<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
January 18, 2000
---------------------
MICRO-ASI, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
STATE OF TEXAS 000-27027 75-2586030
(STATE OR OTHER JURISDICTION OF (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
INCORPORATION) IDENTIFICATION NO.)
---------------------
12655 NORTH CENTRAL EXPRESSWAY, SUITE 1000
DALLAS, TEXAS 75243
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
(972)392-9636
(TELEPHONE NUMBER, INCLUDING AREA CODE)
---------------------
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Effective January 18, 2000, Micro-ASI, Inc., a Texas corporation (the
"Registrant"), completed the acquisition of the outstanding common stock (the
"BTI Common Stock") of Best Technologies, Inc., a Texas corporation ("BTI"),
from the sole shareholder of BTI (the "Seller"), pursuant to a stock purchase
agreement (including all Exhibits and Schedules thereto and documents executed
in connection therewith, the "Agreement"). BTI is an electronics contract
manufacturer headquartered in Wylie, Texas. In connection with the Agreement,
one share of preferred stock of BTI (The BTI Preferred Stock") was created and
issued to the Seller. The Company, as the holder of the BTI Common Stock, has
the right to appoint one director to the three member Board of Directors of BTI.
Seller, as holder of the BTI Preferred Stock has the right to appoint two
directors to the three-member Board of Directors of BTI and certain other voting
rights. Pursuant to the Agreement, the Company will receive the outstanding BTI
Preferred Stock upon the satisfaction of certain obligations, including, but not
limited to, the completion of an initial public offering by the Company.
The total aggregate purchase price for the BTI Common Stock is approximately
$5.3 million. The purchase price includes (i) a promissory note from the Company
to the Seller in the amount of $2,500,000, due the earlier of (a) December 31,
2001 or (b) ten days after the completion of an initial public offering by the
Company (the "Purchase Note"); (ii) a convertible note from the Company to the
Seller in the amount of $1,416,677 due December 31, 2001, which is immediately
convertible into 1,416,677 shares of Common Stock of the Company $.001 par value
(the "Convertible Note"); (iii) a promissory note from BTI to the Seller and
guaranteed by the Company in the amount of $600,000, due the earlier of (a)
March 31, 2000 or (b) ten days after the completion of one or more private
placements having an aggregate gross offering amount in excess of $6,000,000
(the "Cash Note"); and (iv) a contribution from the Company to the capital of
BTI consisting of $750,000 of property and equipment used in BTI's flip-chip
assembly due ninety days after the completion of one or more private placements
having an aggregate gross offering amount in excess of $6,000,000 (the "Capital
Contribution"). Furthermore, the payment of the Cash Note, the Purchase Note and
the Convertible Note are secured by a stock pledge agreement pursuant to which
the Company has pledged all of the BTI Common Stock. The purchase price is not
subject to any post-closing adjustments.
The consideration paid by the Registrant was determined pursuant to arms' length
negotiations and took into account various factors concerning the valuation of
the business of BTI, including valuations of comparable companies and the
business and operating results of BTI. Registrant will account for the stock
acquisition of BTI as a purchase.
The shares of Company Common Stock, which may be issued pursuant to the
Agreement, are not registered under the Securities Act of 1933, as amended (the
"Securities Act") in reliance upon the exemptions provided by Section 4(2) under
the Securities Act.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of the business acquired.
(1) The financial statements by this item will be filed
2
<PAGE> 3
by amendment not later than 75 days the consummation
of the acquisition.
(b) Pro forma financial information.
(1) The pro forma financial statements required by this
item will be filed by amendment not later than 75
days after the consummation of the acquisition.
(c) Exhibits.
2.1 Agreement and Plan of Reorganization dated January
18, 1999.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MICRO-ASI, INC.
JANUARY 18, 2000 /s/ JOEL E. CLAYBROOK
--------------------------------------
JOEL E. CLAYBROOK
President and CEO
3
<PAGE> 4
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- --------------------------------------------------------------------------------
<S> <C> <C>
2.1 Stock Purchase Agreement 5
Exhibit A 18
Exhibit B 20
Exhibit C 23
Exhibit D 25
Exhibit E 31
Exhibit F 37
</TABLE>
4
<PAGE> 1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement"), dated effective as of
January 1, 2000, is between Gary Bottoms ("Shareholder"), Best Technologies,
Inc., a Texas corporation ("BTI"), and Micro-ASI Inc., a Texas corporation
("Micro-ASI").
Recital. Shareholder desires to sell all of the equity ownership in,
and all of the outstanding common shares (collectively, the "Shares") of the
capital stock (the "BTI Stock") of BTI to Micro-ASI in accordance with this
Agreement and Micro-ASI desires to acquire all of the Shares (the
"Acquisition").
NOW, THEREFORE, in consideration of the foregoing and the terms of this
Agreement, the receipt and adequacy of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby covenant and agree as
follows:
ARTICLE I: THE ACQUISITION
1.01. The Purchase. Subject to the terms hereof, on the
Closing Date (as hereinafter defined), Shareholder shall sell and deliver to
Micro-ASI, and Micro-ASI agrees to purchase from Shareholder, the legal and
beneficial ownership of all of the Shares.
1.02. Purchase Price. The purchase price to be paid for all
of the Shares shall be:
(a) The issuance by Micro-ASI to Shareholder of
a non-recourse (to the extent stated therein) promissory note in the form
attached hereto as Exhibit A (the "Purchase Note") in the original principal
amount of Two Million Five Hundred Thousand and No/100 Dollars ($2,500,000.00),
bearing interest at the rate of five percent (5%) per annum, with unpaid
principal and accrued and unpaid interest on the Purchase Note due and payable
on the earlier to occur of (i) December 31, 2001 or (ii) ten (10) days after the
completion by Micro-ASI of its initial public offering.
(b) The issuance by Micro-ASI to Shareholder of
a non-recourse (to the extent stated therein) convertible note in the form
attached hereto as Exhibit B (the "Convertible Note") in the original principal
amount of One Million Four Hundred Sixteen Thousand Six Hundred Sixty-Seven and
No/100 Dollars ($1,416,677.00), bearing interest at the rate of five percent
(5%) per annum. Accrued and unpaid interest on the Convertible Note shall be
paid monthly beginning February 1, 2000. Unpaid principal and accrued and unpaid
interest shall be paid on December 31, 2001. Until the Convertible Note is paid
in full, Shareholder shall have the right, at any time, to make a one time
election to convert all or any portion of the outstanding principal amount of
the Convertible Note into shares of the common stock, $.001 par value per share,
of Micro-ASI (the "Micro-ASI Stock"), at a conversion price of $1.00 per share,
by giving written notice to Micro-ASI. Within fifteen (15) days of receipt of
such written notice, Micro-ASI shall (i) issue to Shareholder the number of
shares of Micro-ASI Stock equal to the amount of the outstanding principal
balance of the Convertible Note Shareholder elects to convert (rounded down to
the nearest dollar) divided by $1.00 and (ii) pay to Shareholder cash in an
amount equal to all accrued and unpaid interest on the Convertible Note and any
remaining principal not converted to Micro-ASI Stock. No fractional shares shall
be issued. Upon the issuance of such shares of Micro-ASI Stock and the payment
of such cash, Shareholder shall mark the Convertible Note paid in full and shall
return the original Convertible Note to Micro-ASI.
(c) The issuance by BTI to Shareholder of a
non-recourse (to the extent stated therein) promissory note in the form attached
hereto as Exhibit C (the "Cash Note") in the original principal amount of Six
Hundred Thousand and No/100 Dollars ($600,000.00), bearing interest at the rate
of five percent (5%) per annum with unpaid principal and all accrued and unpaid
interest due and payable on the earlier to occur of (i) March 31, 2000 or (ii)
ten (10) days after the closing, from and after the date of this Agreement, of
one or more private placements having an aggregate gross offering amount in
excess of Six Million and No/100 Dollars ($6,000,000.00).
5
<PAGE> 2
(d) The payment of the Purchase Note, the
Convertible Note and the Cash Note shall be non-recourse (to the extent stated
therein) and secured by a stock pledge agreement (the "Stock Pledge Agreement")
in the form attached hereto as Exhibit D, and Shareholder will hold the Pledged
Stock (as defined in the Stock Pledge Agreement) as secured party. Any
obligation or liability of Micro-ASI or BTI under the Purchase Note, the
Convertible Note or the Cash Note, to the extent such obligation or liability is
non-recourse, shall be satisfied, if at all, out of the Pledged Stock only
pursuant to the Stock Pledge Agreement. No such non-recourse obligation or
liability shall be personally binding upon, nor shall result for the enforcement
of such non-recourse obligation or liability be had to, the property or assets
of Micro-ASI, its officers, directors, shareholders or employees. At the request
of Shareholder, Micro-ASI shall (i) execute and deliver an appropriate UCC-1
and/or (ii) permit an appropriate legend to be placed on the Pledged Stock
evidencing such security interest.
1.03. Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Gardere & Wynne,
L.L.P., at 1601 Elm Street, Suite 3000, Dallas, Texas 75201, on January 18,
2000, or on such other date and at such other place as the parties may agree, or
unless extended by written agreement of the parties (the "Closing Date").
Notwithstanding the foregoing, the transactions contemplated by this Agreement
shall be effective as of January 1, 2000.
1.04. Closing Documents; Further Assurances. At the Closing, each
party shall execute and deliver each agreement and instrument required by this
Agreement, and not theretofore executed, and such other appropriate and
customary documents as any party reasonably requests as necessary to consummate
the transactions contemplated hereby. After the Closing, each party shall
execute and deliver to the other party such additional documents and take such
additional actions as such other party may reasonably request in order to
consummate the Acquisition.
ARTICLE II: REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDER AND BTI
Shareholder and BTI jointly and severally represent and warrant to
Micro-ASI that the following are true and correct as of the date hereof and will
be true and correct on the Closing Date:
2.01. Organization; Subsidiaries; Records. BTI is a corporation,
duly organized and validly existing under the laws of the State of Texas, has
the corporate power and authority to own or hold under lease its assets and to
carry on its business as it is now being conducted and is duly qualified to do
business and is in good standing in each jurisdiction where the ownership of its
property or the conduct of its business requires such qualification. BTI does
not own (nor has it ever owned) the capital stock of any corporation, nor does
it have (nor has it ever had) an interest in any other entity. True, correct,
and complete copies of the articles of incorporation and bylaws, and all
amendments thereto, of BTI have been delivered to Micro-ASI. The minute books
and books and records of BTI are complete and accurate.
2.02. Binding Effect; No Violation; No Consent. This Agreement
constitutes a valid and binding agreement of Shareholder and BTI, enforceable
against him or it in accordance with its terms. Except as set forth on Schedule
2.02, neither the execution and delivery of this Agreement by Shareholder and
BTI nor the consummation of the transactions contemplated hereby will, with the
lapse of time, the giving of notice, or both, (a) violate, conflict with, or
result in the breach or termination of, any agreement, instrument, or other
document to which Shareholder and/or BTI is a party or is bound, or result in
the creation of any lien, charge, or encumbrance upon any asset or property of
BTI or any of the Shares or the Preferred Share (as defined in Section 5.04
hereof); (b) to the best knowledge of Shareholder and BTI, violate or conflict
with any law, regulation, permit, authorization, franchise, license, judgment,
order, writ, injunction, or decree of any court or governmental authority
applicable to BTI or the Shareholder; or (c) have a material adverse financial
impact on the condition, business, or operations of BTI (a "Material Adverse
Effect"). Other than as set forth on Schedule 2.02, no authorization, consent,
or approval of, or filing with, any governmental authority is necessary for the
consummation by BTI or Shareholder of the transactions contemplated hereby.
2.03. Capitalization. The capital stock of BTI consists solely of
1,000 shares, no par value per share, of the Shares, all of which are fully
paid, validly issued, and nonassessable and the Preferred Share to be created
6
<PAGE> 3
pursuant to Section 5.04. There is no shareholders' or other agreement
restricting the transfer of, or otherwise pertaining to, the BTI Stock. There
are no preemptive rights, outstanding subscriptions, options, warrants, or other
commitments obligating (a) BTI to issue any BTI Stock or (b) Shareholder to
transfer any Shares. Shareholder will be, as of the Closing Date, the record and
beneficial owner of the Shares and the Preferred Share, free and clear of all
liens, liabilities, proxies, claims, and encumbrances. As of the Closing Date,
the transfer of the certificates representing the Shares, properly endorsed or
with a properly executed stock power, will transfer to Micro-ASI good and
indefeasible title to all of the Shares, free and clear of all liens,
liabilities, proxies, claims, and encumbrances. No distribution, payment, or
dividend has been declared, paid, or distributed with respect to any BTI Stock.
2.04. Financial Statements. The compiled financial statements of
BTI, for the period ending December 31, 1998, which have been prepared by
Chapman, Hext & Co., P.C. are attached hereto as Schedule 2.04 A, and the
internally prepared interim financial statements of BTI for the period ending
November 30, 1999, are attached hereto on Schedule 2.04 B. Such compiled and
interim financial statements (collectively, the "BTI Financial Statements") (a)
have been prepared in accordance with the books and records of BTI and are
correct and complete in all material respects; (b) correctly reflect BTI's
income, expenses, assets, and liabilities; and (c) except as to anticipated year
end adjustments made in accordance with historical practices, present fairly the
financial position and the results of operations of BTI at the dates and for the
periods covered thereby, in accordance with generally accepted accounting
principles ("GAAP") consistently applied. The BTI Financial Statements reflect
all material liabilities or obligations of BTI, accrued, contingent, or
otherwise, and all reserves therein are expected to be sufficient to provide for
the losses contemplated thereby. Except as set forth in the BTI Financial
Statements or on Schedule 2.04, BTI has no other claims, liabilities, or
obligations that would or could, individually or in the aggregate, have a
Material Adverse Effect and neither BTI nor Shareholder knows of any basis for
the assertion of any such claim, liability, or obligation. BTI shall deliver to
Micro-ASI, by January 20, 2000, internally prepared year-end financial
statements of BTI for the period ending December 31, 1999 and shall permit Ernst
& Young, LLP to review the books and records of BTI in connection with the
preparation of audited financial statements for such period, at the cost of
Micro-ASI.
2.05. Laws. To the best knowledge of BTI and Shareholder, BTI has
complied with all laws, rules, regulations, and ordinances (collectively,
"Laws") applicable to it or its business. BTI has received no notice of any
alleged violation of any Law. BTI has provided copies to Micro-ASI of all
material licenses, franchises, permits, and governmental authorizations of BTI
(collectively, the "Permits"). BTI possesses all Permits material to the conduct
of its business as it is now being conducted. In connection with any real
property owned, used, or leased by BTI (the "Real Property"), there is not
currently, to the best knowledge of Shareholder and BTI: (a) any
asbestos-containing thermal insulation or building products or PCB-containing
products on the Real Property; (b) any active or inactive hazardous waste
receptacles installed or maintained on the Real Property; (c) any unperformed
environmental obligations; or (d) any hazardous or solid waste, material or
substance spill, discharge or other release, on or from the Real Property.
2.06. Taxes. Except as set forth on Schedule 2.06, BTI has duly
filed all tax returns and reports required to be filed, and has paid or
established adequate reserves for all taxes (including penalties and interest)
which have, or will for current periods, become due. The income tax returns or
reports of BTI fairly reflect the taxable income and taxes of BTI for the
periods covered thereby. BTI has (a) not, to the best knowledge of Shareholder
and BTI, violated any tax Law; (b) no waivers or agreements for the extension of
time for the assessment of any tax; (c) no tax audit pending or, to the best
knowledge of Shareholder and BTI, threatened; and (d) no tax deficiency or
delinquency, or claim therefor, asserted against it. BTI has withheld or
collected all monies due for income, social security, unemployment insurance,
sales, excise, and use taxes, and the portion of any such taxes to be paid by
BTI to governmental agencies has been paid to each such agency or set aside for
payment in the manner required by applicable Law.
2.07. Absence of Certain Changes. Except as set forth on Schedule
2.07, since November 30, 1999, BTI has not (a) suffered damage to or loss of any
material assets; (b) contracted for or paid any single capital expenditure or
total capital expenditures in excess of $10,000 and $50,000, respectively; (c)
created or allowed a lien, claim, or encumbrance on any of its assets; (d)
acquired or disposed of any material assets, except in the ordinary course of
business; (e) incurred, assumed, or guaranteed any indebtedness; (f) forgiven,
canceled, released, or otherwise waived any rights or claims; (g) entered into,
modified, amended, or terminated, any material agreement; (h) except as provided
below, made a loan or granted any bonus or benefit to Shareholder or any
affiliate or employee of BTI;
7
<PAGE> 4
(i) adopted or executed any Plan (as hereinafter defined); (j) lost or
terminated any material employee, supplier or customer; or (k) to the best
knowledge of Shareholder and BTI, experienced any other Material Adverse Effect.
In accordance with historical practices, BTI will grant a year end bonus to
Shareholder in an amount necessary to offset Shareholder's phantom income and
liability for calendar year 1999, which amount is not greater than $60,000.
2.08. Title. Except as expressly stated in the BTI Financial
Statements, BTI has good and marketable title to all assets reflected in the BTI
Financial Statements (except as they have since been affected by transactions in
the ordinary course of business and consistent with past practices) and BTI owns
such assets free and clear of all liens, liabilities, claims, or encumbrances.
All fixed assets owned or leased by BTI are in good condition and repair for
their intended use in the ordinary course of business and conform in all
material respects with all applicable Laws and there are no known defects
therein.
2.09. Proprietary Rights. Except as set forth on Schedule 2.09, (a)
to the best knowledge of BTI and Shareholder, no third party consent is required
for use of any of the patents, technology, know-how, processes, trademarks,
copyrights, designs, or logos (the "Proprietary Rights") necessary for BTI to
conduct its business; (b) no third party claim has been asserted relating to the
ownership of or the right to use any Proprietary Right or challenging the
validity of any license of BTI, and neither Shareholder nor BTI knows of any
basis for any such claim; and (c) there is no claim or inquiry as to whether any
product, activity, or operation of BTI, infringes upon any Proprietary Right of
any third party, and no proceedings are pending or threatened which challenge
the rights of BTI with respect thereto. If any interest in the Proprietary
Rights is owned by Shareholder individually, such interest has been fully
assigned or transferred to BTI prior to the date hereof. All Proprietary Rights
of BTI are listed on Schedule 2.09.
2.10. Labor Relations; Plans. There is not, either pending or
threatened, against BTI any (a) unfair labor practice complaint, proceeding, or
grievance; (b) discrimination charge, relating to sex, age, race, national
origin, handicap, or veteran status; (c) representation question involving an
attempt to organize a bargaining unit; or (d) direct or indirect, express or
implied, obligation to pay severance pay to any officer or employee of BTI, or
any consultant, agent, or other person or entity. BTI does not sponsor or
maintain, is not a party to nor is it obligated under, any employee benefit law,
rule, or regulation, or any employee benefit, pension, profit sharing, welfare
benefit, or other plan (the "Plans"), nor is BTI obligated to create any Plan.
2.11. Litigation. Except as set forth on Schedule 2.11, neither BTI
nor Shareholder is a party to, and the business and assets of BTI are not the
subject of, any pending or, to the best knowledge of Shareholder and BTI,
threatened, suit, claim, action, litigation, or investigation initiated by or
with any party or any administrative, arbitration, or other governmental
authority, and Shareholder and BTI do not know of any basis for the assertion of
any such suit, claim, action, litigation, or investigation. Neither BTI nor its
business, assets, or employees are subject to any continuing court or
administrative order, writ, injunction, or decree or continuing settlement
agreement.
2.12. Contracts. (a) Except as set forth on Schedule 2.12, BTI is
not a party to, or bound by, any undischarged, written or oral contract or
agreement relating to (i) employment; (ii) consulting; (iii) collective
bargaining; (iv) restriction of BTI's right to compete, sell to, or purchase
from any other person or entity; (v) any affiliate of BTI, or a person
controlled directly or indirectly thereby, for the borrowing or lending of
monies, the purchase or sale of goods, or the performance of services; (vi)
payment or receipt of license fees or royalties to or from any person or entity;
(vii) agency, representation, distribution, or franchise; (viii) the providing
of services; (ix) guaranty, performance, bid, or completion bond, or surety or
indemnification; (x) the purchase, sale, ownership, use, or license of
technology; (xi) lease or sublease of real or personal property; (xii) the
purchase, sale, margining, or pledge of securities; (xiii) product service or
warranty; or (xiv) sharing of profits, losses, costs, or liabilities
(collectively, the "Contracts"). Each of the Contracts is in full force and
effect and binding upon BTI and the other parties thereto. No material default
by BTI or the other parties thereto has occurred or, to the best knowledge of
Shareholder and BTI, been threatened. BTI has not received any complaint or
claim under any Contract. All insurance premiums due by BTI have been paid and
no notice of cancellation has been received with respect thereto.
(b) BTI has provided Micro-ASI a complete list of all (i)
agreements (written or oral) between Shareholder, any entities owned or
controlled (directly or indirectly, in whole or in part) by Shareholder, and/or
his family members, on the one hand, and BTI, on the other hand; and (ii) all
amounts due and owing thereon.
8
<PAGE> 5
2.13. Brokers and Finders. There are no claims for investment
bankers' fees, brokerage commissions, finders' fees or similar compensation in
connection with the Acquisition.
2.14. Investment Representations. Shareholder represents and
warrants that:
1. he is selling the Shares for the consideration
recited in Section 1.02, that being the Purchase Note, the Convertible Note, the
Cash Note and any Micro-ASI Stock to be issued pursuant to Section 1.02, without
being furnished any offering literature or prospectus.
2. he either (i) has a personal net worth or joint net
worth with his spouse of greater than $1,000,000 or (ii) has individual income
(not joint income with his spouse) in excess of $200,000 in each of the two most
recent years (or joint income with his spouse in excess of $300,000 in each of
those years) and has a reasonable expectation of reaching the same income level
in the current year, and he has no reason to anticipate any change in personal
circumstances, financial or otherwise, that may cause or require any sale or
distribution of the Convertible Note or the Micro-ASI Stock into which the
Convertible Note may be converted.
3. he is at least 21 years of age and a bona fide
resident and domiciliary (not a temporary or transient resident) of Texas, and
has no present intention of becoming a resident of any other state or
jurisdiction, and Shareholder represents that these statements are now true and
have been true since prior to the first offer to him of an opportunity to invest
in the Convertible Note and the Micro-ASI Stock into which the Convertible Note
may be converted.
4. Shareholder understands, among other things, that (i)
the receipt of the Convertible Note and the Micro-ASI Stock into which the
Convertible Note may be converted is a speculative investment which involves a
high degree of risk of loss to Shareholder, (ii) it is unlikely that there will
be a trading market for the Convertible Note, (iii) there is no assurance there
will be a trading market for the Micro-ASI Stock, (iv) the Convertible Note will
not be freely transferable at any time, and (v) there is no assurance the
Micro-ASI Stock will be freely transferrable. Accordingly, it may not be
possible for Shareholder to liquidate the investment in the Convertible Note or
the Micro-ASI Stock into which the Convertible Note may be converted, or any
portion thereof, in case of emergency, if at all.
5. Shareholder is able (i) to bear the economic risk of
the investment in the Convertible Note and the Micro-ASI Stock into which the
Convertible Note may be converted, and (ii) to afford a complete loss of his
investment.
6. Shareholder is familiar with the nature of and risks
attending investments in securities generally and in a company (such as
Micro-ASI) in the Business (as hereinafter defined), such risks to include, but
not be limited to, the general risks of the securities market and the fact that
Micro-ASI has limited operating history; and has determined that the purchase of
the Convertible Note and the Micro-ASI Stock into which the Convertible Note may
be converted is consistent with his investment objectives and income prospects.
7. Shareholder confirms that (i) he has relied on its
own knowledge and experience or the advice of his own counsel, accountants, or
advisors with regard to the tax and other considerations involved in making an
investment in the Convertible Note and the Micro-ASI Stock into which the
Convertible Note may be converted, (ii) he has had the opportunity to obtain any
information from and to ask questions of Micro-ASI and Micro-ASI's
representatives, and has received such requested information and satisfactory
answers to such questions, concerning any and all information Shareholder
believes might be material to an evaluation of the terms, conditions, merits and
risks of any investment in Micro-ASI, and (iii) no representations have been
made to Shareholder concerning the Convertible Note, the Micro-ASI Stock into
which the Convertible Note may be converted, Micro-ASI, its business, or
prospects, or other matters, except as set forth in this Agreement.
8. Shareholder understands that neither the Convertible
Note nor the Micro-ASI Stock into which the Convertible Note may be converted
has been registered under the Securities Act of 1933, as amended (the
"Securities Act"), or the laws of any state and are being offered under an
exemption from registration thereunder. Shareholder represents and warrants that
the Convertible Note and the Micro-ASI Stock into which the Convertible
9
<PAGE> 6
Note (other than on a public exchange should such Micro-ASI Stock become
publicly traded) may be converted are being acquired by Shareholder solely for
his own account, for investment purposes only, and are not being acquired with a
view to, or in connection with, any resale, distribution, subdivision,
fractionalization, or other distribution thereof. Shareholder has no agreement
or other arrangement, formal or informal, with any person to sell, transfer or
pledge any part of the Convertible Note or the Micro-ASI Stock into which the
Convertible Note may be converted or which would guarantee to Shareholder any
profit or against any loss with respect to such Convertible Note or Micro-ASI
Stock into which the Convertible Note may be converted. Shareholder has no plans
to enter into any such agreement or arrangement, and, consequently, Shareholder
understands that it must bear the economic risk of the investment for an
indefinite period of time because neither the Convertible Note nor the Micro-ASI
Stock into which the Convertible Note may be converted, or any part thereof, can
be sold or otherwise transferred unless they are subsequently registered under
the Securities Act (which Micro-ASI is not obligated and does not plan to do)
and any applicable state law or an exemption from such registration is
available.
9. There have been no representations, guaranties, or
warranties made to Shareholder by Micro-ASI, or its agents or employees, or by
any other person, expressly or by implication, with respect to (i) the
approximate length of time that Shareholder will be required to remain an owner
of the Micro-ASI Stock if the Convertible Note is converted, (ii) the percentage
of profit and/or amount of or type of consideration, profit, or loss (including
tax benefits) to be realized, if any, as a result of investment in the
Convertible Note or the Micro-ASI Stock into which the Convertible Note may be
converted, or (iii) the possibility that the past performance or experience on
the part of any officer or director of Micro-ASI or of any other person might in
any way indicate the predictable results of operations of the Micro-ASI, or of
ownership of the Convertible Note or the Micro-ASI Stock into which the
Convertible Note may be converted.
10. Shareholder understands that the exemptions under
Rule 144 under the Securities Act are not now, and may not be, available with
respect to the Convertible Note or the Micro-ASI Stock into which the
Convertible Note may be converted because of the conditions and limitations of
Rule 144; that in the absence of the availability of such Rule any disposition
by Shareholder of any portion of the Convertible Note or the Micro-ASI Stock
into which the Convertible Note may be converted would require compliance with
another exemption under the Securities Act.
11. Shareholder understands that the officers and/or
directors of Micro-ASI will make notations in the appropriate records of
Micro-ASI of the restrictions on the transferability of the Convertible Note and
the Micro-ASI Stock into which the Convertible Note may be converted and may
stamp or affix to any document or instrument representing any part of the
Convertible Note and the Micro-ASI Stock into which the Convertible Note may be
converted an appropriate legend stating, in effect, that the Convertible Note
and the Micro-ASI Stock into which the Convertible Note may be converted have
not been registered under the Securities Act and that transfers thereof are
prohibited unless such transfers comply with the Securities Act and applicable
state securities laws or unless an opinion of counsel satisfactory to Micro-ASI
is furnished by Shareholder to the effect that an exemption from registration
under the Securities Act and applicable state securities laws is available or is
not required.
12. Shareholder understands that no federal or state
agency has passed on or made any recommendation or endorsement of the
Convertible Note or the Micro-ASI Stock into which the Convertible Note may be
converted or any portion thereof.
2.15. Disclosure. Neither BTI nor Shareholder is aware of any event
that has occurred, or will occur as a result of the transactions contemplated
hereby (except the possible loss of business from Telstrat, Inc. and other
existing customers to the extent that the business plan of BTI, to be mutually
agreed upon by Micro-ASI and Shareholder, adversely affects the ability of BTI
to service such customers), with respect to BTI, BTI's customers, or BTI's
suppliers that will materially adversely impact, or that is reasonably likely to
materially adversely impact, BTI's business, liquidity, capital resources,
and/or results of operations (general economic trends and general business
trends applicable to all business are expressly excluded from this Section
2.15).
10
<PAGE> 7
ARTICLE III: REPRESENTATIONS AND WARRANTIES OF MICRO-ASI
Micro-ASI represents and warrants to Shareholder that the following are
true and correct as of the Closing Date:
3.01. Organization. Micro-ASI is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Texas, and
has the corporate power and authority to own or lease its assets and to carry on
its business as it is now being conducted. Micro-ASI has the corporate power to
enter into this Agreement and to carry out its obligations hereunder.
3.02. Binding Effect; No Violation. This Agreement constitutes a
valid and binding agreement of Micro-ASI, enforceable against it in accordance
with its terms. Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (a) violate or
conflict with any document to which Micro-ASI is a party or is bound, or result
in the creation of any lien, charge, or encumbrance upon any asset of Micro-ASI;
(b) to the best knowledge of Micro-ASI, violate or conflict with any law,
regulation, permit, authorization, franchise, license, judgment, order, writ,
injunction, or decree of any court or governmental authority applicable to
Micro-ASI; or (c) have a material adverse effect on Micro-ASI. No authorization,
consent, or approval of, or filing with, any governmental authority is necessary
for the consummation by Micro-ASI of the transactions contemplated hereby.
3.03. Capitalization. The capital stock of Micro-ASI as of December
31, 1999 consists solely of 19,226,111 shares, $.001 par value per share, all of
which are fully paid, validly issued, and nonassessable.
3.04. Financial Statements. The audited financial statements of
Micro-ASI, for the period ending December 31, 1998, which have been prepared by
Ernst & Young, LLP, and the internally prepared interim financial statements for
Micro-ASI for the period ending September 30, 1999, are attached hereto on
Schedule 3.04 (collectively, the "Micro-ASI Financial Statements") (a) have been
prepared in accordance with GAAP and are correct and complete in all material
respects; (b) correctly reflect Micro-ASI's income, expenses, assets, and
liabilities; and (c) present fairly the financial position and the results of
operations of Micro-ASI at the dates and for the periods covered thereby, in
accordance with GAAP.
3.05. Laws. To the best knowledge of Micro-ASI, Micro-ASI has
complied with all Laws applicable to it or its business. Micro-ASI has received
no notice of any alleged violation of any Law. Micro-ASI possesses all Permits
material to the conduct of its business as it is now being conducted.
3.06. Taxes. Micro-ASI has duly and timely filed all tax returns and
reports required to be filed, and has paid or established adequate reserves for
all taxes (including penalties and interest) which have, or will for current
periods, become due. The income tax returns or reports of Micro-ASI fairly
reflect the taxable income and taxes of Micro-ASI for the periods covered
thereby.
3.07. Title. Except as expressly stated in the Micro-ASI Financial
Statements, Micro-ASI has good and marketable title to all assets reflected in
the Micro-ASI Financial Statements (except as they have since been affected by
transactions in the ordinary course of business and consistent with past
practices) and Micro-ASI owns such assets free and clear of all liens,
liabilities, claims, or encumbrances. All fixed assets owned or leased by
Micro-ASI are in good condition and repair for their intended use in the
ordinary course of business and conform in all material respects with all
applicable Laws and there are no known defects therein.
3.08. Proprietary Rights. Micro-ASI owns all of the Proprietary
Rights necessary to conduct its business without conflict with the rights of
others.
3.09. Litigation. Micro-ASI is not a party to, and the business and
assets of Micro-ASI are not the subject of, any pending or, to the best
knowledge of Micro-ASI, threatened, suit, claim, action, litigation, or
investigation initiated by or with any party or any administrative, arbitration,
or other governmental authority, and Micro-ASI does not know of any basis for
the assertion of any such suit, claim, action, litigation, or investigation.
11
<PAGE> 8
3.10. Brokers and Finders. There are no claims through Micro-ASI for
investment bankers' fees, brokerage commissions, finders' fees or similar
compensation in connection with the Acquisition.
ARTICLE IV: JOINT COVENANTS OF MICRO-ASI AND THE SHAREHOLDER
4.01. Cooperation. Micro-ASI and Shareholder will (a) cooperate with
one another to determine whether any filings with or authorizations or consents
from, any governmental authority or third party, are required prior to the
Closing Date in connection with the transactions contemplated hereby and
cooperate in making any such filings or obtaining any such consents; (b) keep
each other informed in regards to the transactions contemplated hereby; (c)
cooperate with one another and expend reasonable amounts in order to remove any
impediments to the consummation of the transactions contemplated hereby; (d)
take such actions as the other party may reasonably request to consummate the
transactions contemplated hereby; and (e) use all reasonable efforts to satisfy
all conditions precedent specified in Articles VII and VIII herein.
4.02. Commission. The parties agree that BTI shall pay to Micro-ASI
a commission of fifty percent (50%) of the net profits realized by BTI from
business referred to, or placed with, BTI by Micro-ASI. Such payments shall be
made semi-annually. The term "net profits" shall be defined as revenue less cost
of goods sold, less normal operating expenses, less general and administrative
expense, less any inter-company expense allocation, less any Federal income tax
expense incurred or allocated.
ARTICLE V: COVENANTS OF THE SHAREHOLDER
5.01. Notice of any Material Change. Shareholder, promptly after the
first notice or occurrence thereof, but not later than the Closing Date, has
disclosed or will disclose to Micro-ASI in writing any event or the existence of
any state of facts that (a) had such event occurred or such facts existed or
been known at the date hereof, would have been required to have been set forth
in this Agreement; (b) would have made any of the representations and warranties
in this Agreement untrue in any material respect; or (c) would otherwise have
constituted a Material Adverse Effect. No notice hereunder will have any effect
for the purpose of determining the satisfaction of or compliance with the
conditions to the obligations of the parties set forth elsewhere in this
Agreement.
5.02. Conduct of Business. Shareholder and BTI jointly and severally
agree that prior to the Closing Date BTI shall operate its business only in the
ordinary course, and Shareholder shall use his best efforts to preserve intact
the business of BTI and to retain its present customers, suppliers and employees
so that they will be available to BTI after the Closing. Neither BTI nor
Shareholder shall take any action that might impair the business or assets of
BTI without the prior written consent of Micro-ASI.
5.03. Noncompetition and Nonemployment. Shareholder acknowledges and
agrees that Micro-ASI, through its ownership and operation of BTI and otherwise
is engaged in the business of designing and manufacturing printed circuit boards
and electronic products using flip-chip technology (the "Business"). Shareholder
acknowledges that any proprietary information that he has acquired or will
acquire relating to Micro-ASI or any other person or entity controlling,
controlled by, or under common control with, Micro-ASI, including, but not
limited to, BTI (a "Micro-ASI Affiliate"), will enable him to injure Micro-ASI
or a Micro-ASI Affiliate if he competes with Micro-ASI or a Micro-ASI Affiliate
in the Business within fifty miles of the city limits of Dallas or Fort Worth,
Texas. As such, Shareholder covenants and agrees that he shall be bound by the
noncompetition and nonemployment provisions set forth in his employment
agreement with BTI to be executed as of the Closing Date.
5.04. Preferred Share. Prior to Closing, BTI shall create and issue
one (1) share of preferred stock (the "Preferred Share") granting Shareholder
(i) the right to designate certain board members of BTI (as set forth in Section
6.01) and (ii) approval rights for the filing of a voluntary bankruptcy by BTI.
At Closing, such Preferred Share shall be delivered to American Escrow Company,
Inc. (the "Escrow Agent") to be held pursuant to the terms of the escrow
agreement in the form attached hereto as Exhibit E, the terms of which are
incorporated herein by reference for all purposes (the "Escrow Agreement").
12
<PAGE> 9
ARTICLE VI: COVENANTS OF MICRO-ASI
6.01. Board of Directors of BTI. Prior to (a) the payment in full of
the Cash Note, (b) the funding of $750,000 pursuant to Section 6.02, (c) the
release of Gary Bottoms from his guaranty of BTI's indebtedness, and (d)
Micro-ASI's completion of its initial public offering, the Board of Directors of
BTI (the "Board") shall consist of three (3) persons, two (2) of which will be
designated by Gary Bottoms and one (1) of which will be designated by Micro-ASI.
After (a) the payment in full of the Cash Note, (b) the funding of $750,000
pursuant to Section 6.02, (c) the release of Gary Bottoms from his guaranty of
BTI's indebtedness, and (d) Micro-ASI's completion of its initial public
offering, the Board shall be designated solely by Micro-ASI. Notwithstanding any
other provision to this Section 6.01, in the event of the (w) death or
Disability of Gary Bottoms, (x) the Termination for Mismanagement of Gary
Bottoms, (y) the Termination for Just Cause of Gary Bottoms or (z) the
Resignation Without Good Reason of Gary Bottoms (all as defined in his
Employment Agreement (as defined in Section 7.05 hereof) with BTI), Micro-ASI,
immediately upon the occurrence of such event and without the consent of Gary
Bottoms, shall have the right to designate all members of the Board.
6.02. Investment in BTI. Micro-ASI shall make a contribution to the
capital to BTI in property used for production of flip-chip assembly reasonably
acceptable to Shareholder and consistent with the business plan of Micro-ASI, as
may be modified from time to time, in the amount of Seven Hundred Fifty Thousand
and No/100 Dollars ($750,000.00) within ninety (90) days of receipt of proceeds
by Micro-ASI of one or more private placements, from and after the date hereof,
having an aggregate gross offering amount in excess of Six Million and No/100
Dollars ($6,000,000.00).
6.03. Registration Rights. If at any time after the Effective Date,
Micro-ASI proposes to register any of the Micro-ASI Stock, Micro-ASI shall give
prompt written notice ("Piggyback Notice") to Shareholder of its intention to
effect such registration. Upon written request of Shareholder made within twenty
(20) days after delivery of any Piggyback Notice (which request shall specify
the number of shares of Micro-ASI Stock requested to be included in such
registration by Shareholder), Micro-ASI shall use its best efforts to cause to
be included in such registration all Micro-ASI Stock that Shareholder has so
requested be included in such registration; provided however, that if, at any
time after giving the Piggyback Notice and before the effective date of the
registration statement filed in connection with such registration, Micro-ASI
determines for any reason not to register, or to delay the registration of, such
Micro-ASI Stock, Micro-ASI, at its election, may give written notice of such
determination to Shareholder and, thereupon, shall be relieved of its obligation
to register any Micro-ASI Stock of Shareholder in connection with such
registration and shall incur no liability to Shareholder for its failure to do
so. If any investment banker or underwriter of the initial public offering of
Micro-ASI restricts the number of shares of Micro-ASI Stock that the current
shareholders may sell in the initial public offering of Micro-ASI, then
Shareholder shall have the right to register and sell such number of his shares
of Micro-ASI Stock equal to one-third (1/3) of the total number of shares that
may be registered and sold by the group of shareholders of Micro-ASI consisting
of Joel E. Claybrook, Cecil E. Smith, Jr. and Shareholder (collectively, the
"Control Group") until the value of such shares equals $2,500,000.00, at which
time Shareholder may register and sell his remaining shares of Micro-ASI Stock
on a pro rata basis with the Control Group based on the then existing number of
shares of Micro-ASI Stock held by Shareholder and the number of shares of
Micro-ASI Stock owned by Joel E. Claybrook and Cecil E. Smith, Jr. as of the
date of this Agreement.
6.04. Commingling of Assets. Micro-ASI agrees that until the earlier
to occur of (a) the conversion of the Convertible Note, (b) all amounts due to
Shareholder pursuant to Section 1.02 have been paid in full or (c) the
completion of the initial public offering by Micro-ASI, Micro-ASI (y) shall not
commingle the asset of BTI with the assets of Micro-ASI and (z) shall maintain
separate bank accounts.
ARTICLE VII: CONDITIONS PRECEDENT TO
MICRO-ASI'S OBLIGATIONS
The obligations of Micro-ASI to consummate the transactions
contemplated by this Agreement will be subject to satisfaction on or before the
Closing Date of each of the following conditions:
7.01. Absence of Litigation. No governmental authority shall have
instituted, or threatened in writing to institute, any action or proceeding
seeking to enjoin, restrain, or otherwise prohibit the consummation of the
13
<PAGE> 10
transactions contemplated by this Agreement, and no order, judgment, or decree
by any court or governmental authority shall be in effect that enjoins,
restrains, or prohibits the same or otherwise would materially interfere with
the operation of Micro-ASI or BTI after the Acquisition.
7.02. No Material Adverse Change. There shall have been no material
adverse change in the condition (financial or otherwise), business, operations,
or assets of BTI.
7.03. Release of Liens. Except as provided on Schedule 7.03, all
liens and/or charges registered or filed against BTI in favor of any person or
entity shall have been released and any financing statements on file with
respect thereto shall have been terminated.
7.04. Taxes. All taxes due and payable by BTI shall have been paid
or accrued.
7.05. Employment Agreement. Shareholder shall have executed an
employment agreement with BTI in the form of Exhibit F (the "Employment
Agreement").
7.06. Due Diligence. Micro-ASI and its accountants, attorneys and
representatives shall have conducted a due diligence review, satisfactory to
Micro-ASI at Micro-ASI's sole discretion, of the assets, liabilities and
business of BTI.
ARTICLE VIII: CONDITIONS PRECEDENT TO THE
SHAREHOLDER'S OBLIGATIONS
The obligations of Shareholder to consummate the transactions
contemplated by this Agreement will be subject to the satisfaction on or before
the Closing Date of the following conditions:
8.01 Absence of Litigation. No governmental authority shall have
instituted, or threatened in writing to institute, any action or proceeding
seeking to enjoin, restrain, or otherwise prohibit the consummation of the
transactions contemplated by this Agreement, and no order, judgment, or decree
by any court or governmental authority shall be in effect that enjoins,
restrains, or prohibits the same or otherwise would materially interfere with
the operation of BTI of Micro-ASI after the Acquisition.
8.02. No Material Adverse Change. There shall have been no material
adverse change in the condition (financial or otherwise), business, operations,
or assets of Micro-ASI.
8.03. Taxes. All taxes due and payable by Micro-ASI shall have been
paid or accrued.
8.04. Due Diligence. BTI and its accountants, attorneys and
representatives shall have conducted a due diligence review, satisfactory to BTI
at BTI's sole discretion, of the assets, liabilities and business of Micro-ASI .
ARTICLE IX: INDEMNIFICATION
9.01. Indemnification. Shareholder covenants and agrees to indemnify
Micro-ASI and BTI against any loss, expense, liability, taxes, or other damage,
including the reasonable costs of investigation, interest, penalties and
attorneys' and accountants' fees ("Damages"), actually incurred by Micro-ASI or
BTI in connection with, arising from, or attributable to (a) any breach or
inaccuracy of any representation or warranty made by Shareholder or BTI herein;
(b) any breach or failure of Shareholder or BTI to perform any agreement or
covenant herein; (c) any taxes of BTI relating to periods prior to the Closing
Date; (d) any product liability claim against BTI relating to periods prior to
the Closing Date; (e) any litigation or claim against BTI relating to periods
prior to the Closing Date; or (f) the conduct of the business of BTI prior to
the Closing Date.
14
<PAGE> 11
Micro-ASI and BTI shall not be indemnified pursuant to Section 9.01 until the
aggregate of all Damages under Section 9.01 exceed $30,000.00. Upon all such
Damages exceeding $30,000.00, Micro-ASI and BTI shall be indemnified for all
Damages under Section 9.01.
9.02. Expiration of Indemnity; Fraud. No new claim for
indemnification under Section 9.01 may be made after the expiration of one (1)
year from the date of the change of control of the Board to Micro-ASI as set
forth in Section 6.01. Any unresolved claim may continue to be pursued.
Notwithstanding any provision in this Agreement to the contrary, the liability
of Shareholder for fraudulent conduct shall be subject only to applicable
statutes of limitations.
9.03. Survival of Representations; Warranties. No disclosure by
Shareholder or BTI nor any investigation by or on behalf of Micro-ASI with
respect to BTI or Shareholder shall be deemed to affect Micro-ASI's reliance on
the representations, warranties, covenants, or agreements contained herein or to
waive Micro-ASI's rights to indemnity as provided herein for the breach or
inaccuracy or failure to perform or comply with any representation, warranty,
covenant, or agreement of Shareholder or BTI. The indemnity obligations of
Shareholder under this Article IX (and the representations, warranties,
covenants, and agreements of Shareholder and BTI) shall survive the Closing
until the expiration of the period set forth in Section 9.02.
ARTICLE X: REMEDIES
10.01. Remedies. The parties hereto acknowledge that a refusal by a
party to consummate the transactions contemplated hereby will cause irreparable
harm to the other parties, for which there may be no adequate remedy at law. A
party not in default at the time of such refusal shall be entitled, in addition
to other remedies at law or in equity, to specific performance of this Agreement
by the party that refused to consummate the transactions contemplated hereby. At
any time after the occurrence of an event of default and the expiration of any
cure period, if any, under this Agreement or any document executed in connection
herewith the non-defaulting party may exercise any right or remedy available to
such party, whether at law or in equity. The exercise of any such right shall
not be exclusive of any other right available to such party with respect to such
event of default or any other event of default, from time to time, whether at
law or in equity.
10.02. Remedies of BTI. After the Closing, BTI shall have the same
rights and benefits under this Agreement as does Micro-ASI with respect to the
representations, warranties, and covenants of Shareholder and BTI contained
herein, as fully as if such representations, warranties, and covenants had been
made to or with BTI in lieu or in place of Micro-ASI. In any proceeding by BTI
to assert or prosecute any claims under, or to otherwise enforce, this
Agreement, Shareholder agrees that it or he shall not assert as a defense or bar
to recovery by BTI or Micro-ASI and hereby waives any right to so assert such
defense or bar such recovery, that (a) prior to the Closing, BTI shall have had
knowledge of the circumstances giving rise to the claim being pursued by it or
Micro-ASI; (b) prior to the Closing, BTI engaged in conduct or took action that
caused or brought about the circumstances giving rise to its or Micro-ASI's
claim, or otherwise contributed thereto; (c) BTI is estopped from asserting or
recovering upon its claim by reason of having joined in the representations,
warranties, and covenants made by Shareholder in this Agreement; or (d)
Shareholder has a right of contribution from BTI to the extent that there is any
recovery against him.
ARTICLE XI: MISCELLANEOUS
11.01. GOVERNING LAW. THE INTERNAL LAWS (AND NOT THE CONFLICTS OF
LAWS RULES) OF TEXAS GOVERN THIS AGREEMENT AND EACH OF THE PARTIES ON ITS BEHALF
AND ON BEHALF OF ITS SUCCESSORS AND ASSIGNS HEREBY CONSENTS TO PERSONAL
JURISDICTION, SERVICE OF PROCESS AND VENUE IN THE FEDERAL AND STATE COURTS OF
DALLAS COUNTY, TEXAS.
11.02. Expenses. Each party hereto shall bear its own expenses
incurred in connection with this Agreement and the consummation of the
transactions contemplated hereby; provided however, if Micro-ASI fails to close
this transaction for any reason, other than failure of a condition set forth in
Article VII, Micro-ASI shall pay to
15
<PAGE> 12
BTI an amount up to $15,000 for any attorney and accounting fees, costs, or
expenses incurred by BTI and/or Shareholder in connection with this transaction.
11.03. Notices. All notices hereunder will be in writing and will be
deemed given if delivered personally, by delivery service, FedEx or other
nationally recognized overnight delivery service, or mailed by registered or
certified mail (return receipt requested) to the parties at the addresses set
forth opposite each party's name on the signature page hereof (or at such other
address for a party as will be specified by like notice) and will be deemed
given on the date on which so delivered or on the third business day following
the date on which so mailed to the address set forth opposite the name of such
party on the signature page hereof. A copy (which shall not constitute notice)
of any such notice to (a) Micro-ASI shall also be sent to Gardere & Wynne,
L.L.P., c/o David Segrest, 1601 Elm Street, Suite 3000, Dallas, Texas 75201, and
(b) BTI and Shareholder shall also be sent to Kane, Russell, Coleman & Logan,
c/o Gordon B. Russell, 1601 Elm Street, Suite 3700, Dallas, Texas 75201.
11.04. Severability. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable, such provision shall be fully severable, and
this Agreement shall be construed and enforced as if such provision was never a
part hereof; the remaining provisions hereof shall remain in full force and
effect and shall not be affected by the illegal, invalid, or unenforceable
provision or by its severance therefrom; and in lieu of such illegal, invalid,
or unenforceable provision, there shall be added automatically as part of this
Agreement, a provision as similar in its terms to such illegal, invalid, or
unenforceable provision as may be possible and be legal, valid, and enforceable.
11.05. Failure of IPO. If Shareholder exercises his conversion rights
under the Convertible Note, in anticipation of an initial public offering by
Micro-ASI, and if such initial public offering is not consummated, Shareholder
shall have the right to exchange the Micro-ASI shares into which the Convertible
Note was converted for a new convertible note on the same terms and conditions
as the Convertible Note.
11.06. Miscellaneous. This Agreement may be modified only by a
writing signed by all parties hereto. This Agreement may be executed in
counterparts. Faxed copies of manually executed signature pages to this
Agreement will be fully binding and enforceable without the need for delivery of
the manually executed signature page. This Agreement shall not be assignable and
any attempted assignment of this Agreement shall be void. This Agreement and the
Schedules, Exhibits, and documents attached hereto constitute the entire
agreement, and supersede all other prior agreements, both written and oral,
among the parties, or any of them, with respect to the subject matter hereof.
All Schedules, Exhibits, documents, and agreements referred to herein or
attached hereto are incorporated by reference herein. The headings are for
reference purposes only and do not affect in any way the meaning or
interpretation hereof. Use of "herein," "hereof," "hereby," or similar terms
refer to this Agreement as a whole. The reference to any gender shall be
construed to include the masculine, feminine, and neuter.
11.07. Satisfaction of Terminating Event. Concurrently with, and as a
condition to Micro-ASI's requirement to perform, each of (a) the payment in full
of the Cash Note, (b) the funding of $750,000 pursuant to Section 6.03, (c) the
release of Gary Bottoms from his guarantee of BTI's indebtedness and (d) if
reasonably requested by Micro-ASI, the performance of any other obligation of
Micro-ASI pursuant to this Agreement or any other document or agreement executed
in connection herewith, Shareholder shall execute a Satisfaction of Terminating
Event (as defined in the Escrow Agreement) in a form reasonably satisfactory to
Micro-ASI, evidencing the occurrence and/or satisfaction of each such event.
11.08. Preferred Stock. Concurrently with the funding of $750,000
pursuant to Section 6.03, Shareholder agrees to grant to Micro-ASI a security
interest in the Preferred Stock to secure the performance of Shareholder's
obligations under this Agreement, and the other documents and agreements
executed in connection herewith. Shareholder shall execute, deliver and permit
to be filed such documents as Micro-ASI may reasonably require to reflect such
security interest in the Preferred Stock.
[Signatures on Following Page]
16
<PAGE> 13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
Addresses: MICRO-ASI INC.
12655 North Central Expressway
Suite 1000 By:
Dallas, Texas 75243 ----------------------------------------
Telecopy: 972-392-9639 Joel E. Claybrook, President
Attn: President
SHAREHOLDER:
1440 Plummer Drive By:
Rockwall, Texas 75087 ----------------------------------------
Gary Bottoms
BEST TECHNOLOGIES, INC.
710 Business Way
Wylie, Texas 75098-1645
Telecopy: (972) 429-9217 By:
----------------------------------------
Attn: President Gary Bottoms, President
Joel E. Claybrook and Cecil E. Smith, Jr. are executing this Agreement solely to
evidence their agreement with the provisions of Section 6.03 hereof.
----------------------------------------
Joel E. Claybrook
----------------------------------------
Cecil E. Smith, Jr.
The undersigned, Vivian M. Bottoms, spouse of Gary Bottoms, the sole
shareholder of BTI, hereunto subscribes her name in evidence of her agreement
and consent to the terms of this Agreement and the sale to Micro-ASI of 1000
shares of common stock of BTI, no par value per share, owned by Gary Bottoms,
pursuant to the terms hereof.
----------------------------------------
Vivian M. Bottoms
SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT
17
<PAGE> 14
EXHIBIT A
PROMISSORY NOTE
$2,500,000.00 January 1, 2000
FOR VALUE RECEIVED, Micro-ASI Inc., a Texas corporation ("Maker"),
hereby promises to pay to the order of Gary Bottoms, a Texas resident ("Payee"),
at the time and in the manner hereinafter provided, the principal sum of
$2,500,000.00, together with interest on the unpaid principal balance
outstanding from time to time at 5% per annum. This Note shall be payable at
1440 Plummer Drive, Rockwall, Texas 75087 or at such other address as the holder
(as hereinafter defined) shall from time to time designate.
The unpaid principal and all accrued and unpaid interest on this Note
shall be due and payable on the earlier to occur of (i) December 31, 2001 or
(ii) ten (10) days after the closing of the initial public offering by Maker.
Unpaid and past due principal and (to the extent permitted by law)
interest shall bear interest at a per annum interest rate equal to the lesser of
10% per annum or the maximum rate allowed by law from the due date thereof until
paid.
Time is of the essence in the payment of this Note. If this Note is
given to an attorney for collection (whether or not suit is filed), or if this
Note is collected through any legal or bankruptcy proceedings, then Maker agrees
to pay, in addition to all sums then due hereon, all expenses of collection,
including, without limitation, reasonable attorneys' fees.
This Note may be prepaid without premium or penalty. Any prepayment
shall be applied first to accrued, but unpaid, interest with any balance applied
to unpaid principal.
The holder shall be entitled to accelerate this Note and declare all
unpaid sums due hereunder immediately due and payable upon an Event of Default
as set forth in that certain Stock Pledge Agreement dated the date hereof
between Maker and Payee.
Maker and any and all sureties, guarantors, and endorsers of this Note
and all other parties now or hereafter liable hereon, severally waive grace,
demand, presentment for payment, notice of default, notice of dishonor, protest
and notice of protest, notice of intention to accelerate, notice of
acceleration, any other notice and diligence in collecting and bringing suit
against any party hereto and agree (i) to all extensions and partial payments,
with or without notice, before or after maturity, (ii) to any substitution,
exchange, or release of any security now or hereafter given for this Note, (iii)
to the release of any party primarily or secondarily liable hereon, and (iv)
that it will not be necessary for the holder, in order to enforce payment of
this Note, to first institute or exhaust the holder's remedies against Maker or
any other party liable therefor or against any security for this Note. No delay
on the part of the holder in exercising any power or right under this Note shall
operate as a waiver of such power or right, nor shall any single or partial
exercise of any power or right preclude further exercise of that power or right.
All agreements between Maker and the holder, whether now existing or
hereafter arising and whether written or oral, are hereby expressly limited so
that in no contingency or event whatsoever, whether by reason of acceleration of
the maturity hereof, or otherwise, shall the amount paid, or agreed to be paid,
to the holder for the use, forbearance, or detention of the funds advanced
pursuant to this Note, or otherwise, or for the payment or performance of any
covenant or obligation contained herein or in any other document or instrument
evidencing, securing, or pertaining to this Note exceed the maximum amount
permissible under applicable law. If from any circumstances whatsoever,
fulfillment of any provision hereof or any other document or instrument exceeds
the maximum amount of interest prescribed by law, then ipso facto, the
obligation to be fulfilled shall be reduced to the limit of such validity, and
if from any such circumstances the holder shall ever receive anything of value
deemed interest by applicable law, which would exceed interest at the highest
lawful rate, such amount which would be excessive interest shall be applied to
the reduction of the unpaid principal balance of this Note or on account of any
other principal indebtedness of Maker to the holder, and not to the payment of
interest, or if such excessive interest
18
<PAGE> 15
exceeds the unpaid principal balance of this Note and such other indebtedness,
such excess shall be refunded to Maker. All sums paid, or agreed to be paid, by
Maker for the use, forbearance, or detention of the indebtedness of Maker to the
holder shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full term of such indebtedness until
payment in full so that the actual rate of interest on account of such
indebtedness is uniform throughout the term hereof. The terms and provisions of
this paragraph shall control and supersede every other provision of this Note
and all agreements between Maker and the holder (notwithstanding any provision
to the contrary in this Note or in any other agreement).
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH TEXAS
LAW WITHOUT REGARD TO THE CONFLICTS LAWS OF TEXAS.
The invalidity or unenforceability in particular circumstances of any
provision of this Note shall not extend beyond such provision or such
circumstances and no other provision of this Note shall be affected thereby.
All references to Maker herein shall, and shall be deemed to, include
Maker's successors and assigns, and all covenants, stipulations, promises, and
agreements contained herein by or on behalf of Maker shall also be binding upon
Maker's successors and assigns. As used in this Note, the word "holder" shall
mean the Payee(s) or other endorsee(s) of this Note who is in possession of it,
or the bearer(s) of this Note, if this Note is at the time payable to the
bearer(s). All rights of the holder shall inure to the benefit of the holder's
successors and assigns.
Unless and until Maker shall have completed its initial public
offering, (i) this Note shall be non-recourse to Maker and performance hereunder
shall be secured only by that certain Stock Pledge Agreement dated the date
hereof between Maker and Payee; and (ii) Payee shall not enforce the liability
and obligation of Maker to perform and observe the obligations contained in this
Note by any action or proceeding wherein a money judgment shall be sought
against Maker, except Payee may bring a foreclosure action, an action for
specific performance or any other appropriate action or proceeding to enable
Payee to enforce and realize upon its interest under this Note pursuant to the
Stock Pledge Agreement. Following the completion by Maker of its initial public
offering, unless Payee has otherwise foreclosed on the Collateral (as defined in
the Stock Pledge Agreement), Payee shall have full recourse, at law and in
equity, against Maker for Maker's obligation's under this Note.
EXECUTED to be effective as of the date first written above.
MAKER:
MICRO-ASI INC.
By:
------------------------------------
Joel E. Claybrook, President
19
<PAGE> 16
EXHIBIT B
PROMISSORY NOTE
$1,416,667.00 January 1, 2000
FOR VALUE RECEIVED, Micro-ASI Inc., a Texas corporation ("Maker"),
hereby promises to pay to the order of Gary Bottoms, a Texas resident ("Payee"),
at the time and in the manner hereinafter provided, the principal sum of
$1,416,667.00, together with interest on the unpaid principal balance
outstanding from time to time at 5% per annum. This Note shall be payable at
1440 Plummer Drive, Rockwall, Texas 75087 or at such other address as the holder
(as hereinafter defined) shall from time to time designate.
The accrued and unpaid interest on this Note shall be payable monthly
from and after the date hereof with the first such payment due and payable on
February 1, 2000 and successive payments on the first (1st) of each successive
month thereafter. Unpaid principal and all accrued and unpaid interest shall be
due and payable on December 31, 2001.
Unpaid and past due principal and (to the extent permitted by law)
interest shall bear interest at a per annum interest rate equal to the lesser of
10% per annum or the maximum rate allowed by law from the due date thereof until
paid.
Time is of the essence in the payment of this Note. If this Note is
given to an attorney for collection (whether or not suit is filed), or if this
Note is collected through any legal or bankruptcy proceedings, then Maker agrees
to pay, in addition to all sums then due hereon, all expenses of collection,
including, without limitation, reasonable attorneys' fees.
This Note may not be prepaid prior to an initial public offering by
Maker. After the initial public offering by Maker, this Note may be prepared
without premium or penalty. Any prepayment shall be applied first to accrued,
but unpaid, interest with any balance applied to unpaid principal.
The holder shall be entitled to accelerate this Note and declare all
unpaid sums due hereunder immediately due and payable upon the occurrence of an
Event of Default under that certain Stock Pledge Agreement dated the date hereof
between Maker and Payee securing the repayment of this Note.
Until this Note is paid in full, the holder may, at any time, make a
one time election to convert all or any portion of the outstanding principal
amount of this Note into shares of the common stock, $.001 par value per share,
of Maker (the "Micro-ASI Stock"), at a conversion price of $1.00 per share, by
giving written notice to Maker. Within fifteen (15) days of receipt of such
written notice, Maker shall (i) issue to holder the number of shares of the
Micro-ASI Stock equal to the amount of the outstanding principal balance of this
Note holder elects to convert (rounded down to the nearest dollar) divided by
$1.00 and (ii) pay to holder cash in an amount equal to all accrued and unpaid
interest on this Note and any remaining principal not converted to Micro-ASI
Stock. No fractional shares shall be issued. Upon the issuance of such shares of
Micro-ASI Stock and the payment of such cash, holder shall mark this Note paid
in full and shall return the original Note to Maker.
Maker and any and all sureties, guarantors, and endorsers of this Note
and all other parties now or hereafter liable hereon, severally waive grace,
demand, presentment for payment, notice of default, notice of dishonor, protest
and notice of protest, notice of intention to accelerate, notice of
acceleration, any other notice and diligence in collecting and bringing suit
against any party hereto and agree (i) to all extensions and partial payments,
with or without notice, before or after maturity, (ii) to any substitution,
exchange, or release of any security now or hereafter given for this Note, (iii)
to the release of any party primarily or secondarily liable hereon, and (iv)
that it will not be necessary for the holder, in order to enforce payment of
this Note, to first institute or exhaust the holder's remedies against Maker or
any other party liable therefor or against any security for this Note. No delay
on the part of the holder in exercising any power or right under this Note shall
operate as a waiver of such power or right, nor shall any single or partial
exercise of any power or right preclude further exercise of that power or right.
20
<PAGE> 17
All agreements between Maker and the holder, whether now existing or
hereafter arising and whether written or oral, are hereby expressly limited so
that in no contingency or event whatsoever, whether by reason of acceleration of
the maturity hereof, or otherwise, shall the amount paid, or agreed to be paid,
to the holder for the use, forbearance, or detention of the funds advanced
pursuant to this Note, or otherwise, or for the payment or performance of any
covenant or obligation contained herein or in any other document or instrument
evidencing, securing, or pertaining to this Note exceed the maximum amount
permissible under applicable law. If from any circumstances whatsoever,
fulfillment of any provision hereof or any other document or instrument exceeds
the maximum amount of interest prescribed by law, then ipso facto, the
obligation to be fulfilled shall be reduced to the limit of such validity, and
if from any such circumstances the holder shall ever receive anything of value
deemed interest by applicable law, which would exceed interest at the highest
lawful rate, such amount which would be excessive interest shall be applied to
the reduction of the unpaid principal balance of this Note or on account of any
other principal indebtedness of Maker to the holder, and not to the payment of
interest, or if such excessive interest exceeds the unpaid principal balance of
this Note and such other indebtedness, such excess shall be refunded to Maker.
All sums paid, or agreed to be paid, by Maker for the use, forbearance, or
detention of the indebtedness of Maker to the holder shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full term of such indebtedness until payment in full so that the
actual rate of interest on account of such indebtedness is uniform throughout
the term hereof. The terms and provisions of this paragraph shall control and
supersede every other provision of this Note and all agreements between Maker
and the holder (notwithstanding any provision to the contrary in this Note or in
any other agreement).
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH TEXAS
LAW WITHOUT REGARD TO THE CONFLICTS LAWS OF TEXAS.
The invalidity or unenforceability in particular circumstances of any
provision of this Note shall not extend beyond such provision or such
circumstances and no other provision of this Note shall be affected thereby.
All references to Maker herein shall, and shall be deemed to, include
Maker's successors and assigns, and all covenants, stipulations, promises, and
agreements contained herein by or on behalf of Maker shall also be binding upon
Maker's successors and assigns. As used in this Note, the word "holder" shall
mean the Payee(s) or other endorsee(s) of this Note who is in possession of it,
or the bearer(s) of this Note, if this Note is at the time payable to the
bearer(s). All rights of the holder shall inure to the benefit of the holder's
successors and assigns.
Unless and until the occurrence of either (a) the failure of Maker to
timely issue the Micro-ASI Stock pursuant to the conversion rights granted
herein or (b) Maker's completion of its initial public offering, (y) this Note
shall be non-recourse to Maker and performance hereunder shall be secured only
by that certain Stock Pledge Agreement dated the date hereof between Maker and
Payee, and (z) Payee shall not enforce the liability and obligation of Maker to
perform and observe the obligations contained in this Note by any action or
proceeding wherein a money judgment shall be sought against Maker, except Payee
may bring a foreclosure action, an action for specific performance or any other
appropriate action or proceeding to enable Payee to enforce and realize upon its
interest under this Note pursuant to the Stock Pledge Agreement. Following (i)
Maker's failure to timely issue the Micro-ASI Stock pursuant to the conversion
rights granted herein or (ii) the completion by Maker of its initial public
offering, unless Payee has otherwise foreclosed on the Collateral (as defined in
the Stock Pledge Agreement), Payee shall have full recourse, at law and in
equity, against Maker for Maker's obligation's under this Note.
[Signatures on following page]
21
<PAGE> 18
EXECUTED to be effective as of the date first written above.
MAKER:
MICRO-ASI INC.
By:
------------------------------------
Joel E. Claybrook, President
22
<PAGE> 19
EXHIBIT C
PROMISSORY NOTE
$600,000.00 January 1, 2000
FOR VALUE RECEIVED, Best Technologies, Inc., a Texas corporation
("Maker"), hereby promises to pay to the order of Gary Bottoms, a Texas resident
("Payee"), at the time and in the manner hereinafter provided, the principal sum
of $600,000.00, together with interest on the unpaid principal balance
outstanding from time to time at 5% per annum. This Note shall be payable at
1440 Plummer Drive, Rockwall, Texas 75087 or at such other address as the holder
(as hereinafter defined) shall from time to time designate.
The unpaid principal and all accrued and unpaid interest on this Note
shall be due and payable on the earlier to occur of (i) March 31, 2000 or (ii)
ten (10) days after the closing, from and after the date hereof, by Micro-ASI
Inc., a Texas corporation ("Micro-ASI"), of one or more private placements
having an aggregate gross offering price in excess of Six Million and No/100
Dollars ($6,000,000.00).
Unpaid and past due principal and (to the extent permitted by law)
interest shall bear interest at a per annum interest rate equal to the lesser of
10% per annum or the maximum rate allowed by law from the due date thereof until
paid.
Time is of the essence in the payment of this Note. If this Note is
given to an attorney for collection (whether or not suit is filed), or if this
Note is collected through any legal or bankruptcy proceedings, then Maker agrees
to pay, in addition to all sums then due hereon, all expenses of collection,
including, without limitation, reasonable attorneys' fees.
This Note may be prepaid without premium or penalty. Any prepayment
shall be applied first to accrued, but unpaid, interest with any balance applied
to unpaid principal.
The holder shall be entitled to accelerate this Note and declare all
unpaid sums due hereunder immediately due and payable upon an Event of Default
as set forth in that certain Stock Pledge Agreement dated the date hereof
between Micro-ASI Inc. and the sole shareholder of Maker, and Payee.
Maker and any and all sureties, guarantors, and endorsers of this Note
and all other parties now or hereafter liable hereon, severally waive grace,
demand, presentment for payment, notice of default, notice of dishonor, protest
and notice of protest, notice of intention to accelerate, notice of
acceleration, any other notice and diligence in collecting and bringing suit
against any party hereto and agree (i) to all extensions and partial payments,
with or without notice, before or after maturity, (ii) to any substitution,
exchange, or release of any security now or hereafter given for this Note, (iii)
to the release of any party primarily or secondarily liable hereon, and (iv)
that it will not be necessary for the holder, in order to enforce payment of
this Note, to first institute or exhaust the holder's remedies against Maker or
any other party liable therefor or against any security for this Note. No delay
on the part of the holder in exercising any power or right under this Note shall
operate as a waiver of such power or right, nor shall any single or partial
exercise of any power or right preclude further exercise of that power or right.
All agreements between Maker and the holder, whether now existing or
hereafter arising and whether written or oral, are hereby expressly limited so
that in no contingency or event whatsoever, whether by reason of acceleration of
the maturity hereof, or otherwise, shall the amount paid, or agreed to be paid,
to the holder for the use, forbearance, or detention of the funds advanced
pursuant to this Note, or otherwise, or for the payment or performance of any
covenant or obligation contained herein or in any other document or instrument
evidencing, securing, or pertaining to this Note exceed the maximum amount
permissible under applicable law. If from any circumstances whatsoever,
fulfillment of any provision hereof or any other document or instrument exceeds
the maximum amount of interest prescribed by law, then ipso facto, the
obligation to be fulfilled shall be reduced to the limit of such validity, and
if from any such circumstances the holder shall ever receive anything of value
deemed
23
<PAGE> 20
interest by applicable law, which would exceed interest at the highest lawful
rate, such amount which would be excessive interest shall be applied to the
reduction of the unpaid principal balance of this Note or on account of any
other principal indebtedness of Maker to the holder, and not to the payment of
interest, or if such excessive interest exceeds the unpaid principal balance of
this Note and such other indebtedness, such excess shall be refunded to Maker.
All sums paid, or agreed to be paid, by Maker for the use, forbearance, or
detention of the indebtedness of Maker to the holder shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full term of such indebtedness until payment in full so that the
actual rate of interest on account of such indebtedness is uniform throughout
the term hereof. The terms and provisions of this paragraph shall control and
supersede every other provision of this Note and all agreements between Maker
and the holder (notwithstanding any provision to the contrary in this Note or in
any other agreement).
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH TEXAS
LAW WITHOUT REGARD TO THE CONFLICTS LAWS OF TEXAS.
The invalidity or unenforceability in particular circumstances of any
provision of this Note shall not extend beyond such provision or such
circumstances and no other provision of this Note shall be affected thereby.
All references to Maker herein shall, and shall be deemed to, include
Maker's successors and assigns, and all covenants, stipulations, promises, and
agreements contained herein by or on behalf of Maker shall also be binding upon
Maker's successors and assigns. As used in this Note, the word "holder" shall
mean the Payee(s) or other endorsee(s) of this Note who is in possession of it,
or the bearer(s) of this Note, if this Note is at the time payable to the
bearer(s). All rights of the holder shall inure to the benefit of the holder's
successors and assigns.
Until ten (10) days after the closing, from and after the date hereof,
by Micro-ASI of one or more private placements having an aggregate gross
offering price in excess of Six Million and No/100 Dollars ($6,000,000.00), (i)
this Note shall be non-recourse to Maker and Micro-ASI Inc. and performance
hereunder shall be secured only by that certain Stock Pledge Agreement dated the
date hereof between Micro-ASI Inc. and Payee, and (ii) Payee shall not enforce
the liability and obligation of Maker or Micro-ASI Inc. to perform and observe
the obligations contained in this Note by any action or proceeding wherein a
money judgment shall be sought against Maker or Micro-ASI Inc., except Payee may
bring a foreclosure action, an action for specific performance or any other
appropriate action or proceeding to enable Payee to enforce and realize upon its
interest under this Note pursuant to the Stock Pledge Agreement. From and after
ten (10) days after the closing, from and after the date hereof, by Micro-ASI of
one or more private placements having an aggregate gross offering price in
excess of Six Million and No/100 Dollars ($6,000,000.00), unless Payee has
otherwise foreclosed on the Collateral (as defined in the Stock Pledge
Agreement), Payee shall have full recourse, of law and in equity, against Maker
for Maker's obligation's under this Note.
Micro-ASI guarantees the full payment of this Note.
EXECUTED to be effective as of the date first written above.
MAKER:
BEST TECHNOLOGIES, INC.
By:
-----------------------------------------
Gary Bottoms, President
GUARANTOR:
MICRO-ASI INC.
By:
-----------------------------------------
Joel E. Claybrook, President
24
<PAGE> 21
EXHIBIT D
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (this "Agreement"), dated to be effective
as of January 1, 2000, is between Gary Bottoms, a Texas resident ("Secured
Party"), and Micro-ASI Inc., a Texas corporation ("Pledgor").
RECITALS. In connection with that certain Stock Purchase Agreement
dated to be effective as of January 1, 2000 (the "Stock Purchase Agreement"),
among Secured Party, Pledgor and Best Technologies, Inc., a Texas corporation
("BTI"), Pledgor executed and delivered to Secured Party non-recourse promissory
notes, dated of even date herewith, in the original principal amounts of (i) Two
Million Five Hundred Thousand and No/100 Dollars ($2,500,000.00), (ii) One
Million Four Hundred Sixteen Thousand, Six Hundred Sixty-Seven and No/100
Dollars ($1,416,667.00), and (iii) Six Hundred Thousand and No/100 Dollars
($600,000.00) (as guarantor), respectively (collectively, the "Notes"). Pledgor
is the legal and beneficial owner of all of the issued and outstanding Common
Stock, no par value per share, of BTI. Secured Party has required that Pledgor
execute this Agreement as a condition to Secured Party accepting, and making the
loans evidenced by, the Notes.
NOW THEREFORE, in consideration of the foregoing recitals, the terms
hereof, and other good and valuable consideration, the full receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby covenant and agree as follows:
1. Security Interest. To secure the Obligations (hereinafter
defined), Pledgor hereby creates and grants to Secured Party a security interest
in the following (the "Collateral"): (i) all shares of capital stock of BTI now
or hereafter owned by Pledgor, including but not limited to stock certificate
numbered 6 representing 1000 shares, no par value, of Common Stock of BTI (the
"Pledged Stock"), (ii) all shares, securities, monies or property representing a
dividend on the Pledged Stock or representing a distribution or return of
capital upon, or in respect of, the Pledged Stock or any part thereof, or
resulting from a split-up, revision, reclassification or other like change of
the Pledged Stock, or otherwise received in exchange therefor, and any
subscription warrants, rights, or options issued to the holders of, or otherwise
in respect of, the Pledged Stock, (iii) all certificates and instruments
evidencing the foregoing, and (iv) all proceeds and products of the foregoing.
Simultaneously with the execution of this Agreement, Pledgor shall deliver to
Secured Party an original certificate or original certificates representing all
of the Collateral accompanied by duly executed blank stock powers for each such
certificate so delivered to Secured Party.
2. Obligations Secured. The security interest created by this
Agreement secures the following (the "Obligations"):
(a) The Notes and all modifications, renewals,
extensions, or rearrangements of the Notes; and
(b) All costs incurred by Secured Party to obtain,
preserve, perfect, and enforce this Agreement, collect the Obligations and
maintain, preserve, collect, and enforce the Collateral. 3. Events of Default.
As used herein, "Event of Default" shall mean any one or more of the following:
(1) The failure of Pledgor to pay any amounts owing under
the Notes, or perform any obligation with respect thereto, when due;
(2) The failure to timely pay any of the Obligations
after receipt of ten (10) days notice of such failure;
(3) Pledgor's failure to make the capital contribution as
required in Section 6.02 of the Stock Purchase Agreement;
25
<PAGE> 22
(4) Pledgor's failure to immediately begin as of the date
hereof, and to continue, to use its best efforts to obtain additional financing
no later than March 31, 2000;
(5) Pledgor's failure to maintain a cash balance of at
least (i) $200,000 prior to obtaining the financing set forth in Section 3(d)
above and (ii) $500,000 after obtaining such financing;
(6) Pledgor's failure to begin immediately after
obtaining the financing set forth in Section 3(d), and to continue to use its
best efforts, to consummate an initial public offering no later than June 30,
2001;
(7) The filing by or against Pledgor of any proceeding
under applicable bankruptcy laws;
(8) The insolvency of, the assignment for the benefit of
creditors by, or the appointment of a receiver that is not removed within sixty
(60) days of such appointment, for any property of, Pledgor;
(9) Any sale, encumbrance, or transfer of any of the
Collateral in violation of this Agreement;
(10) The Termination Without Just Cause (as defined in the
Employment Agreement between Secured Party and BTI) of Secured Party;
(11) The failure of Pledgor to loan to BTI up to $30,000
per month following receipt of notice from BTI that, due to the acquisition of
BTI by Pledgor, Telstrat, Inc. ceased to do business with BTI, as more
specifically provided in Section 7(c) hereof; or
(12) Micro-ASI's failure to provide, at the expense of
Pledgor, a policy of Officers and Directors Liability Insurance to cover Secured
Party issued by a company qualified and licensed to issue policies in the State
of Texas in an amount equal to and have coverages comparable to those policies
insuring the officers and directors of Pledgor.
4. Rights of Secured Party upon the Occurrence of an Event of
Default. With respect to events set forth in Sections 3(e), 3(k) and 3(l),
Secured Party shall be required to give Pledgor notice of and ten (10) days and
opportunity to cure such Event of Default. With respect to events set forth in
Sections 3(f) and 3(h), Secured Party shall be required to give Pledgor notice
of and thirty (30) days opportunity to cure such Event of Default.
(a) Foreclosure. At any time after an Event of Default,
Secured Party may foreclose the security interest granted by this Agreement in
either of the following ways:
(i) Secured Party at his option and in his sole
discretion may retain the Collateral.
(ii) Secured Party may offer the Collateral in a
commercially reasonable manner, at a public or private sale after five (5) days
notice to Pledgor.
(b) Other Rights. In addition to the right of foreclosure
granted pursuant to Section 4(a) of this Agreement, at any time after an Event
of Default, Secured Party may exercise any right or remedy under the Stock
Purchase Agreement or any document executed in connection therewith or herewith
or otherwise available to Secured Party under applicable law, whether at law or
in equity. The exercise of any remedy by Secured Party shall not be exclusive of
any other right available to Secured Party under any document or under
applicable law, at law or in equity.
(c) Securities Law Compliance. If an Event of Default
occurs, Pledgor, upon request of Secured Party, shall perform any and all
reasonable acts which may be necessary or advisable to enable Secured Party to
consummate any sale or disposition of the Collateral (i) pursuant to and in
compliance with the Securities Act of 1933, as amended (the "Securities Act")
and the rules and regulations of the Securities and Exchange Commission
applicable thereto, and (ii) in compliance with "Blue Sky" or other securities
laws of any state, except
26
<PAGE> 23
that in no event shall Pledgor be required to prepare, file or pay the cost of
preparing or filing a registration statement under the Securities Act.
(d) Manner of Sale. Secured Party shall not incur any
liability to Pledgor as a result of the sale of the Collateral, or any part
thereof, at any private sale conducted in a commercially reasonable manner.
Pledgor hereby waives any claim against Secured Party arising by reason of the
fact that the price at which the Collateral may have been sold at such a private
sale conducted in a commercially reasonable manner was less than the price which
might have been obtained at a public sale or was less than the aggregate amount
of the Obligations, even if Secured Party accepts the first offer received and
does not offer the Collateral to more than one offeree.
(e) Cooperation. Pledgor shall cooperate fully with
Secured Party in order to permit Secured Party to sell, at foreclosure or other
private sale, the Collateral pledged hereunder. Secured Party at any time after
default shall have, and Pledgor shall cause Secured Party to be given, full and
free access during normal business hours to the premises and all books,
correspondence, and records of BTI and Pledgor as Secured Party may deem
appropriate to properly value the Collateral for any foreclosure sale. Secured
Party, its employees, partners, officers, and agents, and any prospective
purchaser may take extracts from such books, correspondence, and records and
make photocopies thereof.
(f) Indemnification. Pledgor hereby agrees to indemnify
and hold harmless Secured Party and its employees, partners, officers, and
agents from and against any law, liability, claim, damage, and expense
(including attorneys' fees) under any applicable federal or state securities
laws or otherwise incurred in connection with any sale of the Collateral.
(g) Retention of Investments. Upon the occurrence of an
Event of Default and Secured Party's exercise of his rights hereunder, BTI shall
retain all investments made by Pledgor in BTI.
(h) Non-Recourse. Notwithstanding any other provision
contained in this Agreement, the Stock Purchase Agreement, or any document
executed in connection therewith, Secured Party's sole remedy with respect to
the liabilities and obligations under the Notes, to the extent such liabilities
and obligations are non-recourse, shall be the foreclosure upon the Collateral.
5. Voting Rights. So long as no Event of Default shall have
occurred and be continuing, Pledgor shall be entitled to exercise any and all
voting and consensual rights and powers relating or pertaining to the
Collateral, such rights and powers to be exercised only in accordance with this
Agreement.
6. Release of Collateral. Upon final and full payment and
performance of all of the Obligations, Secured Party shall release the
Collateral.
7. Covenants.
(a) Pledgor hereby covenants and agrees with Secured
Party that, until final and full payment and performance of all of the
Obligations, Pledgor shall not grant (i) any options, warrants or other rights
to purchase any shares of BTI's capital stock or (ii) any additional liens on
the Collateral.
(b) Pledgor hereby represents, warrants, covenants, and
agrees with Secured Party that until final and full payment and performance of
all of the Obligations (i) this Agreement and the Notes have been duly executed
and delivered by Pledgor and constitute the legal, valid, and binding
obligations of Pledgor and are enforceable against Pledgor in accordance with
their terms, (ii) Pledgor has all necessary capacity and authority to execute,
deliver and perform this Agreement, (iii) Pledgor is the legal and beneficial
owner of all of the Pledged Stock, and (iv) except as specifically set forth
herein, there are no laws or contractual agreements prohibiting or restricting
(A) the pledge of the Collateral to Secured Party or (B) the unencumbered and
unrestricted sale of the Collateral by Secured Party.
(c) If, due to Pledgor's public announcement of its
acquisition of BTI without Secured Party's prior written consent, Telstrat, Inc.
ceases to do business with BTI, Pledgor shall loan to BTI each month, an amount
equal to the difference between $30,000 and the amount of business directed to
BTI by Pledgor until
27
<PAGE> 24
business directed to BTI by Pledgor equals or exceeds $30,000 per month, at
which point no such loans shall be made. Such loans shall be evidenced by a
promissory note bearing no interest and shall be due and payable upon the
earlier to occur (i) one (1) year from the date of such note or (ii) the
foreclosure on the Collateral by Secured Party.
8. Subrogation. Notwithstanding any payment or payments made by
Pledgor hereunder, or the receipt of any amounts by Secured Party with respect
to the Collateral, Pledgor shall not be entitled to be subrogated to any of the
rights of Secured Party against Pledgor or any collateral security held by
Secured Party for the payment of the Obligations until all amounts owing to
Secured Party by Pledgor on account of the Obligations are paid in full.
9. Amendments, Modifications and Waivers with Respect to
Obligations. Pledgor hereby consents that, without the necessity of any
reservation of rights against Pledgor, and without notice to or further assent
by Pledgor, any demand for payment of any of the Obligations made by Secured
Party may be rescinded by Secured Party and any of the Obligations continued,
and the Obligations, or the liability of Pledgor or any other party upon or for
any part thereof, or any collateral security therefor, or right of offset with
respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered, or
released by Secured Party, and the Notes, any collateral security documents or
documents in connection therewith may be amended, modified, supplemented, or
terminated, in whole or in part, as Secured Party may deem advisable from time
to time, and any collateral security at any time held by Secured Party for the
payment of the Obligations may be sold, exchanged, waived, surrendered or
released, all without the necessity of any reservation of rights against Pledgor
and without notice to or further assent by Pledgor, which will remain bound
hereunder, notwithstanding any such renewal, extension, modification,
acceleration, compromise, amendment, supplement, termination, sale, exchange,
waiver, surrender or release. Pledgor waives any and all notice of the creation,
renewal, extension or accrual of any of the Obligations and notice of or proof
of reliance by Secured Party upon this Agreement, and the Obligations, and any
of them, shall conclusively be deemed to have been created, contracted or
incurred in reliance upon this Agreement, and all dealings between Pledgor and
Secured Party shall likewise be conclusively presumed to have been made or
consummated in reliance upon this Agreement.
10. Rights of Secured Party. Any and all of the Pledged Stock held
by Secured Party hereunder may, if an Event of Default has occurred and is
continuing, without notice, be registered in the name of Secured Party or its
nominee, and Secured Party or its nominee may thereafter, without notice,
exercise all voting and other rights at any meeting of the shareholders of BTI
and exercise any and all rights of conversion, exchange, subscription or any
other rights, privileges or options pertaining to any of the Pledged Stock as if
it was the absolute owner thereof. Secured Party shall have no duty to exercise
any of the aforesaid rights, privileges or options and shall not be responsible
for any failure to do so or delay in so doing.
11. Further Assurances. From and after the date hereof, Pledgor
agrees to execute and deliver such additional documents and take such additional
actions as may be reasonably requested by Secured Party or Secured Party's
counsel in order to document the rights, duties and obligations of the parties
hereto.
12. Miscellaneous.
(a) Waiver. No delay or failure on the part of any party
hereto in exercising any right, power, or privilege under this Agreement or
under any other instruments given in connection with or pursuant to this
Agreement shall impair any such right, power, or privilege or be construed as a
waiver of any default or any acquiescence therein. No single or partial exercise
of any such right, power, or privilege shall preclude the further exercise of
such right, power, or privilege or the exercise of any other right, power, or
privilege. No waiver shall be valid against any other party hereto unless made
in writing and signed by the party against whom enforcement of such waiver is
sought and then only to the extent expressly specified therein.
(b) Severability. Should any one or more of the
provisions hereof be determined to be illegal or unenforceable, all other
provisions hereof shall be given effect separately therefrom and shall not be
affected thereby.
(c) Notices. All notices hereunder will be in writing and
will be deemed given if delivered personally, by delivery service, Fed Ex or
other nationally recognized overnight delivery service, or mailed by
28
<PAGE> 25
registered or certified mail (return receipt requested) to the parties at the
addresses set forth opposite each party's name on the signature page hereof (or
at such other address for a party as will be specified by like notice) and will
be deemed given on the date on which so delivered or on the third business day
following the date on which so mailed to the address set forth opposite the name
of such party on the signature page hereof. A copy (which shall not constitute
notice) of any such notice to (a) Micro-ASI shall also be sent to Gardere &
Wynne, L.L.P., c/o David Segrest, 1601 Elm Street, Suite 3000, Dallas, Texas
75201, and (b) BTI and Shareholders shall also be sent to Kane, Russell, Coleman
& Logan, c/o Gordon B. Russell, 1601 Elm Street, Suite 3700, Dallas, Texas
75201.
(d) Assignment and Binding Effect. The Secured Party may
assign this Agreement and the security interest created hereby. This Agreement
shall be binding upon the parties hereto, together with their respective
executors, administrators, successors, personal representatives, heirs, and
assigns and shall inure to the benefit of and be enforceable by the executors,
administrators, successors, personal representatives, heirs, and assigns of the
parties hereto; provided that Pledgor shall not assign any or all of its
respective rights or obligations hereunder.
(e) CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY
THE INTERNAL LAW (AND NOT THE CONFLICTS LAWS) OF TEXAS AND SHALL BE PERFORMABLE
IN DALLAS COUNTY, TEXAS.
(f) Section Headings. The section and other headings
contained in this Agreement are for the purpose of reference only and shall not
affect in any way the meaning of this Agreement or its interpretation.
(g) Attorneys' Fees. The successful party in any
litigation pursuant to this Agreement shall recover its or his reasonable
attorneys' fees and costs and expenses of litigation from the other parties
hereto.
(h) Counterparts. This Agreement may be executed in
counterparts.
(i) Entire Agreement. This Agreement and the Notes
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersede all prior oral or written agreements, if any,
relating to the subject matter hereof and thereof.
(j) Number and Gender. Whenever the context requires,
references in this Agreement to the singular number shall include the plural,
the plural number shall include the singular, and words denoting gender shall
include the masculine, feminine, and neuter.
13. No Third Party Beneficiary. The parties do not intend the
benefits of this Agreement to inure to any third party. Notwithstanding anything
contained herein or in the Notes, or any conduct or course of conduct by any or
all of the parties hereto, before or after signing this Agreement, nothing
herein shall be construed as creating any right, claim or cause of action
against Secured Party, or any of Secured Party's affiliates, partners, officers,
employees, attorneys or agents, in favor of any materialman, supplier,
contractor, subcontractor, purchaser or lessee of any property owned by Pledgor
nor to any other person or entity other than Pledgor.
[Signatures on Following Page]
29
<PAGE> 26
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
PLEDGOR:
Address:
12655 North Central Expressway Micro-ASI Inc., a Texas corporation
Suite 1000
Dallas, Texas 75243
Telecopy: (972) 392-9639 By:
------------------------------------
Attn: President Joel E. Claybrook, President
SECURED PARTY:
Address:
1440 Plummer Drive
Rockwall, Texas 75087 By:
------------------------------------
Gary Bottoms
30
<PAGE> 27
EXHIBIT E
ESCROW AGREEMENT
This Escrow Agreement ("Agreement") is made as of January 1, 2000,
among Gary Bottoms, an individual having an address at 1440 Plummer Drive,
Rockwall, Texas 75087 ("Shareholder"), Micro-ASI Inc., a Texas corporation,
having its principal place of business at 12655 North Central Expressway, Suite
1000, Dallas Texas 7523 ("Micro-ASI") and American Escrow Company, Inc., a Texas
corporation, having its principal place of business at 2626 Howell Street, 10th
Floor, Dallas, Texas 75204 ("Escrow Agent"). (Shareholder, Micro-ASI and Escrow
Agent are hereinafter collectively called the "parties" and each a "party".)
WITNESSETH THAT:
1. Shareholder and Micro-ASI have entered into that certain Stock
Purchase Agreement, dated effective as of January 1, 2000 ("Purchase Agreement")
pursuant to which Shareholder has agreed to sell and Micro-ASI has agreed to
purchase all of the common stock of Best Technologies, Inc., a Texas corporation
("BTI"), upon the terms and subject to the conditions set forth therein.
2. Section 5.04 of the Purchase Agreement requires that the
Preferred Stock of BTI ("Preferred Stock") be delivered to the Escrow Agent at
Closing (as defined in the Purchase Agreement).
3. Section 5.04 of the Purchase Agreement requires that the
Preferred Stock be canceled upon the last to occur of (a) the payment in full of
the Cash Note (as defined in the Purchase Agreement), (b) the funding of
$750,000 pursuant to Section 6.02 of the Purchase Agreement, (c) the release of
Gary Bottoms from his guaranty of BTI's indebtedness, (d) the completion of an
initial public offering by Micro-ASI, and (e) the payment in full of all amounts
owing under the Purchase Note (as defined in the Purchase Agreement) (each a
"Termination Event"; collectively, the "Terminating Events").
4. The parties have deposited a copy of the Purchase Agreement
with Escrow Agent.
5. Shareholder has deposited with Escrow Agent BTI's Preferred
Stock Certificate No. 1 evidencing the Preferred Stock ("Certificate") and a
stock power with respect thereto ("Stock Power") duly endorsed by Shareholder.
6. The Certificate and the Stock Power (collectively, the "Escrow
Documents") shall be held by the Escrow Agent and disbursed in accordance with
the provisions of this Agreement.
7. Pursuant to the Purchase Agreement, Shareholder will execute
and deliver to Micro-ASI a "Satisfaction of Terminating Event" concurrently with
the occurrence of each of the following: (a) payment in full of the Cash Note
(as defined in the Purchase Agreement), (b) the funding of $750,000 pursuant to
Section 6.02 of the Purchase Agreement, and (c) the release of Gary Bottoms from
his guaranty of BTI's indebtedness.
8. The parties require Escrow Agent to hold the Escrow Documents
until the satisfaction of each of the conditions set forth in Paragraph 1 or
Paragraph 2 of this Agreement.
9. Unless the Escrow established under this Agreement ("Escrow")
is previously terminated, upon the occurrence of the last of the Terminating
Events, the parties desire the Escrow Agent to deliver the Escrow Documents in
accordance with the terms and conditions set forth below.
NOW THEREFORE, the parties hereto agree as follows:
Unless the Escrow shall be terminated earlier in accordance with its
terms, Escrow Agent shall hold the Escrow Documents until the earlier to occur
of:
(a) Receipt of written instructions from Shareholder to
deliver the Escrow Documents to Micro-ASI; or
31
<PAGE> 28
(b) Receipt of:
(i) A "Satisfaction of Terminating Event"
originally signed by Shareholder and notarized by a Texas
notary public with respect to each of the following: (A)
payment in full of the Cash Note (as defined in the Purchase
Agreement), (B) the funding of $750,000 pursuant to Section
6.02 of the Purchase Agreement, and (C) the release of Gary
Bottoms from his guaranty of BTI's indebtedness; and
(ii) A certificate from Micro-ASI's underwriter
that Micro-ASI has completed the initial public offering
("IPO") contemplated by Section 6.02 of the Purchase
Agreement,
(iii) Opinion of a firm of Micro-ASI's independent
certified public accountants stating the amount of principal
and accrued interest payable on the Purchase Note as of the
date of final payment ("Purchase Note Payoff Amount").
(iv) Immediately available funds payable to the
account of Shareholder in an amount equal to the Purchase Note
Payoff Amount; or
(c) Fifteen (15) calendar days following receipt from
Micro-ASI of notice that: (i) employment of Shareholder by BTI has been
lawfully terminated pursuant to the Employment Agreement between
Shareholder and BTI, dated effective as of January 1, 2000, because:
(A) Shareholder has been terminated for mismanagement or just cause;
(B) Shareholder has resigned without just cause; or (C) Shareholder has
died or been adjudicated as being disabled.
Upon the receipt of the Purchase Note Payoff Amount, Escrow
Agent is instructed to immediately notify Shareholder and transfer the
Purchase Note Payoff Amount to such account as shall be directed by
Shareholder. Upon: (i) the giving of the notice described in Section
1(a) hereof; (ii) the occurrence of the last of the events described in
Section 1(b) hereof; or (iii) the passage of 15 days following the
giving of the notice described in Section 1(c) hereof, the Escrow Agent
is instructed to deliver the Escrow Documents to Micro-ASI. Upon the
occurrence of the last of the events described in Section 1(b) hereof,
Escrow Agent shall notify Micro-ASI and Shareholder thereof in writing.
The Escrow shall be terminated, and Escrow Agent is instructed
to deliver the Escrow Documents to Shareholder upon receipt of written
instructions from Micro-ASI to so deliver the Escrow Documents to
Shareholder. The Escrow shall be terminated, and Escrow Agent shall
deliver the Escrow Documents to Shareholder, fifteen (15) calendar days
following the receipt by Escrow Agent of written notice from
Shareholder:
(a) On or after April 1, 2000, that any amounts owing
under the Cash Note shall not have been paid in full on or prior to
March 31, 2000; or
(b) That ten (10) days has passed since the completion by
Micro-ASI, on or after January 1, 2000, of one or more private
placements having an aggregate gross offering price of $6,000,000 or
more, and that Micro-ASI has failed to pay all amounts due and owing
under the Cash Note; or
(c) That ninety (90) days has passed since the completion
by Micro-ASI of the financing contemplated by Section 6.02 of the
Purchase Agreement and that Micro-ASI has failed to fund the $750,000
required by such section; or
(d) On or after January 1, 2002, that any amounts owing
under the Purchase Note shall not have been paid in full on or prior to
December 31, 2001; or
(e) That ten (10) days has passed since the completion of
an initial public offering by Micro-ASI, and that Micro-ASI has failed
to pay all amounts due and owing under the Purchase Note; or
32
<PAGE> 29
(f) That any amounts owing under the Convertible Note
shall not have been paid in full as and when such amounts became due
and owing; or
(g) That the Convertible Note has been presented for
conversion in accordance with its terms and Micro-ASI has failed to
convert the Convertible Note into shares of the Micro-ASI common stock
as provided in the Convertible Note; or
(h) That an event of default has occurred under the Stock
Pledge Agreement executed in connection with Purchase Agreement and
shall not have been cured within the applicable cure period.
Copies of any notice delivered by a party to Escrow Agent shall be
provided to the other party in writing and will be deemed given if delivered
personally, by delivery service, by FedEx or other nationally recognized
overnight delivery service, or mailed by registered or certified mail (return
receipt requested) to the parties at the addresses set forth below (or at such
other address for a party as will be specified in like notice) and will be
deemed given on the date so delivered or on the third business day following the
date on which so mailed:
If to Micro-ASI:
12655 North Central Expressway, Suite 1000
Dallas, Texas 75243
w/ a copy to (which copy
shall not constitute notice) Gardere & Wynne, L.L.P.
1601 Elm Street, Suite 3000
Dallas, Texas 75201
Attn: David Segrest, Esq.
If to Bottoms: 1440 Plummer Drive
Rockwall, Texas 75087
w/ a copy to (which copy
shall not constitute notice) Kane, Russell, Coleman & Logan, P.C.
1601 Elm Street, Suite 3700
Dallas, Texas 75201
Attn: Gordon B. Russell, Esq.
If to Escrow Agent: American Escrow Company
2626 Howell Street, 10th Floor
Dallas, Texas 75204-4064
Attn: Peter Graf, Esq.
Escrow Agent may rely upon any written notice from a party without need
to make any independent investigation as to the veracity of the representations
made therein.
Upon a termination of the Escrow, Escrow Agent shall be relieved of all
further responsibility and liability hereunder.
Except as provided in this Agreement, Escrow Agent is not a party to,
or bound by any agreement which may be deposited under, evidenced by, or which
arises out of the foregoing instructions.
Escrow Agent acts hereunder as a depository only and is not responsible
or liable in any manner whatever for the sufficiency, correctness, genuineness
or validity of any instrument deposited with it hereunder, or with respect to
the form or execution of same; or the identity, authority, or rights of any
person executing or depositing the same. Documents in escrow shall not be
assignable in whole or in part by any party and shall not be pledged, mortgaged,
or hypothecated.
33
<PAGE> 30
The parties hereto further agree that Escrow Agent assumes no liability
for and is expressly released from any claim or claims whatsoever in connection
with the receiving, retaining and delivering of the Escrow Documents except to
account for receipt and delivery thereof. Deposit by Escrow Agent of the Escrow
Documents with a Court in Dallas County, Texas shall relieve Escrow Agent of all
further responsibility and liability, and Escrow Agent is hereby expressly
authorized to disregard in its sole discretion any and all notices or warnings
given by any of the parties hereto, or by any other person or corporation;
however, Escrow Agent is hereby expressly authorized to regard and to comply
with and obey any and all Orders, Judgments or Decrees entered or issued by any
Court with or without jurisdiction, and in case Escrow Agent obeys or complies
with any such Order, Judgment or Decree of any Court it shall not be liable to
any of the parties hereto or to any other person, firm or corporation by reason
of such compliance, notwithstanding any such Order, Judgment or Decree be
entered without jurisdiction or be subsequently reversed, modified, annulled,
set aside or vacated. The undersigned jointly and severally agree to indemnify
and hold harmless Escrow Agent from all loss, costs or damages incurred,
including but not limited to attorneys' fees, by reason of this Agreement or the
subject matter hereof or any cause of action which may be filed in connection
therewith and to pay Escrow Agent, upon demand all such costs, fees and expenses
so incurred, excluding any loss, costs or damages arising or resulting from the
gross negligence or willful misconduct of Escrow Agent.
Escrow Agent shall not be liable for any error of judgment or for any
act done or step taken or omitted by it in good faith, or for any mistake of
fact or law, or for anything which it may do or refrain from doing in connection
herewith, except its own gross negligence or willful misconduct, and Escrow
Agent shall have no duties to anyone except those signing this Agreement.
Escrow Agent may consult with legal counsel in the event of any dispute
or questions as to the construction of the foregoing instructions, or Escrow
Agent's duties hereunder, and Escrow Agent shall incur no liability and shall be
fully protected in acting in accordance with the reasoned opinion and
instructions of such counsel.
Escrow Agent have no liability to any of the parties other than (i)
Escrow Agent filing for bankruptcy or the consequences or effect of such a
bankruptcy on the documents deposited hereunder, and (ii) for the gross
negligence or willful misconduct of Escrow Agent.
The parties hereto acknowledge and agree that, in connection with the
Purchase Agreement and the transactions contemplated thereby, the parties may
pursue any and all other rights and remedies arising under applicable law. This
Agreement will in no way impair or waive any or all such rights and remedies.
The parties hereto agree to pay to the Escrow Agent a reasonable fee
for Escrow Agent's services under this Agreement not to exceed $1,000.00, which
fees will be shared fifty percent each by Shareholder and Micro-ASI.
This Agreement may be executed in multiple counterparts, together of
which will constitute one original. Facsimile counterparts of this Agreement
will be valid and binding.
The internal laws (and not the conflicts of laws rules) shall govern
this Agreement; and each of the parties hereto, on its behalf and on behalf of
its successors and assigns hereby consents to personal jurisdiction, service of
process and venue in the federal and state courts situated in Dallas County,
Texas. Should Micro-ASI provide notice to Escrow Agent which misrepresents the
status of the transactions contemplated by the Purchase Agreement or the
conditions precedent to the delivery of the Escrow Documents by Escrow Agent to
Micro-ASI, then Shareholder shall be entitled, as a matter of right to an
injunction issued by a court of competent jurisdiction restraining the delivery
of the Escrow Documents to Micro-ASI and requiring that the Escrow Documents be
delivered into the registry of said court pending the determination of the
issue. If Micro-ASI removes Shareholder from his guarantee of BTI and satisfies
all other conditions precedent to the delivery by Escrow Agent of the Escrow
Documents to Micro-ASI, and if Shareholder shall not deliver the notice that his
guarantee shall have been so released, then Shareholder shall be entitled, as a
matter of right to an injunction issued by a court of competent jurisdiction
requiring that the Escrow Documents be delivered into the registry of said court
pending the determination of the issue.
If any provision of this Agreement is held to be illegal, invalid, or
unenforceable, such provision shall be fully severable, and this Agreement shall
be construed and enforced as if such provision was never a part hereof; the
34
<PAGE> 31
remaining provisions hereof shall remain in full fore and effect and shall
not be affected by the illegal invalid or unenforceable provision or by the
severance thereof; and in lieu of such illegal invalid or unenforceable
provision a term as similar in its terms to such illegal invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
This Agreement may be modified only in writing by all parties hereto.
This Agreement shall not be assignable and any attempted assignment shall be
void. This Agreement is the sole agreement among the parties with respect to the
Escrow established hereunder, and supersedes all prior agreements whether
written or oral with respect to the Escrow.
[SIGNATURES ON FOLLOWING PAGE]
35
<PAGE> 32
EXECUTED as of the day and year first above written.
SHAREHOLDER
BY:
----------------------------------
Gary Bottoms, individually
MICRO-ASI INC.,
a Texas corporation
By:
----------------------------------
Joel E. Claybrook, President
AMERICAN ESCROW COMPANY, INC., Escrow Agent herein, hereby acknowledges receipt
of the aforementioned documents and agrees to act as Escrow Agent herein
pursuant to the turns of this Agreement, dated this ____ day of _______________,
_______.
ESCROW AGENT:
AMERICAN ESCROW COMPANY, INC.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
36
<PAGE> 33
EXHIBIT F
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated to be effective as of
January 1, 2000, is between BEST TECHNOLOGIES, INC., a Texas corporation
("Employer"), and GARY BOTTOMS ("Employee").
RECITALS. Employee and Employer have agreed to enter into this Agreement in
connection with that certain stock purchase agreement (the "Stock Purchase
Agreement") dated effective as of January 1, 2000, among Micro-ASI Inc., a Texas
corporation ("Micro-ASI"), Employer and Employee, pursuant to which Employee
agrees to provide services to and become a full-time employee of Employer, on
the terms and conditions provided herein, and Employer agrees to employ
Employee, provided that, in so doing, Employer can protect its confidential
information, business, accounts, patronage, and good will. Employer is engaged
in the design and manufacture of printed circuit boards and electronic products
using "flip-chip" technology.
NOW, THEREFORE, in consideration of the foregoing recitals, the terms hereof,
and other good and valuable consideration, the full receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby covenant and agree as follows:
1. Definitions. The following terms have the following meanings:
(a) "Affiliate" means, as to a Person, any other Person
Controlling, Controlled by, or under common Control with such first Person.
"Control" mean the power, directly or indirectly, to (i) vote more than 50% of
the outstanding voting equity of an entity, or (ii) designate a majority of the
directors of an incorporated Person or the individuals exercising similar
functions of an unincorporated Person. "Person" means an entity, an individual,
or a governmental unit.
(b) "Business" means the design and manufacture of printed circuit
boards and electronic products using a "flip-chip" technology. Business does not
include the manufacture of printed circuit boards using other technologies, or
any business in which Employer engaged prior to the date hereof.
(c) "Business Plan" means the business plan mutually agreed upon
by Micro-ASI and Employee from time to time for the integration of "flip-chip"
technology in the product lines of Employer.
(d) "Disability" means an illness whereby Employee is unable to
engage in any substantial gainful activity by reason of any medically determined
physical or adjudicated mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 6 months.
(e) "Termination For Just Cause" means any termination by Employer
of Employee's employment for the commission by Employee of an act involving
moral turpitude, dishonest conduct of Employee and/or conduct of Employee
constituting an intentional misrepresentation by Employee personally regarding a
material Employer matter, such as theft, embezzlement, misappropriation of funds
or property, or fraud. Termination For Just Cause shall require that Employer
provide written notice of such termination.
(f) "Termination Without Just Cause" means any termination by
Employer of Employee's employment for any reason other than Employee's
Termination For Just Cause or Employee's Termination for Mismanagement.
37
<PAGE> 34
(g) "Resignation With Good Reason" means:
(1) Employee's resignation from employment by Employer
within 30 days after a reduction in Employee's base compensation below the level
provided in Section 2(a) hereof unless such reduction is with Employee's
consent; or
(2) Employee's resignation from employment by Employer
within 90 days after (A) a substantial downward change in the on-going duties of
Employee that is inconsistent with Employee's skills, position, duties,
responsibilities, or status, as of the date hereof, with Employer, (B) a
substantial downward change in Employee's reporting responsibilities or
principal position, as in effect on the date hereof, with Employer or (C) the
removal of Employee from, failure to re-elect Employee to, or elimination of,
such principal position, except, in any case, in connection with a promotion of
Employee.
(h) "Resignation Without Good Reason" means Employee's resignation
for any reason other than a Resignation With Good Reason.
(i) "Termination for Mismanagement" means the termination by
Employer (at the direction of Micro-ASI as the sole shareholder of all of the
Common Stock of Employer) of Employee's employment for the failure of Employee
to take reasonable measures to implement the Business Plan. If Employee fails to
take reasonable measures to implement the Business Plan, Micro-ASI may cause
Employee to be Terminated for Mismanagement.
2. Compensation and Employment.
(a) Employee agrees to provide services to Employer, and Employer
agrees to employ Employee, on the terms and conditions set forth herein.
Employer shall pay to Employee, and Employee agrees to accept as full
consideration for his continued employment, a gross monthly base compensation of
$12,500 payable in accordance with Employer's customary payroll procedures and
subject to appropriate tax withholding. Employee's base compensation shall be
reviewed on an annual basis by Employer. Notwithstanding the foregoing, Employer
shall pay to Employee, on or before March 31, 2000, a bonus in an amount
necessary, after giving effect to any prior bonuses made for such purpose, to
cover any taxes owing by Shareholder on phantom income received due to
Employer's status as an S-corporation, which shall not be greater than $60,000.
(b) Employee shall be entitled to paid vacation and such other
fringe benefits as are consistent with the customary practices of Employer or as
Employer may, in its sole discretion, determine at any time and from time to
time. Employee agrees to devote his full business time and his best efforts,
skills, and abilities exclusively to the performance of his duties herein, to
the furtherance of Employer's business and to use reasonable efforts to
implement the Business Plan.
(c) Employee's title shall be President and his duties shall
include performing such services for Employer as may be directed from time to
time by the Board of Directors of Employer (the "Board") in connection with the
Business which shall include a right to manage Employer in accordance with
historical practice. Employee shall use his best efforts to preserve the
Business of Employer and the good will of all employees, customers, suppliers,
and other persons having business relations with Employer.
3. Term and Severance.
(a) Employ employment of Employee shall begin on the date of this
Agreement and shall continue until the earliest of: (i) Employee's Termination
For Just Cause, Termination Without Just Cause, Resignation With Good Reason,
Resignation Without Good Reason, or Employee's Termination for Mismanagement,
(ii) Employee's death or Disability, or (iii) January 1, 2002 (the period from
the effective date hereof until the expiration or termination hereof is the
"Term").
(b) In the event of the termination of Employee's employment for
any reason (other than Termination Without Just Cause), Employee shall be
entitled only to the compensation earned by him as of the date of termination.
If Employee's employment is Terminated Without Just Cause, Employee shall be
entitled to the
38
<PAGE> 35
compensation set forth in Section 2(a) hereof for the entire Term, which
compensation shall be paid monthly as provided in Section 2(a).
(c) Notwithstanding anything to the contrary herein, the
provisions of Sections 4, 5, and 6 survive termination of Employee's employment
and the expiration of the Term.
(d) If Employee's employment is terminated due to death or
Disability, Employer agrees employee Charles Bottoms and Mark Bottoms, if at the
time of the death or Disability of Employee such person is employed by Employer,
for a period of at least one (1) year from the date of such death or Disability.
4. Nondisclosure Agreement. (a) In connection with the implementation of
the Business Plan, Employee has had and shall continue to have access to and
become familiar with various trade secrets and proprietary and confidential
information consisting of, but not limited to, processes, computer programs,
compilations of information, records, sales procedures, customer requirements,
pricing techniques, customer and potential customer lists, methods of doing
business and other confidential information (collectively, the "Trade Secrets")
to be developed and owned by Employer and regularly used in the Business.
Employee acknowledges and agrees that the Trade Secrets (i) will be secret and
not known in the industry; (ii) will be entrusted to Employee only because he is
hereby acknowledging their confidential and secret status and because of the
position occupied by Employee; (iii) will be developed or acquired by Employer
for and on behalf of Employer and/or its Affiliates through substantial
expenditures of time, effort, and money and are used in the Business; (iv) give
Employer an advantage over competitors who do not know or use the Trade Secrets;
(v) will be of such value and nature as to make it reasonable and necessary to
protect and preserve the confidentiality and secrecy of the Trade Secrets; and
(vi) will be valuable, special and unique assets of Employer, the disclosure of
which could cause substantial injury and loss of profits and goodwill to
Employer. Employee shall not disclose any of the Trade Secrets, directly or
indirectly, either during the Term or at any time thereafter, except as required
in the course of his employment under this Agreement. All files, records,
documents, information, data, and similar items relating to Employer, whether
prepared by Employee or otherwise coming into his possession, shall remain the
exclusive property of Employer and its Affiliates and shall not be removed from
the premises of Employer or its Affiliates under any circumstances without the
prior written consent of Employer (except in the ordinary course of business
during Employee's employment), and in any event shall be promptly delivered to
Employer upon the termination hereof. Upon his receipt of any subpoena, process,
or other request to produce or divulge, directly or indirectly, any Trade
Secrets, Employee agrees to promptly notify Employer thereof and hand deliver a
copy of the subpoena, process, or other request to Employer.
(b) For purposes of the foregoing, the Trade Secrets shall not
include information that (i) is, or becomes, generally available to the public
as evidenced by written publication or in a medium of mass circulation, other
than as a result of a disclosure by Employee, (ii) is obtained following the
termination of this Agreement by Employee from any other party, or (iii) is
required to be disclosed by a court or government order or decree; provided,
that, if Employee shall be required or become legally compelled (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or
similar process) to disclose any of the Trade Secrets, then Employee shall
provide Employer with prompt prior written notice of such request or requirement
so that Employer may seek a protective order or other appropriate remedy and/or
waive compliance with the terms of this Agreement. In the event that such
protective order or other remedy is not obtained, or that Employer waives
compliance with the provisions hereof, Employee agrees to furnish only that
portion of the Trade Secrets which it is advised by its legal counsel is legally
required to be disclosed and to exercise best efforts to obtain assurances that
confidential treatment will be accorded such Trade Secrets. Provided that
Employer indemnify and hold Employee harmless against all reasonable costs,
liabilities and expense associated with the defense and protection of any Trade
Secret from disclosure, Employee irrevocably appoints Employer (including any
attorney or legal counsel retained by Employer), as his true and lawful
attorney-in-fact, to act in Employee's name, place, and stead to perform any act
that Employee might perform to defend and protect against any disclosure of any
Trade Secret.
5. Noncompetition Agreement.
(a) Employee acknowledges and agrees that the proprietary
information he has acquired and will acquire regarding Employer will enable him
to injure Employer if he should compete with Employer in the Business.
Therefore, Employee hereby agrees that, without the prior written consent of
Employer, which consent may be withheld in Employer's sole and absolute
discretion, Employee shall not, during the Term and for a period of
39
<PAGE> 36
two years thereafter, directly or indirectly, as a director, officer, agent,
employee, consultant, or independent contractor or in any other capacity, (i)
engage in the Business within 50 miles of the city limits of Dallas, Texas or
Fort Worth, Texas (the "Territory"), (ii) invest (other than investments of up
to 1% in publicly-owned companies) in, or loan money to, or provide employment,
consulting, or other services to, or serve as an officer, director, or employee
of, or consultant to, any Competitor (as hereinafter defined), (iii) contact,
solicit, attempt to solicit, accept business from, or do business with, on his
own behalf or on behalf of a Competitor, (A) any Business customer of Employer
or its Affiliates, or (B) any Person within the Territory whose Business
Employer is actively soliciting as of the date of termination of Employee's
employment, or (iv) take any action inconsistent with the fiduciary relationship
of an employee to his employer. Employer and Employee agree that the term
"Competitor" means a Person engaged in the Business.
(b) Employee agrees that (i) all restrictions in this Section 5
are reasonable and valid, and all defenses to the strict enforcement thereof by
Employer are hereby waived by Employee, and (ii) the maximum geographic areas
specified above are reasonable and valid. If a court of competent jurisdiction
considers any of the maximum geographic areas to be unreasonable, Employee
requests that such court apply the maximum geographic area that it considers
reasonable.
6. Nonemployment Agreement. For a period of two years after cessation of
Employee's employment with Employer for any reason whatsoever, Employee shall
not, on his own behalf or on behalf of any other Person, hire, solicit, or seek
to hire any employee of Employer or in any other manner attempt, directly or
indirectly, to influence, induce, or encourage any employee of Employer to leave
the employment of Employer, nor shall Employee use or disclose to any Person any
information obtained while an employee of Employer concerning the names and
addresses of persons employed by Employer in the Business during the term of
this Agreement.
7. Severability. The parties hereto intend all provisions hereof,
including Sections 4, 5 and 6 hereof, to be enforced to the fullest extent
permitted by law. Accordingly, should a court of competent jurisdiction
determine that the scope of any provision hereof, including Sections 4, 5 and 6
hereof, is too broad to be enforced as written, the parties intend that the
court reform the provision to such narrower scope as it determines to be
reasonable and enforceable. In addition, Employee agrees that the nondisclosure,
noncompetition, and nonemployment provisions set forth above each constitute
separate agreements independently supported by good and adequate consideration
and shall be severable from the other provisions of, and shall survive, this
Agreement. The existence of any claim or cause of action of Employee against
Employer, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by Employer of the covenants and
agreements of Employee contained in the nondisclosure, noncompetition, or
nonemployment agreements. If any provision hereof is held to be illegal,
invalid, or unenforceable, such provision shall be fully severable and this
Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision never comprised a part hereof; and the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid, or unenforceable provision or by its severance
herefrom. Furthermore, in lieu of such illegal, invalid, or unenforceable
provision, there shall be added automatically as part of this Agreement, a
provision as similar in its terms to such illegal, invalid, or unenforceable
provision as may be possible and be legal, valid, and enforceable.
8. Inventions. Employee shall promptly disclose, grant, and assign to
Employer for its sole use and benefit any and all inventions, improvements,
technical information, business processes, and suggestions relating in any way
to the Business, which Employee has in the past conceived, developed, or
acquired, or may conceive, develop, or acquire during his employment with
Employer or its Affiliates (whether or not during usual working hours), together
with all patent applications, letters patent, copyrights and reissues thereof
that may at any time be granted for or upon any such invention, improvement,
technical information, or business processes. In connection therewith, Employee
shall promptly at all times during and after the Term (a) execute and deliver
such applications, assignments, descriptions, and other instruments as may be
necessary or proper in the opinion of Employer to vest title to such inventions,
improvements, technical information, business processes, patent applications and
patents or reissues thereof in Employer and to enable it to obtain and maintain
the entire right and title thereto throughout the world, and (b) render to
Employer, at its expense, all such assistance as it may require in the
prosecution of applications for said patents or reissues thereof, in the
prosecution or defense of interferences which may be declared involving any of
said application or patents, and in any litigation in which Employer may be
involved relating to any such patents, inventions, improvements, or technical
information.
40
<PAGE> 37
9. Affiliates. Employee will use his best efforts to ensure that no
relative of his or entity of which he is an officer, director, or shareholder,
or other Affiliate of his, shall take any action that Employee could not take
without violating any provision hereof.
10. Remedies. Employee recognizes and acknowledges that the ascertainment
of damages in the event of his breach of any provision hereof would be
difficult, and Employee agrees that Employer, in addition to all other remedies
it may have, shall have the right to injunctive relief if there is such a
breach.
11. Acknowledgments. Employee acknowledges and recognizes that the
enforcement of any of the noncompetition provisions in this Agreement will not
interfere with Employee's ability to pursue a proper livelihood. Employee
further represents that he is capable of earning a proper livelihood by pursuing
opportunities other than the Business. Employee recognizes and agrees that the
enforcement of this Agreement is necessary to ensure the preservation and
continuity of the business and good will of Employer. Employee agrees that due
to the nature of the Business, the noncompetition restrictions set forth in this
Agreement are reasonable as to time and geographic area. At any time during
Employee's employment with Employer and for a period of two years thereafter,
Employer may request Employee to supply such information as Employer reasonably
deems necessary to ascertain whether or not Employee has complied with, or has
violated, the restrictive covenants of Sections 4, 5, and/or 6 hereof. Any such
request for information will be sent to Employee by certified mail, return
receipt requested, addressed to Employee's last known address. Employee shall
furnish the requested information to Employer within 10 days following the
receipt of such request.
12. Notices. Any notice or communication must be in writing and given by
(a) deposit in the mail, addressed to the party to be notified, postage prepaid
and registered or certified with return receipt requested, (b) delivery in
person or by courier service providing evidence of such delivery, (c)
transmission by telecopy, or (d) FedEx. Each notice or communication that is
mailed, delivered, or transmitted in the manner described above shall be deemed
sufficiently given, served, sent, and received, in the case of mailed notices,
on the third business day following the date on which it is mailed and, in the
case of notices delivered by hand, courier service, or telecopy, at such time as
it is delivered to the addressee (with the delivery receipt or the affidavit of
messenger being evidence of delivery) or at such time as delivery is refused by
the addressee upon presentation. For purposes of notice, the addresses of the
parties shall be set forth beside their signatures to this Agreement. Each party
may change its address for notice by written notice to the other party.
13. Attorneys' Fees. If either party breaches its obligations under this
Agreement, the non-breaching party shall be entitled to reimbursement for its
reasonable attorneys' fees and court costs incurred in connection with enforcing
its rights under this Agreement.
14. Assignment. Employer may assign this Agreement to its successors or
assigns. The terms "successors" and "assigns" shall include any Person that buys
all or substantially all of Employer's assets or all of its stock, or with which
Employer merges or consolidates. The rights, duties, and benefits to Employee
hereunder are personal to him, and no such right or benefit may be assigned by
him.
15. Miscellaneous. This Agreement shall be governed by the internal laws
(and not the conflicts laws) of Texas and shall be performable in Dallas County,
Texas. This Agreement shall be binding upon the parties hereto, together with
their respective executors, administrators, successors, personal
representatives, heirs, and assigns. The waiver by Employer of a breach of any
provision hereof by Employee shall not operate or be construed as a waiver of
any subsequent breach by Employee. This Agreement supersedes any and all other
agreements, either oral or written, between the parties hereto with respect to
the subject matter hereof and contains all of the covenants and agreements
between the parties with respect thereto. No change hereof shall be valid or
binding upon the parties hereto, nor shall any waiver of any term or condition
in the future be so binding, unless such change or waiver shall be in writing
and signed by the parties hereto. This Agreement may be executed in
counterparts. Upon Employee's death, any monies that may be due him hereunder
shall be paid to his estate. The terms hereof, herein, and hereunder refer to
this Agreement as a whole unless the context clearly requires otherwise.
[Signatures on Following Page]
41
<PAGE> 38
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the date first above written.
EMPLOYER
Best Technologies, Inc.
By:
--------------------------------------------
Gary Bottoms
Chief Executive Officer and President
By:
--------------------------------------------
Charles Bottoms
Secretary and Treasurer
EMPLOYEE
By:
--------------------------------------------
Gary Bottoms
42
