Document:

a50800578ex10_3.htm

Exhibit 10.3

 

FORBEARANCE AGREEMENT

 

THIS FORBEARANCE AGREEMENT (this “Agreement”) is executed and effective this __ day of February, 2014 (the “Effective Date”), by and among Partners for Growth III, L.P., a Delaware limited partnership corporation (“PFG”) with its principal place of business at 150 Pacific Avenue, San Francisco, California 94111, and each of Advanced Photonix, Inc., a Delaware corporation and Picometrix, LLC, a Delaware limited liability company, each with its principal place of business at 2925 Boardwalk, Ann Arbor, MI 48104 (individually and collectively, jointly and severally, “Borrower”).

 

RECITALS

 

A.           PFG and Borrower have entered into that certain Loan and Security Agreement, dated as of February 8, 2013 (as the same may from time to time be amended, modified, supplemented or restated, the “Loan Agreement”), pursuant to which PFG has made available to Borrower, among other credit accommodations, a term loan in the original principal amount of Two Million Five Hundred Thousand Dollars ($2,500,000) (the “Loan”).

 

B.           Borrower is currently in default of Section 5 of the Schedule to the Loan Agreement for failing to comply with the minimum EBITDA financial covenant for the month ending December 31, 2013 (the “Existing Event of Default”).

 

C.           Borrower has requested that PFG forbear from exercising its rights and remedies under the Loan Agreement as a result of the Existing Event of Default during the Forbearance Period (as hereinafter defined).

 

NOW, THEREFORE, in consideration of the agreements and covenants contained herein, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.           Incorporation by Reference; Acknowledgement of Recitals.  Borrower acknowledges the recitals set forth herein and the description of the Existing Event of Default set forth above are true and correct statements of fact, are incorporated herein, and form a substantive part of this Agreement.

 

2.           Definitions.  Capitalized terms used but not defined in this Agreement, including its preamble and recitals, shall have the meanings given to them in the Loan Agreement.

 

3.           Acknowledgment of Indebtedness.  Borrower hereby acknowledges and agrees that as of January 31, 2014, the outstanding principal balance under the Loan is: (a) One Million Eight Hundred Forty-Five Thousand Two Hundred Thirty-Eight Dollars and Nine Cents ($1,845,238.09), excluding all accrued and unpaid interest (of which $18,670.22 is due and payable February 1, 2014), fees and PFG expenses, and that such sum is due and owing without offset or defense.

 

  

  

  

 

4.           Ratification of Loan Documents; Further Assurances.

 

(a)           Borrower acknowledges and agrees that (i) each of the Loan Documents remain in full force and effect in accordance with the original terms, except as expressly modified hereby, (ii) the Liens granted by Borrower to PFG under the Loan Documents shall remain in place, unimpaired by the transactions contemplated by this Agreement, and PFG’s priority with respect thereto shall not be affected hereby or thereby, and (iii) the Loan Agreement and the other Loan Documents shall continue to secure all Obligations as stated therein except as expressly amended and modified by this Agreement and the Forbearance Documents (as hereinafter defined).

 

(b)           Borrower ratifies, reaffirms, restates and incorporates by reference all of its representations, warranties, covenants, and agreements made under the Loan Documents.

 

(c)           Borrower hereby ratifies, confirms, and reaffirms that the Obligations include, without limitation, the Loans, and any future modifications, amendments, substitutions or renewals thereof.

 

(d)           Borrower hereby agrees that this Agreement is the legal, valid and binding obligation of Borrower, enforceable against Borrower.

 

(e)           Borrower and PFG acknowledge that the Existing Event of Default are ongoing, existing and continuing Events of Default under the Loan Agreement.

 

(f)           Borrower and PFG confirm that neither party has heretofore waived or modified, and has not agreed to waive or modify, any term of the Loan Documents, and any actions that Borrower takes or fails to take (including the expenditure of any funds) is voluntary, informed and taken at its own risk.

 

(g)           Borrower shall, from and after the execution of this Agreement, execute and deliver to PFG whatever additional documents, instruments, and agreements that PFG may reasonably require in order to perfect the Collateral granted in the Loan Agreement more securely in PFG and to otherwise give effect to the terms and conditions of this Agreement.

 

5.           Forbearance Period.  Subject to Borrower’s strict compliance and performance with the terms of this Agreement and each Forbearance Document and so long as no Event of Default (other than the Existing Event of Default) or Termination Event occurs, PFG will forbear from enforcing its rights and remedies under the Loan Documents through February 28, 2014 (the “Forbearance Period”).  Except as expressly provided herein, this Agreement does not constitute a waiver or release by PFG of any Obligations or of any Event of Default which may arise in the future after the Effective Date.

 

6.           Termination.  The Forbearance Period shall terminate automatically and without notice to Borrower upon the occurrence of a Termination Event.

 

  

  

  

 

7.           Termination Events.  The occurrence of any one or more of the following events shall constitute a termination event (hereinafter, a “Termination Event”) under this Agreement:

 

(a)           The failure of Borrower to cause the PFG’s Obligations to be repaid as and when required by the Loan Agreement, it being expressly acknowledged and agreed that TIME IS OF THE ESSENCE.

 

(b)           The filing of a petition for relief by or against Borrower under the United States Bankruptcy Code.

 

(c)           The failure of Borrower to promptly, punctually, or faithfully perform any other term, condition, or covenant of this Agreement or any of the other documents executed and delivered in connection with this Agreement (the “Forbearance Documents”) as and when due, it being expressly acknowledged and agreed that TIME IS OF THE ESSENCE.

 

(d)           The occurrence of any further default or Event of Default (other than the Existing Event of Default) under the Loan Agreement, any other Loan Document or any Forbearance Document.

 

(e)           any recital, representation or warranty made herein, in any document Forbearance Document, or in any report, certificate, financial statement or other instrument or document previously, now or hereafter furnished by or on behalf of Borrower in connection with this Agreement or any Forbearance Document, shall prove to have been false, incomplete or misleading in any material respect on the date as of which it was made; and

 

(f)           a material impairment in the perfection or priority of PFG’s security interest in the Collateral or in the value of such Collateral taken as a whole occurs.

 

8.           Rights Upon Termination.  Upon the earlier of (i) the occurrence of any Termination Event or (ii) the expiration of the Forbearance Period, all of the Obligations shall, without notice or demand, become immediately due and payable in full and at the sole discretion of PFG and PFG shall be entitled to immediately pursue any and all remedies available under applicable law or pursuant to the Loan Documents.

 

9.           Conditions Precedent.  The effectiveness of this Agreement and the forbearance described herein is subject to the satisfaction of each of the following conditions precedent:

 

(a)           This Agreement and any Forbearance Document shall be executed by all parties and delivered to PFG; and

 

(b)           Borrower’s payment to PFG of a fully-earned and non-refundable forbearance fee in an amount equal to Ten Thousand Dollars ($10,000) and all legal fees and expenses of PFG shall have been paid in full, to the extent due in connection with the Existing Event of Default and the preparation, negotiation, execution and delivery of this Agreement and the Forbearance Documents.  Borrower hereby authorizes PFG to debit the deposit account maintained by Borrower with PFG for all such amounts.

 

  

  

  

 

(c)           Borrower’s delivery of an update to the Representations, if required to render the information set forth therein as delivered to PFG on the date of the Loan Agreement true, correct, accurate and complete as of the Effective Date of this Forbearance.

 

10.           Representations of Borrower.  Borrower warrants and represents to PFG as follows:

 

(a)           Borrower has no defenses, affirmative or otherwise, rights of setoff, rights of recoupment, claims, counterclaims, actions or causes of action of any kind or nature whatsoever against PFG or any past, present or future agent, attorney, legal representative, predecessor-in-interest, affiliate, successor, assign, employee, director or officer of PFG, directly or indirectly, arising out of, based upon, or in any manner connected with, any transaction, event, circumstance, action, failure to act, or occurrence of any sort or type, whether known or unknown, which occurred, existed, was taken, permitted, or began prior to the execution of this Agreement and accrued, existed, was taken, permitted or begun in accordance with, pursuant to, or by virtue of the terms or conditions of the Loan Documents, or which directly or indirectly relate to or arise out of or in any manner are connected with any of the Loan Documents; TO THE EXTENT ANY SUCH DEFENSES, AFFIRMATIVE OR OTHERWISE, RIGHTS OF SETOFF, RIGHTS OF RECOUPMENT, CLAIMS, COUNTERCLAIMS, ACTIONS OR CAUSES OF ACTION EXIST OR EXTEND, SUCH DEFENSES, RIGHTS, CLAIMS, COUNTERCLAIMS, ACTIONS AND CAUSES OF ACTION ARE HEREBY FOREVER WAIVED, DISCHARGED AND RELEASED.

 

(b)           Borrower has freely and voluntarily entered into this Agreement after an adequate opportunity and sufficient period of time to review, analyze and discuss all terms and conditions of this Agreement and all factual and legal matters relevant hereto with counsel freely and independently chosen by it.  Borrower further acknowledges that it has actively and with full understanding participated in the negotiation of this Agreement after consultation and review with its counsel and that this Agreement has been negotiated, prepared and executed without fraud, duress, undue influence or coercion of any kind or nature whatsoever having been exerted by or imposed upon any party to this Agreement.

 

(c)           As of the Effective Date, except as disclosed in the Representations, there are no actions or proceedings pending or, to the knowledge of any Responsible Officer, threatened in writing by or against Borrower or any of its Subsidiaries involving more than any single claim of $50,000 or more, or involving $100,000 or more in the aggregate.

 

(d)           There is no statute, rule, regulation, order or judgment, no charter, by-law or preference stock provision with respect Borrower, and no provision of any material agreement binding on Borrower or any of its properties which would prohibit or cause a default under or in any way prevent the execution, delivery, performance, compliance or observance of any of the terms or conditions of this Agreement.

 

(e)           Borrower has not voluntarily or involuntarily, granted any Liens to any creditor not previously disclosed to PFG in writing on or before the Effective Date or taken any action or failed to take any action which could or would impair, change, jeopardize or otherwise adversely affect the priority, perfection, validity or enforceability of any Liens securing all or any portion of the Obligations or the priority or validity of PFG’s claims with respect to the Obligations relative to any other creditor of Borrower, subject only to Permitted Liens that are permitted pursuant to the terms of the Loan Agreement to have superior priority to PFG’s Lien under the Loan Agreement.

 

  

  

  

 

(f)           Borrower has the corporate power and authority to enter into and perform its obligations under this Agreement and the Forbearance Documents, and the execution and delivery of this Agreement and the other Forbearance Documents by Borrower and the consummation by Borrower of the transactions contemplated hereby and thereby and performance of their obligations hereunder and thereunder have been duly authorized.

 

(g)           This Agreement and each of the Loan Documents to which Borrower is a party constitutes the valid, binding and enforceable obligation of Borrower, enforceable against Borrower in accordance with the terms thereof, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights generally and by general principles of equity.

 

11.           Reimbursement of Costs and Expenses.  Borrower shall reimburse PFG for any and all reasonable costs, expenses, and costs of collection (including reasonable attorneys’ fees, expenses, audit fees, and appraisal fees) heretofore or hereafter incurred by PFG in connection with this Agreement and with the protection, preservation, and enforcement by PFG of its rights and remedies.  Borrower hereby authorizes and directs PFG to debit Borrower’s deposit account maintained at PFG for all such fees and expenses.

 

12.           Non-Interference.  From and after the expiration or termination of the Forbearance Period, Borrower agrees not to interfere with the exercise by PFG of any of its rights and remedies.  Borrower further agrees that it shall not seek to distrain or otherwise hinder, delay, or impair PFG’s efforts to realize upon the Collateral, or otherwise to enforce its rights and remedies pursuant to the Loan Documents.  The provisions of this Section 12 shall be specifically enforceable by PFG.

 

  

  

  

 

13.           RELEASE OF CLAIMS.  FOR AND IN CONSIDERATION OF PFG’S AGREEMENTS CONTAINED HEREIN, BORROWER, TOGETHER WITH ITS, SUCCESSORS AND ASSIGNS (INDIVIDUALLY AND COLLECTIVELY, “RELEASORS”) HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER WAIVES AND DISCHARGES PFG AND EACH OF ITS RESPECTIVE PARENTS, DIVISIONS, SUBSIDIARIES, AFFILIATES, MEMBERS, MANAGERS, PARTICIPANTS, PREDECESSORS, SUCCESSORS, AND ASSIGNS, AND EACH OF THEIR RESPECTIVE CURRENT AND FORMER DIRECTORS, OFFICERS, SHAREHOLDERS, MEMBERS, MANAGERS, PARTNERS, AGENTS, AND EMPLOYEES, AND EACH OF THEIR RESPECTIVE PREDECESSORS, SUCCESSORS, HEIRS, AND ASSIGNS (INDIVIDUALLY AND COLLECTIVELY, THE “RELEASED PARTIES”) FROM ALL POSSIBLE CLAIMS, COUNTERCLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES AND LIABILITIES WHATSOEVER, WHETHER KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT OR CONDITIONAL, OR AT LAW OR IN EQUITY, IN ANY CASE ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE EFFECTIVE DATE THAT ANY OF THE RELEASORS MAY NOW OR HEREAFTER HAVE AGAINST THE RELEASED PARTIES, IF ANY, IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, INCLUDING WITHOUT LIMITATION ARISING DIRECTLY OR INDIRECTLY FROM THE LAWSUIT, ANY PRIOR OR EXISTING LOANS BETWEEN RELEASORS AND RELEASED PARTIES, ANY OF THE LOAN DOCUMENTS, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER ANY OF THE LOAN DOCUMENTS, AND/OR NEGOTIATION FOR AND EXECUTION OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE.  EACH OF THE RELEASORS WAIVES THE BENEFITS OF ANY LAW INCLUDING SECTION 1542 OF THE CALIFORNIA CIVIL CODE, WHICH MAY PROVIDE IN SUBSTANCE: “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN ITS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY IT MUST HAVE MATERIALLY AFFECTED ITS SETTLEMENT WITH THE DEBTOR.” EACH OF THE RELEASORS UNDERSTANDS THAT THE FACTS WHICH IT BELIEVES TO BE TRUE AT THE TIME OF MAKING THE RELEASE PROVIDED FOR HEREIN MAY LATER TURN OUT TO BE DIFFERENT THAN IT NOW BELIEVES, AND THAT INFORMATION WHICH IS NOT NOW KNOWN OR SUSPECTED MAY LATER BE DISCOVERED.  EACH OF THE RELEASORS ACCEPTS THIS POSSIBILITY, AND EACH OF THEM ASSUMES THE RISK OF THE FACTS TURNING OUT TO BE DIFFERENT AND NEW INFORMATION BEING DISCOVERED; AND EACH OF THEM FURTHER AGREES THAT THE RELEASE PROVIDED FOR HEREIN SHALL IN ALL RESPECTS CONTINUE TO BE EFFECTIVE AND NOT SUBJECT TO TERMINATION OR RESCISSION BECAUSE OF ANY DIFFERENCE IN SUCH FACTS OR ANY NEW INFORMATION.

 

By entering into this release, Borrower recognizes that no facts or representations are ever absolutely certain and it may hereafter discover facts in addition to or different from those which it presently knows or believes to be true, but that it is the intention of Borrower hereby to fully, finally and forever settle and release all matters, disputes and differences, known or unknown, suspected or unsuspected; accordingly, if Borrower should subsequently discover that any fact that it relied upon in entering into this release was untrue, or that any understanding of the facts was incorrect, Borrower shall not be entitled to set aside this release by reason thereof, regardless of any claim of mistake of fact or law or any other circumstances whatsoever.  Borrower acknowledges that it is not relying upon and has not relied upon any representation or statement made by PFG with respect to the facts underlying this release or with regard to any of such party’s rights or asserted rights.

 

This release may be pleaded as a full and complete defense and/or as a cross-complaint or counterclaim against any action, suit, or other proceeding that may be instituted, prosecuted or attempted in breach of this release.  Borrower acknowledges that the release contained herein constitutes a material inducement to PFG to enter into this Agreement, and that PFG would not have done so but for PFG’s expectation that such release is valid and enforceable in all events.

 

  

  

  

 

Borrower hereby represents and warrants to PFG, and PFG is relying thereon, as follows:

 

(a)           Except as expressly stated in this Agreement, neither PFG nor any agent, employee or representative of PFG has made any statement or representation to Borrower regarding any fact relied upon by Borrower in entering into this Agreement.

 

(b)           Borrower has made such investigation of the facts pertaining to this Agreement and all of the matters appertaining thereto, as it deems necessary.

 

(c)           The terms of this Agreement are contractual and not a mere recital.

 

(d)           This Agreement has been carefully read by Borrower, the contents hereof are known and understood by Borrower, and this Agreement is signed freely, and without duress, by Borrower.

 

(e)           Borrower represents and warrants that it is the sole and lawful owner of all right, title and interest in and to every claim and every other matter which it releases herein, and that it has not heretofore assigned or transferred, or purported to assign or transfer, to any person, firm or entity any claims or other matters herein released.  Borrower shall indemnify PFG, defend and hold it harmless from and against all claims based upon or arising in connection with prior assignments or purported assignments or transfers of any claims or matters released herein.

 

14.           Amendment of Loan Agreement. Section 8.21 of the Loan Agreement shall be deemed amended by Section 15 hereof.

 

15.           JURY TRIAL.  BORROWER HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY RELATED AGREEMENT OR (II) IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS EVIDENCED HEREBY OR THEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND BORROWER HEREBY AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT BORROWER OR PFG MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 15 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF BORROWER TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

 

  

  

  

 

WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a trial by jury is not enforceable, the parties hereto agree that any and all disputes or controversies of any nature between them arising at any time shall be decided by a reference to a private judge, mutually selected by the parties (or, if they cannot agree, by the Presiding Judge of the Santa Clara County, California Superior Court) appointed in accordance with California Code of Civil Procedure Section 638 (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts), sitting without a jury, in Santa Clara County, California; and the parties hereby submit to the jurisdiction of such court.  The reference proceedings shall be conducted pursuant to and in accordance with the provisions of California Code of Civil Procedure §§ 638 through 645.1, inclusive.  The private judge shall have the power, among others, to grant provisional relief, including without limitation, entering temporary restraining orders, issuing preliminary and permanent injunctions and appointing receivers.  All such proceedings shall be closed to the public and confidential and all records relating thereto shall be permanently sealed.  If during the course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that point pursuant to the judicial reference procedures, then such party may apply to the Santa Clara County, California Superior Court for such relief.  The proceeding before the private judge shall be conducted in the same manner as it would be before a court under the rules of evidence applicable to judicial proceedings.  The parties shall be entitled to discovery which shall be conducted in the same manner as it would be before a court under the rules of discovery applicable to judicial proceedings.  The private judge shall oversee discovery and may enforce all discovery rules and orders applicable to judicial proceedings in the same manner as a trial court judge.  The parties agree that the selected or appointed private judge shall have the power to decide all issues in the action or proceeding, whether of fact or of law, and shall report a statement of decision thereon pursuant to California Code of Civil Procedure § 644(a).  Nothing in this paragraph shall limit the right of any party at any time to exercise self-help remedies, foreclose against collateral, or obtain provisional remedies.  The private judge shall also determine all issues relating to the applicability, interpretation, and enforceability of this paragraph.

 

16.           Power of Attorney.  Borrower irrevocably appoints PFG as its lawful attorney to, after the expiration or termination of the Forbearance Period, exercisable upon the occurrence and during the continuance of an Event of Default:  (i) endorse Borrower’s name on any checks or other forms of payment or security; (ii) sign Borrower’s name on any invoice or bill of lading for any Accounts or drafts against Account Debtors, (iii) transfer the Collateral into the name of PFG or a third party as the Code permits; and (iv) take such other actions as PFG deems necessary to carry out the intent of this Agreement and the Forbearance Documents.  PFG may exercise the power of attorney to sign Borrower’s name on any documents necessary to perfect or continue the perfection of any security interest regardless of whether a default has occurred under this Agreement or any of the Loan Documents.  PFG’s appointment as Borrower’s attorney in fact, and all of PFG’s rights and powers, coupled with an interest, are irrevocable until the Obligations have been fully repaid and performed and PFG’s obligation to provide any extension of credit to Borrower under the Loan Documents have been  terminated.

 

17.           Entire Agreement.  This Agreement shall be binding upon Borrower and its successors and assigns, and shall inure to the benefit of PFG and its respective successors and assigns.  This Agreement and all documents, instruments, and agreements executed in connection herewith incorporate all of the discussions and negotiations between Borrower and PFG, either expressed or implied, concerning the matters included herein and in such other documents, instruments and agreements, any statute, custom, or usage to the contrary notwithstanding.  No such discussions or negotiations shall limit, modify, or otherwise affect the provisions hereof.  No modification, amendment, or waiver of any provision of this Agreement, or any provision of any other document, instrument, or agreement between Borrower and PFG shall be effective unless executed in writing by the party to be charged with such modification, amendment, or waiver, and if such party be PFG, then by a duly authorized officer thereof.

 

  

  

  

 

18.           Advice of Counsel.  The PFG and Borrower have prepared this Agreement and all documents, instruments, and agreements incidental hereto with the aid and assistance of their respective counsel.  Accordingly, all of them shall be deemed to have been drafted by the PFG and Borrower and shall not be construed against the PFG or Borrower.

 

19.           Illegality or Unenforceability.  Any determination that any provision or application of this Agreement is invalid, illegal, or unenforceable in any respect, or in any instance, shall not affect the validity, legality, or enforceability of any such provision in any other instance, or the validity, legality, or enforceability of any other provision of this Agreement.

 

20.           Consistent Changes; Conflicts.  The Loan Documents are hereby amended wherever necessary to reflect the changes described above.  To the extent any term or provision herein conflicts with any term or provision contained in any of the Loan Documents, the term or provision provided for herein shall control.

 

21.           Continuing Validity.  Borrower understands and agrees that in entering into this Agreement, PFG is relying upon Borrower’s representations, warranties, and agreements, as set forth in the Loan Documents.  Except as expressly modified pursuant to this Agreement, the terms of the Loan Documents remain unchanged and in full force and effect.  PFG’s agreement to modifications to the existing Loan Agreement pursuant to this Agreement in no way shall obligate PFG to make any future modifications to the Loan Agreement.  Nothing in this Agreement shall constitute a satisfaction of the Obligations.  It is the intention of PFG and Borrower to retain as liable parties all makers and endorsers of Loan Documents, unless the party is expressly released by PFG in writing.  No maker, endorser, or guarantor will be released by virtue of this Agreement.  The terms of this Section 26 apply not only to this Agreement, but also to all subsequent loan modification agreements.

 

22.           No Waiver.  This Agreement is not applicable to any Event of Default under any Loan Document whether arising before or after the Effective Date or as a result of the transactions contemplated hereby other than the Existing Event of Default.

 

23.           Reservation of Rights.  PFG hereby reserves all rights and remedies under the Loan Documents and Forbearance Documents, at law, in equity or otherwise including, without limitation, the right upon a Termination Event or the expiration of the Forbearance Period, to immediately (i) foreclose on any Collateral securing the Loans and (ii) exercise any and all other remedies available under the Loan Documents, the Forbearance Documents or applicable law.  The failure of PFG to exercise all or any of its rights or remedies at any time shall not constitute a waiver of any other right or remedy, nor shall this Agreement constitute a waiver of the Existing Event of Default or any other Event of Default under the Loan Documents or the Forbearance Documents.

 

24.           Successors and Assigns.  This Agreement shall inure to the benefit of and be binding upon the heirs, successors, and permitted assigns of the parties.

 

  

  

  

 

25.           Governing Law and Jurisdiction.  This Agreement shall be construed and enforced in accordance with the terms of the laws of the State of California without regard to its conflicts of laws principles.  If any provision of this Agreement is not enforceable, the remaining provisions of the Agreement shall be enforced in accordance with their terms.  Borrower, and PFG represent and warrant to each other that each is duly authorized to execute and deliver this Agreement on their respective behalves.

 

26.           Counterparts.  This Agreement may be executed in two or more counterparts each of which shall constitute an original and all of which shall, when taken together, constitute one and the same agreement, notwithstanding that all parties may not have signed all counterparts of this Agreement.

 

[Signatures Appear on the Following Page]

 

( )

 

  

  

  

 

IN WITNESS WHEREOF, the parties hereto have executed, or caused this Forbearance Agreement to be executed by the respective officer or authorized signatory thereunto duly authorized, as of the date first written above.

 

	
Borrower:

ADVANCED PHOTONIX, INC.

 

By_______________________________

President or Vice President

 

By_______________________________

Secretary or Ass't Secretary

	
PFG:

PARTNERS FOR GROWTH III, L.P. 

 

By_______________________________

 

Name:  ___________________________

 

Title: Manager, Partners for Growth III, LLC

Its General Partner

	  	  
	
Borrower:

PICOMETRIX, LLC

 

By_______________________________

   President

 

Name ____________________________

	  

Richard D. KurtzExhibit 10.1

                            ASSET PURCHASE AGREEMENT

THIS AGREEMENT is made effective this 9th day of September, 2013.

BETWEEN:

          JOSEPH FEWER, DOING BUSINESS AS HACIENDA ACRES, of 7123 Hacienda Road,
          RR #6, Aylmer, Ontario, N5H 2R5;

          ("Fewer")

                                                               OF THE FIRST PART

AND:

          LISBOA LEISURE, INC., a company incorporated pursuant to the laws of
          Nevada with an office located at H 16/B, Adsulim, Benaulim, Goa,
          India, 403716;

          ("Lisboa")

                                                              OF THE SECOND PART

WHEREAS:

A. Fewer is the owner of a 100% interest in the intellectual property described
Schedule "A" hereto, as well as all related assets necessary for operating a
plant growth enhancement product manufacture and sales business as a going
concern (collectively, "the Assets");

B. Fewer has agreed to sell and transfer the Assets to Lisboa and Lisboa has
agreed to purchase the Assets from Fewer upon the following terms and
conditions; and

C. Upon execution of this Agreement, Lisboa will forthwith incorporate a new
corporation (the "Subsidiary") that will act as a subsidiary for the operation
of the plant growth enhancement product manufacture and sales business
contemplated by this Agreement and will own the Assets.

     NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
premises and mutual agreements and covenants herein contained, the parties
hereby covenant and agree as follows:

1. FEWER'S REPRESENTATIONS

Fewer represents and warrants to Lisboa now and at the Closing Date that:
<PAGE>
     (a)  Fewer has good and sufficient right and authority to enter into this
          Agreement on the terms and conditions herein set forth and to transfer
          the legal title and beneficial ownership of the Assets to the
          Subsidiary;

     (b)  the performance of this Agreement will not be in violation of any
          Agreement to which Fewer is a party, whether written or verbal, and
          will not give any person or company any right to terminate or cancel
          any agreement or any right enjoyed by Fewer and will not result in the
          creation or imposition of any lien, encumbrance or restriction of any
          nature whatsoever in favour of a third party upon or against the
          Assets;

     (c)  Fewer has good and marketable title to the Assets, all of which are
          free and clear of all liens, charges and encumbrances, and are in the
          possession of or under the control of Fewer;

     (d)  there has been no act of God, damage, destruction, loss, labour
          disruption or trouble, or other event (whether or not covered by
          insurance) materially and adversely affecting any of the Assets or the
          organization, operations, affairs, business, properties, prospects or
          financial condition or position of Fewer's business operations;

     (e)  Fewer holds, and shall transfer to the Subsidiary at the Closing Date,
          all permits, licences, registrations and authorizations necessary to
          own and operate the Assets and carry on its business;

     (f)  Fewer has not, directly or indirectly, engaged or entered into any
          transaction or incurred any liability or obligation which might
          materially and adversely affect any of the Assets;

     (g)  there is no known indebtedness of Fewer to any person which might, by
          operation of law or otherwise, now or hereafter constitute or be
          capable of forming an encumbrance upon any of the Assets and there is
          no known indebtedness of any kind whatsoever relating to the business
          in respect of which the Subsidiary may become liable on or after the
          Closing Date;

     (h)  no known action, suit, judgment, investigation, inquiry, assessment,
          reassessment, litigation, determination or administrative or other
          proceeding or arbitration before or of any court, arbitrator or
          governmental authority is in process, or pending or threatened,
          against or relating to Fewer's Assets and no known state of facts
          exists which could constitute the basis therefor;

     (i)  all tangible rights, assets and properties comprising the Assets are
          free from material defect, are in good condition and repair and (where
          applicable) are in proper working order, having regard to the use and
          age thereof;

                                       2
<PAGE>
     (j)  there is no known written, oral or implied agreement, option,
          understanding or commitment or any right or privilege capable of
          becoming any of the same, for the purchase from Fewer of his Assets,
          other than purchase orders accepted by Fewer in the usual and ordinary
          course of the operation of his business; and

     (k)  none of the Assets is in any respect infringing the right of any
          person under or in respect of any patent, design, trade mark, trade
          name, copyright or other industrial or intellectual property.

2. LISBOA'S REPRESENTATIONS

Lisboa represents and warrants to Fewer now and at the Closing Date that:

     (a)  Lisboa is a corporation duly incorporated, validly existing and in
          good standing under the laws of Nevada and is a United States
          reporting company; and

     (b)  Lisboa is in good standing with the U.S. Securities & Exchange
          Commission (the "Commission"). All of Lisboa's filings submitted to
          the Commission are true and accurate as at the date of such filing;
          and

     (c)  Lisboa has good and sufficient right and authority to enter into this
          Agreement on the terms and conditions herein set forth.

3. EFFECT OF REPRESENTATIONS

3.1 The representations and warranties of Fewer and Lisboa (the "Parties") set
out above form a part of this Agreement and are conditions upon which the
Parties have relied in entering into this Agreement and shall survive the
acquisition of the Assets by Lisboa.

4. PURCHASE AND SALE OF ASSETS

For the mutual valuable consideration set forth in this paragraph, the Parties
hereby agree as follows:

4.1 Forthwith upon execution of this Agreement, Lisboa shall take steps to
incorporate the Subsidiary.

4.2 Fewer hereby agrees to sell and transfer to the Subsidiary a 100% right,
interest, and title to the Assets in consideration of Lisboa issuing to Fewer,
or any other parties designated by Fewer, an aggregate of 12,500,000 post-split
shares of restricted common stock in the capital of Lisboa.

4.3 The Parties hereby agree that they will cause the Subsidiary to execute a
consulting agreement with Fewer in the form attached hereto as Schedule "B" (the
"Consulting Agreement") on the Closing Date.

                                       3
<PAGE>
5. CLOSING

The sale and purchase of the Assets shall be closed at the office of Hacienda
Acres (Ontario time) on October 15, 2013 or on such other date or at such other
place as may be agreed upon by the parties (the "Closing Date" or "Closing").

6. ACTIONS BY THE PARTIES PENDING CLOSING

From and after the date hereof and until the Closing Date, the Parties covenant
and agree that:

     (a)  Lisboa, and its authorized representatives, shall have full access
          during normal business hours to all documents of Fewer relating to the
          Assets and shall have full access to inspect the Assets, and Fewer
          shall furnish to Lisboa or its authorized representatives all
          information with respect to the Assets as Lisboa may reasonably
          request;

     (b)  Fewer, and his authorized representatives, shall have full access
          during normal business hours to all documents relating to Lisboa's
          affairs that Fewer may reasonably request; and

     (c)  Fewer shall not enter into any contract or commitment to purchase or
          sell any interest in the Assets without the prior written consent of
          Lisboa.

7. CONDITIONS PRECEDENT TO FEWER'S OBLIGATIONS

Each and every obligation of Fewer to be performed on the Closing Date shall be
subject to the satisfaction by the Closing Date of the following conditions,
unless waived in writing by Fewer:

     (a)  The representations and warranties made by Lisboa in this Agreement
          shall be true and correct on and as of the Closing Date with the same
          effect as though such representations and warranties had been made or
          given by the Closing Date;

     (b)  Lisboa shall have completed a forward split of its common stock such
          that every share of pre-split common stock shall be exchanged for 25
          post-split shares of common stock;

     (c)  Lisboa shall have changed its name to "GroGenesis, Inc.", or such
          other name acceptable to Fewer;

     (d)  Lisboa shall deliver to Fewer:

          (i)  a copy of resolutions of Lisboa's Board of Directors authorizing
               the execution of this Agreement and the acquisition of the
               Assets;

                                       4
<PAGE>
          (ii) copies of the incorporation documents for the Subsidiary;

          (iii) a share certificate representing 12,500,000 post-split shares of
               common stock in the capital of Lisboa issued in the name of
               Fewer, or any other nominees that Fewer designates; and

          (iv) a copy of a current report on Form 8-K that includes pro forma
               financial statements showing Lisboa's financial position upon
               completion of its acquisition of the Assets; and

          (v)  an executed copy of the Consulting Agreement.

8. CONDITIONS PRECEDENT TO LISBOA'S OBLIGATIONS

Each and every obligation of Lisboa to be performed on the Closing Date shall be
subject to the satisfaction by the Closing Date of the following conditions,
unless waived in writing by Lisboa:

     (a)  The representations and warranties made by Fewer in this Agreement
          shall be true and correct on and as of the Closing Date with the same
          effect as though such representations and warranties had been made or
          given by the Closing Date; and

     (b)  Fewer shall deliver to Lisboa

          (i)  a bill of sale evidencing the sale and transfer of title to the
               Assets to the Subsidiary; and

          (ii) an executed copy of the Consulting Agreement.

9. SUBSIDIARY DIRECTORS AND MANAGEMENT

The Parties hereto shall cause the initial director of the board of the
Subsidiary to be Steven Moseley who will also act as the President, Chief
Executive Officer, and Secretary of the Subsidiary.

10. FURTHER ASSURANCES

The parties hereto covenant and agree to do such further acts and execute and
deliver all such further deeds and documents as shall be reasonably required in
order to fully perform and carry out the terms and intent of this Agreement.

                                       5
<PAGE>
11. ENTIRE AGREEMENT

This Agreement constitutes the entire agreement to date between the parties
hereto and supersedes every previous agreement, communication, expectation,
negotiation, representation or understanding, whether oral or written, express
or implied, statutory or otherwise, between the parties with respect to the
subject of this Agreement.

12. TIME OF ESSENCE

Time shall be of the essence of this Agreement.

13. TITLES AND RECITALS

The titles to the respective sections hereof shall not be deemed a part of this
Agreement but shall be regarded as having been used for convenience only. The
Parties intend the recitals to this Agreement to be binding and effective terms
of this Agreement.

14. SEVERABILITY

If any one or more of the provisions contained herein should be invalid, illegal
or unenforceable in any respect in any jurisdictions, the validity, legality and
enforceability of such provisions shall not in any way be affected or impaired
thereby in any other jurisdiction and the validity, legality and enforceability
of the remaining provisions contained herein shall not in any way be affected or
impaired thereby.

15. APPLICABLE LAW

The situs of the Agreement is Aylmer, Ontario, and for all purposes this
Agreement will be governed exclusively by and construed and enforced in
accordance with laws prevailing in the Province of Ontario. The parties agree to
attorn to the jurisdiction of the Courts of the Province of Ontario.

17. ENUREMENT

This Agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns.

                                       6
<PAGE>
IN WITNESS WHEREOF this Agreement has been executed as of the day and year first
above written.

                                          LISBOA LEISURE INC.

/s/ Joseph Fewer                          per: /s/ Maria Fernandes
-------------------------------                ---------------------------------
JOSEPH FEWER in his personal                   Authorized Signatory
capacity and doing business as
Hacienda Acres

                                       7
<PAGE>
                                  SCHEDULE "A"

            TO THAT CERTAIN AGREEMENT MADE AS OF SEPTEMBER 9TH, 2013
              BETWEEN JOSEPH FEWER DOING BUSINESS AS HACIENDA ACRES
                             AND LISBOA LEISURE INC.

The intellectual property described in Recital "A" to this Agreement and forming
part of the Assets is more particularly described by the following patent
application filed with the United States Patent and Trademark Office:

United States provisional patent application number 61/897,584 - "Composition
and Method for Enhancing Plant Growth"

                                       8
<PAGE>
                                  SCHEDULE "B"

            TO THAT CERTAIN AGREEMENT MADE AS OF SEPTEMBER 9TH, 2013
              BETWEEN JOSEPH FEWER DOING BUSINESS AS HACIENDA ACRES
                             AND LISBOA LEISURE INC.

                                       9
<PAGE>
                            1. CONSULTING AGREEMENT

THIS AGREEMENT dated as of the o, 2013.

BETWEEN:

          GROGENESIS INC., a company incorporated pursuant to the laws of USA,
          an office located at 8810 Hwy 79 North, Springville, Tennessee, 38256;

          (the "Company")

AND:

          JOSEPH FEWER, having an address at 7123 Hacienda Road, RR #6, Aylmer,
          Ontario, N5H 2R5;

          (the "Consultant")

WHEREAS:

A. The Company wishes to obtain the services of the Consultant who will be
involved in the production, marketing, and sales of the Company's products; and

B. The Consultant is qualified to undertake the duties outlined in this
Agreement;

     THEREFORE in consideration of the foregoing recitals and of the mutual
promises, covenants and agreements hereinafter set forth, the parties promise,
covenant and agree that:

2. CONSULTANCY

     (a)  Position

          (i)  The Company hereby retains the Consultant to supervise and manage
               operations on a full-time basis.

     (b)  Term

          (i)  The term of this Agreement shall commence on the date that
               GroGenesis, Inc. ("GroGenesis"), the parent corporation of the
               Company, raises a minimum sum of US$500,000 for the Company's
               operations and shall continue until it is terminated in
               accordance with this Agreement.

                                       10
<PAGE>
     (c)  Duties

          (i)  The Consultant shall perform such duties and render such services
               as and when prescribed by the Board of Directors of the Company
               or GroGenesis (the "Boards") and in accordance with such
               instructions and directions of the Board as are lawfully assigned
               or communicated to him and as are consistent with the position of
               President and of manager of operations. The Consultant shall
               perform such duties on behalf of Company and, as directed by the
               Board.

          (ii) The Consultant understands that the Consultant is retained on a
               full-time basis with Company. Throughout the term of this
               Agreement, the Consultant shall:

               I.   diligently, honestly and faithfully serve Company and shall
                    use his best efforts to promote and advance the interests
                    and goodwill of Company;

               II.  conduct himself at all times in a manner which is not
                    prejudicial to Company interests;

               III. except as permitted in this Agreement or authorized by the
                    Board in writing, devote all of his business time to the
                    business and affairs of Company;

               IV.  refrain from engaging in any activity which shall in any
                    manner, directly or indirectly, compete with the trade or
                    business of Company; and

               V.   without the consent in writing of the Board, not acquire,
                    directly or indirectly, any interest in a firm, partnership,
                    association or corporation, the business and operations of
                    which in any manner, directly or indirectly, compete with
                    the trade or business of Company other than publicly traded
                    stocks representing not more than 10% of any such firm,
                    partnership, association or corporation.

3. REMUNERATION

     (a)  Salary

          (i)  During the currency of this Agreement, the Company shall pay to
               the Consultant a monthly salary of $7,000 (the "Salary") for all
               hours worked. The Salary shall be payable monthly in advance.

          (ii) The Company shall have the right to deduct and withhold from the
               Consultant's compensation any amounts required to be deducted and
               remitted under any applicable local, domestic or other laws of
               general application to the consultancy relationship. The
               Consultant shall have the right to charge the company any
               applicable taxes, including Goods & Services Tax or Harmonized
               Sales Tax.

                                       11
<PAGE>
     (b)  Reimbursement of Expenses

          (i)  The Company shall reimburse the Consultant for all reasonable
               travel, promotional and other business expenses actually and
               properly incurred by the Consultant in the performance of his
               duties for the Company.

4. TERMINATION OF CONSULTANCY

     (a)  Termination by Consultant

          (i)  The Consultant may terminate this Agreement by giving 90 days
               written notice of resignation to Company. At the time the
               Consultant provides the Company with notice of resignation, or at
               any time thereafter, the Company shall have the right to elect to
               terminate the this Agreement at any time prior to the end of the
               effective date of the Consultant's resignation, and upon such
               election, shall provide to the Consultant a lump sum equal to 30
               days of the Salary or to such proportion of the 30 days that
               remain outstanding at the time of the election and shall continue
               to provide only those benefits that Company is permitted or able
               to provide under the applicable rules of the relevant plans for
               the lesser of 30 days or the period of time that remains
               outstanding at the time of the Company's election.

     (b)  Termination by Company Without Cause

          (i)  The Company may immediately terminate this Agreement without
               cause at any time by providing the Consultant with a written
               notice of termination together with a lump sum payment in an
               amount equal to six month's Salary.

          (ii) The Consultant agrees that the Consultant shall not be entitled,
               to any remuneration, compensation or other benefits other than
               those expressly provided for in this Agreement.

     (c)  Termination by Company for Just Cause

          (i)  Notwithstanding any other provision of this Agreement, the
               Company may on written notice to the Consultant immediately
               terminate this Agreement with the Company at any time for
               "cause", without notice or payment in lieu of notice or any other
               form of compensation, severance pay or damages.

          (ii) For the purposes of this Agreement, "cause" has the meaning
               commonly ascribed to the phrase "cause" or "just cause for
               termination" in the courts of the Province of Ontario, and
               without limiting the foregoing, includes any of the following
               acts or omissions:

               I.   the wilful failure of the Consultant to follow the
                    instructions of the Company;

               II.  the wilful failure of the Consultant to perform the
                    reasonable duties assigned to him by the Company;

                                       12
<PAGE>
               III. the Consultant's misconduct, dishonesty, or any material
                    violation of the Company's policies and procedures in effect
                    from time to time;

               IV.  the material breach or non-observance of any of the
                    provisions of this Agreement by the Consultant;

               V.   any breach of Sections 5 and 6 of this Agreement; or

               VI.  any conduct of the Consultant which tends to bring him or
                    the Company into disrepute and which is not corrected within
                    a reasonable time after the Company gives written notice to
                    the Consultant specifying the conduct.

5. CONFIDENTIALITY AND OWNERSHIP OF COMPANY PROPERTY

     (a)  Confidential and Proprietary Information

          (i)  The Consultant acknowledges that, by reason of the Consultant's
               position with the Company, the Consultant will have access to
               Confidential and Proprietary Information, as hereinafter defined,
               of the Company, that the Company has or will spend time, effort
               and money to develop and acquire.

          (ii) The term "Confidential and Proprietary Information" as used in
               this Agreement means all trade secrets, proprietary information
               and other data or information (and any tangible evidence, record
               or representation thereof) whether prepared, conceived or
               developed by an Consultant or agent of the Company (including the
               Consultant) or received by the Company from an outside source
               which is maintained in confidence by the Company or any of its
               customers. Without limiting the generality of the foregoing,
               Confidential and Proprietary Information includes information of
               the Company pertaining to:

               I.   business improvements and processes; marketing and selling
                    plans; business opportunities, plans (whether pursued or
                    not) and budgets; unpublished financial statements;
                    licenses; pricing, pricing strategy and cost data;
                    information regarding the skills and compensation of
                    Consultants; the identities of clients and potential
                    clients, customers and potential customers (collectively,
                    "Customers"); the identities of contact persons at
                    Customers; the preferences and needs of Customers;
                    information regarding sales calls, timing, sales terms,
                    service plans, methods, practices, strategies, forecasts,
                    know-how, and other marketing techniques; the identities of
                    key accounts, potential key accounts; the identities of
                    suppliers and Consultants, and all information about those

                                       13
<PAGE>
                    supplier and Consultant relationships; research and
                    development plans or projects, data and reports; computer
                    materials such as programs, instructions, source and object
                    code, and printouts; formulas, inventions, developments and
                    discoveries; and product information, including testing
                    information;

               II.  any information relating to the relationship of the Company
                    with any personnel, suppliers, principals, investors,
                    contacts or prospects of the Company and any information
                    relating to the requirements, specifications, proposals,
                    orders, contracts or transactions of or with any such
                    persons; and

               III. financial information, including the Company's costs,
                    financing or debt arrangements, income, profits, salaries or
                    wages.

          (iii) The Consultant acknowledges that the Confidential and
               Proprietary Information is a valuable and unique asset of the
               Company and that the Confidential and Proprietary Information is
               and will remain the exclusive property of the Company.

          (iv) The Consultant agrees to maintain securely and hold in strict
               confidence all Confidential and Proprietary Information received,
               acquired or developed by the Consultant or disclosed to the
               Consultant as a result of or in connection with the Consultant's
               position with the Company. The Consultant agrees that, both
               during his relationship with the Company and after the
               termination of this Agreement, the Consultant will not, directly
               or indirectly, divulge, communicate, use, copy or disclose or
               permit others to use, copy or disclose, any Confidential and
               Proprietary Information to any person, except as such disclosure
               or use is required to perform his duties hereunder or as may be
               consented to by prior written authorization of the Board.

          (v)  The obligation of confidentiality imposed by this Agreement shall
               not apply to information that appears in issued patents or
               printed publications, that otherwise becomes generally known in
               the industry through no act of the Consultant in breach of this
               Agreement, or that is required to be disclosed by court order or
               applicable law.

          (vi) The Consultant understands that the Company has from time to time
               in its possession information belonging to third parties or which
               is claimed by third parties to be confidential or proprietary and
               which the Company has agreed to keep confidential. The Consultant
               agrees that all such information shall be Confidential and
               Proprietary Information for the purposes of this Agreement.

                                       14
<PAGE>
          (vii) The Consultant represents and warrants that the Consultant has
               not brought and will not bring with the Consultant to the
               Company, and that the Consultant has not used and will not use,
               while performing the Consultant's duties for the Company, any
               materials or documents of a former company which the Consultant
               is under a duty not to disclose. The Consultant understands that,
               while retained by the Company, the Consultant shall not breach
               any obligation or confidence or duty the Consultant may have to a
               former Company and the Consultant agrees that the Consultant will
               fulfil all such obligations during the Consultant's relationship
               with the Company.

          (viii) The Consultant represents and warrants that the Consultant will
               not, to the best of the Consultant's knowledge and belief, use or
               cause to be incorporated in any of the Consultant's work product
               any information, designs, techniques or know-how which the
               Consultant or the Company does not have the right to use.

     (b)  Ownership and Disclosure of Discoveries, Ideas and Inventions

          (i)  Any new technology, knowledge or information developed by the
               Consultant related to the business of the Company during the term
               of this Agreement shall be the exclusive property of the Company
               to the extent that such technology, knowledge or information is
               owned by the Consultant.

          (ii) The Consultant acknowledges that all Confidential and Proprietary
               Information and all other discoveries, know-how, inventions,
               ideas, concepts, processes, products, protocols, treatments,
               methods, tests and improvements, computer programs, or parts
               thereof, conceived, developed, reduced to practice or otherwise
               made by the Consultant either alone or with others, during the
               course of the Consultant's relationship with the Company pursuant
               to this Agreement or any previous agreements or arrangements
               between the Consultant and the Company, whether or not conceived,
               developed, reduced to practice or made during the Consultant's
               regular working hours or on the premises of the Company
               (collectively "Inventions"), and any and all services and
               products which embody, emulate or employ any such Inventions will
               be the sole property of the Company and all copyrights, patents,
               patent rights, trademarks, service marks and reproduction rights
               to, and other proprietary rights in, each such Invention, whether
               or not patentable or copyrightable, will belong exclusively to
               the Company.

          (iii) The Consultant represents and warrants that the Consultant does
               not claim rights in, or otherwise exclude from this Agreement,
               any Inventions.

          (iv) The Consultant shall disclose promptly to the Company, its
               successors or assigns, any Inventions.

          (v)  The Consultant hereby assigns and agrees to assign all his
               rights, title and interest in the Inventions, to the Company or
               its nominee.

                                       15
<PAGE>
          (vi) Whenever requested to do so by the Company, the Consultant shall
               execute any and all applications, assignments or other
               instruments which the Company shall deem necessary to apply for
               and obtain patents or copyrights of Canada, the United States or
               any foreign country or to otherwise protect the Company's
               interest in the Inventions and shall assist the Company in every
               proper way (entirely at the Company's expense, including
               reimbursement to the Consultant for all expense and loss of
               income) to obtain such patents and copyrights and to enforce
               them, inclusive of but not limited to, US Provisional Patent
               Application 61//858203 and US Provisional Patent Application
               86/092618.

          (vii) The Consultant hereby waives for the benefit of the Company and
               its successors and assigns any and all moral rights in respect of
               any Inventions.

     (c)  Delivery of Records

          (i)  The Consultant agrees that documents, copies, records and other
               property or materials made or received by the Consultant that
               pertain to the business and affairs of the Company, including all
               Confidential and Proprietary Information and Inventions which is
               in the Consultant's possession or under the Consultant's control
               are the property of the Company and that the Consultant will
               return same and any copies of same to the Company immediately
               upon termination of this Agreement or at any time upon the
               request of the Company.

6. NON-SOLICITATION

     (a)  During the term of this Agreement and for a period of 36 months
          following the termination of this Agreement, howsoever arising, the
          Consultant shall not (unless acting as an Consultant under this
          Agreement or with the prior written consent of the Board or its
          nominee):

          I.   call on, solicit, or endeavour to entice away, either directly or
               indirectly, any person or entity who is, or was a client,
               customer or potential customer of the Company who the Consultant
               or his subordinates solicited or serviced on behalf of the
               Company during the twelve month period immediately preceding the
               termination of this Agreement; and

          II.  call on, solicit, or endeavour to entice away, either directly or
               indirectly, any person or entity who is, or was an employee,
               independent contractor, or consultant of the Company during the
               twelve month period immediately preceding the termination of this
               Agreement, to terminate his or her relationship with the Company
               in order to become an employee, consultant or independent
               contractor for any person or entity other than the Company.

                                       16
<PAGE>
7. EQUITABLE RELIEF

     (a)  The Consultant acknowledges that the restrictions contained in
          Sections 5 and 6 are, in view of the nature of the business of the
          Company, reasonable and necessary to protect the legitimate interests
          of the Company, that the Company would not have entered into this
          Agreement in the absence of such restrictions and that any violation
          of any provision of those Sections could result in irreparable injury
          to the Company.

     (b)  The Consultant agrees that, in the event he violates any of the
          restrictions referred to in Sections 5 and 6, the Company shall be
          entitled to such injunctive relief or other remedies at law or in
          equity which the Court deems fit.

8. RIGHT TO USE THE CONSULTANT'S NAME AND LIKENESS

     (a)  The Consultant hereby grants to the Company, during the term of the
          Consultant's term with the Company, the right to use the Consultant's
          name, likeness and biography in connection with the Consultant's
          services under this Agreement and in connection with the advertising
          or exploitation of any project with respect to which the Consultant
          performs his services for the Company.

9. GENERAL

     (a)  No Derogation of Obligations at Law

          (i)  Nothing in this Agreement is intended to limit or otherwise
               affect the duties and obligations of the Consultant to the
               Company existing at common law or in equity whether during, or
               after the termination of, this Agreement.

     (b)  Waiver

          (i)  No consent or waiver, express or implied, by any party to this
               Agreement or any breach or default by any other party in the
               performance of its obligations under this Agreement or of any of
               the terms, covenants or conditions of this Agreement shall be
               deemed or construed to be a consent or waiver of any subsequent
               or continuing breach or default in such party's performance or in
               the terms, covenants or conditions of this Agreement. The failure
               of any party to this Agreement to assert any claim in a timely
               fashion for any of its rights or remedies under this Agreement
               shall not be construed as a waiver of any such claim and shall
               not serve to modify, alter or restrict any such party's right to
               assert such claim at any time thereafter.

     (c)  Survival of Provisions

          (i)  The Company and the Consultant expressly acknowledge and agree
               that the provisions of this Agreement, which by their express or
               implied terms extend beyond the termination of the Consultant's

                                       17
<PAGE>
               relationship hereunder, or beyond the termination of this
               Agreement, shall continue in full force and effect
               notwithstanding the termination of the this Agreement for any
               reason.

     (d)  Notices

          (i)  Any notice relating to this Agreement or required or permitted to
               be given in accordance with this Agreement shall be in writing
               and shall, if to the Company, be personally delivered, emailed or
               mailed by registered mail, postage prepaid, to its address set
               out on the first page of this Agreement and, if to the
               Consultant, to the home address of the Consultant on the
               Company's records. Any notice shall be deemed to have been
               received if delivered or sent by email, when delivered or
               emailed, and if mailed, on the third day (excluding Saturdays,
               Sundays and holidays) after the mailing thereof. If normal mail
               service is interrupted the sender shall deliver such notice in
               order to ensure prompt receipt thereof.

          (ii) Each party to this Agreement may change its address for the
               purpose of Section (i) by giving written notice of such change in
               the manner provided for in Section (i).

     (e)  Applicable Law

          (i)  This Agreement shall be governed by and construed in accordance
               with the laws of Ontario including the laws of Canada applicable
               therein, which shall be deemed to be the proper law hereof. The
               parties hereto hereby attorn and agree to submit to the
               jurisdiction of the courts of Ontario, Canada.

     (f)  Currency

          8.6.1 Unless otherwise indicated, all funds referred to under the
               terms of this Agreement shall be funds designated in the lawful
               currency of Canada.

     (g)  Severability

          (i)  If any provision of this Agreement for any reason is declared
               invalid, such declaration shall not affect the validity of any
               remaining portion of the Agreement, which remaining portion shall
               remain in full force and effect as if this Agreement had been
               executed with the invalid portion thereof eliminated and it is
               hereby declared the intention of the parties that they would have
               executed the remaining portions of this Agreement without
               including therein any such part, parts or portion which may, for
               any reason, be hereafter declared invalid.

     (h)  Entire Agreement

          (i)  This Agreement constitutes the entire Agreement between the
               parties hereto in relation to the subject matter hereof and there
               are no representations or warranties, express or implied,
               statutory or otherwise other than those set forth in this
               Agreement. This Agreement supersedes any prior agreements,

                                       18
<PAGE>
               written or oral in respect of the Consultant's relationship with
               the Company, and any such prior agreements are hereby terminated
               and cancelled.

          (i)  Amendment

     (i)  This Agreement cannot be amended or supplemented except by a written
          Agreement executed by all parties hereto.

     (j)  Counterpart

          (i)  This Agreement may be executed in counterpart and such
               counterparts together shall constitute one and the same
               instrument and notwithstanding the date of execution shall be
               deemed to bear the date as set out on the first page of this
               Agreement.

     (k)  Enurement

     (i)  This Agreement shall enure to the benefit of and be binding upon the
          parties and their respective heirs, executors, administrators,
          successors, personal representatives and permitted assigns.

                                       19
<PAGE>
IN WITNESS WHEREOF the parties have duly executed this Agreement as of the date
set out on the first page of this Agreement

By:
   -------------------------------

                                       20

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00226-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00226-of-00352.parquet"}]]