FOURTH AMENDMENT TO FINANCING AND SECURITY AGREEMENT
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THIS FOURTH AMENDMENT TO FINANCING AND SECURITY AGREEMENT (this
"Agreement") is dated as of January 16, 2002, but effective as of December 31,
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
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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. Pursuant to that certain Third Amendment to Financing Agreement
dated as of October 24, 2001, by and among the Borrowers and the Lender, the
parties thereto agreed to 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 otherwise modify the
Financing Agreement as more fully set forth therein (the "Third Amendment").
E. The Company desires to obtain mortgage financing in an amount of
not less than One Million Five Hundred Thousand Dollars ($1,500,000)from a third
party (the "Proposed Mortgage"), and in connection therewith the Company
anticipates that the Proposed Mortgage
will have to be secured by the Excluded Collateral (as hereinafter defined)
owned by the Company located in Cape Canaveral, Florida.
F. The Borrowers have requested, that the Lender (i) permanently
reduce the maximum principal amount of the revolving credit facility and (ii)
consent to the Borrowers entering into the Proposed Mortgage and related
transactions, and the Lender has agreed to do so on the condition, among others,
that this Agreement be executed.
AGREEMENTS
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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
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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 definition of "Revolving Credit Committed
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Amount" set forth in Section 1.1 of the Financing Agreement is hereby deleted in
its entirety and the following is inserted in full substitution thereof:
"Revolving Credit Committed Amount" means $6,500,000, as such
amount shall be permanently reduced by the aggregate amount of all
Revolving Credit Permanent Reduction Amounts, from time to time.
From and after the date hereof, the following defined terms are added
to Section 1.1 of the Financing Agreement:
"Mortgage Closing Date" means the date on which the Proposed
Mortgage closes and funds.
"Net Mortgage Proceeds" means the net proceeds received from
the Proposed Mortgage on the Mortgage Closing Date, after the payment
of customary costs and expenses in connection with the Proposed
Mortgage.
"Revolving Credit Permanent Reduction Amount" shall mean as of any
date, the sum of the Step Reductions occurring on or prior to such date
and the Net Mortgage Proceeds payable to the Lender.
"Step Reduction" means the following permanent reductions to
the Revolving Credit Committed Amount, which are cumulative in nature
and effective as of the following dates:
Date: Step Reduction:
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January 1, 2002 $500,000;
February 1, 2002 $500,000;
March 1, 2002 $500,000;
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April 1, 2002 $750,000;
May 1, 2002 $750,000;
June 1, 2002 $750,000; and
July 1, 2002 $750,000.
By way of illustration, on February 1, 2002, the total Step Reduction
applicable to the Revolving Credit shall be $1,000,000 and the Step
Reductions shall reduce the Revolving Credit Committed Amount by
$1,000,000.
3. Borrowing Base. Notwithstanding anything set forth in the
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Financing Agreement or in Paragraph 4 of the Third Amendment to the contrary,
from and after January 1, 2002, the Borrowers shall continue to furnish to the
Lender no less frequently than the fifteenth (15th) day of each month and at
such other times as may be requested by the Lender, a Borrowing Base Report in
the form required from time to time by the Lender, appropriately completed and
duly signed. Unless otherwise requested by the Lender, the Borrowing Base Report
shall be dated as of the last Business Day of the immediately preceding month
and shall contain a detailed aging schedule of all Receivables by Account Debtor
as of the date of the Borrowing Base Report, the amount and payments on the
Receivables, and the calculations of the Borrowing Base, all in such detail, and
accompanied by such supporting and other information, as the Lender may from
time to time request, including, but not limited to, 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
reasonably request.
4. Revolving Credit Mandatory Reductions. Paragraph 6 of the Third
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Amendment is hereby deleted in its entirety.
5. Letters of Credit. Notwithstanding anything set forth in the
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Financing Agreement to the contrary, the Lender shall not be obligated to issue
any Letter of Credit having an expiration date beyond June 30, 2002 or if the
Lender determines in the exercise of its sole, but reasonable discretion, that
the face amount of such Letter of Credit will at any time exceed the then
applicable Revolving Credit Committed Amount.
6. Replacement Note. Exhibit B to the Financing Agreement is being
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replaced in its entirety with Exhibit B attached hereto. The Borrowers shall
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execute and deliver to the Lender on the date hereof the Third 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
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attached hereto and incorporated herein by reference (the "Replacement Note"),
in substitution for and not satisfaction of, the issued and outstanding
revolving credit 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.
7. Conditions Precedent. This Agreement shall become effective on
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the date the Borrowers satisfies each of the following conditions:
(a) The Borrowers execute and deliver to the Lender the
Replacement Note;
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(b) The Borrowers shall pay all of the Lender's reasonable attorney's
fees, in connection with this Agreement; and
(c) 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.
8. Request for Consent to Proposed Mortgage; Application of Net Mortgage
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Proceeds.
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(a) As required under Sections 6.2.4 and 6.2.8 of the Financing
Agreement, the Borrowers hereby request the Lender's consent to the Borrowers
entering into definitive agreements with one or more lenders in connection with
the Proposed Mortgage of the collateral set forth in Exhibit A hereto (the
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"Excluded Collateral"). The Lender agrees that upon receipt and review of
substantially final drafts of the definitive documents to be executed in
connection with the Proposed Mortgage, provided no Event of Default has occurred
and is continuing at such time and further provided the terms of such definitive
documents are customary for transactions of such nature, the Lender will not
unreasonably withhold, condition or delay its consent to the Proposed Mortgage,
including, without limitation, the creation, assumption or existence of such
indebtedness and the Company's granting a security interests on the Excluded
Collateral.
(b) The Lender agrees at the expense of the Borrowers to execute and
deliver to the Borrowers, without any further consideration, any required
filings, including those under the Uniform Commercial Code or otherwise, that
are necessary to release any security interest or lien the Lender has in any of
the Excluded Collateral.
(c) On the Mortgage Closing Date, the Borrowers shall promptly cause
the Net Mortgage Proceeds in an amount equal to not less than One Million Five
Hundred Thousand Dollars ($1,500,000) to be immediately paid to the Lender, and
in the event that the Net Mortgage Proceeds equal or exceed Three Million
Dollars ($3,000,000), the Borrowers shall cause all Net Mortgage Proceeds in
excess of Three Million Dollars ($3,000,000) to be immediately paid to the
Lender, but not to exceed the unpaid Obligations.
(d) Notwithstanding anything set forth herein to the contrary, the
Borrowers and the Lender understand and agree that the amount of Net Mortgage
Proceeds paid to the Lender by the Borrowers on the Mortgage Closing Date will
be reduced by the amount of any Step Reduction paid in the month in which the
Proposed Mortgage closes. By way of illustration, if the Mortgage Closing Date
is March 15, 2002 and the Net Mortgage Proceeds are $1,500,000, then, the
Borrowers shall only be required to remit to the Lender $1,000,000, which is the
difference between the Net Mortgage Proceeds ($1,500,000) and the Step Reduction
already paid to the Lender for such month ($500,000).
(e) Notwithstanding anything set forth herein to the contrary, in the
event the Net Mortgage Proceeds are not received on or before April 30, 2002,
the Revolving Credit Committed Amount shall be permanently reduced on May 1,
2002 by One Million Five Hundred Thousand Dollars ($1,500,000) (which amount
includes the Step Reduction in the amount of $750,000 payable on May 1, 2002.
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9. Representations. The Borrowers represent and warrant to the Lender
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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) All of the Schedules to the Financing Agreement are true, correct
and complete as of the date hereof; and
(e) 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.
10. Additional Representations. Each Borrower warrants and represents to
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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,
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
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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.
11. Additional Defaults. In addition to the Events of Default
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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) 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;
(d) the occurrence of any default under the Proposed Mortgage.
12. No Novation. The Borrowers agree that this Agreement is not
intended to and shall not cause a novation with respectto any or all of the
Obligations of the Borrowers. The
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headings and captions in this Agreement are for the convenience of the parties
only and are not a part of this Agreement.
13. No Claims. The Borrowers acknowledge and warrant that the
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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.
14. Expenses. The Borrowers shall pay at the time this Agreement
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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.
15. Time of Essence. Time is of the essence of this Agreement.
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16. Consistent Changes. The Financing Documents are hereby
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amended wherever necessary to reflect the changes described above.
17. Counterparts. This Agreement may be executed in any number
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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.
18. Governing Law. Borrowers acknowledge and agree that this
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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]
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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)
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Julia A. Pulzone
Chief Financial Officer
WITNESS/ATTEST JOHNSON ENGINEERING CORPORATION
_________________________ By:: /s/ Julia A. Pulzone (Seal)
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Julia A. Pulzone
Chief Financial Officer
WITNESS/ATTEST: ASTROTECH SPACE OPERATIONS, INC.
_________________________ By:: /s/ Julia A. Pulzone (Seal)
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Julia A. Pulzone
Chief Financial Officer
LENDER:
WITNESS: BANK OF AMERICA, N. A.
_________________________ By: /s/ Mark A. Herdman (Seal)
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Mark Herdman, Vice President
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