SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED
PURSUANT TO RULE 13(d)-2(a)
SPACEHAB, INCORPORATED
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(Name of Issuer)
Common Stock, No Par Value
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(Title of Class of Securities)
846243103
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(CUSIP Number)
General Counsel
DaimlerChrysler Aerospace AG
Postfacht 801109
81663 Munich
Germany
011-49-89-607-34277
with a copy to:
DELBERT D. SMITH, ESQ.
Dorsey & Whitney LLP
1001 Pennsylvania Avenue, NW
Suite 300 South
Washington, D.C. 20004
(202) 824-8889
--------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 5, 1999
---------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a Statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
Statement because of Rule 13d-1(b)(3) or (4), check the following box: [ ]
Page 1 of 6
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SCHEDULE 13D
CUSIP NO.: 846243103
(1) NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
DaimlerChrysler Aerospace AG
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
(3) SEC USE ONLY
(4) SOURCE OF FUNDS
WC
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Federal Republic of Germany
NUMBER OF (7) SOLE VOTING POWER 1,079,165*
SHARES
(8) SHARED VOTING POWER 0
BENEFICIALLY
(9) SOLE DISPOSITIVE POWER 1,079,165*
OWNED BY THE
(10) SHARED DISPOSITIVE POWER 0
REPORTING
PERSON
WITH:
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY THE REPORTING PERSON
1,079,165 shares of Common Stock of the Company.*
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.9%
(14) TYPE OF REPORTING PERSON
CO
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* See Item 5
Page 2 of 6
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Item 1. Security and Issuer.
This Schedule 13D relates to the Common Stock, no par value, of Spacehab,
Incorporated, a Washington corporation (the "Company"), which has its principal
executive offices at 300 D Street, SW, Suite 814, Washington, D.C. 20024.
Item 2. Identity and Background.
This Schedule 13D is filed by DaimlerChrysler Aerospace AG (the "Reporting
Person"), a stock corporation formed under the laws of the Federal Republic of
Germany. The Reporting Person is wholly owned by DaimlerChrysler
Luft-und-Raumfahrt Holding AG, a stock corporation organized under the laws of
the Federal Republic of Germany ("DCLR"). DCLR, in turn, is majority owned
(i.e., 93.83%) by DaimlerChrysler AG, a stock corporation organized under the
laws of the Federal Republic of Germany ("DC").
The Reporting Person is principally engaged in aerospace projects.
Attached as Appendix I is information concerning (i) the executive officers
and directors of the Reporting Person and (ii) each person controlling the
Reporting Person, as is required to be disclosed in response to Item 2 and
General Instruction C to Schedule 13D.
Neither the Reporting Person nor any of the persons referred to in Appendix
I has, during the last five years, been convicted in a criminal proceeding
(excluding traffic violations and similar misdemeanors) or been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, U.S. Federal or state securities laws or finding any
violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Considerations.
The Reporting Person entered into a Preferred Stock Purchase Agreement with
the Company, dated as of August 2,1999 (the "Stock Purchase Agreement") (Exhibit
A hereto).
Pursuant to the Stock Purchase Agreement, on August 5, 1999, the Reporting
Person acquired 975,000 shares (the "Initial Shares") of Series B Senior
Convertible Preferred Stock, no par value ("Preferred Stock"), for a purchase
price of $8,775,000, or $9 per share. In addition, the Stock Purchase Agreement
provides for the Reporting Person, subject to certain conditions (including the
shareholder approval described below), to purchase an additional 358,334 shares
(the "Subsequent Shares") of Preferred Stock for a purchase price of $3,225,006
($9 per shares) within five (5) business days of the approval by the Company's
shareholder of an amendment to the Company's Articles of Incorporation
increasing the authorized shares of Preferred Stock. Such shareholder approval
is to be sought at the meeting of shareholders scheduled to be held in October
1999.
Page 3 of 6
<PAGE>
Item 4. Purpose of Transaction.
The Initial Shares were acquired by the Reporting Person to become the
Company's leading strategic investor and in connection with a decision by the
Company and the Reporting Person to pursue strategic cooperative activities with
the Company in areas of mutual technological interest.
In connection with, and as a condition to the acquisition of the Initial
Shares, the Reporting Person and the Company entered into (i) a Registration
Rights Agreement, dated as of August 5, 1999 (Exhibit B hereto), and (ii) a
Strategic Collaboration Agreement, dated as of August 5, 1999 (Exhibit C
hereto).
Pursuant to the Stock Purchase Agreement and the Designation of Rights,
Terms and Preferences of Series B Senior Convertible Preferred Stock of the
Company as filed with the Secretary of State of the State of Washington on
August 2, 1999 (the "Certificate of Designations") (Exhibit D hereto), for as
long as the Reporting Person owns thirty percent (30%) of the Preferred Shares
purchased pursuant to the Agreement (inclusive of the Subsequent Shares) and/or
Common Stock of the Company issued upon conversion of said Preferred Shares, the
Reporting Person shall be entitled to designate one of the Company's directors.
Said director is to be a member of the Executive Committee of the Company's
Board of Directors. Mr. Joseph Kind, President of the Reporting Person's Space
Infrastructure Division, has been so designated by the Reporting Person and
joined the Company's Board on August 5, 1999.
Although the Reporting Person has not formulated any definitive plans with
respect to the shares of Common Stock of the Company owned by it, the Reporting
Person may from time to time acquire, or dispose of, Common Stock and/or other
securities of the Company if and when it deems it appropriate, subject to the
restrictions imposed by Section 16 of the Securities Exchange Act of 1934, as
amended (the "Act"). The Reporting Person may formulate other purposes, plans or
proposals relating to any of such securities of the Company to the extent deemed
advisable in light of market conditions, investment policies and other factors.
Except as described in this Item 4 and elsewhere in this Schedule 13D,
neither the Reporting Person nor any of the persons named on Appendix I to this
Schedule 13D has any plans or proposals which relate to or would result in: (a)
the acquisition by any person of additional securities of the Company, or the
disposition of securities of the Company; (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Company or any of its subsidiaries; its subsidiaries; (d) any change in the
present Board of Directors or management of the Company, including any plans or
proposals to change the number or term of directors or to fill any existing
vacancies on the Board; (e) any material change in the present capitalization or
dividend policy of the Company; (f) any other material change in the Company's
business or corporate structure; (g) changes in the Company's charter, By-Laws
or instruments corresponding thereto or other actions which may impede the
acquisition of control of the Company by any person; (h) causing a class of
securities of the Company to be delisted from a national securities exchange or
cease to be authorized to be quoted in an interdealer quotation system of a
registered national securities association; (i) causing a class of equity
securities of the Company to become eligible for termination of registration
pursuant to Section 12(g)(4) of the Act, as amended; or (j) any action similar
to those enumerated above.
Page 4 of 6
<PAGE>
Item 5. Interest in Securities of the Issuer.
The Reporting Person directly owns (a) 104,165 shares of Common Stock of
the Company (acquired in 1995) and (b) 975,000 shares of Preferred Stock, which
allow the Reporting Person to convert said Initial Shares into Common Stock as
described below. In addition, the Reporting Person is to purchase an additional
358,334 shares of Preferred Stock, as described in Item 3.
The Initial Shares (i.e., the 975,000 of Preferred Stock) currently are
convertible by the Reporting Person, without the payment of additional
consideration, into an equal number of shares of Common Stock. The conversion
mechanism, as set forth in the Certificate of Designation, provides for the
conversion ratio to be adjusted for stock splits, combinations, certain
dividends and distributions, reclassifications, merger or reorganization.
If the Reporting Person exercised its conversion rights with respect to the
Initial Shares within sixty days of the date of the Stock Purchase Agreement,
the Reporting Person would directly control a total of 1,079,165 shares (or
8.9%) of the issued and outstanding Common Stock of the Company. Such percentage
is based on the 11,205,310 shares of Common Stock reported as outstanding on
April 30, 1999 in the Company's Form 10-Q for the quarter ended March 31, 1999.
After purchase of the Subsequent Shares, which purchase is subject to
shareholder approval of an amendment to the Company's Articles of Incorporation
scheduled for October 1999, and assuming no changes to the Company's
capitalization, the Reporting Person would control, directly or indirectly
(i.e., through conversion of the Preferred Shares), a total of 1,437,334 shares
(or 11.5%) of the issued and outstanding Common Stock of the Company.
Other than the transactions described in this Schedule 13D, no transactions
in the shares of Common Stock of the Company have been effected in the past 60
days by the Reporting Person.
Item 6. Contracts, Arrangement, Understandings
or Relationships with Respect to Securities of Issuer.
Other than the transaction described in this Schedule 13D, no arrangements
currently exist between the Reporting Person and the Company with respect to the
securities of the Company.
Item 7. Material to be Filed as Exhibits.
Exhibit 1 Preferred Stock Purchase Agreement, dated as of August 2, 1999,
between the Reporting Person and the Company.
Exhibit 2 Registration Rights Agreement, dated as of August 5, 1999, between the
Reporting Person and the Company.
Exhibit 3 Strategic Collaboration Agreement, dated as of August 5, 1999, between
the Reporting Person and the Company.
Page 5 of 6
<PAGE>
Exhibit 4 Designation of Rights, Terms and Preferences of Series B Senior
Convertible Preferred Stock of the Company as filed with the Secretary
of State of the State of Washington on August 2, 1999.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: August 5, 1999
DAIMLERCHRYSLER AEROSPACE AG
By: /s/
-----------------------------------------
Name: Ulrich Goebel
Title: General Counsel
Page 6 of 6
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF THE REPORTING PERSON, AND DCLR AND DC
1. DIRECTORS AND EXECUTIVE OFFICERS OF THE REPORTING PERSON AND DCLR. The
following table sets forth the name and present principal occupation or
employment of each member of the Board of Management of each of the Reporting
Person and DCLR. Unless otherwise indicated, each such person is a citizen of
the Federal Republic of Germany and the business address of each such person is
Postfacht 80 11 69, 81663 Munich, Germany.
Present Principal
Name Office Occupation or Employment
Manfred Bischoff Chairman, Board of
Management
Werner Heinzman Member, Board of Defense Systems
Management
Dr. Gustav Humbert Member, Board of Civil Aircraft
Management
Dr. Hartwig Knitter Member, Board of Human Resources
Management
2. DIRECTORS AND EXECUTIVE OFFICERS OF DC. The following table sets forth
the name, business address and present principal occupation or employment of
each member of the Supervisory Board and Board of Management of DC. Unless
otherwise indicated, each such person is a citizen of the Federal Republic of
Germany and such person's business address is Postfacht 80 11 69, 81663 Munich,
Germany. Unless otherwise indicated, each occupation set forth opposite an
individual's name refers to employment with DC.
Present Principal
Name Office Occupation or Employment
Robert J. Eaton* Chairman, Board of
1000 Chrysler Drive Management
Auburn Hills, MI 48326-2912
U.S.A.
Jurgen E. Schrempp Chairman, Board of
Management
Sch.I-1
<PAGE>
Present Principal
Name Office Occupation or Employment
Manfred Bischoff Member, Board of Aerospace & Industrial
Management Non-Automotive
Eckhard Cordes Member, Board of Corporate Development &
Management IT-Management (incl.
responsibility for MTU
Diesel Engines and
Automotive Electronics)
Theodor R. Cunningham* Member, Board of Sales and Marketing
1000 Chrysler Drive Management Latin America (all
Auburn Hills, MI 48326-2912 automotive brands) and
U.S.A. Chrysler Truck
Operations
Thomas C. Gale* Member, Board of Product Strategy, Design
1000 Chrysler Drive Management and Passenger Car
Auburn Hills, MI 48326-2912 Oerations Chrysler,
U.S.A. Plymouth, Jeep and Dodge
Manfred Gentz Member, Board of Finance and Controlling
Management
James P. Holden* Member, Board of Brand Management
1000 Chrysler Drive Management Chrysler, Plymouth, Jeep
Auburn Hills, MI 48326-2912 and Dodge & Sales and
U.S.A. Marketing North America
(all automotive brands)
& Minivan Operations
Jurgen Hubbert Member, Board of Passenger Cars Mercedes-
Management Benz & Smart
Kurt J. Lauk Member, Board of Commercial Vehicles &
Management Brand Management
Commercial Vehicles
Klaus Mangold Member, Board of Services
Management
Thomas W. Sidlik* Member, Board of Procurement & Supply for
1000 Chrysler Drive Management the Chrysler, Plymouth,
Auburn Hills, MI 48326-2912 Jeep and Dodge brands &
U.S.A. Jeep Operations
Thomas T. Stallkamp* Member, Board of Passenger Cars & Trucks
1000 Chrysler Drive Management Chrysler, Plymouth, Jeep
Auburn Hills, MI 48326-2912 and Dodge
U.S.A.
Sch. I-2
<PAGE>
Present Principal
Name Office Occupation or Employment
Heiner Tropitzsch Member, Board of Human Resources & Labor
Management Relations Director
Gary C. Valade* Member, Board of Global Procurement and
1000 Chrysler Drive Management Supply
Auburn Hills, MI 48326-2912
U.S.A.
Klaus-Deiter Voehringer Member, Board of Research & Technology
Management
Dieter Zetsche Member, Board of Brand Management
Management Mercedes-Benz and Smart
& Sales and Marketing
Europe, Asia, Africa
Australia/Pacific (all
automotive brands)
*Citizen of the United States of America
Sch. I-3
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PREFERRED STOCK PURCHASE AGREEMENT
BETWEEN
SPACEHAB, INCORPORATED
AND
DAIMLERCHRYSLER AEROSPACE AG
Dated as of July 26, 1999
- --------------------------------------------------------------------------------
<PAGE>
PREFERRED STOCK PURCHASE AGREEMENT dated as of August 2, 1999 (together with all
exhibits and schedules, the "Purchase Agreement") by and among Spacehab,
Incorporated, a Washington corporation (the "Company", which term shall also
include successors and assigns), and DaimlerChrysler Aerospace AG, a German
corporation ("Purchaser", which term shall also include successors and assigns).
WI T N E S S E T H:
-------------------
In consideration of the mutual covenants and agreements set forth herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
SECTION 1. SALE AND PURCHASE
1.1 Issuance of Shares.
The Company will authorize the issuance (i) on the Initial Closing Date (as
hereinafter defined) of 975,000 shares (the "Initial Shares") of Series B Senior
Convertible Preferred Stock, $0.01 par value per share (the "Preferred Stock")
and (ii) on the Second Closing Date (as hereinafter defined) of an additional
358,334 shares (the "Subsequent Shares") of Preferred Stock. The Initial Shares
and the Subsequent Shares being acquired under this Purchase Agreement are
herein collectively referred to as the "Shares" and shall contain all the rights
and privileges as more fully set forth in the Designation of Rights, Terms and
Preferences to the Articles of Incorporation adopted by the Company in the form
attached hereto as Exhibit A (the "Certificate of Designations").
1.2 The Closings.
(a) The Company agrees to sell to Purchaser and, subject to the terms and
conditions hereof and in reliance upon the representations and warranties of the
Company contained herein or made pursuant hereto, Purchaser agrees to purchase
from the Company, the Initial Shares for the aggregate purchase price of
$8,775,000, or $9.00 per Share (the "Purchase Price"). No further payment shall
be required from the Purchaser for the Initial Shares.
(b) The closing of the purchase and sale of the Initial Shares purchased by
the Purchaser (the "Initial Closing") will take place at the offices of Dorsey &
Whitney LLP in Washington, D.C., at 10:00 A.M., Eastern Standard time, on August
5, 1999 or such other time and date as shall be mutually agreed to by the
Company and the Purchaser. Such time and date are herein referred to as the
"Initial Closing Date".
(c) The Company agrees to sell to Purchaser and, subject to the terms and
conditions hereof and in reliance upon the representations and warranties of the
Company contained herein or made pursuant hereto, Purchaser agrees to purchase
from the Company, the Subsequent Shares for the aggregate Purchase Price of
$3,225,006, or $9.00 per Share. No further payment shall be required from the
Purchaser for the Subsequent Shares.
(d) The closing of the purchase and sale of the Subsequent Shares purchased
by the Purchaser (the "Second Closing") will take place at the offices of Dorsey
& Whitney LLP in
<PAGE>
Washington, D.C., at 10:00 A.M., Eastern Standard time, on the day which is five
(5) Business Days after the shareholders of the Company approve the Amendment
(as hereinafter defined) or such other time and date as shall be mutually agreed
to by the Company and the Purchaser. Such time and date are herein referred to
as the "Second Closing Date".
(e) At each Closing (i) the Company will deliver to Purchaser a certificate
registered in Purchaser's name (or in any such other name as Purchaser may
request) evidencing the Shares being purchased at such Closing, and (ii) upon
Purchaser's receipt thereof, Purchaser will deliver to the Company by wire
transfer of immediately available funds an aggregate amount equal to the
Purchase Price of such Shares.
SECTION 2. DEFINITIONS
(a) For purposes of this Purchase Agreement, the following definitions
shall apply (such definitions to be equally applicable to both the singular and
plural forms of the terms defined):
"Affiliate," when used with respect to any Person, means any other Person
which, directly or indirectly, controls or is controlled by or is under common
control with such Person. For purposes of this definition, "control" (including
the correlative terms "controlling", "controlled by" and "under common control
with"), with respect to any Person, shall mean possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities or
by contract or otherwise. Notwithstanding the foregoing, for purposes of this
definition, neither the execution of this Purchase Agreement and the Other
Transaction Documents (or the existence of any other agreement or arrangement
between the Company and Purchaser), nor the holding of any of the Shares (or the
exercise of any such rights, including without limitation electing a director to
the Board of the Company), shall cause Purchaser (or such nominated director or
observer of any person related to such Person) to be deemed to be an "Affiliate"
of the Company or of any Subsidiary.
"Amendment" means the amendment to the Articles of Incorporation
contemplated by Section 8.2 below.
"Articles of Incorporation" means the Restated Articles of Incorporation of
the Company dated January 8, 1998, as amended by the Certificate of
Designations.
"Benefit Plan" means any Plan, existing on the Closing Date or established
prior thereto, to which contributions have at any time been made by the Company
or any Subsidiary, or any predecessor of any of the foregoing, or under which
any employee, former employee or director of the Company or any Subsidiary or
any beneficiary thereof is covered, is eligible for coverage or has benefit
rights.
"Board" means, with respect to any Person which is a corporation, a
business trust or other entity, the board of directors or other group, however
designated, which is charged with legal responsibility for the management of
such Person, or any committee of such board of directors or
2
<PAGE>
group, however designated, which is authorized to exercise the power of such
board or group in respect of the matter in question.
"Business Day" means any day, other than a Saturday, Sunday or legal
holiday, on which banks in New York, New York are open for business.
"Certificate of Designations" has the meaning set forth in Section 1.1
hereof.
"Closing"means the Initial Closing or the Subsequent Closing, as the case
may be.
"Closing Date" means the Initial Closing Date or the Subsequent Closing
Date, as the case may be.
"Code" means the United States Internal Revenue Code of 1986, as amended
from time to time, and the regulations and interpretations thereunder.
"Collaboration Agreement" has the meaning set forth in Section 3.1(b)
hereof.
"Commission" means the United States Securities and Exchange Commission and
any other similar or successor agency of the federal government administering
the Securities Act or the Exchange Act.
"Common Stock" of the Company or of a Subsidiary (as the case may be) shall
mean the Company's or the Subsidiary's (as the case may be) presently authorized
Common Stock, and any stock into which such Common Stock may hereafter be
changed or for which such Common Stock may be exchanged after giving effect to
the terms of such change or exchange (by way of reorganization,
recapitalization, merger, consolidation or otherwise) and shall also include any
Common Stock of the Company or of a Subsidiary (as the case may be) of any other
class hereafter authorized which is not preferred as to dividends or assets over
any other class of capital stock of the Company or a Subsidiary (as the case may
be) or which has ordinary voting power for the election of directors of the
Company or of a Subsidiary (as the case may be).
"Company" means Spacehab, Incorporated, a Washington corporation, and its
successors and assigns.
"Consents" has the meaning set forth in Section 5.4 hereof.
"Consolidated" or "consolidated" when used with reference to any financial
term in this Purchase Agreement, means the aggregate for the Company and its
Subsidiaries of the amounts signified by such term for all such Persons, with
intercompany items eliminated, and, with respect to net worth, after eliminating
the portion of net worth properly attributable to minority interests, if any, in
the capital of any such Person (other than in the capital of the Company) and
otherwise as determined in accordance with GAAP (except as otherwise expressly
provided herein).
"Disclosure Material" has the meaning set forth in Section 5.5(a) hereof.
3
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"Environmental Claim" means any and all administrative or judicial actions,
suits, orders, claims, liens, notices, notices of violations, investigations,
complaints, requests for information, proceedings, or other communication
(written or oral), whether criminal or civil, (collectively, "Claims") pursuant
to or relating to any applicable Environmental Law or any Environmental Permit
by any person (including but not limited to any Governmental Authority, private
person and citizens' group) based upon, alleging, asserting, or claiming any
actual or potential (i) violation of or liability under any Environmental Law,
(ii) violation of any Environmental Permit, or (iii) liability for investigatory
costs, cleanup costs, removal costs, remedial costs, response costs, natural
resource damages, property damage, personal injury, fines, or penalties arising
out of, based on, resulting from, or related to the presence, Release, or
threatened Release into the environment, of any Hazardous Materials at any
location, including but not limited to any off-Site location to which Hazardous
Materials or materials containing Hazardous Materials were sent for handling,
storage, treatment, or disposal.
"Environmental Laws" means all current and future, federal, state, local,
foreign, civil and criminal laws, statutes, ordinances, orders, codes,
Environmental Permits, rules, policies, and regulations and common law relating
to the protection of the environment and human health or relating to the
handling, use, generation, treatment, storage, transportation or disposal of
Hazardous Materials, including but not limited to the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. ss. 6901 et seq.; the Toxic Substances Control
Act, 15 U.S.C. ss. 2601 et seq.; the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. ss. 9601 et seq.; the Federal
Water Pollution Control Act, 33 U.S.C. ss. 1251 et seq.; the Clean Air Act, 42
U.S.C. ss. 7401 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C.
ss. 1801 et seq.; the Occupational Safety and Health Act, 29 U.S.C. ss. 651; the
Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. ss. 136 et seq. and
the Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et seq.; and all the state
analogues thereto, all as may be amended or superseded from time to time.
"Environmental Permits" means all permits, licenses, approvals,
authorizations or consents required by any Governmental Authority under any
applicable Environmental Law and includes any and all orders, consent orders or
binding agreements issued or entered into by a Governmental Authority under any
applicable Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"ERISA Affiliate" means any Person who is, or at any time was, a member of
a controlled group (within the meaning of Section 412(n)(6) of the Code) that
includes, or at any time included, the Company or any Subsidiary, or any
predecessor of any of the foregoing.
"Exchange Act" means the United States Securities Exchange Act of 1934, as
amended from time to time, and the rules, regulations and interpretations
thereunder.
"GAAP" means United States generally accepted accounting principles
consistently applied.
4
<PAGE>
"Governmental Authority" means any federal, state, local or county
governmental agency, department, board, commission, instrumentality or authority
(including regulatory authority) of the United States or any foreign nation or
any self regulatory organization having jurisdiction over the Company (or any
Subsidiary) or any of their respective assets or businesses.
"Hazardous Materials" means any petroleum, petroleum hydrocarbons,
petroleum waste or petroleum products, underground storage tanks, asbestos or
asbestos containing materials, pesticides, lead and lead containing materials,
urea formaldehyde insulation and polychlorinated biphenyls (PCBs), ionizing and
non-ionizing radiation (including radon and electromagnetic frequency
radiation); and any chemicals, materials, substances or wastes in any amount or
concentration which are now or hereafter become defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous wastes," "restricted hazardous wastes," "toxic substances,"
"toxic pollutants" or words of similar import, under any Environmental Law.
"Initial Closing" has the meaning set forth in Section 1.2(b) hereof.
"Initial Closing Date" has the meaning set forth in Section 1.2(b) hereof.
"Initial Shares" has the meaning set forth in Section 1.1 hereof.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or preference, priority or
other security interest of any kind or nature whatsoever (including without
limitation any conditional sale or other title retention agreement, any
financing lease having substantially the same effect as any of the foregoing,
any assignment or other conveyance of any right to receive income and any
assignment of receivables with recourse against the assignor), any filing of a
financing statement as debtor under the Uniform Commercial Code or any similar
statute and any agreement to give or make any of the foregoing.
"Material Adverse Effect" means any event, matter, condition or
circumstance which (i) has or could reasonably be expected to have a material
adverse effect on the assets, properties, liabilities, business, affairs,
results of operations, condition (financial or otherwise) or prospects of (x)
any Subsidiary of the Company which, as of the date any determination is made as
to the existence of a Material Adverse Effect, contributed twenty-five percent
(25%) of the Company's consolidated revenues for the prior fiscal year or (y)
the Company on a consolidated basis or (ii) has or could reasonably be expected
to have a material adverse effect on the ability of the Company to perform its
obligations under this Purchase Agreement or the Other Transaction Documents.
"Other Transaction Documents" means, collectively, the Certificate of
Designations, the Amendment, the Collaboration Agreement, the Registration
Rights Agreement and a side letter from Dr. Shelley A. Harrison of the Company
to Dr. Manfred Bischoff and Mr. Josef Kind of Purchaser (each as amended,
modified or supplemented from time to time) and any other documents, agreements,
instruments or certificates contemplated hereby or thereby.
5
<PAGE>
"Person" or "person" means an individual, corporation, company,
partnership, firm, association, joint venture, trust, unincorporated
organization, government, governmental body, agency, political subdivision or
other entity.
"Plan" means any bonus, incentive compensation, deferred compensation,
pension, profit sharing, retirement, stock purchase, stock option, stock
ownership, stock appreciation rights, phantom stock, leave of absence, layoff,
vacation, day or dependent care, legal services, cafeteria, life, health,
accident, disability, workmen's compensation or other insurance, severance,
separation or other employee benefit plan, practice, policy or arrangement of
any kind, whether written or oral, or whether for the benefit of a single
individual or more than one individual including, but not limited to, any
"employee benefit plan" within the meaning of Section 3(3) of ERISA.
"Purchase Agreement" has the meaning set forth in the first paragraph
hereof.
"Purchase Price" has the meaning set forth in Section 1.2(a) hereof.
"Purchaser" has the meaning set forth in the first paragraph hereof.
"Purchaser Director" has the meaning set forth in Section 8.1(a) hereof.
"Qualified Holder" has the meaning set forth in Section 7.1 (b) hereof.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing of a
Hazardous Material into the environment.
"Rule 144" means (i) Rule 144 under the Securities Act as such Rule is in
effect from time to time, and (ii) any successor rule, regulation or law, as in
effect from time to time.
"Rule 144A" means (i) Rule 144A under the Securities Act as such Rule is in
effect from time to time and (ii) any successor rule, regulation or law, as in
effect from time to time.
"Rule 144 Transaction" means a transfer of Common Stock (A) complying with
Rule 144 under the Securities Act as such Rule is in effect on the date of such
transfer (but not including a sale other than pursuant to a "brokers
transaction" as defined in clauses (1) and (2) of paragraph (g) of such Rule as
in effect on the date hereof) and (B) occurring at a time when Common Stock are
registered pursuant to Section 12 of the Exchange Act (or any successor to such
Section).
"Second Closing" has the meaning set forth in Section 1.2(d) hereof.
"Second Closing Date" has the meaning set forth in Section 1.2(d) hereof.
"Secretary of State" means the Secretary of State of the State of
Washington.
"Securities Act" means the United States Securities Act of 1933, as amended
from time to time, and the rules, regulations and interpretations thereunder.
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"SEC Documents" has the meaning set forth in Section 5.5(d) hereof.
"Series A Designation" means the Certificate of Designation of Rights,
Terms and Preferences of Series A Junior Participating Preferred Stock of the
Company dated March 26, 1999.
"Shares" has the meaning set forth in Section 1.1 hereof.
"Site" means any of the real properties currently or previously owned,
leased or operated by the Company, any Subsidiary, any predecessors of the
Company or any Subsidiary, or any entities previously owned by the Company or
any Subsidiary, including all soil, subsoil, surface waters and groundwater
thereat.
"Subsequent Shares" has the meaning set forth in Section 1.1 hereof.
"Subsidiary" with respect to any Person, means any corporation, association
or other entity controlled by such Person. For purposes of this definition,
"control" with respect to any Person, shall mean possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities or
by contract or otherwise. The term "Subsidiary" or "Subsidiaries" when used
herein without reference to any particular Person, means a Subsidiary or
Subsidiaries of the Company which may now or hereafter exist.
(b) For all purposes of this Purchase Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(i) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Purchase Agreement as a whole and not to any
particular Section or other subdivision;
(ii) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP (except as otherwise
expressly provided herein);
(iii) all computations provided for herein shall be made in accordance
with GAAP (except as otherwise expressly provided herein);
(iv) any uses of the masculine, feminine or neuter gender shall also
be deemed to include any other gender, as appropriate,
(v) all references herein to actions by the Company or any Subsidiary,
such as "create," "sell," "transfer," "dispose of," etc., means such
action, whether voluntary or involuntary, by operation of law or otherwise,
(vi) the exhibits and schedules to this Purchase Agreement shall be
deemed a part of this Purchase Agreement,
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(vii) each of the representations and warranties of the Company
contained in Section 5 hereof is separate and is not limited, qualified or
modified by the existence, wording or satisfaction of any other
representation or warranties of the Company in Section 5 or otherwise,
(viii) each of the covenants of the Company contained in Sections 7
and 8 hereof or otherwise contained in the Other Transaction Documents is
separate and is not limited or satisfied by the existence, wording or
satisfaction of any other covenant of the Company in Sections 7 or 8 or
otherwise; and
(ix) all references herein (in covenants or otherwise) to any
action(s) which are to be taken (or which are prohibited from being taken)
by any Person, the Company or any Subsidiary shall apply to such Person,
the Company or such Subsidiary, as the case may be, whether such action is
taken directly or indirectly.
SECTION 3. CONDITIONS TO CLOSING
The Purchaser's obligation to purchase the Shares hereunder at a Closing is
subject to satisfaction of the following conditions at or prior to such Closing
(any of which may be waived by the Purchaser).
3.1 Certificate of Designations; Amendment; Collaboration Agreement;
Registration Rights Agreement.
(a) The Articles of Incorporation of the Company shall have been duly
amended by the filing of the Certificate of Designations (and, in the case of
the Second Closing, by the Amendment).
(b) The Company and the Purchaser shall have entered into a Strategic
Collaboration Agreement relating to certain areas of mutual technological
interest dated the date hereof (the "Collaboration Agreement") in the form
attached hereto as Exhibit B.
(c) The Company and the Purchaser shall have entered into a Registration
Rights Agreement dated the date hereof ( the "Registration Rights Agreement") in
the form attached hereto as Exhibit C.
3.2 Accuracy of Representations and Warranties.
The representations and warranties of the Company herein or in any Other
Transaction Document or in any certificate or document delivered pursuant hereto
or thereto shall be correct and complete on and as of the Closing Date with the
same effect as though made on and as of the Closing Date (after giving effect to
the transactions contemplated by this Purchase Agreement).
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3.3 Compliance with Agreements.
The Company shall have performed and complied with all agreements,
covenants and conditions contained in this Purchase Agreement, the Other
Transaction Documents and any other document contemplated hereby or thereby
which are required to be performed or complied with by the Company on or before
the Closing Date.
3.4 Certificates.
Purchaser shall have received from the Company the following:
(a) a certificate dated the Closing Date and signed by the Chairman or
President and by the Secretary or Assistant Secretary of the Company, to the
effect set forth in Exhibit D-1 hereto certifying as to the fulfillment of the
conditions contained in this Section 3;
(b) a certificate dated the Closing Date and signed by the Chairman or
President and by the Secretary or Assistant Secretary of the Company, to the
effect set forth in Exhibit D-2 hereto, having attached thereto the following:
(i) certified copies of the resolutions duly adopted by the Board of
the Company authorizing the execution, delivery and performance of this
Purchase Agreement, the Other Transaction Documents, the issuance and sale
of the Shares and the consummation of all other transactions contemplated
by this Purchase Agreement and the Other Transaction Documents;
(ii) certified copies of the Articles of Incorporation of the Company
and each of its Subsidiaries, all amendments thereto and the By-laws of the
Company and each of its Subsidiaries, each as in effect at the Closing; and
(iii) certificates of good standing of the Company and each of its
Subsidiaries from their respective states of incorporation or organization.
3.5 Proceedings.
All corporate and other proceedings in connection with the transactions
contemplated by this Purchase Agreement and the Other Transaction Documents, and
all documents incident hereto and thereto, shall be in form and substance
satisfactory to Purchaser and its counsel, and Purchaser shall have received all
such originals or certified or other copies of such documents as Purchaser or
its counsel may reasonably request.
3.6 Legality: Governmental and Other Authorization.
The purchase of and payment for the Shares shall not be prohibited by any
law or governmental order, rule, ruling, regulation, release, interpretation or
opinion applicable to Purchaser and shall not subject Purchaser to any penalty,
tax, liability or other onerous condition. The Consents
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set forth in Schedule 5.4 hereto have been obtained or made by the Company and
shall be in full force and effect (and all such Consents shall have been
delivered to Purchaser).
3.7 No Change in Law, etc
No legislation, order, rule, ruling or regulation shall have been proposed,
enacted or made by or on behalf of any Governmental Authority, and no
legislation shall have been introduced in either House of Congress, and no
investigation by any Governmental Authority shall have been commenced or
threatened, and no action, suit or proceeding shall have been commenced before,
and no decision shall have been rendered by, any court, other Governmental
Authority or arbitrator, which, in any such case, in Purchaser's reasonable
judgment could adversely affect, restrain, prevent or change the transactions
contemplated by this Purchase Agreement or the Other Transaction Documents
(including without limitation the issuance of the Shares) or materially and
adversely affect the assets, properties, liabilities, business, affairs, results
of operations, condition (financial or otherwise) or prospects of the Company on
a consolidated basis.
3.8 Opinion of Counsel.
The Purchaser shall have received an opinion, dated the Closing Date and
addressed to Purchaser, of Dewey Ballantine LLP, counsel for the Company. Such
opinion shall be in form and substance satisfactory to Purchaser and shall be to
the effect set forth in Exhibit E hereto. The Company hereby instructs such
counsel to prepare and deliver such opinion to Purchaser pursuant to this
Section 2.8 and agrees that Purchaser may rely on the opinion so delivered.
3.9 Company Financial Condition; No Material Adverse Effect.
Since March 31, 1999, no event or events shall have occurred, and no
condition or conditions shall exist, which could have a Material Adverse Effect.
3.10 Other Documents and Opinions.
Purchaser shall have received such other documents and opinions, in form
and substance satisfactory to Purchaser and its counsel, relating to matters
incident to the transactions contemplated hereby, as Purchaser may reasonably
request.
3.11 Purchaser Director.
The Purchaser Director shall upon closing be elected to the Board of
Directors of the Company, and the Purchaser Director shall, upon closing, be
appointed as a member of the Executive Committee of the Board.
SECTION 4. COMPANY'S CONDITIONS TO CLOSING
The Company's obligations to issue and sell to Purchaser the Shares to be
issued by it on a Closing Date are subject to satisfaction of the following
conditions at Closing:
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4.1 Collaboration Agreement; Registration Rights Agreement.
(a) The Company and the Purchaser shall have entered into the Strategic
Collaboration Agreement.
(b) The Company and the Purchaser shall have entered into the Registration
Rights Agreement.
4.2 Accuracy of Representations and Warranties.
The representations and warranties of Purchaser in Section 6 hereof shall
be correct and complete on and as of the Closing Date with the same effect as
though made on and as of the Closing Date.
4.3 Compliance with Agreements.
The Purchaser shall have performed and complied with all agreements,
covenants and conditions contained in this Purchase Agreement, the Other
Transaction Documents and any other document contemplated hereby or thereby
which are required to be performed or complied with by the Purchaser on or
before the Closing Date.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Purchaser as follows as of the date
hereof and as of each Closing Date.
5.1 Corporate Existence, Power and Authority.
(a) The Company and each Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of its state or other
jurisdiction of incorporation. The Company and each Subsidiary is duly
qualified, licensed and authorized to do business and is in good standing in
each jurisdiction in which it owns or leases any material property or in which
the conduct of its business requires it to be so qualified or licensed.
(b) No proceeding has been commenced looking toward the dissolution or
merger of the Company or any Subsidiary. Except as contemplated by this
Agreement, no proceeding has been commenced looking toward the amendment of the
respective certificate or articles of incorporation of the Company or any
Subsidiary (as the case may be). Neither the Company nor any Subsidiary is in
violation in any respect of its certificate or articles of incorporation or
by-laws.
(c) The Company and each Subsidiary has all requisite power, authority
(corporate and other) and legal right to own or to hold under lease and to
operate the properties it owns or holds and to conduct its business as now being
conducted.
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(d) The Company has all requisite power, authority (corporate and other)
and legal right to execute, deliver, enter into, consummate and perform the
transactions contemplated by this Purchase Agreement and each Other Transaction
Document (including without limitation the issuance by the Company of the
Shares). The execution, delivery and performance by the Company of this Purchase
Agreement and each Other Transaction Document (including without limitation the
issuance of the Shares) have been duly authorized by all required corporate and
other actions. The Company has duly executed and delivered this Purchase
Agreement and each Other Transaction Document and, at Closing, will duly deliver
the Shares. This Purchase Agreement and each Other Transaction Document
constitute the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms.
5.2 Capitalization.
(a) The authorized capital stock of the Company consists of: (i) 30,000,000
shares of Common Stock, par value $0.01 per share; and (ii) 1,000,000 shares of
serial preferred stock, par value $0.01 per share, of which 25,000 shares were
designated Series A Junior Participating Preferred Stock pursuant to the Series
A Designation and, giving effect to the Certificate of Designations, 975,000 are
being designated Series B Senior Convertible Preferred Stock. Following filing
of the Amendment on or before the Second Closing Date, the number of shares of
authorized serial preferred stock will be increased to 2,500,000, of which
1,333,334 will be designated Series B Senior Convertible Preferred Stock. Item
(a) of Schedule 5.2 sets forth the number of shares of Common Stock issued and
outstanding on the Closing Date. At Closing, all of such shares of capital stock
will be duly authorized and validly issued and will be outstanding and fully
paid and non-assessable. No shares of preferred stock (other than the Shares
being issued to Purchaser) of the Company will be issued and outstanding on
either Closing Date. The Shares will, when issued, be duly authorized, validly
issued, fully paid and non-assessable. None of the shares of the Company's
capital stock or other securities which will be outstanding at a Closing will be
subject to preemptive rights or provide the holders thereof with any preemptive
rights with respect to any issuance of capital stock. On each Closing Date, no
other shares of capital stock of the Company will be outstanding or held in the
Company's treasury.
(b) Except as set forth in item (b) of Schedule 5.2, and except for Common
Stock issuable upon conversion of the Shares (the "underlying Common Stock"), no
shares of the Company's Common Stock are reserved for issuance by the Company.
The underlying Common Stock is duly authorized and reserved for issuance and,
upon conversion of the Shares will be validly issued, fully paid and
non-assessable, free and clear of any and all liens, claims and encumbrances,
and entitled to be traded on the National Association of Securities Dealers
Automated Quotation system National Market ("NASDAQ"), and the holders of such
underlying Common Stock shall be entitled to all rights and preferences accorded
to a holder of Common Stock.
(c) Except as set forth in item (c) of Schedule 5.2, there are no
outstanding options, warrants, subscriptions, rights, calls, convertible
securities or other agreements or plans or any provision of law under which the
Company may become obligated to issue, sell or transfer shares of its capital
stock or other securities.
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(d) Except as set forth in item (d) of Schedule 5.2, and except as provided
in the Registration Rights Agreement, there are no outstanding registration
rights with respect to any capital stock of the Company or of any Subsidiary.
(e) Except as provided in item (e) of Schedule 5.2, there are no
shareholder or voting agreements, voting trusts, proxies or other agreements or
understandings with respect to the voting of any capital stock of the Company or
any Subsidiary.
(f) Except as set forth in item (f) of Schedule 5.2, and except as provided
by the terms of the Certificate of Designations, there are no anti-dilution
protections or other adjustment provisions in existence with respect to any
outstanding capital stock of the Company.
(g) The Certificate of Designations has been duly adopted by the Company
and filed with the Secretary of State and is fully effective as an amendment to
the Company's Articles of Incorporation. The Amendment has been duly adopted by
the Board and, upon approval by the Company's shareholders and filing thereof
with the Secretary of State, will be fully effective as a further amendment to
the Company's Articles of Incorporation. The Initial Shares have, and upon
filing of the Amendment the Subsequent Shares will have, all the rights,
priorities and terms set forth in the Certificate of Designations.
5.3 Subsidiaries.
(a) The Company's only Subsidiaries on each Closing Date will be those set
forth on Schedule 5.3 hereto. Such Subsidiaries are owned by the Company as set
forth in Schedule 5.3 hereto. Neither the Company nor any Subsidiary owns any
equity or debt securities in any other Person.
(b) All outstanding capital stock of the Subsidiaries has been duly
authorized and validly issued and is fully paid and non-assessable and is owned
beneficially and of record by the Company free and clear of all Liens, options
or claims of any kind. There are no outstanding options, warrants,
subscriptions, rights, convertible securities or other agreements or plans under
which any Subsidiary may become obligated to issue or sell shares of its capital
stock or other securities.
5.4 No Defaults or Conflicts.
(a) Neither the Company nor any of its Subsidiaries is in material
violation of or material default in any respect under any indenture, agreement
or instrument to which it is a party or by which it or its properties may be
bound. Neither the Company nor any of its Subsidiaries is in default under any
order, writ, injunction, judgment or decree of any court or other Governmental
Authority or arbitrator(s) which default could have a Material Adverse Effect.
(b) The execution, delivery and performance by the Company of this
Purchase Agreement and each of the Other Transaction Documents to which it is a
party, and any of the transactions contemplated hereby or thereby (including
without limitation the issuance of the Shares as contemplated herein) does not
and will not (i) violate or conflict with, result in a breach of, or
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constitute a default under (with or without the giving of notice or the passage
of time or both) any provision of (A) the respective articles or certificate of
incorporation or by-laws of the Company or any of its Subsidiaries or (B) any
law, rule, regulation or order of any Governmental Authority, or any order,
judgment, writ, injunction, decree, award or other action of any court or
Governmental Authority or arbitrator(s), or (C) any material agreement,
mortgage, indenture, franchise, license, permit or other instrument applicable
to the Company or any of its Subsidiaries or any of their respective properties,
(ii) result in the creation of any Lien upon any of the Company's or any
Subsidiary's properties, assets or revenues, (iii) except as set forth in
Schedule 5.4 hereto, require the consent, waiver or approval of, or license,
permit, order or authorization of, or the declaration, registration,
qualification or filing with, any Governmental Authority or other Person
(collectively, "Consents"), or (iv) except as set forth in Schedule 5.4 hereto,
cause anti-dilution clauses of any outstanding securities to become operative or
give rise to any preemptive rights.
5.5 Disclosure Materials: Other Information.
(a) The Company has previously furnished to Purchaser the following
material (the "Disclosure Material"): (i) audited consolidated financial
statements of the Company and its Subsidiaries consisting of consolidated
balance sheets as at June 30, 1998 and June 30, 1997 and the related
consolidated statements of income, changes in shareholders' equity and cash
flows for the fiscal years ended June 30, 1998 and June 30, 1997 and the nine
months ended June 30, 1996 and the related notes thereto, all of which
statements have been certified by KPMG Peat Marwick LLP, independent certified
public accountants; (ii) unaudited consolidated financial statements of the
Company consisting of consolidated balance sheets as at March 31, 1999 and the
related consolidated statements of income, shareholders' equity and cash flows
for the three and nine-month periods then ended and the related notes thereto;
(iii) the other financial information described in Schedule 5.5(a)(iii); and
(iv) the Company's Form 10-K for the year ended June 30, 1998, Form 10-Q for the
fiscal quarters ended September 30, 1998, December 31, 1998 and March 31, 1999
and all other reports, schedules, forms, statements and other documents filed by
the Company with the Commission since June 30, 1998 (in each case, as amended
since the time of filing). The audited and unaudited financial statements
referred to in the preceding clauses (i) and (ii) above (including in each case
the related notes and schedules) fairly present the financial condition of the
Company and its Subsidiaries as of the respective dates thereof and the results
of the operations of the Company and its Subsidiaries for such periods and have
been prepared in accordance with GAAP, except that any such unaudited statements
may omit notes and may be subject to normal year-end adjustments.
(b) Since March 31, 1999, (i) the business of the Company and its
Subsidiaries has been conducted in the ordinary course and (ii) except as set
forth in Schedule 5.5, there has occurred no event that could reasonably be
expected to have a Material Adverse Effect.
(c) Neither the Company nor any Subsidiary is aware of any obligations or
liabilities, contingent or otherwise (including without limitation any tax
liabilities due or to become due), of the Company or of the Subsidiaries that
have not been fully disclosed and adequately provided for in the financial
statements referred to in Section 5.5(a) above or otherwise disclosed in
Schedule 5.5 hereto, other than liabilities arising in the ordinary course of
business subsequent to March 31, 1999, none of which would have a Material
Adverse Effect.
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(d) The Company has filed all required reports, schedules, forms,
statements and other documents with the Commission since June 30, 1998 (such
reports, schedules, forms, statements and other documents, together with all
registration statements filed by the Company or its Subsidiaries with the
Commission since June 30, 1998, in each case, as such documents have been
amended since the time of their filing) (all such documents referred to herein
as the "SEC Documents"). As of their respective filing dates (or, if amended, as
of the date of the filing of such amendment), the SEC Documents complied in all
material respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, and the rules and regulations of the Commission
promulgated thereunder applicable to such SEC Documents. None of the SEC
Documents as of such dates contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(e) The financial information referred to in Section 5.5(a)(iii) was
prepared in good faith and the Company reasonably believes that as of the
respective dates of their preparation there was a reasonable basis for such
financial information, subject to the assumptions made in their preparation and
the qualifications set forth therein, and nothing has come to the Company's
attention to cause it to believe that the financial information and assumptions
upon which it was predicated were unreasonable as of the respective preparation
dates thereof.
(f) Nothing has come to the attention of the Company or any Subsidiary that
would cause it to believe that any of the Disclosure Material contained or
contains a false or misleading statement of a material fact or omits to state
any material fact necessary in order to make the statements made in such
material, in light of the circumstances under which they were made, not
misleading, provided that the financial information items referred to in Section
5.5(a)(iii) have not been updated since their respective dates of preparation.
5.6 Litigation.
Except as set forth in Schedule 5.6, there is no action, suit, arbitration,
proceeding, investigation or claim pending or, to the knowledge of the Company
or its Subsidiaries, threatened, in law, equity or otherwise before any court,
administrative agency, Governmental Authority or arbitrator which either (i)
questions the validity of this Purchase Agreement or any of the Other
Transaction Documents or any action taken or to be taken pursuant hereto or
thereto, (ii) could have a Material Adverse Effect, or (iii) would be required
to be, but has not previously been, described in any filing by the Company with
the Commission. The Company has no knowledge of any unasserted claim that, if
asserted, could have a Material Adverse Effect.
5.7 Taxes.
The Company and each Subsidiary has duly and timely filed all federal,
state, local, foreign and other tax returns, statements, forms and reports, and
any other returns (including information returns), statements, forms and reports
with all Governmental Authorities required to be filed by it and all such
returns are complete and correct. The Company and each Subsidiary has paid or
caused to be paid all taxes, fees, assessments and other governmental charges or
levies (including interest
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and penalties) that are due and payable (whether or not shown on any such
return), except those which are being contested by it in good faith by
appropriate proceedings and in respect of which adequate reserves are being
maintained on its books in accordance with GAAP. The Company and each Subsidiary
has withheld and paid all taxes required to have been withheld and paid,
including taxes in connection with amounts paid or owing to any employee,
creditor, independent contractor or other third party. Neither the Company nor
any Subsidiary has any material liabilities for taxes other than those incurred
in the ordinary course of business and in respect of which adequate reserves are
being maintained by it in accordance with GAAP.
5.8 Employee Benefit Plans.
The transactions contemplated by this Agreement will not trigger or cause
to be made or provided in any way (either directly or indirectly) any payments,
or result in the acceleration or other increase in any vesting of rights or
other benefits of any kind whatsoever, under (i) any Benefit Plan (including but
not limited to the Spacehab, Incorporated Directors' Stock Option Plan or 1994
Stock Incentive Plan), and (ii) any employment, consulting, severance or similar
agreements or arrangements, whether formal or informal, whether written or oral.
5.9 Legal Compliance.
(a) The Company and each Subsidiary has complied with all applicable
constitutions, statutes, laws, rules, regulations, orders, licenses, judgments,
writs, injunctions, decrees, rulings, charges or demands, except to the extent
that the failure to so comply could not have a Material Adverse Effect.
(b) There are no adverse orders, judgments, writs, injunctions, decrees,
rulings, charges or demands of any court or administrative body, domestic or
foreign, or of any other Governmental Authority, outstanding against the Company
or any Subsidiary, which would cause a Material Adverse Effect.
5.10 Environmental Compliance.
(a) The Company and each Subsidiary has obtained and holds all necessary
Environmental Permits.
(b) The Company and each Subsidiary is in compliance in all material
respects with all terms, conditions and provisions of all applicable (i)
Environmental Permits, and (ii) Environmental Laws.
(c) There are no past, pending, or to the knowledge of the Company or any
Subsidiary, threatened Environmental Claims against the Company or any
Subsidiary, and neither the Company nor any Subsidiary is aware of any facts or
circumstances which could reasonably be expected to form the basis for any
Environmental Claim against the Company.
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(d) No Releases of Hazardous Materials have occurred at, from, in, to, on,
or under any Site and, except as set forth in Schedule 5.10 hereto, no Hazardous
Materials are present in, on, about or migrating to or from any Site that could
give rise to an Environmental Claim against the Company or any Subsidiary.
(e) Except as set forth in Schedule 5.10, neither the Company, any
Subsidiary, any predecessor of the Company or any Subsidiary, nor any entity
previously owned by the Company or any Subsidiary, has transported or arranged
for the treatment, storage, handling, disposal, or transportation of any
Hazardous Material to any off-Site location which could result in an
Environmental Claim against the Company or any Subsidiary.
(f) There are no Liens relating to an Environmental Claim on the assets or
property of the Company or any Subsidiary arising under or pursuant to any
Environmental Law on any Site and, to the Company's or any Subsidiary's
knowledge, there are no facts, circumstances, or conditions that could
reasonably be expected to restrict, encumber, or result in the imposition of
special conditions under any Environmental Law with respect to the ownership,
occupancy, development, use, or transferability of any Site.
(g) Except as set forth in Schedule 5.10, there are no (i) underground
storage tanks, active or abandoned, (ii) polychlorinated biphenyl containing
equipment, or (iii) asbestos containing material at any Site, which could result
in an Environmental Claim against the Company or any Subsidiary.
(h) Except as set forth in Schedule 5.10, there have been no environmental
investigations, studies, audits, tests, reviews or other analyses conducted by,
on behalf of, or which are in the possession of the Company or any Subsidiary
with respect to any Site.
5.11 Outstanding Securities.
All securities (as defined in Section 2(l) of the Securities Act) of the
Company have been offered, issued, sold and delivered in compliance with, or
pursuant to exemptions from, all applicable federal and state laws, and the
rules and regulations of federal and state regulatory bodies governing the
offering, issuance, sale and delivery of securities.
5.12 Permits, Filings, Licenses and Approvals: Intellectual Property and
Other Rights
The Company and each Subsidiary owns or possesses and holds free from
burdensome restrictions all franchises, licenses, permits, consents, approvals
and other authorizations (governmental or otherwise), patents, patent rights,
trademarks, trademark rights, tradenames, tradename rights and copyrights, and
all rights and privileges with respect to any of the foregoing, as are necessary
for the conduct of its business as now being conducted and as proposed to be
conducted. Except as set forth in Schedule 5.12, neither the Company nor any
Subsidiary is in default in any material respect under any of such franchises,
licenses, permits, consents, approvals or other authority. The rights of (and
use by) the Company and each Subsidiary with respect to such or any other
patents, patent rights, trademarks, trademark rights, tradenames, tradename
rights or copyrights
17
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do not, to the best knowledge of the Company, conflict with or infringe any
rights of others and no such claim of conflict or infringement has been asserted
by any Person.
5.13 Properties.
(a) Except as set forth in Schedule 5.13, the Company does not own, and no
Subsidiary owns, any real property. The Company and each Subsidiary has good and
marketable title to its assets and other properties (including tangible and
intangible personal property) free and clear of all Liens other than Liens
disclosed in the most recent financial statements of the Company referred to in
Section 5.5(a) and other Liens which could not result in a Material Adverse
Effect. Certain real property used by the Company or its Subsidiaries in the
conduct of their respective businesses is held under lease, as identified in
Schedule 5.13 hereto.
(b) The Company and each Subsidiary has the right to and does enjoy
peaceful and undisturbed possession under all leases pursuant to which it leases
property. Neither the Company nor any Subsidiary is aware of any pending or
threatened claim or action by any lessor of any such property to terminate any
such lease. All such leases are valid and in full force and effect, and none of
such leases is in default.
(c) All of the buildings, machinery, equipment and other tangible assets
necessary for the conduct of the Company's business are in good condition and
repair, ordinary wear and tear excepted, and are usable in the ordinary course
of business. There are no defects in such assets or other conditions relating
thereto which, in the aggregate, materially adversely affect the operation or
value of such assets. The Company owns, or leases under valid leases, all
buildings, machinery, equipment and other tangible assets necessary for the
conduct of its business.
5.14 Insurance Coverage.
There is in full force and effect one or more policies of insurance issued
by financially sound and reputable insurance companies with an A.M. Best rating
of A - or better, insuring (i) the Company and its Subsidiaries, their
properties and business and (ii) the directors and executive officers of the
Company and its Subsidiaries, against such losses and risks, and in such
amounts, as are customary in the case of corporations of established reputation
engaged in the same or similar businesses of similar size and similarly
situated. The Company and its Subsidiaries have not been refused any insurance
coverage, and existing insurance coverage of directors and executive officers of
the Company and its Subsidiaries sought or applied for, and the Company and its
Subsidiaries have no reason to believe that they will be unable to renew their
existing insurance coverage upon terms at least as favorable as those presently
in effect.
5.15 Key Employees: Labor Matters.
The Company and each Subsidiary has good relationships with its employees
and has not experienced and does not expect to experience any substantial labor
problems. Neither the Company nor any Subsidiary has any knowledge as to any
intentions of any key employee or any group of employees to leave the employ of
the Company or of any Subsidiary. No employee of the Company
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<PAGE>
or any Subsidiary is represented by a labor union or organization, no labor
union or organization has been certified or recognized as a representative of
any such employee, there are no pending or, to the knowledge of the Company,
threatened representation campaigns concerning union representation involving
any employee or efforts of any labor union or organization (or representatives
thereof) to organize any employees.
5.16 Information True and Accurate.
None of the representations or warranties made by the Company or any
Subsidiary in this Purchase Agreement (including all exhibits and schedules
hereto) or in any Other Transaction Document, as of the date of such
representations and warranties and as of each Closing Date, and none of the
statements contained in each exhibit, schedule or report or any other
information furnished by or on behalf of the Company or any Subsidiary to
Purchaser in connection with this Purchase Agreement or any Other Transaction
Document as of the respective dates of such materials and as of each Closing
Date, contains any untrue statement of a material fact or omits any material
fact required to be stated therein or necessary to make the statements made
therein, in the light of the circumstances under which they are made, not
misleading.
5.17 No Brokers or Finders.
None of the Company or its Subsidiaries has contracted for or otherwise
arranged for the services of any Person who has, or as a result of the
transactions contemplated herein will have, any right or valid claim against the
Company or any of its Subsidiaries or Purchaser for any commission, fee or other
compensation as a finder or broker, or in any similar capacity.
5.18 Interested Party Transactions.
Except as disclosed in the Company's most recent proxy statement filed with
the Commission or Schedule 5.18, no executive officer or director of the
Company, or shareholder who is known to the Company to own of record or
beneficially more than five percent (5%) of the Company's Common Stock, or
immediate family member of any of the foregoing, has or has had, or will have
either directly or indirectly, a material interest in any transaction, series of
similar transactions or currently proposed transaction or series of similar
transactions, to which the Company or any of its Subsidiaries is, was or is to
be a party, in which the amount involved exceeds $60,000, except for normal and
customary employment, severance and related matters.
5.19 Offering of Securities.
Neither the Company, nor any agent or other Person acting on its behalf
has, directly or indirectly, (i) offered any of the Shares (A) by any form of
general solicitation or general advertising (within the meaning of Regulation D
under the Securities Act) or (B) for sale to or solicited offers to buy any
thereof from, or otherwise approached or negotiated with respect thereto with,
any person other than Purchaser and other institutional investors each of which
the Company reasonably believed was an "accredited investor" within the meaning
of Regulation D under the Securities Act, or (ii) done or caused to be done (or
has omitted to do or to cause to be done) any act which act (or
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<PAGE>
which omission) would result in bringing the issuance or sale of the Shares
within the provisions of Section 5 of the Securities Act or the filing,
notification or reporting provisions of any state securities laws.
SECTION 6. REPRESENTATIONS OF THE PURCHASER
Purchaser hereby makes the representations and warranties to the Company
contained in this Section 6.
6.1 Corporate Power and Authority.
Purchaser is duly organized, validly existing and in good standing under
the laws of Germany and has all requisite power, authority and legal right to
execute, deliver, enter into, consummate and perform this Purchase Agreement and
each Other Transaction Document to which it is a party. The execution, delivery
and performance of this Purchase Agreement and each Other Transaction Document
(to the extent to which it is a party thereto) by Purchaser have been duly
authorized by all required corporate actions. Purchaser has duly executed and
delivered this Purchase Agreement and each Other Transaction Document to which
it is a party, and this Purchase Agreement and each Other Transaction Document
(to the extent to which it is a party thereto) constitutes the legal, valid and
binding obligation of Purchaser enforceable against Purchaser in accordance with
its terms, subject to bankruptcy, insolvency, reorganization, moratorium and
other similar laws relating to the rights of creditors generally.
6.2 Accredited Investor.
Purchaser is purchasing the Shares to be purchased by it for its own
account, for investment purposes and not with a present view to any distribution
thereof in violation of any applicable securities laws. It is understood that
the disposition of Purchaser's property shall at all times be within Purchaser's
control. If Purchaser should in the future decide to dispose of any of its
Shares, it is understood that it may do so but only in compliance with the
Securities Act and applicable securities laws. Purchaser is as of the date
hereof and will be as of each Closing Date an "accredited investor" as defined
in Rule 501 (a) under the Securities Act. Purchaser agrees that the Company may
place a customary Securities Act legend on the certificate(s) representing the
Shares.
SECTION 7. COVENANTS OF THE COMPANY REGARDING CERTAIN INFORMATION
7.1 Financial and Business Information.
(a) The Company will maintain, and cause each Subsidiary to maintain, a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in accordance
with GAAP.
(b) The Company will deliver the following to Purchaser, so long as
Purchaser continues to hold at least thirty percent (30%) of the Shares and/or
Common Stock issuable upon conversion of the Shares (in which event Purchaser
shall be deemed to be a "Qualified Holder"):
20
<PAGE>
(i) Budgets. As soon as practicable prior to the beginning of each
fiscal year of the Company, a budget for such fiscal year prepared on a
quarterly basis regarding the Company's operations and capital expenditures
on a consolidated basis and any material revisions or amendments made by
the Company to any budget delivered under this clause;
(ii) Reports. As soon as practicable, copies of any annual, special or
interim audit reports or management or comment letters with respect to the
Company or any of its Subsidiaries or their operations submitted to the
Company by independent public accountants;
(iii) Public Filings. As soon as practicable, copies of (x) all
financial statements, proxy materials or reports sent to the Company's or
any Subsidiary's stockholders, (y) any public or press releases and (z) all
reports, forms, registration statements or other documents filed with the
Commission pursuant to the Securities Act or the Exchange Act (which
filings pursuant to the Exchange Act the Company covenants and agrees shall
be made on a timely basis);
(iv) Board Materials. As soon as practicable and without duplication
of any of the above items, all materials furnished, from time to time, to
directors of the Company and any Subsidiary, as the case may be (including
without limitation all communications and information furnished to such
directors), and copies of minutes of meetings of the Board (and of any
executive committees) except to the extent that such materials have been
provided to any person appointed or designated by the Qualified Holder as a
director of the Company pursuant to this Agreement; provided, that the
Qualified Holder will not use any of such documents, reports or other
information for any reason or purpose other than to review the affairs and
financial condition of the Company in connection with such Qualified
Holder's investment in the Company and the compliance by the Company with
the terms and provisions of this Purchase Agreement and the Other
Transaction Documents and will hold in confidence, unless required to
disclose by judicial, regulatory or administrative process or by other
requirements of law, all documents, reports or other information obtained
from the Company, except to the extent that such documents, reports and
other information have been (i) previously known on a nonconfidential basis
by such Qualified Holder, (ii) in the public domain through no fault of
such Qualified Holder or (iii) subsequent lawfully acquired by such
Qualified Holder from sources other than the Company who, to the knowledge
of such Qualified Holder, had such documents, reports and other information
without any breach of any obligation of confidentiality; provided that any
such Qualified Holder may disclose such documents, reports and other
information to officers, directors, employees, accountants, counsel,
consultants, advisors and agents of such Qualified Holder in connection
with such Qualified Holder's review of such documents, reports or other
information so long as such Persons are informed by such Qualified Holder
to treat such information confidentially and not to use any of such
documents, reports or other information for any reason or purpose other
than in connection with such Qualified Holder's review;
(v) Other Materials. As soon as practicable and without duplication of
any of the above items, all materials furnished, from time to time, by or
on behalf of the Company to
21
<PAGE>
any holders of indebtedness or of capital stock of the Company which
relates to a default or prospective default thereunder or a proposed waiver
of any covenant; and
(vi) Requested Information. As soon as practicable, such other
information, as may reasonably be requested by the Qualified Holder,
regarding the assets, properties, liabilities, business, affairs, results
of operations, conditions (financial or otherwise) or prospects of the
Company or any Subsidiary.
All such financial statements shall be prepared in accordance with GAAP (except
for any change in accounting principles specified in the accompanying
certificate and except that any interim financial statements may omit notes and
may be subject to normal year-end adjustments) and shall be true and correct in
all material respects as of the date and for the periods stated therein.
(c) Without limiting the foregoing provisions of this Section 7.1, the
Company agrees that, if expressly requested in writing by the Qualified Holder,
it will not deliver to such holder (until otherwise instructed by such holder)
(x) any information or materials regarding the Company or any Subsidiary
(whether described in this Section 7.1 or otherwise) that is non-public and (y)
any information (whether or not included in clause (vi)) which such holder
specifies it does not want to receive.
7.2 Inspection.
The Company will permit Qualified Holder and any authorized representative
of Qualified Holder to visit and inspect any of the properties of the Company
and its Subsidiaries, to examine their respective books and records and to
discuss with their officers their books and records and the assets, properties,
liabilities, business, affairs, results of operations, condition (financial or
otherwise) or prospects of the Company or any Subsidiary, as may be reasonably
requested.
SECTION 8. OTHER COVENANTS OF THE COMPANY
The Company covenants and agrees as follows (for so long as Purchaser is a
Qualified Holder in the case of Sections 8.1, 8.2, 8.3 and 8.4):
8.1 Purchaser Director.
(a) Purchaser shall be entitled to designate one (1) individual to serve as
a member of the Board (such director referred to herein as the "Purchaser
Director"). The Purchaser Director shall be an employee, officer or director of
Purchaser or of an Affiliate of Purchaser. The Purchaser Director shall be
elected pursuant to Section 8.1(b) hereby. Upon the expiration of the term of
such Purchaser Director, a Purchaser Director shall be designated and elected
for successive terms pursuant to the provisions hereof.
(b) The Company agrees that it shall take all actions within its power to
facilitate the election of the Purchaser Director and to cause the Purchaser
Director to be appointed as a member of the Executive Committee of the Board,
including without limitation recommending the election
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<PAGE>
of such Purchaser Director as is designated by Purchaser from time to time. Such
election shall be pursuant to the provisions of the Certificate of Designations
while Shares remain outstanding. Following conversion of all of the Shares into
Common Stock, such election shall be by the stockholders of the Company at any
annual meeting or special meeting of stockholders (or, in the case of a vacancy
in the Purchaser Director, by election of the remaining directors). The Company
shall, if requested by Purchaser, take all actions within its power to cause the
removal, with or without cause, of any Purchaser Director.
(c) Any action taken by a Purchaser Director in his capacity as a director
of the Company (such as approving or authorizing transactions, adopting
resolutions, etc.) shall be considered to be an action taken by such director
solely in his capacity as a director and not in any other capacity and shall not
be construed as, considered to be or deemed to be an action taken by Purchaser
and such action shall not in any way bind, obligate, estop, waive the rights of
or otherwise affect in any way Purchaser (in its capacity as stockholder or
otherwise) or the director in any capacity other than as director of the
Company.
8.2 Amendment. The Company agrees that at the next annual stockholders
meeting of the Company (scheduled for October 1999) it will recommend to its
stockholders, in the proxy statement to be distributed in connection with such
meeting, that the Articles be amended to increase the authorized shares of
Preferred Stock by 1,500,000, of which 358,334 represent the Subsequent Shares.
The Company will use its best efforts to hold such meeting by October 31, 1999
and, on the Second Closing Date, will file Articles of Amendment (the
"Amendment") reflecting such amendment to the Articles of Incorporation.
8.3 Listing of Shares.
The Company will take all such actions as may be necessary, from time to
time, to maintain the listing of its Common Stock on The National Association of
Securities Dealers, Inc. Automated Quotation System (the "Nasdaq System").
8.4 Exchange Act Registration.
(a) The Company will maintain effective a registration statement
(containing such information and documents as the Commission shall specify and
otherwise complying with the Exchange Act), under Section 12(b) or Section
12(g), whichever is applicable, of the Exchange Act, with respect to the
Company's Common Stock, and the Company will file on time such information,
documents and reports as the Commission may require or prescribe for companies
whose stock has been registered pursuant to such Section 12(b) or Section 12(g),
whichever is applicable.
(b) The Company will make whatever other filings with the Commission, or
otherwise make generally available to the public such financial and other
information, as Purchaser may deem reasonably necessary or desirable in order to
enable Purchaser to be permitted to sell Common Stock issued or issuable upon
exercise of the Shares pursuant to the provisions of Rule 144.
23
<PAGE>
8.5 Delivery of Information for Rule 144A Transactions.
If Purchaser proposes to transfer any Shares or underlying Common Stock
pursuant to Rule 144A, the Company agrees to provide (upon the request of
Purchaser or the prospective transferee) to Purchaser and (if requested) to the
prospective transferee any financial or other information concerning the Company
and its Subsidiaries which is required to be delivered by Purchaser to any
transferee of such Shares or underlying Common Stock pursuant to Rule 144A.
8.6 Press Releases.
The Company shall submit any proposed press release, media alert, public
announcement or other similar notice related to this Purchase Agreement or any
Other Transaction Document, or any transaction contemplated hereby or thereby,
to Purchaser for its approval (which approval shall not be unreasonably
withheld) not less than three (3) Business Days (or such shorter period as may
be mandated for regulatory purposes) prior to sending any such release, alert,
announcement or notice. Purchaser shall provide the Company with comments with
respect thereto, which comments shall be duly considered (and not unreasonably
rejected) by the Company and its counsel.
8.7 Private Placement Status.
Neither the Company nor any agent nor other Person acting on the Company's
behalf will do or cause to be done (or will omit to do or to cause to be done)
any act which (or which omission) would result in bringing the issuance or sale
of the Shares or underlying Common Stock within the provisions of Section 5 of
the Securities Act or the filing, notification or reporting requirements of any
state securities law (other than in accordance with a registration and
qualification of Common Stock under the Registration Rights Agreement).
SECTION 9. AMENDMENT OF AGREEMENT
This Purchase Agreement may be amended or modified only by an instrument in
writing executed by the Company and Purchaser.
SECTION 10. REMEDIES
(a) The Company shall indemnify Purchaser and its officers, directors,
employees, agents and stockholders (collectively, the "Indemnitees") and hold
them harmless against any loss, liability, deficiency, damage, expense or cost
(including reasonable legal expenses) (collectively "Losses"), which any
Indemnitee may suffer, sustain or become subject to, directly or indirectly as a
result of (i) any misrepresentation in or breach any of the representations and
warranties of the Company contained in this Agreement or in any Other
Transaction Documents or (ii) any breach of, or failure to perform, any
agreement or covenant of the Company contained in this Agreement or any of the
Other Transaction Documents.
(b) In the case of a breach of any representation or warranty, or failure
to perform any of the agreements or covenants of the Company or any Subsidiary
contained in this Purchase
24
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Agreement or the Registration Rights Agreement the Purchaser may proceed to
protect and enforce its rights by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement or
covenant contained herein or therein or for an injunction against a violation of
any of the terms hereof or thereof or in aid of the exercise of any power
granted hereby or thereby or by law or for any other remedy (including without
limitation damages).
(c) No course of dealing and no delay on the part of any party to this
Purchase Agreement in exercising any rights or remedies shall operate as a
waiver thereof or otherwise prejudice such party's rights. No right or remedy
conferred hereby or by the Other Transaction Documents shall be exclusive of any
other right or remedy referred to herein or therein or available at law, in
equity, by statute or otherwise.
(d) Purchaser shall, in addition to other remedies provided by law, have
the right and remedy to have the provisions of this Purchase Agreement or the
Registration Rights Agreement specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any breach or threatened
breach of the provisions of this Purchase Agreement or the Registration Rights
Agreement will cause irreparable injury to Purchaser and that money damages will
not provide an adequate remedy. Nothing contained herein shall be construed as
prohibiting Purchaser from pursuing any other remedies available to such holder
for such breach or threatened breach, including without limitation the recovery
of damages from the Company.
SECTION 11. RESTRICTIONS ON TRANSFER
(a) Purchaser, by acceptance thereof, agrees that it will not sell or
otherwise dispose of any Shares or underlying Common Stock unless (i) such
Shares have been registered under the Securities Act and, to the extent
required, under any applicable state securities laws, (ii) such Shares or
underlying Common Stock are sold in accordance with the applicable requirements
and limitations of Rule 144 or Rule 144A or another exemption from registration
and any applicable state securities laws, (iii) if the Company has so requested,
the Company has been furnished with an opinion, in form and substance reasonably
satisfactory to the Company, from counsel to Purchaser to the effect that
registration under the Securities Act is not required for the transfer as
proposed (provided that such opinion may be conditioned upon the transferee's
assuming the obligations of a holder of Shares or underlying Common Stock under
this Section) or (iv) the Company has been furnished with a letter from the
Division of Corporate Finance of the Commission to the effect that such Division
would not recommend any action to the Commission if such proposed transfer were
effected without a registration statement effective under the Securities Act.
The Company agrees that within five (5) Business Days after receipt of any
opinion referred to in (iii) above, it will notify the holder supplying such
opinion whether such opinion is satisfactory to the Company's counsel.
(b) The Company may endorse on all Share (or underlying Common Stock)
certificates a legend stating or referring to the transfer restrictions
contained in paragraph (a) above provided, that no such legend shall be endorsed
on any certificates which, when issued, are no longer subject to the
restrictions of this Section 11; provided, further, that if a transfer is made
pursuant to Rule 144 or clause (i) or clause (iv) of paragraph (a) of this
Section 11 or if an opinion of counsel provided
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pursuant to clause (iii) of paragraph (a) concludes that the legend is no longer
necessary, the Company will deliver upon transfer certificates without such
legends.
SECTION 12. EXPENSES
(a) Except as otherwise provided herein, each party will bear its own
expenses in connection with the preparation, production and negotiation of this
Purchase Agreement and the Other Transaction Documents
(b) The Company agrees to pay, or to cause to be paid, all transfer,
recording, stock transfer, documentary, stamp and other similar taxes and fees
levied under the laws of the United States of America or any state or local
taxing authority thereof or therein in connection with the issuance, sale or
subsequent transfer of the Shares or underlying Common Stock (other than taxes
in connection with a transfer by a holder which are imposed on or measured by
the net income of such holder) and the execution and delivery of this Purchase
Agreement, any Other Transaction Documents and any other documents or
instruments contemplated hereby or thereby and any modification of this Purchase
Agreement, and Other Transaction Documents or any such other documents or
instruments and will hold Purchaser harmless without limitation as to time
against any and all liabilities with respect to all such taxes. The Company
shall file all necessary documentation and returns with respect to such taxes.
SECTION 13. NOTICES
All notices, demands and other communications to be given or delivered
under or by reason of the provisions of this Agreement will be in writing and
will be deemed to have been given when personally delivered or mailed by
facsimile, telecopy or other electronic transmission device. Notices, demands
and communications to Purchaser and the Company will, unless another address is
specified in writing, be sent to the address indicated below:
Notices to Purchaser with a copy to:
- -------------------- ---------------
DaimlerChrysler Aerospace AG Dorsey & Whitney LLP
Space Infrastructure 1001 Pennsylvania Avenue, N.W., Suite 300 South
1-5 Huenefeldstrasse Washington, D.C. 20004
D-28199 Bremen Attention: Delbert D. Smith, Esq.
Germany Fax No.: (202) 824-8990
Attention: Dr. Eckart Wolff Telephone: (202) 824-8800
Fax No.: 011-49-421-539-5000
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Notices to the Company with a copy to:
- ---------------------- ---------------
Spacehab, Incorporated Dewey Ballantine LLP
300 D Street, SW 1301 Avenue of the Americas
Suite 814 New York, NY 10019
Washington, DC 20024 Attention: Frank E. Morgan II, Esq.
Attention: David A. Rossi, President Fax No.: (212) 259-8326
Fax No.: (202) 488-3100
SECTION 14. MISCELLANEOUS
14.1. Governing Law.
This Purchase Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York (other than any conflict of laws rule
which might result in the application of the laws of any other jurisdiction).
14.2 Waiver of Jury Trial. EACH PARTY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
14.3. Survival.
All agreements, representations and warranties, covenants, and obligations
of the Company and any Subsidiary contained in this Purchase Agreement and the
Other Transaction Documents, or any document or certificate delivered pursuant
hereto or thereto shall survive, and shall continue in effect following, the
execution and delivery of this Purchase Agreement and the Other Transaction
Documents, the closings hereunder and thereunder, any investigation at any time
made by or on behalf of Purchaser or by any other Person, the issuance, sale and
delivery of the Shares, and any disposition thereof; provided, however, that the
survival of representations and warranties shall be limited to three (3) years
after the Closings hereunder. All statements contained in any certificate or
other document delivered by or on behalf of the Company pursuant hereto shall
constitute representations and warranties by the Company hereunder.
14.4 Binding Effect, Benefit and Assignment.
(a) Neither party hereto may assign any of its rights or delegate or
otherwise transfer any of its duties under this Agreement without the prior
written consent of the other party. This provision shall not apply in the event
of any reorganization of either party or merger or acquisition of a party with
or by a third party where the reorganized, merged or successor party is
qualified to perform the terms of this Agreement.
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(b) In addition to any assignment permitted by Section 14.4(a), Purchaser
may assign, in whole or in part, any or all of its rights (and/or obligations)
under this Purchase Agreement to any permitted transferee of any or all of its
Shares or underlying Common Stock, and (unless such assignment expressly
provides otherwise) any such assignment shall not diminish the rights Purchaser
would otherwise have under this Purchase Agreement or with respect to any
remaining Shares or underlying Common Stock held by Purchaser or with respect to
any indemnity rights (or with respect to any other provisions which expressly
provide that they survive any termination of this Purchase Agreement).
14.5. Severability.
Any provision hereof or of any Other Transaction Documents which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or thereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
14.6. Headings.
The headings and captions in this Purchase Agreement and the table of
contents are for convenience of reference only and shall not define, limit or
otherwise affect any of the terms or provisions hereof.
14.7. Counterparts.
This Purchase Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which such counterparts shall together constitute one and the same
instrument, and all signatures need not appear on any one counterpart.
14.8. Entire Agreement.
This Purchase Agreement and the Other Transaction Documents, together with
any further agreements entered into by Purchaser and the Company at the closing
hereunder contain the entire agreement among Purchaser and the Company, and
supersede any prior oral or written agreements, commitments, terms or
understandings, regarding the subject matter hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Purchase Agreement
to be duly executed as of the date first above written.
SPACEHAB, INCORPORATED
By:
-------------------
Name:
Title:
Accepted and agreed to as of the date first above written by the
undersigned Purchaser:
DAIMLERCHRYSLER
AEROSPACE AG
By:
-------------------
Name:
Title:
[Signature Page to Stock Purchase Agreement]
29
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Schedule 5.2(a)
---------------
Capitalization
Common Stock issued and outstanding on July 30, 1999: 11,230,902.
No preferred shares issued or outstanding at closing, however, 25,000 shares of
Series A Junior Preferred are reserved for issuance in connection with a
Stockholders' Rights Plan.
Sch. -1
<PAGE>
Schedule 5.2(b)
---------------
Shares reserved for issuance by Spacehab, Incorporated
(except common stock issuable upon conversion
of Series B Senior Convertible Preferred Stock)
(1) 250,000 shares of common stock are reserved for issuance upon exercise of
options granted under the Company's 1995 Directors' Stock Option Plan.
(2) 2,750,000 shares of common stock are reserved for issuance upon exercise of
options granted under the Company's 1994 Stock Incentive Plan as amended in
October 21, 1997.
(3) 1,500,000 shares of common stock are reserved for issuance upon exercise of
options granted under the Company's 1997 Employee Stock Purchase Plan.
(4) 270,000 shares of common stock are reserved for issuance upon exercise of
options to purchase such number, pursuant to Option Agreements, dated July
1, 1998, between the Company and each of Eugene A. Cernan, W.T. Short and
William A. Jackson. Each option agreement is for 90,000 shares and the
options vest on July 1, 1999. The exercise price for each option is $14.00
per share.
(5) Pursuant to consulting Agreements dated August 25, 1996 and August 15, 1997
Gordon S. Macklin has an option to purchase 20,000 shares of common stock.
(6) Warrants were issued to five individuals for a total of 53,000 shares of
Company common stock. The warrants were issued to the following individuals
on the following dates and expire on June 30, 2002:
Mark Heilman, issued June 30, 1997;
Brad M. Meslin, issued June 30, 1997;
Peter Malone, issued June 30, 1997;
Mark Oderman, issued June 30, 1997; and
Marc Vaucher, issued June 30, 1997.
They are exercisable at $9.00 per share.
(7) 4,642,201 shares of common stock are reserved for conversion of the
Company's 8% Subordinated Convertible Notes due 2007. Please see the
Indenture between the Company and First Union National Bank, dated October
15, 1997.
(8) Stock options which were issued to employees and former employees and were
not issued pursuant to one of the Company's option plans are outstanding
and exercisable for a total of 173,804 shares.
Sch.-2
<PAGE>
Schedule 5.2(c)
---------------
Outstanding options, warrant, subscriptions, rights, calls,
convertible agreements or plans or similar provisions of law
(1) 270,000 shares of common stock are reserved for issuance upon exercise of
options to purchase such number, pursuant to Option Agreements, dated July
1, 1998, between the Company and each of Eugene A. Cernan, W.T. Short and
William A. Jackson. Each option agreement is for 90,000 shares and the
options vest on July 1, 1999. The exercise price for each option is $14.00
per share.
(2) Pursuant to consulting Agreements dated August 25, 1996 and August 15, 1997
Gordon S. Macklin has an option to purchase 20,000 shares of common stock.
(3) Options to purchase 2,600,417 shares of common stock are granted and
outstanding and remain outstanding under the 1994 Incentive Stock Plan and
the 1995 Directors' Stock Option Plan.
(3) Participants in the Company's 1997 Employee Stock Purchase Plan have set
aside approximately $18,000 for the purchase of Company common stock on the
next purchase date under this plan, being September 30, 1999.
(5) Warrants were issued to five individuals for a total of 53,000 shares of
Company common stock. The warrants were issued to the following individuals
on the following dates and expire on June 30, 2002:
Mark Heilman, issued June 30, 1997;
Brad M. Meslin, issued June 30, 1997;
Peter Malone, issued June 30, 1997;
Mark Oderman, issued June 30, 1997; and
Marc Vaucher, issued June 30, 1997.
They are exercisable at $9.00 per share.
(6) 4,642,201 shares of common stock are reserved for conversion of the
Company's 8% Subordinated Convertible Notes due 2007. Please see the
Indenture between the Company and First Union National Bank, dated October
15, 1997.
(7) Stock options which were issued to employees and former employees and were
not issued pursuant to one of the Company's option plans are outstanding
and exercisable for a total of 173,804 shares.
Sch.-3
<PAGE>
Schedule 5.2(d)
---------------
Registration Rights and similar agreements
(1) Registration Rights Agreement dated October 15, 1997 between Spacehab,
Incorporated and Credit Suisse First Boston Corporation, CIBC Wood Gundy
Securities Corp. and Oppenheimer & Co., Inc., which is incorporated into
the Indenture dated October 15, 1997 between the Company and First Union
National Bank, Trustee for the Company's 8% Convertible Subordinated Notes
due 2007.
(2) Registration Rights for 1,899,998 shares of common stock in favor of Poly
Ventures, BEA, Chase Manhattan Capital Corporation, Mitsubishi, Mitsubishi
Heavy Industries, Ltd., Mitsubishi International Corporation, MTBC Finance,
Inc., Japan Airlines Company, Ltd., Shimizu Corporation, Toro Engineering
Corporation and certain other corporate stockholders. The registration
rights are described in the Company's Offering Circular for the 8%
Convertible Subordinated Notes due 2007.
(3) Registration rights incidental to warrants for up to 641,940 shares of
common stock have been granted. However, there are outstanding warrants for
only 53,000 shares which carry these registration rights. These warrants
are held by Mark Heilman, Brad M. Meslin, Peter Malone, Mark Oderman and
Marc Vaucher and are described in further detail on Schedules 5.2(b) and
5.2(c).
Sch.-4
<PAGE>
Schedule 5.2(e)
---------------
Shareholder agreements, voting agreements,
voting trusts, proxies or other agreements or
understandings regarding capital stock
None.
Sch.-5
<PAGE>
Schedule 5.2(f)
---------------
Anti-dilution protections and other adjustment provisions
except for Certificate of Designations
None.
Sch.-6
<PAGE>
Schedule 5.3
------------
Subsidiaries (related to representation
that no equity or debt held by Spacehab in any other entity)
(1) Johnson Engineering Corporation, a Colorado corporation.
(2) Astrotech Space Operations, Inc., a Delaware corporation.
Sch.-7
<PAGE>
Section 5.4(b)(iii)
-------------------
Required consents, waivers, consents,
approvals, licenses, permits, orders,
authorizations, declarations, registrations,
qualifications and filings
None.
Sch.-8
<PAGE>
Schedule 5.4(b)(iv)
-------------------
Anti-dilution clauses of outstanding securities
which become operative or give rise to
pre-emptive rights
None.
Sch.-9
<PAGE>
Schedule 5.5(a)(iii)
--------------------
Other financial information delivered
(1) February 21, 1999 financial outlook to the Board of Directors
(2) Financial Models dated May 6, 1999 (1:02 p.m. and 3:37 p.m.)
(3) Schedules A - Operating Plan, B - Balance Sheets, C - Cash Flow Analysis, D
- Cash Flow Analysis and Discounted Cash Flow Summary dated May 17, 1999
(1:21 p.m.)
(4) Report regarding marketing, dated May 20, 1999.
Sch.-10
<PAGE>
Schedule 5.5(b)
---------------
Events since March 31, 1999 which could
have Material Adverse Effect
None.
Sch.-11
<PAGE>
Schedule 5.5(c)
---------------
Obligations and liabilities,
contingent or otherwise, not fully disclosed
and provided for in financial statements
except for liabilities arising in the ordinary course
since March 31, 1999 which would not have
a Material Adverse Effect
(1) On April 30, 1999, the Company increased its indebtedness by drawing an
additional $1,000,000 under its credit facility with CIT Group. The terms
of this credit facility are described in the Loan and Security Agreement
dated July 14, 1997 between the Company and CIT Group/Equipment Financing.
Sch.-12
<PAGE>
Schedule 5.6
------------
Actions, suits, proceedings, investigations, claims
pending or threatened which
(i) question transaction documents;
(ii) could have a Material Adverse Effect, or
(iii) would be required to be filed with the SEC
and has not been so filed.
None.
Sch.-13
<PAGE>
Schedule 5.10(d)
----------------
Hazardous Materials affecting any site which
could give rise to an
Environmental Claim
Astrotech
- ---------
(1) Chemical Descriptions CAS Number
--------------------- ----------
Hydrazine anhydrous 302012
Monomethylhydrazine 60344
Nitrogen Tetroxide 10544-72-6
1. Limited quantities of Isopropyl Alcohol, Methyl Ethyl Ketone and other
solvents are maintained for cleaning purposes. Miscellaneous
janitorial and maintenance supplies including chemicals are also
utilized at the site. In addition, customers use hazardous materials
while occupying the facility. However, they bring such chemicals on
site and are responsible for removing and disposing of same. (Please
refer to attached chemical listing which identifies chemicals stored
at the site by Astrotech, as well as those chemicals stored by
customers.)
(2) Astrotech Space Operations, Inc., 1515 Chaffee Drive, Titusville, Florida
Facility
1. The facility contains electrical transformers, owned by the Florida
Power and Light Company, which the utility presumes contain between 50
and 500 parts per million of PCBs. FP&L is responsible for regulatory
compliance and maintenance of the facility. The facility contains
fluorescent light fixtures, which may contain ballasts (small
capacitors) containing PCBs.
2. The facility utilizes two 6000 gallon underground storage tanks to
receive and store washwater used during the cleaning and fueling of
satellites. The washwater is treated by air stripping to remove
volatile organic compounds prior to discharge to the tanks. The tanks
are periodically pumped out by a waste disposal contractor.
2. The facility contains ceiling tiles, floor tiles, roofing material,
and wallboard/joint compound which typically were manufactured in the
past, and continue to be manufactured using some asbestos fibers,
which are bound into a solid matrix and thus are not considered to be
friable. No asbestos survey has been done to determine whether, in
fact, such materials contain asbestos.
Sch.-14
<PAGE>
3. The facility generates waste oil, which may contain small
concentrations of hazardous substances, and uses various alcohols,
degreasing and cleaning agents, all of which are temporarily stored
onsite in 55 gallon drums.
4. In the normal course of operations at the Company's facilities,
customers of the Company and, less frequently, the Company itself,
bring onto the Company's property, store and use Hazardous Material,
usually in small quantities, the highest volumes of which pertain to
anhydrous hydrozine, momomethylhydraxine and nitrogen tetroxide.
Customers who bring chemicals onto the Company's Property are required
by the Company to remove any wastes or residuals when they leave.
(3) Astrotech Space Operations, Inc., Vandenberg Air Force Base, Santa Barbara
County, California
1. The facility contains one pad-mounted liquid dialectric
fluid-containing transformer which might contain PCBs, and it contains
fluorescent lighting fixtures, some of which may include ballasts
(capacitors) that contain PCBs.
2. The facility is situated on property owned by the United States and
administered by the United States Air Force. The land was previously
used by the Air Force for other purposes, which would have involved
the disposal or release of Hazardous Material. Air Force environmental
site assessments indicate an absence of Hazardous Material on the
property.
3. The facility contains ceiling tiles, floor tiles, roofing material,
and wallboard/joint compound and various types of mastic, which
typically were manufactured in the past, and continue to be
manufactured using some asbestos fibers, which are bound into a solid
matrix and thus are not considered to be friable. No asbestos survey
has been done to determine whether, in fact, such materials contain
asbestos.
4. In the normal course of operations at the Company's facilities,
customers of the Company, and, less frequently, the Company itself,
bring onto the Company's Property, store and use Hazardous Material,
usually in small quantities, the highest volumes of which pertain to
anhydrous hydrozine, momomethylhydraxine and nitrogen tetroxide.
Customers who bring chemicals onto the Company's Property are required
by the Company to remove any wastes or residuals when they leave. The
facility contains an internal fully enclosed concrete trench catchment
to which spills of hazardous substances that occur during satellite
preparation would drain.
(4) Spacehab, Incorporated Payload Processing Facility, 620 Magellan Drive,
Cape Canaveral, Florida
Sch.-15
<PAGE>
1. Hazardous Materials, as broadly defined in the Certificate, are stored
and used at the facility in small quantities. They are stored in a
separate flammable materials storage building. Various paints,
petroleum products and chemicals are used by the Company or brought
onto the site and are used by customers of the Company. Liquid
chemical wastes are stored for less than 90 days and are removed by a
large waste management contractor, Safety Kleen or another chemical
waste contractor.
2. The facility contains an electrical transformer, owned by the Florida
Power and Light Company, which the utility presumes contain between 50
and 500 parts per million of PCBs. FP&L is responsible for regulatory
compliance and maintenance of the transformer. The facility also
contains fluorescent light fixtures, which may contain ballasts (small
capacitors) containing PCBs.
3. The facility contains ceiling tiles, floor tiles, roofing material,
and wallboard/joint compound which typically were manufactured in the
past, and continue to be manufactured using some asbestos fibers,
which are bound into a solid matrix and thus are not considered to be
friable. No asbestos survey has been done to determine whether, in
fact, such materials contain asbestos.
Sch.-16
<PAGE>
Schedule 5.10(e)
----------------
Transportation, treatment, storage, handling, disposal
or transportation of Hazardous Material
which could result in Environmental Claim
Astrotech
- ---------
(1) Chemical Descriptions CAS Number
--------------------- ----------
Hydrazine anhydrous 302012
Monomethylhydrazine 60344
Nitrogen Tetroxide 10544-72-6
1. Limited quantities of Isopropyl Alcohol, Methyl Ethyl Ketone and other
solvents are maintained for cleaning purposes. Miscellaneous
janitorial and maintenance supplies including chemicals are also
utilized at the site. In addition, customers use hazardous materials
while occupying the facility. However, they bring such chemicals on
site and are responsible for removing and disposing of same. (Please
refer to attached chemical listing which identifies chemicals stored
at the site by Astrotech, as well as those chemicals stored by
customers.)
(2) Astrotech Space Operations, Inc., 1515 Chaffee Drive, Titusville, Florida
Facility
1. In the normal course of operations at the Company's facilities,
customers of the Company and, less frequently, the Company itself,
bring onto the Company's Property, store and use Hazardous Material,
usually in small quantities, the highest volumes of which pertain to
anhydrous hydrozine, momomethylhydraxine and nitrogen tetroxide.
Customers who bring chemicals onto the Company's Property are required
by the Company to remove any wastes or residuals when they leave.
(3) Astrotech Space Operations, Inc., Vandenberg Air Force Base, Santa Barbara
County, California
1. In the normal course of operations at the Company's facilities,
customers of the Company, and, less frequently, the Company itself,
bring onto the Company's Property, store and use Hazardous Material,
usually in small quantities, the highest volumes of which pertain to
anhydrous hydrozine, momomethylhydraxine and nitrogen tetroxide.
Customers who bring chemicals onto the Company's Property are required
by the Company to remove any wastes or residuals when they leave. The
facility contains an internal fully enclosed concrete trench catchment
to which spills of hazardous substances that occur during satellite
preparation would drain.
Sch.-17
<PAGE>
(4) Spacehab, Incorporated Payload Processing Facility, 620 Magellan Drive,
Cape Canaveral, Florida
1. Hazardous Materials are stored and used at the facility in small
quantities. They are stored in a separate flammable materials storage
building. Various paints, petroleum products and chemicals are used by
the Company or brought onto the site and are used by customers of the
Company. Liquid chemical wastes are stored for less than 90 days and
are removed by a large waste management contractor, Safety Kleen or
another chemical waste contractor.
Sch.-18
<PAGE>
Schedule 5.10(g)
----------------
Underground storage tanks, PCBs, asbestos
(1) Astrotech Space Operations, Inc., 1515 Chaffee Drive, Titusville, Florida
Facility
1. The facility contains electrical transformers, owned by the Florida
Power and Light Company, which the utility presumes contain between 50
and 500 parts per million of PCBs. FP&L is responsible for regulatory
compliance and maintenance of the facility. The facility contains
fluorescent light fixtures, which may contain ballasts (small
capacitors) containing PCBs.
2. The facility utilizes two 6000 gallon underground storage tanks to
receive and store washwater used during the cleaning and fueling of
satellites. The washwater is treated by air stripping to remove
volatile organic compounds prior to discharge to the tanks. The tanks
are periodically pumped out by a waste disposal contractor.
3. The facility contains ceiling tiles, floor tiles, roofing material,
and wallboard/joint compound which typically were manufactured in the
past, and continue to be manufactured using some asbestos fibers,
which are bound into a solid matrix and thus are not considered to be
friable. No asbestos survey has been done to determine whether, in
fact, such materials contain asbestos.
(2) Astrotech Space Operations, Inc., Vandenberg Air Force Base, Santa Barbara
County, California
1. The facility contains one pad-mounted liquid dialectric
fluid-containing transformer which might contain PCBs, and it contains
fluorescent lighting fixtures, some of which may include ballasts
(capacitors) that contain PCBs.
2. The facility contains ceiling tiles, floor tiles, roofing material,
and wallboard/joint compound and various types of mastic, which
typically were manufactured in the past, and continue to be
manufactured using some asbestos fibers, which are bound into a solid
matrix and thus are not considered to be friable. No asbestos survey
has been done to determine whether, in fact, such materials contain
asbestos.
(3) Spacehab, Incorporated Payload Processing Facility, 620 Magellan Drive,
Cape Canaveral, Florida
1. The facility contains an electrical transformer, owned by the Florida
Power and Light Company, which the utility presumes contain between 50
and 500 parts per million of PCBs. FP&L is responsible for regulatory
compliance and maintenance of the transformer. The facility also
contains fluorescent light fixtures, which may contain ballasts (small
capacitors) containing PCBs.
Sch.-19
<PAGE>
2. The facility contains ceiling tiles, floor tiles, roofing material,
and wallboard/joint compound which typically were manufactured in the
past, and continue to be manufactured using some asbestos fibers,
which are bound into a solid matrix and thus are not considered to be
friable. No asbestos survey has been done to determine whether, in
fact, such materials contain asbestos.
Sch.-20
<PAGE>
Schedule 5.10(h)
----------------
Environmental investigations, studies, audits, tests
reviews or other analyses
(1) Certificate Regarding Environmental Matters from Astrotech to the CIT
Group/Equipment Financing, Inc. See items 4(2) through (4) on Schedule
5.10(d)
(2) SPACEHAB, Incorporated: Phase I Environmental Site Assessment of Cape
Canaveral, FL Facility (7-9-97).
(3) Astrotech Space Operations, Inc.: Phase I Environmental Site Assessment of
Titusville, FL Facility (7-9-97).
(4) Astrotech Space Operations, Inc.: Phase I Environmental Site Assessment of
Vandenberg Air Force Base, CA Facilities (7-10-97).
Sch.-21
<PAGE>
Schedule 5.12
-------------
Defaults in a material respect under any franchise,
license, permit, consent, approval
or other authority
(1) By letter dated July 7, 1997 from J. Rick Tache of McDonnell Douglas to
William Dawson of Spacehab, Incorporated, the Company was advised of
McDonnell Douglas' objection to the Company's reference to certain
trademarks of McDonnell Douglas in promotional material. The Company no
longer refers to McDonnell Douglas in marketing materials and other
corporate communications.
Sch.-22
<PAGE>
Schedule 5.13
-------------
Owned and Leased Properties
Owned Property
- --------------
(1) Spacehab, Incorporated facility located at 620 Magellan Drive, Cape
Canaveral, FL 32920. The Company owns the building on this site but leases
the land upon which the building is constructed through the lease described
in item (9) of this schedule. This facility is subject to an Indenture,
dated July 14, 1997, in favor of CIT Group/Equipment Financing, Inc.
(2) Astrotech Space Operations, Inc. facility located at 1515 Chaffee Dr.,
Titusville, FL 32780.
(3) Astrotech Space Operations, Inc. facilities located at Vandenberg Air Force
Base. The Company owns four buildings on this site but leases the land upon
which the buildings are constructed through a lease with the Secretary of
the Air Force.
Leased Property
- ---------------
(1) Property at 555 Forge River Dr., Suite #150, Webster, TX under lease
between Johnson Engineering Corporation and CD UP LP a wholly-owned
subsidiary of Carey Diversified LLC, successor in interest to J.A. Billip
Development Corporation.
(2) Property at 18100 Upper Bay Road, Suite #208, Houston, TX under lease
between Johnson Engineering Corporation and Nassau Development Company,
dated February 19, 1998.
(3) Property at 1331 Gemini Ave, Houston, TX under Gemini Office Building
Lease, dated January 14, 1998, between Spacehab, Incorporated and KBS
Capital I/LP, L.P.
(4) Property at 6305 Ivy Lane, Suite #250, Greenbelt, MD under Capital Office
Park Lease, as amended, dated April 23, 1998 between Astrotech Space
Operations, Inc. and Eleventh Springhill Lake Associates L.L.L.P.
(5) Property at 920, 926 and 928 Gemini Ave., Houston, TX under Standard
Commercial Lease between Johnson Engineering Corporation and Lakeland
Development dated February 1, 1998.
(6) Property on Vandenberg Air Force Base under Office Building Lease
Agreement, dated October 6, 1993 between Astrotech Space Operations, Inc.
and the Secretary of the Air Force (Lease number SPCVAN - 2-94-001).
Sch.-23
<PAGE>
(7) Property at 300 D Street, SW, Suite #814, Washington, DC, dated December
16, 1998 between Spacehab, Incorporated and The Washington Design Center,
L.L.C.
(8) Property at 16850 Titan, Houston, TX under lease agreement dated August 1,
1999 between Johnson Engineering Corporation and Computer Extension
Systems, Inc.
(9) Property located at 620 Magellan Dr., Cape Canaveral, FL under a lease
between Spacehab, Incorporated and the Canaveral Port Authority. Spacehab,
Incorporated originally occupied this property under a Sublease with
Eastern American Teak Corporation, dated April 9, 1991. In August of 1997,
the Canaveral Port Authority consented to the assignment of that Sublease
from Eastern American Teak Corporation to Spacehab, Incorporated.
Sch.-24
<PAGE>
Schedule 5.18
-------------
Interested party transactions
(for officers, directors, 5 % percent holders;
involving amounts in excess of $60,000,
except for employment, severance and similar)
(1) On January 15, 1999, the Compensation Committee of the Board of Directors
of the Company revised the terms of employment for the Company's Chairman
and Chief Executive Officer, Shelley A. Harrison. The revised terms are set
forth in the Amended and Restated Employment and Non-Interference
Agreement, dated January 15, 1999 between the Company and Dr. Harrison and
in the Consulting Agreement dated January 15, 1999 between the Company and
Dr. Harrison.
(2) On January 15, 1999, the Compensation Committee of the Board of Directors
of the Company approved a revision to the terms of employment for the
Company's President, David Rossi. Upon the successful completion of a
transaction constituting a change in control of the Company, Mr. Rossi will
be entitled to receive a special bonus consisting of a lump sum payment
equal to three times the highest of the last three annual bonuses paid to
Mr. Rossi. This bonus shall be in addition to, and shall not reduce in any
way, the other payments and benefits to which Mr. Rossi may become entitled
under any other agreement, plan or otherwise.
Sch.-25
REGISTRATION RIGHTS AGREEMENT, dated as of August 5, 1999, between Spacehab,
Incorporated, a Washington corporation (the "Company"), and DaimlerChrysler
Aerospace AG, a German corporation ("Purchaser"). Capitalized terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the
Purchase Agreement dated August 2, 1999, between the Company and Purchaser (the
"Purchase Agreement").
W I T N E S S E T H:
--------------------
WHEREAS, pursuant to the Purchase Agreement, Purchaser is investing in
shares of Series B Convertible Preferred Stock, no par value (the "Preferred
Stock"), of the Company, which Preferred Stock is convertible into shares of
Common Stock, no par value ("Common Stock") of the Company, all on the terms and
subject to the conditions therein set forth; and
WHEREAS, the Purchase Agreement contemplates the execution and delivery of
this Agreement contemporaneously therewith;
NOW, THEREFORE, in connection with the Purchase Agreement and for the other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
Section 1. Definitions.
As used in this Agreement, the following terms shall have the following
meanings:
"Commission" means the Securities and Exchange Commission and any other
successor agency of the federal government administering the Securities Act or
the Exchange Act.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any similar successor federal statute, and the rules, regulations and
interpretations of the Commission thereunder, all as the same shall be in effect
at the time.
"Holder" means any person owning or having the right to acquire Registrable
Securities (as defined herein) or any assignee or transferee thereof in
accordance with the provisions of the Purchase Agreement.
"Person" or "person" means an individual, corporation, partnership,
association, joint venture, trust or unincorporated organization, or a
government, governmental body, court, or any agency or political subdivision
thereof.
"Registered", "registered" or "registration" refer to a registration
effected by preparing and filing a registration statement or similar document in
compliance with the Securities Act, and the declaration or ordering of
effectiveness of such registration statement or document.
"Registrable Securities" means (i) the shares of Common Stock obtainable
upon conversion of Preferred Stock, (ii) the shares of Common Stock outstanding
from any previous conversion of
<PAGE>
Preferred Stock and (iii) 104,165 shares of Common Stock owned by Purchaser
prior to its purchase of Preferred Stock. Once a Holder sells Registrable
Securities pursuant to a registration statement or Rule 144 under the Securities
Act, they shall no longer be deemed to be Registrable Securities.
"Registration Demand" shall mean a written notice (i) from one (1) or more
Holders stating that the Holder or Holders of a majority of the Registrable
Securities as of such date desire to sell all or part of such Registrable
Securities under circumstances requiring registration under the Securities Act
and requesting that the Company effect registration with respect to such
Registrable Securities.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar successor federal statute, and the rules, regulations and
interpretations of the Commission thereunder, all as the same shall be in effect
at the time.
Section 2. Registration Rights.
(a) Demand Registration Rights. At any time after the first anniversary of
the effective date of this Agreement and on or before the tenth anniversary
thereof, the Holders holding a majority of the Registrable Securities as of such
date may make a Registration Demand requesting registration under the Securities
Act of all or part of their Registrable Securities. The Company shall use its
best efforts to cause the Registrable Securities as to which registration is
requested in the Registration Demand to be promptly registered under the
Securities Act (and in any event, such registration shall be effected within one
hundred and eighty (180) days following receipt of a Registration Demand).
Within ten (10) days after receipt of any such Registration Demand, the Company
shall give written notice of the proposed registration to all other Holders of
Registrable Securities. All Holders of Registrable Securities shall have the
option to have all or part of their Registrable Securities included in any
registration under this Section 2(a). Any Holder may exercise such option by
delivering written notice of exercise to the Company within thirty (30) days
after receiving notice from the Company of the proposed registration. Any such
notice to the Company shall specify the number of Registrable Securities to be
included in such registration and the Company shall be obligated to include such
Registrable Securities in any such registration.
(b) Number of Demand Registrations. Subject to the terms and conditions
hereof, the Holders shall be entitled to request (and the Company shall be
required to effect) up to four (4) registrations under the Securities Act of all
or part of the Registrable Securities. For purposes hereof, if (i) the Company
withdraws a registration statement prior to the effectiveness thereof, (ii) the
sale of securities subject to a registration statement filed pursuant to any
Registration Demand is not consummated because of the failure of the Company to
comply with the terms of this Agreement, (iii) upon the consummation of a sale
of securities subject to a registration statement filed pursuant to any
Registration Demand, less than eighty percent (80%) of the securities registered
for sale or requested to be registered for sale thereunder are sold, or (iv) a
revocation notice has been delivered and expenses of the Company have been paid
as provided in Section 2.3 hereof, such registration
2
<PAGE>
statement shall not be counted as one of the registrations to which such Holders
are entitled under this Section 2(b).
(c) Right of Holders to Revoke Registration Demand. After the delivery of a
Registration Demand under this Section 2, at any time prior to the effective
date of the registration relating to such Registration Demand, the Holder or
Holders making such Registration Demand may revoke such request by providing
written notice of such revocation to the Company. Any such revocation shall
count as one (1) of the registrations to which such revoking Holder or Holders
are entitled under Section 2(b) hereof unless the revoking Holder or Holders pay
all of the Company's out-of-pocket expenses with respect to such registration
and qualification incurred to the date of the revocation notice. In any such
event, the registration statement initiated by the revoked Registration Demand
need not be filed.
(d) Right of Company to Delay or Postpone Registration. The Company may
delay or postpone the registration of Registrable Securities following a
Registration Demand for a period of not more than ninety (90) days after receipt
of such Registration Demand if the Company furnishes to each Holder of
Registrable Securities to be included in the applicable registration a copy of a
resolution of the Board of Directors certified by the Secretary of the Company
stating that (i) the Company is in possession of material non-public information
which, in the good faith judgment of the Board of Directors, it considers
prudent not to disclose in a registration statement, or (ii) such registration
would, in the good faith judgment of the Board of Directors, adversely affect a
material pending third party financing, reorganization, recapitalization,
merger, consolidation or similar transaction, or (iii) such registration would,
in the good faith judgment of the Board of Directors, have a Material Adverse
Effect on the Company's business or financial condition and, in each case,
stating the basis of such good faith judgment; provided, however, that the
Company during such delay or postponement may not file a registration statement
for securities to be issued and sold for its own account or that of anyone other
than the Holders.
(e) Selection of Underwriters. The managing underwriter and all other
underwriters participating in any underwritten public offering covered by a
Registration Demand shall be selected by the Holders of a majority of the shares
of Registrable Stock that participate in such registration, subject to the
approval of the Board of Directors of the Company, which shall not be
unreasonably withheld.
Section 3. Piggyback Registrations.
(a) Piggyback Registration. If at any time or from time to time, the
Company shall propose to register any Common Stock (or any warrants, units,
convertibles, rights or other securities related or linked to any shares of the
Common Stock) for public sale under the Securities Act, whether pursuant to a
demand by other security holders, a shelf registration on behalf of other
security holders (other than the existing effective shelf registration statement
for the Company's outstanding 8% Convertible Subordinated Notes due 2007) or
otherwise, then the Company shall give prompt written notice to all Holders of
the proposed registration (but in no event shall such
3
<PAGE>
notice be given later than forty-five (45) days before any such registration is
filed with the Commission). If any Holders so request within thirty (30) days
after receipt of such notice, the Company, subject to the provisions of Section
3(c) shall include in such registration the Registrable Securities held or to be
held by such Holders and requested to be included in such registration.
(b) Right of Company to Withdraw Registration. The Company may at any time
prior to the effectiveness of any such registration statement, in its sole
discretion and following notice to any Holder that has, or may, elect to
participate in such registration, abandon the proposed offering. In the event of
any such abandonment, the Company shall bear all reasonable expenses incurred by
such Holder in connection with such withdrawn registration statement.
(c) Underwriter's Clawback. Notwithstanding anything contained in Sections
3(a) and 3(b) hereof, the Company shall not be obligated to include such
Registrable Securities in such offering if the Company is advised in writing by
the managing underwriter or underwriters of such offering (with a copy to each
Holder) that such offering would in its or their good faith judgment be
materially adversely affected by such inclusion, in which case Holders shall be
entitled to participate in any such reduced number of Registrable Securities (if
any) which may be included in such registration in proportion to their relative
holdings of Registrable Securities. Notwithstanding the foregoing, any such
clawback shall be imposed pro rata on the Holders exercising piggyback rights
and other security holders.
Section 4. Expenses. Subject to the limitations contained in this Section 4
and except as otherwise specifically provided in this Agreement, the entire
costs and expenses of the registrations and qualifications pursuant to this
Agreement shall be borne by the Company. Such costs and expenses shall include,
without limitation, (i) the fees and expenses of counsel for the Company and of
its accountants, (ii) all other costs, fees and expenses of the Company incident
to the preparation, printing and filing under the Securities Act of the
registration statement and all amendments and supplements thereto, (iii) the
cost of furnishing copies of each preliminary prospectus, each final prospectus
and each amendment or supplement thereto to underwriters, dealers and other
purchasers of the Registrable Securities, (iv) the costs and expenses (including
fees and disbursements of counsel) incurred in connection with the qualification
of the Registrable Securities under the securities or Blue Sky laws of various
jurisdictions, and (v) the reasonable fees and expenses of one counsel
representing the Holders in connection with each registration of their
Registrable Securities. Such expenses shall not include any selling costs of the
Holders such as underwriters' discounts and selling commissions or any taxes
related to any sale of Registrable Securities by the Holders.
Section 5. Obligations of the Company. Without limiting any other provision
hereof, in connection with any registration of Registrable Securities pursuant
to Section 2 or 3 hereof, the Company shall (i) use its best efforts to prepare
and file with the Commission as soon as reasonably practicable a registration
statement with respect to the shares required to be so registered; (ii) use its
best efforts to register and qualify the shares covered by such registration
statement under the securities or Blue Sky Laws of such jurisdictions as any
Holder may reasonably request; (iii) take such other actions as are reasonable
and necessary to comply with the requirements of the Securities
4
<PAGE>
Act, the Exchange Act, and all applicable rules and regulations promulgated
thereunder; (iv) obtain the withdrawal of any order suspending the effectiveness
of the registration statement at the earliest possible time; and (v) provide a
transfer agent and registrar for the Registrable Securities not later than the
effective date of any registration statement.
Section 6. Procedures.
(a) In the case of each registration or qualification pursuant to this
Agreement, the Company will keep all Holders advised in writing as to the
initiation of proceedings for such registration and qualification and as to the
completion thereof, and will advise any such Holder, upon request, of the
progress of such proceedings.
(b) The Company will use its best efforts, at the Company's sole expense,
to keep each registration and qualification under this Agreement effective (and
in compliance with the Securities Act) by such action as may be necessary or
appropriate for a period of one hundred twenty (120) days after the effective
date of such registration statement, including, without limitation, the filing
of post-effective amendments and supplements to any registration statement or
prospectus necessary to keep the registration statement current and the further
qualification under any applicable Blue Sky or other state securities laws to
permit such sale or distribution, all as requested by the Holder or Holders.
(c) The Company shall immediately notify each Holder on whose behalf
Registrable Securities have been registered pursuant to this Agreement, at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement (including any preliminary
prospectus), as then in effect, includes an untrue statement of a material fact
or omits to state any material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the circumstances then
existing.
(d) In the case of an underwritten offering (and in the case of a
non-underwritten offering where the Company furnishes the same to any other
selling securityholder), the Company will furnish to the underwriter(s) and each
Holder on whose behalf Registrable Securities have been registered pursuant to
this Agreement a signed counterpart, addressed to the underwriter(s) (or in the
case of such non-underwritten offering, each Holder), of (i) an opinion of
counsel for the Company, dated the effective date of such registration
statement, and (ii) a so-called "cold comfort" letter signed by the independent
public accountants certifying the Company's financial statements included in
such registration statement, and such opinion of counsel and accountants' letter
shall cover substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of such
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to underwriters in connection with
underwritten public offerings of securities.
5
<PAGE>
(e) Without limiting any other provision hereof, in connection with any
registration of Registrable Securities under this Agreement, the Company will
comply with the Securities Act, the Exchange Act, all applicable rules and
regulations of the Commission, and all other applicable laws and will make
generally available to its securities holders, as soon as reasonably
practicable, an earnings statement covering a period of at least twelve (12)
months, beginning with the first month of the first fiscal quarter after the
effective date of such registration statement, which earnings statement shall
satisfy the provisions of Section 11 (a) of the Securities Act.
(f) In connection with any registration of Registrable Securities under
this Agreement, the Company will, if requested by underwriters for any
Registrable Securities included in such registration, enter into an underwriting
agreement with such underwriters for such offering, such agreement to contain
such representations and warranties by the Company and such other terms and
provisions as are customarily contained in underwriting agreements with respect
to secondary distributions, including, without limitation, provisions relating
to indemnification. The Holders on whose behalf Registrable Securities are to be
distributed by such underwriters shall be parties to any such underwriting
agreement, and the representations and warranties by, and the other agreements
on the part of, the Company to and for the benefit of such underwriters shall
also be made to and for the benefit of such Holders. Such underwriting agreement
shall also comply with Section 8 hereof.
(g) If the Company at any time proposes to register any of its securities
under the Securities Act, other than pursuant to a request made under Section 2
hereof, whether or not for sale for its own account, and such securities are to
be distributed by or through one or more underwriters, then the Company will use
its best efforts, if requested by any Holder requesting registration of
Registrable Securities in connection therewith pursuant to Section 3 hereof, to
arrange for such underwriters to include such Registrable Securities among the
securities to be distributed by or through such underwriters.
(h) In connection with the preparation and filing of each registration
statement registering Registrable Securities, the Company will give any Holders
on whose behalf such Registrable Securities are to be so registered, any
underwriters participating in any such disposition of Registrable Securities and
their respective counsel and accountants, the opportunity to participate in the
preparation of such registration statement, each prospectus included therein or
filed with the Commission, and each amendment thereof or supplement thereto, and
will give each of them such access to its books and records and such
opportunities to discuss the business of the Company with its officers, its
counsel and the independent public accountants who have certified its financial
statements, as shall be necessary, in the opinion of such Holders or such
underwriters or their respective counsel, in order to conduct a reasonable and
diligent investigation within the meaning of the Securities Act. Without
limiting the foregoing, each registration statement, prospectus, amendment,
supplement or any other document filed with respect to a registration under this
Agreement shall be subject to review and reasonable approval by the Holders
registering Registrable Securities in such registration and by their counsel.
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<PAGE>
Section 7. Furnishing of Documents. The Company will, at its sole expense,
furnish to each holder with respect to which registration has been effected,
such number of registration statements, prospectuses, offering circulars and
other documents incident to any registration or qualification referred to in
this Agreement as any such Holder from time to time may reasonably request.
Section 8. Indemnification of Holders.
(a) Subject to the conditions set forth below, in connection with any
registration of Registrable Securities pursuant hereto, the Company agrees to
indemnify and hold harmless each Holder and any underwriters, selling brokers,
dealer managers and similar securities industry professionals participating in a
distribution covered by a registration statement, their respective officers,
directors and affiliates (collectively, the "Indemnitees"):
(i) against any and all losses, claims, damages or liabilities, joint
or several, and expenses whatsoever arising out of or based upon
(including, but not limited to, any and all expense whatsoever reasonably
incurred by any of the Indemnities in investigating, preparing or defending
any litigation, commenced or threatened, or any claim whatsoever based upon
or arising out of) (A) any untrue or alleged untrue statement of a material
fact contained in any preliminary prospectus, or any amendment or
supplement thereto, the registration statement or the prospectus (each as
from time to time amended and supplemented), or in any application or other
document executed by the Company or based upon written information
furnished by the Company filed in any jurisdiction in order to qualify the
Common Stock under the securities laws thereof or otherwise incident to the
registration or the qualification of the Common Stock under the Securities
Act or any state securities laws applicable to the Company; or (B) the
omission or alleged omission from any item referred to in the preceding
clause of a material fact required to be stated therein or necessary to
make the statements therein not misleading; or (C) any other violation or
alleged violation of applicable federal or state law, rule or regulation
relating to action or inaction by the Company in connection with any such
registration or qualification; provided, however, that with respect to an
Indemnitee, the indemnity agreement contained herein shall not apply to any
loss, claim, damage, liability or action of or involving such Indemnitee
arising out of or based upon any untrue or alleged untrue statement or
omission made in reliance upon and in conformity with any information
furnished in writing to the Company by such Indemnitee expressly for use
therein; and
(ii) subject to the proviso contained in subsection (i) above, against
any and all losses, claims, damages and liabilities, joint or several, and
expenses whatsoever to the extent of the aggregate amount paid in
settlement of any litigation, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission or any such
alleged untrue statement or omission (including, but not limited to, any
and all expenses whatsoever reasonably incurred by the Indemnitees or their
respective counsel in investigating, preparing or defending against any
such litigation or claim) if such settlement
7
<PAGE>
is effected with the written consent of the Company which consent shall not be
unreasonably withheld.
(b) The Company will enter into an underwriting agreement and other
agreements with the underwriter or underwriters for any offering registered
under the Securities Act pursuant to this Agreement and with the Holders selling
Registrable Securities pursuant to such offering, and such underwriting
agreement and other agreements shall contain customary provisions with respect
to indemnification which shall, at a minimum, provide the indemnification set
forth above.
(c) The procedure for indemnification by the Company under this Section 8
shall be as follows:
(i) if any action or proceeding (including any governmental
investigation or inquiry) shall be brought or asserted against an
Indemnitee in respect of which indemnity may be sought from the Company,
such Indemnitee shall promptly notify the Company in writing, and the
Company shall be entitled to assume the defense thereof, including the
employment of counsel reasonably satisfactory to such Indemnitee and the
payment of all reasonable expenses related thereto (including those of such
counsel), by delivering written notice of its election to do so within
fifteen (15) days following receipt of notice from such Indemnitee;
provided that the failure of the Indemnitee to give the Company prompt
notice as provided herein shall not relieve the Company of its
indemnification obligations hereunder except to the extent, if any, the
Company shall have been prejudiced thereby;
(ii) such Indemnitee shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, but the fees
and expenses of such separate counsel shall be the expense of such
Indemnitee unless (A) the Company has agreed to pay such fees and expenses,
or (B) the Company has failed to assume the defense of such action or
proceeding by delivering the notice referred to in subsection (i) hereof,
or (C) the Company has failed to employ counsel reasonably satisfactory to
the Indemnitee within ten (10) days after the Company has elected to assume
the defense of such action pursuant to subsection (i) hereof, or if such
counsel has been employed by the Company, at any time after such
employment, such counsel ceases (in the reasonable judgment of the
Indemnitee) to be reasonably satisfactory, or (D) the named parties to any
such action or proceeding (including any impleaded parties) include both
such Indemnitee and the Company, and such Indemnitee shall have been
advised by counsel that there may be one or more legal defenses available
to such Indemnitee that are different from or additional to those available
to the Company creating a conflict of interest on the part of such counsel
to represent both parties; and
(iii) if such Indemnitee notifies the Company in writing that it
elects to employ separate counsel at the expense of the Company as
permitted by the provisions of the preceding subsection (ii), the Company
shall not have the right to assume the defense of such action or proceeding
on behalf of such Indemnitee. The foregoing notwithstanding, the
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Company shall not be liable for the reasonable fees and expenses of more
than one (1) separate firm of attorneys at any time for such Indemnitee and
any other Indemnitee (which firm shall be designated in writing by such
Indemnitee) in connection with any one such action or proceeding or
separate but substantially similar or related actions or proceedings in the
same jurisdiction arising out of the same general allegations or
circumstances.
Section 9. Indemnification of the Company.
Each Holder, in any registered offering pursuant hereto, agrees to
indemnify and hold harmless the Company, its officers and directors and agents
and each other person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act against any and all losses, liabilities,
claims, damages and expenses of the kind indemnified against by the Company
under Section 8 above based upon statements or omissions or alleged statements
or omissions, if any, made in any preliminary prospectus, the registration
statement or prospectus or any amendment or supplement thereof or any
application or other document in reliance upon, and in conformity with, written
information furnished by such Holder to the Company expressly for use in any
preliminary prospectus, the registration statement or prospectus or any
amendment or supplement thereof or in any such application or other document. In
no event, however, shall the liability hereunder of any Holder be greater than
the dollar amount of the proceeds received by such Holder upon sale of its
Registrable Securities in the offering giving rise to such indemnification
obligation. In case any action shall be brought against the Company, or any
other person so indemnified, in respect of which indemnity may be sought against
any Holder, such Holder shall have the rights and duties given to the Company,
and each person so indemnified shall have the rights and duties given to such
Holder, by the provisions of Section 8 above and the procedure for
indemnification shall be as provided for in Section 8.
Section 10. Reports Under Exchange Act. With a view to making available to
each Holder the benefits of Rule 144 promulgated under the Securities Act and
any other rule or regulation of the Commission that may at any time permit the
Holder to sell securities of the Company to the public without registration or
pursuant to a registration with the information required to be disclosed on Form
S-3, the Company agrees to use its best efforts to satisfy the requirements of
all such rules and regulations (including the requirements for public
information, registration under the Exchange Act and timely reporting to
the-Commission). The Company shall (whether or not it shall then be required to
do so) timely file such information, documents and reports as the Commission may
require or prescribe under Section 13 or 15(d) (whichever is applicable) of the
Exchange Act, for so long as the Company is subject to the reporting
requirements of either Section 13 or 15(d) of the Exchange Act. The Company
shall forthwith upon request furnish any Holder of applicable Registrable
Securities (i) a written statement by the Company that it has complied with such
reporting requirements, (ii) a copy of the most recent annual or quarterly
report of the Company and (iii) such other reports and documents filed by the
Company with the Commission as such Holder may reasonably request.
9
<PAGE>
Section 11. Obligations of Holders. It shall be a condition precedent to
the obligation of the Company to register any Registrable Securities pursuant
hereto that each Holder shall (i) furnish to the Company such information
regarding the Registrable Securities and the intended method of disposition
thereof and other information concerning such Holder as the Company shall
reasonably request and as shall be required in connection with the registration
statement to be filed by the Company, and (ii) agree to abide by such additional
customary terms affecting the proposed offering as may be reasonably requested
by the managing underwriter of such offering.
Section 12. Certain Limitations in Connection with Future Grants of
Registration Rights.
(a) From and after the date of this Agreement, the Company shall not enter
into any agreement with any holder or prospective holder of any of its Common
Stock providing for the granting to such holder of demand registration rights
unless such agreement includes provisions to the effect that (i) the Company
will give each Holder notice at least thirty (30) days prior to the filing of a
registration statement pursuant to the exercise of such rights and (ii) if any
Holder requests inclusion of Registrable Securities in such registration
statement within thirty (30) days after receipt of such notice, then such
Holder's Registrable Securities requested to be so included will be on a pari
passu basis in proportion to the securities each selling securityholder requests
to be registered if marketing factors require a limitation on the number of
securities to be included in such registration statement.
(b) From and after the date of this Agreement, the Company shall not enter
into any agreement with any holder or prospective holder of any of its Common
Stock providing for the granting to such holder of incidental or "piggyback'
registration rights unless such agreement includes provisions to the effect
that, in the case of a registered underwritten public offering of the Common
Stock to which Section 3 hereof applies, such agreement gives priority to the
Holders of Registrable Securities requested to be so included if marketing
factors require a limitation on the number of shares of Common Stock to be
included in such offering.
Section 13. Suspension of Sales. Upon receipt of written notice from the
Company that a registration statement, preliminary prospectus or prospectus
contains an untrue statement of a material fact or an omission to state a
material fact required to be stated in a registration statement or prospectus or
necessary to make the statements in a registration statement, prospectus or
preliminary prospectus not misleading, each Holder shall forthwith discontinue
disposition of Registrable Securities until such Holder has received copies of
the supplemented or amended prospectus, or until such Holder is advised in
writing by the registrant that the use of the prospectus may be resumed, and, if
so directed by the registrant, such Holder shall deliver to the registrant (at
the registrant's expense) all copies, other than permanent file copies then in
such Holder's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice.
Section 14. Holdback. Except for transfers made in transactions exempt from
the registration requirements under the Securities Act pursuant to Section 4(2)
thereof or pursuant to
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Rule 144A, upon the written request of the managing underwriter of any
underwritten offering of the Common Stock, neither the Company nor any Holder
shall sell, make any short sale of, loan, grant any option for the purchase of,
or otherwise dispose of any Common Stock (other than those included in such
registration) without the prior written consent of such managing underwriter for
a period (not to exceed thirty (30) days before the effective date and ninety
(90) days thereafter) that such managing underwriter reasonably determines is
necessary in order to effect the underwritten public offering. In addition, the
Company will cause each of the officers and directors of the registrant and any
future grantee of registration rights to enter into substantially similar
hold-back agreements with such managing underwriter covering at least the same
period.
Section 15. Changes in Registrable Securities or Preferred Stocks. If, and
as often as, there are any changes in the Registrable Securities or Preferred
Stock by way of stock split, stock dividend, combination or reclassification, or
through merger, consolidation, reorganization or recapitalization, or by any
other means, appropriate adjustment shall be made in the provisions of this
Agreement, as may be required, so that the rights and privileges granted hereby
shall continue with respect to the Registrable Securities as so changed.
Section 16. Specific Performance. The Company agrees and stipulates that
the remedies at law of the Holders in the event of any default by the Company in
the performance of or compliance with any of the terms of this Agreement are not
and will not be adequate and that, to the fullest extent permitted by law, such
terms may be specifically enforced by a decree for the specific performance of
any agreement contained herein or by an injunction against a violation of any of
the terms hereof or otherwise. Such remedies and all other remedies provided for
in this Agreement shall, however, be cumulative and not exclusive and shall be
in addition to any other remedies which a party may have under this Agreement or
otherwise.
Section 17. Notices. All notices, demands and other communications to be
given or delivered under or by reason of the provisions of this Agreement will
be in writing and will be deemed to have been given when personally delivered or
mailed by facsimile, telecopy or other electronic transmission device. Notices,
demands and communications to Purchaser and the Company will, unless another
address is specified in writing, be sent to the address indicated below:
Notices to Purchaser with a copy to:
- -------------------- ---------------
DaimlerChrysler Aerospace AG Dorsey & Whitney LLP
Space Infrastructure 1001 Pennsylvania Avenue, N.W., Suite 300 South
1-5 Huenefeldstrasse Washington, D.C. 20004
D-28199 Bremen Attention: Delbert D. Smith, Esq.
Germany Fax No.: (202) 824-8990
Attention: Dr. Eckart Wolff
Fax No.: 011-49-421-539-5000
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Notices to the Company with a copy to:
Spacehab, Incorporated Dewey Ballantine LLP
300 D Street, SW 1301 Avenue of the Americas
Suite 814 New York, NY 10019
Washington, DC 20024 Attention: Frank E. Morgan II, Esq.
Attention: President Fax No.: (212) 259-8326
Fax No.: (202) 488-3100
If to any other Holder of Registrable Securities, at the Holder's address set
forth in the records of the Company or at such other address as the Holder
thereof may otherwise indicate in a written notice delivered to the Company.
Section 18. Miscellaneous.
(a) Governing Law. This Purchase Agreement shall be governed by, and
construed in accordance with, the laws of the District of Columbia (other than
any conflict of laws rule which might result in the application of the laws of
any other jurisdiction).
(b) Waiver of Jury Trial. EACH PARTY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(c) Binding Obligation. By executing this Agreement, each of the
undersigned represents and warrants, severally and not jointly, that (i) it has
all necessary power and has taken all necessary action to make all the
provisions of the Agreement the valid and binding obligation of the undersigned
and enforceable in accordance with its terms; and (ii) the Agreement is a legal,
valid and binding obligation of the undersigned enforceable in accordance with
its terms.
(d) Binding Effect, Benefit and Assignment. The terms of this Agreement
shall be binding upon, and inure to the benefit of, the parties and their
respective successors and permitted assigns whether so expressed or not. The
Company may not assign any of its obligations, duties or rights under this
Agreement except with the consent of each Holder. In addition to any assignment
by operation of law, (i) each Holder may assign, in whole or in part, any or all
of its rights (and/or obligations) under this Agreement to any person, provided
that any such transfer or assignment is made in accordance with the Purchase
Agreement and (unless such assignment expressly provides otherwise) any such
assignment shall not diminish the rights the Holder would otherwise have under
this Agreement or with respect to any remaining Registrable Securities held by
the Holder.
(e) Remedies. The rights and remedies of each Holder hereunder shall be
independent of the rights and remedies of any other Holder, except as otherwise
expressly provided herein.
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Without limiting the foregoing, if the Company or any other person has any
rights, claims or defenses against any Holder, such rights, claims or defenses
shall not apply with respect to any other Holder, except as otherwise expressly
provided herein. The taking of any action or the failure to take any action by
any Holder with respect to the subject matter of this Agreement shall not, and
shall not be deemed to, constitute the taking of any action or the failure to
take any action by any other Holder, except as expressly set forth in this
Agreement.
(f) Amendment. Except as otherwise provided herein, the provisions of this
Agreement may be amended, and compliance with any covenant or provision herein
set forth may be omitted or waived, only if the Company has obtained the written
consent of the Holders of at least seventy-five percent (75%) of the Registrable
Securities then held by Holders. In each such case, the Company shall deliver
copies of such consent in writing to any Holders who did not execute the same.
Any waiver or consent may be given subject to satisfaction of conditions stated
therein and any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
(g) Severability. Any provision hereof which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof or thereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
(h) Headings. The headings and captions in this Agreement are for
convenience of reference only and shall not define, limit or otherwise affect
any of the terms or provisions hereof.
(i) Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument, and all signatures need not appear on any one counterpart.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
SPACEHAB, INCORPORATED
By:
------------------------
Name:
Title:
DAIMLERCHRYSLER AEROSPACE AG
By:
------------------------
Name:
Title:
[Signature Page to the Registration Rights Agreement]
14
STRATEGIC COLLABORATION AGREEMENT
THIS AGREEMENT is entered into this 5th day of August 1999, by and between
DaimlerChrysler Aerospace AG ("DASA"), a German corporation, acting through its
Space Infrastructure Division, with offices located at Hunefeldstrasse 1-5, PO
Box 105909, D-28059 Bremen, Germany ("DASA-RI"); and Spacehab, Inc., a
Washington State corporation with offices located at Suite 814, 300 D Street,
S.W., Washington, D.C. 20024, U.S.A. ("Spacehab") (DASA and Spacehab are
hereafter collectively referred to as the "parties").
W I T N E S S E T H:
--------------------
WHEREAS, Spacehab develops, owns and operates pressurized and unpressurized
modules and other equipment for use in transportation, research and logistical
support on board the United States National Aeronautics and Space Administration
("NASA") Space Shuttle; and
WHEREAS, DASA has been a shareholder in Spacehab since 1995; and
WHEREAS, pursuant to a Collaboration Agreement effective July 24, 1995 (the
"1995 Collaboration Agreement"), the parties have cooperated in the joint
pursuit of technological innovations and new business opportunities in the
environment of space; and
WHEREAS, DASA has, as of August 2, 1999, entered into a Preferred Stock
Purchase Agreement with Spacehab to increase its equity participation in
Spacehab to approximately Eleven and One-Half Percent (11.50%) through the
acquisition of shares in a new class of preferred stock (the "Spacehab Stock")
with the view to becoming Spacehab's leading strategic investor (the
"Subscription Agreement"); and
WHEREAS, the parties have agreed to update and expand the scope of their
Collaboration Agreement to reflect their current objectives in cooperating with
one another on technical and financial grounds;
WHEREAS, the parties envisage also cooperating beyond the scope defined in
this Collaboration Agreement and will be free to propose additional business
opportunities for one another's consideration;
NOW, THEREFORE, in consideration for the mutual covenants and undertakings
herein contained, the parties have agreed as follows:
<PAGE>
1. Exclusive Common Business Segments.
1.1 The parties agree, during the term hereof, to collaborate technically
and financially in the following areas of mutual technological interest (the
"Exclusive Common Business Segments"):
(a) Human space flight support and research services in the
unpressurized domain, including the development and procurement of required
flight and ground hardware, software and related payloads; and
(b) Acquisition, preparation and performance of sounding rocket
missions excluding, however, DASA-RI's ongoing TEXUS and MAXUS programs,
and
(c)Inflatable structures excluding, however, the Inflatable Reentry
and Descent Technology and its applications.
Schedule 1.1 attached hereto and hereby incorporated into and made a part of
this Agreement sets forth the parties' agreed areas of collaboration within the
Exclusive Common Business Segments as of the execution of this Agreement. It is
understood that, except as set forth in sections 1.5, 1.6 and 2.4.2 below, the
parties' engagement in new lines of business and activities falling within the
Exclusive Common Business Segments beyond those addressed in Schedule 1.1 will
hereafter be decided by the parties' Joint Management Committee pursuant to
article 2 of this Agreement. The parties intend to invest jointly in the
procurement of flight hardware and software as a prerequisite for offering to
NASA and other customers a commercial service based on these assets and will
also pursue other upcoming business opportunities in the Exclusive Common
Business Segments.
1.2 Within the framework of this cooperation, DASA will receive and
Spacehab will place with DASA-RI contracts (preferably development contracts)
with a value of at least $12 million (U.S.) by December 31, 2000 ("DASA-RI
Minimum Contract Award").
1.3 Based on their joint market assessment the parties agree that, during
calendar year 2001 at least $13 million (U.S.) and in calendar year 2002 and
beyond an average of $26 million in annual revenues (but in no event less than
an aggregate of $65 million by the end of 2003) will be generated for DASA-RI
through the parties' collaboration on the projects listed in Schedule 1.1 in
sales to NASA and other customers. These revenues will be generated from (1)
customer contracts for integration and operation services and (2) contracts for
the leasing of hardware procured through the parties' joint investments, if any
("DASA-RI
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Minimum Revenue"). These amounts are understood to be in addition to and not to
include the value of the Minimum Contract Award defined in section 1.2 above.
The average annual and aggregate revenues generated referred to in the first
sentence of this Section 1.3 are subject to unforeseen events beyond the control
of Spacehab which prevent Spacehab from generating such revenues despite
Spacehab's reasonable best efforts to do so. Spacehab will take reasonable best
efforts to minimize the effects of any unforeseen events.
1.4 Spacehab agrees that, except as permitted under section 2.4.2 below,
during the term of this Agreement, it will not enter into agreements with any
third parties for engagement in work or cooperation falling within the Exclusive
Common Business Segments.
1.5 The parties hereby agree that any program already in development by
either party shall be exempted from the terms of this Agreement.
1.6 DASA-RI shall be free to pursue new business opportunities falling
within the Exclusive Common Business Segments (except for projects in the United
States in competition with business opportunities pursued by Spacehab), whether
in Europe or elsewhere, without the participation of Spacehab.
1.7 The parties may agree to collaborate jointly with third parties in any
activities which they jointly undertake within the Exclusive Common Business
Segments.
2. Joint Management Committee.
2.1 The parties' collaboration in the Exclusive Common Business Segments
shall be conducted under the direction and oversight of a Joint Management
Committee (the "Committee").
2.2 The Committee shall be comprised of an equal number of representatives
designated by Spacehab and DASA-RI. They shall choose their own chairman and
adopt procedural rules of governance.
2.3 The Committee shall meet at least four times a year and shall operate
by consensus. Meetings may be held by telephone or other electronic means by
which all members present may hear and be heard by one another.
2.4 The Committee shall be responsible for overseeing the parties'
implementation of the schedule of agreed lines of business and activities set
forth in Schedule 1.1 hereto. To this end the Committee will periodically review
all active joint projects. Spacehab will and DASA-RI, at its sole election, may
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present to the Committee during the term hereof additional or new commercial
opportunities not reflected or addressed in Schedule 1.1 but falling within the
Exclusive Common Business Segments. Such presentation will include a preliminary
business plan indicating the key business parameters of the opportunity. Upon
receipt of such a plan the Committee will do one of the following at its next
meeting
(a) Agree that the candidate project shall be considered further, or
(b) Agree that the candidate project should not be pursued as a joint
project, in which case the proposing party shall be free to
pursue the opportunity independently, or
(c) Fail to agree on either (a) or (b), in which case section 2.4.2
below shall apply.
2.4.1 In the case a decision is taken under paragraph (a) above, a project
manager from each party shall be assigned to draft a business plan and a project
plan to include proposed investments by the parties, if any, as well as the
development and operations structures for implementation of the opportunity. The
Committee shall review the completed business and project plan and either
approve the project for implementation or decide that the project should not be
pursued as a joint project. The Committee may approve complete implementation,
or require the project manager to return for incremental authorization at
specific milestones in the project plan.
2.4.2 If the parties elect by consensus not to collaborate on any
commercial opportunity within the Exclusive Common Business Segments, the
proposing party shall be free to pursue such commercial opportunity
independently from the other party, including, should it so elect, jointly with
one or more third parties. If the parties, following repeated good faith
efforts, fail to reach consensus on how to respond to any commercial opportunity
within the Exclusive Common Business Segments presented to the Committee, the
Committee shall refer the issue for resolution by the Chairman of Spacehab and
the President of DASA-RI, who shall meet and confer on the subject in good
faith. If, following such effort to resolve a bona fide deadlock between the
parties, the parties are still unable to reach consensus on how to respond to
the commercial opportunity within the Exclusive Common Business Segments, then
either party shall be free to engage in the business opportunity in question.
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2.4.3 If the parties fail to reach consensus following the procedure
defined in section 2.4.2 above, and one party elects to pursue the business
opportunity on its own (the "Electing Party"), then the other party will have a
right of first refusal to match bona fide proposals by third parties for
subcontract work in pursuit of such opportunity for the Electing Party. Spacehab
expressly agrees in such instance, however, not to compete with a then existing
business opportunity of DASA-RI in Europe.
2.5 As part of its consideration of any commercial opportunity for the
parties falling within the Exclusive Common Business Segments (other than in
cases where one party is acting in the capacity of a contractor to the other
party pursuant to Section 2.4.3), the Committee shall determine the parties'
respective ownership of intellectual property interests (including rights to
seek patent protection) in any technology which will be jointly developed as a
result of the parties' engagement in the commercial opportunity.
2.6 In their consideration of new commercial opportunities within the
Exclusive Common Business Segments, the parties, acting through their appointed
members on the Committee, shall work in good faith to reach consensus. Neither
party shall be entitled to abstain from good faith consideration of any
opportunity brought before the Committee or deliberately to block or hinder the
achievement of consensus on any such issue.
2.7 The Spacehab Executive Committee and/or Board of Directors and the
DASA-RI Board of Management shall have final authority on behalf of the
respective party hereto to accept or reject any major determination by the Joint
Management Committee, including any financial commitments required from the
parties hereto, but they shall have no authority to alter or amend any such
determination.
3. Executive Exchange Program. Both parties agree to exchange executive
level representatives of their companies for a period of up to three months each
with the goal to achieve a better understanding of each other's structures and
processes and thereby to optimize the efficiency of the collaboration.
4. Term.
4.1 The term of this Agreement shall commence concurrently with the initial
closing of the Subscription Agreement and shall remain in effect until the
earliest of the following:
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(a) Following the expiration of four (4) years from the effective date of
this Agreement, upon sixty (60) days prior written notice of termination by
either party (the "Notifying Party") to the other (the "Notified Party");
(b) In the event that the DASA-RI Minimum Revenue is not met in 2001 or in
2002, upon thirty (30) days prior written notice of termination by DASA-RI to
Spacehab; or
(c) In the event that the DASA-RI Minimum Contract Award is not met by
December 31, 2000, upon thirty (30) days prior written notice of termination by
DASA-RI to Spacehab;
(d) Immediately upon written notice of termination by the Notifying Party
in the event the Notified Party breaches any material undertaking hereunder or
in the Subscription Agreement and fails to cure such breach within fifteen (15)
days of receiving notice of default from the Notifying Party.
4.2 In the event of termination of this Agreement pursuant to paragraph (a)
above, the parties will promptly enter into good faith negotiations to reach a
mutual agreement on the discontinuation of joint projects and they will ensure
that ongoing contractual obligations toward third parties are professionally
fulfilled or wound up.
5. Notices. Any notices provided under this Agreement shall be given in
writing by facsimile, confirmed by registered mail postage prepaid, and shall be
addressed as follows:
If to DASA-RI: DaimlerChrysler Aerospace AG
Space Infrastructure
1-5 Huenefeldstrasse
D-28199 Bremen
Germany
Attention: Dr. Eckart Wolff
Fax No.: 011-49-421-539-5000
If to Spacehab: Spacehab, Incorporated
300 D Street, S.W., Suite 814
Washington, DC 20024
Attention: President
Fax No.: (202) 488-3100
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Notices provided in accordance with the terms hereof shall be deemed received
upon receipt of the facsimile copy. Any changes to the foregoing addresses
during the term hereof shall be promptly notified to the other party in
accordance with the terms of this provision.
6. Dispute Resolution. All disputes arising out of the interpretation or
enforcement of this Agreement and not settled previously in an amicable manner
shall be finally settled under the rules of conciliation and arbitration of the
International Chamber of Commerce by a panel of three arbitrators appointed in
accordance with said rules. The arbitration proceeding shall take place in
London, England, or at such other location as the parties may mutually agree,
and shall be conducted in the English language. The arbitration award shall be
final and binding on the parties. Judgment upon the award may be entered in any
court of appropriate jurisdiction upon application by a party hereto.
7. Miscellaneous Provisions.
7.1 Governing Law. This Agreement, and any disputes arising under it, shall
be governed by the laws of the State of New York without reference to the
conflict of laws provisions thereof.
7.2 Assignment. Neither party hereto may assign any of its rights or
delegate or otherwise transfer any of its duties under this Agreement without
the prior written consent of the other party. This provision shall not apply in
the event of any reorganization of either party or merger or acquisition of a
party with or by a third party where the reorganized, merged or successor party
is qualified to perform the terms of this Agreement.
7.3 Waiver. The waiver of any right hereunder shall not be deemed to
constitute a waiver of such right on any future occasion.
7.4 Entire Agreement. This Agreement constitutes the full understanding of
the parties regarding the subject matter hereof and supersedes all previous
representations, communications and understandings of the parties, whether
written or oral, including, but not limited to, the 1995 Collaboration
Agreement, provided, however, that the Subscription Agreement, and the
Non-Disclosure Agreement executed by the parties on March 30, 1999, shall
survive in full force and effect in accordance with their terms.
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IN WITNESS WHEREOF, the parties hereto have affixed their signatures and
seals below the first date indicated above, intending to be bound thereby.
DAIMLERCHRYSLER AEROSPACE SPACEHAB, INC.
AG
By: By:
----------------------------- ----------------------------
Title: Title:
-------------------------- --------------------------
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Schedule 1.1
AGREED AREAS OF COLLABORATION WITHIN
EXCLUSIVE COMMON BUSINESS SEGMENTS
AS OF THE EXECUTION OF THIS AGREEMENT
It is agreed that Spacehab shall, by December 31, 2000, award contracts to
DASA-RI for work within the following areas of collaboration valued in the
aggregate at no less than $12 million (U.S.):
1. Consolidated Resupply/ISS Logistics
2. ISS Services
(a) Commercial Station Reboost and Resupply Service
(b) Carrier Hardware Interface Adapters
3. External ISS Research Facilities
(a) Quick External Science Tray
(b) Commercial Attached Payload Service
(c) EXPRESS/TEF
4. Experiment Integration Services/ISS Research Services
5. ISS Research Facilities
(a) Space-DRUMS (TM)
(b) TEMPUS
6. X-37 Cradle
7. Spacehab Universal Communication System (provided DASA co-invests in
the system), excepting developments and projects on said system already
in process in accordance with Section 1.5 of the Agreement.
DESIGNATION OF RIGHTS, TERMS AND PREFERENCES
OF
SERIES B SENIOR CONVERTIBLE PREFERRED STOCK
OF
SPACEHAB, INCORPORATED
(Pursuant to Chapter 6 of the
Washington Business Corporation Act)
Spacehab, Incorporated, a corporation organized and existing under the
Business Corporation Act of the State of Washington (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Chapter 6 of the
Business Corporation Act at a meeting duly called and held on July 13, 1999:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the
Articles of Incorporation, the Board of Directors hereby creates a series
of Preferred Stock of the Corporation, no par value per share (the
"Preferred Stock"), and hereby states the designation and number of shares,
and fixes the relative rights, preferences, and limitations thereof as
follows:
Series B Senior Convertible Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series B Senior Convertible Preferred Stock" (the "Series B
Preferred Stock") and the number of shares constituting the Series B Preferred
Stock shall be Nine Hundred Seventy-Five Thousand (975,000). Such number of
shares may be decreased by resolution of the Board of Directors; provided that
no decrease shall reduce the number of shares of Series B Preferred Stock to a
number less than the number of shares then outstanding.
Section 2. Dividends. The holders of the Series B Preferred Stock shall be
entitled to receive, out of funds legally available therefor, such dividends
with respect to the shares of Series B Preferred Stock as may be declared by the
Board of Directors. In addition, when and if the Board of Directors shall
declare a dividend payable with respect to the then outstanding shares of Common
Stock, no par value per share ("Common Stock") of the Corporation, each holder
of Series B Preferred Stock shall be entitled to the amount of dividends as
would be payable on the largest number of whole shares of Common Stock into
which shares of Series B Preferred Stock held by such holder could then be
converted pursuant to Section 5 hereof (such number to be determined as of the
record date for the determination of holders of Common Stock entitled to receive
such
<PAGE>
dividend). Dividends shall not be declared or paid to holders of Common Stock
unless and until the Corporation shall simultaneously declare and pay to holders
of Series B Preferred Stock the dividend referred to in the preceding sentence.
Section 3. Liquidation, Dissolution or Winding Up; Certain Mergers,
Consolidations and Asset Sales.
a. In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of shares of
Series B Preferred Stock then outstanding shall be entitled to be paid out
of the assets of the Corporation available for distribution to its
stockholders, before any payment shall be made to the holders of Common
Stock or any other class or series of stock ranking on liquidation junior
to the Series B Preferred Stock (the Common Stock and any other class or
series of stock ranking on liquidation junior to the Series B Preferred
Stock, including without limitation, the Series A Junior Participating
Preferred Stock of the Corporation, being collectively referred to as
"Junior Stock") by reason of their ownership thereof, an amount equal to
Nine Dollars ($9.00) for each outstanding share of Series B Preferred Stock
(the "Series B Original Issue Price")(subject to appropriate adjustment in
the event of any stock dividend, stock split, combination or other similar
recapitalization affecting such shares) plus (ii) any dividends declared or
accrued but unpaid thereon. If upon any such liquidation, dissolution or
winding up of the Corporation, the remaining assets of the Corporation
available for distribution to its stockholders shall be insufficient to pay
the holders of shares of Series B Preferred Stock the full amount to which
they shall be entitled, the holders of shares of Series B Preferred Stock
and any class or series of stock ranking on liquidation on a parity with
the Series B Preferred Stock shall share ratably (based upon the sum of
each series respective Original Issue Price plus accrued but unpaid
dividends) in any distribution of the remaining assets and funds of the
Corporation in proportion to the respective amounts which would otherwise
be payable in respect of the shares held by them upon such distribution if
all amounts payable on or with respect to such shares were paid in full.
b. After the payment of all preferential amounts required to be paid
to the holders of Series B Preferred Stock and any other class or series of
stock of the Corporation ranking on liquidation on a parity with the Series
B Preferred Stock upon the dissolution, liquidation or winding up of the
Corporation, the holders of shares of Junior Stock then outstanding shall
be entitled to receive the remaining assets and funds of the Corporation
available for distribution to its stockholders.
c. The consolidation or merger of the Corporation into or with any
other entity or entities which results in the exchange of outstanding
shares of the Corporation for securities or other consideration issued or
paid or caused to be issued or paid by any such entity or affiliate
thereof, and the sale or transfer by the Corporation of all or
substantially all its assets, shall be deemed to be a liquidation,
dissolution or winding up of the Corporation within the meaning of the
provisions of this Section 3, but only for the purposes of the redemption
of such Series B Preferred Stock, and only if so elected by the holders of
a majority of the outstanding shares of Series B Preferred Stock, in their
sole discretion.
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Section 4. Voting.
a. Each holder of outstanding shares of Series B Preferred Stock shall
be entitled to the number of votes equal to the number of whole shares of
Common Stock into which the shares of Series B Preferred Stock held by such
holder are then convertible (as adjusted from time to time pursuant to
Section 5 hereof), at each meeting of stockholders of the Corporation (and
written actions of stockholders in lieu of meetings) with respect to any
and all matters presented to the stockholders of the Corporation for their
action or consideration. Except as provided by law, or by the provisions of
Subsections 4(b), 4(c) and 4(d) below, holders of Series B Preferred Stock
shall vote together with the holders of Common Stock, as a single class.
b. For so long as (i) any shares of Series B Preferred Stock remain
outstanding and (ii) any holder thereof is a Qualified Holder (as defined
in the Preferred Stock Purchase Agreement (the "Purchase Agreement") dated
as of August 2, 1999 between the Corporation and Daimler Chrysler Aerospace
AG ("DASA")), the Series B Preferred Stock (voting as a class) will elect
one of the Directors (the "Preferred Director") and the Common Stock
(voting as a class) will elect the remaining Directors. The Preferred
Director shall be included as a member of the Executive Committee of the
Board. If at any time Series B Preferred Stock issued remains outstanding
but there is no Qualified Holder, all of the Directors will be elected by
the Series B Preferred Stock and Common Stock voting together as one class.
This Section 4(b) shall not affect or limit provisions of Section 8.1 of
the Purchase Agreement as to the right of a Qualified Holder to designate a
nominee for election to the Board (and for such designee, if elected by the
shareholders, to serve on the Executive Committee of the Board), which
provisions may remain applicable notwithstanding there not being any shares
of Series B Preferred Stock outstanding.
c. Any Preferred Director may be removed at any time, by the vote of
the holders of more than fifty percent (50%) of all of the then outstanding
shares of Series B Preferred Stock, voting as a separate class in person or
by proxy at a special meeting of stockholders called for such purpose (or
at any adjournment thereof) by holders of at least twenty percent (20%) of
the outstanding shares of Series B Preferred Stock or at any annual meeting
of stockholders, or by written consent delivered to the Secretary of the
Corporation, and no Preferred Director may be removed at any time without
the affirmative vote or consent of the holders of more than fifty percent
(50%) of all of the outstanding shares of Series B Preferred Stock. Any
vacancy created by the removal, death or resignation of a Preferred
Director may be filled by the holders of more than fifty percent (50%) of
all of the outstanding shares of Series B Preferred Stock by vote in person
or by proxy at a special meeting of stockholders of the Corporation called
for such purpose by holders of at least twenty percent (20%) of the
outstanding shares of Series B Preferred Stock, or at any annual meeting,
or by written consent delivered to the Secretary of the Corporation.
d. So long as any shares of the Series B Preferred Stock remain
outstanding, unless the vote or consent of the holders of a greater number
of shares shall then be required by law, the affirmative vote or consent of
the holders of more than fifty
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percent (50%) of all of the shares of Series B Preferred Stock at the time
outstanding, voting separately as a class, given in person or by proxy
either in writing (as may be permitted by law and the Articles of
Incorporation and By-laws of the Corporation) or at any special or annual
meeting, shall be necessary to permit, effect or validate the taking of any
of the following actions by the Corporation:
(i) create, authorize, issue or sell (i) any class or series of
capital stock ranking prior to or on parity with the Series B
Preferred Stock as to dividends or upon liquidation, dissolution or
winding up; provided, however, that holders of Common Stock may
receive dividends to the extent provided by Section 2 above and,
provided further, that the consent to issuance of any class or series
of capital stock ranking on parity with the Series B Preferred Stock
shall not be unreasonably withheld; or (ii) any rights, options or
other securities convertible, exercisable or exchangeable for or into,
or having rights to purchase, any shares of capital stock described in
clause (i) hereof; or
(ii) amend the Articles of Incorporation or By-laws of the
Corporation, or in any other manner alter or change the powers,
rights, privileges or preferences of the Series B Preferred Stock, if
such amendment or action would alter, change or affect adversely the
powers, rights, privileges or preferences of the holders of the Series
B Preferred Stock; or
(iii) increase the number of shares of Series B Preferred Stock
authorized for issuance above 1,333,334 shares; or
(iv) at any time after the initial issuance date of the Series B
Preferred Stock, issue any shares of Series B Preferred Stock, except
(i) issuances pursuant to the Purchase Agreement, or (ii) issuances of
share certificates upon transfers or exchanges of shares by holders
(other than the Corporation) or in replacement of lost, stolen,
damaged or mutilated share certificates;
Section 5. Optional Conversion. The holders of the Series B Preferred Stock
shall each have conversion rights as follows (the "Conversion Rights"):
a. Right to Convert. Shares of Series B Preferred Stock shall be
convertible, at the option of the holder thereof, at any time and from time
to time, and without the payment of additional consideration by the holder
thereof, into such number of fully paid and nonassessable shares of Common
Stock as is determined by dividing the aggregate Series B Original Issue
Price of the Shares of Series B Preferred Stock being converted by the
Series B Conversion Price in effect at the time of conversion or such
share. The initial "Series B Conversion Price" shall be Nine Dollars
($9.00), subject to adjustment as provided below. For purposes of this
Section 5, "Original Issue Date" shall mean, for the Series B Preferred
Stock, the date on which the first share of Series B Preferred Stock was
issued.
In the event of a liquidation of the Corporation, the Conversion
Rights shall terminate at the close of business on the first full day
preceding the date
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fixed for the payment of any amounts distributable on liquidation to the
holders of Series B Preferred Stock.
b. Fractional Shares. No fractional shares of Common Stock shall be
issued upon conversion of the Series B Preferred Stock, and the number of
shares of Common Stock to be issued shall be rounded to the nearest whole
share. The shares issuable upon such conversion shall be determined on the
basis of the total number of shares of Series B Preferred Stock which the
holder is at the time converting into Common Stock and the number of shares
of Common Stock issuable upon such aggregate conversion.
c. Mechanics of Conversion.
(i) In order for a holder of Series B Preferred Stock to convert
shares of Series B Preferred Stock into shares of Common Stock, such
holder shall surrender the certificate or certificates for such shares
of Series B Preferred Stock, at the office of the transfer agent for
the Corporation (or at the principal office of the Corporation if the
Corporation serves as its own transfer agent), together with written
notice that such holder elects to convert all or any number of the
shares of the Series B Preferred Stock represented by such certificate
or certificates. Such notice shall state such holder's name or the
names of the nominees in which such holder wishes the certificate or
certificates for shares of Common Stock to be issued. If required by
the Corporation, certificates surrendered for conversion shall be
endorsed or accompanied by a written instrument or instruments of
transfer, in form satisfactory to the Corporation, duly executed by
the registered holder or his, her or its attorney duly authorized in
writing. The date of receipt of such certificates and notice by the
transfer agent (or by the Corporation if the Corporation serves as its
own transfer agent) shall be the conversion date ("Conversion Date").
The Corporation shall, as soon as practicable after the Conversion
Date, issue and deliver at such office to such holder of Series B
Preferred Stock, or to his, her or its nominees, a certificate or
certificates for the number of shares of Common Stock to which such
holder shall be entitled, together with cash in lieu of any fraction
of a share. In case less than all the shares of Series B Preferred
Stock represented by any certificate are being converted, a new
certificate representing the unconverted shares of Series B Preferred
Stock shall be issued to the holder thereof without cost to such
holder.
(ii) The Corporation shall at all times when the Series B
Preferred Stock shall be outstanding, reserve and keep available out
of its authorized but unissued stock, for the purpose of effecting the
conversion of the Series B Preferred Stock, such number of its duly
authorized shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding Series B
Preferred Stock.
(iii) Upon any such conversion, no adjustment to the Series B
Conversion Price shall be made for any declared or accrued but unpaid
dividends on the Series B Preferred Stock surrendered for conversion
or on the Common Stock delivered upon conversion, but, as provided in
clause (iv) below, such dividends shall remain payable to the holder
thereof.
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(iv) All shares of Series B Preferred Stock which shall have been
surrendered for conversion as herein provided shall no longer be
deemed to be outstanding and all rights with respect to such shares,
including the rights, if any, to receive notices and to vote, shall
immediately cease and terminate on the Conversion Date, except only
the right of the holders thereof to receive shares of Common Stock in
exchange therefor and payment of any dividends declared or accrued but
unpaid thereon. Any shares of Series B Preferred Stock so converted
shall be retired and cancelled and shall not be reissued, and the
Corporation (without the need for stockholder action) may from time to
time take such appropriate action as may be necessary to reduce the
authorized Series B Preferred Stock accordingly.
(v) The Corporation shall pay any and all issue and other taxes
that may be payable in respect of any issuance or delivery of shares
of Common Stock upon conversion of shares of Series B Preferred Stock
pursuant to this Section 5. The Corporation shall not, however, be
required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of shares of Common
Stock in a name other than that in which the shares of Series B
Preferred Stock so converted were registered, and no such issuance or
delivery shall be made unless and until the person or entity
requesting such issuance has paid to the Corporation the amount of any
such tax or has established, to the satisfaction of the Corporation,
that such tax has been paid.
d. Adjustment for Stock Splits and Combinations. If the Corporation
shall at any time or from time to time after the Original Issue Date of the
Series B Preferred Stock effect a subdivision of the outstanding Common
Stock, the Series B Conversion Price then in effect with respect to the
Series B Preferred Stock immediately before that subdivision shall be
proportionately decreased. If the Corporation shall at any time or from
time to time after the Original Issue Date of the Series B Preferred Stock
combine the outstanding shares of Common Stock, the Series B Conversion
Price then in effect immediately before the combination with respect to the
Series B Preferred Stock shall be proportionately increased. Any adjustment
under this paragraph shall become effective at the close of business on the
date the subdivision or combination becomes effective.
e. Adjustment for Certain Dividends and Distributions. In the event
the Corporation at any time, or from time to time after the Original Issue
Date of the Series B Preferred Stock shall make or issue, or fix a record
date for the determination of holders of Common Stock entitled to receive,
a dividend or other distribution payable in additional shares of Common
Stock, then and in each such event the Series B Conversion Price with
respect to the Series B Preferred Stock then in effect shall be decreased
as of the time of such issuance or, in the event such a record date shall
have been fixed, as of the close of business on such record date, by
multiplying the Series B Conversion Price for the Series B Preferred Stock
then in effect by a fraction:
(1) the numerator of which shall be the total number of shares of
Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date, and
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(2) the denominator of which shall be the total number of shares of
Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date plus the number of
shares of Common Stock issuable in payment of such dividend or
distribution;
provided, however, that if such record date shall have been fixed and such
dividend is not fully paid or if such distribution is not fully made on the
date fixed therefor, the Series B Conversion Price for the Series B
Preferred Stock shall be recomputed accordingly as of the close of business
on such record date and thereafter the Series B Conversion Price for the
Series B Preferred Stock shall be adjusted pursuant to this paragraph as of
the time of actual payment of such dividends or distributions.
f. Adjustments for Other Dividends and Distributions. In the event the
Corporation at any time or from time to time after the Original Issue Date
of the Series B Preferred Stock shall make or issue, or fix a record date
for the determination of holders of Common Stock entitled to receive, a
dividend or other distribution payable in securities of the Corporation
other than shares of Common Stock, then and in each such event provision
shall be made so that the holders of Series B Preferred Stock shall receive
upon conversion thereof in addition to the number of shares of Common Stock
receivable thereupon, the amount of securities of the Corporation that they
would have received had the Series B Preferred Stock been converted into
Common Stock on the date of such event and had thereafter, during the
period from the date of such event to and including the conversion date,
retained such securities receivable by them as aforesaid during such
period, giving application to all adjustments called for during such period
under this paragraph with respect to the rights of the holders of the
Series B Preferred Stock.
g. Adjustment for Reclassification, Exchange or Substitution. If the
Common Stock issuable upon the conversion of the Series B Preferred Stock
shall be changed into the same or a different number of shares of any class
or classes of stock, whether by capital reorganization, reclassification,
or otherwise (other than a subdivision or combination of shares or stock
dividend provided for above, or a reorganization, merger, consolidation, or
sale of assets provided for below), then and in each such event the holders
of the Series B Preferred Stock shall have the right thereafter to convert
such share into the kind and amount of shares of stock and other securities
and property receivable upon such reorganization, reclassification, or
other change, by holders of the number of shares of Common Stock into which
such shares of Series B Preferred Stock might have been converted
immediately prior to such reorganization, reclassification, or change, all
subject to further adjustment as provided herein.
h. Adjustment for Merger or Reorganization, etc. In case of any
consolidation or merger of the Corporation with or into another corporation
or the sale of all or substantially all of the assets of the Corporation to
another corporation (other than a consolidation, merger or sale which is
covered by Subsection 3(c)), each share of Series B Preferred Stock shall
thereafter be convertible (or shall be converted into a security which
shall be convertible) into the kind and amount of shares of stock or other
securities or property to which a holder of the number of shares of Common
Stock of the Corporation deliverable upon conversion of such Series B
Preferred Stock would have
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been entitled upon such consolidation, merger or sale; and, in such case,
appropriate adjustment (as determined in good faith by the Board of
Directors) shall be made in the application of the provisions in this
Section 5 set forth with respect to the rights and interest thereafter of
the holders of the Series B Preferred Stock, to the end that the provisions
set forth in this Section 5 (including provisions with respect to changes
in and other adjustments of the Series B Conversion Price) shall thereafter
be applicable, as nearly as reasonably may be, in relation to any shares of
stock or other property thereafter deliverable upon the conversion of the
Series B Preferred Stock.
i. No Impairment. The Corporation will not, by amendment of its
Articles of Incorporation, or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by
the Corporation, but will at all times in good faith assist in the carrying
out of all the provisions of this Section 5 and in the taking of all such
action as may be necessary or appropriate in order to protect the
respective Conversion Rights of the holders of the Series B Preferred Stock
against impairment.
j. Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Series B Conversion Price pursuant to
this Section 5, the Corporation at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and furnish
to each holder of Series B Preferred Stock a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Corporation shall, upon the
written request at any time of any holder of Series B Preferred Stock,
furnish or cause to be furnished to such holder a similar certificate
setting forth (i) such adjustments and readjustments, (ii) the Series C
Conversion Price then in effect, and (iii) the number of shares of Common
Stock and the amount, if any, of other property which then would be
received upon the conversion of such Series B Preferred Stock.
k. Notice of Record Date. In the event:
(a) that the Corporation declares a dividend (or any other
distribution) on its Common Stock payable in Common Stock or
other securities of the corporation;
(b) that the Corporation subdivides or combines its outstanding
shares of Common Stock;
(c) of any reclassification of the Common Stock of the
Corporation (other than a subdivision or combination of its
outstanding shares of Common Stock or a stock dividend or
stock distribution thereon), or of any consolidation or
merger of the Corporation into or with another corporation,
or of the sale of all or substantially all of the assets of
the Corporation; or
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(d) of the involuntary or voluntary dissolution, liquidation or
winding up of the Corporation;
then the Corporation shall cause to be filed at its principal office, and shall
cause to be mailed to the holders of the Series B Preferred Stock at their last
addresses as shown on the records of the Corporation or its transfer agent, at
least ten (10) days prior to the date specified in (i) below or twenty (20) days
before the date specified in (ii) below, a notice stating
(i) the record date of such dividend, distribution, subdivision
or combination, or, if a record is not to be taken, the date
as of which the holders of Common Stock of record to be
entitled to such dividend, distribution, subdivision or
combination are to be determined, or
(ii) the date on which such reclassification, consolidation,
merger, sale, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such
reclassification, consolidation, merger, sale, dissolution
or winding up.
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IN WITNESS WHEREOF, this Designation of Rights, Terms and Preferences is
executed on behalf of the Corporation by its President and attested by its
Assistant Secretary this 29th day of July, 1999.
SPACEHAB, INCORPORATED
By:___________________________
Name: David A. Rossi
Title: President
Attest:___________________________
Name: Frank E. Morgan II
Title: Assistant Secretary
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