Press Release

ORBIMAGE Announces Terms of a Settlement Agreement

By SpaceRef Editor
January 22, 2003
Filed under , ,

(“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.


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

SpaceRef staff editor.