EXHIBIT 99.3
PROJECT SPIRIT
NON-COMPETITION AGREEMENT
BY AND AMONG
SPACEDEV, INC.,
A COLORADO CORPORATION; AND
XXXXX XXXXXXXX,
AN INDIVIDUAL RESIDENT OF THE STATE OF COLORADO
AND KEY SHAREHOLDER OF STARSYS RESEARCH CORPORATION
JANUARY 31, 2006
PAGE
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT (this "AGREEMENT") is made and entered into
entered into effective as of January 31, 2006 (the "EFFECTIVE DATE"), by and
between SpaceDev, Inc., a Colorado corporation (together with its successors,
"SPACEDEV"), and Xxxxx Xxxxxxxx, an individual resident of the State of Colorado
("XXXXXXXX").
RECITALS
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WHEREAS, SpaceDev, its wholly-owned subsidiary, Monoceros Acquisition
Corp., a Colorado corporation ("MERGER SUB"), Starsys Research Corporation, a
Colorado corporation (together with its successors, the "COMPANY"), Xxxxxxxx and
certain other parties made and entered into that certain Agreement and Plan of
Merger and Reorganization as of October 24, 2005 (as amended, modified or
supplemented from time to time, the "MERGER AGREEMENT");
WHEREAS, the Merger Agreement provides for the merger of the Company with
and into Merger Sub, with Merger Sub as the surviving company (the "SURVIVING
CORPORATION") and a wholly-owned subsidiary of SpaceDev (the "MERGER");
WHEREAS, as a significant shareholder of the Company, Xxxxxxxx will realize
a material benefit from the consummation of Merger, and the execution and
delivery of this Agreement by Xxxxxxxx is a material condition precedent to the
execution and delivery by SpaceDev of the Merger Agreement and the consummation
of the Merger, and constitutes a necessary and material inducement for SpaceDev
therefor;
WHEREAS, the parties hereto agree that this Agreement is necessary to
protect the rights of SpaceDev and constitutes a key element of the bargain for
SpaceDev under the Merger Agreement; and
WHEREAS, concurrently herewith, SpaceDev and Xxxxxxxx are entering into
that certain Executive Employment Agreement (the "EMPLOYMENT AGREEMENT").
AGREEMENT
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NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. DEFINITIONS. Capitalized terms used but not otherwise defined herein
shall have the same meanings ascribed to such terms in the Merger Agreement.
2. NEGATIVE COVENANTS. As a material inducement for SpaceDev to effect the
Merger and in further consideration of payments in the aggregate amount of Three
Hundred Thousand Dollars ($300,000), payable in equal installments of
Twenty-Five Thousand Dollars ($25,000) quarterly, starting on the Effective
Date, (the "CONSIDERATION"), Xxxxxxxx shall comply with the following covenants
from the Effective Date until the third anniversary of the Closing Date (the
"RESTRICTED PERIOD"):
2.1 Non-Competition. Xxxxxxxx shall not, directly or indirectly, have any
interest (of record or beneficial) in, or have any interest as a consultant in,
or otherwise aid or assist in any manner, any Entity, proprietorship or other
business that engages in a business which designs, develops, manufactures,
engineers, markets, distributes or sells, electro-mechanical systems, deployable
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structures, motors, actuators or mechanical components for the aerospace
industry (the "BUSINESS"); provided, however, that Xxxxxxxx may own, directly or
indirectly, solely as an investment, securities of any publicly traded company
if Xxxxxxxx (a) is not a controlling person of, or a member of a group which
controls, such company, and (b) does not, directly or indirectly own two percent
or more of any class of securities of such company.
2.2 Non-Solicitation of Business. Xxxxxxxx shall not, directly or
indirectly, (i) solicit or assist any other Person to solicit any business
(other than business that is not substantially similar to the Business) from any
present or past customer of SpaceDev or any Related Company; or (ii) take any
action that would reasonably be expected to have the effect of discouraging any
past or present lessor, licensor, customer, supplier, licensee, business
prospect or other business associate of SpaceDev or any Related Company from
entering into or maintaining, or causing it to terminate or cease, its
relationship with SpaceDev or any Related Company. The term "RELATED COMPANY"
includes a parent, a subsidiary or other Affiliate of SpaceDev, including the
Company and Merger Sub.
2.3 Non-Solicitation of Employees. Xxxxxxxx shall not, directly or
indirectly, (i) solicit or encourage any employee of SpaceDev or any Related
Company to leave or reduce his or her employment; or (ii) hire or offer
employment, including as a contractor or consultant, to any employee of SpaceDev
or any Related Company.
2.4 Non-Solicitation of Consultants. Xxxxxxxx shall not, directly or
indirectly, solicit or encourage any consultant or other contractor then under
contract with SpaceDev or any Related Company to cease or diminish his or her
work with such entity.
2.5 No Use of Company Intellectual Property. Xxxxxxxx agrees that, from and
after the Closing Date, Xxxxxxxx shall not, directly or indirectly, use any of
the Company Intellectual Property (other than (i) as an officer or employee of
SpaceDev for the benefit of SpaceDev and its Subsidiaries, or (ii) pursuant to a
written agreement with the Surviving Corporation entered into after the Closing
Date).
2.6 No Disparagement. Xxxxxxxx shall not orally or in writing, expressly or
impliedly, make any negative or disparaging statements regarding SpaceDev or any
Related Company, or any of their respective officers, directors, employees or
consultants, to any third party, including any existing or potential customer or
competitor of SpaceDev or any Related Company.
2.7 Confidential Information.
(a) "CONFIDENTIAL INFORMATION" means confidential or proprietary
information of SpaceDev or any Related Company (including of the Company prior
to the Merger), including trade secrets, inventions, whether or not patentable,
and all know-how related thereto, any materials for which copyright protection
may be obtained, equipment, equipment configuration, research, development
efforts, methodologies, testing, engineering, manufacturing, marketing, sales,
finances, operations, processes, formulas, methods, techniques, devices,
software programs, projections, strategies and plans, personnel information,
industry contacts made during Xxxxxxxx' employment with SpaceDev or any Related
Company, and customer information, including customer needs, contacts,
particular projects and pricing. Confidential Information does not include any
information that: (i) is or becomes generally available to and known by the
public (other than as a result of a wrongful disclosure), or (ii) is or becomes
available to Xxxxxxxx on a non-confidential basis from a source other than
SpaceDev or any Related Company or any of their respective directors, officers,
agents, employees, attorneys, accountants or other representatives (the
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"REPRESENTATIVES"), provided that such source is not and was not bound by a
confidentiality agreement with or other obligation of secrecy to SpaceDev or any
Related Company of which Xxxxxxxx has knowledge.
(b) During the Restricted Period, Xxxxxxxx shall keep secret and retain in
strictest confidence, and shall not use for the benefit of Xxxxxxxx or any
Person other than SpaceDev and its Related Companies, any Confidential
Information. Xxxxxxxx acknowledges that the Confidential Information is highly
material to the business of SpaceDev and the Related Companies and that the
unauthorized disclosure of such information to or its use by others could cause
substantial harm to SpaceDev, for which SpaceDev may seek any remedies available
at law or in equity. This covenant shall survive the termination of this
Agreement and the Employment Agreement.
(c) In the event that Xxxxxxxx is requested or required (by oral questions,
interrogatories, requests for information or documents, subpoenas, civil
investigative demands or similar processes) to disclose any Confidential
Information, Xxxxxxxx shall (i) provide SpaceDev with prompt notice thereof and
copies of the documents requested or required to be disclosed so that SpaceDev
may seek an appropriate protective order or waive compliance with the provisions
of this Agreement, and (ii) consult with SpaceDev as to the advisability of
SpaceDev's taking of legally available steps to resist or narrow such request.
(d) Xxxxxxxx also acknowledges and agrees that all of the records and data,
in any form electronic or otherwise, of SpaceDev or any Related Company
(including the Company prior to the Merger) shall at all times be and remain the
property of such Person.
(e) Xxxxxxxx therefore expressly agrees that if Xxxxxxxx breaches or
threatens to breach any of the covenants of this Section 2.7, the parties
acknowledge that the damage or imminent damage to the business or goodwill of
SpaceDev or its Related Companies would be irreparable and extremely difficult
to estimate, making any remedy at law or in damages inadequate. Accordingly,
SpaceDev shall be entitled to injunctive relief against Xxxxxxxx in the event of
any such breach or threatened breach, in addition to any other relief (including
damages) available to SpaceDev under this Agreement, at law or in equity.
3. COOPERATION. During the Restricted Period, upon the request of SpaceDev,
Xxxxxxxx shall: (i) execute and deliver any and all further materials, documents
and instruments of conveyance, transfer or assignment as may reasonably be
requested by the Surviving Corporation to effect, record or verify the transfer
to and vesting in the Surviving Corporation of the Company's right, title and
interest in and to any Property of the Company, free and clear of all
Encumbrances, in accordance with the terms of this Agreement, (ii) cooperate
with SpaceDev and the Surviving Corporation to enforce the terms of any
Contracts, including terms relating to confidentiality and Intellectual Property
Rights, and cooperate with SpaceDev to contest or defend against any Action
relating to the Transactions or to the operation of the Company's business
before the Closing Date, (iii) cooperate with the Surviving Corporation and
SpaceDev in their efforts to continue and maintain after the Closing Date for
the benefit of SpaceDev those business relationships of the Company existing
prior to the Closing Date, (iv) refer to SpaceDev or the Surviving Corporation
all inquiries relating to the Company; and (v) promptly deliver to the Surviving
Corporation (1) any mail, packages and other communications addressed to the
Company, and (2) any cash or other Property that Xxxxxxxx receives and that
properly belongs to SpaceDev or the Surviving Corporation, including any
insurance proceeds, payments with respect to receivables, and interest payable
thereon. Without limiting the generality or specificity of the provisions of
Section 2, during the Restricted Period Xxxxxxxx shall not, and shall use his
Best Efforts to cause his agents, advisors and other representatives (if
applicable) not to, take any action that would tend to interfere materially with
the business or operations of SpaceDev or the Surviving Corporation after the
Closing Date.
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4. TOLLING. In the event of a violation of any provision of Section 2.1
through Section 2.6, inclusive, or Section 3, the term of the Restricted Period,
solely as it relates to the Section containing such provision, shall be tolled
effective the date of the first violation whether known or unknown by SpaceDev
and shall commence to run again only upon the earlier to occur of (i) the date
that Xxxxxxxx ceases violating such provision, and (ii) upon grant of relief to
SpaceDev by a court of competent jurisdiction for all damages incurred, whether
equitable or at law.
5. RIGHTS AND REMEDIES UPON BREACH. Xxxxxxxx acknowledges that any breach
or threatened breach of any of the provisions of this Agreement will cause
SpaceDev irreparable injury, therefore, Xxxxxxxx acknowledges and agrees that
SpaceDev, in addition to claiming damages: (i) SpaceDev shall be as a matter of
right entitled to off-set, reduce or stop making the payments set forth in
Section 2; (ii) in the event of any willful and material breach, the
undistributed Performance Consideration to which Xxxxxxxx would be entitled, as
a shareholder of the Company, under the Merger Agreement, if any, shall be
retained by SpaceDev and automatically forfeited and, without any additional
consideration, assigned by Xxxxxxxx to SpaceDev; and (iii) SpaceDev shall have
the following rights and remedies, each of which rights and remedies shall be in
addition to, and not in lieu of, any other rights and remedies available to
SpaceDev at law or in equity, under the Merger Agreement or under any Related
Agreement:
5.1 Injunctive Relief. The right and remedy to have the provisions of this
Agreement specifically enforced by any court having equity jurisdiction, all
without the need to post a bond or other security to prove any amount of actual
damages, it being acknowledged and agreed that any such breach or threatened
breach will cause irreparable injury to SpaceDev and that monetary damages will
not provide and adequate remedy to SpaceDev.
5.2 Accounting and Indemnification. The right and remedy to require
Xxxxxxxx: (i) to pay to SpaceDev, on behalf of itself and all Related Companies,
all damages, and to account for compensation, profits, monies, accruals,
increments or other benefits derived or received by Xxxxxxxx or any associated
party deriving such benefits as a result of any breach of the provisions of this
Agreement; and (ii) to indemnify, defend and hold harmless SpaceDev and any
Related Company, against any other Losses, damages (including special and
consequential damages), costs and expenses, including actual attorneys' fees and
court costs, which may be incurred by SpaceDev or any Related Company and which
result from or arise out of any such breach of the provisions of this Agreement.
6. CONSTRUCTION. The rules of construction specified in Section 11.17
(Construction) of the Merger Agreement are hereby incorporated by reference
herein and shall apply to this Agreement mutatis mutandis, as if expressly set
forth herein.
7. TITLES AND HEADINGS. The section and paragraph titles and headings
contained herein are inserted purely as a matter of convenience and for ease of
reference and shall be disregarded for all other purposes, including the
construction, interpretation or enforcement of this Agreement or any of its
terms or provisions.
8. SEVERABILITY. The provisions of this Agreement shall be deemed severable
and the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof; provided that if any
provision of this Agreement, as applied to any party or to any circumstance, is
adjudged by a court, tribunal or other governmental body, arbitrator or mediator
not to be enforceable in accordance with its terms, the parties agree that such
governmental body, arbitrator or mediator making such determination shall have
the power to modify the provision in a manner consistent with its objectives
such that it is enforceable, and to delete specific words or phrases, and in its
reduced form, such provision shall then be enforceable and shall be enforced.
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9. ASSIGNMENT. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned without the prior written consent of
each other party; provided, however, that SpaceDev may assign, in its sole
discretion, any or all of its rights, interests and obligations under this
Agreement to any direct wholly-owned subsidiary of SpaceDev, to any Related
Company (as defined in the Merger Agreement) and to any successor by merger or
consolidation. Any assignment in violation of the preceding sentence shall be
null and void and of no force or effect. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of, and be enforceable by,
the parties hereto and their respective successors and permitted assigns.
10. AMENDMENTS AND MODIFICATION. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and delivery of a
written agreement executed by each of the parties hereto.
11. NO WAIVER. The failure of any party hereto to exercise any right, power
or remedy provided under this Agreement or otherwise available in respect hereof
at law or in equity, or to insist upon compliance by any other party hereto with
its obligations hereunder, or any custom or practice of the parties at variance
with the terms hereof shall not constitute a waiver by such party of its right
to exercise any such or other right, power or remedy or to demand such
compliance. No waiver by any party of any default, misrepresentation or breach
hereunder, whether intentional or not, shall be effective unless in writing and
signed by the party against whom such waiver is sought to be enforced, and no
such waiver shall be deemed to extend to any prior or subsequent default,
misrepresentation or breach hereunder or affect in any way any rights arising
because of any prior or subsequent such occurrence.
12. NOTICES. All notices and other communications hereunder shall be made
and delivered as set forth in Section 11.4 of the Merger Agreement, provided
that for Xxxxxxxx the address shall be as set forth on the signature page hereof
below of Xxxxxxxx' signature.
13. GOVERNING LAW. This Agreement and the performance of the transactions
and obligations of the parties hereunder shall be governed by and construed in
accordance with the laws of the State of Colorado applicable to contracts
negotiated, executed and to be performed entirely within such State.
14. ENTIRE AGREEMENT. The parties hereby acknowledge and re-affirm the
terms and provisions of Section 11.1 of the Merger Agreement.
15. THIRD-PARTY BENEFICIARIES. This Agreement is made solely for the
benefit of the parties to this Agreement and their respective permitted
successors and assigns, and no other Person shall have or acquire any right or
remedy by virtue hereof except as otherwise expressly provided herein.
16. SUBMISSION TO JURISDICTION; NO JURY TRIAL. The terms and provisions of
Section 11.6 (Submission to Jurisdiction; No Jury Trial; Service of Process) of
the Merger Agreement are hereby incorporated by reference herein and shall apply
to this Agreement mutatis mutandis, as if expressly set forth herein.
17. REPRESENTATION BY COUNSEL. Xxxxxxxx acknowledges that he has been
represented by legal counsel in connection with this Agreement, that he has read
and understands this Agreement, that he is fully aware of its legal effect, and
that he has entered into it freely and voluntarily and based on his own judgment
and not on any representations or promises other than those contained in this
Agreement. Xxxxxxxx also acknowledges and agrees that a breach of the Employment
Agreement by SpaceDev shall not affect in any manner any of Xxxxxxxx'
obligations under this Agreement.
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18. COUNTERPARTS. This Agreement may be executed in two or more original or
facsimile counterparts, each of which shall be deemed an original but all of
which together shall constitute but one and the same instrument.
19. FACSIMILE EXECUTION. A facsimile, telecopy or other reproduction of
this Agreement may be executed by one or more parties hereto, and an executed
copy of this Agreement may be delivered by one or more parties hereto by
facsimile or similar electronic transmission device pursuant to which the
signature of or on behalf of such party can be seen, and such execution and
delivery shall be considered valid, binding and effective for all purposes. At
the request of any party hereto, all parties hereto agree to execute an original
of this Agreement as well as any facsimile, telecopy or other reproduction
hereof.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK ]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.
SPACEDEV, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
President
/s/ Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx
Address:
0000 Xxxxxx Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
