Exhibit 10.14
LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into as of May 27, 2001, (the
"Execution Date") by and between HEURISTIC PHYSICS LABORATORIES, INC., a
California corporation ("Borrower") and Xxxx Xxxxxxxxx, a California resident
("Lender").
RECITALS
A. Borrower and Applied Materials, Inc. ("AMAT") have entered into that
certain Secured Convertible Debenture, dated as of February 15, 2000 (as may
from time to time be modified, amended, supplemented, restated or superseded,
the "Debenture").
B. Borrower wishes to borrow from Lender $1,500,000 (the "Loan") in the
event that AMAT declares outstanding all the Obligations (as defined in the
Debenture) due to an Event of Default (as defined in the Debenture) and demands
repayment of the Debenture (a "Demand").
C. Lender is willing to provide the Loan (as defined below) to Borrower
if AMAT makes a Demand subject to certain terms and conditions.
NOW, THEREFORE, in consideration of the covenants and conditions
contained herein, the parties agree as follows:
AGREEMENT
1. THE LOAN. Subject to all of the terms and conditions of this
Agreement, Lender agrees to lend Borrower $1,500,000 (the "Loan") promptly after
receipt of a written notice from Borrower of the occurrence of a Demand.
2. THE COMMITMENT FEE. Upon the execution of this Agreement by the
parties hereto, Borrower shall pay Lender a fee of $1,000 for the Lender's
commitment to make the Loan.
3. TERMINATION OF LENDER'S OBLIGATION TO MAKE LOAN. The Lender's
obligation to make the Loan upon a Demand shall terminate (i) if the Borrower or
Borrower's parent raises $5 million in equity or debt financing, or (ii) one
year from the Execution Date, whichever occurs first.
4. THE NOTE. The Loan will be evidenced by a Promissory Note of
Borrower (the "Note") in the form attached hereto as EXHIBIT A.
5. INTEREST. The amount advanced by Lender under the Note shall bear
simple interest at the annual rate of 8.0%. Interest on the amount advanced by
Lender shall be payable quarterly in arrears on the first business day of each
fiscal quarter of Borrower.
6. PAYMENTS. All outstanding principal of the Note shall be due and
payable on the date which is twelve months after date of issuance of the Note.
Borrower may prepay the Note, without premium or penalty, in whole at any time
or from time to time in part, with accrued interest to the date of such
prepayment on the amount prepaid.
7. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to
Lender as follows:
(a) Borrower has been duly incorporated and is validly existing in
good standing under the laws of the State of California.
(b) Borrower has the corporate power and authority to enter into
and perform this Agreement and the Note (collectively, the "Documents") and to
execute all documents and perform all other acts as may be necessary to perform
all of Borrower's obligations under the Documents.
(c) Each of the Documents has been duly authorized by all necessary
corporate action on the part of Borrower and this Agreement has been duly
executed and delivered by Borrower.
(d) This Agreement is, and the Note will be upon execution, valid
and binding obligations of Borrower enforceable in accordance with their
respective terms.
(e) The consummation of the transactions contemplated by the
Documents does not and will not violate any statute, law, ordinance or
regulation.
8. NOTICES. All notices or other communications required or permitted
under this Agreement shall be in writing and shall be deemed to have been duly
given if delivered personally or by courier guaranteeing delivery within the
next two days, or by telecopier, addressed as follows or such other address as
the party to be notified has furnished in writing by a notice given in
accordance with this Section 8:
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If to Borrower:
Heuristic Physics Laboratories, Inc.
0000 Xxxxxxx Xxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx, President
Telephone (000) 000-0000
Facsimile: (000) 000-0000
If to Lender:
Xxxx Xxxxxxxxx
0000 Xxxxxx Xx.
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Any such notice or communication shall be deemed given as of the date of
delivery, if delivered personally, on the second day after the sending thereof,
if by courier, and when transmission is acknowledged, if telecopied (except that
a notice of change of address for receipt of notice under this Section 8 shall
not itself be deemed to have been given until actually received by the
addressee).
9. EXPENSES. Borrower shall pay on demand all costs and expenses,
including, without limitation, reasonable fees and out-of-pocket expenses of
counsel, incurred by Lender in connection with the enforcement and protection of
its rights hereunder, including the protection of its rights in any bankruptcy,
reorganization, liquidation or insolvency proceeding of Borrower.
10. INTERPRETATION. The headings used in the Documents are for the
purpose of reference only and will not otherwise affect the meaning or
interpretation of any provisions of the Documents. All pronouns and all
variations thereof shall be deemed to refer to the masculine, feminine or
neuter, singular or plural, as the context in which they are used may require.
In the event any claim is made relating to any conflict, omission or ambiguity
in the Documents, no presumption or burden of proof or persuasion shall be
implied by virtue of the fact that the Documents were prepared by or at the
request of a particular party or its counsel.
11. GOVERNING LAW. The Documents shall be governed by, and construed
and enforced in accordance with, the laws of the State of California, without
regard to its principles of conflicts of law. The parties agree to the exclusive
jurisdiction and hereby irrevocably waive objection as to the jurisdiction and
venue of the state and federal courts situated in San Jose, California.
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12. SURVIVAL. All agreements, representations and warranties made in
the Documents shall survive the execution and delivery of the Documents and
shall continue until the Note and all obligations of Borrower under the
Documents have been paid and performed in full.
13. BINDING EFFECT. The provisions of the Documents shall bind and
inure to the benefit of the parties and their respective successors and
permitted assigns.
14. ASSIGNMENT. This Agreement and any rights hereunder may not be
assigned by Borrower without the prior written consent of Lender.
15. AMENDMENT AND WAIVER. The Documents may be amended, modified or
supplemented only by a writing executed by each of the parties. Any party may
waive any provision of the Documents to the extent such provision is for the
benefit of the waiving party; PROVIDED, HOWEVER, that such waiver must be in
writing. No action taken pursuant to the Documents, including any investigation
by or on behalf of any party, shall be deemed to constitute a waiver by that
party of its or any other party's compliance with any provision of the
Documents. No waiver by any party of a breach of, or noncompliance with, any
provision of the Documents shall be construed as a waiver of any subsequent or
different breach or noncompliance, and no forbearance by a party to seek a
remedy for breach or noncompliance by another party shall be construed as a
waiver of any right or remedy with respect to such breach or noncompliance.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute a single agreement.
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IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to
be executed as of the date first above written.
BORROWER:
HEURISTIC PHYSICS LABORATORIES, INC.
a California corporation
By: /s/ XXXXX XXXXXXXX
---------------------------------
Name: Xxxxx Xxxxxxxx
Title: President and CFO
LENDER:
/s/ XXXX XXXXXXXXX
-------------------------------------
XXXX XXXXXXXXX, a California resident
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EXHIBIT A
PROMISSORY NOTE
PROMISSORY NOTE
$1,500,000.00 San Jose, California
_____________, 2001
FOR VALUE RECEIVED, HEURISTIC PHYSICS LABORATORIES, INC., a California
corporation ("Borrower"), hereby promises to pay to Xxxx Xxxxxxxxx, a California
resident ("Lender"), or order, the principal sum of One Million Five Hundred
Thousand Dollars and No Cents ($1,500,000.00), on ____________, 200_, [TWELVE
MONTHS FROM THE DATE OF ISSUANCE OF THIS NOTE] (the "Due Date") and to pay
simple interest on the unpaid principal balance hereof on the Due Date at the
rate of 8.0% per annum. Interest shall be computed on the basis of a year of 365
days for the actual number of days elapsed. Interest on the outstanding
principal amount of this Note shall be payable quarterly in arrears on April 1,
July 1, October 1 and January 1 of each year. All payments under this Note shall
be made in lawful currency of the United States of America at [LENDER'S
ADDRESS].
Borrower may prepay this Note, without premium or penalty, in whole at
any time or from time to time in part, with accrued interest to the date of such
prepayment on the amount prepaid.
Borrower waives diligence, presentment, protest and notice of protest,
dishonor and nonpayment of this Note, and expressly agrees that this Note, or
any payment under it, may be extended and any security may be accepted, released
or substituted by the holder from time to time without in any way affecting the
liability of Borrower.
This Note is issued pursuant to a Loan Agreement, dated as of May 29,
2001, between Borrower and Lender (the "Loan Agreement"). The holder of this
Note is entitled to the benefits of the terms and conditions of the Loan
Agreement. Upon the occurrence of any Event of Default, as defined below, the
entire principal unpaid balance and accrued interest shall immediately become
due and payable without diligence, demand, presentment, protest or notice of any
kind.
The occurrence of any of the following shall, at the option of Lender,
constitute an event of default (each an "Event of Default") under this Note: (1)
Borrower fails to pay any portion of the Loan under this Note, whether of
principal or interest (including any interest which, but for the provisions of
the Bankruptcy Code, would have accrued on such amounts) when due and payable or
when declared due and payable; or (2) Borrower's material failure to comply with
any of the material provisions, conditions, covenants, or agreements in, or the
material incorrectness of any material representation or warranty contained in,
the Loan Agreement or this Note; provided, however, that no
Event of Default shall occur under clause (2) unless Lender shall have given
Borrower notice of the default, and allowed Borrower to cure such default within
ten (10) business days of having received such notice. If Borrower fails to cure
the default within said 10-day period, Lender may proceed with its rights and
remedies under this Note.
Borrower agrees to reimburse the holder of this Note for all costs of
collection or enforcement of this Note including, but not limited to, reasonable
attorneys' fees, incurred by the holder.
This Note shall be governed by and construed in accordance with the
laws, without regards to the laws as to choice or conflict of laws, of the State
of California.
EXECUTED at San Jose, California.
HEURISTIC PHYSICS LABORATORIES, INC.,
a California corporation
By: _________________________________
Name:
Title:
