Document:

EXHIBIT 4.2

 

Letter Agreement

 

August 31, 2007

 

                Spacehab, Incorporated (“Spacehab”) agrees
that Plainfield Special Situations Master Fund Limited (“Investor”) shall be
entitled to participate in up to 25% of all future public or private sales or
issuances by Spacehab of its common stock or securities convertible into its
common stock or debt securities (“New Securities”) to the extent necessary to
maintain the percentage of Spacehab common stock (provided the percentage of
common stock shall be determined as if any issued and outstanding Series C
Convertible Preferred Stock had been converted on the date such percentage is
determined) held by Investor immediately prior to the proposed issuance of the
New Securities (its “Pro
Rata Share”); provided, however, that the number of shares
issuable to Investor shall not exceed the amount which would require
shareholder approval under the principal securities exchange on which the
Spacehab common stock is listed. Spacehab will provide Investor with at least 5
business days advance written notice of any such proposed private sale or
issuance of New Securities (the “Proposed Issuance”), which notice shall
contain information pertaining thereto (including the purchase price) and an
offer to Investor to participate in such Proposed Issuance (at a price and upon
terms and conditions no less favorable than those provided to the other
offerees or purchasers of New Securities in the Proposed Issuance).

 

                At its sole option, Investor
may, by written notice to Spacehab so as to be actually received by Spacehab on
or before the fifth day following delivery of notice of such Proposed Issuance,
exercise its preemptive right contained herein and elect to purchase its Pro
Rata Share of New Securities at the price and on the same terms and conditions
as the other purchasers of the New Securities. Failure of Investor to deliver
such notice within five business days shall be deemed to be a waiver of such preemptive
rights. If the terms of the Proposed Issuance materially change subsequent to
delivery of the notice to Investor, Spacehab will provide Investor with a new 5
day advance notice period prior to consummating the transaction contemplated by
the Proposed Issuance. Any issuance of New Securities for cash not completed
within 90 days of the date notice is provided by Spacehab to Investor shall be
deemed to be a new issuance of New Securities, which shall require a new 5 day notice.

 

                This purchase right shall
terminate in two years from date of agreement.

 

                This preemptive right shall not
apply to: (i) securities of Spacehab issued or sold pursuant to the
agreements or convertible notes set forth on Exhibit A; (ii) securities
issued upon the exchange of the convertible notes that are outstanding on the
date hereof; (iii) the issuance of capital stock or warrants, options or
other rights to acquire capital stock currently outstanding or that may
hereafter be granted by Spacehab to any officer, employee, consultant or
director under any existing or future option plan, incentive plan or other
benefit plan of Spacehab or under any option, warrant or other right to acquire
capital stock that is or has been approved by the shareholders of Spacehab; (iv) securities
of Spacehab issued in connection with the acquisition of assets or the equity interests
of any entity owning such assets; or (v) with respect to a merger, plan of
exchange or other combination involving Spacehab that requires the approval of
the shareholders of Spacehab and with respect to which such approval is
obtained. This Agreement shall become effective immediately following the closing
of the transactions contemplated under that certain Restructuring and Exchange
Agreement dated August 31, 2007 and executed contemporaneously herewith.

 

 

                This Agreement may be executed
in any number of counterparts, all of which taken together shall be deemed to
constitute one and the same instrument. This Agreement shall be governed under
the laws of the State of New York.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  Spacehab,
  Incorporated

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/Thomas
  B. Pickens, III

  
	
   

  	
  Name:

  	
  Thomas
  B. Pickens, III

  
	
   

  	
  Title:

  	
  Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  Accepted and agreed to as
  of the

  	
   

  
	
  date set forth above:

  	
   

  
	
   

  	
   

  
	
  Plainfield Special
  Situations Master Fund Limited

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/Steven Segaloff

  	
   

  
	
  Name:

  	
  Steven Segaloff

  	
   

  
	
  Title:

  	
  Authorized Individual

  	
   

  

 

 

EXHIBIT
A

 

8.0% Convertible Notes due
2007

5.5% Senior Convertible
Notes due 2010

Series B Convertible
Preferred Stock

Securities Issued under the
Restructuring and Exchange Agreement dated even date herewith

1997 Employee Stock Purchase
PlanEXHIBIT 4.3

 

Letter Agreement

 

August 31, 2007

 

                Spacehab, Incorporated (“Spacehab”) agrees
that Lanphier Capital Management Inc. (“Investor”) shall be
entitled to participate in up to 25% of all future public or private sales or
issuances by Spacehab of its common stock or securities convertible into its
common stock or debt securities (“New Securities”) to the extent necessary to
maintain the percentage of Spacehab common stock (provided the percentage of
common stock shall be determined as if any issued and outstanding Series C
Convertible Preferred Stock had been converted on the date such percentage is
determined) held by Investor immediately prior to the proposed issuance of the
New Securities (its “Pro
Rata Share”); provided, however, that the number of shares
issuable to Investor shall not exceed the amount which would require
shareholder approval under the principal securities exchange on which the
Spacehab common stock is listed. Spacehab will provide Investor with at least 5
business days advance written notice of any such proposed private sale or
issuance of New Securities (the “Proposed Issuance”), which notice shall
contain information pertaining thereto (including the purchase price) and an
offer to Investor to participate in such Proposed Issuance (at a price and upon
terms and conditions no less favorable than those provided to the other
offerees or purchasers of New Securities in the Proposed Issuance).

 

                At its sole option, Investor
may, by written notice to Spacehab so as to be actually received by Spacehab on
or before the fifth day following delivery of notice of such Proposed Issuance,
exercise its preemptive right contained herein and elect to purchase its Pro
Rata Share of New Securities at the price and on the same terms and conditions
as the other purchasers of the New Securities. Failure of Investor to deliver
such notice within five business days shall be deemed to be a waiver of such preemptive
rights. If the terms of the Proposed Issuance materially change subsequent to
delivery of the notice to Investor, Spacehab will provide Investor with a new 5
day advance notice period prior to consummating the transaction contemplated by
the Proposed Issuance. Any issuance of New Securities for cash not completed
within 90 days of the date notice is provided by Spacehab to Investor shall be
deemed to be a new issuance of New Securities, which shall require a new 5 day notice.

 

                This purchase right shall
terminate in two years from date of agreement.

 

                This preemptive right shall not
apply to: (i) securities of Spacehab issued or sold pursuant to the
agreements or convertible notes set forth on Exhibit A; (ii) securities
issued upon the exchange of the convertible notes that are outstanding on the
date hereof; (iii) the issuance of capital stock or warrants, options or
other rights to acquire capital stock currently outstanding or that may
hereafter be granted by Spacehab to any officer, employee, consultant or
director under any existing or future option plan, incentive plan or other
benefit plan of Spacehab or under any option, warrant or other right to acquire
capital stock that is or has been approved by the shareholders of Spacehab; (iv) securities
of Spacehab issued in connection with the acquisition of assets or the equity
interests of any entity owning such assets; or (v) with respect to a
merger, plan of exchange or other combination involving Spacehab that requires
the approval of the shareholders of Spacehab and with respect to which such
approval is obtained. This Agreement shall become effective immediately
following the closing of the transactions contemplated under that certain
Restructuring and Exchange Agreement dated August 31, 2007 and executed
contemporaneously herewith.

 

 

                This Agreement may be executed
in any number of counterparts, all of which taken together shall be deemed to
constitute one and the same instrument. This Agreement shall be governed under
the laws of the State of New York.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  Spacehab,
  Incorporated

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/Thomas
  B. Pickens, III

  
	
   

  	
  Name:

  	
  Thomas
  B. Pickens, III

  
	
   

  	
  Title:

  	
  Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  Accepted and agreed to as
  of the

  	
   

  
	
  date set forth above:

  	
   

  
	
   

  	
   

  
	
  Lanphier Capital
  Management Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/C. E. Lanphier

  	
   

  
	
  Name:

  	
  C. E. Lanphier

  	
   

  
	
  Title:

  	
  President

  	
   

  

 

 

EXHIBIT
A

 

8.0% Convertible Notes due
2007

5.5% Senior Convertible
Notes due 2010

Series B Convertible
Preferred Stock

Securities Issued under the
Restructuring and Exchange Agreement dated even date herewith

1997 Employee Stock Purchase
Plan

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