Exhibit 10.8 - Share Exchange Agreement - WebGear Inc.
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SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (this "Agreement") dated as of June 16, 2000,
is among SIMTEK CORPORATION, a Colorado corporation ("Simtek"), and WEBGEAR,
INC., a California corporation ("WebGear").
RECITAL
Simtek desires to exchange 1,250,000 shares of the common stock, $0.01 par
value per share, of Simtek (the "Simtek Shares") for 1,875,000 shares of the
common stock, no par value per share, of WebGear (the "WebGear Shares"), and
WebGear desires to exchange the WebGear Shares for the Simtek Shares, all on the
terms and conditions set forth herein.
ARTICLE I
EXCHANGE OF SHARES
1.1 EXCHANGE OF SHARES. Upon the terms and subject to the conditions of
this Agreement, WebGear shall issue the WebGear Shares to Simtek in return for
Simtek issuing the Simtek Shares to WebGear (the "Exchange").
1.2 THE CLOSING. Subject to the terms and conditions of this Agreement, the
closing of the Exchange (the "Closing") shall take place at the offices of Holme
Roberts & Owen LLP, 90 South Cascade, Suite 1300, Colorado Springs, Colorado
80903 at 3:00 p.m., local time, on the date hereof (the "Closing Date").
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF WEBGEAR
WebGear, as of the date hereof but not after the date hereof, represents
and warrants to Simtek as follows:
2.1 DUE AUTHORIZATION. WebGear has the full power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby and has taken all actions necessary to secure all approvals required in
connection therewith. This Agreement has been duly executed and delivered by
WebGear and constitutes the valid and binding obligation of WebGear enforceable
against WebGear in accordance with its terms.
2.2 STOCK. The WebGear Shares have been duly authorized and when issued in
accordance with this Agreement, will be validly issued, fully paid and
non-assessable, free and clear of any restrictions on transfer (other than any
restrictions under the Securities Act of 1933, as amended (the "Securities Act")
and state securities laws); Taxes (as defined in Section 2.18); any mortgage,
pledge, lien, encumbrance, charge, or other security interest (a "Lien"); and
any option, warrant, put, call, purchase right, equity, claim, demand, or other
commitment or agreement of any nature. WebGear is not a party to any option,
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warrant, put, call, purchase right or other commitment or agreement that could
require WebGear to sell, transfer or otherwise convey any WebGear Shares, other
than pursuant to this Agreement.
2.3 BROKERS' AND FINDERS' FEES. WebGear has not incurred, or will not
incur, directly or indirectly, any liability for brokerage or finders' fees or
agents' commissions or investment bankers' fees or any similar charges in
connection with this Agreement or any transaction contemplated hereby.
2.4 ORGANIZATION AND STANDING. WebGear is a corporation duly organized and
validly existing and in good standing under the laws of the State of California,
has the full corporate power to own its properties and to carry on its business
as now being conducted and as proposed to be conducted and is duly qualified to
do business and is in good standing in each jurisdiction in which the failure to
be so qualified and in good standing would have a Material Adverse Effect (as
defined in Section 6.2) on WebGear. WebGear has delivered to Simtek a true and
correct copy of it Articles of Incorporation and Bylaws, each as amended to
date. WebGear is not in violation of any of the provisions of its Articles of
Incorporation or Bylaws.
2.5 CAPITALIZATION. The authorized capital stock of WebGear consists of
25,000,000 shares of common stock and 5,000,000 shares of preferred stock, of
which there are issued and outstanding 19,914,883 shares of common stock and
500,000 shares of preferred stock. There are no other outstanding shares of
capital stock or other securities of WebGear and no outstanding subscriptions,
options, warrants, puts, calls, rights, exchangeable or convertible securities
or other commitments or agreements of any nature relating to the capital stock
or other securities of WebGear, or otherwise obligating the Company to issue,
transfer, sell, purchase, redeem or otherwise acquire such stock or securities,
except as set forth in Schedule 2.5. All outstanding shares of WebGear capital
stock are duly authorized, validly issued, fully paid and non-assessable and are
free and clear of any Lien and are not subject to preemptive rights or rights of
first refusal.
2.6 SUBSIDIARIES. WebGear does not directly or indirectly own any equity or
similar interest in, or any interest convertible or exchangeable or exercisable
for, any equity or similar interest in, any corporation, partnership, joint
venture or other business association or entity, except as set forth in Schedule
2.6.
2.7 NO CONFLICTS. The execution and delivery of this Agreement do not, and
the consummation of the transactions contemplated hereby will not, (a) conflict
with or violate any provision of the Articles of Incorporation or Bylaws of
WebGear, (b) violate or conflict with any permit, order, license, decree,
judgment, statute, law, ordinance, rule or regulation applicable to WebGear or
the properties or assets of WebGear, or (c) result in any breach or violation
of, or constitute a default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of,
or result in the creation of any Lien on any of the properties or assets of
WebGear pursuant to, or require the consent of any party to any mortgage,
indenture, lease, contract or other agreement or instrument, bond, note,
concession or franchise applicable to WebGear or any of its properties or assets
except, in the case of this clause (c) only, where such conflict, violation,
default, termination, cancellation or acceleration would not have and could not
reasonably be expected to prevent the consummation of the transactions
contemplated hereby. No consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative agency or
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commission or other governmental authority or instrumentality ("Governmental
Entity") is required by or with respect to WebGear in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
2.8 FINANCIAL STATEMENTS. WebGear has heretofore delivered to Simtek true
and complete copies of an unaudited balance sheet, and the related statements of
operations and stockholders' equity and of cash flows with separate disclosure
of the balance sheet and income and retained earnings of WebGear as of and for
the year ended December 31, 1999 (the "Annual Financial Statements"). WebGear
also has heretofore delivered to Simtek true copies of the unaudited balance
sheet of WebGear at March 31, 2000, and the related unaudited statements of
income for the three months then ended (the "Interim Financial Statements"). The
Annual Financial Statements and the Interim Financial Statements were prepared
in accordance with generally accepted accounting principles applied on a basis
consistent throughout the periods indicated and consistent with each other
(except that no notes are included), are true and correct and fairly present the
financial condition and operating results of WebGear at the dates and during the
periods indicated therein, subject, in the case of the Interim Financial
Statements, to normal, recurring year-end audit adjustments.
2.9 ABSENCE OF CERTAIN CHANGES. Except as specifically permitted by this
Agreement or as set forth in Schedule 2.9 hereto, since March 31, 2000, WebGear
has conducted its business in the ordinary course consistent with past practice
and there has not occurred:
(a) any change, event or condition (whether covered by insurance)
that has resulted in, or might reasonably be expected to result
in, a Material Adverse Effect on WebGear;
(b) any sale, lease or other transfer or disposition of any property
or asset of WebGear, except for the sale of inventory in the
ordinary course of business;
(c) any change in accounting methods, practices or policies
(including any change in depreciation or amortization policies or
rates) by WebGear or any revaluation by WebGear of any of its
assets, except as described in the Annual Financial Statements;
(d) any declaration, setting aside, or payment of any dividend or
other distribution to WebGear's shareholders or any direct or
indirect redemption, retirement, purchase or other acquisition by
WebGear of any of its capital stock or other securities or
options, warrants or other rights to acquire capital stock;
(e) any entering into, amendment or termination of, or default under,
by WebGear of any contract to which WebGear is a party or by
which it or any of them is bound other than in the ordinary
course of business and as provided to Simtek;
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(f) any material damage, destruction or loss (whether or not covered
by insurance) to the properties and assets of WebGear;
(g) any commitment or transaction (including any capital expenditure,
capital financing or sale of assets) by WebGear for any amount
that requires or could require payments in excess of $50,000 with
respect to any individual contract or a series of related
contracts, other than in the ordinary course of business
consistent with past practice;
(h) any Lien on any asset allowed to exist, other than in the
ordinary course of business consistent with past practice, by
WebGear;
(i) any cancellation of any debt or waiver or release of any right or
claim by WebGear, other than in the ordinary course of business
consistent with past practice;
(j) any payment, discharge or satisfaction of any claim, liability or
obligation by WebGear, other than as reflected or reserved
against in the Annual Financial Statements or the Interim
Financial Statements or in the ordinary course of business
consistent with past practice;
(k) any labor dispute, litigation or governmental investigation
affecting the business or financial condition of WebGear;
(l) any issuance or sale of capital stock or other securities,
exchangeable or convertible securities, options, warrants, puts,
calls or other rights to acquire capital stock or other
securities of WebGear;
(m) any indebtedness for borrowed money incurred, assumed or
guaranteed by WebGear, other than in the ordinary course of
business consistent with past practice;
(n) any loan or advance (other than advances to employees in the
ordinary course of business for travel and entertainment in
accordance with past practice) to any person;
(o) any increase in any salary, wage, benefit or other remuneration
payable or to become payable to any current or former officer,
director, employee or agent of WebGear or any bonus or severance
payment or arrangement made to, for or with any officer,
director, employee or agent of WebGear or any supplemental
retirement plan or other program or special remuneration for any
officer, director, employee or agent of WebGear, except for
normal salary or wage increases relating to periodic performance
reviews and annual bonuses consistent with past practices of
WebGear;
(p) any grant of credit to any customer on terms or in amounts more
favorable than those which have been extended to such customer in
the past, any other change in the terms of any credit heretofore
extended or any other change in the policies or practices of
WebGear with respect to the granting of credit;
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(q) any delay in the payment of any trade or other payables other
than in the ordinary course of business consistent with past
practice; or
(r) any agreement, whether in writing or otherwise, by WebGear to do
any of the foregoing.
2.10 LIABILITIES. Except as set forth in the Annual Financial Statements,
the Interim Financial Statements or Schedule 2.10 hereto and except for
liabilities or obligations arising in the ordinary course and consistent with
past practice and those incurred in connection herewith, WebGear has no
liability or obligation of any nature, whether due or to become due, fixed or
contingent.
2.11 LITIGATION. Except as set forth on Schedule 2.11 hereto, there is no
private or governmental action, suit, proceeding, claim, arbitration or
investigation pending before any agency, court or tribunal or, to the knowledge
of WebGear, threatened against WebGear or any of its assets and properties.
There is no judgment, decree or order against WebGear, that could prevent
consummation of the transactions contemplated by this Agreement, or that could
reasonably be expected to have a Material Adverse Effect on WebGear. There is no
action, suit proceeding or investigation by WebGear currently pending or that
WebGear currently intends.
2.12 INTELLECTUAL PROPERTY.
(a) WebGear owns, or is licensed or otherwise possesses legally
enforceable rights to use, all patents, trademarks, trade names,
service marks, copyrights, maskworks and any applications
therefor, net lists, schematics, technology, know-how, trade
secrets, inventory, ideas, algorithms, processes, computer
software programs or applications (in both source code and object
code form), and tangible or intangible proprietary information or
material ("Intellectual Property") that are used in the business
of WebGear as currently conducted, except to the extent that the
failure to have such rights have not and could not reasonably be
expected to have a Material Adverse Effect on WebGear.
(b) All patents, registered trademarks, registered service marks, and
copyrights held by WebGear are valid, subsisting and enforceable.
WebGear (i) has not been sued in any suit, action or proceeding
which involves a claim of infringement of any patent, trademark,
service mark, copyright or violation of any trade secret or other
proprietary right of any third party or received any notice,
written or otherwise, of any alleged infringement of any such
third party right or (ii) has not brought any action, suit or
proceeding for infringement of Intellectual Property or breach of
any license or agreement involving Intellectual Property against
any third party. To the knowledge of WebGear, the design,
manufacture, marketing, licensing, offer to sell or sale of the
products and services of WebGear do not infringe any patent,
trademark, service mark, copyright, trade secret or other
proprietary right, domestic or foreign, of any third party.
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2.13 INTERESTED PARTY TRANSACTIONS. Except as disclosed in Schedule 2.21
hereto, WebGear is not indebted to any shareholder, director, officer, employee
or agent of WebGear (except for amounts due as normal salaries and bonuses and
in reimbursement of ordinary expenses).
2.14 COMPLIANCE WITH LAWS. WebGear has complied with, is not in violation
of, and has not received any notices of violation with respect to, any federal,
state, local or foreign statute, law or regulation with respect to the conduct
of its business, or the ownership or operation of its business, except for such
violations or failures to comply as could not be reasonably expected to have a
Material Adverse Effect on WebGear.
2.15 PUBLIC FILINGS. WebGear has received and reviewed copies of the
Exchange Act Documents (as defined below).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SIMTEK
Simtek, as of the date hereof but not after the date hereof, represents and
warrants to WebGear as follows:
3.1 ORGANIZATION. Simtek is a corporation duly organized, validly existing
and in good standing under the laws of the State of Colorado.
3.2 DUE AUTHORIZATION. Simtek has the full corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. This Agreement has been duly executed and delivered by Simtek and
constitutes the valid and binding obligation of Simtek enforceable against
Simtek in accordance with its terms. The execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated hereby
will not, (a) violate or conflict with any permit, order, license, decree,
judgment, statute, law, ordinance, rule or regulation applicable to Simtek or
(b) result in any breach or violation of, or constitute a default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of, or result in the creation of any
Lien on any of the properties or assets of Simtek pursuant to, or require the
consent of any party to any mortgage, indenture, lease, contract or other
agreement or instrument, bond, note, concession or franchise applicable to
Simtek or any of its properties or assets, except, in the case of this clause
(b) only, where such conflict, violation, default, termination, cancellation or
acceleration would not have and could not reasonably be expected to prevent the
consummation of the transactions contemplated hereby. No consent, approval,
order or authorization of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to Simtek in connection with
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
3.3 DULY AUTHORIZED, FULLY PAID AND NON-ASSESSABLE STOCK. The issuance of
the Simtek Shares has been duly authorized, and upon issuance to WebGear
pursuant to the terms hereof, will be validly issued, fully paid and
nonassessable.
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3.4 BROKERS' AND FINDERS' FEES. Simtek has not incurred, and will not
incur, directly or indirectly, any liability for brokerage or finders' fees or
agents' commissions or investment bankers' fees or any similar charges in
connection with this Agreement or any transaction contemplated hereby.
3.5 EXCHANGE ACT FILINGS. Simtek has provided WebGear with a copy of
Simtek's annual report on Form 10-KSB for the year ended December 31, 1999,
quarterly report on Form 10-QSB for the quarter ended March 31, 2000, and
filings on Form 8-K filed April 25, 2000, May 1, 2000 and May 11, 2000
(collectively, the "Exchange Act Documents"). Simtek does not have reason to
believe that any of the Exchange Act Documents contains any untrue statement of
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
3.6 INVESTMENT. Simtek is acquiring the WebGear Shares for its own account,
for investment and not with a view to the resale or other distribution thereof.
Simtek is aware that the WebGear Shares have not been registered under the
Securities Act of 1933, as amended, or State Blue Sky Law.
ARTICLE IV
DELIVERIES AT CLOSING
4.1 WEBGEAR DELIVERIES. At the Closing, WebGear shall deliver to Simtek:
(a) the certificates representing shares of WebGear Shares in
negotiable form, duly endorsed in blank, or with separate
notarized stock transfer powers attached thereto and signed in
blank; and
(b) evidence, satisfactory to Simtek, of all consents or approvals of
those persons whose consent or approval is required in connection
with the transactions contemplated hereby under any material
contract of WebGear or otherwise.
4.2 SIMTEK DELIVERIES. At the Closing, Simtek shall deliver to WebGear:
(a) stock certificates representing the Simtek Shares, duly issued to
WebGear.
ARTICLE V
SURVIVAL; REGISTRATION; BOARD OF DIRECTORS
5.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties in Article II of WebGear shall survive the Closing and continue in
full force and effect for one year after the date hereof, except for the
representation and warranty of Section 2.2 which shall survive indefinitely. The
representations and warranties in Article III of Simtek shall not survive the
Closing, except for the representation and warranty of Section 3.3 which shall
survive indefinitely. For the avoidance of doubt, Simtek and WebGear's
representations and warranties are made only as of the date hereof, not after
the date hereof and the parties do not remake any representations or warranties
after the date hereof.
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5.2 REGISTRATION. Simtek shall use its best efforts to affect the
registration under the Securities Act on a Form SB-2 (the "Registration
Statement") of the resale by WebGear of the Simtek Shares within 20 days
following the date hereof on the terms and conditions set forth in the attached
Exhibit 5.2.
5.3 BOARD OF DIRECTORS. Upon the Registration Statement being declared
effective by the Securities and Exchange Commission, Simtek shall have the right
to appoint one member ("Simtek Appointee") of the board of directors of WebGear
(the "WebGear Board"), which person (or, in the event of such person's death,
resignation or removal from the WebGear Board, such other person as Simtek shall
appoint to fill the resultant vacancy), shall serve on the WebGear Board until
the earlier of (i) such time as Simtek has transferred more than 50% of the
WebGear Shares, or (ii) the date the Securities and Exchange Commission declares
effective a registration statement for an underwritten initial public offering
of the common stock of WebGear pursuant to which the common stock of WebGear is
traded on the New York Stock Exchange, the NASDAQ Stock Market, or another
national stock exchange. At no time during which Simtek has the right to appoint
a member of the WebGear Board pursuant to this Section 5.3 shall the number of
directors comprising the WebGear Board exceed seven (7). Shareholders of WebGear
representing a majority of the voting shares of WebGear shall agree to vote
their shares in a manner so as to ensure that the Simtek Appointee is elected to
and serves as a member of the WebGear Board in accordance with this Section 5.3.
ARTICLE VI
GENERAL PROVISIONS
6.1 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail, return receipt
requested, or sent via facsimile, with confirmation of receipt, to the parties
at the following address or at such other address for a party as shall be
specified by notice hereunder:
(a) if to Simtek, to:
Simtek Corporation
1465 Kelly Johnson Blvd., Suite 301
Colorado Springs, CO 80920
Attention: Douglas Mitchell
Facsimile No.: (719) 531-9481
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with a copy to:
Holme Roberts & Owen LLP
1700 Lincoln, Suite 4100
Denver, Colorado 80203
Attention: Garth B. Jensen, Esq.
Facsimile No.: (303) 866-0200
(b) if to WebGear, to:
WebGear, Inc.
97 So. Second Street, Suite 100
San Jose, CA 95113
Attention: Tom Wagen
Facsimile No.: (408) 271-1598
with a copy to:
Joel Bernstein, Esq., P.A.
11900 Biscayne Boulevard, Suite 604
Miami, FL 33181
Attention: Joel Bernstein, Esq.
Facsimile No.: (305) 892-0822
6.2 INTERPRETATION. When a reference is made in this Agreement to Exhibits,
Articles or Sections, such reference shall be to an Exhibit, Article or Section
to this Agreement unless otherwise indicated. The words "include," "includes"
and "including" when used herein shall be deemed in each case to be followed by
the words "without limitation." The phrase "made available" in this Agreement
shall mean that the information referred to has been made available if requested
by the party hereto to whom such information is to be made available. The table
of contents and Article and Section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. In this Agreement, any reference to any event,
change, condition or effect being "material" with respect to any entity or group
of entities means any material event, change, condition or effect related to the
condition (financial or otherwise), properties, assets (including intangible
assets), liabilities, business, operations or results of operations of such
entity or group of entities. In this Agreement, any reference to a "Material
Adverse Effect" with respect to any entity or group of entities means any event,
change or effect that is materially adverse to the condition (financial or
otherwise), properties, assets, liabilities, business, operations or results of
operations of such entity and its subsidiaries, taken as a whole. In this
Agreement, any reference to a party's "knowledge" means such party's actual
knowledge after due and diligent inquiry of officers, directors and other
employees of such party reasonably believed to have knowledge of such matters.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms.
6.3 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
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shall become effective when one or more counterparts have been signed by each of
the parties hereto and delivered to the other parties hereto, it being
understood that all parties hereto need not sign the same counterpart.
6.4 ENTIRE AGREEMENT; NONASSIGNABILITY; PARTIES IN INTEREST. This Agreement
and the documents and instruments and other agreements specifically referred to
herein or delivered pursuant hereto, including the Exhibits and the attached
Schedule (a) constitute the entire agreement among the parties hereto with
respect to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties hereto with respect to
the subject matter hereof; (b) are not intended to confer upon any other person
any rights or remedies hereunder; and (c) shall not be assigned by operation of
law or otherwise except as otherwise specifically provided.
6.5 SEVERABILITY. In the event that any provision of this Agreement, or the
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties hereto further agree to replace such
void or unenforceable provision of this Agreement with a valid and enforceable
provision that will achieve, to the extent possible, the economic, business and
other purposes of such void or unenforceable provision.
6.6 REMEDIES CUMULATIVE; NO WAIVER. Except as otherwise provided herein,
any and all remedies herein expressly conferred upon a party will be deemed
cumulative with and not exclusive of any other remedy conferred hereby, or by
law or equity upon such party, and the exercise by a party of any one remedy
will not preclude the exercise of any other remedy. No failure or delay on the
part of any party hereto in the exercise of any right hereunder shall impair
such right or be construed to be a waiver of, or acquiescence in, any breach of
any representation, warranty or agreement herein, nor shall any single or
partial exercise of any such right preclude other or further exercise thereof or
of any other right.
6.7 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado (without regard to the
principles of conflicts of law thereof).
6.8 FURTHER ASSURANCES. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Agreement,
the proper officers and/or directors of Simtek and WebGear shall take all such
necessary action.
6.9 AMENDMENT. The parties hereto may cause this Agreement to be amended at
any time by execution of an instrument in writing signed by Simtek and WebGear.
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IN WITNESS WHEREOF, the parties hereto have caused this Share Exchange
Agreement to be executed and delivered by their respective officers thereunto
duly authorized, all as of the date first written above.
Simtek:
SIMTEK CORPORATION, a Colorado corporation,
By: /s/ Douglas Mitchell
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Name: Douglas Mitchell
Title: President
WebGear:
WEBGEAR, INC., a California corporation,
By: /s/ Thomas A. Wagen
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Name: Thomas A. Wagen
Title: Chairman and Chief Executive Officer
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[schedules and exhibits omitted]
