EXHIBIT 10.ap
POOLING AGREEMENT
SciTech inc. ("SciTech") a Wisconsin corporation, Xxxxxx Xxxxxxxx and
Xxxxx Xxxxxxxx (together, "Sellers") and SBS Technologies, Inc., a New Mexico
Corporation ("Buyer".) and its wholly-owned subsidiary, SBS Technologies, Inc.
Communications Products, a California corporation ("Company"), agree:
I. RECITALS.
A. OWNERSHIP. Sellers are the owners of all of the outstanding
common stock ("SciTech Shares") of SciTech and wish to exchange
the SciTech Shares for common stock of Buyer.
B. RECEIPT OF SHARES. Buyer wishes to receive the SciTech Shares
under the terms and conditions of this Agreement.
C. POOLING OF INTEREST. The parties intend that the Transactions (as
later defined) be accounted for as a pooling of interests in
accordance with generally accepted accounting principles.
D. EMPLOYMENT ARRANGEMENTS AND OPTIONS. Upon receipt of the SciTech
Shares, Buyer wishes to employ Seller Xxxxxx Xxxxxxxx, who is an
employee of SciTech. The Seller Xxxxxx Xxxxxxxx wishes to be
employed by Buyer. A form of employment agreement is attached as
Exhibit I-D. In connection with his employment, Buyer will also
issue to Seller Xxxxxx Xxxxxxxx options for Buyer Common Stock. A
form of option agreement is attached as Exhibit I-D1 ("Option
Agreement").
E. COVENANT NOT TO COMPETE. In connection with the acquisition of
the SciTech Shares, Seller Xxxxxx Xxxxxxxx agrees to enter into a
non-compete agreement in substantially the form attached as
Exhibit I-E to this Pooling Agreement ("Covenant") for the
consideration specified in the Covenant.
F. TAX-FREE REORGANIZATION. The parties intend that the Transactions
be a tax-free reorganization under the Internal Revenue Code of
1986, as amended.
II. MERGER.
A. MERGER ACTION. Subject to the terms and conditions of this
Pooling Agreement, SciTech will merge with and into Company
("Merger"); at the time the Merger is effective under all
applicable state laws ("Effective Time") Company will be the
surviving company ("Surviving Company"). The form of Plan of
Merger is attached as Exhibit II-A.
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B. EFFECT OF MERGER.
1. The Merger will become effective at the Effective Time, with the
effect set forth in applicable New Mexico and Wisconsin Business
Corporation Laws. The Surviving Company may, at any time after
the Effective Time, take any action (including executing and
delivering any document) in the name and on behalf of either
SciTech or Company in order to carry out and effectuate the
transactions, including the Merger, contemplated by this Pooling
Agreement ("Transactions").
2. Buyer will designate such directors and officers as it may
determine to be in the best interest of the Surviving Company.
Nothing in this paragraph shall entitle any director or officer
to maintain that position if not thereafter duly elected or
appointed to it.
3. At and as of the Effective Time, and subject to adjustment as
provided below, each of the 1,000 issued and outstanding SciTech
Shares shall be converted into the right to receive shares of
the no par value common stock of Buyer as set forth below. No
fractional shares will be issued, the number of SBS common shares
a shareholder receives will be rounded down to the nearest whole
number, and no payment for fractional shares made. All shares of
the common stock of Buyer received pursuant to this subparagraph
II.B.3 are the "Buyer Shares," and the ratio of Buyer Shares to
each SciTech Share is the "Conversion Ratio". The Conversion
Ratio will be adjusted equitably if there should occur any stock
split, stock dividend, reverse stock split, or other change in
the number of SciTech Shares outstanding. The total number of
Buyer Shares to be issued will equal $6,400,000 divided by the
average of the closing price on the NASDAQ National Market System
of SBS common stock for the five trading days preceding Closing.
No SciTech Share shall be deemed to be outstanding or to have any
rights other than those set forth in this subparagraph after the
Effective Time.
4. At and as of the Effective Time, each share of the no par value
common stock of Company then outstanding ("Company Share") will
remain outstanding as the common stock of the Surviving Company.
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5. After Closing, transfers of SciTech Shares outstanding before the
Effective Time shall not be made on the stock transfer books of
the Surviving Company.
III. POOLING CONDITION.
Each of Buyer, and Sellers and SciTech hereby covenant and agree to take
all steps reasonably necessary in order to obtain a favorable determination from
the Securities and Exchange Commission ("SEC") that the Transactions may be
accounted for as a pooling of interests in accordance with generally accepted
accounting principles ("Pooling Condition"). If Buyer determines, based on good
faith advice of its accountants, that consummation of the Transactions would be
accounted for as a pooling of interests in accordance with generally accepted
accounting principles, then, subject to the terms and conditions of this
Agreement, the Transactions will be consummated. If the Pooling Condition is
not satisfied, Buyer has the right to terminate this Agreement at any time
before Closing, without liability for any damages arising out of the
termination, by giving express written notice of that intent to Sellers before
Closing. Sellers must receive that notice before Closing.
IV. REGISTRATION RIGHTS.
The Buyer Shares delivered to Sellers at Closing will not be
registered under the Securities Act of 1933 (the "1933 Act") or any state
securities laws, will be issued pursuant to exemptions from those laws, and will
be "restricted securities" as that term is defined under Rule 144 under the
Securities Exchange Act of 1934. Sellers will sign a Subscription Agreement and
Representation Letter in the form attached as Exhibit IV. Sellers will have the
registration rights described below.
A. DEMAND RIGHT. If, at any time after the filing with the SEC of
Buyer's Form 10-Q for the second quarter of its 2000 fiscal year,
Buyer receives a written request from the holders of a majority
of the Buyer Shares to register the sales of all or part of the
Buyer Shares, Buyer will, as promptly as practicable, but in any
event within six months after the date of that request, use its
best efforts to prepare and file with the SEC a registration
statement sufficient to permit the public offering and sale of
the Buyer Shares, provided that Buyer is eligible to use Form S-3
for that registration. Buyer will be obligated to file only one
such registration statement and will pay all expenses (other than
fees for selling holders, counsel and underwriting discounts
applicable to the Buyer Shares sold) in connection with the
offering. If, at the time of the request, Buyer expects to
undertake, or is in the process of undertaking, the registration
of an offering of Common Stock in which the Buyer Shares may be
included, Buyer may, at its option, include the Buyer Shares in
that registration instead of filing a separate registration for
them.
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B. PIGGYBACK RIGHT. If, at any time during the two-year period
commencing on the date of Closing, Buyer files a registration
statement (other than on Form X-0, Xxxx X-0 or other form not
permitting "piggyback" of shares, and any successor forms) with
the SEC while any Buyer Shares are held by Seller under this
Pooling Agreement, Buyer will give all of the then holders of
Buyer Shares ("Eligible Holders") at least 20 days' prior written
notice of the filing of the registration statement. If
requested in writing by Eligible Holders holding not less than a
majority of the Buyer Shares within 10 days after receipt of such
a notice, Buyer will, one time only, at Buyer' sole expense
(other than the fees of legal counsel to the Eligible Holders and
underwriting discounts applicable to any Buyer Shares sold),
register or qualify all or, at each Eligible Holder's option, any
portion, of the Buyer Shares requested by an Eligible Holder with
the registration of the other Buyer securities being registered.
However, if the underwriter of such an offering determines that
inclusion of the Buyer Shares or any part of them in the proposed
offering is materially detrimental to the offering and so advises
the Eligible Holders, the Buyer Shares will not be registered and
the Eligible Holders will be deemed not to have been given notice
under this paragraph.
C. COOPERATION. In any registration of Buyer Shares, the current
shareholders and employees of SciTech and the selling holders
will cooperate fully with Buyer to facilitate the registration.
D. NOTICE. If Buyer receives a request from a holder of Buyer Shares
to register Buyer Shares under this Section, Buyer will notify
all other holders of Buyer Shares and include such of their Buyer
Shares as they may request to be registered in any registration
statement, if the request is received within 10 days of the date
of the notice.
E. EFFECTIVE PERIOD. Buyer will use its best efforts to cause to
become effective and to keep effective for a period not to exceed
90 days any registration filed under this Section and from time
to time will amend or supplement the registration statement as
necessary.
X. XXXXX AND SUSPENSION OF SALES. Notwithstanding the foregoing
provisions, Buyer may delay filing a registration statement for
not longer than six months from the date Buyer would have been
required to register under paragraph A of this Section and may
withhold efforts to cause the registration statement to become
effective, if Buyer determines in good faith that (a) such a
registration (i) might interfere with or adversely affect the
negotiation or completion of any transaction that is being
contemplated by Buyer (whether or not a final decision has been
made to undertake that transaction) at the time the right to
delay is exercised, (ii) might involve initial or continuing
disclosure obligations that might not be in the best interest of
the Company's stockholders, or (iii) will require preparation of
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audited financial information for Buyer as of a date or for a
period which would not otherwise be required, or (b) any material
circumstance of Buyer renders the effecting of such a
registration statement inappropriate at the time. If, after a
registration statement becomes effective, Buyer advises the
holders of registered shares that Buyer considers it appropriate
for the registration statement to be amended, the holders of
those shares shall suspend any further sales of their registered
shares until Buyer advises them that the registration statement
has been amended. The 90-day time period referred to in this
Section during which the registration statement must be kept
current after its effective date shall be extended for an
additional number of business days equal to the number of
business days during which the right to sell shares was suspended
pursuant to the preceding sentence, but in no event will Buyer be
required to update the registration statement after the first
anniversary of Closing.
G. POOLING SALES RESTRICTIONS. Except for de minimis sales, no
affiliate of either Buyer or SciTech shall sell any shares of
Buyer during the period beginning 30 days before Closing and
ending on the publication date of financial results covering at
least 30 days of post-merger operations, as provided by SEC
Accounting Series Release Number 130.
H. DOCUMENTS. Buyer will furnish to each selling shareholder a
number of copies of the registration statement, preliminary
prospectus and prospectus and amendments and supplements to them
as the selling shareholder may reasonably request to facilitate
the disposition of the Buyer Shares in the registration.
X. XXXXXXX' REPRESENTATIONS AND WARRANTIES.
Sellers and SciTech, jointly and severally, represent and warrant to
Buyer that the following are true at the date of this Agreement and will be true
at Closing except as disclosed on the SciTech Disclosure Schedule designated as
Exhibit V to this Agreement. Any listed exceptions must be reasonably acceptable
to Buyer.
A. ORGANIZATION AND STANDING OF SCITECH. SciTech is a corporation
validly existing under the laws of the State of Wisconsin, with
full power and authority to carry on its business as it is now
being conducted, and to own and operate its assets and business.
It has no subsidiaries. SciTech is duly licensed or qualified to
transact business as a foreign corporation, and is in good
standing, in each jurisdiction in which the nature of the
business transacted by it or the character of properties owned or
leased by it requires that licensing or qualification, except
where the failure to be so licensed or qualified would not have a
material adverse effect on its business, operations or financial
condition.
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B. CAPITALIZATION. SciTech is authorized to issue 9,000 shares of
no par value common stock and only 1,000 shares, constituting the
SciTech Shares, are issued and outstanding. As of the date of
Closing, a total of 1,000 SciTech shares are issued and
outstanding, of which Xxx Xxxxxxxx holds 920 shares and Xxxx
Xxxxxxxx holds 80 shares. SciTech holds no shares of SciTech
stock as treasury shares. The SciTech Shares have been validly
issued and are fully paid and nonassessable. No outstanding
subscriptions, options, warrants, calls, commitments or
agreements relating to the authorized or issued shares of SciTech
are outstanding.
C. STOCK OWNERSHIP. Sellers have good and marketable title to the
SciTech Shares held by them, free from encumbrance or any
contractual or other restriction on their transfer or
encumbrance, and have full power, right and authority to
surrender the SciTech Shares pursuant to this Pooling Agreement.
Sellers own and have all right and title to their respective
SciTech Shares as of August 1999.
D. APPROVAL. The Board of Directors and shareholders of SciTech
have approved this Agreement and have authorized their officers
to take all action and to execute, acknowledge and deliver all
documents appropriate to consummate the Transactions. No other
approval is necessary to consummate the Transactions contemplated
by this Pooling Agreement. This Pooling Agreement constitutes
the legal, valid and binding obligation of Sellers and SciTech,
enforceable in accordance with its terms (subject, as to
enforcement of remedies, to the discretion of courts in awarding
equitable relief and to applicable bankruptcy, reorganization,
insolvency, moratorium and similar laws affecting the rights of
creditors generally).
E. FINANCIAL STATEMENTS. The Closing Balance Sheet (Exhibit
V-E), the Closing Year to Date Income Statement (from January
1,1999 to Closing) (Exhibit V-E1), the Closing Income
Statement (from October 1, 1999 to Closing), (Exhibit V-E2),
and their supporting information, when delivered by Sellers
and SciTech to Buyer, will be, and the books and records on
which they are based are and will be, correct in all material
respects, and fairly represent the financial condition of
SciTech as of their dates. The Year-End Financial Statements
(Exhibit V-E3), the Six-Month Financial Statements (Exhibit
V-E4), the Third Quarter Financial Statements (Exhibit V-E5),
and the books and records on which they are based, are correct
in all material respects and fairly represent the financial
and operational condition of SciTech as of SciTech's most
recent year end and the end of SciTech's most recent third
quarter, respectively. The Closing Balance Sheet (and any
other financial statements provided to Buyer) may be audited
by Buyer's public accounting firm at its expense.
F. OWNERSHIP OF SCITECH. As of the date of Closing, except for this
Pooling Agreement, there will not be any outstanding or
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authorized warrants, calls, rights, commitments or other
agreements of any nature to which SciTech is a party, or may be
bound by, requiring it to issue, transfer, sell, purchase, redeem
or acquire any shares of capital stock or any securities or
rights convertible into, exchangeable for, or evidencing the
right to subscribe for or acquire any shares of capital stock of
SciTech.
G. ABSENCE OF CERTAIN CHANGES. Since the end of the most recent
SciTech fiscal year ("Most Recent SciTech Year End"), there have
not been (i) any material changes in SciTech's financial
condition, assets, liabilities, or, to Sellers' best knowledge,
business, other than changes in the ordinary course of business,
none of which has been materially adverse; (ii) any damage,
destruction, or loss, whether or not covered by insurance,
materially and adversely affecting SciTech's properties or
business or the assets; (iii) any labor trouble or any event or
condition of any character materially and adversely affecting
SciTech's business; (iv) any indebtedness incurred by SciTech for
borrowed money or any commitment to borrow money entered into or
any guarantee given by SciTech, except for trade advances from
customers in the ordinary course of business and in accordance
with historic business practices; (v) any mortgage, pledge,
subjection to lien, charge or encumbering of or creation of any
security interest in all or any of SciTech's assets or its
business, (vi) any failure to maintain insurance policies or
renewals thereof in force or to give all notices or claims made
thereunder in a timely fashion, or (vii) any material increase in
the compensation payable by SciTech to any officer, director or
key employee of SciTech, except for normal distributions to
shareholders.
H. TITLE TO PROPERTIES. SciTech owns, free and clear of any liens,
encumbrances, claims, charges, contractual or other restrictions
on transfer, equities, security interests, options or other
restrictions, and has good title to its assets, subject to any
lien for current taxes or assessments not yet delinquent.
I. CONTRACTS. There are no contracts, agreements, leases, or
commitments not terminable at will, which would prevent Buyer
from continuing the business as it is now conducted by SciTech,
including without limitation, those with purveyors or suppliers
of items used in the conduct of SciTech's business. To Sellers'
best knowledge, SciTech has materially performed all its
contracts, to the extent performance is due, and has cured all
defaults.
J. ACTIONS. To the best knowledge of Sellers, there are no
judgments, actions, suits, claims, proceedings, investigations,
bankruptcy or insolvency proceedings or receiverships
(collectively, "Actions") pending or threatened against or
relating to SciTech, its assets or business, in any court, or
before any governmental department or agency, nor is SciTech or
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any of its assets subject to any unsatisfied judgment, order or
award as a result of any such Actions. Sellers and SciTech do
not know of any basis for any such Actions.
K. TAX MATTERS. As of the date of this Agreement, to the best
knowledge of Sellers and SciTech, the representations concerning
tax matters contained in the financial statements are true and
correct in all material respects. All tax returns required to be
filed with respect to SciTech or its operations by SciTech or
Sellers with any taxing authority as of Closing have been filed
or, as to the short period from January 1, 1999 to Closing
("Short Period")], will be filed promptly after Closing or when
due, and all taxes required to be paid with respect to the
periods covered by those returns, including the Short Period,
have been paid or accrued or adequate reserves for the payment
thereof have been established. SciTech is not delinquent in the
payment of any tax, assessment or governmental charge. Sellers
will be responsible for the payment of all personal taxes imposed
on them with respect to the S corporation earnings of SciTech or
distributions and dividends paid to them by SciTech before
Closing, as well as any other personal taxes resulting from the
Transactions and any taxes on built-in gain imposed on SciTech or
Sellers because of SciTech's election to be treated as an S
corporation. SciTech's S corporation election under the IRC was
properly filed and has, since made, been in effect and
unchallenged.
L. DISCLOSURE. Sellers have not made any untrue statement of a
material fact or omitted to state a material fact, in written
information provided by Seller Xxxxxx Xxxxxxxx and in this
Pooling Agreement, necessary in order to make the statements
made, in light of the circumstances under which they were made,
not misleading.
M. NO VIOLATION OF CORPORATION INSTRUMENTS OR OTHER AGREEMENTS.
Except as set forth on Exhibit V-M, the execution and delivery of
this Pooling Agreement does not, and the consummation of the
Transactions will not: (i) violate any provision of the Articles
of Incorporation, Bylaws, Stock Certificates, Stock Records or
Minute Book of SciTech; (ii) result in any material breach or the
acceleration of any material obligation under any instrument,
indenture, note, lien, bond, agreement, contract, mortgage,
lease, license, or commitment under which any or all of SciTech
and Sellers are bound; (iii) require any consent, approval or
authorization of any governmental or regulatory authority; (iv)
violate any order, writ, injunction, judgment, decree, statute,
rule or regulation applicable to SciTech or Sellers or SciTech's
business or any of SciTech's assets or (v) result in the creation
or imposition of any lien, charge, restriction, claim or
encumbrance of any nature upon the assets or business.
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N. BROKERAGE. No brokerage fees are payable in connection with the
Transactions resulting from any brokerage agreements entered into
by Sellers or SciTech.
O. INTELLECTUAL PROPERTY. For purposes of this paragraph,
intellectual property means (i) all patents, patent
applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions,
extensions, and re-examinations thereof, (ii) all trademarks,
service marks, trade dress, logos, trade names, and corporate
names, together with all translations, adaptations,
derivations, and combinations thereof and including all
goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith, (iii) all
copyrights, and all applications, registrations, and renewals
in connection therewith, (iv) all mask works and all
applications, registrations, and renewals in connection
therewith, (v) all trade secrets and confidential business
information (including research and development, know-how,
formulae, compositions, manufacturing and production processes
and techniques, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost
information, and business marketing plans and proposals), (vi)
all computer software (including data and related
documentation), (vii) all other proprietary rights, and (viii)
all copies and tangible embodiments thereof (in whatever form
or medium).
1. SciTech owns or has the right to use pursuant to
license, sublicense, agreement, or permission, all
intellectual property necessary or desirable to
design, manufacture and sell its current products and
for office administration, the failure to possess
which would have a material adverse effect on SciTech.
Each material item of intellectual property owned or
used by SciTech immediately before the Closing will be
owned or available for use by the Company on identical
terms and conditions immediately after the Closing.
SciTech has taken reasonable action to maintain and
protect as a trade secret each material item of
intellectual property that it owns or uses.
2. To SciTech's and Sellers' best knowledge, none of the
products manufactured by SciTech infringes upon any
intellectual property rights of third parties, and
neither SciTech nor any of the Sellers has received
any written charge, complaint, claim, demand, or
notice alleging any such infringement (including any
claim that SciTech must license or refrain from using
any intellectual property rights of any third party).
3. SciTech owns the patents, trademarks and tradenames
listed on Exhibit V-O3. SciTech has not granted to any
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third party any license with respect to any of its
intellectual property to manufacture or produce any
product.
4. The SciTech Disclosure Schedule identifies each item
of intellectual property that any third party owns and
that SciTech embodies or incorporates in SciTech's
products, pursuant to license, sublicense, agreement,
or permission. The Sellers and SciTech have delivered
to Buyer correct and complete copies of all such
licenses, sublicenses, agreements, and permissions,
(as amended to date). With respect to each item of
intellectual property required to be identified in the
SciTech Disclosure Schedule, the license, sublicense,
agreement, or permission covering the item is, to the
Sellers' best knowledge, the legal, valid and binding
obligation of SciTech, enforceable in accordance with
its terms, and in full force and effect, and will stay
in effect following the Closing.
P. PERMITS, LICENSES AND FRANCHISES. To the best of Sellers'
knowledge, (i) SciTech has all permits, licenses, franchises, and
other authorizations necessary to, and has substantially complied
with all laws applicable to, the conduct of its business in the
manner in which the business is currently being conducted, and
all those permits, licenses, franchises and authorizations are
valid and in full force and effect, (ii) SciTech and Sellers have
not engaged in any activity which would cause revocation or
suspension of any such permit, license, franchise or
authorization which would result-in a material adverse effect on
SciTech or the operation of the business, and (iii) neither
SciTech nor Sellers (or either of them) has knowledge of any
action, threat or proceeding looking to or contemplating the
revocation or suspension of any thereof.
Q. EMPLOYEES. To the best of Sellers' knowledge, no third party has
claimed that any person employed or affiliated with SciTech has
violated or may be violating any of the terms and conditions of
that person's employment, non-competition or nondisclosure
agreement with that third party, or disclosed or may be
disclosing or utilized or may be utilizing any trade secret or
proprietary information or. documentation of that third party or
interfered or may be interfering in the employment relationship
between that third party and any of its present or former
employees. Sellers have no knowledge that any key employee of
SciTech intends to leave or is leaving the employ of SciTech in
order to take part, as an employee or otherwise, in any business
in competition with SciTech.
R. ENVIRONMENTAL, HEALTH AND SAFETY. To the best of Sellers'
knowledge, (i) SciTech has complied with all environmental,
health and safety laws, and no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand, or notice has
been filed or commenced against it alleging any failure so to
comply; (ii) without limiting the generality of the preceding,
each of SciTech and its predecessors and affiliates has obtained
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and been in material compliance with all of the terms and
conditions of all permits, licenses, and other authorizations
which are required under, and has complied with all other
limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules, and timetables which are
contained in, all environmental, health and safety laws; and
(iii) none of SciTech, its predecessors and affiliates has any
liability for damage to any site, location, or body of water
(surface or subsurface), for any illness of or personal injury to
any employee or other individual or for any reason under any
environmental, health or safety law. To the best of Sellers',
and SciTech's knowledge, all properties and equipment used in
SciTech's and its predecessors, and affiliates, business have
been free of asbestos, PCE'S, methylene chloride,
1,2-trans-dichloroethylene, dioxins, dibenzofurans, and extremely
hazardous substances.
S. PRODUCT LIABILITY. To the best of Sellers' knowledge, SciTech has
no material liability (whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether
liquidated or unliquidated, and whether due or to become due)
arising out of any injury to individuals or property as a result
of the ownership, possession, or use of any product manufactured,
sold, leased, or delivered by SciTech.
T. CONTINUITY OF BUSINESS ENTERPRISE. Before the Effective Time
of the Merger, SciTech has historically operated and engaged in
the business enterprise of designing, marketing and manufacturing
communications products, and historically has utilized its
business assets in such business enterprise, as contemplated by
Treas. Reg. section 1.368-1(d).
U. SHAREHOLDER INTERESTS AND AGREEMENT. Sellers represent and
warrant that they hold all of the issued and outstanding shares
of capital stock of SciTech, that of those outstanding shares Xxx
Xxxxxxxx owns 920 and Xxxx Xxxxxxxx owns 80 of the issued SciTech
Shares and that they agree on those percentages, and that no
disputes of any nature, whether claims, lawsuits or other
disagreements formally filed or informally pursued exist between
them or on their behalf with respect to that share, no such
disputes have been threatened and each has fully and finally
agreed to waive any right to dispute, change or affect that
ownership and their respective percentages of ownership.
V. LIABILITIES IN THE ORDINARY COURSE OF BUSINESS. The liabilities
of SciTech assumed by Company and the liabilities to which the
transferred assets of SciTech are subject, were incurred by
SciTech in the ordinary course of business
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W. INVESTMENT COMPANY. SciTech is not an investment company within
the meaning of that term as used. in Section
368(a)(2)(F)(iii) and (iv) of the Internal Revenue Code.
X. EQUITY TRANSACTIONS. There have been no transactions in SciTech
common stock since September 30, 1999, and no options, warrants,
rights or other equity instruments other than the previously
issued common stock were outstanding-during that period.
Y. INTERCORPORATE DEBT. There is no intercorporate debt existing
between Buyer and SciTech or between Company and SciTech that was
issued, acquired, settled or will be settled at a discount.
Z. REDUCTION IN EQUITY AND DISTRIBUTIONS. SciTech's shareholders'
equity has not been reduced since the date of and as set forth in
its Third Quarter Financial Statements, except as to which Buyer
has given its prior written approval, and any such approved
distribution has been and is in accordance with restrictions on
distributions specified in the accounting and SEC regulations
related to a pooling of interests. Before Closing, Scitech has
distributed to Sellers its 1998 earnings and, to satisfy Sellers'
1999 tax liability, 50% of 1999 estimated earnings in accordance
with an estimate approved in advance by Buyer, to be adjusted
after closing to actual amounts needed to pay income taxes.
VI. BUYER'S WARRANTIES AND REPRESENTATIONS.
Buyer represents and warrants to SciTech and Sellers that the following
are true as of the date of this Agreement and will be true at Closing except as
disclosed on the Buyer Disclosure Schedule designated as Exhibit VI to this
Agreement. Any listed exceptions must be reasonably acceptable to Sellers.
A. ORGANIZATION AND STANDING OF BUYER. Each of Buyer and
Company is a corporation validly existing and in good
standing under the laws of the State of New Mexico and
California, respectively, with full power and authority to
carry on its business as it is conducted, to own and operate
its assets, and to execute this Agreement and consummate the
Transactions. Buyer is duly licensed or qualified to
transact business as a foreign corporation and is in good
standing in each jurisdiction in which the nature of the
business transacted by it or the character of the properties
owned or leased by it requires that licensing or
qualification, except where the failure to be so licensed or
qualified would not have a material adverse effect on the
business, operations or financial condition of Buyer.
B. CAPITALIZATION. Buyer is authorized to issue 100,000,000
shares of common stock and, as of November 30, 1999,
6,019,891 of its shares are issued and outstanding. Buyer
holds no treasury shares. Buyer's shares have been validly
issued and are fully paid and nonassessable. No
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outstanding subscriptions, options, warrants, calls,
commitments or agreements relating to the authorized or
issued shares of Buyer are outstanding except (i)
pursuant to Buyer's employee and director stock option
and stock purchase plans and its acquisition of
GreenSpring Computers, Inc., (ii) as disclosed in its
Form 10-K for the 1999 fiscal year and subsequent
periodic filings filed with the SEC, and (iii) as
required to be issued under this Agreement.
C. NO VIOLATION OF CORPORATE INSTRUMENTS OR OTHER AGREEMENTS.
Except as set forth on Exhibit VI-C, the execution and
delivery of this Pooling Agreement does not, and the
consummation of the Transactions will not (i) violate any
provision of the Articles of Incorporation, Bylaws, Stock
Certificates, Stock Records or Minute Book of Buyer; (ii)
result in any material breach or result in the acceleration
of any material obligation under any instrument, indenture,
note, lien, bond, agreement, contract, mortgage, lease,
license or commitment under which Buyer is bound; (iii)
require any consent, approval or authorization of any
governmental or regulatory authority, (iv) violate any
order, writ, injunction, judgment, decree, statute, rule or
regulation applicable to Buyer, Buyer's business or any of
Buyer's assets, or (v) result in the creation or imposition
of any lien, charge, restriction, claim or encumbrance of
any nature upon the assets or business.
D. APPROVAL. Buyer's Board of Directors has, and as of
Closing, Company's shareholder will have, approved, by all
necessary corporate action by Buyer, the execution, delivery
and performance of this Pooling Agreement and consummation
of the Transactions and has authorized its officers to take
all action and to execute, acknowledge and deliver all
documents appropriate to consummate the Transactions. This
approval constitutes all and the only actions required by
law, the Articles of Incorporation or Bylaws of Buyer or
Company, as the case may be, or otherwise to authorize the
execution and delivery of this Pooling Agreement and the
consummation of the Transactions. This Pooling Agreement
constitutes the legal, valid and binding obligation of Buyer
and Company, enforceable in accordance with its terms
(subject as to enforcement of remedies, to the discretion of
courts in awarding equitable relief and to applicable
bankruptcy, reorganization, insolvency, moratorium and
similar laws affecting the rights of creditors generally).
E. BROKERAGE. No brokerage fees are payable by Buyer in
connection with the Transactions.
F. SHARES. The issuance, sale and delivery of the Buyer Shares
have been duly authorized by all required corporate action;
the Buyer Shares issued at Closing will be validly issued,
fully paid and nonassessable, free and clear of all liens,
charges, restrictions, claims and encumbrances imposed
13
by or through Buyer except as imposed by securities laws.
The issuance, sale or delivery of the Buyer Shares is
not subject to any preemptive right of stockholders of
Articles of Incorporation or Bylaws of Buyer, each as
amended, or to any contractual right of first refusal or
other right in favor of any person.
G. FINANCIAL STATEMENTS. Buyer has filed a Quarterly Report on
Form 10-Q for the fiscal quarter ended September 30, 1999
("Most Recent Fiscal Quarter End"), and an Annual Report on
Form 10-K for the fiscal year ended June 30, 1999 (together,
the "Public Reports"). The financial statements included in
or incorporated by reference into these Public Reports
(including the related notes and schedules) have been
prepared in accordance with GAAP applied on a consistent
basis throughout the periods covered by them and present
fairly the financial condition of Buyer as of the indicated
dates and the results of operations of Buyer for the
indicated periods. However, the interim statements are
subject to normal year-end adjustments. Since the Most
Recent Fiscal Quarter End, there has not been any material
adverse change in the financial condition, assets,
liabilities, or, to the best of Buyer's knowledge, business
of Buyer and its subsidiaries taken as a whole.
H. FILINGS WITH SEC. Buyer has made all filings with the
Securities and Exchange Commission ("SEC") that it has been
required to make within the past 12 months under the
Securities Act and the Securities Exchange Act. The Public
Reports, a correct and complete copy of each of which was
delivered by Buyer to Sellers, complied with the Securities
Act and the Securities Exchange Act in all material
respects. Each of the Public Reports, as of its date, did
not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the
statements made in it, in light of the circumstances under
which they were made, not misleading.
I. CONTROL OF COMPANY. Before the Merger, Buyer will be in
control of Company within the meaning of Section 368(c) of
the Internal Revenue Code.
J. REDEMPTION OF SHARES. Buyer has no plan or intention to
redeem or otherwise reacquire any of the Buyer Shares to be
issued in the Merger.
K. BUYER'S INTENTION. Buyer has no plan or intention to
liquidate Company, to merge Company with and into another
corporation not a subsidiary of Buyer, to sell or otherwise
dispose of the stock of Company, or to cause Company to sell
or otherwise dispose of any of the assets of SciTech
acquired in the Merger, except for dispositions made in the
ordinary course of business, transfers described in Section
368(a)(2)(C) of the Internal Revenue Code, or transfers to a
subsidiary of Buyer.
14
L. CONTINUATION OF HISTORIC BUSINESS AND USE OF ASSETS.
Following the Effective Time, of the Merger, the Company will
continue to operate and engage in SciTech's historic business
enterprise of designing, marketing and manufacturing
communications products, and will continue to utilize
SciTech's business assets in that business enterprise, as
contemplated by Treas. Reg. section 1.368-1(d).
M. INTERCORPORATE DEBT. There is no intercorporate debt
existing between Buyer and SciTech or between Company and
SciTech that was issued, acquired, settled or will be
settled at a discount.
N. INVESTMENT COMPANY. Buyer and Company are not investment
companies within the meaning of such term as used in Section
368(a)(2)(F)(iii) and (iv) of the Internal Revenue Code.
VII. BUYER'S CONDITIONS PRECEDENT.
All obligations of Buyer under this Pooling Agreement to close the
Transactions are subject to the fulfillment before Closing, of each of the
following conditions:
A. REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. Sellers'
representations and warranties contained in this Agreement are
true at the time of Closing.
B. PERFORMANCE. Sellers have performed and complied with all
agreements and conditions required by this Pooling Agreement to
be performed or complied with by Sellers at Closing.
C. CONSENTS. Any consents necessary to allow the Transactions to
occur have been obtained in writing, in form satisfactory to
Buyer.
D. SCITECH BANKRUPTCY. SciTech is not in a bankruptcy,
reorganization or insolvency proceeding, nor is any such
proceeding contemplated.
E. ADVERSE PROCEEDINGS. No action, suit or proceeding is pending or
threatened before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction or
before any arbitrator as to which an unfavorable judgment,
injunction, order, decree, ruling or charge ("Decision") would
(i) prevent consummation of the Transactions, (ii) cause any of
the Transactions to be rescinded following consummation, or (iii)
adversely affect the right of the Company to own the former
assets, and to operate the former business, and no such Decision
is in effect.
15
F. CERTIFICATE OF SATISFACTION OF CONDITIONS. SciTech and Sellers
have delivered to Buyer certificates to the effect that each of
the conditions specified in VIIA, B, C, D and E is satisfied in
all respects.
G. SATISFACTORY DUE DILIGENCE. Buyer has completed, to its
satisfaction, its due diligence review of SciTech and the
Sellers, including without limitation, SciTech's books, records,
operating assets, earnings potential, contracts, customer and
revenue base, employees, and compliance with environmental and
other laws, and background checks of senior management, and such
other due diligence as it has deemed necessary or appropriate.
H. POOLING OF INTERESTS OPINION. Buyer will have received from its
accountants an opinion, satisfactory in form and substance to it,
to the effect that the Transactions will be treated by Buyer as a
"pooling of interests" for accounting purposes.
I. ATTORNEY OPINION. Buyer will have received from SciTech's and
Sellers' attorney an opinion of counsel with respect to the
Transactions in substantially the form attached as Exhibit VII-I.
J. CERTIFIED RESOLUTIONS. Sellers have furnished to Buyer a
certified copy of resolutions duly adopted by the Board of
Directors and the shareholders of SciTech authorizing and
approving the execution and delivery of this Agreement and
authorizing the consummation of the Transactions.
The Buyer may waive any condition specified in this Section if it
executes a writing so stating at or before Closing.
VIII. SELLERS' CONDITIONS PRECEDENT.
All obligations of Sellers under this Pooling Agreement to close the
Transactions are subject to the fulfillment by Closing of each of the following
conditions:
A. REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. Buyer's
representations and warranties contained in this Pooling
Agreement are true at the time of Closing.
B. PERFORMANCE. Buyer has performed and complied with all
agreements and conditions required by this Pooling Agreement to
be performed or complied with by Buyer before or at Closing.
C. CONSENTS. Any consents to be obtained by Buyer necessary to
allow the Transactions to occur have been obtained in writing, in
form satisfactory to SciTech and Sellers.
16
D. BUYER BANKRUPTCY. Buyer is not in a bankruptcy, reorganization or
insolvency proceeding, nor is any such proceeding contemplated.
E. ADVERSE PROCEEDINGS. No action, suit or proceeding is pending or
threatened before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction or
before any arbitrator as to which an unfavorable judgment,
injunction, order, decree, ruling or charge ("Decision") would
(i) prevent consummation of the Transactions, (ii) cause any of
the Transactions to be rescinded following consummation, or (iii)
adversely affect the right of the Company to own the former
assets, and to operate the former business, and no such Decision
is in effect.
F. CERTIFICATE OF SATISFACTION OF CONDITIONS. Buyer has delivered
to SciTech and Sellers certificates to the effect that each of
the conditions specified in VIIIA, B, C, D and E is satisfied in
all respects.
G. BUYER PUBLIC REPORTS. Buyer has delivered to Sellers the Public
Reports and any additional information reasonably requested by
Sellers which Buyer can obtain without undue expense so that
Sellers are making an informed investment decision with respect
to the Transactions.
H. ATTORNEY OPINION. Sellers will have received from Buyer's
attorney an opinion of counsel with respect to the Transactions
in substantially the form attached as Exhibit VIII-H.
I. CERTIFIED RESOLUTIONS. Buyer has furnished to Sellers a certified
copy of resolutions duly adopted by the Board of Directors of
Buyer authorizing and approving the execution and delivery of
this Agreement and authorizing the consummation of the
Transactions.
The Sellers may waive any condition specified in this Section if they
execute a writing so stating at or before Closing.
IX. CLOSING.
Closing will be held as soon as practicable, but in any event not later
than December 20, 1999. If Sellers', and Buyer's conditions precedent have been
performed or waived. the Transactions will be closed. If those conditions
precedent have not been performed or waived, the Transactions will not be
closed, and the rights, duties and obligations between the parties will be
terminated without further liability.
A. SELLERS' DUTIES. Sellers and SciTech, as appropriate, will
deliver to Buyer at Closing:
17
1. The SciTech Shares, properly endorsed for transfer;
2. A certified copy of the resolutions of directors and
shareholders of SciTech authorizing the Transactions;
3. Executed resignation letters of officers and directors of
SciTech;
4. Executed Employment Agreement of Seller Xxxxxx Xxxxxxxx with
Buyer;
5. Executed Covenant Not To Compete of Seller Xxxxxx Xxxxxxxx
with Buyer;
6. Executed Articles of Merger;
7. Executed Subscription Agreement and Representation Letters
of Sellers;
8. Affidavit of Sellers with respect to Stock ownership;
9. Executed Option Agreements from Buyer to Sellers;
10. UCC-3 Termination Statement from Firststar Bank, N.A.; and
11. Any and all other documents required by this Pooling
Agreement to be delivered to Buyer at Closing.
B. BUYER'S DUTIES. Buyer will deliver to Sellers at Closing:
1. The Buyer Shares (to be furnished as soon as practicable
after Closing);
2. Executed Option Agreement from Buyer to Seller Xxxxxx
Xxxxxxxx;
3. Executed Employment Agreement of Seller Xxxxxx Xxxxxxxx with
Buyer;
4 Executed Covenant Not to Compete with Buyer;
5 Executed Articles of Merger;
6 Certified copy of resolutions of Buyer's Board of Directors
authorizing the Transactions and the issuance of the Buyer
Shares and Buyer Options; and
7 Any and all other documents required by this Pooling
Agreement to be delivered to Sellers at Closing.
18
C. JOINT DUTIES. Buyer and Sellers will execute any further
documents and do all things necessary to consummate the
Transactions contemplated by this Pooling Agreement, including
executing and filing the Articles of Merger required to be filed
under applicable state law.
X. PERSONAL GUARANTEES.
As soon as reasonably practical after Closing, but in no event later
than sixty (60) days following Closing, Buyer and the Company shall cause
Sellers to be removed from personal guarantees as may exist on obligations and
indebtedness of SciTech existing at the time of Closing, and which are disclosed
on Exhibit X.
XI. PROPRIETARY INFORMATION.
Sellers each agree, represent and warrant that, unless each of them has
obtained Buyer's prior written consent, each of Sellers will not, at any time
after Closing, use for the benefit of other than Buyer, directly or indirectly,
on behalf of Sellers or either of them or any other person or business entity,
any trade secrets or confidential information (i) concerning the business of
SciTech or any proprietary information relating to the business, including the
composition, plans or technology of the products produced by SciTech and the
method of their manufacture, and SciTech financial data and related information
or (ii) provided by Buyer to Sellers in connection with this Agreement.
Confidential information does not include information generally known in the
industry in which SciTech and Buyer engage. Sellers each agree that release of
Confidential Information will cause irreparable harm to Buyer and. that, upon
any breach or threatened breach of this Section, Buyer may seek, without
limitation of other actions and remedies which might be available, equitable
injunctive relief.
XII. REMEDY FOR BREACH OF WARRANTY.
If any warranty or representation in this Agreement is found within
twelve months of Closing, or by the date of the issuance of the first audited
annual consolidated financial statements of the combined entities following
Closing, whichever is earlier, to be untrue or inaccurate, the party desiring to
make a claim for damages resulting from such breach may do so by delivering to
the breaching party express written notice of the details of such breach and the
intent to make a claim, such notice to be received by the breaching party no
later than twelve months following the date of Closing. Time is of the essence
for the purpose of this paragraph. The party to whom such a representation has
been made shall request an arbitration conducted under the rules of the American
Arbitration Association (each party to select one arbitrator and the- third
arbitrator to be selected by the other two). The results of the arbitration
shall be binding upon all parties. The prevailing party in such arbitration
shall be entitled to recover its costs, including reasonable attorneys' fees,
incurred in the arbitration proceeding, from the non-prevailing party, and an
award of such costs and expenses shall be included in the final judgment
19
entered in the arbitration. Unless the cumulative total of all damages being
sought for all claims has exceeded $100,000, the party against whom a claim
is made shall not be liable for any damages resulting from a breach or
warranty hereunder; however, if the $100,000 limit is exceeded, the liable
party shall be liable for the full amount of the breach. The maximum
liability of a party for breach of a representation or warranty hereunder, if
the arbitrators determine that the party against whom a liability is asserted
did not know that the representation or warranty was untrue, is limited to a
cumulative amount of $500,000 for all such liabilities, which in the case of
the Sellers, shall apply to their combined liabilities under this Agreement.
Sellers may pay for amounts owed for breaches of warranties and
representations by them by returning to Buyer that number of Buyer Shares
(valued at the average closing price determined under Article II-B3 above for
purposes of Closing) equal to the amount of the claim (including costs and
expenses). Buyer agrees to keep in effect for the duration of Sellers'
representation and warranty regarding product liability the amount of product
liability insurance currently held by SciTech.
XIII. COOPERATION.
A. OTHER DOCUMENTS AND ACTIONS. Sellers and SciTech, and Buyer will
cooperate to effectuate the purposes of this Agreement. Sellers
and SciTech, and Buyer will, without additional consideration,
execute any other documents and take any other action reasonably
necessary to carry out the purposes of this Pooling Agreement.
Until Closing, no news release about the Transactions will be
released by Buyer, Sellers, or either of them, or SciTech to the
public through any media without prior approval of the other
parties, except as may be required by law, in which case, the
other parties will have a reasonable opportunity for review of
and comment on a proposed news release.
B. ACTIONS. Sellers and SciTech will cooperate with Buyer in
connection with any actions, proceedings, arrangements or
disputes involving SciTech's business or based upon the
consummation of the Transactions or upon contracts, arrangements
or acts of Sellers or SciTech which were in effect or occurred on
or before the Closing date.
C. FINANCIAL AND OTHER INFORMATION. Sellers and SciTech will
cooperate, as reasonably required by Buyer, in the preparation in
a form satisfactory to Buyer and Buyer's accountants, of all
financial and other information (including information relating
to Sellers' operation of the business before SciTech's
incorporation), needed by Buyer to comply with reporting and
filing requirements imposed on Buyer by federal and state
regulatory authorities.
20
XIV. NATURE AND SURVIVAL OF WARRANTIES AND REPRESENTATIONS.
Unless otherwise provided, all representations and warranties will
survive the consummation of the Transactions for a period of twelve months from
the date of Closing, or, until the date of issuance of the first audited annual
consolidated financial statements of the combined entities following Closing,
whichever is earlier.
XV. TERMINATION OF AGREEMENT. In addition to a termination of this
Pooling Agreement pursuant to Paragraph III above, this Pooling Agreement may
be terminated by the action of the Board of Directors of Buyer at any time
before Closing if: (i) Sellers or SciTech fail to comply in any material
respect with the Pooling Condition; or (ii) it is determined that any
representation or warranty of Sellers or SciTech is not true in all material
respects when made, causing this Transaction not to be characterized as a
pooling of interest or a tax-free reorganization under Section 368(a) of the
Internal Revenue Code of 1986, as amended. Sellers may terminate this
Pooling Agreement at any time before Closing if (i) the accountant's opinion
to SciTech and Sellers provided in this Pooling Agreement concludes that the
Transactions will not be a tax-free reorganization under the terms of the
Internal Revenue Code; or (ii) it is determined that any representation or
warranty of Buyer is not true in all material respects when made, causing
this Transaction not to be characterized as a pooling of interest or a
tax-free reorganization Under Section 368(a) of the Internal Revenue Code of
1986, as amended. Terminations made pursuant to this Paragraph shall be
without liability for any damages arising out of the termination. The party
terminating this Pooling Agreement pursuant to this Paragraph shall give
express written notice of such intent to the non-terminating party before
Closing, which notice must be received by the non-terminating party before
Closing.
XVI. MISCELLANEOUS.
This Pooling Agreement binds and benefits the parties, their
successors, assigns and transferees. This Pooling Agreement is
specifically enforceable and is governed by New Mexico law. Any suits
brought by the parties arising under this Pooling Agreement shall be
brought in the United States District Court for the Second District of
New Mexico, and the parties expressly acknowledge that such court
shall have jurisdiction over the matter and parties, and that venue
shall be proper in such court. In any proceeding or action brought to
enforce the provisions of this Pooling Agreement or to settle disputes
between the parties arising under this Pooling Agreement, the
prevailing party shall be awarded its costs, including reasonable
attorneys' fees, incurred in such proceeding or action, against the
non-prevailing party. This Pooling Agreement, the Employment
Agreements and the Covenants constitute the entire agreement and
understanding of the parties and supersede all prior oral or written
agreements and understandings and may be modified only in writing.
This Pooling Agreement may be executed in multiple counterparts, each
of which shall be deemed an original, but all of which taken together
will constitute one and the same instrument. Captions and titles have
been inserted in this Pooling Agreement for the benefit of the parties
in referring to this Pooling Agreement, but will not be construed or
interpreted as part of this Pooling Agreement. Each of Sellers and
SciTech, and Buyer will pay its
21
expenses, including without limitation attorneys' fees, arising out of
the Transactions and the agreements embodying them.
XVII. NOTICES.
Any notice or other communication required under this Pooling
Agreement or desired to be given by any of the parties to this Pooling
Agreement to any other party shall be deemed to be duly given when
personally delivered or five (5) business days after being mailed by
certified or registered United States mail, return receipt requested,
postage prepaid, to the other party, or delivered pre-paid for over-night
delivery to an expedited delivery service, addressed as follows:
BUYER:
SBS Technologies, Inc.
Attn: Xxxxxxxxxxx X. Xxxxxxx, President and CEO
0000 Xxxxxxxxx Xxxxxxxxx, XX
AFC Xxxxxxxx 0, Xxxxx 000
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Copy to: Xxxxxx X. Xxxxxxx, Esquire
Xxxxxxx, Xxxxxxxxxxx & Xxxx
X.X. Xxx 00000
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Telephone:(000) 000-0000
Facsimile: (000) 000-0000
SELLERS:
Xx. Xxxxxx Xxxxxxxx
0000 Xxxxxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Xx. Xxxx Xxxxxxxx
0000 Xxxx Xxx.
Xxxxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000
22
Copy to: Xxxx Xxxxxxx, Esquire
Boardman, Suhr, Xxxxx & Field LLP
Fourth Floor
Xxx Xxxxx Xxxxxxxx Xx.
X.X. Xxx 000
Xxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Or to such other address which may be furnished in writing.
DATED: December 1999
BUYER: SELLERS:
SBS TECHNOLOGIES, INC. SCITECH INC.
By: /s/ X.X. Xxxxxxx By: /s/ Xxxxxx Xxxxxxxx
----------------------- --------------------------
Its: C.E.O. Its: President
---------------------- -------------------------
SBS TECHNOLOGIES, INC. COMMUNICATIONS PRODUCTS XXXXXX XXXXXXXX
By: /s/ X.X. Xxxxxxx /s/ Xxxxxx Xxxxxxxx
----------------------- ------------------------
Its: C.E.O.
---------------------- XXXXX XXXXXXXX
/s/ Xxxxx Xxxxxxxx
------------------------
23
EXHIBIT I-D
FORM OF EMPLOYMENT AGREEMENT
24
EMPLOYMENT AGREEMENT
SBS TECHNOLOGIES, INC. ("Company") and Xxxxxx X. Xxxxxxxx agree:
1. EMPLOYMENT. Company employs Employee for the period beginning on the
date of this Employment Agreement and ending upon discharge or
resignation of Employee (the "Employment Period"). During the
Employment Period, Employee will serve in the capacities determined by
the Company. Employee will devote sufficient time and energies to the
business of Company to accomplish the duties assigned, will perform to
the best of Employee's ability all duties assigned to Employee by
Company and will devote Employee's best efforts to advance the
interests of Company. Employee will have the power and authority
determined by Company.
2. REIMBURSEMENT OF EXPENSES. Company recognizes that Employee in
performing Employee's duties hereunder, may be required to spend sums
of money in connection with those duties for the benefit of Company.
Employee may present to Company an itemized voucher listing expenses
paid by Employee in the performance of Employee's duties on behalf of
Company, and on presentation of such itemized voucher, Company will
reimburse Employee for all reasonable expenses itemized thereon,
including, but not limited to, travel, meals, lodging, entertainment,
and promotion with respect to all activities approved in advance by the
Company. Employee may receive advances from Company for anticipated
expenses. Employee agrees that the amount by which an advance exceeds
actual expenses ("Amount") will be promptly refunded to Company upon
determination by Company that it is due, that the Amount may be
deducted from any payments of any nature (including without limitation
salary) owed by Company to employee, and that the Amount will
constitute a debt from Employee to Company, enforceable by Company in
all respects as if Employee had executed a promissory note or other
instrument acknowledging the debt, bearing interest at a rate of 10%
per year from the date repayment is due and payable in full on demand
without set-off or deduction.
3. SICK LEAVE AND DISABILITY. Employee will be entitled to sick leave for
the number of days determined by Company ("Sick Leave"). Employee will
be considered to be disabled during any period in excess of Sick Leave
during which Employee is unable to work because of illness or
incapacity ("Disability Period"). Employee will be entitled to receive
Employee's full salary during Sick Leave and will be deemed to be on
leave, without pay, during the Disability Period. If Employee is unable
to work for a period in excess of 180 days, the Employee, at the
discretion of the Board of Directors of Company, will be considered to
have resigned. In no event will Employee be entitled to payment or
other compensation for unused Sick Leave or Disability Period, unless
required by law or otherwise provided in a policy or employment manual
adopted by the Board of Directors of Company.
4. RESTRICTIONS. Employee may not during the Employment Period, directly
or indirectly, own, manage, operate, invest in, control, be employed
by, participate in, be a financial sponsor of, or be connected in any
manner with the ownership, management, operation or control of any
business which competes with a business conducted by Company at any
time during the Employment Period or a business which Employee knows,
during the Employment Period, that Company intends to conduct. The
ownership restriction applies, however, only in the Employee owns a
beneficial interest of 5% or more the capital or profits of the
business.
5. RESIGNATION AND DISCHARGE. Employee may resign by giving two weeks'
written notice to Company before resigning. Employee's death will
constitute a voluntary resignation. Company
EMPLOYMENT AGREEMENT - PAGE 1
may discharge Employee without cause upon two weeks' notice. If the
Employment Period is terminated by resignation or discharge without
cause, Employee will be paid Employee's salary on a pro-rata basis
through the effective date of resignation or discharge ("Effective
Date"), and if requested by Company, employee will continue to render
Employee's services through the Effective Date. If Employee refuses,
upon Company's requests, or fails to render services competently and in
good faith to the Company's benefit through the Effective Date, Company
may deem the Effective Date to be the date of refusal or failure, as
the case may be. If during the Employment Period, Employee violates any
provision or restriction or fails to perform any obligation contained
in this Employment Agreement or in any Company policy or Company
employment manual or practice, or, unless otherwise provided by Company
policy or Company employment manual, (a) is reasonably believed by
Company (i) to have failed to comply with any employment or
nondiscrimination or similar law, regulation or policy, (ii) to abuse,
as determined by the Company, alcohol or to use drugs, (other than as
prescribed by Employee's physician), or (b) refuses to submit to
testing for alcohol or drugs, or (c) is reasonably believed by Company
to have committed or is charged with any felony or misdemeanor (except
minor traffic violations and similar offenses), Company may immediately
discharge Employee without liability for salary after the date of the
discharge and without any other liability to Employee. In no event will
Employee be entitled, upon resignation or discharge with or without
cause, to payment for sick leave or similar benefits of any kind unless
required by law or otherwise provided in a policy or employment manual
adopted by the Board of Directors of Company.
6. CONFIDENTIAL INFORMATION. Employee acknowledges and recognizes that
Employee is, or will be, employed by Company in a confidential
relationship and may receive and have access to the confidential
business information, customer names, contracts and other customer
data, business methods, techniques and trade secrets of Company
("Confidential Information"). Employee may develop ideas, conceptions,
inventions, processes, methods, products and improvements; and Employee
may receive disclosures of ideas, conceptions, inventions, processes,
methods, products and improvements made by other employees of Company
("Company Inventions"). Employee may participate with Company in
improving and developing Confidential Information and Company
Inventions. Confidential Information and Company Inventions developed
on behalf of Company are neither commonly known nor readily accessible
to others and are used by Company in its business to obtain a
competitive advantage over Company's competitors who do not know or use
the Confidential Information or Company Inventions. Protection of the
Confidential Information and Company Inventions against unauthorized
disclosure and use is of critical importance to Company in maintaining
its competitive position. Employee agrees that Employee will not, at
any time, during or after the Employment Period, make any independent
use of, or disclose to any other person or organization, except as
authorized by Company in writing, any Confidential Information or
Company Inventions. Upon termination of the Employment Period for any
reason, Employee shall promptly deliver to Company all drawings,
manuals, letters, notes, notebooks, reports, customer lists, customer
data, mailing lists, and all other materials and records of any kind,
and all copies thereof, that may be in the possession of, or under the
control of, Employee pertaining to Company's business including any
that contain any Confidential Information or Company Inventions.
7. PERSONNEL POLICIES. Company's personnel policies apply to all of
Company's employees including Employee and describe additional terms
and conditions of employment of Employee. Those terms and conditions,
as they may be revised from time to time by Company, are incorporated
by reference into this Employment Agreement. Company reserves the right
to revise the personnel policies from time to time, as Company deems
necessary. If any personnel policy provision conflicts with a provision
of this Employment Agreement, the terms of this Employment Agreement
shall govern.
EMPLOYMENT AGREEMENT - PAGE 2
8. ALCOHOL AND DRUG TESTING. Employee agrees to comply with and submit to
any Company program or policy for testing for alcohol abuse or use of
drugs.
9. BINDING EFFECT. This Employment Agreement constitutes the entire
understanding of the parties, may be modified only in writing, is
governed by laws of New Mexico, and will bind and inure to the benefit
of Employee and Employee's personal representative and Company and
Company's successors and assigns.
10. ANNUAL PAY. The base annual pay for employee will be $120,000, and will
be reviewed on an annual basis on July 1 of each calendar year.
11. INCENTIVE. Employee shall be eligible to participate in the Company's
Management Incentive Plan on par with management of equal reporting
level and responsibility, subject to the terms of that Plan.
12. STOCK OPTIONS. Employee shall receive a grant of options for 25,000
shares of SBS common stock on the date of first employment, subject to
the terms of the Option Agreement.
DATED: December 20, 1999
COMPANY:
SBS TECHNOLOGIES, INC.
By:
---------------------------------
EMPLOYEE:
------------------------------------
Xxxxxx X. Xxxxxxxx
EMPLOYMENT AGREEMENT - PAGE 3
EXHIBIT I-D1
OPTION AGREEMENT
25
1998 LONG-TERM EQUITY INCENTIVE AGREEMENT
SBS TECHNOLOGIES, INC., a New Mexico corporation, ("Company") and
Xxxxxx X. Xxxxxxxx ("Employee") agree:
I. Recitals
A. Company has adopted the 1998 Long-Term Equity
Incentive Plan for the benefit of Company's officers, directors and full-time
employees. This Plan is intended to be a non-compensatory stock option plan.
B. The Board of Directors of Company has determined that
Company will benefit by granting, pursuant to the 1998 Long-Term Equity
Incentive Plan, this Incentive Stock Option to Employee for the purpose of
inducing Employee to remain in the service of Company and its subsidiary
companies and as an incentive for increased effort during that service.
II. Definitions
A. "Company" means SBS Technologies, Inc., its parents,
subsidiaries and a corporation (and its parents and subsidiaries) issuing or
assuming a stock option in a transaction to which IRC 425(a) applies, as
appropriate in the context.
B. "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
C. "Common Stock" means the no par value common stock of
the Company or such other security or right or instrument into which that Common
Stock may be changed or converted in the future.
D. "Date of Grant" means the date on which the Grant is
made by the Committee under the Plan.
E. "Disability" means (i) the mental or physical
disability, either occupational or non occupational in origin, of the
Participant defined as "total disability" in the Plan currently in effect and as
amended from time to time; or (ii) a determination by the Committee of "Total
Disability" based on medical evidence that precludes the Participant from
engaging in any occupation or employment for wage or profit for at least twelve
months and appears to be permanent.
F. "Levy" means attachment, execution, levy or similar
process.
1
G. "Major Shareholder" means an individual possessing
more than 10% of the total combined voting power of all classes of stock of SBS
Technologies, Inc. or of its parent or subsidiary corporation.
H. "Option" means the right to acquire Option Shares
under this Agreement.
I. "Option Shares" means the number of shares of Common
Stock which Employee may purchase pursuant to this Option, as shown on
Appendix A.
J. "Plan" means the SBS Technologies, Inc. 1998
Long-Term Equity Incentive Plan.
K. "Purchase Price" means, if Employee is not a Major
Shareholder, the fair market value per share of the Common Stock on the Date of
Grant and, if Employee is a Major Shareholder, 110% of the fair market value per
share of Common Stock on the Date of Grant, as shown on Appendix A.
L. "Transfer" means to transfer, assign, pledge, or
hypothecate in any way (whether by operation of law or otherwise).
III. Grant of Option
Subject to the terms and conditions of this Option, Company
grants to Employee the right to acquire the Option Shares at the Purchase Price.
IV. Exercise of Option
A. Employee may exercise the Option on the schedule set
forth on Appendix A. Employee understands that rules governing this grant
provide that no more than $100,000 worth of incentive stock options based on the
market value of the stock at the time of grant can become exercisable for the
first time in one calendar year and still be treated as incentive stock options.
The net result is that options or portions of options will be nonqualified to
the extent they become exercisable in a given year for the shares in excess of
the $100,000 limit. The ratio of qualified options to nonqualified options, that
which exceeds $100,000 based on the market price of the Company's stock at the
time of grant, will be used to determine the portion of each individual exercise
that will be considered nonqualified. Employee further understands that any
Option not held for two years from the date of grant and one year from the date
of exercise will lose the most beneficial capital gain treatment of those
Options under current tax law. In order to qualify for the lowest capital gain
tax rates, Employee must hold the stock after exercise for at least 12 months.
Any portion of this option that is considered nonqualified will be subject to
applicable withholding taxes.
For more information, Employee may refer to Section 422 of the Internal Revenue
Code and the regulations under it.
2
B. If Employee does not purchase the full number of
Option Shares to which Employee is entitled at any given time, Employee may
purchase the remaining Option Shares from that period in any subsequent period,
assuming the same proportion of qualified options to nonqualified options as
described in IV.A. in addition to the Option Shares purchasable during that
subsequent period.
C. Employee may not exercise the Option for less than 25
shares each time.
D. Exercise of this Option and delivery of the Option
Shares are subject to and contingent upon compliance with applicable federal and
state securities and other laws. Company is not obligated to take any action to
register, qualify or provide an exemption pursuant to which Option Shares could
be issued or to take any other action to cause the issuance and delivery of the
Option Shares to comply with applicable law. Company shall refund to Employee
the Purchase Price of any Option Shares not deliverable under this paragraph.
E. This Option may be exercised only by Employee during
Employee's lifetime or, upon Employee's death, by Employee's executor or
administrator or the heir or devisee to whom the rights to the Option pass
pursuant to Employee's will or the laws of descent or distribution.
V. Termination of Option
This Option and all rights to acquire Option Shares under it shall
terminate on the earlier of:
A. Three months from the date Employee ceases to be
employed by the Company, unless Employee is Disabled.
B. One year from the date Employee ceases to be employed
by the Company if Employee is Disabled.
C. If Employee dies while in the employ of Company, the
earlier of six months from the date of issuance of letters of testamentary or
letters of administration to Employee's executor or administrator, or one year
after Employee's death.
D. Ten years, or, if Employee is a Major Shareholder,
five years, from the Date of Grant.
E. Employee's attempt to Transfer this Option in
violation of its terms or a Levy by any person or entity.
F. Dissolution or liquidation of Company.
3
G. Employee's (i) commission of any act of malfeasance
or wrongdoing affecting Company, (ii) breach of any covenant not to compete or
employment contract with Company, or (iii) engaging in conduct that would
warrant Employee's discharge for cause (excluding general dissatisfaction with
Employee's performance of Employee's duties, but including any act of disloyalty
or any conduct clearly tending to bring discredit upon Company).
VI. Limitation Upon Transfer
This Option and the rights under it:
A. May not be Transferred during the lifetime of
Employee.
B. Are not subject to Levy.
C. May only be transferred by will or pursuant to the
laws of descent and distribution.
VII. Reclassification, Consolidation, Merger or Exchange
If and to the extent that the number of issued and outstanding shares
of Common Stock is increased or reduced by change in par value, split up,
reclassification, distribution of a dividend payable in Common Stock, or the
like, the number of Option Shares and the Purchase Price will be proportionately
adjusted. If the Company is reorganized, consolidated, or merged, or shares of
Common Stock are exchanged, with another corporation (an "Event"), the Employee
will be entitled to receive options covering shares of the reorganized,
consolidated, or merged company, or shares exchanged, in the same proportion, at
an equivalent price, and subject to the same conditions, in accordance with IRC
425. The excess of the aggregate fair market value of the shares subject to the
option immediately after the Event over the aggregate price of those shares will
not be more than the excess of the aggregate fair market value of all Option
Shares immediately before the Event over the aggregate Purchase Price for the
Option Shares, and the new option or assumption of the old Option will not give
the Employee additional benefits Employee did not have under the old Option or
deprive Employee of benefits which the Employee had under the old Option.
VIII. Rights as Shareholder and Employee
Employee shall have no rights as a shareholder of Company with respect
to any Option Shares before the date of issuance to Employee of the certificates
for those Option Shares. The Option does not confer on Employee any right to
continue in the employ of the Company.
4
IX. Notice
All notices and communications must be given in writing and will be
deemed to have been given if delivered in person or by expedited delivery
service or mailed by certified or registered mail, return receipt requested,
postage prepaid, and addressed to Company or Employee at the following addresses
unless either party changes its address by giving written notice of that change
to the other:
A. Notice to Company at:
SBS Technologies, Inc.
Attention: Xxxxx X. Xxxxx, Xx.
Vice President Finance and Administration
0000 Xxxxxxxxx Xxxxxxxxx XX
AFC Xxxxxxxx 0, Xxxxx 000
Xxxxxxxxxxx, Xxx Xxxxxx 00000
B. Notice to Employee:
At the address specified on Appendix A.
X. Option Shares as Investment
Employee, by accepting this Option, acknowledges for Employee and
Employee's heirs and legatees, that Employee is acquiring Option Shares for
investment and not with a view to distribution. Employee, or Employee's heirs
and legatees, as the case may be, will not transfer, in any manner, any Option
Shares without first giving 30 days' notice to Company and, unless the Option
Shares have been registered pursuant to an effective registration statement and
have complied with state qualification requirements, providing to Company an
opinion, satisfactory to Company in all respects, of Employee's counsel, also
satisfactory to Company in all respects, that the Option Shares will be
transferred in compliance with all applicable securities laws. Employee
recognizes that under IRC 422(a)(1), an Option Share must be held for a period
of two years from the Date of Grant of the Option and one year from the date of
transfer to Employee of the Option Share.
5
XI. Miscellaneous
This Agreement shall be governed by the laws of the State of New
Mexico, represents the entire understanding of the parties, supersedes all prior
agreements, may not be assigned by Employee, may be modified only in writing,
and is binding upon the parties, their heirs, executors, administrators and
assigns.
Dated: December 20, 1999
-------------------------------------------------
SBS Technologies, Inc.
By:
-------------------------------------
Its President
------------------------------
Employee
---------------------------------
Xxxxxx X. Xxxxxxxx
6
APPENDIX A
II D. The Date of Grant is December 20, 1999.
II I. The aggregate number of Option shares is 25,000
II K. The Purchase Price is $ 34.4375 per share.
IV A. The exercise schedule is:
These Options will vest in accordance with the following
schedule:
Amount Vesting Date
8,333 12/15/00
8,334 12/15/01
8,333 12/15/02
However notwithstanding the above exercise schedule, this
option becomes exercisable as to all option shares seven years from its
date of grant.
This Option is intended to be non-compensatory in nature.
IX. The Employee's address for notice purposes is:
Xxxxxx X. Xxxxxxxx
0000 Xxxxxxxxx
Xxxxxxx, Xxxxxxxxx 00000
---------------------------------------------------
Social Security Number
7
EXHIBIT I-E
FORM OF COVENANT NOT TO COMPETE
26
COVENANT NOT TO COMPETE
Xxxxxx Xxxxxxxx ("Seller") and SBS Technologies, Inc., a New Mexico
corporation ("SBS") agree as follows:
I. RECITALS
A. SBS and Seller are, simultaneously with the execution of this
Covenant, entering into a purchase agreement ("Pooling Agreement") under which
SBS's wholly owned subsidiary, SBS Technologies, Inc. Communications Products, a
California corporation ("Company"), is merging with SciTech inc., a Wisconsin
corporation ("SCI"), and will exchange all the outstanding stock of SCI for
common stock of SBS.
B. SBS wishes to assure that Seller will refrain from competing with
SBS in the areas of Company's or SCI's business, and Seller is willing to so
refrain as provided in this Covenant.
II. COVENANT
A. Seller agrees that, during the term of the Covenant, Seller will
not, without prior written consent of SBS, for Seller's own account or jointly
with another, directly or indirectly, for or on behalf of any individual,
partnership, corporation or other legal entity, as principal, agent or
otherwise:
1. Own, control, manage or otherwise participate in the
ownership, control or management of a business involved within the Territory in
the development, manufacture, servicing or sale of any telecommunications, LAN,
WAN, network interface products which are in competition with or the same as or
similar in operation, function or construction (should that construction be
unique in the industry) to, those products now or previously offered for sale by
SCI, currently under design by SCI, or which will be designed by Company either
(i) during the term of Seller's employment and six months after his employment
or (ii) during the term of this Covenant, whichever is less, (together the "SCI
and Company Products"); or
2. Solicit, call upon, or attempt to solicit any individual, partnership,
corporation, or entity for the purpose of providing to that individual,
partnership, corporation or other entity products or services which are
competitive with the SCI and Company Products.
B. Seller may, without violation of the Covenant, own, directly or
indirectly not more than two percent (2%) of any class of outstanding securities
of a corporation or partnership (even if in competition with SCI and Company
Products) if that class is regularly traded on a national securities exchange or
in the over-the-counter market.
III. TERM
The term of the Covenant will be the later of three years from the
date of this Covenant ("Term").
IV. TERRITORY
The territory covered by this Covenant is the world ("Territory").
V. CONSIDERATION
The consideration for the Covenant is the Pooling Agreement and an
undivided amount of the Purchase Price paid to Seller or Seller's benefit under
the Pooling Agreement.
VI. ACKNOWLEDGEMENT
Seller recognizes the importance of the Covenant and acknowledges that,
based on Seller's past experiences and expertise, and Seller's past development,
exploitation and management of the SCI and Company Products, the close
relationships Seller has with SCI customers and SBS's intent to utilize and
exploit the SCI and Company Products and expand Company's customer base, the
restrictions in this Covenant are reasonable as to terms, time and area,
necessary for the protection of SBS's business and not unduly restrictive of
Seller's rights as an individual.
VII. BREACH
If Seller commits a breach or threatens to commit a breach of any of
the provisions of this Covenant, SBS shall have the right and remedy, in
addition to any others that may be available, at law or in equity, to have the
provisions of this Covenant specifically enforced by any court having equity
jurisdiction, together with an accounting therefor, Seller having specifically
acknowledged that any such breach or threatened breach will cause irreparable
injury to SBS and that money damages will not provide an adequate remedy to SBS.
VIII.INVALIDITY
If any provision of the Covenant is later construed to be unenforceable
or invalid, the remaining provisions shall not be affected but shall continue in
full effect. If the Term or Territory are found to be unenforceable or invalid
by any court having jurisdiction, that court shall have the power to reduce the
Term or Territory of the Covenant and the Covenant as revised shall then be
fully enforceable. The payment provided for in Section V shall be payable in
full notwithstanding any such construction, finding or revision.
IX. MISCELLANEOUS
This Covenant binds and benefits the parties, their successors, assigns
and transferees, is specifically enforceable, constitutes (together with the
Pooling Agreement) the entire agreement of the parties and supersedes all prior
oral or written agreements and understandings, is governed by New Mexico law and
may be modified only in writing. This Covenant may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which taken
together
COVENANT NOT TO COMPETE
PAGE 2
will constitute one and the same instrument. Captions and titles have been
inserted in this Covenant for the benefit of the parties in referring to this
Covenant, but will not be construed or interpreted as part of this Covenant. Any
suits brought by the parties arising under this Covenant shall be brought in the
United States District Court for the District of New Mexico, and the parties
expressly acknowledge that such court shall have jurisdiction over the matter
and parties, and that venue shall be proper in such court.
X. NOTICES
Any notice or other communication required under this Covenant or
desired to be given by any of the parties to this Covenant to any other party
shall be deemed to be duly given when personally delivered or when mailed by
certified or registered mail, return receipt requested, postage prepaid, or when
delivered prepaid to a next-day expedited delivery service to the other party
addressed as follows:
SBS:
SBS Technologies, Inc.
Attn: Xxxxx X. Xxxxx, Xx.,Vice President Finance and
Administration
0000 Xxxxxxxxx Xxxx. NE
AFC Xxxxxxxx 0, Xxxxx 000
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Copy to:
Xxxxxx X. Xxxxxxx, Esquire
0000 Xxx Xxxxx Xxxx. XX, Xxxxx X-000
Xxxxxxxxxxx, Xxx Xxxxxx 00000
SELLER:
Xxxxx Xxxxxxxx
**
Any party may change its address for notice by giving written notice of
the change pursuant to this Section.
COVENANT NOT TO COMPETE
PAGE 3
XI. ANNOUNCEMENTS
Seller, without the prior written consent of SBS, will not make any
announcement, public or non-public, or issue any press release in respect of
this Covenant.
DATED: December 20, 1999
SELLER: SBS TECHNOLOGIES, INC.
By:
---------------------- --------------------------------------
Xxxxx Xxxxxxxx
Its:
---------------------------------
COVENANT NOT TO COMPETE
PAGE 4
EXHIBIT II-A
PLAN OF MERGER
1. RECITALS. SBS Technologies, Inc., a New Mexico corporation ("SBS")
intends to acquire SciTech, Inc., a Wisconsin corporation ("SciTech"),
pursuant to the terms of a Pooling Agreement among the parties, of which this
Plan of Merger is a part. To accomplish the acquisition, SciTech will be
merged with and into SBS Technologies, Inc. Communications Products, a
California corporation, a wholly-owned subsidiary of SBS (the "Company"),
which shall be the surviving corporation in the merger. This Plan of Merger
shall be filed with the appropriate state agencies of California and Wisconsin
as required by law.
2. MERGER. On the Effective Date (as defined below), SciTech shall
be merged with and into the Company, which shall be the surviving corporation
of the merger (the "Surviving Corporation"). As of the Effective Date, the
corporate existence, identity, purpose, powers, objects, franchises, rights
and immunities of the Company shall continue unaffected and unimpaired by the
merger, and the corporate identity, existence, purposes, powers, objects,
franchises, rights and immunities of SciTech shall be wholly merged in the
Surviving Corporation. Accordingly, on the Effective Date the separate
existence of SciTech shall cease, except insofar as continued by statute.
3. ARTICLES OF INCORPORATION. The Articles of Incorporation of the
Company, as in effect immediately prior to the Effective Date, shall continue
in full force and effect as the Articles of Incorporation of the Surviving
Corporation.
4. BYLAWS. From and after the Effective Date, the Bylaws of the
Company shall be and become the Bylaws of the Surviving Corporation until
they shall be altered, amended, or repealed, or until new Bylaws shall be
adopted in accordance with the provisions of the Bylaws and the Articles of
Incorporation of the Surviving Corporation.
5. DIRECTORS AND OFFICERS. The duly qualified and acting directors
and officers of the Company immediately prior to the Effective Date shall be
the directors and officers of the Surviving Corporation, each such director
or officer to hold office until the term for which he or she has previously
been elected shall expire and until his or her successor has been elected and
qualified.
6. CONVERSION OF COMMON STOCK. At and as of the Effective Time, and
subject to adjustment as provided below, each of the 1,000 issued and
outstanding shares of SciTech common stock shall be converted into the right
to receive shares of the no par value common stock of SBS. No fractional
shares will be issued, the number of SBS common shares a shareholder receives
will be rounded down to the nearest whole number, and no payment for fractional
shares shall be made. The total number of SBS shares to be issued will equal
$6,400,000 divided by the average of the closing price on the NASDAQ National
Market System of SBS common stock for the
1
five trading days preceding Closing. No SciTech Share shall be deemed to be
outstanding or to have any rights other than those set forth in this Plan of
Merger after the Effective Date.
7. ASSETS AND LIABILITIES. On the Effective Date, all property,
real, personal and mixed, and all debts due to SciTech or the Company on
whatever account, and all and every other interest of or belonging to SciTech
or the Company shall be taken by and deemed to be transferred to and vested
in the Surviving Corporation without any further act or deed; and all
property and every other interest shall be thereafter as effectively the
property of the Surviving Corporation as it was of SciTech or the Company.
8. RIGHTS OF CREDITORS. All rights of creditors and all liens upon
the property of SciTech or the Company shall be preserved and unimpaired, and
all debts, liabilities, obligations and duties of SciTech or the Company
shall thenceforth attach to the Surviving Corporation, and may be enforced
against it to the same extent as if such debts, liabilities, obligations and
duties had been incurred or contracted by it.
9. POWER OF ATTORNEY. SciTech hereby grants to the Surviving
Corporation an irrevocable proxy, coupled with an interest, to execute and
deliver, in the name of SciTech, all bills of sale and instruments, and to take
or cause to be taken all such further or other action as the Surviving
Corporation may deem necessary or desirable in order to vest in and confirm
to the Surviving Corporation or its successors and assigns the title to and
possession of all the aforesaid property and rights and otherwise carry out
the intent and purposes of this Agreement.
10. REGISTERED OFFICE AND REGISTERED AGENT. The registered agent and
office of the Surviving Corporation in the State of California will, as of
the Effective Date, be CT Corporation, 000 Xxxx 0xx Xxxxxx, Xxx Xxxxxxx, XX
00000, and in the State of Wisconsin will, as of the Effective Date, be
Xxxxxx X. Xxxxxxxx, 0000 Xxx Xxx Xxxxx, Xxxxx X, Xxxxxxx, XX 00000.
11. INCOME TAXES AND ACCOUNTING. The parties intend that the merger
constitute a tax-free "forward triangular merger" under Section 368(a)(2)(D)
of the Internal Revenue Code. The parties also intend that the merger be
accounted for as a "pooling of interests" under generally accepted accounting
principles, as further described in the Pooling Agreement.
12. EFFECTIVE DATE. The merger shall be effective as of 12:01 a.m.,
P.S.T., on December 20, 1999, or as soon thereafter as permitted by the laws
of the States of Wisconsin and California upon the filings of Articles of
Merger with the Wisconsin Department of Financial Institutions and the
California Secretary of State, Corporations Division.
2
EXHIBIT IV
FORM OF SUBSCRIPTION AND REPRESENTATION LETTER
28
SUBSCRIPTION AGREEMENT AND REPRESENTATION LETTER
SBS Technologies, Inc.
0000 Xxxxxxxxx Xxxxxxxxx XX
AFC Xxxxxxxx 0, Xxxxx 000
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Ladies and Gentlemen:
I (that term referring to both prospective purchasers if the purchase
of the interest is being made with community funds) understand and agree as
follows:
1. RECEIPT OF INFORMATION. I acknowledge receipt of such information
about SBS Technologies, Inc., ("SBS") as I have requested, including the SBS
Form 10K for the fiscal year ended June 30, 1999, the Form 10Q for the quarter
ended September 30, 1999, and the 1999 Annual Report and 1999 Annual Meeting
Proxy Statement ("Information"). I have read the Information, and have had the
opportunity to ask questions of the management of SBS concerning the business of
SBS, and have received answers from management, as I have deemed necessary.
2. SALE OF STOCK. Subject to the terms and conditions of this
Subscription Agreement and Representation Letter (the "Letter"), and pursuant to
the provisions of the Pooling Agreement dated December 15, 1999 ("Pooling
Agreement"), I will exchange my shares of SciTech inc. for a total of 13,989
shares of the common stock of SBS ("Shares"). At closing, SBS will deliver to me
a properly executed Certificate representing the Shares. SBS's obligation to
close this transaction is conditioned upon my warranties and representations
herein being true at Closing.
3. WARRANTIES AND REPRESENTATIONS OF PURCHASER. I represent and warrant
to SBS that:
A. I am aware that no United States federal or state agency
has made any finding or determination as to the fairness for public investment,
nor any recommendation or endorsement, of the Shares and the Shares will not be
registered under the Securities Act of 1933 (the "1933 Act"), the New Mexico
Securities Act of 1986, the Wisconsin Securities Act, or the securities laws of
any other state.
B. I understand that in order to ensure that the offer and
sale of the Shares to me is exempt from registration under the 1933 Act by
reason of Sections 4(2) or 3(b) of the 1933 Act and the securities laws of any
other state, SBS is required to have reasonable grounds to believe, and must
actually believe, after making reasonable inquiry and before making any
issuance, that I am purchasing the Shares for investment only. I, either alone
or with my purchaser representative, am able to evaluate the risks involved in
any investment in the Shares, and I have sufficient knowledge and experience in
financial and business matters in general, and investments in particular, to be
fully capable of evaluating the merits and risks of an investment by me in the
Shares. I have been furnished, have read, and understand the Information. I have
no questions concerning SBS, the Shares or the business of SBS which have not
been answered and have obtained all the information concerning these matters
which I desire. My financial condition is such that I have adequate means of
providing for my current and possible personal contingencies
and I am under no present or contemplated need to liquidate any portion of the
Shares to satisfy any existing or contemplated undertaking, need or
indebtedness; and I am able to bear the economic risk of any investment in the
Shares, including the possible complete loss of the investment and possible
inability to sell or transfer the Shares for an indefinite period of time.
C. My (and my spouse's full names(s), date(s) of birth, tax
identification number(s), and primary residence address are:
------------------------------ ---------------------------------
My Name My Date of Birth
------------------------------ ---------------------------------
My Spouse's Name Spouse's Date of Birth
------------------------------ ---------------------------------
My Tax Identification\ My Spouse's Tax Identification\
Social Security Number Social Security Number
------------------------------
------------------------------
My (Our) Residence Address
If there is no name set forth for my Spouse, it means that I am not at
present married, or no person has any community property interest in the assets
I am using to make this investment.
D. My occupation is ;
---------------------------------
E. My business address is:
--------------------------------
--------------------------------
F. I am acquiring the Shares for my own account for investment
only and not with a view to, or for sale in connection with, the distribution or
transfer thereof, and I am not participating directly or indirectly in a
distribution or transfer of Shares, or in the underwriting of any such
distribution or transfer of the Shares, nor will I act in any way that would
constitute me an underwriter, within the meaning of the 1933 Act, of the Shares.
I understand that in order for the Shares to be qualified for an exemption from
registration, I must represent and warrant that I will not transfer or sell the
Shares in the absence of registration under the 1933 Act or an exemption
therefrom. I will, before any proposed sale, pledge, gift or other transfer, for
value or otherwise, of any or all of the Shares or any interest or interests
therein (a "Transfer"), give written notice to SBS
SUBSCRIPTION AGREEMENT AND REPRESENTATION LETTER
PAGE 2
expressing my desire to effect the Transfer and describing the Transfer in
detail, accompanied by an opinion of qualified counsel to the effect that the
proposed Transfer will be exempt from the registration provisions under
applicable federal and state securities laws and otherwise will be in compliance
with such laws, and will not violate or jeopardize exemptions upon which SBS has
relied in issuing the Shares to me. For purposes of this paragraph, "qualified
counsel" shall mean an attorney licensed to practice law in one or more
jurisdictions connected with the proposed Transfer, who devotes a significant
portion of such attorney's practice to the area of federal and state securities
law, and which attorney is rated "AV" by Martindale Xxxxxxx Law Directory. I
understand SBS will make, or will advise the transfer agent of the Shares to
make, stop transfer notations on its records relating to the Shares and the
certificate representing the Shares will have the following legend imprinted or
typed on the face of the Certificate:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 or any state
securities laws. No transfer or other disposition of the
Securities can be made except in compliance with the
restrictions contained in a Subscription Agreement and
Representation Letter between the Corporation and the
person(s) whose name(s) appear(s) on this certificate as
registered holder, a copy of which is on file at the office of
the Corporation."
G. I am checking the box or boxes below which describe me.
: : Any bank as defined in section 3(a)(2) of the Act, or
any savings and loan association or other institution as
defined in section 3(a)(5)(A) of the Act whether acting in its
individual or fiduciary capacity; any broker or dealer
registered pursuant to section 15 of the Securities Exchange
Act of 1934; any insurance company as defined in section 2(13)
of the Act; any investment company registered under the
Investment Company Act of 1940 or a business development
company as defined in section 2(a)(48) of that Act; Small
Business Investment Company licensed by the U.S. Small
Business Administration under section 301(c) or (d) of the
Small Business Investment Act of 1958; any plan established
and maintained by a state, its political subdivisions or any
agency or instrumentality of a state or its political
subdivisions for the benefit of its employees, if such plan
has total assets in excess of $5,000,000; employee benefit
plan within the meaning of the Employee Retirement Income
Security Act of 1974 if the investment decision is made by a
plan fiduciary, as defined in Section 3(21) of such Act, which
is either a bank, savings and loan association, insurance
company, or registered investment adviser, or if the employee
benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made solely by
persons that are accredited investors.
SUBSCRIPTION AGREEMENT AND REPRESENTATION LETTER
PAGE 3
: : Any private business development company as defined in
section 202(a)(22) of the Investment Advisers Act of 1940;
: : Any organization described in Section 501(c)(3) of the
Internal Revenue Code, corporation, Massachusetts or similar
business trust, or partnership, not formed for the specific
purpose of acquiring the securities offered, with total assets
in excess of $5,000,000.
: : The undersigned is a director or executive officer of
SBS.
: : The undersigned is a natural person whose individual
net worth as of the date hereof (including the net worth of
the undersigned's spouse if the undersigned is married)
exceeds $1,000,000.
: : The undersigned is a natural person who had an
individual income that exceeded $200,000 or joint income with
his or her spouse in excess of $300,000 in each of the two
most recent years and who reasonably expects that in the
current year his or her or their income will reach the same
level. For purposes of this document, the term "income" shall
mean adjusted gross income reported or to be reported on a
federal income tax return, increased by (i) any deductions for
long term capital gains (under Section 1202 of the Internal
Revenue Code (the "Code"), (ii) any deductions for depletion
(pursuant to Section 601 ET SEQ. of the Code), (iii) any
exclusions of interest (pursuant to Section 103 of the Code)
and (iv) any losses of a partnership allocated to the
undersigned as an individual limited partner (as reported in
Schedule E of Form 1040).
: : Any trust, with total assets in excess of $5,000,000,
not formed for the specific purpose of acquiring the
securities offered, whose purchase is directed by a
sophisticated person as described in Section 230.506
(b)(2)(ii); and
: : Any entity in which all of the equity owners are
accredited investors.
: : None of the boxes above accurately describes the
undersigned.
H. I am aware that I will not be able to dispose readily of
the Shares in view of the fact that the Shares will not be registered under the
1933 Act and that SBS has not, except solely as provided in Paragraph IV of the
Pooling Agreement, agreed with me to register the Shares for distribution
pursuant to the 1933 Act. I am aware that any sales under Rule 144 may not be
made until (i) one year from the date of purchase and then only in amounts and
in the manner permitted by Rule 144, or (ii) two years from the date of purchase
without regard to the volume, manner and notice requirements of Rule 144, but in
compliance with other requirements of Rule 144, assuming I am not an affiliate
of SBS at that time. I understand that, in the absence of any available
exemption, I may have to hold the Shares indefinitely unless and until the
Shares are subsequently registered under the 1933 Act and applicable state
securities laws.
SUBSCRIPTION AGREEMENT AND REPRESENTATION LETTER
PAGE 4
I. I am acquainted with the requirements of Section 13(d) of
the Securities Exchange Act of 1934 and the rules and regulations issued
thereunder. I understand that, as a result of my acquisition of Shares, and in
order to comply with Section 13(d) and the rules and regulations issued
thereunder, I may be required to file a Schedule 13D and I agree to file if that
Schedule is required.
J. The information contained in this Letter is true and
correct.
DATED: December 20, 1999
PURCHASER:
--------------------------------------------
XXXXX XXXXXXXX
RECEIVED AND ACCEPTED BY:
SBS TECHNOLOGIES, INC.
By:
----------------------------------
Its:
---------------------------------
DATED:
-------------------------------
SUBSCRIPTION AGREEMENT AND REPRESENTATION LETTER
PAGE 5
SUBSCRIPTION AGREEMENT AND REPRESENTATION LETTER
SBS Technologies, Inc.
0000 Xxxxxxxxx Xxxxxxxxx XX
AFC Xxxxxxxx 0, Xxxxx 000
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Ladies and Gentlemen:
I (that term referring to both prospective purchasers if the purchase
of the interest is being made with community funds) understand and agree as
follows:
1. RECEIPT OF INFORMATION. I acknowledge receipt of such information
about SBS Technologies, Inc., ("SBS") as I have requested, including the SBS
Form 10K for the fiscal year ended June 30, 1999, the Form 10Q for the quarter
ended September 30, 1999, and the 1999 Annual Report and 1999 Annual Meeting
Proxy Statement ("Information"). I have read the Information, and have had the
opportunity to ask questions of the management of SBS concerning the business of
SBS, and have received answers from management, as I have deemed necessary.
2. SALE OF STOCK. Subject to the terms and conditions of this
Subscription Agreement and Representation Letter (the "Letter"), and pursuant to
the provisions of the Pooling Agreement dated December 15, 1999 ("Pooling
Agreement"), I will exchange my shares of SciTech inc. for a total of 13,989
shares of the common stock of SBS ("Shares"). At closing, SBS will deliver to me
a properly executed Certificate representing the Shares. SBS's obligation to
close this transaction is conditioned upon my warranties and representations
herein being true at Closing.
3. WARRANTIES AND REPRESENTATIONS OF PURCHASER. I represent and warrant
to SBS that:
A. I am aware that no United States federal or state agency
has made any finding or determination as to the fairness for public investment,
nor any recommendation or endorsement, of the Shares and the Shares will not be
registered under the Securities Act of 1933 (the "1933 Act"), the New Mexico
Securities Act of 1986, the Wisconsin Securities Act, or the securities laws of
any other state.
B. I understand that in order to ensure that the offer and
sale of the Shares to me is exempt from registration under the 1933 Act by
reason of Sections 4(2) or 3(b) of the 1933 Act and the securities laws of any
other state, SBS is required to have reasonable grounds to believe, and must
actually believe, after making reasonable inquiry and before making any
issuance, that I am purchasing the Shares for investment only. I, either alone
or with my purchaser representative, am able to evaluate the risks involved in
any investment in the Shares, and I have sufficient knowledge and experience in
financial and business matters in general, and investments in particular, to be
fully capable of evaluating the merits and risks of an investment by me in the
Shares. I have been furnished, have read, and understand the Information. I have
no questions concerning SBS, the Shares or the business of SBS which have not
been answered and have obtained all the information concerning these matters
which I desire. My financial condition is such that I have adequate means of
providing for my current and possible personal contingencies
and I am under no present or contemplated need to liquidate any portion of the
Shares to satisfy any existing or contemplated undertaking, need or
indebtedness; and I am able to bear the economic risk of any investment in the
Shares, including the possible complete loss of the investment and possible
inability to sell or transfer the Shares for an indefinite period of time.
C. My (and my spouse's full names(s), date(s) of birth, tax
identification number(s), and primary residence address are:
------------------------------ ---------------------------------
My Name My Date of Birth
------------------------------ ---------------------------------
My Spouse's Name Spouse's Date of Birth
------------------------------ ---------------------------------
My Tax Identification\ My Spouse's Tax Identification\
Social Security Number Social Security Number
------------------------------
------------------------------
My (Our) Residence Address
If there is no name set forth for my Spouse, it means that I am not at
present married, or no person has any community property interest in the assets
I am using to make this investment.
D. My occupation is ;
---------------------------------
E. My business address is:
--------------------------------
--------------------------------
F. I am acquiring the Shares for my own account for investment
only and not with a view to, or for sale in connection with, the distribution or
transfer thereof, and I am not participating directly or indirectly in a
distribution or transfer of Shares, or in the underwriting of any such
distribution or transfer of the Shares, nor will I act in any way that would
constitute me an underwriter, within the meaning of the 1933 Act, of the Shares.
I understand that in order for the Shares to be qualified for an exemption from
registration, I must represent and warrant that I will not transfer or sell the
Shares in the absence of registration under the 1933 Act or an exemption
therefrom. I will, before any proposed sale, pledge, gift or other transfer, for
value or otherwise, of any or all of the Shares or any interest or interests
therein (a "Transfer"), give written notice to SBS
SUBSCRIPTION AGREEMENT AND REPRESENTATION LETTER
PAGE 2
expressing my desire to effect the Transfer and describing the Transfer in
detail, accompanied by an opinion of qualified counsel to the effect that the
proposed Transfer will be exempt from the registration provisions under
applicable federal and state securities laws and otherwise will be in compliance
with such laws, and will not violate or jeopardize exemptions upon which SBS has
relied in issuing the Shares to me. For purposes of this paragraph, "qualified
counsel" shall mean an attorney licensed to practice law in one or more
jurisdictions connected with the proposed Transfer, who devotes a significant
portion of such attorney's practice to the area of federal and state securities
law, and which attorney is rated "AV" by Martindale Xxxxxxx Law Directory. I
understand SBS will make, or will advise the transfer agent of the Shares to
make, stop transfer notations on its records relating to the Shares and the
certificate representing the Shares will have the following legend imprinted or
typed on the face of the Certificate:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 or any state
securities laws. No transfer or other disposition of the
Securities can be made except in compliance with the
restrictions contained in a Subscription Agreement and
Representation Letter between the Corporation and the
person(s) whose name(s) appear(s) on this certificate as
registered holder, a copy of which is on file at the office of
the Corporation."
G. I am checking the box or boxes below which describe me.
: : Any bank as defined in section 3(a)(2) of the Act, or
any savings and loan association or other institution as
defined in section 3(a)(5)(A) of the Act whether acting in its
individual or fiduciary capacity; any broker or dealer
registered pursuant to section 15 of the Securities Exchange
Act of 1934; any insurance company as defined in section 2(13)
of the Act; any investment company registered under the
Investment Company Act of 1940 or a business development
company as defined in section 2(a)(48) of that Act; Small
Business Investment Company licensed by the U.S. Small
Business Administration under section 301(c) or (d) of the
Small Business Investment Act of 1958; any plan established
and maintained by a state, its political subdivisions or any
agency or instrumentality of a state or its political
subdivisions for the benefit of its employees, if such plan
has total assets in excess of $5,000,000; employee benefit
plan within the meaning of the Employee Retirement Income
Security Act of 1974 if the investment decision is made by a
plan fiduciary, as defined in Section 3(21) of such Act, which
is either a bank, savings and loan association, insurance
company, or registered investment adviser, or if the employee
benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made solely by
persons that are accredited investors.
SUBSCRIPTION AGREEMENT AND REPRESENTATION LETTER
PAGE 3
: : Any private business development company as defined in
section 202(a)(22) of the Investment Advisers Act of 1940;
: : Any organization described in Section 501(c)(3) of the
Internal Revenue Code, corporation, Massachusetts or similar
business trust, or partnership, not formed for the specific
purpose of acquiring the securities offered, with total assets
in excess of $5,000,000.
: : The undersigned is a director or executive officer of
SBS.
: : The undersigned is a natural person whose individual
net worth as of the date hereof (including the net worth of
the undersigned's spouse if the undersigned is married)
exceeds $1,000,000.
: : The undersigned is a natural person who had an
individual income that exceeded $200,000 or joint income with
his or her spouse in excess of $300,000 in each of the two
most recent years and who reasonably expects that in the
current year his or her or their income will reach the same
level. For purposes of this document, the term "income" shall
mean adjusted gross income reported or to be reported on a
federal income tax return, increased by (i) any deductions for
long term capital gains (under Section 1202 of the Internal
Revenue Code (the "Code"), (ii) any deductions for depletion
(pursuant to Section 601 ET SEQ. of the Code), (iii) any
exclusions of interest (pursuant to Section 103 of the Code)
and (iv) any losses of a partnership allocated to the
undersigned as an individual limited partner (as reported in
Schedule E of Form 1040).
: : Any trust, with total assets in excess of $5,000,000,
not formed for the specific purpose of acquiring the
securities offered, whose purchase is directed by a
sophisticated person as described in Section 230.506
(b)(2)(ii); and
: : Any entity in which all of the equity owners are
accredited investors.
: : None of the boxes above accurately describes the
undersigned.
H. I am aware that I will not be able to dispose readily of
the Shares in view of the fact that the Shares will not be registered under the
1933 Act and that SBS has not, except solely as provided in Paragraph IV of the
Pooling Agreement, agreed with me to register the Shares for distribution
pursuant to the 1933 Act. I am aware that any sales under Rule 144 may not be
made until (i) one year from the date of purchase and then only in amounts and
in the manner permitted by Rule 144, or (ii) two years from the date of purchase
without regard to the volume, manner and notice requirements of Rule 144, but in
compliance with other requirements of Rule 144, assuming I am not an affiliate
of SBS at that time. I understand that, in the absence of any available
exemption, I may have to hold the Shares indefinitely unless and until the
Shares are subsequently registered under the 1933 Act and applicable state
securities laws.
SUBSCRIPTION AGREEMENT AND REPRESENTATION LETTER
PAGE 4
I. I am acquainted with the requirements of Section 13(d) of
the Securities Exchange Act of 1934 and the rules and regulations issued
thereunder. I understand that, as a result of my acquisition of Shares, and in
order to comply with Section 13(d) and the rules and regulations issued
thereunder, I may be required to file a Schedule 13D and I agree to file if that
Schedule is required.
J. The information contained in this Letter is true and
correct.
DATED: December 20, 1999
PURCHASER:
--------------------------------------------
XXXXXX XXXXXXXX
RECEIVED AND ACCEPTED BY:
SBS TECHNOLOGIES, INC.
By:
----------------------------------
Its:
---------------------------------
DATED:
-------------------------------
SUBSCRIPTION AGREEMENT AND REPRESENTATION LETTER
PAGE 5
