EXHIBIT 10.1
LOAN AGREEMENT
THIS LOAN AGREEMENT (the "AGREEMENT"), is entered into as of the 8th day of
September 2005, by and between STARSYS RESEARCH CORPORATION, a Colorado
corporation (the "BORROWER"), with an address at 0000 Xxxxxxxx Xx. Xxxxx,
Xxxxxxx, Xxxxxxxx 00000, and SPACEDEV, INC., a Colorado corporation (the
"LENDER"), with an address at 00000 Xxxxx Xxxxx, Xxxxx, Xxxxxxxxxx 00000.
The Borrower and the Lender, with the intent to be legally bound, agree as
follows:
1. LOAN. The Lender shall make a loan in the principal amount of
$1,200,000.00 (the "LOAN") to the Borrower for the purpose of paying down the
Borrower's existing credit facilities (together with all other obligations
outstanding to Vectra Bank Colorado, National Association ("VECTRA"), pursuant
to that certain Revolving Credit and Term Loan Agreement, dated as of March 30,
2005, between Vectra and the Borrower, and all "Loan Documents" (as defined
therein) executed in connection therewith, the "VECTRA OBLIGATIONS") with
Vectra, subject to the terms and conditions and in reliance upon the
representations and warranties of the Borrower set forth in this Agreement. The
Loan is or will be evidenced by a promissory note of the Borrower (together with
all renewals, extensions, amendments and restatements thereof, collectively, the
"NOTE") acceptable to the Lender, which shall set forth the interest rate,
repayment and other provisions related to the making of the Loan, the terms of
which are incorporated into this Agreement by reference.
2. SECURITY. The security for repayment of the Loan shall include but not
be limited to the collateral set forth in that certain Security Agreement
between the Borrower and the Lender of even date herewith (the "Security
Agreement"), including all financing statements, riders and exhibits related or
attached thereto (collectively, the "SECURITY DOCUMENTS"), which shall secure
repayment of the Loan, the Note and all other loans, advances, debts,
liabilities, obligations, covenants and duties owing by the Borrower to the
Lender or to any other direct or indirect subsidiary of the Lender of any kind
or nature, present or future (including any interest accruing thereon after
maturity, or after the filing of any petition in bankruptcy, or the commencement
of any insolvency, reorganization or like proceeding relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding), whether direct or indirect (including those acquired by
assignment or participation), absolute or contingent, joint or several, due or
to become due, now existing or hereafter arising, whether or not (i) evidenced
by any note, guaranty or other instrument, (ii) arising under any agreement,
instrument or document, (iii) for the payment of money, (iv) arising by reason
of an extension of credit, loan, equipment lease or guarantee, or (v) arising
out of electronic funds transfers (whether by wire transfer or through automated
clearing houses or otherwise) or other failure of the Lender to receive final
payment for, any check, item, instrument, payment order or other deposit or
credit to a deposit or other account, or out of the Lender's non-receipt of or
inability to collect funds or otherwise not being made whole in connection with
other similar arrangements; and any amendments, extensions, renewals and
increases of or to any of the foregoing, and all costs and expenses of the
Lender incurred in the enforcement, collection and otherwise in connection with
any of the foregoing, including reasonable attorneys' fees and expenses
(hereinafter referred to collectively as the "OBLIGATIONS"). Unless expressly
provided to the contrary in documentation for any other loan or loans, it is the
express intent of the Lender and the Borrower that all Obligations, including
the Loan, be cross-collateralized and cross-defaulted, such that collateral
securing any of the Obligations shall secure repayment of all Obligations and a
default under any Obligation shall be a default under all Obligations.
This Agreement, the Note, the Security Documents and all other agreements
and documents executed and/or delivered pursuant hereto, as each may be amended,
modified, extended or renewed from time to time, are collectively referred to as
the "LOAN DOCUMENTS." Capitalized terms not defined herein shall have the
meanings ascribed to them in the Loan Documents.
3. REPRESENTATIONS AND WARRANTIES. The Borrower hereby makes the following
representations and warranties on the date of the closing of the Loan and on
each date on which the certificates referenced under Section 4.3 are delivered
to the Lender, which shall be true and correct on each such date except as
otherwise set forth on the Addendum attached hereto and incorporated herein by
reference (the "ADDENDUM"):
3.1. NO DEFAULTS OR VIOLATIONS. There does not exist any Event of
Default under this Agreement or any default or violation by the Borrower of
or under any of the material terms, conditions or obligations of: (i) its
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certificate of incorporation, regulations or bylaws or its other
organizational documents, as applicable; (ii) any material indenture,
mortgage, deed of trust, franchise, permit, contract, agreement, or other
instrument to which it is a party or by which it is bound; or (iii) any
law, ordinance, regulation, ruling, order, injunction, decree, condition or
other requirement applicable to or imposed upon it by any law, the action
of any court or any governmental authority or agency; and the consummation
of this Agreement and the transactions set forth herein will not result in
any such default or violation or Event of Default; provided, however, that
the Borrower will permit any officer, employee or agent authorized by the
Lender to visit and inspect the Borrower's books and records at any time
during normal business hours for the purpose of determining the
materiality, in the Lender's discretion, of any indenture, mortgage, deed
of trust, franchise, permit, contract, agreement or other instrument to
which the Borrower is a party or by which it is bound.
3.2. EXISTENCE, POWER AND AUTHORITY. The Borrower is duly organized,
validly existing and in good standing under the laws of the State of its
incorporation or organization, and has the power and authority to own and
operate its assets and to conduct its business as now carried on, and is
duly qualified, licensed and in good standing to do business in all
jurisdictions where its ownership of property or the nature of its business
requires such qualification or licensing. The Borrower is duly authorized
to execute and deliver the Loan Documents, all necessary action of its
Board of Directors or as may be required by applicable law or the
Borrower's organizational documents, to authorize the execution and
delivery of the Loan Documents has been properly taken, and the Borrower is
and will continue to be duly authorized to borrow under this Agreement and
to perform all of the other terms and provisions of the Loan Documents.
3.3. NO MATERIAL ADVERSE CHANGE. Since the date of the most recent
Financial Statements (as defined in Section 4.3) delivered to the Lender,
the Borrower has not suffered any damage, destruction or loss, and no event
or condition has occurred or exists, which has resulted or could result in
a material adverse change in its business, assets, operations, condition
(financial or otherwise) or results of operation.
3.4. BINDING OBLIGATIONS. The Borrower has full power and authority to
enter into the transactions provided for in this Agreement; and the Loan
Documents, when executed and delivered by the Borrower, will constitute the
legal, valid and binding obligations of the Borrower, enforceable in
accordance with their terms, except to the extent that enforceability may
be limited by applicable bankruptcy, insolvency, moratorium, reorganization
or other similar laws affecting the enforcement of creditors' rights and
subject to general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
3.5. FINANCIAL STATEMENTS. The Borrower has delivered or caused to be
delivered to the Lender its most recent balance sheet, income statement and
statement of cash flows, (as applicable, the "HISTORICAL FINANCIAL
STATEMENTS"). The Historical Financial Statements are true, complete and
accurate in all material respects and fairly present the financial
condition, assets and liabilities, whether accrued, absolute, contingent or
otherwise and the results of the Borrower's operations for the period
specified therein. The Historical Financial Statements have been prepared
in accordance with generally accepted accounting principles ("GAAP")
consistently applied from period to period, subject in the case of interim
statements to normal year-end adjustments and to any comments and notes
acceptable to the Lender in its sole discretion.
3.6. TAX RETURNS. The Borrower has filed all returns and reports that
are required to be filed by it in connection with any federal, state or
local tax, duty or charge levied, assessed or imposed upon it or its
property or withheld by it, including income, unemployment, social security
and similar taxes, and all of such taxes have been either paid or adequate
reserve or other provision has been made therefore.
3.7. TITLE TO ASSETS; PERMITTED LIENS. The Borrower has good and
marketable title to the assets reflected on the most recent Financial
Statements, free and clear of all liens and encumbrances, except for (i)
current taxes and assessments not yet due and payable, (ii) assets disposed
of by the Borrower in the ordinary course of business since the date of the
most recent Financial Statements, and (iii) those liens or encumbrances, if
any, specified on the Addendum (such items contained in subparagraphs (i)
and (iii) hereof, collectively, "PERMITTED LIENS").
3.8. INTELLECTUAL PROPERTY. The Borrower owns or is licensed to use
all patents, patent rights, trademarks, trade names, service marks,
copyrights, intellectual property, technology, know-how and processes
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necessary for the conduct of its business as currently conducted that are
material to the condition (financial or otherwise), business or operations
of the Borrower.
3.9. ENVIRONMENTAL MATTERS. The Borrower is in compliance, in all
material respects, with all Environmental Laws (as hereinafter defined),
including, without limitation, all Environmental Laws in jurisdictions in
which the Borrower owns or operates, or has owned or operated, a facility
or site, stores collateral granted by the Borrower under the Security
Agreement (the "COLLATERAL"), arranges or has arranged for disposal or
treatment of hazardous substances, solid waste or other waste, accepts or
has accepted for transport any hazardous substances, solid waste or other
wastes or holds or has held any interest in real property or otherwise.
Except as otherwise disclosed on the Addendum, no litigation or proceeding
arising under, relating to or in connection with any Environmental Law is
pending or, to the best of the Borrower's knowledge, threatened against the
Borrower, any real property which the Borrower holds or has held an
interest or any past or present operation of the Borrower. No release,
threatened release or disposal of hazardous waste, solid waste or other
wastes is occurring, or to the best of the Borrower's knowledge has
occurred, on, under or to any real property in which the Borrower holds or
has held any interest or performs or has performed any of its operations,
in violation of any Environmental Law. As used in this Section, "LITIGATION
OR PROCEEDING" means any written demand, written claim notice, suit, suit
in equity, action, administrative action, investigation or inquiry whether
brought by a governmental authority or other person, and "ENVIRONMENTAL
LAWS" means all provisions of laws, statutes, ordinances, rules,
regulations, permits, licenses, judgments, writs, injunctions, decrees,
orders, awards and standards promulgated by any governmental authority
concerning health, safety and protection of, or regulation of the discharge
of substances into, the environment.
3.10. EMPLOYEE BENEFIT PLANS. Each employee benefit plan as to which
the Borrower may have any liability complies in all material respects with
all applicable provisions of the Employee Retirement Income Security Act of
1974 (as amended from time to time, "ERISA"), including minimum funding
requirements, and (i) no Prohibited Transaction (as defined under ERISA)
has occurred with respect to any such plan, (ii) no Reportable Event (as
defined under Section 4043 of ERISA) has occurred with respect to any such
plan which would cause the Pension Benefit Guaranty Corporation to
institute proceedings under Section 4042 of ERISA, (iii) the Borrower has
not withdrawn from any such plan or initiated steps to do so, and (iv) no
steps have been taken to terminate any such plan.
3.11. LITIGATION. There are no actions, suits, proceedings or
governmental investigations pending or, to the knowledge of the Borrower,
threatened against the Borrower, which could result in a material adverse
change in its business, assets, operations, condition (financial or
otherwise) or results of operations, and there is no reasonable basis known
to the Borrower for any action, suit, proceeding or investigation which
could reasonably be expected to result in such a material adverse change.
All pending and threatened litigation against the Borrower is listed on the
Addendum.
3.12. NO CONSENT. No consent of, approval from, qualification of,
order of, authorization of or filing with any governmental authority is
required in connection with any of the Borrower's Obligations pursuant to
this Agreement or any of the other Loan Documents other than the filing of
financing statements or similar documents to evidence and perfect the
Lender's lien on and security interest in the Collateral.
3.13. REGULATION U. No part of the proceeds of the Loan will be used
for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to time in
effect or for any purpose which violates the provisions of the Regulations
of such Board of Governors.
3.14. [RESERVED.]
3.15. DISCLOSURE. None of the representations made by the Borrower in
the Loan Documents contains or will contain any untrue statement of
material fact or omits or will omit to state a material fact necessary in
order to make the statements contained in this Agreement or the Loan
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Documents not misleading. There is no fact known to the Borrower which
materially adversely affects or, so far as the Borrower can now reasonably
foresee, might reasonably be expected to materially adversely affect the
business, assets, operations, condition (financial or otherwise) or results
of operation of the Borrower and which has not otherwise been fully set
forth in this Agreement or in the Loan Documents.
3.16. USE OF PROCEEDS. All proceeds of the Loan shall be used by the
Borrower to make partial repayment of the existing Vectra Obligations.
4. AFFIRMATIVE COVENANTS. The Borrower agrees that from the date of
execution of this Agreement until all Obligations have been paid in full and any
commitments of the Lender to the Borrower have been terminated, the Borrower
will:
4.1. BOOKS AND RECORDS. Maintain books and records in accordance with
GAAP and give representatives of the Lender access thereto at all
reasonable times, including permission to examine, copy and make abstracts
from any of such books and records and such other information as the Lender
may from time to time reasonably request, and the Borrower will make
available to the Lender for examination copies of any reports, statements
and returns which the Borrower may make to or file with any federal, state
or local governmental department, bureau or agency.
4.2. ANNUAL FINANCIAL STATEMENTS. Furnish the Borrower's Financial
Statements to the Lender within sixty (60) days after the end of each
fiscal year. Those Financial Statements will be prepared, if requested, on
an audited basis in accordance with GAAP by an independent certified public
accountant selected by the Borrower and satisfactory to the Lender. Audited
Financial Statements shall contain the unqualified opinion of an
independent certified public accountant and all accountant examinations
shall have been made in accordance with GAAP consistently applied from
period to period.
4.3. INTERIM FINANCIAL STATEMENTS; CERTIFICATE OF NO DEFAULT. Furnish
the Lender within ten (10) days after the end of each month, the Borrower's
Financial Statements for such period, in reasonable detail, certified by an
authorized officer of the Borrower and prepared in accordance with GAAP
consistently applied from period to period. The Borrower shall also deliver
a certificate as to its compliance with applicable financial covenants
(containing detailed calculations of all financial covenants) for the
period then ended and whether any Event of Default exists, and, if so, the
nature thereof and the corrective measures the Borrower proposes to take.
As used in this Agreement, "FINANCIAL STATEMENTS" means the Borrower's
consolidated and, if required by the Lender in its sole discretion,
consolidating balance sheets, income statements and statements of cash
flows for the year, month or quarter together with year-to-date figures and
comparative figures for the corresponding periods of the prior year.
4.4. PAYMENT OF TAXES AND OTHER CHARGES. Pay and discharge when due
all indebtedness and all taxes, assessments, charges, levies and other
liabilities imposed upon the Borrower, its income, profits, property or
business, except those which currently are being contested in good faith by
appropriate proceedings and for which the Borrower shall have set aside
adequate reserves or made other adequate provision with respect thereto
acceptable to the Lender in its sole discretion.
4.5. FINANCIAL COVENANTS. Comply with all of the financial and other
covenants, if any, set forth on the Addendum.
4.6. INSURANCE. Maintain, with financially sound and reputable
insurers, insurance with respect to its property and business against such
casualties and contingencies, of such types and in such amounts, as is
customary for established companies engaged in the same or similar business
and similarly situated. In the event of a conflict between the provisions
of this Section and the terms of any Security Documents relating to
insurance, the provisions in the Security Documents will control.
4.7. MAINTENANCE OF EXISTENCE, OPERATION AND ASSETS. Do all things
necessary to (i) maintain, renew and keep in full force and effect its
organizational existence and all rights, permits and franchises necessary
to enable it to continue its business as currently conducted; (ii) continue
in operation in substantially the same manner as at present; (iii) keep its
properties in good operating condition and repair; and (iv) make all
necessary and proper repairs, renewals, replacements, additions and
improvements thereto.
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4.8. COMPLIANCE WITH LAWS. Comply in all material respects with all
laws applicable to the Borrower and to the operation of its business
(including without limitation any statute, ordinance, rule or regulation
relating to employment practices, pension benefits or environmental,
occupational and health standards and controls).
4.9. ADDITIONAL REPORTS. Provide prompt written notice to the Lender
of the occurrence of any of the following (together with a description of
the action which the Borrower proposes to take with respect thereto): (i)
any Event of Default or any event, act or condition which, with the passage
of time or the giving of notice, or both, would constitute an Event of
Default (a "Default"), (ii) any litigation filed by or against the
Borrower, (iii) any Reportable Event or Prohibited Transaction with respect
to any Employee Benefit Plan(s) (as defined in ERISA) or (iv) any event
which might reasonably be expected to result in a material adverse change
in the business, assets, operations, condition (financial or otherwise) or
results of operation of the Borrower.
5. NEGATIVE COVENANTS. The Borrower covenants and agrees that from the date
of this Agreement until all Obligations have been paid in full and any
commitments of the Lender to the Borrower have been terminated, and, except as
set forth in the Addendum, the Borrower will not, without the Lender's
prior written consent:
5.1. INDEBTEDNESS. Create, incur, assume or suffer to exist any
indebtedness for borrowed money other than: (i) the Loan and any subsequent
indebtedness to the Lender; (ii) open account trade debt incurred in the
ordinary course of business and not past due, and (iii) the indebtedness
described on the Addendum.
5.2. LOANS OR ADVANCES. Purchase or hold beneficially any stock, other
securities or evidences of indebtedness of, or make or have outstanding,
any loans or advances to, or otherwise extend credit to, or make any
investment or acquire any interest whatsoever in, any other person, firm,
corporation or other entity, except investments disclosed on the Borrower's
Historical Financial Statements or acceptable to the Lender in its sole
discretion.
5.3. LIENS AND ENCUMBRANCES. Except for Permitted Liens, create,
assume, incur or permit to exist any mortgage, pledge, encumbrance,
security interest, lien or charge of any kind upon any of its property, now
owned or hereafter acquired, or acquire or agree to acquire any kind of
property subject to any conditional sales or other title retention
agreement.
5.4. MERGER OR TRANSFER OF ASSETS. Liquidate or dissolve, or merge or
consolidate with or into any person, firm, corporation or other entity, or
sell, lease, transfer, abandon or otherwise dispose of all or any
substantial part of its property, assets, operations or business, whether
now owned or hereafter acquired without the prior written consent of the
Lender.
5.5. ACQUISITIONS. Make acquisitions of all or substantially all of
the property or assets of any person, firm, corporation or other entity
without the prior written consent of the Lender.
5.6. CHANGE IN BUSINESS, MANAGEMENT OR OWNERSHIP. Make or permit any
change in its form of organization, the nature of its business as carried
on as of the date hereof, in the composition of its current executive
management, or in its equity ownership without the prior written consent of
the Lender.
5.7. GUARANTEES. Guarantee, endorse or become contingently liable for
the obligations of any person, firm, corporation or other entity, except in
connection with the endorsement and deposit of checks in the ordinary
course of business for collection.
5.8. DIVIDENDS. Declare or pay any dividends on or make any
distribution with respect to any class of its equity or ownership interest,
or purchase, redeem, retire or otherwise acquire any of its equity.
5.9. MANAGEMENT FEES. Pay or obligate itself to pay, directly or
indirectly, any compensation to any person not previously disclosed to the
Lender, or any increased compensation to any director, officer, shareholder
or employee of the Borrower other than regular compensation increases for
non-executive employees of the Borrower made in accordance with the
Borrower's past business practices.
PAGE 5
6. EVENTS OF DEFAULT. The occurrence of any of the following will be
deemed to be an EVENT OF DEFAULT:
6.1. COVENANT DEFAULT. The Borrower shall fail to perform any of the
covenants or agreements contained in this Agreement and such failure to
perform shall not have been cured by the Borrower within ten (10) business
days after Lender's written notice of such failure;
6.2. BREACH OF WARRANTY. Any Financial Statement, representation,
warranty or certificate made or furnished by the Borrower to the Lender in
connection with this Agreement shall be false, incorrect or incomplete in
any material respect when made; provided, however, that if any such
Financial Statement, representation, warranty or certificate made after the
date hereof is capable of being remedied, the Borrower may correct such
Financial Statement, representation, warranty or certificate by delivering
a written correction thereof to the Lender within ten business days of
obtaining knowledge of its falseness, incorrectness or incompleteness; or
6.3. OTHER DEFAULT. The occurrence of an Event of Default as defined
in the Note or any of the other Loan Documents.
Upon the occurrence of an Event of Default, the Lender will have all rights and
remedies specified in the Note and the Loan Documents and all rights and
remedies (which are cumulative and not exclusive) available under applicable law
or in equity.
7. CONDITIONS. The Lender's obligation to make the advance of the Loan is
subject to the conditions that as of the date of the advance:
7.1. NO EVENT OF DEFAULT. No Event of Default or event which with the
passage of time, the giving of notice or both would constitute an Event of
Default shall have occurred and be continuing;
7.2. AUTHORIZATION DOCUMENTS. The Lender shall have received certified
copies of resolutions of the board of directors of the Borrower, or other
proof of authorization satisfactory to the Lender; and
7.3. RECEIPT OF LOAN DOCUMENTS. The Lender shall have received the
Loan Documents and such other instruments and documents which the Lender
may reasonably request in connection with the transactions provided for in
this Agreement, which may include an opinion of counsel to the Borrower in
form and substance satisfactory to the Lender.
8. EXPENSES. The Borrower hereby agrees to pay the Lender a premium equal
to One Hundred Twenty Thousand Dollars ($120,000) as a placement fee for making
the Loan represented by the Note and to cover the Lender's expenses, including
legal and accounting expenses, associated with the preparation and negotiation
of the Loan Documents and the making of the Loan to the Borrower (the
"PREMIUM").
The Borrower and the Lender are contemplating a business transaction which could
include but may not be limited to (a) acquisition of (i) all of the outstanding
voting stock of the Borrower, or (b) all of the assets of the Borrower or (2)
merger of the Borrower with and into the Lender pursuant to that certain
non-binding Letter of Intent between the Borrower and the Lender dated August
23, 2005 (the "LETTER OF INTENT") absent a violation by the Borrower of the
Exclusivity Agreement of even date herewith between the Lender and the Borrower
(each representing a "Reorganization Event"); (an "Event")
The Borrower further hereby agrees and acknowledges that the Premium shall be
added to the principal balance of the Note at funding of the Loan; provided,
however, that the Lender agrees to reduce the principal balance of the Note by
the amount of the Premium and to forgive payment of the Premium immediately upon
the occurrence of any of the following:
(a) The Lender unilaterally withdraws from negotiations with the Borrower
for an Event.
(b) The Borrower and the Lender mutually agree to cease negotiations
regarding any Event;
PAGE 6
(c) The closing of any Event on or before October 31, 2005, or such other
date as the parties shall mutually agree upon; or
(d) The parties are unable to complete any Event as a result of either
party's inability to obtain necessary government approvals therefor.
In addition, the Borrower agrees to pay the Lender on demand, all costs and
expenses incurred by the Lender in connection with the collection of all of the
Obligations, including but not limited to enforcement actions, relating to the
Loan, whether through judicial proceedings or otherwise, or in defending or
prosecuting any actions or proceedings arising out of or relating to this
Agreement, including reasonable fees and expenses of outside counsel to the
Lender, expenses for expert witnesses, auditors, appraisers and environmental
consultants, and expenses for lien searches, recording and filing fees and taxes
necessary for such collection.
9. [RESERVED.]
10. MISCELLANEOUS.
10.1. MODIFICATIONS AND AMENDMENTS. No modification, amendment or
waiver of, or consent to any departure by the Borrower from, any provision
of this Agreement will be effective unless made in a writing signed by the
party to be charged, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. No
notice to or demand on the Borrower will entitle the Borrower to any other
or further notice or demand in the same, similar or other circumstance
unless specifically provided for in the Loan Documents.
10.2. SUCCESSORS AND ASSIGNS. This Agreement will be binding upon and
inure to the benefit of the Borrower and the Lender and their respective
heirs, executors, administrators, successors and assigns; provided,
however, that neither party may assign this Agreement in whole or in part
without the other party's prior written consent. Upon receipt of the
Borrower's written consent therefor, the Lender may sell, assign, transfer,
negotiate, grant participations in, or otherwise dispose of all or any part
of the Lender's interest in the Loan as permitted in such consent. The
Borrower hereby authorizes the Lender to provide, with notice to the
Borrower, any information concerning the Borrower, including information
pertaining to the Borrower's financial condition, business operations or
general creditworthiness, to any person or entity which may succeed to or
participate in all or any part of the Lender's interest in the Loan.
10.3. INTERPRETATION. In this Agreement, unless the Lender and the
Borrower otherwise agree in writing, the singular includes the plural and
the plural the singular; words importing any gender include the other
genders; references to statutes are to be construed as including all
statutory provisions consolidating, amending or replacing the statute
referred to; the word "or" shall be deemed to include "and/or", the words
"including", "includes" and "include" shall be deemed to be followed by the
words "without limitation"; references to articles, sections (or
subdivisions of sections) or exhibits are to those of this Agreement; and
references to agreements and other contractual instruments shall be deemed
to include all subsequent amendments and other modifications to such
instruments, but only to the extent such amendments and other modifications
are not prohibited by, and entered into in accordance with, the terms of
this Agreement. Section headings in this Agreement are included for
convenience of reference only and shall not constitute a part of this
Agreement for any other purpose. Unless otherwise specified in this
Agreement, all accounting terms shall be interpreted and all accounting
determinations shall be made in accordance with GAAP. If this Agreement is
executed by more than one party as Borrower, the obligations of such
persons or entities will be joint and several. The language used in this
Agreement will be deemed to be the language chosen by the parties to
express their mutual intent, and no rules of strict construction will be
applied against any party.
10.4. NO CONSEQUENTIAL DAMAGES, ETC. Neither the Lender nor the
Borrower (except as provided below) will be responsible for any damages,
consequential, incidental, special, punitive or otherwise, that may be
incurred or alleged by any person or entity, including the Borrower or the
Lender, as applicable, as a result of this Agreement, the other Loan
Documents, the transactions contemplated hereby or thereby, or the use of
the proceeds of the Loan; provided, however, that the Borrower shall be
PAGE 7
responsible to the Lender for any consequential damages that may be
incurred by the Lender as a result of a material misrepresentation made by
the Borrower to the Lender under this Agreement or any other Loan Document.
10.5. PUBLICITY. The Lender and the Borrower shall have the right to
approve, before issuance any public statement with respect to the
transactions contemplated hereby made by any party; provided, however, that
the Lender shall be entitled, without the prior approval of the Borrower,
to issue any public disclosure with respect to such transactions required
under applicable securities or other laws or regulations (the Lender shall
use its best efforts to consult the Borrower in connection with any such
press release or other public disclosure prior to its release and Borrower
shall be provided with a copy thereof upon release thereof).
10.6. ENTIRE AGREEMENT. This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement and
supersedes all other prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof.
10.7. PRESERVATION OF RIGHTS. No delay or omission on the Lender's
part to exercise any right or power arising hereunder will impair any such
right or power or be considered a waiver of any such right or power, nor
will the Lender's action or inaction impair any such right or power. The
Lender's rights and remedies hereunder are cumulative and not exclusive of
any other rights or remedies which the Lender may have under other
agreements, at law or in equity.
10.8. SEVERABILITY. If any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, it shall not
affect or impair the validity, legality and enforceability of the remaining
provisions of this Agreement.
10.9. NOTICES. All notices, demands, requests, consents, approvals and
other communications required or permitted hereunder ("NOTICES") must be in
writing and will be effective upon receipt. Notices may be given in any
manner to which the parties may separately agree, including electronic
mail. Without limiting the foregoing, first-class mail, facsimile
transmission and commercial courier service are hereby agreed to as
acceptable methods for giving Notices. Regardless of the manner in which
provided, Notices may be sent to a party's address as set forth above or to
such other address as any party may give to the other for such purpose in
accordance with this section.
10.10. GOVERNING LAW AND JURISDICTION. This Agreement has been
delivered to and accepted by the Lender and shall be construed in
accordance with, and governed in all respects by the laws of the State of
California, County of San Diego as applied to agreements entered into and
to be performed entirely in such state, between residents of such state.
Nothing contained in this Agreement will prevent the Lender from bringing
any action, enforcing any award or judgment or exercising any rights
against the Borrower individually, against any security or against any
property of the Borrower within any other county, state or other foreign or
domestic jurisdiction. The Lender and the Borrower agree that the venue
provided above is the most convenient forum for both the Lender and the
Borrower. The Borrower waives any objection to venue and any objection
based on a more convenient forum in any action instituted under this
Agreement.
10.11 WAIVER OF JURY TRIAL. THE BORROWER IRREVOCABLY WAIVES ANY AND
ALL RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM
OF ANY NATURE RELATING TO THIS AGREEMENT, ANY DOCUMENTS EXECUTED IN
CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED IN ANY OF
SUCH DOCUMENTS. THE BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVER IS
KNOWING AND VOLUNTARY.
10.12. COUNTERPARTS. This Agreement may be signed in any number of
counterpart copies and by the parties hereto on separate counterparts, but
all such copies shall constitute one and the same instrument. Delivery of
an executed counterpart of a signature page to this Agreement by facsimile
transmission shall be effective as delivery of a manually executed
counterpart. Any party so executing this Agreement by facsimile
transmission shall promptly deliver a manually executed counterpart,
provided that any failure to do so shall not affect the validity of the
counterpart executed by facsimile transmission.
PAGE 8
THE BORROWER ACKNOWLEDGES THAT IT HAS READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS AGREEMENT, INCLUDING THE WAIVER OF JURY TRIAL, AND HAS BEEN
ADVISED BY COUNSEL AS NECESSARY OR APPROPRIATE.
WITNESS the due execution hereof as a document under seal, as of the date
first written above.
STARSYS RESEARCH CORPORATION
/s/ Xxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxxxx
---------------------------- ---------------------------------
Xxxxx X. Xxxxxxxx
Chief Executive Officer
SPACEDEV, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxx
President
PAGE 9
ADDENDUM TO LOAN AGREEMENT
ADDENDUM to that certain Loan Agreement entered into as of September 8,
2005 between STARSYS RESEARCH CORPORATION as the Borrower and SPACEDEV, INC., as
the Lender. Capitalized terms used in this Addendum and not otherwise defined
shall have the meanings given them in the Agreement. Section numbers below refer
to the sections of the Agreement.
3.1 - Defaults/Violations: (1) defaults existing with respect to the Vectra
Obligations and described in the Forbearance Agreement, dated as of June 24,
2005, between Vectra, the Borrower and Xxxxx X. Xxxxxxxx as guarantor, as
amended by the First Amendment to Forbearance Agreement, made as of July 25,
2005, between Vectra, the Borrower and Xxxxx X. Xxxxxxxx as guarantor, and as
extended by the letter dated August 31, 2005, from Vectra to the Borrower (and
as further amended, extended or modified from time to time); and (2) the consent
of Vectra to the making of the Loan evidenced in the Intercreditor Agreement of
even date herewith, between Vectra, the Lender and the Borrower.
3.7 - Permitted Liens and Encumbrances: (1) liens in favor of Vectra; (2)
liens in favor of the Lender; (3) liens incurred in the ordinary course of
business in connection with workers' compensation, unemployment insurance,
social security and other governmental rules that do not, in the aggregate,
materially impair the use or value of the property or assets of the Borrower;
(4) minor defects, easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and encumbrances
consisting of zoning restrictions, licenses, restrictions on the use of property
or minor imperfections in title which do not materially impair the property
affected thereby for the purpose for which title was acquired or materially
interfere with the operation of the Borrower's business; (5) interest in a joint
patent application ("Highly Compact, Precision Lightweight Deployable Truss
Which Accommodates Side Mounted Components") held by Xxxxxx Corporation; (6)
interest in certain assigned technology of the Borrower in favor of SAAB
Ericsson Space AB ("SES") pursuant to that certain Proprietary Rights Agreement,
made October 25, 1999, by the Borrower and SES; (7) interest in certain assigned
technology of the Borrower in favor of SES pursuant to that certain Technology
License and Cooperation Agreement, dated December 19, 2000, by the Borrower and
SES; and (8) rights of Lockheed Xxxxxx Corporation ("LMC") to certain technology
developed by the Borrower and described in that certain Patent License
Agreement, made February 27, 1996, between the Borrower and LMC, as amended.
3.11 - Pending and Threatened Litigation:
Date Name Type Description
-------- ------------------ ------- --------------------------------------------
08/30/05 Qualified Pension Action Small claims court for $3K unpaid invoice
Services that is about one year old; the invoice will
be paid in 09/05 for services rendered and
the judgment will be rescinded.
2003 Xxxx Xxxxxxxxx Threatened Threatened to xxx for non-compliance with
Action an existing employment and non-compete
agreement.
3.15 - Disclosure: defaults existing with respect to the Vectra Obligations
and described in the Forbearance Agreement, dated as of June 24, 2005, between
Vectra, the Borrower and Xxxxx X. Xxxxxxxx as guarantor, as amended by the First
Amendment to Forbearance Agreement, made as of July 25, 2005, between Vectra,
the Borrower and Xxxxx X. Xxxxxxxx as guarantor, and as extended by the letter
dated August 31, 2005, from Vectra to the Borrower (and as further amended,
extended or modified from time to time).
5.1 - Existing Debt: (1) the Vectra Obligations; (2) debt evidenced by that
certain Subordinated Promissory Note, dated July 22, 2005, from the Borrower to
Xxx Xxxxxxxx, in the principal amount of $100,000; (3) debt evidenced by that
certain Subordinated Promissory Note, dated July 22, 2005, from the Borrower to
Xxxxx Xxxxxxxx, in the principal amount of $100,000; (4) debt evidenced by that
certain Subordinated Promissory Note, dated July 22, 2005, from the Borrower to
Xxxx Xxxxxxxx, in the principal amount of $100,000; and (5) debt evidenced by
PAGE A-1
Addendum to Loan Agreement between Starsys
Research Corporation and SpaceDev, Inc., CONTINUED
that certain Subordinated Promissory Note, dated July 22, 2005, from the
Borrower to Xxxxx Xxx, in the principal amount of $500,000.
5.9 - Management Fees: (1) $5,000/month fee payable to St. Xxxxxxx; and (2)
country club dues paid or reimbursable to Xxxxx X. Xxxxxxxx as part of his
compensation.
PAGE A-2
