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corresp

December 1, 2004

VIA EDGAR CORRESPONDENCE

Larry Spirgel

Assistant Director

Division of Corporation Finance

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C. 20549-0305

    RE:

    Orbimage Inc.

    Form 10

    Filed September 13, 2004

    File No. 050933

Dear Mr. Spirgel:

          On behalf of my client, ORBIMAGE Inc. (“we,” “us,” “ORBIMAGE” or the “Company”),
this letter
sets forth the Company’s responses to the Staff’s comment letter dated October 26, 2004.
Commensurate with delivery of the letter, we are filing today Amendment No. 1 to our Form 10 under
cover of Form 10/A. For your convenience, I have set forth each of the Staff’s comments
immediately preceding the Company’s response, and have indicated where we have included additional
disclosure as part of our response in the Form 10/A. Under separate cover, we are providing you a
blackline copy of the Form 10/A that reflects changes to the Form 10 filed on September 13, 2004.

General

    1.

    We are aware of your October 4, 2004 press release, which states that your company has
received “commitments from investors to purchase 6.5 million units,” with each unit consisting
of one share of common stock and one warrant with a 5-year maturity and an exercise price of
$10 per share. The release further indicates that half of these units will be sold in a
private placement to be conducted in late October 2004, and the remaining units will be sold
via a public rights offering to existing Orbimage shareholders to take place in either late
2004 or early 2005. Since you have not yet filed a registration statement for covering those
securities transactions, tell us the consideration given to the requirements of § 5(c) of the
Securities Act of 1933 and the restrictions contemplated by Securities Act Rule 135. Please
also tell

    us the proposed price for the public rights offering and the identity of the proposed
investors in the private placement.

    Response:

    The commitments from investors disclosed in our October 4, 2004 press release are part
of our plan of financing for the NextView satellite program.

    During the bidding process for the NextView contract, the National Geospatial
Intelligence Agency (“NGA”) required both the Company and the competing bidder to
demonstrate a plan for committed financing by which the winner would be able to support
its work share requirements for the contract in the amount of $265 million. We worked
with our financial advisors to develop a plan that would provide for: (1) $65 million
of new common equity for the Company, in the form of 6.5 million common shares priced
at $10 per share with full warrant coverage exercisable at $10 per share (each share
and warrant, a “Unit”); (2) $45 million in cash flow generated from existing
operations; and (3) $155 million of additional debt that would rank no higher than pari
passu with our Senior Subordinated Notes due 2008.

    In developing this plan, we determined to offer initially 3.25 million Units to funds
known to us to be existing investors in our outstanding securities and who would be in
a position to purchase Units promptly following an award of the NextView contract.
This gave us the assurance that we could raise $32.5 million in gross proceeds to
commence work on the contract immediately. We further determined to offer the
remaining 3.25 million Units to all holders of our common stock pursuant to a
registered rights offering that would be backstopped on a firm commitment basis by the
original investors, thus assuring that we would raise $65 million in total as new
equity for NextView program support. Our intent was (and remains) to give our public
stockholders the opportunity to invest in our Units at the same price as our private
investors. We believed this plan of financing offered the best competitive advantage
for winning the NextView award.

    In early July 2004, we contacted private funds who we knew to be existing investors in
either our Senior Subordinated Notes due 2008, in our Senior Notes due 2008 (the Senior
Subordinated Notes and the Senior Notes together, the “Notes”), or in our common stock.
Many of these investors held both common stock of ORBIMAGE as well as our Senior Notes
or our Senior Subordinated Notes. We also believed, and received representations from
each investor, that they qualified as “accredited investors” for purposes of Rule
501(a) under the Securities Act of 1933, as amended (the “Securities Act”). We advised
these investors of the plan for financing and solicited their commitments to subscribe
to up to 6.5 million Units in total. Their commitments would require them to purchase
collectively no less than 3.25 million Units shortly after contract award, and up to
3.25 million additional Units as a backstop obligation should our rights offering be
undersubscribed by our shareholders. In exchange for entering into this obligation to
us, we offered these investors a commitment fee of an additional 1 million warrants,
exercisable at $10 per share, subject to our winning the contract. On July 27, 2004,
we received

    binding subscription letters from 15 investors fully committing to purchase up to 6.5
million Units as described. The subscription obligation of each investor was
conditioned solely upon execution and delivery of a contract between NGA and the
Company with respect to the NextView program, customary legal and financial due
diligence with respect to the NextView award, the absence of a material adverse change
in the Company’s business, and the execution of mutually agreeable definitive
documentation with respect to their investment in the Units.

    Our Senior Subordinated Notes due 2008 and our Senior Notes due 2008 both contain
covenants that require us to use cash from existing operations to pay down debt.
Because our plan of financing for the NextView program includes using $45 million of
our cash flows toward the program, it was necessary for us to obtain the consent of the
holders of at least a majority in principal value of each class of our Notes to waive
these covenants in support of our NextView bid. The investors who submitted the
binding subscription letters to us held more than 50% in outstanding principal value of
each class of our Notes, and accordingly consented to these covenant waivers as part of
their equity commitments. In exchange, we agreed to increase by 2% the principal
amount of each outstanding Note held by these investors were we to win the NextView
award. Although we had the requisite majority consent for the covenant waiver from
this group of investors, a provision in the Indenture governing our Senior Subordinated
Notes required that we offer this consent opportunity and the corresponding increase in
principal to each holder of our Senior Subordinated Notes. By late September we had
received consents from holders of 100% of our Notes prior to the award of the NextView
contract, and following the award, we increased the principal of all of our Notes by 2%

    We provided copies of the subscription letters to NGA on a confidential basis in
support of our bid and to demonstrate our ability to raise the necessary financing for
the NextView program. We also provided NGA with firm written commitments from other
investors to provide up to $155 million in debt financing at our option as and when
required for the NextView program.

    Following the contract award, the investors conducted their financial and legal due
diligence of the NextView contract to determine that the NextView program was
consistent with representations to them by the Company prior to their entry into the
binding subscription letters on July 27, 2004, when our bid was pending. On November
16, 2004, the investors entered into definitive Investment Agreements and a
Registration Rights Agreement with the Company and funded the initial $32.5 million of
their commitments. We have included a copy of the Registration Rights Agreement and a
form of the Investment Agreement entered into by the investors as Exhibits 4.5 and
10.11, respectively, to the Form 10/A.

    It is the Company’s view, after consultation with counsel, that the investors had
irrevocably committed to subscribe to the Company’s common stock and warrants upon
their delivery of their subscription letters to the Company on July 27, 2004, subject
only to customary conditions related to the award of the NextView contact, legal and
financial confirmation as to the terms of that contract (as to which the

    investors had no control, influence or participation), and completion of definitive
documentation. The Company has not commenced its rights offering and has no plans to
do so until the review of its Form 10 (and the just-filed Form 10/A) is completed by
the SEC Staff and the Company is able to prepare, file and have declared effective a
Form S-1 for registration of the rights offering of Units under the Securities Act.
While the Company may commence its rights offering prior to January 27, 2005, we note
that if the Company commences the offering after that date, the private placement of
the Units to the investors in July 2004 would clearly fall within the six-month “no
integration” safe harbor of Rule 502(a) under the Securities Act.

    We also note that, commensurate with obtaining binding commitments from the investors
as to the private placement of the Units, it was necessary to require the investors to
waive the debt paydown covenants in our Senior Subordinated Notes and our Senior Notes.
This waiver was an integral term of the solicitation to our investors because without
assurances that the covenants would be waived, the plan of financing would not be
adequate to meet the NGA requirements. A further integral term agreed to by the
investors was to backstop our rights offering following the NextView contract award.
By obtaining this commitment from our investors we were able to demonstrate to NGA’s
satisfaction that we had binding commitments to raise $65 million in new equity. In
short, the private placement of Units to our investors contained material terms unique
to that solicitation that will not be necessary to, nor included with, a registered
rights offering of Units to our common stockholders.

    For these reasons, it is the view of the Company and our counsel, Latham & Watkins LLP,
that the solicitation and sale of Units to our investors, both with respect to the
initial 3.25 million Units and any additional Units they are required to purchase as a
backstop commitment obligation should the rights offering be undersubscribed, is a
valid private placement under Section 4(2) and Rule 506 under the Securities Act.

    Our investors understand and have been so advised by their counsel, that shares of our
common stock acquired with their purchase of the Units, the warrants they have acquired
and the shares issuable upon the exercise of the warrants, have not been acquired in a
transaction registered under the Securities Act. Such securities may not be resold
except pursuant to a valid exemption from registration under the Securities Act, or in
compliance with the holding period, manner of sale and information requirements of Rule
144, or under an effective shelf registration statement for the resale of such
securities. This applies to all Units, shares of common stock, warrants and shares
issuable upon the exercise of warrants, whether or not acquired in the initial tranche
of 3.25 million Units sold to the investors, or as part of their backstop obligation
should the rights offering be undersubscribed.

The identities of the investors are as follows:

Triage Capital Management L.P., Triage Offshore Fund, Ltd. and Triage Capital
Management B, LP

CSS, LLC

Cold Springs LP

River Run Partners LP

River Run Fund Ltd.

Harbert Distressed Investment Master Fund, Ltd.

Redwood Master Fund Ltd.

Deephaven Distressed Opportunities Trading, Ltd.

Pandora Select Partners, L.P.

Whitebox Hedged High Yield Partners, L.P.

Credit Suisse First Boston LLC

Concordia Distressed Debt Fund LP

Concordia MAC29, Ltd.

Sagamore Hill Hub Fund Ltd.

Deutsche Bank Securities, Inc.

    Finally, the Company’s October 4, 2004 press release complied with the requirements of
Rule 135 under the Securities Act. The press release began with an italicized legend,
in satisfaction of Rule 135(1), stating, “The following statements do not constitute an
offer to sell or the solicitation of offers to buy any securities of ORBIMAGE Inc.” As
required by Rule 135(2) (including subsection (A) thereof), the press release contained
only the following information with respect to the rights offering: the name of the
issuer, the basic terms of the securities offered, the anticipated timing of the
offering, a brief statement of the manner and the purpose of the offering, the class of
security holders eligible to subscribe, the expected subscription price, the anticipated
record date, and the anticipated issuance date of the rights.

    The proposed price for each Unit (as correctly described in your comment) to be sold in
the rights offering is $10 per Unit.

Overview

    2.

    Describe the material terms of each of your material contracts, and file copies of each such
contract as an exhibit to the amended Form 10. This includes, but is not limited to, material
customers and suppliers. In particular, discuss and file the various agreements, covering:

    •

    The various ongoing relationships you have with affiliates of your predecessor and
those of Orbital Sciences, including those referenced in financial statement Note 4;

    •

    Your relationships with NGA and other government agencies; and

    •

    Ownership and use of your satellites, operational ground facilities, and executive
offices.

    Response:

    We have described the material terms of each material contract under Item
1¬Business¬Products and Services on page 3 of the Form 10/A, and under Recent
Developments on page 10. We have filed as exhibits (subject to requests for
confidential treatment of various terms) all material contracts with international
parties, including NTT Data Corporation (Exhibits 10.1 and 10.1.1), Korea Aerospace
Industries, Ltd. (Exhibits 10.2, 10.2.1, 10.2.2 and 10.2.3) and a client in Taiwan
(Exhibit 10.3).

    Orbital Sciences Corporation (“OSC”) completed the check-out of our OrbView-3 satellite
system earlier this year. We continue to use OSC for occasional consulting services on
a time and materials basis, but we no longer view our relationship with OSC as material
to our operations or financial condition.

    With respect to our contracts with NGA and other U.S. Government agencies, substantial
portions of those agreements are classified. Other portions of those contracts
incorporate or contain references to the Federal Acquisition Regulation. We
respectfully submit that, were we to file redacted copies of those contracts, the
copies would be significantly more confusing to investors than the summaries we have
provided in the text of our Form 10/A. We note further that our government
contracts are subject to termination for convenience, and as such may be terminated or
renegotiated at any time. We are mindful of the requirement that we disclose in a
timely manner any material modifications to, or termination of, any material contract,
including a material government contract, under Items 1.01 and 1.02 of Form 8-K, and we
hereby commit to do so.

    We own all of our satellites and material equipment at each of our ground stations,
free of any liens or other encumbrances. We do not consider any of our leases of real property to be
material.

    3.

    Define the term “photogrammetry” and similar technical terms used throughout your Form 10.

    Response:

    The Company has amended the disclosure in the Form 10 to define “photogrammetry” and
similar technical terms.

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