THIRD AMENDMENT TO FINANCING AND SECURITY AGREEMENT
---------------------------------------------------
THIS THIRD AMENDMENT TO FINANCING AND SECURITY AGREEMENT (this "Agreement")
is dated as of October 24, 2001, by and among SPACEHAB, INCORPORATED, a
corporation organized under the laws of the State of Washington (the "Company"),
JOHNSON ENGINEERING CORPORATION, a corporation organized under the laws of the
State of Colorado ("Johnson Engineering") and ASTROTECH SPACE OPERATIONS, INC.,
a corporation organized under the laws of the State of Delaware ("Astrotech")
jointly and severally (each of Company, Johnson Engineering and Astrotech, a
"Borrower"; Company, Johnson Engineering and Astrotech, collectively, the
"Borrowers"); and BANK OF AMERICA, N.A., a national banking association, its
successors and assigns ("Lender").
RECITALS
--------
A. The Borrowers and SPACE MEDIA, INC., a corporation organized under the
laws of the State of Delaware ("Space Media"; together with the Borrowers, the
"Original Borrowers") and the Lender entered into a Financing and Security
Agreement dated August 9, 2000 (the same, as amended, modified, substituted,
extended, and renewed from time to time is hereinafter called, the "Financing
Agreement"). Unless otherwise expressly defined in this Agreement, terms defined
in the Financing Agreement shall have the same meaning under this Agreement.
B. The Financing Agreement provides for a Revolving Credit in the
original maximum principal amount of Fifteen Million Dollars ($15,000,000) and a
letter of credit facility in the original maximum principal amount of Ten
Million Dollars ($10,000,000).
C. Pursuant to that certain Second Amendment to Financing Agreement dated
as of August 30, 2001, by and among the Original Borrowers and the Lender, the
parties thereto agreed to release Space Media from all of its obligations under
the Financing Agreement and each of the Financing Documents and to reduce the
maximum principal amount of the Revolving Credit from Fifteen Million Dollars
($15,000,000) to Six Million Five Hundred Thousand Dollars ($6,500,000).
D. The Borrowers anticipate that they will be unable to comply with
certain covenants set forth in the Financing Agreement and have requested, among
other things, that the Lender reset certain covenants and terms set forth in the
Financing Agreement to permit the Borrowers to restructure certain existing
Indebtedness to certain creditors of the Borrowers, and the Lender has agreed to
do so on the condition, among others, that this Agreement be executed.
AGREEMENTS
----------
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, receipt of which is hereby acknowledged, the Borrowers
and the Lender agree as follows:
1. Recitals. The Borrowers and the Lender agree that the Recitals
--------
above are true and correct in all material respects and that the same are
incorporated herein and made a part hereof by reference.
2. Defined Terms. The definitions of "Debt Service", "Revolving Credit
-------------
Committed Amount" and "Revolving Credit Expiration Date" set forth in Section
1.1 of the Financing Agreement are hereby deleted in their entirety and the
following are inserted in full substitution thereof:
"Debt Service" means as to each Borrower and its Subsidiaries for any
period of determination thereof an amount equal to the total of the
aggregate amount of all payments of interest with respect to Indebtedness
for Borrowed Money of each Borrower and its Subsidiaries paid in cash
during such period, plus cash paid during such period for current
maturities of long term Indebtedness of each Borrower and its Subsidiaries,
excluding all scheduled payments due to Alenia under the Alenia Debt and
Internally Funded Capital Expenditures.
"Revolving Credit Committed Amount" means from October 24, 2001
through and including April 30, 2002 the maximum principal amount of Six
Million Five Hundred Thousand Dollars ($6,500,000) and from and after May
1, 2002, the maximum principal amount of Three Million Dollars
($3,000,000), as such amounts shall be permanently reduced from time to
time by any Revolving Credit Mandatory Reduction in accordance with this
Agreement.
"Revolving Credit Expiration Date" means July 31, 2002.
From and after the date hereof, the following defined terms are added to
Section 1.1 of the Financing Agreement:
"Adjusted Debt Service Coverage Ratio" means as to each Borrower and
its Subsidiaries for any period of determination thereof, the ratio of (a)
EBITDA, plus the net cash proceeds from the Astrotech Loan received by the
Company to (b) Debt Service, plus all scheduled payments due to Alenia on
the Alenia Debt, plus the amount of all Internally Funded Capital
Expenditures. EBITDA will be increased by $2,400,000 for the period ending
December 31, 2001 and will be decreased by $2,400,000 for the period ending
June 30, 2002, to take into account the effect of a $2,400,000 lease
payment due to Astrium which has been deferred from December 31, 2001 to
June 30, 2002 to assist the Company in making a $3,000,000 payment to
Alenia. "Net proceeds from the Astrotech Loan" are defined as, any and all
cash recaptured by the Company from the Astrotech Loan during the period
being measured.
2
"Alenia Debt" means the Company's Indebtedness to Alenia Spazio S.p.A.
("Alenia") under the (i) Subordinated Promissory Note issued by Spacehab to
Alenia on August 12, 1992 for a principal amount of $425,104, (ii)
Subordinated Promissory Note issued by the Company to Alenia on August 12,
1992 for a principal amount of $1,842,328, (iii) Subordinated Promissory
Note issued by the Company to Alenia on August 12, 1992 for a principal
amount of $2,157,500, (iv) Subordinated Promissory Note issued by the
Company to Alenia on February 23, 1993 for a principal amount of
$1,242,028, (v) Subordinated Promissory Note issued by the Company to
Alenia on February 13, 1993 for a principal amount of $1,078,750, (vi)
Subordinated Promissory Note issued by the Company to Alenia on June 1,
1993 for a principal amount of $1,113,850, (vii) Letter Agreement between
the Company and Alenia dated December 10, 1998, and (viii) Letter from
Alenia to the Company dated December 21, 1998.
"Alenia Debt Loan Documents" means any of the documents now or
hereafter evidencing or securing the Alenia Debt.
"Astrium" means Astrium GmbH.
"Excess Cash Flow" means for each fiscal quarter beginning with the
fiscal quarter beginning October 1, 2001, an amount equal to fifty percent
(50%) of the increase in excess net cash from previous quarter as shown on
the Company's Form 10Q Statement of Cash Flows, furnished to the Lender in
accordance with Section 6.1.1 (Financial Statements); or in the event that
the Borrowers fail to deliver such financial statements to the Lender as
and when required, or the Lender determines in the exercise of its
reasonable discretion, that such financial statements do not accurately
reflect the Borrowers' consolidated financial position for the period
covered, the Lender shall estimate, in its sole and absolute discretion,
the amount of Excess Cash Flow for such period.
3. Borrowing Base. Section 2.1.3 of the Financing Agreement is hereby
--------------
deleted in its entirety and the following is inserted in full substitution
thereof:
2.1.3 Borrowing Base. As used in this Agreement, the term "Borrowing
--------------
Base" means at any time, an amount equal to the aggregate of (a) eighty
percent (80%) of the amount of Eligible Receivables derived from Government
Contracts, plus (b) eighty percent (80%) of Eligible Receivables derived
from contracts other than Government Contracts.
The Borrowing Base shall be computed based on the Borrowing Base
Report most recently delivered to and accepted by the Lender in its sole
and absolute discretion. In the event the Borrowers fail to furnish a
Borrowing Base Report required by Section 2.1.4 (Borrowing Base Report), or
in the event the Lender believes that a Borrowing Base Report is no longer
accurate, the Lender may, in its sole and absolute discretion exercised
from time to time and without limiting other rights and remedies under this
Agreement, suspend the making of or limit advances under the Revolving
Credit. The Borrowing Base shall be subject to reduction by amounts
credited to the Collateral Account since the date of the most recent
Borrowing Base Report and by the amount of any Receivable
3
which was included in the Borrowing Base but which the Lender determines
fails to meet the respective criteria applicable from time to time for
Eligible Receivables.
If at any time the total of the aggregate principal amount of the
Revolving Credit and Outstanding Letter of Credit Obligations exceeds the
Borrowing Base, a borrowing base deficiency ("Borrowing Base Deficiency")
shall exist. Each time a Borrowing Base Deficiency exists, the Borrower,
at the sole and absolute discretion of the Lender exercised from time to
time, shall pay the Borrowing Base Deficiency within two Business Days of
DEMAND to the Lender.
Without implying any limitation on the Lender's discretion with
respect to the Borrowing Base, the criteria for Eligible Receivables
contained in the definition of Eligible Receivables are in part based upon
the business operations of the Borrowers existing on or about the Closing
Date and upon information and records furnished to the Lender by the
Borrowers. If at any time or from time to time hereafter, the business
operations of the Borrowers change or such information and records
furnished to the Lender is incorrect or misleading, the Lender in its
discretion, may at any time and from time to time during the duration of
this Agreement change such criteria or add new criteria. The Lender may
communicate such changed or additional criteria to the Borrowers from time
to time either orally or in writing.
4. Borrowing Base. Notwithstanding anything set forth in the Financing
--------------
Agreement to the contrary, from and after January 1, 2002, in accordance with
the requirements of Section 2.1.3 (Borrowing Base) of the Financing Agreement,
the Borrowing Base shall be subject to immediate reduction by eighty percent
(80%) of the amounts credited to the Lockbox and/or the Collateral Account since
the date of the most recent Borrowing Base Report.
(a) Notwithstanding anything set forth in the Financing Agreement to
the contrary, from and after the effective date of this Agreement, the Borrowers
shall furnish to the Lender additional Borrowing Base Reports dated as of the
last day of such period at the following times:
Period Ending: Borrowing Base Report Due:
October 31, 2001 Not later than November 15, 2001;
November 30, 2001 Not later than December 15, 2001; and
January 1, 2002
and at all times thereafter Not later than Wednesday of each week
and dated as of the last Business Day
of the immediately preceding week.
(b) In addition, from and after the effective date of this Agreement,
the Borrowers shall furnish to the Lender not later than the fifteenth (15/th/)
day of each month hereafter, a detailed aging schedule of all Receivables by
Account Debtor as of the last day of the preceding month and a report containing
a detailed aging of all accounts payable by supplier, in such detail, and
accompanied by such supporting information, as the Lender may from time to time
request.
4
5. The Collateral Account. In accordance with the provisions of
----------------------
Section 2.1.8 of the Financing Agreement, the Lender hereby directs the
Borrowers to immediately notify all Account Debtors to direct the mailing of all
Items of Payment directly into the Lockbox. Notwithstanding such direction, in
the event any Items of Payment are not deposited into the Lockbox, but are
received by any Borrower or deposited into any other deposit account maintained
by any Borrower, such Borrower shall immediately cause such Item of Payment to
be deposited in precisely the form received into the Lockbox. The Lender shall
have unrestricted and exclusive access to the Lockbox. All collected funds in
the Lockbox shall be applied against the Revolving Credit in accordance with
Section 2.1.8 of the Financing Agreement.
6. Mandatory Reduction of Revolving Credit. The Borrowers shall make
---------------------------------------
mandatory reductions (each a "Revolving Credit Mandatory Reduction" and
collectively the "Revolving Credit Mandatory Reductions") of the Revolving
Credit, which shall permanently reduce the Revolving Credit Committed Amount by
the amount of each such Revolving Credit Mandatory Reduction at the following
times and amounts:
(a) On a quarterly basis commencing with the fiscal quarter ending
December 31, 2001, the Borrowers shall make a Revolving Credit Mandatory
Reduction in the amount of the Excess Cash Flow for the then preceding fiscal
quarter which shall be payable on the date the Borrowers furnish to the Lender
the quarterly financial statements referred to in Section 6.1.1 (Financial
Statements). If, however, the Borrowers fail to furnish such financial
statements in any given fiscal quarter year as and when required, the Borrowers
shall be required to pay the Revolving Credit Mandatory Reduction payable during
such fiscal quarter on the date which is forty five (45) days after the close of
the Borrowers' then preceding fiscal quarter. The Borrowers shall pay to the
Lender on the date of each Revolving Credit Mandatory Reduction accrued interest
to such date on the amount prepaid. Each Revolving Credit Mandatory Reduction
shall permanently reduce the Revolving Credit Committed Amount by an equivalent
amount.
(b) If at any time after the effective date of this Agreement, any
Borrower sells any assets (other than the Vertical Cargo Carrier being sold to
Astrium such Borrower will immediately upon closing of such sale, pay to the
Lender fifty percent (50%) of the Net Proceeds from such sale. For purposes
hereof, "Net Proceeds" shall mean all consideration received in connection with
such sale, including, but not limited to the value of assets, stock, warrants,
or other property transferred, pledged or given in connection therewith, less
customary and reasonable closing costs and expenses associated with such sale.
Nothing in this Section shall be deemed to waive or in any manner modify the
requirements under Section 6.2.1 of the Financing Agreement or as otherwise set
forth in the Financing Agreement, that the Borrowers' obtain the Lender's prior
written consent before selling, leasing or otherwise disposing of any assets.
7. Financial Covenants. Section 6.1.15 of the Financing Agreement is
-------------------
hereby deleted in its entirety and the following is inserted in full
substitution thereof:
6.1.15 Financial Covenants.
-------------------
(a) Tangible Net Worth. The Borrowers, on a consolidated basis,
-------------------
will maintain a Tangible Net Worth of not less than the following amounts
at the following times:
5
Period Ending: Minimum Tangible Net Worth:
------------- ---------------------------
September 30, 2001 $59,000,000
December 31, 2001 $58,000,000
March 31, 2002 $63,000,000
June 30, 2002 $61,000,000
The minimum Tangible Net Worth required by this section will
automatically be increased by the amount of any adjustments on or after the
date hereof to net accrued tax assets which result from a restatement of
the Company's outside auditor's qualified opinion for the fiscal year
ending June 30, 2001.
(b) Debt to Worth Ratio. The Borrowers, on a consolidated basis, will
-------------------
at all times maintain, tested as of the end of each calendar quarter,
commencing with the calendar quarter ending September 30, 2001, a Debt to
Worth Ratio of not more than 2.50 to 1.0.
(c) Debt Service Coverage Ratio. The Borrowers will maintain, on a
---------------------------
consolidated basis, and tested as of the last day of each of the Company's
fiscal quarters, a ratio of EBITDA to Debt Service of not less than the
following amounts at the following times:
Period Ending: Minimum Debt Service Coverage:
------------- -------------------------------
September 30, 2001 (0.60)
December 31, 2001 1.00
March 31, 2002 1.50
June 30, 2002 1.50
The EBITDA to Debt Service Coverage ratio shall be calculated for the
stand-alone quarters ending September 30, 2001, December 31, 2001 and March
31, 2002 on the last day of the relevant quarter. For the period ending
June 30, 2002, the ratio shall be calculated for the period of four (4)
fiscal quarters ending on the last day of the relevant quarter.
(d) Cash to Subsidiaries and Space Media. Neither the Company nor any
------------------------------------
other Borrower shall make any cash advances to any Subsidiary or Affiliate,
other than investments and loans permitted under Section 6.2.5 of this
Agreement, and cash advances to Space Media not to exceed Three Hundred
Ninety Thousand Dollars ($390,000) for the quarterly period ending
September 30, 2001. From and after September 30, 2001, no further cash
advances may be made to Space Media.
(e) Maximum Payments to Alenia and for Internally Funded Capital
------------------------------------------------------------
Expenditures. Neither the Company nor any other Borrower shall make any
------------
payments to Alenia or any Capital Expenditures which are funded by the
Company or any other Borrower (taken as a whole) )("Internally Funded
Capital Expenditures"), unless at the time of such payment and/or Capital
Expenditure and after giving effect thereto, the Borrowers have an Adjusted
Debt Service Coverage Ratio in excess of the following amounts at the
following times:
6
Adjusted Debt Service Coverage Ratio Period Ending
------------------------------------ -------------
1.00 to 1.00 December 31, 2001
1.20 to 1.00 March 31, 2002 and thereafter
For each the fiscal quarters ending December 31, 2001 and March 31, 2002,
the Adjusted Debt Service Coverage Ratio shall be measured on a stand-alone
quarter basis and shall be calculated on the last day of the relevant
quarter. For the period ending June 30, 2002, and thereafter, the Adjusted
Debt Service Coverage Ratio shall be measured for the four (4) fiscal
quarter period then ending.
(g) Internally Funded Capital Expenditures. Internally Funded Capital
---------------------------------------
Expenditures will not exceed the following amounts at the following times:
Period: Amount:
------ ------
July 1, 2001 through September 30, 2001 $1,000,000
October 1, 2001 through December 31, 2001 $ 850,000
January 1, 2002 through March 31, 2002 $ 750,000
April 1, 2002 through June 30, 2002 $ 750,000
8. Financial Statements. The Borrowers have advised the Lender that
--------------------
because of the ongoing negotiations with the Lender and certain other creditors
of the Borrowers in connection with the restructure of the Revolving Credit and
certain other Indebtedness, that the Company will be unable to provide the
Lender with an unqualified opinion of the Company's accountant as and when
required under the Financing Agreement. The Lender waives the requirement for
delivery of the unqualified opinion for the period ending June 30, 2001.
9. Liens. The Borrowers and the Lender agree that notwithstanding the
-----
specific prohibition on encumbering the Flight Assets as set forth in Section
6.2.8 of the Financing Agreement, in connection with the Borrowers'
restructuring of certain existing Indebtedness in favor of certain other
creditors and such creditors waiving any defaults existing as of the effective
date of this Agreement, and subject to the express terms of this Agreement, the
Lender consents to the Company granting to (i) Alenia a first Lien security
interest on Module Two of the Flight Assets and (ii) to Astrium a first Lien
security interest on Module Three of the Flight Assets.
10. Double Modules. To further secure the repayment of the Obligations
--------------
and in consideration of the agreements set forth in this Agreement, the
Borrowers shall execute and deliver to the Lender on the date of this Agreement
a Security Agreement in the form of Exhibit C attached hereto and incorporated
---------
herein by reference (the "Double Module Security Agreement") pursuant to which
the Borrowers shall grant to the Lender a first lien security interest on a
portion of the Flight Assets, known as the "Research Double Module" and as
flight assets Modules One and Four, and all proceeds and products thereof.
11. Field Examinations. The Borrowers acknowledge and agree that the
------------------
Lender shall have the right to perform field examinations of each Borrower's
business, operations and income (each a "Field Examination"), at such times as
the Lender may request. The results of each field examination shall be in all
respects acceptable to the Lender in its sole and absolute discretion.
7
12. Payments of Certain Indebtedness. From and after the effective date of
--------------------------------
this Agreement, none of the Borrowers will, or will permit any Subsidiary,
without the prior written consent of the Lender, make:
(a) any amendment or modification of or supplement to the Alenia
Debt Loan Documents, other than amendments or modifications that change terms
which are not material, or changes necessary to grant to Alenia the Lien on
Module 2 of the Flight Assets; and
(b) payment of principal or interest on the Alenia Debt other
than in accordance with Section 6.1.15(e) of this Agreement.
13. Replacement Note. Exhibit B to the Financing Agreement is being
---------------- ---------
replaced in its entirety with Exhibit B attached hereto. The Borrowers shall
---------
execute and deliver to the Lender on the date hereof the Second Amended and
Restated Revolving Promissory Note in the maximum principal amount of Six
Million Five Hundred Thousand Dollars ($6,500,000) in the form of Exhibit B
---------
attached hereto and incorporated herein by reference (the "Replacement Note"),
in substitution for and not satisfaction of, the issued and outstanding
revolving promissory note. The Replacement Note shall be the "Revolving Credit
Note" for all purposes of the Financing Documents. The revolving promissory note
being substituted pursuant to this Agreement shall be marked "Replaced" and
returned to the Borrowers promptly after the execution and delivery of the
Replacement Note.
14. Fees. On the date of this Agreement, in consideration of the Lender's
----
agreement to reset the financial covenants, pursuant to Section 7 of this
Agreement, the Borrowers will pay the Lender a fully earned, non-refundable
release fee of Fifteen Thousand Dollars ($15,000).
15. Conditions Precedent. This Agreement shall become effective on the
--------------------
date the Borrowers satisfies each of the following conditions:
(a) The Borrowers execute and deliver to the Lender the Replacement
Note;
(b) The Borrowers execute and deliver to the Lender the Double Module
Security Agreement, together with all documents and instruments (including,
without limitation, UCC-1 financing statements, UCC-3 termination statements and
any assignments required under the Federal Assignment of Claims Act) required to
be filed, registered or recorded in order to create, in favor of the Lender, a
perfected first Lien in the Double Module Collateral (described in the Double
Module Security Agreement) and the proceeds thereof, in form and in sufficient
number for filing, registration, and recording in each office in each
jurisdiction in which such filings, registrations and recordations are required,
along with such evidence as the Lender may deem satisfactory that all necessary
filing fees and all recording and other similar fees, and all taxes and other
expenses related to such filings, registrations and recordings will be or have
been paid in full;
(c) The Borrowers shall pay all of the Lender's fees set forth in
Section 15 hereof and expenses, including reasonable attorney's fees, in
connection with this Agreement; and
8
(d) Provide the Lender with such other information, instruments,
opinions, documents, certificates and reports as the Lender may deem necessary
and requests prior to the Lender's execution of this Agreement.
16. Representations. The Borrowers represent and warrant to the Lender as
---------------
follows:
(a) Each Borrower has the power and authority to execute and deliver
this Agreement and each Borrower has the power and authority to perform its
obligations hereunder and has taken all necessary and appropriate action to
authorize the execution, delivery and performance of this Agreement;
(b) The Financing Agreement, as heretofore amended and as amended by
this Agreement, and each of the other Financing Documents remains in full force
and effect, and each constitutes the valid and legally binding obligation of
each Borrower, enforceable in accordance with its terms;
(c) Each Borrower's representations and warranties contained in the
Financing Agreement and the other Financing Documents are true and correct on
and as of the date of the Borrowers execution of this Agreement;
(d) The Alenia Debt Loan Documents described herein are all of the
documents currently evidencing the Alenia Debt;
(e) All of the Schedules to the Financing Agreement are true, correct
and complete as of the date hereof; and
(f) No Event of Default and no event which, with notice, lapse of
time or both would constitute an Event of Default, has occurred and is
continuing under the Financing Agreement or the other Financing Documents which
has not been waived in writing by the Lender.
17. Additional Representations. Each Borrower warrants and represents to
--------------------------
the Lender as follows:
(a) Each Borrower has no defenses, affirmative or otherwise, rights of
setoff, rights of recoupment, claims, counterclaims, actions or causes of action
of any kind or nature whatsoever against the Lender or any past, present or
future agent, attorney, legal representative, predecessor-in-interest,
affiliate, successor, assign, employee, director or officer of the Lender
(collectively, the "Bank Group"), directly or indirectly, arising out of, based
upon, or in any manner connected with, any transaction, event, circumstance,
action, failure to act, or occurrence of any sort or type, whether known or
unknown, which occurred, existed, was taken, permitted, or began prior to the
execution of this Agreement and accrued, existed, was taken, permitted or begun
in accordance with, pursuant to, or by virtue of the Obligations or any of the
terms or conditions of the Financing Documents, or which directly or indirectly
relate to or arise out of or in any manner are connected with the Obligations or
any of the Financing Documents; TO THE EXTENT ANY SUCH DEFENSES, AFFIRMATIVE OR
OTHERWISE, RIGHTS OF SETOFF, RIGHTS OF RECOUPMENT, CLAIMS, COUNTERCLAIMS,
ACTIONS OR CAUSES OF ACTION EXIST OR EXTEND, SUCH DEFENSES, RIGHTS, CLAIMS,
9
COUNTERCLAIMS, ACTIONS AND CAUSES OF ACTION ARE HEREBY FOREVER WAIVED,
DISCHARGED AND RELEASED.
(b) Each Borrower has freely and voluntarily entered into this Agreement
after an adequate opportunity and sufficient period of time to review, analyze
and discuss all terms and conditions of this Agreement and all factual and legal
matters relevant hereto with counsel freely and independently chosen by it. Each
Borrower further acknowledges that it has actively and with full understanding
participated in the negotiation of this Agreement after consultation and review
with its counsel and that this Agreement has been negotiated, prepared and
executed without fraud, duress, undue influence or coercion of any kind or
nature whatsoever having been exerted by or imposed upon any party to this
Agreement.
(c) As of the date hereof, there are no proceedings or investigations
pending or, so far as any Borrower knows, threatened against it, before any
court or arbitrator or any governmental, administrative or other judicial
authority or agency.
(d) There is no statute, rule, regulation, order or judgment, no charter,
by-law or preference stock provision with respect to any Borrower, and no
provision of any mortgage, indenture, contact or other Agreement binding on any
Borrower or any of its properties which would prohibit or cause a default under
or in any way prevent the execution, delivery, performance, compliance or
observance of any of the terms or conditions of this Agreement.
(e) No Borrower has voluntarily or involuntarily, granted any Liens to any
creditor not previously disclosed to the Lender in writing on or before the date
of this Agreement or permitted under the Financing Agreement and have not
otherwise taken any action or failed to take any action which could or would
impair, change, jeopardize or otherwise adversely affect the priority,
perfection, validity or enforceability of any Lien securing all or any portion
of the Obligations or the priority or validity of the Lender's claims with
respect to the Obligations relative to any other creditor of any Borrower other
than Permitted Liens as permitted under the Financing Agreement.
18. Additional Defaults. In addition to the Events of Default specifically
-------------------
enumerated in the Financing Documents, the occurrence of any of the following
events shall each constitute an Event of Default:
(a) the Borrowers or any other Person (other than the Lender) fail to
observe, perform, or comply with any of the terms, conditions or provisions of
this Agreement, as and when required;
(b) any additional defaults shall occur under any of the Financing
Documents as modified hereby;
(c) the results of any Field Examination are not in all respects
acceptable to the Lender in its sole and absolute discretion;
10
(d) any representation or warranty made herein, in any document
executed and delivered in connection herewith, or in any report, certificate,
financial statement or other instrument or document previously, now or hereafter
furnished by or on behalf of any Borrower in connection with this Agreement,
shall prove to have been false, incomplete or misleading in any material respect
on the date as of which it was made; and
(e) any default occurs under the Alenia Debt, which is not cured
within any applicable cure or grace period or waived in writing by Alenia.
19. No Novation. The Borrowers agree that this Agreement is not intended
-----------
to and shall not cause a novation with respect to any or all of the Obligations
of the Borrowers. The headings and captions in this Agreement are for the
convenience of the parties only and are not a part of this Agreement.
20. No Claims. The Borrowers acknowledge and warrant that the Lender has
---------
acted in good faith and has conducted in a commercially reasonable manner its
relationships with the Borrowers in connection with this Agreement and generally
in connection with the Financing Agreement and the Obligations, the Borrowers
hereby waiving and releasing any claims to the contrary.
21. Expenses. The Borrowers shall pay at the time this Agreement is
--------
executed and delivered all fees, commissions, costs, charges, taxes and other
expenses incurred by the Lender and its counsel in connection with this
Agreement, including, but not limited to, reasonable fees and expenses of the
Lender's counsel.
22. Time of Essence. Time is of the essence of this Agreement.
---------------
23. Consistent Changes. The Financing Documents are hereby amended
------------------
wherever necessary to reflect the changes described above.
24. Counterparts. This Agreement may be executed in any number of
------------
duplicate originals or counterparts, each of such duplicate originals or
counterparts shall be deemed to be an original and all taken together shall
constitute but one and the same instrument. The Borrowers agree that the Lender
may rely on a telecopy of any signature of the Borrowers. The Lender agrees that
the Borrowers may rely on a telecopy of this Agreement executed by the Lender.
25. Governing Law. Borrowers acknowledge and agree that this Agreement,
-------------
shall be governed by the Laws of the State, as if this Agreement had been
executed, delivered, administered and performed solely within the State even
though for the convenience and at the request of the Borrowers, this Agreement
may be executed elsewhere.
[SIGNATURES BEGIN ON THE FOLLOWING PAGE]
11
IN WITNESS WHEREOF, the Borrowers and the Lender have executed this
Agreement under seal as of the date and year first written above.
BORROWERS:
WITNESS/ATTEST: SPACEHAB, INCORPORATED
_________________________ By: /s/ Julia A. Pulzone____________(Seal)
------------------------------------
Julia A. Pulzone
Chief Financial Officer
WITNESS/ATTEST JOHNSON ENGINEERING CORPORATION
_________________________ By: /s/ Julia A. Pulzone____________(Seal)
------------------------------------
Julia A. Pulzone
Chief Financial Officer
WITNESS/ATTEST: ASTROTECH SPACE OPERATIONS, INC.
_________________________ By: /s/ Julia A. Pulzone____________(Seal)
------------------------------------
Julia A. Pulzone
Chief Financial Officer
LENDER:
WITNESS: BANK OF AMERICA, N. A.
_________________________ By: /s/ Lawrence J. Shufelt_________(Seal)
-----------------------------------------
Lawrence J. Shufelt, Vice President
12