversion Rate. If the purchase price provided for in any Option, the additional consideration (if any) payable upon the issue, conversion or exchange of any Convertible Security, or the rate at which any Convertible Security is convertible into or exchangeable for Common Stock change at any time, any Conversion Price previously adjusted with respect to such Option or Convertible Security and in effect at the time of such change shall be readjusted to the Conversion Price which would have been in effect at such time had such Option or Convertible Security originally provided for such changed purchase price, additional consideration or changed conversion rate, as the case may be, at the time initially granted, issued or sold. (iv) Treatment of Expired Options and Unexercised Convertible Securities. Upon the expiration of any Option or the termination of any right to convert or exchange any Convertible Security without the exercise of any such Option or right, any Conversion Price then in effect hereunder shall be adjusted to the Conversion Price which would have been in effect at the time of such expiration or termination had such Option or Convertible Security, to the extent outstanding immediately prior to such expiration or termination, never been issued. (v) Calculation of Consideration Received. If any Common Stock, Option or Convertible Security is issued or sold or deemed to have been issued or sold for cash, the consideration received therefor shall be deemed to be the amount received by the Corporation therefor. In case any Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of the consideration other than cash received by the Corporation shall be the fair value of such consideration, except where such consideration consists of securities, in which case the amount of consideration received by the Corporation shall be the Market Price thereof as of the date of receipt. If any Common Stock, Option or Convertible Security is issued to the owners of the non-surviving entity in connection with any merger in which the Corporation is the surviving corporation, the amount of consideration therefor shall be deemed to be the fair value of such portion of the assets and business of the non-surviving entity as is attributable to such Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other than cash and securities shall be determined jointly by the Corporation and the holders of 70% of the outstanding Preferred Shares. If such parties are unable to reach agreement within a reasonable period of time, the fair value of such consideration shall be determined by an independent appraiser experienced in valuing such type of consideration jointly selected by the Corporation and the holders of 70% of the outstanding Preferred Shares. The determination of such appraiser shall be final and binding upon the parties, and the fees and expenses of such appraiser shall be borne by the Corporation. (vi) Integrated Transactions. In case any Option is issued in connection with the issue or sale of other securities of the Corporation, together comprising one integrated transaction in which no specific consideration is allocated to such Option by the parties thereto, the Option shall be deemed to have been issued for a consideration of $.01. (vii) Treasury Shares. The number of shares of Common Stock outstanding at any given time does not include shares owned or held by or for the account of the Corporation or any Subsidiary, and the disposition of any shares so owned or held shall be considered an issue or sale of Common Stock. (viii) Record Date. If the Corporation fixes a record date for determining the holders of Common Stock entitled (a) to receive a dividend or other distribution payable in Common Stock, Options or in Convertible Securities or (b) to subscribe for or purchase Common Stock, Options or Convertible Securities, then such record date shall be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or upon the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be. 6D. Subdivision or Combination of Common Stock. If the Corporation at any time subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, any Conversion Price in effect immediately prior to such subdivision shall be proportionately reduced, and if the Corporation at any time combines (by reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, any Conversion Price in effect immediately prior to such combination shall be proportionately increased. 6E. Reorganization, Reclassification, Consolidation, Merger or Sale. In connection with any Organic Change, the Corporation shall make appropriate provisions (in form and substance reasonably satisfactory to the holders of 70% of the Preferred Shares then outstanding) to insure that each of the holders of Preferred Stock shall thereafter have the right to acquire and receive, in lieu of or in addition to (as the case may be) the shares of Common Stock immediately theretofore acquirable and receivable upon the conversion of such holder's Preferred Stock, such shares of stock, securities or assets as such holder would have received in connection with such Organic Change if such holder had converted its Preferred Stock immediately prior to such Organic Change. In each such case, the Corporation shall also make appropriate provisions (in form and substance reasonably satisfactory to the holders of 70% of the Preferred Shares then outstanding) to insure that the provisions of this Section 6 and Sections 7 and 8 hereof shall thereafter be applicable to the Preferred Stock (including, in the case of any such consolidation, merger or sale in which the successor entity or purchasing entity is other than the Corporation, an immediate adjustment of the Conversion Price to the value for the Common Stock reflected by the terms of such consolidation, merger or sale, and a corresponding immediate adjustment in the number of shares of Common Stock acquirable and receivable upon conversion of Preferred Stock, if the value so reflected is less than the Conversion Price in effect immediately prior to such consolidation, merger or sale). 6F. Certain Events. If any event occurs of the type contemplated by the provisions of this Section 6 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Corporation's board of directors shall make an appropriate adjustment in each Conversion Price so as to protect the rights of the holders of Preferred Stock; provided that no such adjustment shall increase any Conversion Price as otherwise determined pursuant to this Section 6 or decrease the number of shares of Conversion Stock issuable upon conversion of each share of Preferred Stock. 6G. Notices. (i) Immediately upon any adjustment of any Conversion Price, the Corporation shall give written notice thereof to all holders of Preferred Stock, setting forth in reasonable detail and certifying the calculation of such adjustment. (ii) The Corporation shall give written notice to all holders of Preferred Stock at least 20 days prior to the date on which the Corporation closes its books or fixes a record date (a) with respect to any dividend or distribution upon Common Stock, (b) with respect to any pro rata subscription offer to holders of Common Stock or (c) for determining rights to vote with respect to any Organic Change or Liquidation. (iii) The Corporation shall also give written notice to the holders of Preferred Stock at least 20 days prior to the date on which any Organic Change shall take place. 6H. Mandatory Conversion. The Corporation may require by written notice to all holders of Preferred Stock, the conversion of all of the outstanding Preferred Stock, at the then applicable Conversion Price or Prices, at any time after the second anniversary of the Closing, provided that (a) the Closing Price of the Common Stock (adjusted proportionately for stock dividends, stock splits, combinations, and similar changes in the Common Stock occurring after the Closing) on at least 30 of the 45 latest trading days preceding the date of the Corporation's notice has been greater than (i) $12.50 per share, if such notice is delivered prior to the last day of the 30th month after Closing, (ii) $15.62 per share, if such notice is delivered after the last day of the 30th month after Closing but prior to the third anniversary of the Closing, or (iii) $18.75 per share, if such notice is delivered on or after the third anniversary of the Closing, (b) the number of Public Float Securities outstanding exceeds 20% of the number of shares of Common Stock outstanding on a "fully diluted" basis (i.e., after giving effect to the exercise, exchange and conversion of all rights, options, warrants and convertible securities that are, directly or indirectly, exercisable or exchangeable for, or convertible into, Common Stock, determined without regard to any vesting limitations or restrictions on exercise, exchange or conversion), and (c) the holders of the Preferred Stock are not then subject to (and will not, as a result of such exercise, become subject to) any agreement restricting the sale of the Common Stock issued upon the conversion of the Preferred Stock. Section 7. Liquidating Dividends. If the Corporation declares or pays a Liquidating Dividend upon the Common Stock, then the Corporation shall pay to the holders of Preferred Stock at the time of payment thereof the Liquidating Dividends which would have been paid on the shares of Common Stock had such Preferred Stock been converted immediately prior to the record date fixed for determining the stockholders entitled to receive payment of such Liquidating Dividend, or, if no record date is fixed, the date as of which the record holders of Common Stock entitled to such dividends are to be determined. Section 8. Purchase Rights. If at any time the Corporation grants, issues or sells any Purchase Rights pro rata to the record holders of any class of Common Stock, then each holder of Preferred Stock shall be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such holder could have acquired if such holder had held the number of shares of Common Stock acquirable upon conversion of such holder's Preferred Shares immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights. Section 9. Consequences of Certain Events of Noncompliance. (i) If an Event of Noncompliance of the type described in subparagraph (ii) of the definition of Event of Noncompliance has occurred and has continued for a period of 30 days and is continuing or any other Event of Noncompliance has occurred and is continuing, the annual dividend rate on the Preferred Stock shall increase immediately by an increment of two percentage points. Thereafter, until such time as no Event of Noncompliance exists, the annual dividend rate shall increase automatically at the end of each succeeding 90-day period by an additional increment of two percentage points (but in no event shall the annual dividend rate exceed 14%). Any increase of the dividend rate resulting from the operation of this paragraph shall terminate as of the close of business on the date on which no Event of Noncompliance exists, subject to subsequent increases pursuant to this paragraph. (ii) If both (a) either (1) an Event of Noncompliance of the type described in subparagraph (i) or (iii) of the definition of Event of Noncompliance has occurred and is continuing, or (2) an Event of Noncompliance of the type described in subparagraph (ii) or (iv) of the definition of Event of Noncompliance has occurred and has continued for a period of 60 days and is continuing and (b) the holder or holders of 70% of the Preferred Stock then outstanding have given written notice to the Corporation of their intent to exercise their rights under this paragraph (ii) in connection with such Event of Noncompliance (which notice may be given at any time after the occurrence of such Event of Noncompliance) and 30 days have lapsed since the date such notice was given, then the holder or holders of 70% of the Preferred Stock then outstanding shall have the option to demand (by written notice delivered to the Corporation at any time thereafter until such time as there is no Event of Noncompliance in existence) redemption of all or any portion of the Preferred Stock owned by such holder or holders at a price per Preferred Share equal to the Liquidation Value thereof (plus all accrued and unpaid dividends thereon). The Corporation shall give prompt written notice of such election to the other holders of Preferred Stock (but in any event within five days after receipt of the initial demand for redemption), and each such other holder shall have the option to demand redemption of all or any portion of such holder's Preferred Stock by giving written notice thereof to the Corporation within seven days after receipt of the Corporation's notice. The Corporation shall redeem all Preferred Stock as to which rights under this paragraph have been exercised within 15 days after receipt of the initial demand for redemption. (iii) If any Event of Noncompliance exists, each holder of Preferred Stock shall also have any other rights which such holder is entitled to under any contract or agreement at any time and any other rights which such holder may have pursuant to applicable law. Section 10. Registration of Transfer. The Corporation shall keep at its principal office a register for the registration of Preferred Stock. Upon the surrender of any certificate representing Preferred Stock at such place, the Corporation shall, at the request of the record holder of such certificate, execute and deliver (at the Corporation's expense) a new certificate or certificates in exchange therefor representing in the aggregate the number of Preferred Shares represented by the surrendered certificate. Each such new certificate shall be registered in such name and shall represent such number of Preferred Shares as is requested by the holder of the surrendered certificate and shall be substantially identical in form to the surrendered certificate, and dividends shall accrue on the Preferred Stock represented by such new certificate from the date to which dividends have been fully paid on such Preferred Stock represented by the surrendered certificate. Section 11. Replacement. Upon receipt of evidence reasonably satisfactory to the Corporation (an affidavit of the registered holder shall be satisfactory) of the ownership and the loss, theft, destruction or mutilation of any certificate evidencing Preferred Shares of any series of Preferred Stock, and in the case of any such loss, theft or destruction, upon receipt of indemnity reasonably satisfactory to the Corporation (provided that if the holder is a financial institution or other institutional investor, its own agreement shall be satisfactory), or, in the case of any such mutilation upon surrender of such certificate, the Corporation shall (at its expense) execute and deliver in lieu of such certificate a new certificate of like kind representing the number of Preferred Shares of such series represented by such lost, stolen, destroyed or mutilated certificate and dated the date of such lost, stolen, destroyed or mutilated certificate, and dividends shall accrue on the Preferred Stock represented by such new certificate from the date to which dividends have been fully paid on such lost, stolen, destroyed or mutilated certificate. Section 12. Definitions. "Business Day" means a day on which banks are generally open for business in New York City. "Closing" has the meaning given such term in the Purchase Agreement. "Closing Price" of each share of Common Stock or other security means the composite closing price of the sales of the Common Stock or such other security on all securities exchanges on which such security may at the time be listed (as reported in The Wall Street Journal), or, if there has been no sale on any such exchange on any day, the average of the highest bid and lowest asked prices of the Common Stock or such other security on all such exchanges at the end of such day, or, if such security is not so listed, the closing price (or last price, if applicable) of sales of the Common Stock or such other security in the Nasdaq National Market (as reported in The Wall Street Journal) on such day, or if such security is not quoted in the Nasdaq National Market but is traded over-the-counter, the average of the highest bid and lowest asked prices on such day in the over-the-counter market as reported by the National Quotation Bureau Incorporated, or any similar successor organization. "Common Stock" means, collectively, the Corporation's common stock, par value $0.01 per share, and any capital stock of any class of the Corporation hereafter authorized which is not limited to a fixed sum or percentage of par or stated value in respect to the rights of the holders thereof to participate in dividends or in the distribution of assets upon any Liquidation of the Corporation; and if there is a change such that the securities issuable upon conversion of the Preferred Stock are issued by an entity other than the Corporation or there is a change in the class of securities so issuable, then the term "Common Stock" shall mean one share of the security issuable upon conversion of the Preferred Stock if such security is issuable in shares, or shall mean the smallest unit in which such security is issuable if such security is not issuable in shares. "Conversion Price" shall mean, with respect to any Series A Share, $8.50 (subject to adjustment as provided in Section 6 for events occurring after the Closing). "Convertible Security" means any stock or other securities of the Corporation convertible into or exchangeable for Common Stock. "Corporation" means Orion Newco Services, Inc., a Delaware corporation. "Date of Issuance," with respect to any Preferred Share, means the date on which the Corporation initially issues such Preferred Share, regardless of the number of times transfer of such Preferred Share is made on the stock records maintained by or for the Corporation and regardless of the number of certificates which may be issued to evidence such Preferred Share. "Dividend Reference Dates" mean August 31, November 30, February 28 and May 31 of each year. "Excluded Issuance" means the issue or sale of (i) shares of Common Stock in respect of any transaction described in paragraph 6D or pursuant to the Old ONS Merger Agreement, (ii) up to an aggregate of 2,203,960 shares of Common Stock by the Corporation pursuant to the exercise of Options and Convertible Securities outstanding immediately prior to the Closing at exercise prices that are greater than or equal to the respective exercise prices in effect as of Closing (as adjusted pursuant to the terms of such securities to give effect to stock dividends or stock splits or a combination of shares in connection with a recapitalization, merger, consolidation or other reorganization occurring after the Closing), (iii) up to an aggregate of 150,000 shares of Common Stock by the Corporation for any purpose, or (iv) Options to acquire Common Stock by the Corporation pursuant to a resolution of, or a stock option plan approved by a resolution of, the Board of Directors of the Corporation (or the compensation committee thereof) to the Corporation's employees, the per share exercise price of which is greater than or equal to the fair market value of a share of Common Stock at the time such Option is issued, as determined by the Board of Directors of the Corporation (or the compensation committee thereof). "Event of Noncompliance" means and shall be deemed to have occurred if: (i) the Corporation fails to make any redemption payment with respect to the Preferred Stock which it is obligated to make hereunder, whether or not such payment is legally permissible or is prohibited by any agreement to which the Corporation is subject; (ii) the Corporation breaches or otherwise fails to perform or observe any other covenant or agreement set forth herein or in the Purchase Agreement; provided, first, that no Event of Noncompliance shall be deemed to have occurred under this subparagraph (ii) if the Corporation reasonably establishes that the Event of Noncompliance is not material to the financial condition, operating results, operations or assets of the Corporation and its Subsidiaries, taken as a whole, or to any holder's investment in the Preferred Stock; and provided, second, that, so long as the Corporation commences promptly and continues to exercise reasonable and diligent efforts to cure the Event of Noncompliance (if cure is possible) within a reasonable time after its occurrence, the applicable grace periods set forth in paragraph (i) and in clause (a) of paragraph (ii) of Section 9 shall be extended with respect to such Event of Noncompliance for a period of time equal to the period during which such efforts are continuing; (iii) any representation, warranty or certification by or on behalf of the Corporation contained in the Purchase Agreement or required to be furnished to any holder of Preferred Stock pursuant to the Purchase Agreement is false or misleading in any material respect on the date made; provided, however, that any Event of Noncompliance under this clause (iii) resulting from the delivery of a certification that is made in good faith but is false or misleading shall be deemed to be cured from and after the date a certification correcting the earlier false or misleading certification is delivered to the holders of the Preferred Stock, which delivery shall occur promptly after the facts or events that caused such earlier certification to be false or misleading become known to the Corporation; or (iv) the Corporation or any Subsidiary makes an assignment for the benefit of creditors or admits in writing its inability to pay its debts generally as they become due; or an order, judgment or decree is entered adjudicating the Corporation or any Subsidiary bankrupt or insolvent; or any order for relief with respect to the Corporation or any Subsidiary is entered under the Federal Bankruptcy Code; or the Corporation or any Subsidiary petitions or applies to any tribunal for the appointment of a custodian, trustee, receiver or liquidator of the Corporation or any Subsidiary or of any substantial part of the assets of the Corporation or any Subsidiary, or commences any proceeding (other than a proceeding for the voluntary liquidation and dissolution of a Subsidiary) relating to the Corporation or any Subsidiary under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction; or any such petition or application is filed, or any such proceeding is commenced, against the Corporation or any Subsidiary and either (a) the Corporation or any such Subsidiary by any act indicates its approval thereof, consent thereto or acquiescence therein or (b) such petition, application or proceeding is not dismissed within 60 days. "Freely Tradeable Securities" has the meaning given such term in the Purchase Agreement. "Fundamental Change" has the meaning given such term in the Purchase Agreement. "Investment Regulations" means, as applicable, Title III of the Small Business Investment Act of 1958, as amended, and the regulations promulgated thereunder, Regulation Y (Title 12, Code of Federal Regulations, Part 225) under Section 5(b) of the Bank Holding Company Act of 1956, as amended, or other similar laws or regulations governing a regulated Person's investment authority. "Junior Securities" means Common Stock and any other capital stock or other equity securities issued by the Corporation, whether currently existing or hereafter authorized or issued. "Liquidation" means the liquidation, dissolution or winding up of the Corporation; provided, however, that neither the consolidation or merger of the Corporation into or with any other entity or entities, nor the sale or transfer by the Corporation of all or any part of its assets, nor the reduction of the capital stock of the Corporation, shall be deemed to be a liquidation, dissolution or winding up of the Corporation. "Liquidating Dividend" means a dividend upon the Common Stock payable otherwise than in cash out of earnings or earned surplus (determined in accordance with generally accepted accounting principles, consistently applied) except for a stock dividend payable in shares of Common Stock. "Liquidation Value" of any Preferred Share shall be equal to $1,000. "Market Price" of each share of Common Stock or other security means the Closing Price of such share or other security, averaged over a period of 21 days consisting of the day as of which the Market Price is being determined and the 20 consecutive Business Days prior to such day. If during this period such security is not listed on any securities exchange, quoted in the Nasdaq National Market, or quoted in the over-the-counter market, the Market Price will be the fair value of such security determined by agreement between the Company and the holders of 70% of the outstanding Preferred Shares. If such parties are unable to reach agreement within a reasonable period of time, the fair value of such security shall be determined by an independent appraiser experienced in valuing such type of consideration jointly selected by the Corporation and the holders of 70% of the outstanding Preferred Shares. The determination of such appraiser shall be final and binding upon the parties, and the fees and expenses of such appraiser shall be borne by the Corporation. "Old ONS" Orion Network Systems, Inc., a Delaware Corporation incorporated in 1982. "Old ONS Merger Agreement" means the Agreement and Plan of Merger dated as of January 8, 1997, by and among the Corporation, Old ONS and Orion Merger Company, Inc. "Old ONS Preferred Share" means one (1) share of the series of the preferred stock of Old ONS having the designation "Series A 8% Cumulative Redeemable Convertible Preferred Stock," as set forth in that certain "Certificate of Designations, Rights and Preferences of Series A 8% Cumulative Redeemable Convertible Preferred Stock of Orion Network Systems, Inc." filed with the Secretary of State of the State of Delaware on June 17, 1994. "Old ONS Preferred Share Conversion" means the conversion of Old ONS Preferred Shares into the right to receive Preferred Shares, pursuant to the Old ONS Merger Agreement. "Options" means any right or option to subscribe for or to purchase Common Stock or any Convertible Securities. "Organic Change" means any recapitalization, reorganization, reclassification, consolidation, merger, sale of all or substantially all of the Corporation's assets to another Person or other transaction which is effected in such a manner that holders of Common Stock are entitled to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock. "Person" means an individual, a partnership, a corporation, an association, a joint stock company, a limited liability company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof. "Preferred Share" means a share of Preferred Stock. "Preferred Stock" means the Series A Preferred. "Public Float Securities" means, as of any date of determination, those shares of the Corporation's Common Stock that (i) previously have been sold to the public in an offering registered under the Securities Act or through a broker, dealer or market maker under Rule 144 of the Securities Act, (ii) are listed for trading on a "national securities exchange" (within the meaning of the Securities Exchange Act of 1934, as amended) or quoted on the "National Market System" or "National List" published by the National Association of Securities Dealers Automated Quotations System or any successor list, and (iii) are held by Persons other than the Corporation or any of its "affiliates" (within the meaning of Rule 144 under the Securities Act). "Public Offering" means any offering by the Corporation of its equity securities to the public pursuant to an effective registration statement under the Securities Act of 1933, as then in effect, or any comparable statement under any similar federal statute then in force; provided, that "Public Offering" shall not include an offering made in connection with a business acquisition or combination or an employee benefit plan. "Purchase Agreement" means the Purchase Agreement, dated as of June 17, 1994, by and among Old ONS and certain investors, as such agreement may from time to time be amended in accordance with its terms, the performance of Old ONS's obligations under which the Corporation has assumed pursuant to a written agreement by and among Old ONS, the Corporation, and such investors. "Purchase Rights" mean any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property. "Redemption Date" means the date on which the Redemption Price of a Preferred Share is paid to the holder thereof. "Redemption Price" means, with respect to any Preferred Share being redeemed, the Liquidation Value of such Preferred Share plus all accrued and unpaid dividends thereon. "Reorganization" means any merger or consolidation of the Corporation with any Person where both (i) either (a) the Corporation is not the surviving corporation, (b) the terms of the Preferred Stock are altered in any respect, or (c) the Preferred Stock is exchanged for cash, securities or other property, and (ii) such merger or consolidation does not constitute a Fundamental Change. "Securities Act" means the Securities Act of 1933, as amended. "Series A Preferred" means the Corporation's Series A 8% Cumulative Redeemable Convertible Preferred Stock, par value $.01 per share. "Series A Share" means a share of Series A Preferred. "Subsidiary" means, with respect to any Person, corporation, partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of 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 that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a partnership, association or other business entity if such Person or Persons shall be allocated a majority of partnership, association or other business entity gains or losses or shall be or control a general partner of such partnership, association or other business entity. Without limiting the foregoing, International Private Satellite Partners, L.P., a Delaware limited partnership, shall be deemed to be a Subsidiary of the Corporation for so long as the Corporation or any of its other Subsidiaries is the general partner thereof. "Warrants" means the Common Stock purchase warrants issued pursuant to the Purchase Agreement (whether at the Closing or thereafter pursuant to paragraph 1D or Section 7 thereof) and any warrant issued in exchange, substitution or replacement thereof. Section 13. Amendment and Waiver. No amendment, modification or waiver shall be binding or effective with respect to any provision of Sections 1 to 13 hereof without the prior written consent of the holders of 70% of the Preferred Shares outstanding at the time such action is taken; provided, that no such action shall change (i) the rate at which or the manner in which dividends on the Preferred Stock accrue or the times at which such dividends become payable or the amount payable on redemption of the Preferred Stock or the times at which redemption of Preferred Stock is to occur, without the prior written consent of the holders of at least 90% of the Preferred Shares then outstanding, (ii) any Conversion Price of the Preferred Stock or the number of shares or class of stock into which the Preferred Stock is convertible, without the prior written consent of the holders of at least 90% of the Preferred Stock then outstanding or (iii) the percentage required to approve any change in clauses (i) and (ii) above, without the prior written consent of the holders of at least 90% of the Preferred Stock then outstanding. Section 14. Notices. Except as otherwise expressly provided hereunder, all notices referred to herein shall be in writing and shall be delivered by registered or certified mail, return receipt requested and postage prepaid, or by reputable overnight courier service, charges prepaid, and shall be deemed to have been given when so mailed or sent (i) to the Corporation, at its principal executive offices and (ii) to any stockholder, at such holder's address as it appears in the stock records of the Corporation (unless otherwise indicated by any such holder). CERTIFICATE OF DESIGNATIONS, RIGHTS AND PREFERENCES OF SERIES B 8% CUMULATIVE REDEEMABLE CONVERTIBLE PREFERRED STOCK OF ORION NEWCO SERVICES, INC. - -------------------------------------------------------------------------------- Pursuant to Section 151 of the General Corporation Law of the State of Delaware - -------------------------------------------------------------------------------- The undersigned DOES HEREBY CERTIFY that, pursuant to the authority contained in Article FOURTH of the Restated Certificate of Incorporation of Orion Newco Services, Inc., a Delaware corporation (the "Corporation"), and in accordance with Section 151 of the General Corporation Law of the State of Delaware, the Board of Directors of the Corporation has authorized the creation of Series B 8% Cumulative Redeemable Convertible Preferred Stock having the designations, rights and preferences as are set forth in Exhibit A hereto and made a part hereof and that the following resolution was duly adopted by the Board of Directors of the Corporation: RESOLVED, that a series of authorized Preferred Stock, par value $.01 per share, of the Corporation be, and it hereby is, created; that the shares of such series shall be, and they hereby are, designated as "Series B 8% Cumulative Redeemable Convertible Preferred Stock"; that the number of shares constituting such series shall be, and it hereby is, 5,000; and that the designations, rights and preferences of the shares of such series are as set forth in Exhibit A attached hereto and made a part hereof. IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be hereunto affixed and this Certificate to be signed by its President and Chief Executive Officer and attested to by its Vice President, Corporate and Legal Affairs, and Secretary this ____ day of __________, 199__. ORION NEWCO SERVICES, INC. By: ------------------------------------ [SEAL] Name: W. Neil Bauer Title: President/Chief Executive Officer ATTEST: - ---------------------------------------- Name: Richard H. Shay, Esq. Title: Vice President, Corporate and Legal Affairs/Secretary EXHIBIT A SERIES B 8% CUMULATIVE REDEEMABLE CONVERTIBLE PREFERRED STOCK The following sections set forth the designations, rights and preferences of the Corporation's Series B Preferred. Capitalized terms used herein are defined in Section 12 below. Section 1. Dividends. 1A. General Obligation. When and as declared by the Corporation's board of directors and to the extent permitted under the General Corporation Law of Delaware, the Corporation shall pay preferential dividends to the holders of the Preferred Stock as provided in this Section 1. Except as otherwise provided herein, dividends on each Preferred Share shall accrue on a daily basis at the rate of 8% per annum of the sum of the Liquidation Value thereof plus all accumulated and unpaid dividends thereon, from and including the Date of Issuance of such Preferred Share to and including the date on which the Liquidation Value of such Preferred Share (plus all accrued and unpaid dividends thereon) is paid or the date on which such Preferred Share is converted into shares of Common Stock hereunder. Such dividends shall accrue whether or not they have been declared and whether or not there are profits, surplus or other funds of the Corporation legally available for the payment of dividends. 1B. Dividend Reference Dates. To the extent not paid on a Dividend Reference Date, with the initial Dividend Reference Date being February 28, 1997, all dividends which have accrued on each Preferred Share outstanding since the latest preceding Dividend Reference Date (or the Date of Issuance of such Preferred Share, if later) ending upon each such Dividend Reference Date, and, in the case of each Preferred Share outstanding that was issued upon the Old ONS Preferred Share Conversion, all dividends that were accrued, accumulated, and unpaid at the time of the Old ONS Preferred Share Conversion on the Old ONS Preferred Share that was converted into such Preferred Share, shall be accumulated and shall remain accumulated dividends with respect to such Preferred Share until paid. 1C. Distribution of Partial Dividend Payments. Except in connection with redemptions or repurchases (i) pursuant to paragraph 4A or 4B below, (ii) in compliance with paragraph 4H below, or (iii) as provided in the Purchase Agreement, if at any time the Corporation pays less than the total amount of dividends then accrued with respect to the Preferred Stock, such payment shall be distributed ratably among the holders thereof based upon the aggregate accrued but unpaid dividends on the Preferred Shares held by each such holder and such payment shall be applied first to dividends which have accrued on such Preferred Shares during the period since the latest preceding Dividend Reference Date and second to reduce any accumulated dividends with respect to such Preferred Shares. Section 2. Liquidation. Subject to the provisions of Section 2 of the Series A Certificate: upon any Liquidation, each holder of Preferred Stock shall be entitled to be paid, before any distribution or payment is made upon any Junior Securities, an amount in cash equal to the greater of (a) the aggregate Liquidation Value (plus all accrued and unpaid dividends) of all shares of Preferred Stock held by such holder or (b) the amount which would be distributed with respect to the shares of Common Stock (including fractional shares for purposes of this calculation) into which such shares of Preferred Stock are convertible (assuming conversion of all outstanding Preferred Stock) immediately prior to the record date for such distribution (or, if there is no such record date, then the date as of which the holders of Common Stock entitled to such distribution are determined), and the holders of Preferred Stock shall not be entitled to any further payment; and if upon any such Liquidation the Corporation's assets to be distributed among the holders of the Preferred Stock are insufficient to permit payment to such holders of the aggregate amount which they are entitled to be paid, then the entire assets to be distributed shall be distributed ratably among such holders based upon the aggregate Liquidation Value (plus all accrued and unpaid dividends) of the Preferred Shares held by each such holder. Prior to such Liquidation, the Corporation shall declare for payment all accrued and unpaid dividends with respect to the Preferred Stock. (Payment of the greater of the amounts specified in clauses (a) and (b) of this Section 2 in respect of such Preferred Shares shall constitute payment of such declared dividends.) The Corporation shall mail written notice of such Liquidation, not less than 60 days prior to the payment date stated therein, to each record holder of Preferred Stock. Section 3. [Reserved.] Section 4. Redemptions. 4A. Redemption at Option of Corporation. (i) The Corporation may at any time redeem all or, subject to paragraph 4E below, any of the Preferred Shares then outstanding at the Redemption Price, provided that no redemption pursuant to this paragraph 4A shall be for Preferred Shares with an aggregate Liquidation Value of less than $1,000,000 (less the aggregate liquidation value of any Series A Shares being redeemed) or such lesser number of Preferred Shares then outstanding. (ii) The Corporation may in connection with a Reorganization redeem all or any of the Preferred Shares then outstanding at the Redemption Price, payable at the time of the consummation of the Reorganization as follows: (a) first, in Freely Tradeable Securities in an amount not to exceed the lesser of (1) the Redemption Price of such Preferred Shares and (2) the amount of Freely Tradeable Securities that, if such holder had converted such Preferred Shares into Common Stock immediately prior to such Reorganization, would have been issued to such holder in connection with such Reorganization in respect of such shares of Common Stock; and (b) second, the balance of the Redemption Price (if any) in cash. Notwithstanding paragraph 4H hereof, if the Corporation seeks the consent of the holders of Preferred Stock to any Reorganization under subparagraph 3D(iv) of the Purchase Agreement, and the affirmative consent of the holders required thereunder is not obtained, the Corporation may redeem at or prior to the time of the consummation of such Reorganization and pursuant to this paragraph 4A(ii), all (but not less than all) of the Preferred Shares held by those holders that did not affirmatively consent to such transaction. 4B. Redemptions at the Option of the Holder. (i) At any time after the fifth anniversary of the Closing, subject to subparagraph 4B(ii) below, each holder of Preferred Stock may request redemption of all or a portion of the Preferred Shares owned by such holder for a price equal to the Redemption Price. Within five Business Days after receipt of such request (or of any similar request under paragraph 4B(i) of the Series A Certificate), the Corporation shall give written notice to all other holders of Preferred Stock, and such other holders may request redemption of their Preferred Shares by delivering written notice to the Corporation within 10 Business Days after receipt of the Corporation's notice. The Corporation shall pay the Redemption Price of all Preferred Shares whose redemption has been duly requested pursuant to this paragraph 4B within 30 days after its receipt of the initial request for such redemption. Notwithstanding the above, the Corporation shall not be obligated pursuant to this paragraph 4B to redeem any Preferred Share initially issued to a Small Business Investment Company licensed by the U.S. Small Business Administration before the fifth anniversary of the Date of Issuance of such Preferred Share, provided that all such outstanding Preferred Shares shall be counted as held by their holders for purposes of all pro rata and other calculations. (ii) Notwithstanding the provisions of subparagraph 4B(i) above, the Corporation shall not be obligated to repurchase, pursuant to this paragraph 4B: (a) on a cumulative basis, (x) before the sixth anniversary of the Closing, a number of shares of Preferred Stock, which when taken together with the number of Series A Shares similarly repurchased, exceeds one-third of all shares of Series A Preferred and Series B Preferred issued by the Corporation at any time (for purposes of such calculation, taking into account both repurchases under this paragraph 4B, repurchases under paragraph 4B of the Series A Certificate and repurchases under paragraph 6A of the Purchase Agreement), and (y) before the seventh anniversary of the Closing, a number of shares of Preferred Stock, which when taken together with the number of Series A Shares similarly repurchased, exceeds two-thirds of all shares of Series A Preferred and Series B Preferred issued by the Corporation at any time (for purposes of such calculation, taking into account both repurchases under this paragraph 4B, repurchases under paragraph 4B of the Series A Certificate and repurchases under paragraph 6A of the Purchase Agreement) (and at no time shall any initial holder and its transferees be entitled to sell shares of Preferred Stock to the Corporation pursuant to this paragraph 4B to the extent that the aggregate number of shares of Series A Preferred and Series B Preferred sold by such Persons at or before that time pursuant to this paragraph 4B, pursuant to paragraph 4B of the Series A Certificate or pursuant to paragraph 6A of the Purchase Agreement (limited in the case of a transferee to shares of Series A Preferred and Series B Preferred acquired directly or indirectly from, or acquired in respect of Series A Preferred or Series B Preferred acquired directly or indirectly from, such initial holder) would, on a cumulative basis, exceed an amount equal to (I) the maximum cumulative number of shares which the Corporation may be required to redeem under this subparagraph 4B(ii) (a) at such time, multiplied by (II) a fraction (x) the numerator of which is the aggregate number, without duplication, of shares of Series A Preferred and Series B Preferred issued by the Corporation at any time that was held by such holders (limited in the case of a transferee to shares of Series A Preferred and Series B Preferred acquired directly or indirectly from, or acquired in respect of Series A Preferred and Series B Preferred acquired directly or indirectly from, such initial holder), and (y) the denominator of which is the aggregate number, without duplication, of shares of Series A Preferred and Series B Preferred issued by the Corporation at any time); and (b) for a period of 180 days after the date the Corporation redeems shares of Series B Preferred pursuant to paragraph 4B(i) (or Series A Preferred pursuant to paragraph 4B(i) of the Series A Certificate), any shares of Preferred Stock pursuant to a request for redemption under paragraph 4B(i) that is requested subsequent to, and not as part of, such prior redemption. 4C. Redemption Payment. For each Preferred Share which is to be redeemed (and except as otherwise provided in paragraph 4A(ii) above), the Corporation shall be obligated on the Redemption Date to pay to the holder thereof (upon surrender by such holder at the Corporations principal office of the certificate representing such Preferred Share) an amount in immediately available funds equal to the Redemption Price of such Preferred Share. Subject to the provisions of paragraph 4C of the Series A Certificate: if the funds of the Corporation legally available for redemption of Preferred Shares on any Redemption Date are insufficient to redeem the total number of Preferred Shares to be redeemed on such date, those funds which are legally available shall be used to redeem the maximum possible number of Preferred Shares ratably among the holders of the Preferred Shares to be redeemed based upon the aggregate Redemption Price of the Preferred Shares held by each such holder and the remaining Preferred Shares will remain outstanding; and at any time thereafter when additional funds of the Corporation are legally available for the redemption of Preferred Shares, such funds shall immediately be used to redeem the balance of the Preferred Shares which the Corporation has become obligated to redeem on any Redemption Date but which it has not redeemed. In connection with any redemption of Preferred Stock pursuant to this Section 4, the Corporation shall declare for payment all dividends that are accrued and unpaid as of the Redemption Date with respect to the Preferred Shares which are to be redeemed on such Redemption Date. (Payment of the Redemption Price in respect of such Preferred Shares shall constitute payment of such declared dividends.) 4D. Notice of Redemption. The Corporation shall mail written notice of each redemption of any Series A Preferred or Series B Preferred to each record holder of Preferred Stock not more than 60 nor less than 30 days prior to the date on which such redemption is to be made in the case of a redemption pursuant to paragraph 4A (or paragraph 4A of the Series A Certificate), and not less than 5 Business Days prior to the date on which such redemption is to be made in the case of a redemption pursuant to paragraph 4B (or paragraph 4B of the Series A Certificate). Upon mailing any such notice of redemption, the Corporation shall become obligated to redeem the total number of Preferred Shares specified in such notice at the time of redemption specified therein. In case fewer than the total number of Preferred Shares represented by any certificate are redeemed, a new certificate representing the number of unredeemed Preferred Shares shall be issued to the holder thereof without cost to such holder within three Business Days after surrender of the certificate representing the redeemed Preferred Shares. 4E. Determination of the Number of Each Holder's Preferred Shares to be Redeemed. The number of Preferred Shares to be redeemed from each holder thereof in redemptions pursuant to paragraph 4A(i) shall be the number of Preferred Shares determined by multiplying the total number of Preferred Shares to be redeemed by a fraction, the numerator of which shall be the total Redemption Price of Preferred Shares then held by such holder and the denominator of which shall be the aggregate Redemption Price of Preferred Shares then outstanding. 4F. Dividends after Redemption Date. No Preferred Share is entitled to any dividends accruing after the Redemption Date. On the Redemption Date of any Preferred Share, all rights of the holder of such Preferred Share shall cease, and such Preferred Share shall not be deemed to be outstanding. 4G. Redeemed or Otherwise Acquired Preferred Shares. Any Preferred Shares which are redeemed or otherwise acquired by the Corporation thereupon shall be retired. All such shares shall upon their retirement become authorized but unissued shares of preferred stock of the Corporation and may not be reissued as Preferred Stock but may be reissued as part of a new series of preferred stock to be created by resolution or resolutions of the board of directors, subject to the conditions or restrictions on issuance set forth in the certificate of incorporation of the Corporation. 4H. Other Redemptions or Acquisitions. Neither the Corporation nor any Subsidiary shall redeem or otherwise acquire any Preferred Stock, except as expressly authorized herein or pursuant to the Purchase Agreement or pursuant to a purchase offer made pro rata to all holders of Preferred Stock on the basis of the aggregate Redemption Price of the Preferred Shares owned by each such holder. Section 5 Voting Rights. The holders of the Preferred Stock shall be entitled to notice of all stockholders meetings in accordance with the Corporation's bylaws, and except as otherwise required by law, the holders of the Preferred Stock shall be entitled to vote on all matters submitted to the stockholders for a vote together with the holders of the Common Stock voting together as a single class with each share of Common Stock entitled to one vote per share, and each Preferred Share (including fractional shares) entitled to one vote for each share of Common Stock that would be issuable upon conversion of such Preferred Share at the time the vote is taken. Section 6. Conversion. 6A. Conversion Procedure. (i) At any time and from time to time after the issuance thereof, any holder of Preferred Stock may convert all or any of the Preferred Shares (including any fraction of a Preferred Share) held by such holder into a number of shares of Common Stock computed by multiplying the number of Preferred Shares to be converted by the Liquidation Value and dividing the result by the applicable Conversion Price then in effect. (ii) Each conversion of Preferred Stock shall be deemed to have been effected as of the close of business on the date on which the certificate or certificates representing the Preferred Shares to be converted have been surrendered at the principal office of the Corporation. At such time as such conversion has been effected, the rights of the holder of such Preferred Shares as such holder shall cease, all accrued and unpaid dividends on such Preferred Shares shall be deemed to have been forfeited immediately prior to such conversion, and the Person or Persons in whose name or names any certificate or certificates for shares of Common Stock are to be issued upon such conversion shall be deemed to have become the holder or holders of record of the shares of Common Stock represented thereby. (iii) The conversion rights of any Preferred Share subject to redemption hereunder shall terminate on the Redemption Date for such Preferred Share unless the Corporation has failed to pay to the holder thereof the Redemption Price thereof. (iv) Notwithstanding any other provision hereof, if a conversion of any Preferred Shares is to be made in connection with a Public Offering, such conversion may, at the election of the holder of such Preferred Shares, be conditioned upon the consummation of the Public Offering, in which case such conversion shall not be deemed to be effective until the consummation of the Public Offering (v) As soon as possible after a conversion has been effected (but in any event within five Business Days in the case of subparagraph (a) below), the Corporation shall deliver to the converting holder: (a) a certificate or certificates representing the number of shares of Common Stock issuable by reason of such conversion in such name or names and such denomination or denominations as the converting holder has specified; (b) payment of the amount payable under subparagraph (viii) below with respect to such conversion; and (c) a certificate representing any Preferred Shares which were represented by the certificate or certificates delivered to the Corporation in connection with such conversion but which were not converted. (vi) The issuance of certificates for shares of Common Stock upon conversion of Preferred Stock shall be made without charge to the holders of such Preferred Stock for any issuance tax in respect thereof or other cost incurred by the Corporation in connection with such conversion and the related issuance of shares of Common Stock. (vii) The Corporation shall not close its books against the transfer of Preferred Stock or of Common Stock issued or issuable upon conversion of Preferred Stock in any manner which interferes with the timely conversion of Preferred Stock. The Corporation shall assist and cooperate (but the Corporation shall not be required to expend substantial efforts or funds) with any holder of Preferred Shares required to make any governmental filings or obtain any governmental approval prior to or in connection with any conversion of Preferred Shares hereunder (including, without limitation, making any filings required to be made by the Corporation). (viii) If any fractional interest in a share of Common Stock would, except for the provisions of this subparagraph, be deliverable upon any conversion of a holder's Preferred Stock, the Corporation, in lieu of delivering the fractional share therefor, shall pay an amount to the holder thereof equal to the Market Price of such fractional interest as of the date of conversion. (ix) The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of issuance upon the conversion of the Preferred Stock or exercise of the Warrants, such number of shares of Common Stock issuable upon the conversion of all outstanding Preferred Stock and exercise of all outstanding Warrants which may then be exercised. All shares of Common Stock which are so issuable shall, when issued, be duly and validly issued, fully paid and nonassessable and free from all taxes, liens and charges. The Corporation shall take all such actions as may be necessary to ensure that all such shares of Common Stock may be so issued without violation of any applicable law or governmental regulation (excluding Investment Regulations) or any requirements of any domestic securities exchange upon which shares of Common Stock may be listed (except for official notice of issuance which shall be immediately delivered by the Corporation upon each such issuance). 6B. Conversion Price. (i) In order to prevent dilution of the conversion rights granted under this subdivision, the Conversion Price shall be subject to adjustment from time to time pursuant to this Section 6. (ii) If and whenever on or after the Date of Issuance of any Preferred Share the Corporation issues or sells, or in accordance with paragraph 6C is deemed to have issued or sold, other than in an Excluded Issuance, any share of Common Stock for a consideration per share less than the Conversion Price in effect immediately prior to such time with respect to any such Preferred Share, then forthwith upon such issue or sale the Conversion Price of such Preferred Share shall be reduced to the lowest net price per share at which any such share of Common Stock has been issued or sold or is deemed to have been issued or sold. 6C. Effect on Conversion Price of Certain Events. Solely for purposes of determining the adjusted Conversion Price under paragraph 6B, the following shall be applicable: (i) Issuance of Rights or Options. If the Corporation in any manner grants any Options and the lowest price per share for which any one share of Common Stock is issuable upon the exercise of any such Option or upon conversion or exchange of any Convertible Security is less than any Conversion Price in effect immediately prior to the time of the granting of such Option, then such share of Common Stock shall be deemed to have been issued and sold by the Corporation at the time of the granting of such Options for such price per share and such Conversion Price shall be adjusted in accordance with paragraph 6B(ii) above. For purposes of this paragraph, the "lowest price per share for which any one share of Common Stock is issuable" shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Corporation with respect to any one share of Common Stock upon the granting of the Option, upon exercise of the Option and upon conversion or exchange of the Convertible Security. No further adjustment of such Conversion Price shall be made upon the actual issue of such Common Stock or of such Convertible Security upon the exercise of such Options or upon the actual issue of such Common Stock upon conversion or exchange of such Convertible Security. (ii) Issuance of Convertible Securities. If the Corporation in any manner issues or sells any Convertible Security and the lowest price per share for which any one share of Common Stock is issuable upon conversion or exchange thereof is less than any Conversion Price in effect immediately prior to the time of such issue or sale, then such share of Common Stock shall be deemed to have been issued and sold by the Corporation at the time of the issuance or sale of such Convertible Securities for such price per share and such Conversion Price shall be adjusted in accordance with paragraph 6B(ii) above. For the purposes of this paragraph, the "lowest price per share for which any one share of Common Stock is issuable" shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Corporation with respect to any one share of Common Stock upon the issuance of the Convertible Security and upon the conversion or exchange of such Convertible Security. No further adjustment of such Conversion Price shall be made upon the actual issue of such Common Stock upon conversion or exchange of any Convertible Security, and if any such issue or sale of such Convertible Security is made upon exercise of any Options for which adjustments of such Conversion Price had been or are to be made pursuant to other provisions of this Section 6, no further adjustment of such Conversion Price shall be made by reason of such issue or sale. (iii) Change in Option Price or Conversion Rate. If the purchase price provided for in any Option, the additional consideration (if any) payable upon the issue, conversion or exchange of any Convertible Security, or the rate at which any Convertible Security is convertible into or exchangeable for Common Stock change at any time, any Conversion Price previously adjusted with respect to such Option or Convertible Security and in effect at the time of such change shall be readjusted to the Conversion Price which would have been in effect at such time had such Option or Convertible Security originally provided for such changed purchase price, additional consideration or changed conversion rate, as the case may be, at the time initially granted, issued or sold. (iv) Treatment of Expired Options and Unexercised Convertible Securities. Upon the expiration of any Option or the termination of any right to convert or exchange any Convertible Security without the exercise of any such Option or right, any Conversion Price then in effect hereunder shall be adjusted to the Conversion Price which would have been in effect at the time of such expiration or termination had such Option or Convertible Security, to the extent outstanding immediately prior to such expiration or termination, never been issued. (v) Calculation of Consideration Received. If any Common Stock, Option or Convertible Security is issued or sold or deemed to have been issued or sold for cash, the consideration received therefor shall be deemed to be the amount received by the Corporation therefor. In case any Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of the consideration other than cash received by the Corporation shall be the fair value of such consideration, except where such consideration consists of securities, in which case the amount of consideration received by the Corporation shall be the Market Price thereof as of the date of receipt. If any Common Stock, Option or Convertible Security is issued to the owners of the non-surviving entity in connection with any merger in which the Corporation is the surviving corporation, the amount of consideration therefor shall be deemed to be the fair value of such portion of the assets and business of the non-surviving entity as is attributable to such Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other than cash and securities shall be determined jointly by the Corporation and the holders of 70% of the outstanding Preferred Shares. If such parties are unable to reach agreement within a reasonable period of time, the fair value of such consideration shall be determined by an independent appraiser experienced in valuing such type of consideration jointly selected by the Corporation and the holders of 70% of the outstanding Preferred Shares. The determination of such appraiser shall be final and binding upon the parties, and the fees and expenses of such appraiser shall be borne by the Corporation. (vi) Integrated Transactions. In case any Option is issued in connection with the issue or sale of other securities of the Corporation, together comprising one integrated transaction in which no specific consideration is allocated to such Option by the parties thereto, the Option shall be deemed to have been issued for a consideration of $.01. (vii) Treasury Shares. The number of shares of Common Stock outstanding at any given time does not include shares owned or held by or for the account of the Corporation or any Subsidiary, and the disposition of any shares so owned or held shall be considered an issue or sale of Common Stock. (viii) Record Date. If the Corporation fixes a record date for determining the holders of Common Stock entitled (a) to receive a dividend or other distribution payable in Common Stock, Options or in Convertible Securities or (b) to subscribe for or purchase Common Stock, Options or Convertible Securities, then such record date shall be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or upon the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be. 6D. Subdivision or Combination of Common Stock. If the Corporation at any time subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, any Conversion Price in effect immediately prior to such subdivision shall be proportionately reduced, and if the Corporation at any time combines (by reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, any Conversion Price in effect immediately prior to such combination shall be proportionately increased. 6E. Reorganization, Reclassification, Consolidation, Merger or Sale. In connection with any Organic Change, the Corporation shall make appropriate provisions (in form and substance reasonably satisfactory to the holders of 70% of the Preferred Shares then outstanding) to insure that each of the holders of Preferred Stock shall thereafter have the right to acquire and receive, in lieu of or in addition to (as the case may be) the shares of Common Stock immediately theretofore acquirable and receivable upon the conversion of such holder's Preferred Stock, such shares of stock, securities or assets as such holder would have received in connection with such Organic Change if such holder had converted its Preferred Stock immediately prior to such Organic Change. In each such case, the Corporation shall also make appropriate provisions (in form and substance reasonably satisfactory to the holders of 70% of the Preferred Shares then outstanding) to insure that the provisions of this Section 6 and Sections 7 and 8 hereof shall thereafter be applicable to the Preferred Stock (including, in the case of any such consolidation, merger or sale in which the successor entity or purchasing entity is other than the Corporation, an immediate adjustment of the Conversion Price to the value for the Common Stock reflected by the terms of such consolidation, merger or sale, and a corresponding immediate adjustment in the number of shares of Common Stock acquirable and receivable upon conversion of Preferred Stock, if the value so reflected is less than the Conversion Price in effect immediately prior to such consolidation, merger or sale). 6F. Certain Events. If any event occurs of the type contemplated by the provisions of this Section 6 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Corporation's board of directors shall make an appropriate adjustment in each Conversion Price so as to protect the rights of the holders of Preferred Stock; provided that no such adjustment shall increase any Conversion Price as otherwise determined pursuant to this Section 6 or decrease the number of shares of Conversion Stock issuable upon conversion of each share of Preferred Stock. 6G. Notices. (i) Immediately upon any adjustment of the Conversion Price, the Corporation shall give written notice thereof to all holders of Preferred Stock, setting forth in reasonable detail and certifying the calculation of such adjustment. (ii) The Corporation shall give written notice to all holders of Preferred Stock at least 20 days prior to the date on which the Corporation closes its books or fixes a record date (a) with respect to any dividend or distribution upon Common Stock, (b) with respect to any pro rata subscription offer to holders of Common Stock or (c) for determining rights to vote with respect to any Organic Change or Liquidation. (iii) The Corporation shall also give written notice to the holders of Preferred Stock at least 20 days prior to the date on which any Organic Change shall take place. 6H. Mandatory Conversion. The Corporation may require by written notice to all holders of Preferred Stock, the conversion of all of the outstanding Preferred Stock at the then applicable Conversion Price, at any time after the second anniversary of the Closing, provided that (a) the Closing Price of the Common Stock (adjusted proportionately for stock dividends, stock splits, combinations, and similar changes in the Common Stock occurring after the Closing) on at least 30 of the 45 latest trading days preceding the date of the Corporation's notice has been greater than (i) $12.50 per share, if such notice is delivered prior to the last day of the 30th month after Closing, (ii) $15.62 per share, if such notice is delivered after the last day of the 30th month after Closing but prior to the third anniversary of the Closing, or (iii) $18.75 per share, if such notice is delivered on or after the third anniversary of the Closing, (b) the number of Public Float Securities outstanding exceeds 20% of the number of shares of Common Stock outstanding on a "fully-diluted" basis (i.e., after giving effect to the exercise, exchange and conversion of all rights, options, warrants and convertible securities that are, directly or indirectly, exercisable or exchangeable for, or convertible into, Common Stock, determined without regard to any vesting limitations or restrictions on exercise, exchange or conversion), and (c) the holders of the Preferred Stock are not then subject to (and will not, as a result of such exercise, become subject to) any agreement restricting the sale of the Common Stock issued upon the conversion of the Preferred Stock. Section 7. Liquidation Dividends. If the Corporation declares or pays a Liquidating Dividend upon the Common Stock, then the Corporation shall pay to the holders of Preferred Stock at the time of payment thereof the Liquidating Dividends which would have been paid on the shares of Common Stock had such Preferred Stock been converted immediately prior to the record date fixed for determining the stockholders entitled to receive payment of such Liquidating Dividend, or, if no record date is fixed, the date as of which the record holders of Common Stock entitled to such dividends are to be determined. Section 8. Purchase Rights. If at any time the Corporation grants, issues or sells any Purchase Rights pro rata to the record holders of any class of Common Stock, then each holder of Preferred Stock shall be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such holder could have acquired if such holder had held the number of shares of Common Stock acquirable upon conversion of such holder's Preferred Shares immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights. Section 9. Consequences of Certain Events of Noncompliance. (i) If an Event of Noncompliance of the type described in subparagraph (ii) of the definition of Event of Noncompliance has occurred and has continued for a period of 30 days and is continuing or any other Event of Noncompliance has occurred and is continuing, the annual dividend rate on the Preferred Stock shall increase immediately by an increment of two percentage points. Thereafter, until such time as no Event of Noncompliance exists, the annual dividend rate shall increase automatically at the end of each succeeding 90-day period by an additional increment of two percentage points (but in no event shall the annual dividend rate exceed 14%). Any increase of the dividend rate resulting from the operation of this paragraph shall terminate as of the close of business on the date on which no Event of Noncompliance exists, subject to subsequent increases pursuant to this paragraph. (ii) If both (a) either (1) an Event of Noncompliance of the type described in subparagraph (i) or (iii) of the definition of Event of Noncompliance has occurred and is continuing, or (2) an Event of Noncompliance of the type described in subparagraph (ii) or (iv) of the definition of Event of Noncompliance has occurred and has continued for a period of 60 days and is continuing and (b) the holder or holders of 70% of the Preferred Stock then outstanding have given written notice to the Corporation of their intent to exercise their rights under this paragraph (ii) in connection with such Event of Noncompliance (which notice may be given at any time after the occurrence of such Event of Noncompliance) and 30 days have lapsed since the date such notice was given, then the holder or holders of 70% of the Preferred Stock then outstanding shall have the option to demand (by written notice delivered to the Corporation at any time thereafter until such time as there is no Event of Noncompliance in existence) redemption of all or any portion of the Preferred Stock owned by such holder or holders at a price per Preferred Share equal to the Liquidation Value thereof (plus all accrued and unpaid dividends thereon). The Corporation shall give prompt written notice of such election (or of any similar election under paragraph 9(ii) of the Series A Certificate) to the other holders of Preferred Stock (but in any event within five days after receipt of the initial demand for redemption), and each such other holder shall have the option to demand redemption of all or any portion of such holder's Preferred Stock by giving written notice thereof to the Corporation within seven days after receipt of the Corporation's notice. The Corporation shall redeem all Preferred Stock as to which rights under this paragraph have been exercised within 15 days after receipt of the initial demand for redemption. (iii) If any Event of Noncompliance exists, each holder of Preferred Stock shall also have any other rights which such holder is entitled to under any contract or agreement at any time and any other rights which such holder may have pursuant to applicable law. Section 10. Registration of Transfer. The Corporation shall keep at its principal office a register for the registration of Preferred Stock. Upon the surrender of any certificate representing Preferred Stock at such place, the Corporation shall, at the request of the record holder of such certificate, execute and deliver (at the Corporation's expense) a new certificate or certificates in exchange therefor representing in the aggregate the number of Preferred Shares represented by the surrendered certificate. Each such new certificate shall be registered in such name and shall represent such number of Preferred Shares as is requested by the holder of the surrendered certificate and shall be substantially identical in form to the surrendered certificate, and dividends shall accrue on the Preferred Stock represented by such new certificate from the date to which dividends have been fully paid on such Preferred Stock represented by the surrendered certificate. Section 11. Replacement. Upon receipt of evidence reasonably satisfactory to the Corporation (an affidavit of the registered holder shall be satisfactory) of the ownership and the loss, theft, destruction or mutilation of any certificate evidencing Preferred Shares of any series of Preferred Stock, and in the case of any such loss, theft or destruction, upon receipt of indemnity reasonably satisfactory to the Corporation (provided that if the holder is a financial institution or other institutional investor, its own agreement shall be satisfactory), or, in the case of any such mutilation upon surrender of such certificate, the Corporation shall (at its expense) execute and deliver in lieu of such certificate a new certificate of like kind representing the number of Preferred Shares of such series represented by such lost, stolen, destroyed or mutilated certificate and dated the date of such lost, stolen, destroyed or mutilated certificate, and dividends shall accrue on the Preferred Stock represented by such new certificate from the date to which dividends have been fully paid on such lost, stolen, destroyed or mutilated certificate. Section 12. Definitions. "Business Day" means a day on which banks are generally open for business in New York City. "Closing" means June 17, 1994. "Closing Price" of each share of Common Stock or other security means the composite closing price of the sales of the Common Stock or such other security on all securities exchanges on which such security may at the time be listed (as reported in The Wall Street Journal), or, if there has been no sale on any such exchange on any day, the average of the highest bid and lowest asked prices of the Common Stock or such other security on all such exchanges at the end of such day, or, if such security is not so listed, the closing price (or last price, if applicable) of sales of the Common Stock or such other security in the Nasdaq National Market (as reported in The Wall Street Journal) on such day, or if such security is not quoted in the Nasdaq National Market but is traded over-the-counter, the average of the highest bid and lowest asked prices on such day in the over-the-counter market as reported by the National Quotation Bureau Incorporated, or any similar successor organization. "Common Stock" means, collectively, the Corporation's common stock, par value $0.01 per share, and any capital stock of any class of the Corporation hereafter authorized which is not limited to a fixed sum or percentage of par or stated value in respect to the rights of the holders thereof to participate in dividends or in the distribution of assets upon any Liquidation of the Corporation; and if there is a change such that the securities issuable upon conversion of the Preferred Stock are issued by an entity other than the Corporation or there is a change in the class of securities so issuable, then the term "Common Stock" shall mean one share of the security issuable upon conversion of the Preferred Stock if such security is issuable in shares, or shall mean the smallest unit in which such security is issuable if such security is not issuable in shares. "Conversion Price" shall mean, with respect to any Series B Share, $10.20 (subject to adjustment as provided in Section 6 for events occurring after its Date of Issuance). "Convertible Security" means any stock or other securities of the Corporation convertible into or exchangeable for Common Stock. "Corporation" means Orion Newco Services, Inc. a Delaware corporation. "Date of Issuance," with respect to any Preferred Share, means the date on which the Corporation initially issues such Preferred Share, regardless of the number of times transfer of such Preferred Share is made on the stock records maintained by or for the Corporation and regardless of the number of certificates which may be issued to evidence such Preferred Share. "Dividend Reference Dates" mean August 31, November 30, February 28 and May 31 of each year. "Excluded Issuance" means the issue or sale of (i) shares of Common Stock in respect of any transaction described in paragraph 6D or pursuant to the Old ONS Merger Agreement, (ii) up to an aggregate of 2,203,960 shares of Common Stock by the Corporation pursuant to the exercise of Options and Convertible Securities outstanding immediately prior to the Closing at exercise prices that are greater than or equal to the respective exercise prices in effect as of Closing (as adjusted pursuant to the terms of such securities to give effect to stock dividends or stock splits or a combination of shares in connection with a recapitalization, merger, consolidation or other reorganization occurring after the Closing), (iii) up to an aggregate of 150,000 shares of Common Stock by the Corporation for any purpose, or (iv) Options to acquire Common Stock by the Corporation pursuant to a resolution of, or a stock option plan approved by a resolution of, the Board of Directors of the Corporation (or the compensation committee thereof) to the Corporation's employees, the per share exercise price of which is greater than or equal to the fair market value of a share of Common Stock at the time such Option is issued, as determined by the Board of Directors of the Corporation (or the compensation committee thereof). "Event of Noncompliance" means and shall be deemed to have occurred if: (i) the Corporation fails to make any redemption payment with respect to the Preferred Stock which it is obligated to make hereunder, whether or not such payment is legally permissible or is prohibited by any agreement to which the Corporation is subject; (ii) the Corporation breaches or otherwise fails to perform or observe any other covenant or agreement set forth herein or in the Purchase Agreement; provided, first, that no Event of Noncompliance shall be deemed to have occurred under this subparagraph (ii) if the Corporation reasonably establishes that the Event of Noncompliance is not material to the financial condition, operating results, operations or assets of the Corporation and its Subsidiaries, taken as a whole, or to any holder's investment in the Preferred Stock; and provided, second, that, so long as the Corporation commences promptly and continues to exercise reasonable and diligent efforts to cure the Event of Noncompliance (if cure is possible) within a reasonable time after its occurrence, the applicable grace periods set forth in paragraph (i) and in clause (a) of paragraph (ii) of Section 9 shall be extended with respect to such Event of Noncompliance for a period of time equal to the period during which such efforts are continuing; (iii) any representation, warranty or certification by or on behalf of the Corporation contained in the Purchase Agreement or required to be furnished to any holder of Preferred Stock pursuant to the Purchase Agreement is false or misleading in any material respect on the date made; provided, however, that any Event of Noncompliance under this clause (iii) resulting from the delivery of a certification that is made in good faith but is false or misleading shall be deemed to be cured from and after the date a certification correcting the earlier false or misleading certification is delivered to the holders of the Preferred Stock, which delivery shall occur promptly after the facts or events that caused such earlier certification to be false or misleading become known to the Corporation; or (iv) the Corporation or any Subsidiary makes an assignment for the benefit of creditors or admits in writing its inability to pay its debts generally as they become due; or an order, judgment or decree is entered adjudicating the Corporation or any Subsidiary bankrupt or insolvent; or any order for relief with respect to the Corporation or any Subsidiary is entered under the Federal Bankruptcy Code; or the Corporation or any Subsidiary petitions or applies to any tribunal for the appointment of a custodian, trustee, receiver or liquidator of the Corporation or any Subsidiary or of any substantial part of the assets of the Corporation or any Subsidiary, or commences any proceeding (other than a proceeding for the voluntary liquidation and dissolution of a Subsidiary) relating to the Corporation or any Subsidiary under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction; or any such petition or application is filed, or any such proceeding is commenced, against the Corporation or any Subsidiary and either (a) the Corporation or any such Subsidiary by any act indicates its approval thereof, consent thereto or acquiescence therein or (b) such petition, application or proceeding is not dismissed within 60 days. "Freely Tradeable Securities" has the meaning given such term in the Purchase Agreement. "Fundamental Change" has the meaning given such term in the Purchase Agreement. "Investment Regulations" means, as applicable, Title III of the Small Business Investment Act of 1958, as amended, and the regulations promulgated thereunder, regulation Y (Title 12, Code of Federal Regulations, Part 225) under Section 5(b) of the Bank Holding Company Act of 1956, as amended, or other similar laws or regulations governing a regulated Person's investment authority. "Junior Securities" means Common Stock and any other capital stock or other equity securities issued by the Corporation, whether currently existing or hereafter authorized or issued (other than Series A Preferred). "Liquidation" means the liquidation, dissolution or winding up of the Corporation; provided, however, that neither the consolidation or merger of the Corporation into or with any other entity or entities, nor the sale or transfer by the Corporation of all or any part of its assets, nor the reduction or the capital stock of the Corporation, shall be deemed to be a liquidation, dissolution or winding up of the Corporation. Liquidating Dividend" means a dividend upon the Common Stock payable otherwise than in cash out of earnings or earned surplus (determined in accordance with generally accepted accounting principles, consistently applied) except for a stock dividend payable in shares of Common Stock. "Liquidation Value" of any Preferred Share shall be equal to $1,000. "Market Price" of each share of Common Stock or other security means the Closing Price of such share or other security, averaged over a period of 21 days consisting of the day as of which the Market Price is being determined and the 20 consecutive Business Days prior to such day. If during this period such security is not listed on any securities exchange, quoted in the Nasdaq National Market, or quoted in the over-the-counter market, the Market Price will be the fair value of such security determined by agreement between the Company and the holders of 70% of the outstanding Preferred Shares. If such parties are unable to reach agreement within a reasonable period of time, the fair value of such security shall be determined by an independent appraiser experienced in valuing such type of consideration jointly selected by the Corporation and the holders of 70% of the outstanding Preferred Shares. The determination of such appraiser shall be final and binding upon the parties, and the fees and expenses of such appraiser shall be borne by the Corporation. "Old ONS" means Orion Network Systems, Inc., a Delaware Corporation incorporated in. "Old ONS Merger Agreement" means the Agreement and Plan of Merger dated as of January 8, 1997, by and among the Corporation, Old ONS and Orion Merger Company, Inc. "Old ONS Preferred Share" means one (1) share of the series of the preferred stock of Old ONS having the designation "Series B 8% Cumulative Redeemable Convertible Preferred Stock," as set forth in that certain "Certificate of Designations, Rights and Preferences of Series B 8% Cumulative Redeemable Convertible Preferred Stock of Orion Network Systems, Inc." filed with the Secretary of State of the State of Delaware on June 16, 1995. "Old ONS Preferred Share Conversion" means the conversion of Old ONS Preferred Shares into the right to receive Preferred Shares, pursuant to the Old ONS Merger Agreement. "Options" means any right or option to subscribe for or to purchase Common Stock or any Convertible Securities. "Organic Change" means any recapitalization, reorganization, reclassification, consolidation, merger, sale of all or substantially all of the Corporation's assets to another Person or other transaction which is effected in such a manner that holders of Common Stock are entitled to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock. "Person" means an individual, a partnership, a corporation, an association, a joint stock company, a limited liability company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof. "Preferred Share" means a share of Series B Preferred. "Preferred Stock" means the Series B Preferred. "Public Float Securities" means, as of any date of determination, those shares of the Corporation's Common Stock that (i) previously have been sold to the public in an offering registered under the Securities Act or through a broker, dealer or market maker under Rule 144 of the Securities Act, (ii) are listed for trading on a "national securities exchange" (within the meaning of the Securities Exchange Act of 1934, as amended) or quoted on the "National Market System" or "National List" published by the National Association of Securities Dealers Automated Quotations System or any successor list, and (iii) are held by Persons other than the Corporation or any of its "affiliates" (within the meaning of Rule 144 under the Securities Act). "Public Offering" means any offering by the Corporation of its equity securities to the public pursuant to an effective registration statement under the Securities Act of 1933, as then in effect, or any comparable statement under any similar federal statute then in force; provided, that "Public Offering" shall not include an offering made in connection with a business acquisition or combination or an employee benefit plan. "Purchase Agreement" means the Purchase Agreement, dated as of June 17, 1994, by and among Old ONS and certain investors, as such agreement may from time to time be amended in accordance with its terms, the performance of Old ONS's obligations under which the Corporation has assumed pursuant to a written agreement by and among Old ONS, the Corporation, and such investors. "Purchase Rights" mean any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property. "Redemption Date" means the date on which the Redemption Price of a Preferred Share is paid to the holder thereof. "Redemption Price" means, with respect to any Preferred Share being redeemed, the Liquidation Value of such Preferred Share plus all accrued and unpaid dividends thereon. "Reorganization" means any merger or consolidation of the Corporation with any Person where both (i) either (a) the Corporation is not the surviving corporation, (b) the terms of the Preferred Stock are altered in any respect, or (c) the Preferred Stock is exchanged for cash, securities or other property, and (ii) such merger or consolidation does not constitute a Fundamental Change. "Securities Act" means the Securities Act of 1933, as amended. "Series A Certificate" means the Certificate of Designations, Rights and Preferences for the Series A Preferred. "Series A Preferred" means the Corporation's Series A 8% Cumulative Redeemable Convertible Preferred Stock, par value $.01 per share. "Series B Preferred" means the Corporation's Series B 8% Cumulative Redeemable Convertible Preferred Stock, par value $.01 per share. "Series A Share" means a share of Series A Preferred. "Series B Share" means a share of Series B Preferred. "Subsidiary" means, with respect to any Person, any corporation, partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of 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 that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a partnership, association or other business entity if such Person or Persons shall be allocated a majority of partnership, association or other business entity gains or losses or shall be or control a general partner of such partnership, association or other business entity. Without limiting the foregoing, International Private Satellite Partners, L.P., a Delaware limited partnership, shall be deemed to be a Subsidiary of the Corporation for so long as the Corporation or any of its other Subsidiaries is the general partner thereof. "Warrants" means the Common Stock purchase warrants issued pursuant to the Purchase Agreement (whether at the Closing or thereafter pursuant to paragraph 1D or Section 7 thereof) and any warrant issued in exchange, substitution or replacement thereof. Section 13. Amendment and Waiver. No amendment, modification or waiver shall be binding or effective with respect to any provision of Sections 1 to 13 hereof without the prior written consent of the holders of 70% of the Preferred Shares outstanding at the time such action is taken; provided, that no such action shall change (i) the rate at which or the manner in which dividends on the Preferred Stock accrue or the times at which such dividends become payable or the amount payable on redemption of the Preferred Stock or the times at which redemption of Preferred Stock is to occur, without the prior written consent of the holders of at least 90% of the Preferred Shares then outstanding, (ii) any Conversion Price of the Preferred Stock or the number of shares or class of stock into which the Preferred Stock is convertible, without the prior written consent of the holders of at least 90% of the Preferred Stock then outstanding or (iii) the percentage required to approve any change in clauses (i) and (ii) above, without the prior written consent of the holders of at least 90% of the Preferred Stock then outstanding. Section 14. Notices. Except as otherwise expressly provided hereunder, all notices referred to herein shall be in writing and shall be delivered by registered or certified mail, return receipt requested and postage prepaid, or by reputable overnight courier service, charges prepaid, and shall be deemed to have been given when so mailed or sent (i) to the Corporation, at its principal executive offices and (ii) to any stockholder, at such holder's address as it appears in the stock records of the Corporation (unless otherwise indicated by any such holder). FORM OF CERTIFICATE OF DESIGNATIONS, RIGHTS AND PREFERENCES OF SERIES C 6% CUMULATIVE REDEEMABLE CONVERTIBLE PREFERRED STOCK OF ORION NETWORK SYSTEMS, INC. - -------------------------------------------------------------------------------- Pursuant to Section 151 of the General Corporation Law of the State of Delaware - -------------------------------------------------------------------------------- The undersigned DOES HEREBY CERTIFY that, pursuant to the authority contained in Article FOURTH of the Certificate of Incorporation of Orion Network Systems, Inc., a Delaware corporation (the "Corporation"), and in accordance with Section 151 of the General Corporation Law of the State of Delaware, the Board of Directors of the Corporation has authorized the creation of a series of Preferred Stock of the Corporation having the designation Series C 6% Cumulative Redeemable Convertible Preferred Stock and having the powers, rights and preferences, and the qualifications, limitations and restrictions thereof, as are set forth in Exhibit A hereto and made a part hereof and that the following resolution was duly adopted by the Board of Directors of the Corporation: RESOLVED, that a series of authorized Preferred Stock, par value $0.01 per share, of the Corporation be, and it hereby is, created; that the shares of such series shall be, and they hereby are, designated as "Series C 6% Cumulative Redeemable Convertible Preferred Stock;" that the number of shares constituting such series shall be, and it hereby is, fixed at 150,000; and that the powers, rights and preferences and the qualifications, limitations and restrictions thereof, of the shares of such series are as set forth in Exhibit A attached hereto and made a part hereof. IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be hereunto affixed and this Certificate to be signed by its President and Chief Executive Officer and attested to by its Vice President, Corporate and Legal Affairs, and Secretary this ____ day of January, 1997. ORION NETWORK SYSTEMS, INC. By: -------------------------------------- [SEAL] Name: W. Neil Bauer Title: President/Chief Executive Officer ATTEST: - ----------------------------------------- Name: Richard H. Shay, Esq. Title: Vice President, Corporate and Legal Affairs/Secretary EXHIBIT A SERIES C 6% CUMULATIVE REDEEMABLE CONVERTIBLE PREFERRED STOCK The following sections set forth the powers, rights and preferences, and the qualifications, limitations and restrictions thereof, of the Corporation's Series C 6% Cumulative Redeemable Convertible Preferred Stock. Capitalized terms used herein are defined in Section 10 below. Section 1. Dividends. 1A. General Obligation. Subject to the preferential rights of Series A Preferred Stock or Series B Preferred Stock ranking senior to the Preferred Stock, the record holders of Preferred Stock shall be entitled to receive dividends, when, as and if declared by the Corporation's board of directors (the "Board") and to the extent permitted under the General Corporation Law of Delaware, as amended, as provided in this Section 1, subject to paragraph 1F. Dividends shall accrue on a daily basis commencing on the Date of Issuance of each Preferred Share at the simple interest rate of 6% per annum of the Liquidation Value thereof, and shall be payable as provided in paragraph 1B. Dividends shall cease accruing upon the earliest to occur of (i) the date on which the Liquidation Value of such Preferred Share is paid, (ii) the date on which such Preferred Share is converted into shares of Common Stock hereunder, or (iii) the Maturity Date. Such dividends shall accrue whether or not they have been declared and whether or not there are net profits, surplus or other funds of the Corporation legally available for the payment of dividends. 1B. Payment of Dividends. Subject to the provisions of paragraph 1A and paragraph 1F, dividends shall be payable, in arrears, following each Dividend Reference Date within twenty days after such Dividend Reference Date. The amount of the dividend on each share of Preferred Stock payable following each Dividend Reference Date shall equal the aggregate amount of all accrued and unpaid dividends on such share of Preferred Stock from the Prior Dividend Date (or, in the case of the first dividend paid with respect to such share, the Date of Issuance of such Preferred Share) through such Dividend Reference Date. To the extent any dividend is not paid within twenty days after a Dividend Reference Date, all dividends which have accrued and remain unpaid on each outstanding Preferred Share through such Dividend Reference Date shall be accumulated and shall remain accumulated dividends with respect to such Preferred Share until the date paid. No interest, dividend or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments that may be accrued and unpaid. 1C. Distribution of Partial Dividend Payments. Except in connection with redemptions or repurchases pursuant to paragraph 3A or 3B below, if at any time the Corporation pays less than the total amount of dividends then accrued with respect to the Preferred Stock such payment shall be distributed ratably among the holders thereof based upon the aggregate accrued but unpaid dividends on the Preferred Shares held by each such holder and such payment shall be applied first to dividends which have accrued on such Preferred Shares during the period since the latest preceding Dividend Reference Date and second to reduce any previously accumulated dividends with respect to such Preferred Shares. 1D. Payment of Dividends in Common Stock. Except as specifically provided herein, the Corporation shall pay all dividends with respect to the Preferred Stock (including, in the case of a redemption, any amount equal to accrued and unpaid dividends constituting a portion of the Redemption Price) in fully paid and non-assessable shares of Common Stock. The number of shares of Common Stock distributable in a dividend on each share of Preferred Stock shall be equal to the quotient obtained by dividing (a) the amount of such dividend, as determined under paragraph 1B, by (b) the higher of (i) the Market Price of the Common Stock on the Dividend Reference Date immediately preceding the dividend payment and (ii) the Series A/B Dilution Price. When the Corporation pays a dividend to the holders of Preferred Stock, the Corporation shall provide each holder of Preferred Stock with a calculation of the aggregate number of shares of Common Stock payable in such dividend, including the computation of the Market Price. If any fractional interest in a share of Common Stock would, except for the provisions of this sentence, be deliverable upon payment of any dividend in shares of Common Stock, the Corporation, in lieu of delivering the fractional share therefor, shall pay an amount to the holder thereof equal to the Market Price of such fractional interest, calculated as set forth above in this paragraph 1D. 1E. Dividends on Junior Securities. The Corporation shall not declare and pay any dividends on Junior Securities unless all accrued and unpaid dividends on the Preferred Stock have been paid in full. 1F. Certain Withholding Provisions. Notwithstanding any other provision of Section 1, and without limiting the generality of the Board's power and authority with respect to the declaration and payment of dividends, the Board shall have and may exercise the power and authority to provide that the receipt by each record holder of Preferred Shares entitled thereto of any dividend paid by the Corporation as declared on the issued and outstanding Preferred Shares shall be subject to the condition (the "Tax Payment Condition") that the Corporation receive, at or prior to the time for payment of such dividend (the "Payment Time"), from or on behalf of such record holder, payment in full of the taxes, fees, duties, assessments, or other amounts, if any (the "Tax"), that the Corporation is required under applicable law to pay or withhold in connection with the declaration and payment to such record holder of such dividend. If the Tax Payment Condition applies and has been satisfied, or has been duly waived by the Corporation, at or prior to the Payment Time, at the Payment Time the Corporation shall pay such dividend to such record holder. If the Tax Payment Condition applies but has not been satisfied, and has not been duly waived by the Corporation, at or prior to the Payment Time, at the Payment Time the Corporation shall pay the dividend to which such record holder is entitled by irrevocably depositing and setting aside such dividend with the Secretary of the Corporation as escrow holder (the "Escrow Holder"). Upon the Escrow Holder's receipt, from or on behalf of such record holder, of payment in full of the Tax, plus any interest, penalty, or additional amount to be paid or withheld as a result of the passage of time from and after the Payment Time (the "Escrow Termination Time"), the Escrow Holder shall release such dividend to such record holder and shall release such Tax, and such additional amount if any, to the Corporation. If such dividend is paid in shares of Common Stock and is not received at or prior to the Payment Time by the record holder of Preferred Shares entitled to payment thereof, then (notwithstanding any provision hereof to the contrary) until the Escrow Termination Time (and only until such time, whether or not the dividend has been released by the Escrow Holder), such record holder shall not be entitled to vote such shares of Common Stock for any purpose, to receive payment of dividends or other distributions on such shares of Common Stock, or to exercise any other rights or privileges in respect of such shares of Common Stock, and the Escrow Holder shall have no right to vote such shares of Common Stock or to exercise any other right or privilege in respect thereof (whether in accordance with the wishes or directions of such record holder or otherwise), but the Escrow Holder shall receive and hold in escrow until the Escrow Termination Time together with such shares of Common Stock any dividends paid or other distributions made on such shares of Common Stock and at the Escrow Termination Time shall release such dividends paid or other distributions made on such shares of Common Stock, if any, along with such shares of Common Stock. Section 2. Liquidation. Subject to the provisions of Section 2 of each of the Series A Certificate and the Series B Certificate: upon any Liquidation, each holder of Preferred Stock shall be entitled to be paid, before any distribution or payment is made upon any Junior Securities, an amount in cash equal to the greater of (a) the aggregate Liquidation Value (plus an amount equal to all accrued and unpaid dividends) of all shares of Preferred Stock held by such holder or (b) the amount which would be distributed with respect to the shares of Common Stock (including fractional shares for purposes of this calculation) into which such shares of Preferred Stock are convertible (assuming conversion of all outstanding Preferred Stock) immediately prior to the record date for such distribution (or, if there is no such record date, then the date as of which the holders of Common Stock entitled to such distribution are determined), and the holders of Preferred Stock shall not be entitled to any further payment; and if upon any such Liquidation the Corporation's assets to be distributed among the holders of the Preferred Stock are insufficient to permit payment to such holders of the aggregate amount which they are entitled to be paid, then the entire assets to be distributed shall be distributed ratably among such holders based upon the aggregate Liquidation Value (plus all accrued and unpaid dividends) of the Preferred Shares held by each such holder. Prior to such Liquidation, the Corporation shall (to the extent permitted by law) declare for payment all accrued and unpaid dividends with respect to the Preferred Stock, which dividends shall be payable in cash notwithstanding the provisions of paragraph 1D. (Payment of the greater of the amounts specified in clauses (a) and (b) of this Section 2 in respect of such Preferred Shares shall constitute payment of such declared dividends.) The Corporation shall mail written notice of such Liquidation, not less than 60 days prior to the payment date stated therein, to each record holder of Preferred Stock. Section 3. Redemptions. 3A. Redemption at the Maturity Date. At the Maturity Date the Corporation shall redeem all of the Preferred Shares then outstanding for a price equal to the Redemption Price. The Corporation shall pay the Redemption Price for the Preferred Shares within thirty (30) days after the Maturity Date (or such later date upon which the certificates evidencing the Preferred Shares are surrendered to the Corporation). 3B. Redemption at the Option of the Corporation. At any time after the Initial Redemption Date, or, if prior to the Initial Redemption Date, immediately prior to the consummation of any consolidation, merger or sale in which the successor entity or purchasing entity is other than the Corporation, to the extent that it has funds legally sufficient therefor, the Corporation may redeem all or, subject to the last sentence of this paragraph, a portion of the Preferred Shares then outstanding for the Redemption Price. The number of Preferred Shares to be redeemed from each holder thereof in a partial redemption pursuant to this paragraph 3B shall be the number of Preferred Shares determined by multiplying the total number of Preferred Shares to be redeemed by a fraction, the numerator of which shall be the total Redemption Price of Preferred Shares then held by such holder and the denominator of which shall be the aggregate Redemption Price of Preferred Shares then outstanding. 3C. Redemption Payment. For each Preferred Share which is to be redeemed, the Corporation shall be obligated to pay the Redemption Price to the holder thereof on the Redemption Date or such later date upon which occurs the surrender by such holder at the Corporation's principal office of the certificate representing such Preferred Share. Subject to the provisions of paragraph 4C of the Series A Certificate and paragraph 4C of the Series B Certificate, if the funds of the Corporation legally available for payment of the cash portion of the Redemption Price of Preferred Shares on any Redemption Date are insufficient to pay the cash portion of the Redemption Price for the total number of Preferred Shares to be redeemed on such date, those funds which are legally available shall be used to redeem the maximum possible number of such Preferred Shares ratably among the holders of the Preferred Shares to be redeemed based upon the aggregate Redemption Price of the Preferred Shares held by each such holder and the remaining Preferred Shares called for redemption will remain outstanding; and at any time thereafter when additional funds of the Corporation are legally available for the redemption of Preferred Shares, such funds shall immediately be used to redeem the balance of the Preferred Shares which the Corporation has become obligated to redeem on any Redemption Date but which it has not redeemed. Payment of the Redemption Price in respect of such Preferred Shares shall extinguish all rights to dividends that are accrued and unpaid as of the Redemption Date with respect to the Preferred Shares which are redeemed on such Redemption Date. 3D. Notice of Redemption. The Corporation shall mail written notice of each redemption of any Preferred Stock to each record holder of Preferred Stock not more than 60 nor less than 30 days prior to the date on which such redemption is to be made specifying (a) the number of shares of Preferred Stock to be redeemed by the Corporation and (b) the Redemption Date. Upon mailing any such notice of redemption, the Corporation shall become obligated to redeem the total number of Preferred Shares specified in such notice at the time of redemption specified therein and upon the surrender on or before such time of the certificates representing such Preferred Shares. If one or more holders of Preferred Shares being redeemed shall fail to surrender the certificates representing such Preferred Shares by the Redemption Date, the Corporation shall pay the Redemption Price by irrevocably depositing or setting aside the required amount to be paid promptly upon surrender of such certificates. Such deposit or set aside shall be deemed payment of the Redemption Price to the holder for whom it is deposited or set aside. In case fewer than the total number of Preferred Shares represented by any certificate are redeemed, a new certificate representing the number of unredeemed Preferred Shares shall be issued to the holder thereof without cost to such holder within three Business Days after surrender of the certificate representing the redeemed Preferred Shares. 3E. Dividends after Redemption Date. No Preferred Share that is redeemed is entitled to any dividends accruing after the Redemption Date. On the Redemption Date of any Preferred Share, all rights of the holder of such Preferred Share shall cease, and such Preferred Share shall be deemed to be no longer outstanding. 3F. Redeemed or Otherwise Acquired Preferred Shares. Any Preferred Shares which are redeemed, converted or otherwise acquired by the Corporation thereupon shall be retired. All such shares shall upon their retirement become authorized but unissued shares of preferred stock of the Corporation and may not be reissued as Preferred Stock but may be reissued as part of a new series of preferred stock to be created by resolution or resolutions of the board of directors, subject to the conditions or restrictions on issuance set forth in the certificate of incorporation of the Corporation. Section 4. Voting Rights. The holders of the Preferred Stock shall be entitled to notice of all stockholders meetings in accordance with the Corporation's bylaws, and except as otherwise required by law, the holders of the Preferred Stock shall be entitled to vote on all matters submitted to the stockholders for a vote together with the holders of the Common Stock voting together as a single class with each share of Common Stock entitled to one vote per share, and each Preferred Share (including fractional shares) entitled to one vote for each whole share of Common Stock that would be issuable upon conversion of such Preferred Share at the time the vote is taken. Section 5. Conversion. 5A. Conversion Procedure. (i) At any time and from time to time after the issuance thereof, any holder of Preferred Stock may convert all or any of the Preferred Shares (including any fraction of a Preferred Share) held by such holder into a number of shares of Common Stock equal to the sum of: (a) the number of shares of Common Stock computed by multiplying the number of Preferred Shares to be converted by the Liquidation Value of a Preferred Share, and dividing the result by the Conversion Price then in effect, plus (b) the number of shares of Common Stock that would be payable if all accrued but unpaid dividends were declared and paid on the Preferred Shares to be converted. For purposes of determining the amount of dividends payable or that would be payable with respect to a conversion under Section 5, the date for determining the Market Price shall be the Business Day immediately preceding the date on which conversion is deemed to have been effected. (ii) Each conversion of Preferred Stock shall be deemed to have been effected as of the close of business on the date on which the certificate or certificates representing the Preferred Shares to be converted have been surrendered at the principal office of the Corporation, together with written notice of the holder's desire to convert such Preferred Shares. At such time as such conversion has been effected, the rights of the holder of such Preferred Shares as such holder shall cease, and the Person or Persons in whose name or names any certificate or certificates for shares of Common Stock are to be issued upon such conversion shall be deemed to have become the holder or holders of record of the shares of Common Stock represented thereby, which Common Stock shall be deemed to have been issued as of such time. Issuance of Common Stock by the Corporation to effect any conversion shall extinguish all rights to dividends that are accrued and unpaid as of the date on which conversion is to be made with respect to the Preferred Shares which are to be converted on such date. (iii) The conversion rights of any Preferred Share subject to redemption hereunder shall terminate on the Redemption Date for such Preferred Share unless the Corporation has failed to pay to the holder thereof the Redemption Price thereof. (iv) Notwithstanding any other provision hereof, if a conversion of any Preferred Shares is to be made in connection with a Public Offering or prior to a redemption, such conversion may, at the election of the holder of such Preferred Shares, be conditioned upon the consummation of the Public Offering or the redemption occurring on or before a specified date, in which case such conversion shall not be deemed to be effective until the consummation of the Public Offering or unless the redemption occurs on or before the specified date. (v) As soon as possible after a conversion has been effected (but in any event within three Business Days in the case of subparagraph (a) below), the Corporation shall deliver to the converting holder: (a) a certificate or certificates representing the number of shares of Common Stock issuable by reason of such conversion in such name or names and such denomination or denominations as the converting holder has specified; (b) payment of the amount payable under subparagraph (viii) below with respect to such conversion; and (c) a certificate representing any Preferred Shares which were represented by the certificate or certificates delivered to the Corporation in connection with such conversion but which were not converted. (vi) The issuance of certificates for shares of Common Stock upon conversion of Preferred Stock shall be made without charge to the holders of such Preferred Stock for any issuance tax in respect thereof or other cost incurred by the Corporation in connection with such conversion and the related issuance of shares of Common Stock. (vii) The Corporation shall not close its books against the transfer of Preferred Stock or of Common Stock issued or issuable upon conversion of Preferred Stock in any manner which interferes with the timely conversion of Preferred Stock. The Corporation shall assist and cooperate (but the Corporation shall not be required to expend substantial efforts or funds) with any holder of Preferred Shares required to make any governmental filings or obtain any governmental approval prior to or in connection with any conversion of Preferred Shares hereunder (including, without limitation, making any filings required to be made by the Corporation). (viii) If any fractional interest in a share of Common Stock would, except for the provisions of this subparagraph, be deliverable upon any conversion of shares of a holder's Preferred Stock, the Corporation, in lieu of delivering the fractional share therefor, shall pay an amount to the holder thereof equal to the Market Price of such fractional interest as of the Business Day immediately preceding the date of conversion. (ix) The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of issuance upon the conversion of the Preferred Stock, not less than the number of shares of Common Stock issuable upon the conversion of all outstanding Preferred Stock which may then be exercised. All shares of Common Stock which are so issuable shall, when issued, be duly and validly issued, fully paid and nonassessable and free from all taxes, liens and charges. The Corporation shall take all such actions as may be necessary to ensure that all such shares of Common Stock may be so issued without violation of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which shares of Common Stock may be listed (except for official notice of issuance which shall be immediately delivered by the Corporation upon each such issuance). 5B. Subdivision or Combination of Common Stock. If the Corporation at any time subdivides (by any stock split, stock dividend, recapitalization or otherwise) the outstanding shares of one or more classes of Common Stock into a greater number of shares, the Conversion Price (and the Trigger Price and Series A/B Dilution Price) in effect immediately prior to such subdivision shall be proportionately reduced, and if the Corporation at any time combines (by reverse stock split or otherwise) the outstanding shares of one or more classes of Common Stock into a smaller number of shares, the Conversion Price (and the Trigger Price and Series A/B Dilution Price) in effect immediately prior to such combination shall be proportionately increased. 5C. Reorganization, Reclassification, Consolidation, Merger or Sale. In connection with any Reorganization, (i) the holders of Preferred Stock shall thereafter have the right to acquire and receive, in lieu of or in addition to (as the case may be) the shares of Common Stock immediately theretofore acquirable and receivable upon the conversion of such holder's Preferred Stock, such shares of stock, securities, cash or other assets (or, if not practicably attainable, the reasonable equivalent thereof) as such holder would have received in connection with such Reorganization if such holder had converted its Preferred Stock immediately prior to such Reorganization, and (ii) dividends and amounts in respect of dividends hereunder payable in shares of Common Stock prior to such Reorganization shall be payable, in lieu of each share of Common Stock, in such shares of stock, securities, cash or other assets (or reasonable equivalent thereof) as the holder of one share of Common Stock received in connection with such Reorganization. The Corporation shall make appropriate provisions to ensure that the requirements of the previous sentence are effected. In each such case, the Corporation shall also make appropriate provisions to ensure that the provisions of this Section 5 and Sections 6 and 7 shall thereafter be applicable to the Preferred Stock. 5D. Notices. (i) Immediately upon any adjustment of the Conversion Price, the Corporation shall give written notice thereof to all holders of Preferred Stock, setting forth in reasonable detail and certifying the calculation of such adjustment. (ii) The Corporation shall give written notice to all holders of Preferred Stock at least 20 days prior to the date on which the Corporation closes its books or fixes a record date (a) with respect to any dividend or distribution upon Common Stock, (b) with respect to any pro rata subscription offer to holders of Common Stock or (c) for determining rights to vote with respect to any Liquidation or Reorganization. 5E. Mandatory Conversion. The Corporation may require, by written notice to all holders of Preferred Stock, the conversion of all of the outstanding Preferred Stock into a number of shares of Common Stock equal to the sum of: (a) the number of shares of Common Stock computed by multiplying the number of Preferred Shares to be converted by the Liquidation Value of a Preferred Share, and dividing the result by the applicable Conversion Price then in effect, plus (b) the number of shares of Common Stock that would be payable if all accrued but unpaid dividends were declared and paid on the Preferred Shares to be converted; provided that the Closing Price of the Common Stock (adjusted proportionately for stock dividends, stock splits, combinations, and similar changes in the Common Stock occurring after the Closing) on at least twenty (20) of the thirty (30) latest trading days preceding the date of the Corporation's notice has been greater than or equal to the Conversion Price. If the Corporation shall require the conversion of the Preferred Stock under this Section 5E within two years from the Initial Date of Issuance, then the number of shares of Common Stock into which the shares of Preferred Stock are converted shall be increased by the number of shares of Common Stock that would be payable if the Corporation were immediately to declare and pay all dividends that in the absence of conversion would have accrued on such shares of Preferred Stock over the six-month period immediately following the date of conversion; provided, however, that the total dividends and amounts in respect of dividends paid on the Preferred Stock after the Date of Issuance thereof, including any additional amounts in respect of dividends paid as a result of a required conversion under this Section 5E, shall not be less than the amount of dividends that would have accrued on all outstanding shares of the Preferred Stock for one full year following the Initial Date of Issuance. Any conversion of shares of Preferred Stock under this Paragraph 5E shall be effected and be deemed to have been effected as of the close of business on the date on which the Corporation provides written notice of such conversion to the holders of such shares of Preferred Stock (the "Mandatory Conversion Time"), and as of the Mandatory Conversion Time, the rights of the holders of the converted shares of Preferred Stock, as such, shall cease and terminate, such converted shares of Preferred Stock shall be retired in accordance with paragraph 3F, the shares of Common Stock into which such shares of Preferred Stock are converted shall be issued and deemed to have been issued, the certificate(s) that theretofore represented shares of Preferred Stock thereafter shall represent the number of shares of Common Stock into which the shares of Preferred Stock theretofore represented thereby shall have been converted, and the holder of any such certificate, upon the surrender thereof to the Corporation, shall be entitled to receive from the Corporation a new certificate representing the number of shares of Common Stock into which the shares of Preferred Stock theretofore represented thereby shall have been converted. 5F. Effect on Conversion Price of Certain Events. (i) General. In order to prevent dilution of the conversion rights granted under this Section 5, the Conversion Price shall be subject to adjustment from time to time pursuant to this paragraph 5F. (ii) Adjustment of Conversion Price. If and whenever on or after the Date of Issuance the Corporation issues or sells, or in accordance with this paragraph 5F is deemed to have issued or sold, other than in an Excluded Issuance, any share of Common Stock for a consideration per share less than the Trigger Price in effect immediately prior to such time (a "Dilutive Event"), then forthwith upon such issue or sale in the Dilutive Event the Conversion Price shall be reduced by multiplying the Conversion Price in effect immediately before the Dilutive Event by a fraction, the numerator of which is the number of shares of Common Stock that are Outstanding on an As-Converted Basis (as defined below) immediately before the Dilutive Event plus the number of shares of Common Stock that could be purchased at the Trigger Price at the time of the Dilutive Event for the aggregate consideration paid or payable upon the sale or issuance of Common Stock in the Dilutive Event, and the denominator of which is the number of shares of Common Stock that are Outstanding on an As-Converted Basis immediately before the Dilutive Event plus the number of shares that are acquired or to be acquired upon the sale or issuance of the Common Stock in the Dilutive Event. For purposes of this paragraph 5F(ii), "Outstanding on an As-Converted Basis" immediately before the Dilutive Event means the sum of (i) all Common Stock issued and outstanding immediately before the Dilutive Event plus (ii) all Common Stock issuable upon the exercise of Options or conversion of Convertible Securities outstanding immediately before the Dilutive Event (other than Preferred Stock). (iii) Issuance of Rights or Options. If the Corporation in any manner grants any Options and the price per share for which shares of Common Stock are issuable upon the exercise of any such Option is less than the Trigger Price in effect immediately prior to the time of the granting of such Option, then such shares of Common Stock shall be deemed to have been issued and sold by the Corporation at the time of the granting of such Options for such price per share and the Conversion Price shall be adjusted in accordance with paragraph 5F(ii) above. For purposes of this paragraph, the "price per share" for which shares of Common Stock are issuable upon the exercise of any Option shall be equal to the sum of the amounts of consideration (if any) received or receivable by the Corporation with respect to such shares of Common Stock upon the granting of the Option and upon exercise of the Option. No further adjustment of the Conversion Price shall be made upon the actual issue of such Common Stock upon the exercise of such Options. (iv) Issuance of Convertible Securities. If the Corporation in any manner issues or sells any Convertible Security (or Options to purchase any Convertible Security) and the price per share for shares of Common Stock that are issuable upon conversion or exchange thereof is less than the Trigger Price in effect immediately prior to the time of such issue or sale (or the granting of such Option), then such shares of Common Stock shall be deemed to have been issued and sold by the Corporation at the time of the issuance or sale of such Convertible Securities (or the granting of such Option) for such price per share and the Conversion Price shall be adjusted in accordance with paragraph 5F(ii) above. For the purposes of this paragraph, the "price per share" for which shares of Common Stock are issuable upon conversion or exchange of any Convertible Security (or exercise of any Option therefor) shall be equal to the sum of the amounts of consideration (if any) received or receivable by the Corporation upon the issuance of the Convertible Security (or such Option) and upon the conversion or exchange of such Convertible Security (or exercise of such Option). No further adjustment of the Conversion Price shall be made upon the actual issue of such Common Stock upon conversion or exchange of any Convertible Security, and if any such issue or sale of such Convertible Security is made upon exercise of any Options for which adjustments of the Conversion Price had been or are to be made pursuant to other provisions of this Section 5, no further adjustment of the Conversion Price shall be made by reason of such issue or sale. (v) Change in Option Price or Conversion Rate. If the purchase price provided for in any Option, the additional consideration (if any) payable upon the issue, conversion or exchange of any Convertible Security, or the rate at which any Convertible Security is convertible into or exchangeable for Common Stock change at any time, any Conversion Price previously adjusted with respect to such Option or Convertible Security and in effect at the time of such change shall be readjusted to the Conversion Price which would have been in effect at such time had such Option or Convertible Security originally provided for such changed purchase price, additional consideration or changed conversion rate, as the case may be, at the time initially granted, issued or sold. (vi) Treatment of Expired Options and Unexercised Convertible Securities. Upon the expiration of any Option or the termination of any right to convert or exchange any Convertible Security without the exercise of any such Option or right, any Conversion Price then in effect hereunder shall be adjusted to the Conversion Price which would have been in effect at the time of such expiration or termination had such Option or Convertible Security, to the extent outstanding immediately prior to such expiration or termination, never been issued. (vii) Calculation of Consideration Received. If any Common Stock, Option or Convertible Security is issued or sold or deemed to have been issued or sold for cash, the consideration received therefor shall be deemed to be the amount received by the Corporation therefor. In case any Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of the consideration other than cash received by the Corporation shall be the fair value of such consideration, except where such consideration consists of securities, in which case the amount of consideration received by the Corporation shall be the Market Price thereof as of the date of receipt. If any Common Stock, Option or Convertible Security is issued to the owners of the non-surviving entity in connection with any merger in which the Corporation is the surviving corporation, the amount of consideration therefor shall be deemed to be the fair value of such portion of the assets and business of the non-surviving entity as is attributable to such Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other than cash and securities shall be as determined in good faith by the Board of Directors of the Corporation. (viii) Integrated Transactions. In case any Option is issued in connection with the issue or sale of other securities of the Corporation, together comprising one integrated transaction in which no specific consideration is allocated to such Option by the parties thereto, the Option shall be deemed to have been issued for a consideration of $.01. (ix) Treasury Shares. For purposes of calculating under this paragraph 5F the number of shares of Common Stock outstanding at any given time, the number of shares of Common Stock outstanding at such time does not include shares owned or held by or for the account of the Corporation or any subsidiary thereof, and the disposition of any shares so owned or held shall be considered an issue or sale of Common Stock. (x) De Minimis Adjustments. Notwithstanding any other provisions of this Section 5, the Corporation shall not be required to make any adjustment of the Conversion Price unless such adjustment would require an increase or decrease of at least one percent (1%) in the Conversion Price as then in effect. Any lesser adjustment shall be carried forward and shall be made no later than the time of, and together with, the next subsequent adjustment which, together with any adjustment or adjustments so carried forward, shall amount to an increase or decrease of at least one percent (1%) of the Conversion Price as then in effect. If any action would require adjustment of the Conversion Price pursuant to more than one subparagraph of this paragraph 5F, only one adjustment shall be made as determined in good faith by the Board of Directors of the Corporation. Section 6. Liquidating Dividends. If the Corporation declares or pays a Liquidating Dividend upon the Common Stock, then the Corporation shall pay to the holders of Preferred Stock at the time of payment thereof the Liquidating Dividend which would have been paid to such holders had such Preferred Stock been converted immediately prior to the record date fixed for determining the stockholders entitled to receive payment of such Liquidating Dividend, or, if no record date is fixed, the date as of which the record holders of Common Stock entitled to such dividends are to be determined. Section 7. Purchase Rights. If at any time the Corporation grants, issues or sells any Purchase Rights pro rata to the record holders of any class of Common Stock, then each holder of Preferred Stock shall be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such holder would have acquired if such holder had held the number of shares of Common Stock acquirable upon conversion of such holder's Preferred Shares immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights. Section 8. Registration of Transfer. The Corporation shall keep at its principal office a register for the registration of issuances and transfers of Preferred Stock. Upon the surrender of any certificate representing Preferred Stock at such place, the Corporation shall, at the request of the record holder of such certificate, execute and deliver (at the Corporation's expense) a new certificate or certificates in exchange therefor representing in the aggregate the number of Preferred Shares represented by the surrendered certificate. Each such new certificate shall be registered in such name and shall represent such number of Preferred Shares as is requested by the holder of the surrendered certificate and shall be substantially identical in form to the surrendered certificate, and dividends shall accrue on the Preferred Stock represented by such new certificate from the date to which dividends have been fully paid on such Preferred Stock represented by the surrendered certificate. Section 9. Replacement. Upon receipt of evidence reasonably satisfactory to the Corporation (an affidavit of the registered holder shall be satisfactory) of the ownership and the loss, theft, destruction or mutilation of any certificate evidencing Preferred Shares, and in the case of any such loss, theft or destruction, upon receipt of indemnity reasonably satisfactory to the Corporation (provided that if the holder is a financial institution or other institutional investor, its own agreement shall be satisfactory), or, in the case of any such mutilation upon surrender of such certificate, the Corporation shall (at its expense) execute and deliver in lieu of such certificate a new certificate of like kind representing the number of Preferred Shares represented by such lost, stolen, destroyed or mutilated certificate and dated the date of such lost, stolen, destroyed or mutilated certificate, and dividends shall accrue on the Preferred Stock represented by such new certificate from the date to which dividends have been fully paid on the Preferred Shares represented by such lost, stolen, destroyed or mutilated certificate. Section 10. Definitions. "Bond Offering" means an underwritten offering of notes or debentures of the Corporation to the public, with or without Options, primarily for the purpose of refinancing the indebtedness of International Private Satellite Partners, L.P. ("Orion Atlantic") outstanding under the Credit Agreement dated December 6, 1991 among Orion Atlantic, the Banks named therein and The Chase Manhattan Bank (National Association), as Agent. "Business Day" means a day on which banks are generally open for business in New York City. "Closing" means January 31, 1997. "Closing Price" of each share of Common Stock or other security means the composite closing price of the sales of the Common Stock or such other security on all securities exchanges on which such security may at the time be listed (as reported in The Wall Street Journal), or, if there has been no sale on any such exchange on any day, the average of the highest bid and lowest asked prices of the Common Stock or such other security on all such exchanges at the end of such day, or, if such security is not so listed, the closing price (or last price, if applicable) of sales of the Common Stock or such other security in the Nasdaq National Market (as reported in The Wall Street Journal) on such day, or if such security is not quoted in the Nasdaq National Market but is traded over-the-counter, the average of the highest bid and lowest asked prices on such day in the over-the-counter market as reported by the National Quotation Bureau Incorporated, or any similar successor organization. "Common Stock" means, collectively, the Corporation's common stock, par value $0.01 per share, and any capital stock of any class of the Corporation hereafter authorized which is not limited to a fixed sum or percentage of par or stated value in respect to the rights of the holders thereof to participate in dividends or in the distribution of assets upon any Liquidation of the Corporation; and if there is a change such that the securities issuable upon conversion of the Preferred Stock are issued by an entity other than the Corporation or there is a change in the class of securities so issuable, then the term "Common Stock" shall mean one share of the security issuable upon conversion of the Preferred Stock if such security is issuable in shares, or shall mean the smallest unit in which such security is issuable if such security is not issuable in shares. "Conversion Price" shall mean, with respect to any Series C Share, $17.50 (subject to adjustment as provided in Section 5 for events occurring after its Date of Issuance). "Convertible Securities" means any stock or other securities of the Corporation convertible into or exchangeable for Common Stock. "Convertible Subordinated Debenture Offering" means a public or private offering of convertible subordinated debentures of the Corporation, which debentures would be convertible into Common Stock. "Corporation" means Orion Network Systems, Inc., a Delaware corporation formerly known as Orion Newco Services, Inc. "Date of Issuance," with respect to any Preferred Share, means the date on which the Corporation initially issues such Preferred Share, regardless of the number of times transfer of such Preferred Share is made on the stock records maintained by or for the Corporation and regardless of the number of certificates which may be issued to evidence such Preferred Share. "Dividend Reference Date" mean January 31 of each year, commencing January 31, 1998, and each of the following: (i) the date on which the Liquidation Value of such Preferred Share is paid, (ii) the date on which such Preferred Share is converted into shares of Common Stock hereunder, and (iii) the Maturity Date. "Excluded Issuance" means the issue or sale of (i) shares of Common Stock in respect of any transaction described in paragraph 5B (including without limitation any stock split, stock dividend or recapitalization), (ii) shares of Common Stock by the Corporation pursuant to the exercise of Options and Convertible Securities outstanding immediately prior to the Closing at exercise prices that are greater than or equal to the respective exercise prices in effect as of Closing (as adjusted pursuant to the terms of such securities to give effect to stock dividends or stock splits or a combination of shares in connection with a recapitalization, merger, consolidation or other reorganization occurring after the Closing), (iii) up to an aggregate of 150,000 shares of Common Stock by the Corporation for any purpose, (iv) Options to acquire Common Stock by the Corporation pursuant to a resolution of, or a stock option or stock purchase plan approved by a resolution of, the Board of Directors of the Corporation (or the compensation committee thereof) to the Corporation's employees or directors, (v) shares of Common Stock, Options or Convertible Securities (or shares of Common Stock pursuant to the exercise of Options and Convertible Securities, or as interest thereon) as part of or in connection with a Bond Offering or a Convertible Subordinated Debenture Offering or (vi) shares of Common Stock as dividends on or upon conversion of the Series C Preferred. "Initial Date of Issuance" means the Date of Issuance of the first share of Preferred Stock to be issued. "Initial Redemption Date" means the earlier of (i) the close of business on January 31, 1999 or (ii) the effective date of a Reorganization. "Junior Securities" means Common Stock and any other capital stock or other equity securities issued by the Corporation, whether currently existing or hereafter authorized or issued (other than Series A Preferred or Series B Preferred or any other series of preferred stock of the Corporation issued pursuant to an option granted to purchasers of Series A Preferred in connection with the initial issuances of Series A Preferred by the Corporation). "Liquidation" means the liquidation, dissolution or winding up of the Corporation; provided, however, that neither the consolidation or merger of the Corporation into or with any other entity or entities, nor the sale or transfer by the Corporation of all or any part of its assets, nor the reduction of the capital stock of the Corporation, shall be deemed to be a liquidation, dissolution or winding up of the Corporation. "Liquidating Dividend" means a dividend upon the Common Stock payable otherwise than in cash out of legally available funds (determined in accordance with generally accepted accounting principles, consistently applied) except for a stock dividend payable in shares of Common Stock. "Liquidation Value" of any Preferred Share shall be equal to $1,000. "Market Price" of each share of Common Stock or other security means, with respect to a specified date, the Closing Price of such share or other security, averaged over a period of the 20 consecutive Business Days prior to such date. If during this period such security is not listed on any securities exchange, quoted in the Nasdaq National Market, or quoted in the over-the-counter market, the Market Price will be the fair value of such shares of Common Stock or security determined by agreement between the Corporation and the holders of a majority of the outstanding Preferred Shares. If such parties are unable to reach agreement within a reasonable period of time, the fair value of such security shall be determined by an independent appraiser experienced in valuing such type of consideration jointly selected by the Corporation and the holders of a majority of the outstanding Preferred Shares. The determination of such appraiser shall be final and binding upon the parties, and the fees and expenses of such appraiser shall be borne by the Corporation. "Maturity Date" means the close of business on January 31, 2022. "Options" means any options, warrants or rights to subscribe for or to purchase Common Stock or any Convertible Securities. "Person" means an individual, a partnership, a corporation, an association, a joint stock company, a limited liability company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof. "Preferred Share" means a share of Series C Preferred. "Preferred Stock" means the Series C Preferred. "Prior Dividend Date" means, with respect to a Dividend Reference Date, the previous Dividend Reference Date following which dividends were paid on shares of Preferred Stock hereunder (or, if there is no such previous Dividend Reference Date, the Date of Issuance). "Public Offering" means any offering by the Corporation of its equity securities to the public pursuant to an effective registration statement under the Securities Act of 1933, as then in effect, or any comparable statement under any similar federal statute then in force; provided, that "Public Offering" shall not include an offering made in connection with a business acquisition or combination or an employee benefit plan. "Purchase Rights" means any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property. "Redemption Date" means the date on which the Redemption Price of a Preferred Share is paid to the holder thereof. "Redemption Price" means the Liquidation Value of such Preferred Share, payable in cash, plus an amount equal to all accrued and unpaid dividends thereon, payable in shares of Common Stock pursuant to paragraph 1D. "Reorganization" means any recapitalization, reorganization, reclassification, consolidation, merger, sale of all or substantially all of the Corporation's assets to another Person or other transaction which is effected in such a manner that holders of Common Stock are entitled to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock. "Series A Certificate" means the Certificate of Designations, Rights and Preferences for the Series A Preferred. "Series B Certificate" means the Certificate of Designations, Rights and Preferences for the Series B Preferred. "Series A Preferred" means the Corporation's Series A 8% Cumulative Redeemable Convertible Preferred Stock, par value $.01 per share. "Series B Preferred" means the Corporation's Series B 8% Cumulative Redeemable Convertible Preferred Stock, par value $.01 per share. "Series C Preferred" means the Corporation's Series C 6% Cumulative Redeemable Convertible Preferred Stock, par value $.01 per share. "Series A/B Dilution Price" means, at any time, the conversion price for the Series B Preferred as then in effect under the Series B Certificate. "Series A Share" means a share of Series A Preferred. "Series B Share" means a share of Series B Preferred. "Series C Share" means a share of Series C Preferred. "Trigger Price" shall mean, with respect to any Series C Share, $14.00 (subject to adjustment as provided in Section 5B for events occurring after its Date of Issuance). Section 11. Amendment and Waiver. No amendment, modification or waiver shall be binding or effective with respect to any provision hereof without the prior affirmative vote or written consent of the holders of a majority of the Preferred Shares outstanding at the time such action is taken; provided, however, that without the prior affirmative vote or written consent of each holder individually holding at least 51% of the Preferred Stock then outstanding, no such action shall change (i) the rate at which or the manner in which dividends on the Preferred Stock accrue or the form of consideration in which such dividends are payable or the times at which such dividends become payable or the amount payable on redemption of the Preferred Stock or the times at which redemption of Preferred Stock is to occur, (ii) any Conversion Price of the Preferred Stock or the number of shares or class of stock into which the Preferred Stock is convertible, (iii) the priority of payment of dividends to the Preferred Stock, (iv) the Liquidation Value, (v) the voting rights of the Preferred Stock, (vi) the rights of the Preferred Stock upon a reorganization, (vii) the provisions for mandatory conversion of the Preferred Stock, (viii) the rights of holders of the Preferred Stock to acquire Purchase Rights, or (ix) the percentage required to approve any change in this Section 11. Section 12. Notices. Except as otherwise expressly provided hereunder, all notices referred to herein shall be in writing and shall be delivered by registered or certified mail, return receipt requested and postage prepaid, or by reputable overnight courier service, charges prepaid, and shall be deemed to have been given when so mailed or sent (i) to the Corporation, at its principal executive offices and (ii) to any stockholder, at such holder's address as it appears in the stock records of the Corporation (unless otherwise indicated by any such holder). EX-21.1 5 EXHIBIT 21.1 EXHIBIT 21.1 LIST OF SUBSIDIARIES OF ORION NEWCO SERVICES, INC. STATE OF NAME INCORPORATION - ---- ------------- Orion Oldco Services Inc. Delaware Orion Satellite Corporation Delaware International Private Satellite Partners, L.P. Delaware OrionNet, Inc. Delaware Orion Asia Pacific Corporation Delaware Asia Pacific Space and Communications Delaware Orion Atlantic Europe, Inc. Delaware -----END PRIVACY-ENHANCED MESSAGE-----