EXHIBIT 10.2 - CONSULTANT/ADVISORY SERVICES AGREEMENT
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CONSULTANT/ADVISORY SERVICES AGREEMENT
This Agreement confirms that EMC Holdings Corporation ("EMC") is engaged as an
advisor to SpaceDev, Inc. ("SpaceDev", also known and referred to as "SPDV"),
its successors, subsidiaries and affiliates (collectively referred to herein as,
the "Company"), with respect to financial advisory, market intelligence,
corporate finance, and merger and acquisition matters for twelve (12)
consecutive months effective June 18, 2001. In consideration of the covenants
contained herein, the Parties agree as follows:
During the term of this Agreement, EMC shall provide the Company with such
regular and customary advisory services as are reasonably requested by the
Company, provided that EMC shall not be required to undertake duties not
reasonably within the scope of the advisory services for which it is generally
engaged. In the performance of its duties, EMC shall provide the Company with
its best judgment and efforts. It is understood and acknowledged by the Parties
that the value of EMC's advice is not measurable in a quantitative manner and
EMC shall be obligated to render advice, upon the request of the Company, in
good faith. EMC's duties may include, but will not necessarily be limited to,
the following:
o Advice regarding the formation of corporate goals and their
implementation
o Advice regarding the financial structure of the Company or its
divisions or any programs and projects undertaken by any of
the foregoing
o Advice regarding corporate organization, personnel, and
selection of needed specialty skills
The Company acknowledges that EMC and its affiliates are in the business of
providing advisory services (of all types contemplated by this Agreement) to
others. Nothing herein contained shall be construed to limit or restrict EMC or
its affiliates in conducting such business with respect to others or in
rendering such advice to others.
PARTIES AGREE TO THE FOLLOWING TERMS:
(xiv) SPDV understands and agrees that the fees are for counsel. In
connection with the consulting services being provided to
SpaceDev by EMC, SPDV agrees to issue to EMC one million two
hundred thousand (1,200,000) shares of SPDV's restricted 144
common stock to be dispersed over a six (6) month period. All
stock issued is non-cancelable and non-refundable. The shares
are to be dispersed as follows during the term of this
agreement:
a) Five hundred thousand (500,000) shares of
non-cancelable and non-refundable 144 common stock
upon seven (7) days from execution of this Agreement.
b) Four hundred thousand (400,000) shares of
non-cancelable and non-refundable 144 common stock
shall be issued October 18, 2001.
c) Three hundred thousand (300,000) shares of
non-cancelable and non-refundable 144 common stock
shall be issued December 18, 2001.
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(xv) Immediately upon signing, both Parties shall mutually prepare
a timeline of goals and objectives that will be mutually
agreed to seven days from the effective date.
(xvi) PAYMENT. SPDV agrees to make all payments immediately as
contemplated in this agreement. Any pre-approved out of pocket
expenses (see section (xix), incurred by EMC on SPDV's behalf
shall be paid in full within ten (10) business days from
receipt of expense report. SPDV agrees to issue as payment,
the stock for EMC's consulting services as laid out in section
(i) sub headings a), b) and c). Upon termination of this
Agreement, all monies and fees or any portion thereof owed to
EMC up to the date of termination shall be paid in full
(xvii) CONFIDENTIALITY. "Confidentiality" shall mean either Parties
trade secrets, operating systems, marketing strategy,
knowledge concerning either Party's customers and their
specialized requirements (including and lists and databases
pertaining thereto), Parties' network insurance broker and
agents, any technical, financial, or commercial data or other
information (including without limitation ideas, concepts,
know-how, methods, techniques, structures, information or
materials marketing and development plans and all written
documents. The definition of Confidentiality applies, without
regard, to whether any specific matters would be deemed
confidential, material, and important. The Parties stipulate
that the matters are confidential, material, and important,
and gravely affect the effective and successful conduct of the
Parties' business.
(xviii) TERM AND TERMINATION. The term of this agreement shall
commence on the effective date, June 18, 2001, and shall
remain in effect for a period of twelve (12) months or until
terminated as provided herein. It is the intent of the parties
that this Agreement shall be renewed for a period of twelve
(12) months based on a good faith renegotiation by both
Parties of the terms of the Agreement. Termination of this
Agreement is at will by either Party upon thirty-days (30)
days written notice. Written notice served on either party
either personally, via facsimile transmission, Federal Express
or by United States mail. Section (iv) shall survive the
termination of this agreement. With the exception of common
stock payable under section (i) above, which shall not be
prorated, upon termination of this Agreement, all monies,
compensation and fees or any portion thereof owed to EMC shall
be prorated up to the date of termination and shall be paid in
full.
(xix) Governing LAW. All questions concerning this Agreement, its
construct, and the rights and liabilities of the Parties
hereto shall be interpreted and enforced in accordance with
the laws of the State of California. Any controversy or claim
arising out of or relating to this contract, or the breach
thereof, shall be settled by arbitration administered by the
American Arbitration Association in accordance with its
Commercial Arbitration Rules of California, and judgment on
the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof. In the event of any dispute
arising out of this agreement, the prevailing party shall be
entitled to the recovery of any costs including attorney's
fees.
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(xx) MODIFICATION. No modifications to the Agreement may be made
unless expressed in writing and agreed to by both Parties.
(xxi) FORCE MAJEURE. Neither Party shall be in default if failure to
perform any obligation hereunder is caused solely by
supervening conditions beyond that Party's control, including
acts of God, civil commotion, strikes, labor disputes, and
governmental demands or requirements.
(xxii) Company agrees to lock up any shares, options, warrant of SPDV
held by Xxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxxxx Xxxxx and Xxxxxxx
Xxxxx, including immediate family members, during the term of
this agreement, shall not sell, offer to sell, dispose of
directly or indirectly in any manner whatsoever SPDV stock.
EMC likewise agrees not to permit or cause any of its
restricted SPDV securities to be made unrestricted before the
legal restriction period, or to be offered, sold or disposed
of directly or indirectly, in any manner whatsoever during the
term of this Agreement. The Company shall cause all of the
foregoing persons to execute an agreement with EMC regarding
such restrictions in form and substance satisfactory to EMC
and its counsel.
(xxiii) Additionally, if EMC introduces the Company to another party
or entity during the term of this Agreement and, as a result
of such introduction, a financing transaction is consummated
during the twelve (12) month period following the term of this
Agreement, the Company shall pay EMC upon the consummation of
such financing transaction a fee equal ten percent (10%) of
the value of said transaction.
(xxiv) ACQUISITION TRANSACTION. For purposes of this Agreement, the
term "Acquisition Transaction" means (i) any merger,
consolidation, reorganization or other business combination
pursuant to which the businesses of a third party are combined
with that of the Company, (ii) the acquisition, directly or
indirectly, by the Company of all or a substantial portion of
the assets or common equity of a third party by way of
negotiated purchase or otherwise or (iii) the acquisition,
directly or indirectly, by a third party of all or a
substantial portion of the assets or common equity of the
Company by way of negotiated purchase or otherwise.
(xxv) In connection with a proposed Acquisition Transaction, EMC's
advisory services may include the following: (a) assistance in
the evaluation of a third party from a financial point of
view, (b) assistance and advice with respect to the form and
structure of the Acquisition Transaction and the financing
thereof, (c) conducting discussions and negotiations regarding
an Acquisition Transaction or (d) providing other related
advice and assistance as the Company may reasonably requestin
connection with an Acquisition Transaction.
(xxvi) For purpose of this Agreement, "Consideration" means the
aggregate value, whether in cash, securities, assumption (or
purchase subject to) of debt or liabilities (including,
without limitation, indebtedness for borrowed money, pension
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liabilities and guarantees) or other property, obligations or
services, paid or payable directly or indirectly (in escrow or
otherwise) or otherwise assumed in connection with an
Acquisition Transaction. The value of such Consideration shall
be determined as follows:
(a) The value of securities, liabilities, obligations,
property and services shall be the fair market value
as we shall mutually agree upon at the date of the
closing of the Acquisition Transaction; and
(b) The value of indebtedness, including indebtedness
assumed, shall be the face amount.
(xxvii) If the Consideration payable in an Acquisition Transaction
includes contingent payments to be calculated by reference to
uncertain future occurrences, such as future financial or
business performance, then any fees of EMC relating to such
Consideration shall be payable at the time of the receipt of
such Consideration.
(xxviii) In connection with our services, the Company agrees that if,
during the term of this Agreement or, within one year
thereafter, an Acquisition Transaction is consummated with a
third party introduced by EMC, or the Company enters into a
definitive agreement with a third party introduced by EMC,
which at any time thereafter results in an Acquisition
Transaction, the Company will pay EMC a transaction fee equal
to ten percent (10%) of the Consideration.
(xxix) GENERAL. The services to be provided by EMC hereunder do not
include the giving of tax, legal, regulatory, actuarial or
other specialist advice or the provision of' any other
services unless EMC specifically agrees in writing to provide
such services. EMC has no liability in respect of any services
or advice provided to the Company by persons other than EMC
(including accountants, legal advisers and other specialist
advisers) and the degree to which EMC may rely on the work of
such other persons shall not be affected by any limitation of
liability for such work agreed between them and the Company.
(xxx) EMC will not be responsible for any due diligence for the
Company in relation to any transaction (whether in terms of
nature, extent, adequacy or performance). In particular, EMC
will not have any responsibility for due diligence which would
normally be carried out by specialist advisers (such as
accountancy, tax, legal or valuation advisers) notwithstanding
that any information or advice from these advisers may be
passed on to EMC or passed on by EMC to the Company. It is
solely the Company's responsibility to ensure that the
information and advice relating to such due diligence is
received and considered by the Company and is adequate for the
purposes of the transaction.
(xxxi) Notwithstanding that EMC is not responsible for due diligence,
either Party reserves the right at its absolute discretion and
for its own purposes to take whatever steps it may consider
appropriate to satisfy itself as to the accuracy and
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completeness of any public documents issued in connection with
any transaction. The Company agrees to co-operate fully with
EMC in the taking of such steps.
(xxxii) In addition to all other charges payable to EMC as per the
terms hereof, the, Company agrees to reimburse EMC, upon
requests made from time to time, for all of its reasonable
pre-approved extraordinary out-of-pocket expenses incurred in
connection with its activities under this Agreement.
(xxxiii) EMC agrees to indemnify and hold harmless the Company, its
affiliates, officers, directors and employees from and against
any losses, claims, damages and liabilities arising from
actions taken by EMC not contemplated or within the scope of
this Agreement. The Company agrees to indemnify and hold
harmless EMC, and EMC agrees to indemnify and hold harmless
the Company and each Parties respective affiliates, officers,
directors and employees from and against any losses, claims,
damages and liabilities arising from actions taken which were
not within the scope of this Agreement pursuant to the terms
of the Attached Schedule A Indemnification Agreement. The
Attached Schedule A Indemnity Agreement ("the Indemnity
Agreement") while written to provide that EMC is indemnified
by the Company, it is the intent of the Parties that this
Indemnity Agreement be mutual and reciprocal and shall be read
for all purposes so that the terms and conditions apply
equally to indemnity to or from either Party and the Company
shall receive indemnity from EMC under the same terms and
conditions as EMC receives indemnity from the Company.
(xxxiv) This Agreement, including Schedule A, constitutes the entire
understanding of the parties with respect to the subject
matter hereof and may not be altered or amended except in
writing signed by both parties. This Agreement shall be
governed by and construed under the laws of the State of
California without regard to principles of conflicts of law
thereof. Neither the execution and delivery of this Agreement
by the Company nor the consummation of the transactions
contemplated hereby will, directly or indirectly, with or
without the giving of notice or lapse of time, or both: (i)
violate any provisions of the Certificate of Incorporation or
By-laws of the Company; or (ii) violate, or be in conflict
with, or constitute a default under, any agreement, lease,
mortgage, debt or obligation of the Company or require the
payment, any pre-payment or other penalty with respect
thereto.
ACCEPTED AND AGREED TO
SPACEDEV, INC. EMC HOLDINGS CORPORATION
BY: BY:
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SCHEDULE A INDEMNIFICATION
Recognizing that matters of the type contemplated in this engagement sometimes
result in litigation and that EMC's role is advisory, the Company agrees to
indemnify and hold harmless EMC, its affiliates, and their respective officers,
directors, employees, agents and controlling persons (collectively, the
"Indemnified Parties"), from and against any losses, claims, damages and
liabilities, joint or several, related to or arising in any manner out of any
transaction, financing, proposal or any other matter (collectively, the
"Matters") contemplated by the engagement of EMC hereunder, and will promptly
reimburse the Indemnified Parties for all expenses (including fees and expenses
of legal counsel) as incurred in connection with the investigation of,
preparation for or defense of any pending or threatened claim related to or
arising in any manner out of any Matter contemplated by the engagement of EMC
hereunder, or any action or proceeding arising there from (collectively,
"Proceedings"), whether or not such Indemnified Party is a formal party to any
such Proceeding. Notwithstanding the foregoing, the Company shall not be liable
in respect of any losses, claims, damages, liabilities or expenses that a court
of competent jurisdiction shall have determined by final judgment resulted
solely from the gross negligence or willful misconduct of an Indemnified Party.
The Company further agrees that it will not, without the prior written consent
of EMC, settle, compromise or consent to the entry of any judgment in any
pending or threatened Proceeding in respect of which indemnification may be
sought hereunder (whether or not EMC or any Indemnified Party is an actual or
potential party to such Proceeding), unless such settlement; compromise or
consent includes an unconditional release of EMC and each other Indemnified
Party hereunder from all liability arising out of such Proceeding. In addition,
EMC agrees that it will not settle, compromise or consent to the entry of any
judgment in any pending or threatened Proceeding in respect of which
indemnification is sought under this Agreement, without the prior written
consent of the Company, which consent shall not be unreasonably withheld,
delayed or conditioned.
The Company agrees that if any indemnification or reimbursement sought pursuant
to this Agreement is held by a court for any reason to not be available to any
Indemnified Party or insufficient to hold it harmless as and to the extent
contemplated by this Agreement, then the Company shall contribute to the amount
paid or payable by such Indemnified Party in respect of losses, claims, damages
and liabilities in such proportion as is appropriate to reflect the relative
benefits to the Company and its stockholders on the one hand. EMC in connection
with the Matters to which such indemnification or reimbursement relates or, if
such allocation is not permitted by applicable law, not only such relative
benefits but also the relative faults of such parties to the Company and/or its
stockholders and to EMC with respect to EMC's engagement shall be deemed to be
in the same proportion as (i) the total value paid or received or to be paid or
received by the Company and/or its stockholders pursuant to the Matters (whether
or not consummated) for which EMC is engaged to render financial advisory
services bears to (ii) the fees paid to EMC in connection with such engagement.
In no event shall the Indemnified Parties contribute or otherwise be liable for
an amount in excess of the aggregate amount of fees actually received by EMC
pursuant to such engagement (excluding amounts received by EMC as reimbursement
of expenses).
The Company further agrees that no Indemnified Party shall have any liability
(whether direct of indirect, in contract or tort or otherwise) to the Company
for or in connection with EMC's engagement hereunder except for losses, claims,
damages, liabilities or expenses that a court of competent jurisdiction shall
have determined by final judgment resulted solely from the gross negligence or
willful misconduct of such Indemnified Party. The indemnity, reimbursement and
contribution obligations of the Company shall be in addition to any liability
which the Company may otherwise have and shall be binding upon and inure to the
benefit of any successors, assigns, heirs and personal representatives of the
Company or an Indemnified Party.
The indemnity, reimbursement, contribution provisions set forth herein shall
remain operative and in full force and effect regardless of (i) any withdrawal,
termination or consummation of or failure to initiate or consummate any Matter
referred to herein, (ii) any investigation made by or on behalf of any party
hereto or any person controlling (within the meaning of Section 15 of the
Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act
of 1934, as amended) any party hereto, (iii) any termination or the completion
or expiration of this Agreement or EMC engagement and (iv) whether or not EMC
shall, or shall not be called upon to, render any formal or informal advice in
the course of such engagement.
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