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ORBIMAGE Announces Terms of a Settlement Agreement

Press Release From: Orbimage
Posted: Wednesday, January 22, 2003

ORBITAL IMAGING CORPORATION ("ORBIMAGE") announced today that it has signed a non-binding term sheet with the Official Committee of its Unsecured Creditors ("Creditors' Committee") and Orbital Sciences Corporation ("Orbital") that will facilitate ORBIMAGE's prompt emergence from its Chapter 11 reorganization proceeding now pending in the Eastern District of Virginia.

The agreement in principle includes the material terms for a settlement agreement to be submitted to the Bankruptcy Court for approval. Under the proposed settlement, ORBIMAGE would end its pending litigation with Orbital in exchange for additional working capital and other consideration to be provided by Orbital.

"We are pleased to announce that ORBIMAGE, the Creditors' Committee and Orbital have reached mutually acceptable terms that will allow the bankruptcy process to quickly move forward and will allow the parties to focus their efforts on successfully launching ORBIMAGE's high-resolution imaging satellite, OrbView-3, as soon as possible," stated Matthew O'Connell, the Company's Chief Executive Officer. OrbView-3 is currently scheduled for launch in late April 2003 by Orbital. Armand Mancini, ORBIMAGE's Executive Vice President and Chief Financial Officer added, "We now have cleared the path to emerge from bankruptcy and expect to have a sound capital structure that will restore the company to financial health. Combined with a successful launch of our OrbView-3 satellite, we expect to be very competitive in addressing the growing demand for high-resolution imagery and related products in our industry."

ORBIMAGE expects to obtain formal approval of the settlement agreement from the U.S. Bankruptcy Court by mid-February.

The proposed settlement agreement will contain mutual releases of all claims among the parties, including ORBIMAGE and a significant majority of its bondholders and preferred stockholders, Orbital, and certain individual officers of Orbital. The releases will be effective upon launch of OrbView-3 by Orbital and payment by Orbital of $2.5 million to ORBIMAGE. In exchange, Orbital will receive new notes that are equal to the Orbital payment and rank pari passu with the new notes to be issued to ORBIMAGE's pre-bankruptcy unsecured creditors provided the final reorganization plan is consistent with the term sheet. If the final plan is inconsistent with the term sheet, Orbital will have priority in right of payment over the unsecured creditors.

As part of the settlement, if OrbView-3 is not launched by April 30, 2003 and checked out by July 31, 2003, Orbital will pay ORBIMAGE delay penalties. The term sheet further provides that Orbital will agree to defer certain payments from ORBIMAGE and forgive others.

Final testing of OrbView-3 is being completed, and the satellite is currently scheduled to be launched by Orbital on a Pegasus launch vehicle in April 2003. Checkout of the satellite is expected to take between three to four months.

About ORBIMAGE

ORBIMAGE is a leading global provider of Earth imagery products and services, with a planned constellation of four digital remote sensing satellites. The company currently operates the OrbView-1 atmospheric imaging satellite launched in 1995, the OrbView-2 ocean and land multispectral imaging satellite launched in 1997, and a worldwide integrated image receiving, processing and distribution network. Currently under development, ORBIMAGE's OrbView-3 high-resolution satellite will offer one-meter panchromatic and four-meter multispectral digital imagery on a global basis. ORBIMAGE is also the exclusive U.S. distributor of worldwide imagery from the planned Canadian RADARSAT-2 satellite.

More information about ORBIMAGE can be found at http://www.orbimage.com.

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