1
EXHIBIT 4.2
================================================================================
PREFERRED STOCK PURCHASE AGREEMENT
BETWEEN
SPACEHAB, INCORPORATED
AND
DAIMLERCHRYSLER AEROSPACE AG
DATED AS OF AUGUST 2, 1999
================================================================================
2
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 Xxxxxx & Xxxxxxx 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.
3
(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 Xxxxxx & Whitney LLP in 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
4
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 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
4
5
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.
"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. Section 6901 et seq.; the Toxic Substances
Control Act, 15 U.S.C. Section 2601 et seq.; the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et
seq.; the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq.;
the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801 et seq.; the Occupational Safety and
Health Act, 29 U.S.C. Section 651; the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. Section 136 et seq. and the Oil Pollution Act of 1990,
33 U.S.C. Section 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.
5
6
"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.
"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
6
7
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 Xx. Xxxxxxx X. Xxxxxxxx of the Company
to Xx. Xxxxxxx Xxxxxxxx and Xx. Xxxxx 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.
"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
7
8
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.
"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;
8
9
(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,
(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
9
10
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).
10
11
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
11
12
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 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 Xxxxx Xxxxxxxxxx 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.
12
13
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:
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-
13
14
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.
(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
14
15
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.
(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.
15
16
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 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
16
17
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.
(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.
17
18
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 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.
18
19
(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.
(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.
19
20
(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 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
20
21
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
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.
21
22
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 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
22
23
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"):
(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
23
24
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 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
24
25
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 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
25
26
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.
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
26
27
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 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
27
28
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
28
29
opinion of counsel provided 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 XX Xxxxxx & Xxxxxxx LLP
Space Infrastructure 0000 Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxx 000 South
1-5 Huenefeldstrasse Washington, D.C. 20004
D-28199 Bremen Attention: Xxxxxxx X. Xxxxx, Esq.
Germany Fax No.: (000) 000-0000
Attention: Xx. Xxxxxx Xxxxx Telephone: (000 000-0000
Fax No.: 000-00-000-000-0000
29
30
Notices to the Company with a copy to:
Spacehab, Incorporated Xxxxx Xxxxxxxxxx LLP
000 X Xxxxxx, XX 1301 Avenue of the Americas
Suite 814 New York, NY 10019
Xxxxxxxxxx, XX 00000 Attention: Xxxxx X. Xxxxxx XX, Esq.
Attention: Xxxxx X. Xxxxx, President Fax No.: (000) 000-0000
Fax No.: (000) 000-0000
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.
30
31
(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]
31
32
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]
32
