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EXHIBIT 10.25
AGREEMENT AND PLAN OF REORGANIZATION
AMONG
SANMINA CORPORATION
SANM ACQUISITION SUBSIDIARY, INC.
and
GOLDEN EAGLE SYSTEMS, INC.
December 14, 1995
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TABLE OF CONTENTS
Page
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ARTICLE 1 DESCRIPTION OF TRANSACTION......................................... 1
1.1 Merger of Golden Eagle into SANM Sub............................... 1
1.2 Effect of the Merger............................................... 1
1.3 Closing............................................................ 2
1.4 Conversion of Golden Eagle Stock................................... 2
1.5 SANM Sub Common Stock.............................................. 3
1.6 Golden Eagle Options and Warrants.................................. 3
1.7 Exchange of Golden Eagle Common Stock.............................. 3
1.8 Assignment of Escrow Interests..................................... 5
1.9 Articles of Incorporation of the Surviving Corporation............. 5
1.10 Bylaws of the Surviving Corporation................................ 5
1.11 Deemed Approval by Written Action.................................. 5
1.12 Accounting Treatment............................................... 5
1.13 Tax Consequences................................................... 5
1.14 Stock Subject to Conditions or Forfeiture.......................... 5
1.15 Further Action..................................................... 6
1.16 Dissenting Shares.................................................. 6
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF GOLDEN EAGLE .................... 6
2.1 Organization; Qualification........................................ 6
2.2 Capitalization..................................................... 7
2.3 Investments in Other Companies..................................... 8
2.4 Authority Relative to this Agreement............................... 8
2.5 Consents and Approvals; No Violation............................... 8
2.6 Financial Statements............................................... 8
2.7 Undisclosed Liabilities............................................ 9
2.8 Absence of Certain Changes or Events............................... 9
2.9 Properties and Inventories......................................... 10
2.10 Real Property...................................................... 11
2.11 Insurance.......................................................... 11
2.12 Litigation......................................................... 11
2.13 Purchase, Sale and Other Agreements................................ 11
2.14 Licenses, Trademarks, Patents and Other Rights..................... 13
2.15 Employees and Benefit Plans........................................ 13
2.16 Change of Control Payments......................................... 15
2.17 Borrowing and Guarantees........................................... 15
2.18 Bank Accounts and Powers of Attorney............................... 15
2.19 Compliance with Contracts.......................................... 16
2.20 Compliance with Laws............................................... 16
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2.21 Taxes.............................................................. 16
2.22 Transactions with Associates of Management......................... 17
2.23 Accounts Receivable................................................ 17
2.24 Investment Banking and Finders' Fees............................... 18
2.25 Nondisclosure Agreements........................................... 18
2.26 Warranties......................................................... 18
2.27 Environmental Liability............................................ 18
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SANM AND SANM SUB................ 21
3.1 Organization; Qualification........................................ 21
3.2 Authority.......................................................... 21
3.3 Consents and Approvals; No Violation............................... 21
3.4 Corporate Documents................................................ 22
3.5 SANM Common Stock.................................................. 22
ARTICLE 4 REGISTRATION OF SANMINA STOCK ..................................... 22
4.1 Knowledge of Reliance.............................................. 22
4.2 Investment Purpose in Acquiring the Merger Shares.................. 22
4.3 Information About SANM. .......................................... 23
4.4 Restriction on Transfer; Compliance with Securities Act............ 23
4.5 Restrictive Legend................................................. 23
4.6 Registration Statement............................................. 23
4.7 Expenses........................................................... 25
4.8 Indemnification.................................................... 25
4.9 Information by Holder.............................................. 27
4.10 Rule 144 Requirements.............................................. 27
ARTICLE 5 COVENANTS OF GOLDEN EAGLE ......................................... 27
5.1 Negative Covenants................................................. 27
5.2 Affirmative Covenants.............................................. 29
ARTICLE 6 COVENANTS OF SANM AND SANM SUB..................................... 31
6.1 Negative Covenants................................................. 31
6.2 Affirmative Covenants.............................................. 31
ARTICLE 7 CONDITIONS PRECEDENT TO OBLIGATIONS OF SANM AND SANM SUB........... 32
7.1 Compliance with Covenants; Representations and Warranties Correct.. 32
7.2 Consents of Others................................................. 32
7.3 Legal Opinions..................................................... 32
7.4 Appraisal Rights................................................... 33
7.5 Absence of Restraint............................................... 33
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7.6 Required Approvals................................................. 33
7.7 Golden Eagle's Shareholders' Approval.............................. 33
7.8 Individual Agreements.............................................. 33
ARTICLE 8 CONDITIONS PRECEDENT TO GOLDEN EAGLE'S OBLIGATIONS................. 33
8.1 Compliance with Covenants; Representations and Warranties Correct.. 33
8.2 Legal Opinion...................................................... 33
8.3 Absence of Restraint............................................... 34
8.4 Required Approvals................................................. 34
8.5 Golden Eagle's Shareholders' Approval.............................. 34
8.6 Golden Eagle Performance Incentive Plan............................ 34
ARTICLE 9 TERMINATION........................................................ 34
9.1 Termination........................................................ 34
9.2 Effect of Termination.............................................. 34
9.3 Return of Information.............................................. 35
9.4 Extension of Time; Waivers......................................... 35
ARTICLE 10 INDEMNIFICATION ................................................... 35
10.1 Limited Indemnification by Each Shareholder........................ 35
10.2 Escrow............................................................. 35
10.3 Exclusive Remedy................................................... 35
ARTICLE 11 MISCELLANEOUS...................................................... 36
11.1 Amendment.......................................................... 36
11.2 Survival of Representations and Warranties......................... 36
11.3 Entire Agreement; Counterparts; Applicable Law..................... 36
11.4 Costs and Expenses................................................. 36
11.5 Attorneys' Fees.................................................... 36
11.6 Assignability...................................................... 37
11.7 Notices............................................................ 37
11.8 Arbitration........................................................ 37
11.9 Titles............................................................. 38
11.10 Cooperation........................................................ 38
A - Articles of Merger
B - Form of Noncompetition Agreement
C - Form of Performance Incentive Plan
D - Escrow Agreement
E - Opinion of McGuire & Levy, counsel to Golden Eagle
F - Opinion of Wilson, Sonsini, Goodrich & Rosati, counsel to
SANM and SANM Sub
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AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is made as
of December 14, 1995 by and among Sanmina Corporation, a Delaware corporation
("SANM"), SANM Acquisition Subsidiary, Inc., a Texas corporation ("SANM Sub"),
and Golden Eagle Systems, Inc., a Texas corporation ("Golden Eagle").
RECITALS
A. SANM has formed SANM Sub as a wholly-owned subsidiary in order to
effect the merger of SANM Sub with and into Golden Eagle (the "Merger") in
accordance with the laws of the State of Texas and in accordance with this
Agreement, so that upon consummation of the Merger SANM Sub will cease to exist
and Golden Eagle will become and remain a wholly-owned subsidiary of SANM; and
B. This Agreement has been approved by the Boards of Directors of
Golden Eagle and SANM and will be submitted for approval by the Board of
Directors of SANM Sub and the shareholders of SANM Sub and Golden Eagle.
AGREEMENT
NOW, THEREFORE, in consideration of their mutual covenants, promises
and obligations contained in this Agreement, the parties hereto agree as
follows:
ARTICLE 1
DESCRIPTION OF TRANSACTION
1.1 Merger of Golden Eagle into SANM Sub. Subject to the terms and
conditions of this Agreement, Golden Eagle shall be merged with and into SANM
Sub and the separate existence of SANM Sub shall cease. Golden Eagle shall be
the surviving corporation in the Merger under the corporate name it possesses
immediately prior to the Merger, and SANM will, by reason of the Merger, own all
of the issued and outstanding shares of capital stock of Golden Eagle. Golden
Eagle, in its capacity as the corporation surviving the Merger, is sometimes
referred to herein as the "Surviving Corporation."
1.2 Effect of the Merger. The Merger shall have the effects set forth
in the Texas Business Corporation Act (the "Texas Law"). Without limiting the
generality of the foregoing, the Surviving Corporation shall possess all the
rights, privileges, powers and franchises, of a public as well as a private
nature, and be subject to all the restrictions, disabilities and duties, of each
of SANM Sub and Golden Eagle (collectively, the "Constituent Corporations"). The
Surviving Corporation shall be vested with the
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rights, privileges, powers and franchises, all property (real, personal, and
mixed) and all debts due on whatever account and all other things in action or
belonging to, and all and every other interest of, each of the Constituent
Corporations. All debts, liabilities and duties of each of the Constituent
Corporations shall attach to the Surviving Corporation and may be enforced
against it to the same extent as if such debts, liabilities and duties had been
incurred or contracted by it.
1.3 Closing. Consummation of the transactions contemplated by this
Agreement (the "Closing") will take place at the offices of McGuire & Levy, 1333
Corporate Drive, Suite 350, Irving, Texas, at 10:00 a.m. C.S.T. on January 2,
1996 or at such time and date as SANM and Golden Eagle may mutually select (the
"Closing Date"). At the Closing, SANM Sub and Golden Eagle will each carry out
the procedures specified under the applicable provisions of the Delaware Law and
the Texas Law, including duly executing and filing an Agreement of Merger in the
form attached hereto as Exhibit A (the "Agreement of Merger") with the Texas
Secretary of State, the end that the Merger shall become effective. The Merger
shall become effective on the date the Agreement of Merger is duly filed with
the Delaware Secretary of State and the Texas Secretary of State or on such
later date as may be specified in the Agreement of Merger (the "Effective
Date").
1.4 Conversion of Golden Eagle Stock.
(a) On the Effective Date, each then outstanding share of
Common Stock, no par value, of Golden Eagle (the "Golden Eagle Common Stock")
(other than any shares of Golden Eagle Common Stock to be canceled pursuant to
Section 1.4(b) and other than Dissenting Shares as defined in Section 1.16)
shall cease to be an existing and issued share and shall become and be converted
into, by virtue of the Merger and without any action on the part of SANM, SANM
Sub, Golden Eagle or any holder thereof, (i) the right to receive a cash payment
(the "Cash Payment") which shall equal $6,000,000 divided by the Golden Eagle
Common Share Number (as defined below) (which Cash Payment shall be paid as set
forth in Section 1.7) and (ii) a number of duly and validly issued, fully paid
and nonassessable shares of SANM Common Stock (the "Merger Shares") equal to the
Exchange Rate (as defined below). The number of shares of Golden Eagle Common
Stock held by each holder (each a "Shareholder") thereof shall be aggregated and
multiplied by the Exchange Rate, and any fractional share interest resulting
from such calculation to which such holder would otherwise be entitled shall be
settled in accor dance with the provisions of Section 1.8(f) hereof. The
"Exchange Rate" shall be determined in accordance with the following formula:
Exchange Rate = ($4,000,000.00 / SANM Share Price)
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Golden Eagle Common Share Number
Notwithstanding the foregoing, the numerator of the above fraction shall in no
event exceed 100,000 or be less than 66,667.
If between the date hereof and the Effective Date, the outstanding
shares of SANM Common Stock shall be changed into a different number of shares
by reason of any reclassification, recapitalization, split-up or combination of
shares or if a stock dividend thereon shall be declared with a record date
within
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said period, the number of shares of SANM Common Stock to be issued and
delivered as provided herein and in the Merger Agreement shall be
correspondingly adjusted, and any new Exchange Rate resulting from such
adjustment shall be rounded to four decimal places.
For purposes hereof, the following definitions shall apply:
"SANM Share Price" shall mean the average of the high and low reported
sale prices for SANM Common Stock on the National Association of Securities
Dealers, Inc. Automated Quotation/National Market System ("National Market
System") on each of then ten (10) consecutive trading days ending on (and
including) the date of this Agreement.
"Golden Eagle Common Share Number" shall mean the total number of
shares of Golden Eagle Common Stock outstanding on the Effective Date on a fully
diluted basis.
(b) Each share of Golden Eagle Common Stock issued and
outstanding immediately prior to the Effective Date owned by SANM, SANM Sub or
any subsidiary thereof shall automatically be canceled at the Effective Date and
no conversion shall be made in respect thereof.
1.5 SANM Sub Common Stock. Each share of SANM Sub's Common Stock issued
and outstanding immediately prior to the Effective Date shall be converted into
one (1) share of Common Stock of the Surviving Corporation, and following the
Merger such shares shall constitute the only outstanding shares of capital stock
of the Surviving Corporation.
1.6 Golden Eagle Options and Warrants. Golden Eagle does not as of the
date hereof have, and immediately prior to the Effective Date Golden Eagle will
not have, any outstanding options, warrants or other rights to subscribe for or
purchase Common Stock or other securities of Golden Eagle.
1.7 Exchange of Golden Eagle Common Stock.
(a) Promptly after the Effective Date, SANM shall cause SANM's
stock transfer agent or such other person as SANM may appoint to act as exchange
agent (the "Exchange Agent") to mail or otherwise deliver to each holder of
record of a certificate or certificates that immediately prior to the Effective
Date represented outstanding shares of Golden Eagle Common Stock (the
"Certificates") a form letter of transmittal (which shall specify that delivery
shall be effective, and risk of loss and title to the Certificate(s) shall pass,
only upon delivery of the Certificate(s) to the Exchange Agent or to SANM or
SANM Sub) and instructions for such holder's use in effecting the surrender of
the Certificates in exchange for the per share SANM Common Stock and Cash
Payment consideration.
(b) As soon as practicable after the Effective Date, the
Exchange Agent shall deliver to the Shareholders, upon surrender to the Exchange
Agent of one or more Certificates for cancellation, together with a
duly-executed letter of transmittal, (i) one or more certificates representing
the number of whole shares of SANM Common Stock into which the shares
represented by the Certificate(s) shall have been converted, (ii) a bank check
in the amount of the Cash Payment due in respect of the shares
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of Golden Eagle Common Stock represented by the Certificate(s), and (iii) a bank
check in the amount of cash representing payment in lieu of any fractional share
pursuant to Section 1.7(f) (relating to fractional shares). Notwithstanding the
foregoing, the aggregate Cash Payment shall be distributed in two or more
installments. The first such installment shall be distributed as soon as
practicable following the Effective Date and shall consist of the aggregate Cash
Payment less the amount of cash deposited into escrow pursuant to the Escrow
Agreement entered into pursuant to Section 10. A second such installment shall
be distributed as soon as practicable following the expiration of the
indemnification period set forth in the Escrow Agreement and shall consist of
that portion of the Cash Payment that exceeds the amount for which claims for
Liabilities (as defined in the Escrow Agreement) have been made and have not
been resolved. Thereafter, subsequent installments shall be distributed out of
any remaining escrowed funds at such times as outstanding claims for Liabilities
made by SANM during the indemnification period are resolved, until all such
claims are resolved. The final installment shall consist of the amount of
escrowed funds remaining after satisfaction of all claims for Liabilities, if
any, by SANM. All of such installments shall be distributed to the former Golden
Eagle shareholders ratably, in proportion to such shareholders' interest in the
escrowed funds (as set forth in the Escrow Agreement).
If there has been a transfer of ownership of Golden Eagle
Common Stock that is not registered in the transfer records of Golden Eagle, it
shall be a condition to the issuance of shares of SANM Common Stock that the
Certificate(s) so surrendered shall be properly endorsed or be otherwise in
proper form for transfer and that such transferee shall (i) pay to the Exchange
Agent any transfer or other taxes required, or (ii) establish to the
satisfaction of the Exchange Agent that such tax has been paid or is not
payable.
(c) Holders of Golden Eagle Common Stock will be entitled to
any dividends pertaining to the Merger Shares received in exchange therefor that
become payable to holders of record of SANM Common Stock as of a record date
that follows the Effective Date, which dividends shall be delivered to the
shareholders after they have surrendered their Certificate(s) for exchange.
Prior to such surrender of such Certificate(s), the Exchange Agent shall receive
and hold such dividends until such Certificate(s) are surrendered, whereupon
such dividends shall be remitted to such Shareholder without interest. Holders
of Golden Eagle Common Stock will not be entitled, however, to dividends that
become payable after the Effective Date to holders of record of SANM Common
Stock as of a record date prior to the Effective Date.
(d) All shares of SANM Common Stock issued, Cash Payments made
and cash paid in lieu of fractional shares pursuant to (f) below, shall be
deemed to have been issued and paid in full satisfaction of all rights
pertaining to such shares of Golden Eagle Common Stock.
(e) After the Effective Date, there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of Golden Eagle Common Stock that were outstanding
immediately prior to the Effective Date. If, after the Effective Date,
Certificates representing such shares are presented to the Surviving
Corporation, they shall be canceled and exchanged as provided herein. As of the
Effective Date, the holders of Certificates representing shares
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of Golden Eagle Common Stock shall cease to have any rights as shareholders of
Golden Eagle, except such rights, if any, as they may have pursuant to the Texas
Law. Except as provided above, until such Certificates are surrendered for
exchange, each such Certificate shall, after the Effective Date, represent for
all purposes only the right to receive the consideration set forth in Section
1.4.
(g) In the event any Certificates shall have been lost, stolen
or destroyed, the Exchange Agent shall issue in exchange for such lost, stolen
or destroyed Certificate, upon the making of an affidavit of that fact by the
holder thereof, such shares of SANM Common Stock and cash for fractional shares,
if any, as may be required pursuant to this Article II; provided, however, that
SANM may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed Certificate to
deliver a bond in such sum as SANM may direct as indemnity against any claim
that may be made against SANM or the Exchange Agent with respect to the
Certificate alleged to have been lost, stolen or destroyed.
1.8 Assignment of Escrow Interests. No portion of a shareholders'
rights or interest in the escrow fund established pursuant to the Escrow
Agreement may be sold, assigned, pledged or otherwise transferred; provided that
such rights or interest of any shareholder may be transferred by will, by the
laws of intestate succession, or by operation of law.
1.9 Articles of Incorporation of the Surviving Corporation. The
Articles of Incorporation of SANM Sub, as in effect immediately prior to the
Effective Date, shall be the Articles of Incorporation of the Surviving
Corporation until thereafter amended in accordance with applicable law; provided
that the Surviving Corporation shall retain the name "Golden Eagle Systems,
Inc."
1.10 Bylaws of the Surviving Corporation. The Bylaws of SANM Sub, as in
effect immediately prior to the Effective Date, shall be the Bylaws of the
Surviving Corporation until thereafter amended in accordance with applicable
law.
1.11 Deemed Approval by Written Action. The execution of the action by
written consent of shareholders by holders of a majority of all issued and
outstanding Golden Eagle Common Stock shall constitute the approval of this
Agreement and the Plan of Merger attached hereto pursuant to Articles 5.03
and/or 5.16 of the Texas Law. Golden Eagle shall give all required notices of
such approval by written action.
1.12 Accounting Treatment. The parties intend that the Merger will be
treated as a purchase for accounting purposes.
1.13 Tax Consequences. The Merger is not intended to constitute a
tax-free reorganization within the meaning of Section 368(a) of the Code.
1.14 Stock Subject to Conditions or Forfeiture. All shares of SANM
Common Stock which are received in the Merger in exchange for shares of Golden
Eagle Common Stock which, under applicable stock purchase or restriction
agreements, as amended, with Golden Eagle, are unvested or
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subject to a repurchase option or other condition or forfeiture which by its
terms does not terminate due to the Merger will also be unvested or subject to
the same repurchase option or other condition, as the case may be, and the
certificates evidencing such shares will be marked with appropriate legends.
1.15 Further Action. If at any time after the Effective Date any
further action is necessary or desirable to carry out the purposes of this
Agreement or to vest the Surviving Corporation with the full right, title and
possession to all assets, property, rights, privileges, immunities, powers and
franchises of either or both of the Constituent Corporations, the officers and
directors of the Surviving Corporation are fully authorized in the name of
either or both of the Constituent Corporations or otherwise to take all such
action.
1.16 Dissenting Shares. Notwithstanding anything in this Agreement to
the contrary, shares of Golden Eagle Common Stock that are issued and
outstanding immediately prior to the Effective Date and that are held by
shareholders who have not voted such shares in favor of the Merger and who have
delivered a written demand for appraisal of such shares in the manner provided
in Article 5.11 et. seq. of the Texas Law ("Dissenting Shares") shall have no
right to receive the Cash Payment and shall not be canceled and converted into
shares of SANM Common Stock in accordance with the Exchange Rate unless and
until such holder shall have failed to perfect, or shall have effectively
withdrawn or lost, such holder's right to appraisal and payment under the Texas
Law. If such holder shall have so failed to perfect, or shall have effectively
withdrawn or lost such right, such holder's shares of Golden Eagle Common Stock
shall thereupon be deemed to have been canceled and converted as described in
Section 1.4 at the Effective Date, and each such share shall represent the right
to receive the Cash Payment and shares of SANM Common Stock in accordance with
the Exchange Rate. Golden Eagle shall give SANM prompt notice of any demands
received by Golden Eagle for appraisal of its shares, and, prior to the
Effective Date, SANM shall have the right to participate in all negotiations and
proceedings with respect to such demands. Prior to the Effective Date, Golden
Eagle shall not, except with the prior written consent of SANM, make any payment
with respect to, or settle or offer to settle, any such demands. From and after
the Effective Date, no shareholder who has demanded appraisal rights as provided
in Article 5.11 et. seq. of the Texas Law shall be entitled to vote such
holder's shares for any purpose or to receive payment of dividends or other
distributions with respect to such holder's shares (except dividends and other
distributions payable to shareholders of record at a date which is prior to the
Effective Date).
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF GOLDEN EAGLE
Except as set forth in the disclosure schedule delivered to SANM on the
date hereof, and signed by the President of Golden Eagle (the "Golden Eagle
Disclosure Schedule"), the sections of which are numbered to correspond to the
subsection numbers of this Agreement, Golden Eagle represents and warrants to
SANM and SANM Sub as follows:
2.1 Organization; Qualification.
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(a) Golden Eagle is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas. Golden Eagle
has all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted and is duly
qualified and in good standing to do business as a foreign corporation in each
jurisdiction in which the property owned, leased or operated by it or the nature
of the business conducted by it makes such qualification necessary, except where
the failure to have such power and authority or to be so duly qualified and in
good standing would not, in the aggregate, have a material adverse effect on the
business, operations or financial condition of Golden Eagle.
(b) Golden Eagle has delivered to Sanmina complete and
accurate copies of its charter documents, each as amended, minutes of all its
directors' and shareholders' meetings, and a shareholder list correctly setting
forth the record ownership as of the date of this Agreement of all outstanding
shares of capital stock of Golden Eagle.
2.2 Capitalization.
(a) Golden Eagle's authorized capital stock consists of 10,000
shares of Common Stock, of which 7,935 shares are issued and outstanding on the
date of this Agreement, and no shares of Preferred Stock.
(b) All of the issued and outstanding shares of Golden Eagle
Common Stock have been validly issued in compliance with applicable federal and
State securities laws. The Shares to be purchased by Sanmina have been validly
issued, and are fully paid and nonassessable. Each Seller is the owner,
beneficially and of record, of all of the Shares set forth opposite such
Seller's name in Section 2.2 (b) of the Golden Eagle Disclosure Schedule, free
and clear of encumbrances and rights of each other and others.
(c) Golden Eagle has no outstanding preemptive or subscription
rights, options, warrants, rights to convert, capital stock equivalents or other
rights to purchase or otherwise acquire any of Golden Eagle's capital stock or
other securities. Golden Eagle does not have outstanding any stock appreciation
rights or other rights granting to any person the right to be paid money or
other property based on the value of securities of Golden Eagle.
(d) Section 2.2(d) of the Golden Eagle Disclosure Schedule
sets forth all agreements under which Golden Eagle or any successor company by
merger or otherwise is obligated to register under the Securities Act any of its
presently outstanding securities.
(e) No person has the right to require Golden Eagle to
repurchase or redeem any of its stock or other securities.
(f) There are no agreements, restrictions or understandings to
which Golden Eagle is a party with respect to the future sale or transfer, or
the voting, of any shares of Golden Eagle capital stock.
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(g) Section 2.2(g) of the Golden Eagle Disclosure Schedule
sets forth any stock vesting or repurchase agreements pertaining to capital
stock of Golden Eagle.
2.3 Investments in Other Companies. Golden Eagle has no direct or
indirect ownership interest in any other corporation, partnership, joint venture
or other business entity.
2.4 Authority Relative to this Agreement. Golden Eagle has full
corporate power to execute and deliver this Agreement and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized by the board of directors and all
shareholders of Golden Eagle, and no other corporate proceedings on the part of
Golden Eagle are necessary for Golden Eagle to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Golden Eagle. Each shareholder of Golden
Eagle has good and marketable title to the Golden Eagle capital stock held by
such shareholder, free and clear of all liens and encumbrances, and the shares
of Golden Eagle capital stock set forth opposite such shareholder's name on
Schedule 2.2(b) hereto constitute all shares of Golden Eagle capital stock owned
beneficially or of record by such shareholder. This Agreement constitutes the
valid and binding agreement of Golden Eagle, enforceable against in accordance
with its terms except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to or
affecting enforcement of creditors' rights or by limitations on the availability
of equitable remedies.
2.5 Consents and Approvals; No Violation. Except as set forth in
Section 1 of this Agreement and in Section 2.5 of the Golden Eagle Disclosure
Schedule, there is no requirement applicable to Golden Eagle to make any filing
with, or to obtain any permit, authorization, consent or approval of, any
governmental or regulatory authority as a condition to the lawful consummation
by Golden Eagle of the transactions contemplated by this Agreement. Golden Eagle
does not know of any reason why any required permit, authorization, consent or
approval could not be obtained. Neither the execution and delivery of this
Agreement by Golden Eagle nor the consummation by Golden Eagle of the
transactions contemplated by this Agreement will (i) conflict with or result in
any breach of any provision of the charter documents of Golden Eagle, (ii)
result in a material breach or default (or give rise to any right of
termination, cancellation or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license agreement, lease or
other material contract, instrument or obligation to which Golden Eagle is a
party or by which Golden Eagle or any of its assets may be bound, or violate in
any material respect any statute, rule, regulation, order, writ, injunction or
decree applicable to Golden Eagle or any of its assets, where the consequences
of any and all such breaches, defaults and violations would, in the aggregate,
have a material and adverse effect on the business, operations or financial
condition of Golden Eagle taken as a whole, or (iii) result in the creation of
any material (individually or in the aggregate) liens, charges or encumbrances
on any of the assets of Golden Eagle.
2.6 Financial Statements. Golden Eagle has delivered to Sanmina
unaudited balance sheets of Golden Eagle as of December 31, 1993 and 1994 and
June 30, 1995, and related unaudited statements of operations, shareholders'
equity and cash flows for the fiscal years ended December 31, 1993 and
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1994,. and the six months ended June 30, 1995. Such financial statements are
collectively referred to as the "Golden Eagle Financial Statements". All such
financial statements fairly and accurately present in all material respects the
financial position of Golden Eagle as of their respective dates and the results
of operations for the applicable periods ended on such dates. The statements of
operations included within the Golden Eagle Financial Statements do not contain
any items of special or nonrecurring income or any other income not earned in
the ordinary course of business except as expressly specified therein. The
Golden Eagle Financial Statements have been prepared in accordance with
generally accepted accounting principles, consistent with the prior year-end
except as stated in the notes included therein (including, as indicated in such
notes, the fact that such financial statements have been prepared on a tax
basis) and the requirement of footnotes thereto. The Golden Eagle Financial
Statements at and for the years ended December 31, 1993 and 1994 have been
reviewed, but not audited by, Golden Eagle's independent public accountants. The
books of account of Golden Eagle accurately reflect Golden Eagle's items of
income and expense and all assets and liabilities and accruals which properly
should have been reflected therein in accordance with generally accepted
accounting principles consistently applied throughout the periods covered
thereby except as disclosed in the Golden Eagle Financial Statements. Prior to
the date of this Agreement, Golden Eagle has made available to SANM for review
and copying all working papers of independent public accountants related to any
work done for Golden Eagle.
2.7 Undisclosed Liabilities. There are no debts, liabilities, or claims
against Golden Eagle, or legal basis therefor, whether accrued, absolute,
contingent, or otherwise, and whether due or to become due, including, but not
limited to, liabilities on account of taxes, other governmental charges, duties,
penalties, interest or fines, except:
(a) Liabilities, to the extent set forth or reserved against
in the Golden Eagle June 30, 1995 Balance Sheet;
(b) Liabilities incurred in the ordinary course of business
(and in compliance with this Agreement) since the date of the Golden
Eagle June 30, 1995 Balance Sheet;
(c) Liabilities disclosed in Section 2.7 of the Golden Eagle
Disclosure Schedule; or
(d) Liabilities which do not exceed $10,000, individually or
in the aggregate.
2.8 Absence of Certain Changes or Events. Since June 30, 1995, there
has not been:
(a) any material adverse change in the business, assets,
liabilities, financial condition or results of operations of Golden Eagle taken
as a whole or any event which could, so far as can reasonably be foreseen, have
such an effect;
(b) any material damage, destruction or casualty loss, whether
or not covered by insurance, to any assets or properties of Golden Eagle that
amounts to more than $10,000 in the aggregate;
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(c) any increase in the compensation payable or to become
payable by Golden Eagle to its employees (other than adjustments consistent with
prior practice) or any increase in any bonus, insurance, pension or other
employee benefit plan or program, payment or arrangement made to, for or with
any such directors, officers or employees;
(d) any termination or notification of intended termination of
a relationship with any executive officer or other key employee, material
customer or supplier of Golden Eagle;
(e) any entry by Golden Eagle into any commitment or
transaction exceeding $10,000 in any instance (including, without limitation,
any borrowing or capital expenditure), other than the drawing of funds pursuant
to its line of credit agreement, entering into equipment leases or transactions
in the ordinary course of business;
(f) any change by Golden Eagle in accounting methods,
principles or practices;
(g) any repurchase or retirement of any securities of Golden
Eagle, or any declaration, payment or setting Golden Eagle for payment of any
dividend or other distribution (whether in cash, stock or property) with respect
to the capital stock of Golden Eagle;
(h) any act, omission or event which would be prohibited after
the date of this Agreement under Section 5 hereof; or
(i) any agreement, whether in writing or otherwise, to take
any action described in this Section 2.8.
2.9 Properties and Inventories. Section 2.9 of the Golden Eagle
Disclosure Schedule contains a list of all material items of machinery,
equipment, tools and dies, furniture, fixtures, spare parts, vehicles and other
similar property and assets owned, leased or otherwise used by Golden Eagle,
specifically identifying and describing, those items with an original cost to,
or total lease payments by, Golden Eagle in excess of $10,000, setting forth
with respect to all such listed property a summary description of all liens
relating thereto (other than liens for taxes due but not yet payable),
identifying the parties thereto, the rental or other payment terms, expiration
date and cancellation and renewal terms thereof. Prior to the date of this
Agreement, Golden Eagle has delivered to SANM true and complete copies of all
currently effective leases, conditional sales agreements or other similar
documents concerning the items listed in Section 2.9 of the Golden Eagle
Disclosure Schedule. Golden Eagle has good and marketable title to, valid
leasehold interests in or other valid right to use all of the material assets
used in its operations or necessary for the conduct of its business, subject to
no mortgages, pledges, security interests, licenses, encumbrances, restrictions
or adverse claims, except as disclosed in the Golden Eagle Disclosure Schedule
or the notes to the Golden Eagle Financials and except for any lien for taxes
not yet due and payable and except for any statutory liens for which payment is
not delinquent. All of such assets are in good operating condition, normal wear
and tear excepted, and are adequate and suitable for the purposes for which they
are presently being used. Golden Eagle is not aware of any need to replace or
substantially modify any physical asset of Golden Eagle in order to use such
asset in the
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manner in which it is currently being used in Golden Eagle's business as
presently conducted. Golden Eagle's inventory of finished goods, work in
progress, materials and supplies is in good condition and saleable and is not in
excess of its reasonable requirements. Except as set forth in Section 2.9 of the
Golden Eagle Disclosure Schedule, as of June 30, 1995, all obsolete, damaged,
slow-moving or unusable inventory has been appropriately reserved against or
written down or written off in accordance with generally accepted accounting
principles.
2.10 Real Property. Golden Eagle owns no real property. Section 2.10 of
the Golden Eagle Disclosure Schedule contains a list and description of all real
property leased by Golden Eagle. Golden Eagle has either fee simple title or
enforceable leasehold interests in all property shown in the Golden Eagle
Disclosure Schedule free and clear of all liens, claims, options or other
encumbrances. The Golden Eagle Disclosure Schedule shows the location, land
acreage, building space, current use or principal uses, title insurance (if
any), and (for leases) expiration dates, options to extend and current annual
rentals as to each property owned or leased by Golden Eagle. All buildings used
in the operations of Golden Eagle are in a good state of repair. All buildings
owned by Golden Eagle conform in all material respects with all applicable
ordinances, regulations and zoning laws, and all buildings leased by Golden
Eagle conform in all material respects with all applicable ordinances,
regulations and zoning laws.
2.11 Insurance. Golden Eagle has fire and casualty insurance policies,
with extended coverage (subject to deductibles) covering the assets, properties
and business of Golden Eagle. All such policies, together with any life
insurance policies on any of its officers, directors or employees maintained by
Golden Eagle, are identified in Section 2.11 of the Golden Eagle Disclosure
Schedule. Golden Eagle has delivered copies of each such policies to Sanmina.
Golden Eagle has not done anything by way of action or inaction which might
invalidate any of such policies in whole or in part.
2.12 Litigation. Except as set forth in Section 2.12 of the Golden
Eagle Disclosure Schedule, Golden Eagle is not engaged in, nor has it been
threatened with, any material litigation (which for this purpose shall mean a
potential liability in excess of $10,000 or potential liabilities in the
aggregate in excess of $10,000), arbitration, investigation or other legal
proceeding relating to Golden Eagle or its business, property or employee
benefit plans or policies, nor to the knowledge of Golden Eagle is there any
valid Golden Eagles for any such proceeding.
2.13 Purchase, Sale and Other Agreements.
(a) All of the following (whether written or oral) to which
Golden Eagle is a party or to which Golden Eagle is subject are identified and
summarized in Section 2.13 of the Golden Eagle Disclosure Schedule:
(i) every contract or agreement for the purchase by
Golden Eagle of inventory, supplies, equipment or other real or personal
property, or the procurement of services, except individual purchase orders, or
aggregate purchase orders to a single vendor, involving payments of less than
$10,000;
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(ii) every joint marketing, product development or
distribution agreement;
(iii) lease of equipment, machinery or other personal
property involving aggregate annual payments in excess of $10,000;
(iv) contract or agreements for the sale or lease of
products or furnishing of services by Golden Eagle except individual purchase
orders, or aggregate purchase orders from a single customer, involving payments
of less than $10,000;
(v) joint venture, partnership or other contract or
arrangement involving the sharing of profits;
(vi) any agreement of indemnification or guaranty
not entered into in the ordinary course of business;
(vii) any agreement, contract or commitment relating
to capital expenditures and involving future obligations in excess of $10,000,
(viii) any contract or agreement, other than in the
ordinary course of business, relating to the purchase or acquisition, by merger
or otherwise, of a significant portion of the business, assets or securities of
Golden Eagle by any other person or of any other person by Golden Eagle;
(ix) any contract or agreement containing a covenant
or covenants which purport to limit to a material extent the ability or right of
Golden Eagle to engage in any lawful business activity or compete with any
person or entity;
(x) any employment or consulting agreement,
contract or commitment with any officer or director level employee, not
terminable by Golden Eagle on 14 days notice without liability; or
(xi) any material contract or agreement not
otherwise described in this Section 2.13 which is not terminable by and without
penalty to Golden Eagle within three (3) months after the date of this
Agreement.
(b) A complete and accurate copy of each written contract,
agreement and other document identified in Section 2.13 of the Golden Eagle
Disclosure Schedule has been made available to Sanmina. Each contract, agreement
or arrangement identified in Section 2.13 of the Golden Eagle Disclosure
Schedule is, except to the extent fully performed at the date hereof, in full
force and effect and valid and binding in accordance with its terms in all
material respects (except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
affecting creditors' rights or by limitations on the availability of equitable
remedies); there is no material default under any such material contract,
agreement or arrangement; and no party to any such contract,
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agreement or arrangement has notified Golden Eagle that it intends to cancel,
withdraw, modify or amend such contract, agreement or arrangement.
2.14 Licenses, Trademarks, Patents and Other Rights. Golden Eagle
owns, is licensed or otherwise entitled to use, or, to the knowledge of Golden
Eagle after reasonable inquiry, can obtain the right to use on a golden Eagles
which is commercially reasonable, all patents, trademarks, trade names, service
marks, copyrights, and other proprietary rights known to Golden Eagle and
necessary to the business of Golden Eagle as currently conducted. Section 2.14
of the Golden Eagle Disclosure Schedule lists all of Golden Eagle's patents,
trademarks, trade names, service marks, copyrights, and applications for any of
the foregoing, and all licenses to which Golden Eagle is a party (the "Golden
Eagle Intellectual Property"), other than licenses to readily available
commercial software. No claims (including any request to enter into a license
agreement) have been asserted or threatened by any person (i) to the effect that
any activity in which Golden Eagle is engaged infringes on any patents or other
proprietary rights, (ii) against the use by Golden Eagle of any trademarks,
trade names, technology, know-how or processes necessary for the operation of
the business of Golden Eagle as currently conducted or presently contemplated,
or (iii) challenging or questioning the validity or effectiveness of any of the
Golden Eagle Intellectual Property; and Golden Eagle is not aware of any valid
golden Eagles for any such claim. All Golden Eagle Intellectual Properties are
valid and subsisting. All "taxes" and "annuities" with respect thereto have been
paid by or on behalf of Golden Eagle.
2.15 Employees and Benefit Plans.
(a) Section 2.15(a) of the Golden Eagle Disclosure Schedule
identifies all consulting or employment agreements and other agreements with
individual consultants or employees to which Golden Eagle is a party and which
are either currently effective or will become effective at the Closing Date, as
well as any employee handbooks, policy manuals and job application forms used by
Golden Eagle. Copies of all such written agreements have been delivered to
Sanmina. Also shown on 2.15(a) of the Golden Eagle Disclosure Schedule are the
names and dates of hire of each salaried employee (excluding hourly production
employees but including commissioned direct sales personnel) of Golden Eagle and
as of October 31, 1995, each such person's rate of compensation and accrued
vacation pay. No officer, manager or other key employee of Golden Eagle has
notified Golden Eagle of an intention to terminate employment or to seek a
material change in such employee's terms of employment, except as identified in
Section 2.15(a) of the Golden Eagle Disclosure Schedule. Golden Eagle is not a
party to or bound by any collective bargaining agreement, nor is any strike,
labor dispute, lawsuit, unfair labor or unfair employment practice charge,
contract grievance or similar charge or action pending or threatened by any of
the employees, former employees or employment applicants of Golden Eagle that
could, if determined adversely, have a material adverse effect on Golden Eagle.
To the knowledge of Golden Eagle after reasonable inquiry, no employee of Golden
Eagle is obligated under any agreement or judgment that would conflict with such
employee's obligation to use such employee's best efforts to promote the
interests of Golden Eagle or would conflict with Golden Eagle's business as
conducted or as currently proposed to be conducted, nor is any current employee
of Golden Eagle in violation of the terms of any employment, noncompetition or
similar agreement with any previous employer.
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(b) Section 2.15(b) of the Golden Eagle Disclosure Schedule
sets forth all employee benefit plans (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") and all
bonus, incentive, deferred compensation, supplemental retirement, severance and
other similar employee benefit plans, programs or arrangements, and any current
or former employment or executive compensation or severance agreements, written
or otherwise, for the benefit of, or relating to, any current or former employee
of Golden Eagle or any trade or business (whether or not incorporated) which is
a member or which is under common control with Golden Eagle (an "ERISA
Affiliate") within the meaning of Section 414 of the Code, or any subsidiary of
Golden Eagle (together, the "Employee Plans").
(c) Section 2.15(c) of the Golden Eagle Disclosure Schedule
sets forth a complete and correct list of each plan, policy or arrangement
(written or oral) providing for insurance coverage (including any self-insured
arrangements), workers' compensation, disability benefits, supplemental
employment benefits, vacation benefits, fringe benefits or other forms of
compensation or benefits which (i) is not an Employee Plan, (ii) is maintained,
established or contributed to by Golden Eagle or any related person, and (iii)
covers any employee or former employee of Golden Eagle or any related person,
including without limitation any employee or former employee of a Related Person
that does business outside of the United States. Such plans and arrangements as
are described above are hereinafter referred to collectively as the "Benefit
Arrangements."
(d) (i) None of the Employee Plans or Benefit Arrangements
promises or provides retiree medical or other retiree welfare benefits to any
person except as required by applicable law, including but not limited to COBRA;
(ii) all Employee Plans and Benefit Arrangements are in compliance in all
material respects with the requirements prescribed by any and all applicable
statutes (including ERISA and the Code), orders, or governmental rules and
regulations currently in effect with respect thereto (including all applicable
requirements for notification to participants or beneficiaries or the Department
of Labor, Internal Revenue Service (the "IRS") or Secretary of the Treasury),
and Golden Eagle has performed all material obligations required to be performed
by it under, is not in default under or violation of, and has no knowledge of
any default or violation by any other party to, any of the Employee Plans or
Benefit Arrangements; (iii) each Employee Plan intended to qualify under Section
401(a) of the Code and each trust intended to qualify under Section 501(a) of
the Code either has received a favorable determination letter with respect to
each such Employee Plan from the IRS or still has a remaining period of time
under applicable Treasury Regulations or IRS pronouncements in which to apply
for such a determination letter and to make any amendments necessary to obtain a
favorable determination; and (iv) no Employee Plan or Benefit Arrangement is or
within the prior six (6) years has been subject to, and Golden Eagle has not
incurred and does not expect to incur any liability under, Title IV of ERISA or
Section 412 of the Code and (v) nothing in any Employee Plan or Benefit
Arrangements precludes or interferes with Sanmina's ability to cause Golden
Eagle to terminate (or consolidate, at Sanmina's option) any Employee Plan or
Benefit Arrangement after the Closing; provided that (i) the Employee Plans and
Benefit Arrangements may be terminated prospectively only, subject to rights
accrued by Golden Eagle's employees at the time of such termination and (ii) not
more than sixty days notice may be required to terminate certain Employee Plans
and Benefit Arrangements.
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(e) None of the following now exists or has existed within the
six-year period ending on the date hereof with respect to any Employee Plan: (i)
any act or omission by Golden Eagle constituting a violation of Section 402,
403, 404 or 405 of ERISA; (ii) any act or omission by Golden Eagle which
constitutes a violation of Sections 406 and 407 of ERISA and is not exempted by
Section 408 of ERISA or which constitutes a violation of Section 4975(c) of the
Code and is not exempted by Section 4975(d) of the Code; (iii) any act or
omission by Golden Eagle constituting a violation of Section 503, 510 or 511 of
ERISA; or (iv) any act or omission by Golden Eagle which could give rise to
liability under Section 502 of ERISA or under Sections 4972 or 4975 through 4980
of the Code.
(f) Each Employee Plan and Benefit Arrangement has been
maintained in substantial compliance with its terms, and all contributions,
premiums or other payments due from Golden Eagle or any of its subsidiaries to
(or under) any such Employee Plan or Benefit Arrangement have been fully paid or
adequately provided for on the audited Golden Eagle Financials for the most
recently-ended fiscal year. All accruals thereon (including, where appropriate,
proportional accruals for partial periods) have been made in accordance with
generally accepted accounting principles consistently applied on a reasonable
golden Eagles. There has been no amendment, written interpretation or
announcement (whether or not written) by Golden Eagle with respect to, or change
in employee participation or coverage under, any Employee Plan or Benefit
Arrangement that would increase materially the expense of maintaining such plans
or arrangements, individually or in the aggregate, above the level of expense
incurred with respect thereto for the most recently-ended fiscal year.
(g) Golden Eagle has made available to Sanmina complete,
accurate and current copies of all Employee Plans and Benefit Arrangements and
all amendments, documents, correspondence and filings relating thereto,
including but not limited to any statements, filings, reports or returns filed
with any governmental agency with respect to the Employee Plans and Benefit
Arrangements at any time within the three-year period ending on the date hereof.
2.16 Change of Control Payments. Section 2.16 of the Golden Eagle
Disclosure Schedule sets forth the terms of all agreements, commitments,
employment policies, plans or arrangements pursuant to which all amounts may
become payable (whether currently or in the future) to current or former
officers, directors or employees of Golden Eagle or others as a result of or in
connection with the transactions contemplated hereby, including any termination
of employment relating to or within one year following the Closing Date.
2.17 Borrowing and Guarantees. Section 2.17 of the Golden Eagle
Disclosure Schedule identifies all agreements and undertakings pursuant to which
Golden Eagle (a) is borrowing or is entitled to borrow any money, (b) is lending
or has committed itself to lend any money, or (c) is or may become a guarantor
or surety with respect to the obligations of any person. Complete and accurate
copies of all such written agreements have been delivered to Sanmina.
2.18 Bank Accounts and Powers of Attorney. Section 2.18 of the Golden
Eagle Disclosure Schedule identifies all bank and credit card accounts used in
connection with the operations of Golden
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Eagle whether or not such accounts are held in the name of Golden Eagle and
lists their respective signatories; and lists the names of all persons holding a
power of attorney from Golden Eagle and summarizes the terms thereof.
2.19 Compliance with Contracts. To the best knowledge of Golden Eagle
after reasonable inquiry, Golden Eagle has performed all material obligations
required to be performed by it as of the date of this Agreement under each
material contract, obligation, commitment, agreement, undertaking, arrangement
or lease referred to in this Agreement or the Golden Eagle Disclosure Schedule
and has not received any notice that it is in default thereunder.
2.20 Compliance with Laws. Golden Eagle has substantially complied
with all laws, ordinances, regulations, judgments, decrees, injunctions or
orders of any court or governmental agency or entity applicable in any material
respect to the conduct of its business (except that Section 2.27 shall consist
of the sole representations and warranties made by Golden Eagle and each Seller
with respect to the subject matter thereof).
2.21 Taxes.
(a) Definition of Taxes. For the purposes of this Agreement,
"Tax" or "Taxes" refers to any and all federal, state, local and foreign taxes,
assessments and other governmental charges, duties, impositions and liabilities
relating to taxes, including taxes based upon or measured by gross receipts,
income, profits, sales, use and occupation, and value added, ad valorem,
transfer, franchise, withholding, payroll, recapture, employment, excise and
property taxes, together with all interest, penalties and additions imposed with
respect to such amounts and any obligations under any agreements or arrangements
with any other person with respect to such amounts and including any liability
for taxes of a predecessor entity.
(b) Tax Returns and Audits.
(I) Golden Eagle and each of its subsidiaries has
timely filed all federal, state, local and foreign returns, estimates,
information statements and reports ("Returns") relating to Taxes required to be
filed by Golden Eagle and each of its subsidiaries, except such Returns which
are not material to Golden Eagle, and has paid all Taxes shown to be due on such
Returns or is contesting them in good faith.
(II) Except as is not material to Golden Eagle,
Golden Eagle and each of its subsidiaries as of the Closing Date will have
withheld with respect to its employees all federal and state income taxes, FICA,
FUTA and other Taxes required to be withheld.
(III) Golden Eagle is not delinquent in the payment
of any Tax nor is there any Tax deficiency outstanding, proposed or assessed
against Golden Eagle or any of its subsidiaries, nor has Golden Eagle executed
any waiver of any statute of limitations on or extending the period for the
assessment or collection of any Tax.
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(IV) Except as set forth in Section 2.21(b) of the
Golden Eagle Disclosure Schedule, no audit or other examination of any Return of
Golden Eagle or any of its subsidiaries is presently in progress, nor has Golden
Eagle or any of its subsidiaries been notified of any request for such an audit
or other examination.
(V) Except as set forth in Section 2.21(b) of the
Golden Eagle Disclosure Schedule, Golden Eagle has no liability for unpaid
federal, state, local or foreign Taxes which have not been accrued for or
reserved on Golden Eagle Balance Sheet, whether asserted or unasserted,
contingent or otherwise.
(VI) None of Golden Eagle's assets are treated as
"tax-exempt use property" within the meaning of Section 168(h) of the Code.
(VII) Except as set forth in Section 2.21(b) of the
Golden Eagle Disclosure Schedule, there is no contract, agreement, plan or
arrangement, including but not limited to the provisions of this Agreement,
covering any employee or former employee of Golden Eagle or any of its
subsidiaries that, individually or collectively, could give rise to the payment
of any amount that would not be deductible pursuant to Sections 280G, 404 or
162(m) of the Code.
(VIII) Neither Golden Eagle nor any of its
subsidiaries has filed any consent agreement under Section 341(f) of the Code or
agreed to have Section 341(f)(2) of the Code apply to any disposition of a
subsection (f) asset (as defined in Section 341(f)(4) of the Code) owned by
Golden Eagle.
(IX) Golden Eagle is not, and has not been at any
time, a "United States real property holding corporation" within the meaning of
Section 897(c)(2) of the Code.
2.22 Transactions with Associates of Management. Except as set forth
in Section 2.22 of the Golden Eagle Disclosure Schedule, no executive officer or
director of Golden Eagle has (whether directly or indirectly through another
entity in which such person has a material interest, other than as the holder of
less than 5% of a class of securities of a publicly traded company) any material
interest in (a) any property or assets of Golden Eagle (except as a
shareholder), (b) any current competitor, customer, supplier or agent of Golden
Eagle, or (c) any person which is currently a party to any material contract or
agreement with Golden Eagle. Golden Eagle has not lent any money to or
guaranteed any obligation of any officer, director or shareholder of Golden
Eagle, nor has any such person lent money to or guaranteed any obligation of
Golden Eagle.
2.23 Accounts Receivable.
(a) All accounts receivable reflected on the Golden Eagle
Balance Sheet are bona fide, arose in the ordinary course of business in the
aggregate amount thereof and are collectible in full (less any reserve for
doubtful accounts). Section 2.23 of the Golden Eagle Disclosure Schedule shows
each account receivable of Golden Eagle which had a balance in excess of $10,000
and which was outstanding,
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as of the close of business on October 31, 1995. Any accounts receivable with
such a balance as of that time which were outstanding more than 60 days from
invoice date are so identified in Section 2.23 of the Golden Eagle Disclosure
Schedule.
(b) None of the accounts receivable of Golden Eagle is subject
to any lien or claim of offset, setoff or counterclaim and Golden Eagle has no
knowledge of any facts or circumstances which would give rise to any such claim.
There are no accounts receivable which are contingent upon the performance by
Golden Eagle of future services.
2.24 Investment Banking and Finders' Fees. Section 2.24 of the Golden
Eagle Disclosure Schedule describes any obligations which Golden Eagle has
incurred or will incur for investment banking or finders' fees in connection
with this Agreement or the transactions contemplated hereby. Copies of all
pertinent documents with respect to any such obligations have been delivered to
Sanmina.
2.25 Nondisclosure Agreements. Each employee of Golden Eagle listed in
Section 2.15(a) of the Golden Eagle Disclosure Schedule has entered into Golden
Eagle's standard nondisclosure agreement. Golden Eagle has delivered a copy of
the form of such standard agreement to Sanmina.
2.26 Warranties.
(a) Section 2.26(a) of the Golden Eagle Disclosure Schedule
sets forth the warranties which Golden Eagle currently makes. During the period
since January 1, 1992, Golden Eagle has not made any warranties materially
different from the warranties set forth in Section 2.26(a) of the Golden Eagle
Disclosure Schedule.
(b) Section 2.26(b) of the Golden Eagle Disclosure Schedule
contains a summary description of warranty claims with respect to Golden Eagle
services and the aggregate warranty cost since January 1, 1992.
(c) Golden Eagle has made adequate provision in the Golden
Eagle Financials for warranty claims in accordance with generally accepted
accounting principles consistently applied.
2.27 Environmental Liability.
For purposes of this Agreement, the following terms shall have the
meanings ascribed to them below:
Definitions:
"Hazardous Material" is any material or substance that is
prohibited or regulated by any Environmental Law or that has been designated by
any Governmental Authority to be radioactive, toxic, hazardous or otherwise a
danger to health, reproduction or the environment.
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"Governmental Authority" is any local, state, provincial,
federal, or international governmental authority or agency which has had or now
has jurisdiction over any portion of the subject matter of this Agreement, any
Business Facility or Golden Eagle.
"Business Facility" is any property including the land, the
improvements thereon, the groundwater thereunder and the surface water thereon,
that is or at any time has been owned, operated, occupied, controlled or leased
by Golden Eagle in connection with the operation of its business.
"Disposal Site" is a landfill, disposal agent, waste hauler or
recycler of Hazardous Materials.
"Environmental Laws" are all applicable laws, rules,
regulations, orders, treaties, statutes, and codes promulgated by any
Governmental Authority which prohibit, regulate or control any Hazardous
Material or any Hazardous Material Activity, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
the Resource Recovery and Conservation Act of 1976, the Federal Water Pollution
Control Act, the Clean air Act, the Hazardous Materials Transportation Act, the
Clean Water Act, comparable laws, rules, regulations, orders, treaties,
statutes, and codes of other Governmental Authorities, the regulations
promulgated pursuant to any of the foregoing, and all amendments and
modifications of any of the foregoing, all as amended to date.
"Hazardous Materials Activity" is the transportation,
transfer, recycling, storage, use, treatment, manufacture, removal, remediation,
release, exposure of others to, sale, or distribution of any Hazardous Material
or any product containing a Hazardous Material.
"Environmental Permit" is any approval, permit, license,
clearance or consent required to be obtained from any private person or any
Governmental Authority with respect to a Hazardous Materials Activity which is
or was conducted by Golden Eagle.
Except as set forth in the Golden Eagle Disclosure Schedule, Golden
Eagle hereby represents and warrants to Sanmina that:
(a) Condition of Property: As of the Closing, except in
compliance with Environmental Laws in a manner that could not reasonably be
expected to subject Golden Eagle to liability, to the knowledge of Golden Eagle
after reasonable inquiry, no Hazardous Materials are present on any Business
Facility currently owned, operated, occupied, controlled or leased by Golden
Eagle or were present on any other Business Facility at the time it ceased to be
owned, operated, occupied, controlled or leased by Golden Eagle. Except as set
forth in Section 2.27(a) of the Golden Eagle Disclosure Schedule, there are no
underground storage tanks, asbestos which is friable or likely to become friable
or PCBs present on any Business Facility currently owned, operated, occupied,
controlled or leased by Golden Eagle or as a consequence of the acts of Golden
Eagle or its agents.
(b) Hazardous Materials Activities: Golden Eagle has conducted
all Hazardous Material Activities relating to its business in compliance in all
material respects with all applicable
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Environmental Laws. The Hazardous Materials Activities of Golden Eagle prior to
the Closing have not resulted in the exposure of any person to a Hazardous
Material in a manner which has caused or could reasonably be expected to cause
an adverse health effect to any such person.
(c) Permits: Section 2.27(c) of the Golden Eagle Disclosure
Schedule accurately describes all of the Environmental Permits currently held by
the Golden Eagle and relating to its business and the listed Environmental
Permits are all of the Environmental Permits necessary for the continued conduct
of any Hazardous Material Activity of Golden Eagle relating to its business as
such activities are currently being conducted, except for those permits the
absence of which could not reasonably be expected to result in a material
adverse effect on its business. All such Environmental Permits are valid and in
full force and effect. Golden Eagle has complied in all material respects with
all covenants and conditions of any Environmental Permit which is or has been in
force with respect to its Hazardous Materials Activities. To the knowledge of
Golden Eagle after reasonable inquiry, no circumstances exist which could cause
any Environmental Permit to be revoked, modified, or rendered non-renewable upon
payment of the permit fee. All Environmental Permits and all other consents and
clearances required by any Environmental Law or any agreement to which Golden
Eagle is bound as a condition to the perfor mance and enforcement of this
Agreement, including without limitation, all so-called "ECRA" environmental
clearances required by any Governmental Authority have been obtained or will be
obtained prior to the Closing at no cost to Sanmina.
(d) Environmental Litigation: Except as set forth in Section
2.27(d) of the Golden Eagle Disclosure Schedule, no action, proceeding,
revocation proceeding, amendment procedure, writ, injunction or claim is pending
or threatened, concerning or relating to any Environmental Permit or any
Hazardous Materials Activity of Golden Eagle relating to its business, or any
Business Facility currently owned, operated, occupied, controlled or leased by
Golden Eagle, or the best of Golden Eagle's knowledge, pending or threatened
with respect to any other Business Facility.
(e) Offsite Hazardous Material Disposal: Golden Eagle has
transferred or released Hazardous Materials only to those Disposal Sites set
forth in Section 2.27(e) of the Golden Eagle Disclosure Schedule; and no action,
proceeding, liability or claim exists or is threatened against any Disposal Site
or against Golden Eagle with respect to any transfer or release of Hazardous
Materials relating to the Business to a Disposal Site which could reasonably be
expected to subject Golden Eagle to liability.
(f) Environmental Liabilities: Golden Eagle is not aware of
any fact or circumstance, which could result in any environmental liability
which could reasonably be expected to result in a material adverse effect on the
business or financial status of Golden Eagle.
(g) Reports and Records: Golden Eagle has delivered to Sanmina
or made available for inspection by Sanmina and its agents, representatives and
employees all records in Golden Eagle's position concerning the Hazardous
Materials Activities of Golden Eagle relating to its business and all
environmental audits and environmental assessments of any Business Facility
conducted at the request
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of, or otherwise in the possession of Golden Eagle. Golden Eagle has complied
with all environmental disclosure obligations imposed by applicable law with
respect to this transaction.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SANM AND SANM SUB
SANM and SANM Sub represent and warrant to Golden Eagle as follows:
3.1 Organization; Qualification.
(a) SANM is a corporation duly organized, existing and in good
standing under the laws of the State of Delaware. SANM Sub is a corporation duly
organized, existing and in good standing under the laws of the State of
Delaware. Each of SANM and SANM Sub has all necessary power and authority under
applicable corporate law and its organizational documents to own or lease its
properties and to carry on its business as presently conducted.
(b) Each of SANM and SANM Sub is registered to do business as
a foreign corporation, and is in good standing, under the laws of all
jurisdictions where the nature of its business requires such qualification and
where the failure to so qualify would have a "SANM Material Adverse Effect." For
the purposes of this Agreement, "SANM Material Adverse Effect" means a material
adverse effect on the business, operations or financial condition of SANM taken
as a whole.
3.2 Authority.
(a) Each of SANM and SANM Sub has full corporate power and
authority to execute, deliver and perform this Agreement and the Merger
Agreement. Other than the authorization of the Boards of Directors of SANM and
SANM Sub to execute and deliver this Agreement and the approval of this
Agreement by SANM as the sole shareholder of SANM Sub, no other corporate
proceedings on the part of SANM and SANM Sub are necessary for SANM and SANM Sub
to authorize this Agreement, the Merger Agreement or to consummate the
transactions contemplated hereby or thereby. This Agreement has been duly
executed and delivered and attested to by duly authorized officers of SANM and
SANM Sub. This Agreement is valid, binding and enforceable against each of SANM
and SANM Sub in accordance with its terms (except to the extent that enforcement
is affected by laws pertaining to bankruptcy, reorganization, insolvency and
creditors' rights and by the availability of the injunctive relief, specific
performance and other equitable remedies).
3.3 Consents and Approvals; No Violation. Except as may be required by
the Securities Act, state securities laws, the Delaware Law and the Texas Law,
there is no requirement applicable to SANM and SANM Sub to make any filing with,
or to obtain any permit, authorization, consent or approval of, any governmental
or regulatory authority as a condition to the lawful consummation by SANM and
SANM Sub of the transactions contemplated by this Agreement. Neither SANM and
SANM
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Sub knows of any reason why any required permit, authorization, consent or
approval will not be obtained. Neither the execution and delivery of this
Agreement by SANM and SANM Sub nor the consummation by SANM and SANM Sub of the
transactions contemplated by this Agreement will (a) conflict with or result in
any breach of any provision of the Certificate of Incorporation (or Articles of
Incorporation) or Bylaws of SANM and SANM Sub, (b) result in a default (or give
rise to any right of termination, cancellation or acceleration) under any of the
terms, conditions or provisions of any material note, bond, mortgage, indenture,
license agreement, lease or other material contract, instrument or obligation to
which SANM and SANM Sub is a party or by which SANM and SANM Sub, or any of
their respective assets may be bound, (c) violate in any material respects any
statute, rule, regulation, order, writ, injunction, decree or arbitration award
applicable to SANM and SANM Sub or any of their respective assets or (d) result
in the creation of any material (individually or in the aggregate) liens,
charges or encumbrances on any of the assets of SANM and SANM Sub.
3.4 Corporate Documents.
(a) SANM will deliver to Golden Eagle prior to the Closing
complete and accurate copies of SANM's and SANM Sub's Articles of Incorporation
and Bylaws, each as amended, and minutes of all their respective directors and
shareholders' meetings.
(b) SANM will deliver to Golden Eagle as soon as practicable
after the date of this Agreement copies of (i) its Annual Report to Shareholders
for the year ended September 30, 1994, (ii) its Notice of Annual Meeting and
Proxy Statement for its 1995 annual meeting of stockholders and (iii) its Annual
Report on Securities and Exchange Commission Form 10-K for the year ended
September 30, 1994.
3.5 SANM Common Stock. The shares of SANM Common Stock issuable in
connection with the Merger will, when issued and delivered in accordance with
this Agreement and the Merger Agreement, be duly and validly issued in
compliance with applicable Federal and State securities laws and fully paid and
nonassessable.
ARTICLE 4
REGISTRATION OF SANMINA STOCK
4.1 Knowledge of Reliance. SANM, in claiming exemption from applicable
securities laws for the issuance of the Merger Shares, is relying upon the
statements and representations made herein.
4.2 Investment Purpose in Acquiring the Merger Shares. Each of the
Shareholders is acquiring the Merger Shares for his/her/its own account for
investment purposes only and not with a view to their resale or distribution in
violation of the Securities Act. Each of the Shareholders has the requisite
investment intent to satisfy Section 4(2) of the Securities Act. Each
Shareholder has accurately indicated
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on the Shareholder's Signature Page whether such Shareholder is an "accredited
investor" as such term is used in Rule 501 under the Securities Act.
4.3 Information About SANM. Prior to the Closing each of the
Shareholders will have received certain business information about SANM,
including SANM's most recent Annual Report on Form 10-K, Quarterly Report on
Form 10-Q, and Annual Report to Shareholders. Prior to the Closing each of the
Shareholders will have had the opportunity to discuss the business and affairs
of SANM with an officer of SANM and will have received such information
concerning SANM as such Shareholder considers necessary or advisable in order to
form a decision concerning acquisition of the Merger Shares.
4.4 Restriction on Transfer; Compliance with Securities Act. Each of
the Shareholders understands that the Merger Shares are not freely transferable
and that such Shareholder may in fact be prohibited from selling the Merger
Shares for an extended period of time. If any Shareholder sells or distributes
the Merger Shares in the future, it shall sell or distribute them pursuant to
the requirements of this Section 4.4, the Securities Act and other applicable
securities laws. The Shareholders will not transfer any part of the Merger
Shares without (i) effective registration under the Securities Act and other
applicable securities laws, (ii) obtaining an opinion of counsel satisfactory in
form and substance to counsel for SANM stating that the proposed transaction, if
effected without such registration, will not result in a violation of the
Securities Act and other applicable securities laws, or (iii) providing SANM
with such seller's and broker's affidavits or representations as reasonably
required to enable SANM's counsel to opine that such sale is exempt under Rule
144 of the Securities Act and under other applicable securities laws. Prior to
December 31, 1997 the Shareholders will not sell, transfer or otherwise dispose
of for consideration any Merger Shares, except that during 1997 the Shareholders
may sell a sufficient number of shares to pay all liability for federal or state
income or capital gains taxes resulting from the acquisition of the Shares by
the Shareholders in connection with the Merger. The foregoing shall not restrict
gifts or estate planning transfers of Merger Shares, provided that the donee or
recipient agrees contemporaneously with such transfer to be bound by the
provisions of Article IV of this Agreement.
4.5 Restrictive Legend. SANM may place a restrictive legend on all
certificates representing Merger Shares containing substantially the following
language:
"The Shares represented by this certificate have not been
registered under either the Securities Act of 1933, as
amended, or applicable Blue Sky laws and may not be sold,
pledged, or otherwise transferred except in compliance with
such securities laws."
4.6 Registration Statement.
(a) On the first anniversary of the Effective Date, SANM shall
prepare and file with the SEC a registration statement on Form S-3 (or other
applicable Form) covering the Shareholders' sale of all then issued and
outstanding Registrable Shares which the Shareholders elect to have included in
such registration statement. SANM shall use all reasonable efforts to cause such
registration statement to become and remain effective until the earlier of three
years after the Effective Date, or the date such Registrable Shares included
therein cease to be Registrable Securities.
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(b) With respect to each registration statement filed by SANM
pursuant to this Section, SANM shall:
(i) use all reasonable efforts to cause that
registration statement to become and remain effective for the
period(s) specified above;
(ii) as expeditiously as possible prepare and file
with the SEC any amendments and supplements to the
registration statement and the prospectus included in the
registration statement as may be necessary to keep the
registration statement effective for the period(s) specified
above;
(iii) as expeditiously as possible furnish to each
holder of Registrable Shares who is selling shares pursuant to
such registration (a "Selling Holder") such reasonable numbers
of copies of the prospectus, including a preliminary
prospectus, in conformity with the requirements of the
Securities Act, and such other documents as the Selling Holder
may reasonably request in order to facilitate the public sale
or other disposition of the Registrable Shares owned by the
Selling Holder;
(iv) as expeditiously as possible use all reasonable
efforts to register or qualify the Registrable Shares covered
by the Registration Statement under the securities or Blue Sky
laws of such states as the Selling Holders shall reasonably
request, and do any and all other acts and things that may be
necessary or desirable to enable the Selling Holders to
consummate the public sale or other disposition in such states
of the Registrable Shares owned by the Selling Holder;
provided, however, that SANM shall not be required in
connection with this paragraph (iv) to qualify as a foreign
corporation or execute a general consent to service of process
in any jurisdiction; and
(v) if SANM has delivered preliminary or final
prospectuses to the Selling Holders and after having done so
the prospectus is amended to comply with the requirements of
the Securities Act, promptly notify the Selling Holders and,
if requested, the Selling Holders shall immediately cease
making offers of Registrable Shares and return all
prospectuses to SANM. SANM shall promptly provide the Selling
Holder with revised prospectuses and, following receipt of the
revised prospectuses, the Selling Holders shall be free to
resume making offers of the Registrable Shares.
(d) Notwithstanding the foregoing, if at the time such
registration statement is to be filed, SANM reasonably believes that there are
pending potential material developments or activities which would be required to
be disclosed in such registration statement the disclosure of which, in the good
faith determination of SANM may materially adversely affect SANM, then SANM may
delay the filing of such registration statement subject to the limitation set
forth in the penultimate sentence of this Subsection (d). Furthermore, if an
amendment to an effective registration statement is required by virtue of the
existence of an undisclosed material development or activity the disclosure of
which, in the good faith determination of SANM may materially adversely affect
SANM, then SANM shall notify the Selling
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Holders that such material development or activity exists (without disclosing
the nature or specifics thereof) and the Selling Holders shall thereupon cease
all sales of Registrable Shares subject to the limitation set forth in the last
sentence of this Subsection (d). The aggregate number of days by which the
filing of a registration statement is delayed or for which the Selling Holders
are prevented from selling Registrable Shares pursuant to this subsection (d)
shall not exceed a cumulative 90 days in any 18-month period. The Selling
Holders shall hold in confidence all information provided to them pursuant to
this paragraph and shall not use such information in violation of any applicable
securities laws.
(e) On a one-time basis, SANM shall, if requested by the
holders of at least ten percent (10%) of the Registrable Shares, enter into an
underwriting agreement with an underwriter reasonably acceptable to SANM for the
firm commitment offering of Registrable Securities, which agreement shall
include reasonable and customary terms and provisions; provided, however, that
no shareholders other than the Selling Holders shall be required to sign a
standstill agreement in connection with the underwritten sale of securities.
4.7 Expenses. SANM will pay all of the registration expenses of the
registration statements filed pursuant to this Article V including, without
limitation, all registration and filing fees, exchange listing fees, printing
expenses, fees and disbursements of counsel for SANM, state Blue Sky fees and
expenses, the expense of any special audits incident to or required by any such
registration. SANM shall also pay up to an aggregate of $25,000 of legal fees of
one counsel to the Selling Holders for the total of all registrations effected
under this Article V. The Selling Holders shall pay all underwriting discounts,
underwriter's expenses, and selling commissions with respect to such Selling
Holders' shares, and the fees and expenses of the Selling Holders' counsel in
excess of an aggregate $25,000.
4.8 Indemnification.
(a) With respect to the registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, SANM will indemnify
and hold harmless the seller of such Registrable Shares, each underwriter of
such Registrable Shares, and each other person, if any, who controls such seller
or underwriter within the meaning of the Securities Act or the Exchange Act
against any losses, claims, damages or liabilities, joint or several, to which
such seller, underwriter or controlling person may become subject under the
Securities Act, the Exchange Act, state securities or Blue Sky laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such Registrable Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in the registration
statement, or any amendment or supplement to such Registration Statement, or
arise out of or are based upon the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and SANM will reimburse such seller, underwriter and
each such controlling person for any legal or any other expenses reasonably
incurred by such seller, underwriter or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that SANM will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
(i) any untrue statement or omission made in such registration
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statement, preliminary prospectus or prospectus, or any such amendment or
supplement, in reliance upon and in conformity with information furnished to
SANM, in writing, by or on behalf of such seller, underwriter or controlling
person specifically for use in the preparation thereof, or (ii) sales during any
period in which such Seller is obligated to cease selling Registrable Securities
pursuant to Section 5.6(d).
(b) In the event of any registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, each seller of
Registrable Shares, severally and not jointly, will indemnify and hold harmless
SANM, each of its directors and officers and each underwriter (if any) and each
person, if any, who controls SANM or any such underwriter within the meaning of
the Securities Act or the Exchange Act, against any losses, claims, damages or
liabilities, joint or several, to which SANM, such directors and officers,
underwriter or controlling person may become subject under the Securities Act,
Exchange Act, state securities or Blue Sky laws or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in any registration statement under which such
Registrable Shares were registered under the Securities Act, any preliminary
prospectus or final prospectus contained in the registration statement, or any
amendment or supplement to the Registration Statement, or arise out of or are
based upon any omission or alleged omission to state a material fact required to
be stated therein or necessary to make the statements therein not misleading, if
the statement or omission was made in reliance upon and in conformity with
information furnished in writing to SANM by or on behalf of such seller,
specifically for use in connection with the preparation of such Registration
Statement, prospectus, amendment or supplement; or (ii) sales during any period
in which such Seller is obligated to cease selling Registrable Securities
pursuant to Section 4.6; provided, however, that the obligations of such seller
of Registrable Shares hereunder shall be limited to an amount equal to the net
proceeds to each seller of Registrable Shares from the sale of Registrable
Shares as contemplated herein.
(c) Each party entitled to indemnification under this Section
4.8 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided that, counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld). The Indemnified Party may participate in such defense at such party's
expense; provided, however, that the Indemnifying Party shall pay such expense
if representation of such Indemnified Party by the counsel retained by the
Indemnifying Party would be inappropriate due to actual or potential differing
interests between the Indemnified Party and any other party represented by such
counsel in such proceeding. No Indemnifying Party, in the defense of any such
claim or litigation shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect of such
claim or litigation, and no indemnified Party shall consent to entry of any
judgment or settle such claim or litigation without the prior written consent of
the Indemnifying Party.
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4.9 Information by Holder. Each holder of Registrable Shares included
in any registration shall furnish to SANM such information regarding such holder
and the distribution proposed by such holder as SANM may request in writing and
as shall be required in connection with any registration, qualification or
compliance referred to in this Agreement.
4.10 Rule 144 Requirements. So long as SANM has a class of securities
registered under Section 12 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), SANM agrees to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act;
(b) use all reasonable efforts to file with the SEC in a
timely manner all reports and other documents required of SANM under the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements); and
(c) furnish to any holder of Registrable Shares upon request a
written statement by SANM as to its compliance with the reporting requirements
of said Rule 144, and of the Securities Act and the Exchange Act, a copy of the
most recent annual or quarterly report of SANM, and such other reports and
documents of SANM as such holder may reasonably request to avail itself of any
similar rule or regulation of the SEC allowing it to sell any such securities
without registration.
4.11 Transfer of Registration Rights. The registration rights and
obligations of the Shareholders under this Article V may be transferred to
transferees of Registrable Securities who receive such shares by gift, will, by
the laws of intestate succession, or by operation of law, subject to SANM's
right to place reasonable limitations on the number of such transfers if such
transfers of Registrable Securities would impose a burden on SANM, and provided
that SANM receives prompt written notice of such transfers.
ARTICLE 5
COVENANTS OF GOLDEN EAGLE
Golden Eagle hereby covenants and agrees as follows:
5.1 Negative Covenants. Between the date of this Agreement and the
Effective Date, unless SANM shall otherwise consent in writing, Golden Eagle
will not do any of the following or commit to do so:
(a) Make any purchase, sale or disposition of any material
asset or property other than in the ordinary course of business consistent with
past practices or mortgage, pledge, subject to a lien or otherwise encumber any
of its material properties or assets;
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(b) Incur any contingent liability as a guarantor or otherwise
with respect to the obligations or any person or entity;
(c) Take any action, or permit any action within Golden
Eagle's control, which would prevent the Merger from qualifying as a tax-free
reorganization under Section 368 of the Code and all rules, regulations and
policies of the Securities and Exchange Commission, and Golden Eagle will use
its best efforts to prevent any of its officers or directors from taking or
permitting any such action;
(d) Amend its Articles of Incorporation or Bylaws;
(e) Issue any shares of stock or grant any options, warrants
or rights to acquire any capital stock, or modify the terms or waive any rights
under any options, warrants or other securities currently outstanding; or
declare, set Golden Eagle or pay any dividend or make any other distribution in
respect of its capital stock, or make any direct or indirect redemption,
purchase or other acquisition of its capital stock;
(f) Make any changes in the compensation payable or to become
payable to any of its officers or employees (other than salary adjustments to
nonexempt employees consistent with prior practice or in accordance with a
budget previously approved by SANM) or enter into, amend or terminate any
employment or consulting agreements or waive any material rights thereunder;
(g) Make any loans to or engage in transactions with any of
its stockholders, officers, directors or employees other than in the ordinary
course of business;
(h) Enter into, amend or terminate any material agreement or
waive any material rights thereunder;
(i) Undertake any stock split, recapitalization or
reorganization;
(j) Solicit, encourage or negotiate any of the following:
(i) any merger or consolidation of Golden Eagle with
any person other than SANM or SANM Sub,
(ii) any sale of assets of Golden Eagle (other than
in the ordinary course of business) to any person other than SANM or SANM Sub,
or
(iii) any equity or debt investment in Golden Eagle
by any person;
(k) Knowingly undertake a course of action inconsistent with
this Agreement or which would prevent any condition precedent to its obligations
under this Agreement from being satisfied at or prior to the Effective Date;
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(l) Provide or publish to its shareholders any material which
might constitute an unauthorized "prospectus" within the meaning of the
Securities Act;
(m) Incur any material obligation other than in ordinary
course of business;
(n) Borrow money (other than on terms approved by SANM) or
incur new or additional indebtedness (other than accounts payable or trade
payables incurred in the ordinary course of business);
(o) Incur liabilities in connection with the leasing of
property or assets other than in the ordinary course of business;
(p) Issue any press release or public disclosure, either
written or oral, of the transactions contemplated by this Agreement without the
prior knowledge and written consent of SANM.
5.2 Affirmative Covenants. Prior to the Effective Date, Golden Eagle
will do each of the following:
(a) Use its best efforts to perform and fulfill all conditions
and obligations on its part to be performed and fulfilled under this Agreement,
to the end that the transactions contemplated by this Agreement shall be fully
carried out;
(b) Use its best efforts to obtain all authorizations,
consents and permits of others required to permit the consummation by Golden
Eagle of the transactions contemplated by this Agreement and the continuation of
Golden Eagle's business after the consummation of the Merger;
(c) Promptly advise SANM in writing of (i) any materially
adverse change in the financial condition, business operations or key personnel
of Golden Eagle; and (ii) the occurrence of any event which causes the
representations and warranties made by Golden Eagle in this Agreement or the
information included in the Golden Eagle Disclosure Schedule to be incomplete or
inaccurate in any material respect;
(d) Conduct its business only in the ordinary course and
refrain from changing or introducing any method of management or operations
except in the ordinary course of business and consistent with prior practices;
(e) Use its best efforts to keep intact its business
organization, to keep available its present officers, agents and employees and
to preserve the goodwill of all material suppliers, customers and others having
business relations with it;
(f) Permit SANM and its authorized representatives to have
full access during normal business hours to all of its properties, assets,
records, tax returns, contracts and documents and furnish to SANM and its
authorized representatives such financial and other information with respect to
its
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business and properties as SANM may from time to time reasonably request for
purposes of making a review of the business of Golden Eagle;
(g) Use its best efforts to obtain approval of this Agreement
and the Merger Agreement by the holders of all of the outstanding shares of
Golden Eagle Common Stock entitled to vote (and to that end, recommend approval
of the Merger to Golden Eagle's shareholders);
(h) As promptly as reasonably practicable after the date of
this Agreement, file with any governmental agencies or departments all notices,
reports and other documents required by law with respect to this Agreement and
the Merger and promptly submit any additional information or documentary
material properly requested by any such governmental agency or department;
(i) In the event that between the date hereof and the
Effective Date, any federal, state, local or foreign governmental authority
shall commence any examination, review, investigation, action, suit or
proceeding against Golden Eagle with respect to the Merger, give prompt notice
thereof to SANM, keep SANM informed as the status thereof, and (except as may be
prohibited by such governmental authority or by any court order or decree in an
action or suit instituted by a person other than Golden Eagle or an affiliate of
Golden Eagle) permit SANM to observe and be present at each meeting, conference
or other proceeding and have access to and be consulted in connection with any
document filed or provided to such governmental authority in connection with
such examination, review, investigation, action, suit or proceeding;
(j) Use its best efforts to deliver, or cause to be delivered,
to SANM the closing documents referred to in this Agreement.
(k) Promptly provide SANM with (i) copies of all written
materials and communications furnished by Golden Eagle to its shareholders after
the date of this Agreement, and (ii) copies of all notices, reports or other
documents filed with any government agency or department pursuant to Section
5.2(i) hereof;
(l) Promptly (and in any event not later than 20 working days
after the end of each month) provide SANM with copies of Golden Eagle's balance
sheet and related statements of operations, cash flows and stockholders' equity
for each month commencing October 31, 1995 through the Effective Date. Such
monthly financial statements shall be prepared in conformity with accounting
principles applied on a consistent basis and shall fairly present (subject to
normal year-end audit adjustments) the financial condition, results of
operations and changes in financial position of Golden Eagle as of the dates and
for the periods covered by such statements;
(m) Deliver to SANM a statement executed on Golden Eagle's
behalf by its President in such form as reasonably requested by counsel for
SANM, conforming to the requirements of Treasury Regulation Section
1.897-2(h)(1)(i) and further agrees to provide the notification to the Internal
Revenue Service required pursuant to Treasury Regulation Section 1.897-2(h)(2);
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(n) Cause each of Daniel Vick and Nolan Egbert to execute
Noncompetition Agreements (with a term extending through December 31, 1997) with
SANM in the form attached hereto as Exhibit B on or prior to the Closing Date
(such agreements are sometimes collectively referred to as the "Individual
Agreements");
(o) Cause each shareholder of Golden Eagle to execute a
signature page to the escrow agreement in the form attached hereto as Exhibit D
(the "Escrow Agreement").
ARTICLE 6
COVENANTS OF SANM AND SANM SUB
SANM and SANM Sub covenant and agree as follows:
6.1 Negative Covenants. From the date of this Agreement until the
Effective Date, SANM and SANM Sub will not, unless Golden Eagle shall otherwise
consent in writing:
(a) Knowingly undertake a course of action inconsistent with
this Agreement or which would prevent any condition precedent to its obligations
under this Agreement from being satisfied at or prior to the Effective Date;
(b) Take or permit any action which would prevent the Merger
from qualifying as a tax-free reorganization under Section 368 of the Code and
all rules, regulations and policies of the Securities and Exchange Commission,
and SANM will use its best efforts to prevent any of its officers or directors
from taking or permitting any such action.
6.2 Affirmative Covenants. Prior to the Effective Date, SANM and/or
SANM Sub will do the following:
(a) Use its best efforts to perform and fulfill all conditions
and obligations on its part to be performed and fulfilled under this Agreement,
to the end that the transactions contemplated by this Agreement shall be fully
carried out;
(b) Use its best efforts to obtain all authorizations,
consents and permits of others required to permit the consummation by SANM and
SANM Sub of the transactions contemplated by this Agreement;
(c) Use its best efforts to qualify the SANM Common Stock to
be issued pursuant to the Merger under the securities or "blue sky" laws of
every jurisdiction of the United States in which any registered shareholder of
Golden Eagle has an address on the records of Golden Eagle's transfer agent on
the record date for determining the Golden Eagle shareholders entitled to notice
of and to vote on the Merger, except in either case any such jurisdiction with
respect to which counsel for SANM has
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reasonably determined that such qualification is not required under the
securities or "blue sky" laws of such jurisdiction;
(d) As promptly as reasonably practicable after the date of
this Agreement, file with any governmental agencies or departments all notices,
reports and other documents required by law with respect to the Merger and
promptly submit any additional information or documentary material properly
requested by any such governmental agency or department;
(e) Cause SANM Sub to perform all of its agreements contained
herein;
(f) In the event that between the date hereof and the
Effective Date, any federal, state, local or foreign governmental authority
shall commence any examination, review, investigation, action, suit or
proceeding against SANM with respect to the Merger, give prompt notice thereof
to Golden Eagle, keep Golden Eagle informed as to the status thereof, and
(except as may be prohibited by such governmental authority or by any court
order or decree in an action or suit instituted by a person other that SANM or
an affiliate of SANM) permit Golden Eagle to observe and be present at each
meeting, conference or other proceeding and have access to and be consulted in
connection with any document filed or provided to such governmental authority in
connection with such examination, review, investigation, action, suit or
proceeding.
ARTICLE 7
CONDITIONS PRECEDENT TO OBLIGATIONS OF SANM AND SANM SUB
The obligations of SANM and SANM Sub to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, prior to or upon
the Closing, of the following conditions precedent:
7.1 Compliance with Covenants; Representations and Warranties Correct.
Golden Eagle shall have complied with and performed in all material respects
each covenant contained in this Agreement to be performed by it at or prior to
the Closing Date; the representations and warranties of Golden Eagle contained
in this Agreement shall be true and correct in all material respects as of the
Closing Date with the same effect as though made on the Closing Date; and Golden
Eagle shall have delivered to SANM a certificate of the President of Golden
Eagle evidencing compliance with the conditions set forth in this Section 7.1.
7.2 Consents of Others. The consent of the Merger of each party whose
consent is required and is material to the continuation of the business of
Golden Eagle following the Merger shall have been received.
7.3 Legal Opinions. SANM shall have received an opinion of McGuire &
Levy, counsel to Golden Eagle, dated the Closing Date, substantially to the
effect of Exhibit E hereto.
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7.4 Appraisal Rights. No holders of outstanding shares of Golden Eagle
Common Stock shall be, or have the right to become, entitled to appraisal rights
pursuant to Article 5.11 et. seq. of the Texas Law.
7.5 Absence of Restraint. No action shall be pending or threatened
before any court or administrative body of competent jurisdiction to restrain,
enjoin or otherwise prevent the consummation of this Agreement or the
transactions contemplated hereby.
7.6 Required Approvals. SANM, SANM Sub and Golden Eagle shall have
received all such governmental approvals, consents, authorizations or
modifications as may be required to permit the performance by SANM, SANM Sub and
Golden Eagle, of their respective obligations under this Agreement, and the
consummation of the transactions herein contemplated.
7.7 Golden Eagle's Shareholders' Approval. The approval and adoption
of this Agreement by the holders of all of the outstanding shares of Golden
Eagle Common Stock entitled to vote, as required by and in accordance with the
applicable provisions of the Texas Law, shall have occurred.
7.8 Individual Agreements. All of the Individual Agreements shall have
been executed and delivered by the parties thereto in the manner contemplated by
Section 5.2(n). All Shareholders shall have executed a signature page to the
Escrow Agreement in the form attached hereto as Exhibit D.
ARTICLE 8
CONDITIONS PRECEDENT TO GOLDEN EAGLE'S OBLIGATIONS
The obligation of Golden Eagle to consummate the transactions
contemplated herein is subject to the fulfillment, prior to or upon the Closing,
of the following conditions precedent:
8.1 Compliance with Covenants; Representations and Warranties Correct.
SANM shall have complied with and performed in all material respects each
covenant contained in this Agreement to be performed by it at or prior to the
Closing Date; the representations and warranties of SANM contained in this
Agreement shall be true and correct in all material respects as of the Closing
Date with the same effect as though made on the Closing Date; and SANM shall
have delivered to Golden Eagle a certificate of the President or a Vice
President of SANM, evidencing compliance with the conditions set forth in this
Section 8.1.
8.2 Legal Opinion. Golden Eagle shall have received an opinion of
Wilson, Sonsini, Goodrich & Rosati, counsel to SANM, dated the Closing Date,
substantially to the effect of Exhibit F hereto.
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8.3 Absence of Restraint. No order shall be pending or threatened
before any court or administrative body of competent jurisdiction to restrain,
enjoin or otherwise prevent the consummation of this Agreement or the
transactions contemplated hereby.
8.4 Required Approvals. SANM, SANM Sub and Golden Eagle shall have
received all such governmental approvals, consents, authorizations or
modifications as may be required to permit the performance by SANM, SANM Sub and
Golden Eagle, of their respective obligations under this Agreement and the
consummation of the transactions herein and therein contemplated.
8.5 Golden Eagle's Shareholders' Approval. The approval and adoption
of this Agreement by the holders of all of the outstanding shares of Golden
Eagle Common Stock entitled to vote, as required by and in accordance with the
applicable provisions of the Texas Law, shall have occurred.
8.6 Golden Eagle Performance Incentive Plan. The Golden Eagle
Performance Incentive Plan in the form attached hereto as Exhibit C shall have
been approved and adopted by the board of directors of SANM.
ARTICLE 9
TERMINATION
9.1 Termination. At any time prior to the Closing, this Agreement may
be terminated (a) by mutual consent of all the parties; (b) by SANM if (i) there
has been a material breach by Golden Eagle or any Seller of any material
covenant, representation or warranty contained in this Agreement, (ii) SANM has
notified Golden Eagle in writing of the existence of such breach, and (iii)
Golden Eagle has failed to cure such breach within a reasonable period of time
after receiving such notice; (c) by Golden Eagle if (i) there has been a
material breach by SANM of a material covenant, representation or warranty
contained in this Agreement, (ii) Golden Eagle has notified SANM in writing of
the existence of such breach, and (iii) SANM has failed to cure such breach
within a reasonable period of time after receiving such notice; (d) by either
SANM or Golden Eagle if (i) there shall be a non-appealable order of a federal
or state court in effect preventing consummation of the transactions
contemplated hereby or (ii) there shall be any action taken, or any statute,
rule, regulations or order enacted, promulgated, issued or deemed applicable to
the transactions contemplated hereby by any governmental entity that would make
consummation of such transactions illegal, or (e) by SANM, Golden Eagle or any
Seller without the consent of any other party if the Closing Date does not occur
by January 15, 1996 (or such later date as SANM, Golden Eagle and the Sellers
may agree in writing), provided that the party terminating this Agreement
pursuant to this Subsection 9.1(e) shall not at the time of termination be in
default in the observance or in the due and timely performance of any of its
material covenants and agreements contained in the Agreement.
9.2 Effect of Termination. If this Agreement shall be terminated as
provided in Section 9.1, this Agreement shall forthwith become void (except as
otherwise provided in Section 9.3) and there shall
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be no liability on the part of any party hereto to any other party except any
damages (including expenses) for a material breach of this Agreement and payment
of legal fees pursuant to Section 11.4.
9.3 Return of Information. In the event this Agreement is terminated
or the transactions contemplated hereby are not consummated for any reason, the
confidentiality agreements between the parties shall continue in full force and
effect.
9.4 Extension of Time; Waivers. At any time prior to the Closing:
(a) SANM may (i) extend the time for the performance of any of
the obligations or other acts of Golden Eagle and (ii) waive compliance with any
of the agreements or conditions contained herein to be performed by Golden
Eagle. Any agreement on the part of SANM to any such extension or waiver shall
be valid only if set forth in an instrument in writing signed on behalf of SANM;
and
(b) Golden Eagle may (i) extend the time for the performance
of any of the obligations or other acts of SANM, and (ii) waive compliance with
any of the agreements or conditions contained herein to be performed by SANM.
Any agreement on the part of Golden Eagle to any such extension or waiver shall
be valid only if set forth in an instrument in writing signed on behalf of
Golden Eagle.
ARTICLE 10
INDEMNIFICATION
10.1 Limited Indemnification by Each Shareholder. The Shareholders
shall, pursuant to the terms and conditions of the Escrow Agreement, for a
period of one (1) year after the Closing Date indemnify SANM and SANM Sub and
hold them harmless against and in respect of any interest, penalty, fine, loss,
cost, expense, claim, liability, judgment or damage (including reasonable legal
and expert fees and expenses) incurred by SANM, SANM Sub, any of their
shareholders, affiliates, or subsidiaries or any successor of any of them,
directly or indirectly, such indemnification to be limited to and effected after
the Closing Date by payment to SANM or such other indemnified party of funds
held on behalf of the Shareholders in the escrow fund in accordance with the
terms of the Escrow Agreement.
10.2 Escrow. SANM, SANM Sub, the Shareholders, the shareholders'
representative and the escrow agent named in such agreement shall, as of the
Closing Date, enter into the Escrow Agreement. Pursuant to the Escrow Agreement,
an escrow fund of $1,500,000, which shall be deducted from the Cash Payments
payable to the Shareholders, shall be established for the purpose of
indemnifying SANM and SANM Sub on the terms set forth herein and in the Escrow
Agreement.
10.3 Exclusive Remedy. Recovery from the escrow fund established
pursuant to the Escrow Agreement shall be the sole and exclusive remedy of any
indemnitee under the Escrow Agreement with
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respect to any breach of any representation, warranty, covenant or undertaking
under this Agreement (except for breaches that are established in appropriate
legal proceedings to be the result of fraud).
ARTICLE 11
MISCELLANEOUS
11.1 Amendment. This Agreement may be amended with the approval of the
Boards of Directors of SANM, SANM Sub and Golden Eagle and at any time before or
after approval hereof by the shareholders of Golden Eagle, but, after any such
shareholder approval, no amendment shall be made which would have a material
adverse effect on the shareholders of Golden Eagle, without the further approval
of such shareholders. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties hereto.
11.2 Survival of Representations and Warranties. The representations
and warranties in this Agreement and in any instrument delivered pursuant to
this Agreement shall survive the Merger to the extent provided in Section 10 and
the Escrow Agreement.
11.3 Entire Agreement; Counterparts; Applicable Law. This Agreement
and the agreements contemplated by the exhibits hereto (a) constitute the entire
agreement and supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof, (b) may
be executed in several counterparts, each of which will be deemed an original
and all of which shall constitute one and the same instrument and (c) shall be
governed in all respects, including validity, interpretation and effect, by the
laws of the State of California as applied to contracts entered into and to be
performed entirely within California, provided that, as set forth therein, the
Individual Agreements shall be governed in all respects, including validity,
interpretation and effect, by the laws of the State of Texas as applied to
contracts to be entered into and to be performed entirely within Texas.
11.4 Costs and Expenses. All costs and expenses incurred in connection
with this Agreement, including but not limited to finder's fees and expenses,
investment banking fees and expenses and legal fees and expenses, will be paid
by the party incurring such expense. Notwithstanding the foregoing, all costs
and expenses incurred in connection with this Agreement, including legal fees
and expenses and investment banking and financial advisory fees and expenses, by
Golden Eagle and the Shareholders shall be paid by the Shareholders from the
Cash Payment made at the Closing.
11.5 Attorneys' Fees. In any action at law or suit in equity to
enforce this Agreement or the rights of the parties hereunder, the prevailing
party in such action or suit shall be entitled to receive a reasonable sum for
its attorneys' fees and all other reasonable costs and expenses incurred in such
action or suit.
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11.6 Assignability. This Agreement shall be binding upon, and shall be
enforceable by and inure to the benefit of, the parties named herein and their
respective successors; provided, however, that this Agreement may not be
assigned by any party without the prior written consent of the other parties,
and any attempted assignment without such consent shall be void and of no
effect.
11.7 Notices. All notices, requests, demands and other communications
hereunder shall be deemed to have been duly given if delivered personally or by
overnight courier or mailed by certified or registered mail:
To SANM and SANM Sub:
Sanmina Corporation
355 East Trimble Road
San Jose, California 95131
Attn: Randy W. Furr, Vice President and Chief Financial Officer
With a copy to:
Wilson, Sonsini, Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304
Attn: Christopher D. Mitchell, Esq.
To Golden Eagle:
Golden Eagle Systems, Inc.
2161 Hutton Drive, #126
Carrollton, TX 75006
Attn: Daniel Vick, Chief Executive Officer
With a copy to:
McGuire & Levy
1333 Corporate Drive, Suite 350
Irving, TX 75014
Attn: Albert Levy, Esq.
or to such other address at which any party may by certified or registered mail
notify the other party, and shall be deemed given on the date on which delivered
personally or by overnight courier or on the third business day following the
date on which mailed by certified or registered mail.
11.8 Arbitration. All controversies arising out of or connected with
this Agreement, including any of its terms or conditions, or the alleged breach
or enforceability of any of its terms or conditions,
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shall be settled by arbitration in Dallas, Texas in accordance with the rules
then in effect of the American Arbitration Association. In the event such
controversy arises, the contesting party shall promptly notify the other parties
of its intent to arbitrate the controversy. The decision of the arbitrators,
including a determination of the amount of damages suffered or any right to
set-off, shall be exclusive, final and binding upon the parties hereto, their
heirs, successors and assigns. The parties shall consider themselves to be bound
by any award pursuant to this paragraph and any judgment upon any award rendered
by the arbitrators may be entered in any court having jurisdiction.
11.9 Titles. The titles and captions of the sections and paragraphs of
this Agreement are included for convenience of reference only and shall have no
effect on the construction or meaning of this Agreement.
11.10 Cooperation. SANM, SANM Sub and Golden Eagle each agree to
execute and deliver such other documents, certificates, agreements and other
writings and to take such other actions as may be necessary or desirable in
order to consummate expeditiously or implement the transactions contemplated by
this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
and Plan of Reorganization as of the date first written above.
SANMINA CORPORATION
By:
-----------------------------------
Jure Sola, President and
Chief Executive Officer
SANM ACQUISITION SUBSIDIARY, INC.
By:
-----------------------------------
Jure Sola, President and
Chief Executive Officer
GOLDEN EAGLE SYSTEMS, INC.
By:
-----------------------------------
Daniel Vick, Chief Operating Officer
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The following persons, each a shareholder of Golden Eagle Systems,
Inc., agree to vote any and all shares of Golden Eagle Systems, Inc. capital
stock which they hold, whether at a shareholders meeting or pursuant to a
shareholders written consent, in favor of the transactions contemplated by the
foregoing agreement, agree to be bound by the provisions of Article 8 thereof
and the Escrow Agreement mentioned therein, agree to be bound by the provisions
of Section 11.4 hereof regarding payment of certain fees and expenses, and
understand that their covenants are made for the benefit of, and will be relied
upon by, Sanmina Corporation and SANM Acquisition Subsidiary, Inc.
-------------------------------
Daniel Vick
-------------------------------
Nolan Egbert
-------------------------------
Steven Massey
///
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EXHIBIT A
ARTICLES OF MERGER
OF
SANM ACQUISITION SUBSIDIARY, INC.
WITH AND INTO
GOLDEN EAGLE SYSTEMS, INC.
Pursuant to the provisions of Article 5.04 of the Texas Business
Corporation Act, the undersigned corporations adopt the following Articles of
Merger for the purpose of effecting a merger in accordance with the provisions
of Article 5.01 of the Texas Business Corporation Act.
1. A Plan of Merger adopted in accordance with the provisions of Article
5.03 of the Texas Business Corporation Act providing for the
combination of SANM Acquisition Subsidiary, Inc., a Texas corporation
("NEWCO") and Golden Eagle Systems, Inc., a Texas corporation
("SURVIVING CORPORATION"), with SURVIVING CORPORATION being the
surviving corporation in the merger, is attached hereto as Exhibit A
and is hereby incorporated herein by reference.
2. The name of each of the undersigned corporations and the state under
the laws of which each is incorporated are:
Name of Corporation State
------------------- -----
SANM Acquisition Subsidiary, Inc. Texas
Golden Eagle Systems, Inc. Texas
3. As to each of the undersigned domestic corporations, the approval of
whose shareholders is required, the number of outstanding shares, all
of which are entitled to vote on the Plan of Merger, is as follows:
Number of
Designation Shares
Name of Corporation of Class Outstanding
------------------- -------- -----------
NEWCO Common 1,000
SURVIVING CORPORATION Common 7,935
46
4. As to each of the undersigned domestic corporations, the approval of
whose shareholders is required, (i) no shares of any class or series
are entitled to vote as a class, and (ii) the number of shares voted
for and against the Plan of Merger is as follows:
Total Total
Name of Corporation Voted For Voted Against
------------------- --------- -------------
NEWCO 1,000 0
SURVIVING CORPORATION 7,935 0
The Plan of Merger and the performance of its terms were duly
authorized by all action required by the laws under which each entity that is a
party to the Plan of Merger was incorporated or organized and by its constituent
documents.
DATED: January 2, 1996
SANM ACQUISITION SUBSIDIARY, INC.
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
GOLDEN EAGLE SYSTEMS, INC.
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
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EXHIBIT A
PLAN OF MERGER
This Plan of Merger (the "Plan"), executed as of January 2, 1996, by
and between SANM Acquisition Subsidiary, Inc. ("NEWCO"), a Texas corporation,
and Golden Eagle Systems, Inc. ("SURVIVING CORPORATION"), a Texas corporation.
ARTICLE ONE
Merger of NEWCO with and into SURVIVING CORPORATION
NEWCO will be merged with and into SURVIVING CORPORATION in accordance
with the laws of the State of Texas (the "Merger"), with such Merger to become
effective upon the issuance of the Certificate of Merger by the Secretary of the
State of Texas (the "Effective Time"). The surviving corporation will be
SURVIVING CORPORATION, which will continue (i) to use its present corporate name
and (ii) to be governed by and incorporated in accordance with the laws of the
State of Texas.
ARTICLE TWO
Effect of Merger
The Merger shall in all respects have the effects provided for in
Article 5.06A of the Texas Business Corporation Act, with all rights and
obligations of NEWCO being allocated to and vesting in SURVIVING CORPORATION.
Without limiting the generality of the foregoing, at the Effective time the
separate existence of NEWCO shall cease, and SURVIVING CORPORATION will
immediately (i) succeed, without transfer, to all of the assets, properties,
rights and claims of NEWCO and (ii) be subject to all of the debts, obligations
and liabilities of NEWCO in the same manner and to the same extent as if such
had been incurred by SURVIVING CORPORATION. Neither the rights of creditors with
respect to SURVIVING CORPORATION and NEWCO nor any liens upon the assets of
SURVIVING CORPORATION and NEWCO shall be impaired by the Merger. Any lawsuit,
proceeding or claim pending or existing by or against SURVIVING CORPORATION or
NEWCO may be prosecuted and continued as if the Merger had not occurred or,
alternatively, SURVIVING CORPORATION may be substituted for NEWCO with respect
to any such lawsuit, proceeding or claim.
ARTICLE THREE
Conversion of Shares
At the Effective Time, (i) all shares of common stock, par value of
$0.01 per share, of SURVIVING CORPORATION which is issued and outstanding
immediately prior to the Effective Time (the "Shares") will be canceled and
extinguished and automatically converted into the unconditional right
48
to receive, immediately upon the surrender of the certificate representing such
shares, an aggregate of $6,000,000 in cash (of which $1,500,000 will be subject
to an escrow and indemnification agreement), and (ii) 9.65932 shares of the
Common Stock, par value of $0.01 per share, of SANMINA Corporation, a Delaware
corporation and the sole shareholder of NEWCO for each Share canceled at the
Effective Time. If the aggregate number of shares to be issued to any
shareholder of SURVIVING CORPORATION pursuant to the preceding sentence would
result in a fractional share, such share will be rounded up to the next whole
share. Each outstanding share of NEWCO, no par value per share, which is issued
and outstanding immediately prior to the Effective Time shall, by virtue of the
Merger, be automatically converted into and represent one share of common stock,
$0.01 par value per share, of SURVIVING CORPORATION.
ARTICLE FOUR
Approval of the Board of Directors and Shareholders
The Plan was approved and adopted by the Board of Directors of
SURVIVING CORPORATION at a meeting thereof on December ____, 1995, and by
Written Consent of the Shareholders of SURVIVING CORPORATION dated as of
December ____, 1995. This Plan was also approved and adopted by Written Consent
of the Sole Director of NEWCO dated as of December 22, 1995 and by Written
Consent of the Sole Shareholder of NEWCO dated as of December 22, 1995.
ARTICLE FIVE
Articles of Incorporation
The Articles of Incorporation of NEWCO will become the Articles of
Incorporation of the SURVIVING CORPORATION after the Effective Time of the
Merger of NEWCO with and into SURVIVING CORPORATION, and no changes or
amendments to said Articles are required by the Merger, other than the amendment
of Article One. The Articles of Incorporation of NEWCO before the amendment are
attached hereto as Exhibit A and are incorporated herein as if set forth in
their entirety.
Upon the effectiveness of the Merger Article One shall be amended in
its entirety to read as follows:
"ARTICLE ONE
The name of the corporation is Golden Eagle Systems, Inc."
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IN WITNESS WHEREOF, SURVIVING CORPORATION and NEWCO have caused this
Plan to be executed as of the date first above written.
SANM ACQUISITION SUBSIDIARY, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
GOLDEN EAGLE SYSTEMS, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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EXHIBIT B
NON-COMPETE AGREEMENT
THIS AGREEMENT, dated as of January 2, 1996, is by and among Sanmina
Corporation, a Delaware corporation ("Sanmina"), Golden Eagle Systems, Inc., a
Texas corporation ("Golden Eagle"), and Nolan Egbert ("Executive").
Sanmina and Golden Eagle have entered into an Agreement and Plan of
Reorganization dated December 14, 1995 (the "Reorganization Agreement").
Pursuant to such Reorganization Agreement, Golden Eagle will be merged with SANM
Acquisition Subsidiary, Inc. (the "Merger") and, following such transaction,
Golden Eagle will be a wholly-owned subsidiary of Sanmina.
Sanmina and Golden Eagle, desiring to preserve the goodwill, business
reputation and prospects of Golden Eagle, have made the execution and delivery
of this Agreement, and similar agreements with certain members of management of
Golden Eagle, a condition precedent to the consummation of the Merger under the
Reorganization Agreement and have entered into the Reorganization Agreement
relying upon the agreements and covenants made by the Executive in this
Agreement.
Agreement
In consideration of the foregoing and the mutual agreements hereinafter
set forth, the parties, intending to be legally bound, agree as follows:
1. Preservation of Goodwill. In order that Golden Eagle's and
Sanmina's business reputation and prospects connected with Golden Eagle and
Sanmina will not be materially impaired, Executive agrees that, from the date of
this Agreement through December 31, 2000, Executive will not directly or
indirectly, in any manner or capacity, as advisor, principal, agent, partner,
officer, director, Executive, employee, member of any association or otherwise:
(a) participate or engage in contract
manufacturing or contract assembly of cable, fiberoptic or wire
assemblies (the "Business") in the Territory (as defined below); or
(b) induce or attempt to induce any person who
at the time of such inducement is an employee of Golden Eagle or
Sanmina to perform work or services for any other person or entity
engaged in the Business.
Ownership by Executive, as a passive investment, of less than 1% of the
outstanding shares of capital stock of any corporation with one or more classes
of its capital stock listed on a national securities exchange or publicly traded
in the over-the-counter market shall not constitute a breach of this Agreement.
51
For purposes hereof, the "Territory" shall be North America (consisting
of the United States, Canada and Mexico), and Golden Eagle, Sanmina and the
Executive further acknowledge that Golden Eagle and Sanmina following the Merger
intend to continue to conduct the Business in all parts of the Territory. As a
result of the foregoing, the parties expressly understand and agree that the
non-competition provisions contained in this Agreement are reasonable,
permissible and enforceable.
Notwithstanding the foregoing, in the event of the termination of
Executive's employment by Golden Eagle or Sanmina without Justifiable Cause (as
defined below) at any time on or after December 31, 1997, Executive's
obligations under Sections 1 and 2 of this Agreement shall terminate effective
upon such termination of employment without Justifiable Cause. In the event of
termination of Executive's employment by Golden Eagle or Sanmina without
Justifiable Cause at any time prior to December 31, 1997, Executive's
obligations under Sections 1 and 2 of this Agreement will terminate on the last
day of the calendar year during which such termination without Justifiable Cause
occurs. For purposes hereof, "Justifiable Cause" shall mean a determination by
the board of directors of Golden Eagle or Sanmina, made in good faith in the
exercise of reasonable business judgment, that (i) Golden Eagle has failed to
meet annual net income targets established by the boards of directors of Golden
Eagle or Sanmina in consultation with the Plan participants under the Golden
Eagle Performance Incentive Plan or that Executive (ii) has engaged in any act
of fraud, gross negligence, willful misconduct, theft, dishonesty or
falsification of business records, (iii) has improperly disclosed confidential
or proprietary information of Golden Eagle or Sanmina, (iv) has or is failing to
devote adequate time to the duties of his position with Golden Eagle, (v) has or
is failing to comply with Golden Eagle's or Sanmina's rules, regulations or
financial controls or (vi) has engaged or is engaging in other activity which
has a significant detrimental effect on the business, prospects or reputation of
Golden Eagle or Sanmina.
2. Customers. Executive agrees that he will not directly or
indirectly, during the period set forth in Section 1 of this Agreement, solicit
any of the existing customers of Golden Eagle or Sanmina for purposes of
obtaining their custom or trade in a business which is competitive with the
Business.
3. Severability. To the extent any provision of this Agreement
shall be invalid or unenforceable, it shall be considered deleted herefrom and
the remainder of such provision and of this Agreement shall be unaffected. In
furtherance and not in limitation of the foregoing, should the duration or
geographical extent of, or business activities covered by, any provision of this
Agreement be in excess of that which is valid and enforceable under applicable
law, then such provision shall be construed to cover only that duration, extent
or activities which may validly and enforceably be covered.
4. Injunctive Relief. In view of the nature of the rights in goodwill,
business reputation and prospects of Golden Eagle and Sanmina to be protected
under this Agreement, Executive understands and agrees that neither Golden Eagle
nor Sanmina could be reasonably or adequately compensated in damages in an
action at law for Executive's breach of his obligations hereunder. Accordingly,
Executive specifically agrees that Golden Eagle and Sanmina shall be entitled to
temporary and permanent injunctive relief to enforce the provisions of this
Agreement and that such
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relief may be granted without the necessity of proving actual damages; provided,
however, that such relief may be granted only if the facts otherwise support the
granting of injunctive relief under applicable law. This provision with respect
to injunctive relief shall not, however, diminish the right of Golden Eagle and
Sanmina to claim and recover damages in addition to injunctive relief.
5. Miscellaneous.
5.1 Governing Law. This Agreement is made under and shall
be governed by and construed in accordance with the laws of the State of Texas
and this Agreement shall be deemed to be performable in the State of Texas.
5.2 Other Agreements. This Agreement contains the entire
agreement of the parties relating to the subject matter hereof and supersedes
all prior agreements and understandings with respect to such subject matter, and
the parties hereto have made no agreements, representations or warranties
relating to the subject matter of this Agreement which are not set forth herein.
5.3 Successors. This Agreement shall extend to and be
binding upon Executive, his legal representatives, heirs and distributees, and
upon Golden Eagle and Sanmina, and their successors, and assigns. For purposes
of this Agreement, unless the context otherwise requires, references herein to
Golden Eagle and Sanmina shall include their subsidiaries and affiliated
persons.
5.4 Amendments. No amendment or modification of this
Agreement shall be deemed effective unless made in writing signed by the parties
hereto.
5.5 No Waiver. No term or condition of this Agreement
shall be deemed to have been waived, nor shall there be any estoppel to enforce
any provision of this Agreement, except by a statement in writing signed by the
party against whom enforcement of the waiver or estoppel is sought. Any written
waiver shall not be deemed a continuing waiver unless specifically stated, shall
operate only as to the specific term or condition for the future or as to any
act other than that specifically waived.
5.6 Heading. The headings of paragraphs in this Agreement
are solely for convenience of reference and shall not control the meaning or
interpretation of any provisions of this Agreement.
[remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, this Agreement is executed effective as of the date
first set forth above.
GOLDEN EAGLE SYSTEMS, INC.
-----------------------------------------
Randy W. Furr, President
SANMINA CORPORATION
-----------------------------------------
Randy W. Furr, Vice President and
Chief Financial Officer
EXECUTIVE
-----------------------------------------
Nolan Egbert
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EXHIBIT B
NON-COMPETE AGREEMENT
THIS AGREEMENT, dated as of January 2, 1996, is by and among Sanmina
Corporation, a Delaware corporation ("Sanmina"), Golden Eagle Systems, Inc., a
Texas corporation ("Golden Eagle"), and Daniel Vick ("Executive").
Sanmina and Golden Eagle have entered into an Agreement and Plan of
Reorganization dated December 14, 1995 (the "Reorganization Agreement").
Pursuant to such Reorganization Agreement, Golden Eagle will be merged with SANM
Acquisition Subsidiary, Inc. (the "Merger") and, following such transaction,
Golden Eagle will be a wholly-owned subsidiary of Sanmina.
Sanmina and Golden Eagle, desiring to preserve the goodwill, business
reputation and prospects of Golden Eagle, have made the execution and delivery
of this Agreement, and similar agreements with certain members of management of
Golden Eagle, a condition precedent to the consummation of the Merger under the
Reorganization Agreement and have entered into the Reorganization Agreement
relying upon the agreements and covenants made by the Executive in this
Agreement.
Agreement
In consideration of the foregoing and the mutual agreements hereinafter
set forth, the parties, intending to be legally bound, agree as follows:
6. Preservation of Goodwill. In order that Golden Eagle's and Sanmina's
business reputation and prospects connected with Golden Eagle and Sanmina will
not be materially impaired, Executive agrees that, from the date of this
Agreement through December 31, 2000, Executive will not directly or indirectly,
in any manner or capacity, as advisor, principal, agent, partner, officer,
director, Executive, employee, member of any association or otherwise:
(a) participate or engage in contract
manufacturing or contract assembly of cable, fiberoptic or wire
assemblies (the "Business") in the Territory (as defined below); or
(b) induce or attempt to induce any person who
at the time of such inducement is an employee of Golden Eagle or
Sanmina to perform work or services for any other person or entity
engaged in the Business.
Ownership by Executive, as a passive investment, of less than 1% of the
outstanding shares of capital stock of any corporation with one or more classes
of its capital stock listed on a national securities exchange or publicly traded
in the over-the-counter market shall not constitute a breach of this Agreement.
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For purposes hereof, the "Territory" shall be North America (consisting
of the United States, Canada and Mexico), and Golden Eagle, Sanmina and the
Executive further acknowledge that Golden Eagle and Sanmina following the Merger
intend to continue to conduct the Business in all parts of the Territory. As a
result of the foregoing, the parties expressly understand and agree that the
non-competition provisions contained in this Agreement are reasonable,
permissible and enforceable.
Notwithstanding the foregoing, in the event of the termination of
Executive's employment by Golden Eagle or Sanmina without Justifiable Cause (as
defined below) at any time on or after December 31, 1997, Executive's
obligations under Sections 1 and 2 of this Agreement shall terminate effective
upon such termination of employment without Justifiable Cause. In the event of
termination of Executive's employment by Golden Eagle or Sanmina without
Justifiable Cause at any time prior to December 31, 1997, Executive's
obligations under Sections 1 and 2 of this Agreement will terminate on the last
day of the calendar year during which such termination without Justifiable Cause
occurs. For purposes hereof, "Justifiable Cause" shall mean a determination by
the board of directors of Golden Eagle or Sanmina, made in good faith in the
exercise of reasonable business judgment, that (i) Golden Eagle has failed to
meet annual net income targets established by the boards of directors of Golden
Eagle or Sanmina in consultation with the Plan participants under the Golden
Eagle Performance Incentive Plan or that Executive (ii) has engaged in any act
of fraud, gross negligence, willful misconduct, theft, dishonesty or
falsification of business records, (iii) has improperly disclosed confidential
or proprietary information of Golden Eagle or Sanmina, (iv) has or is failing to
devote adequate time to the duties of his position with Golden Eagle, (v) has or
is failing to comply with Golden Eagle's or Sanmina's rules, regulations or
financial controls or (vi) has engaged or is engaging in other activity which
has a significant detrimental effect on the business, prospects or reputation of
Golden Eagle or Sanmina.
7. Customers. Executive agrees that he will not directly or
indirectly, during the period set forth in Section 1 of this Agreement, solicit
any of the existing customers of Golden Eagle or Sanmina for purposes of
obtaining their custom or trade in a business which is competitive with the
Business.
8. Severability. To the extent any provision of this Agreement
shall be invalid or unenforceable, it shall be considered deleted herefrom and
the remainder of such provision and of this Agreement shall be unaffected. In
furtherance and not in limitation of the foregoing, should the duration or
geographical extent of, or business activities covered by, any provision of this
Agreement be in excess of that which is valid and enforceable under applicable
law, then such provision shall be construed to cover only that duration, extent
or activities which may validly and enforceably be covered.
9. Injunctive Relief. In view of the nature of the rights in
goodwill, business reputation and prospects of Golden Eagle and Sanmina to be
protected under this Agreement, Executive understands and agrees that neither
Golden Eagle nor Sanmina could be reasonably or adequately compensated in
damages in an action at law for Executive's breach of his obligations hereunder.
Accordingly, Executive specifically agrees that Golden Eagle and Sanmina shall
be entitled to temporary and permanent injunctive relief to enforce the
provisions of this Agreement and that such
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relief may be granted without the necessity of proving actual damages; provided,
however, that such relief may be granted only if the facts otherwise support the
granting of injunctive relief under applicable law. This provision with respect
to injunctive relief shall not, however, diminish the right of Golden Eagle and
Sanmina to claim and recover damages in addition to injunctive relief.
10. Miscellaneous.
10.1 Governing Law. This Agreement is made under and shall
be governed by and construed in accordance with the laws of the State of Texas
and this Agreement shall be deemed to be performable in the State of Texas.
10.2 Other Agreements. This Agreement contains the entire
agreement of the parties relating to the subject matter hereof and supersedes
all prior agreements and understandings with respect to such subject matter, and
the parties hereto have made no agreements, representations or warranties
relating to the subject matter of this Agreement which are not set forth herein.
10.3 Successors. This Agreement shall extend to and be
binding upon Executive, his legal representatives, heirs and distributees, and
upon Golden Eagle and Sanmina, and their successors, and assigns. For purposes
of this Agreement, unless the context otherwise requires, references herein to
Golden Eagle and Sanmina shall include their subsidiaries and affiliated
persons.
10.4 Amendments. No amendment or modification of this
Agreement shall be deemed effective unless made in writing signed by the parties
hereto.
10.5 No Waiver. No term or condition of this Agreement
shall be deemed to have been waived, nor shall there be any estoppel to enforce
any provision of this Agreement, except by a statement in writing signed by the
party against whom enforcement of the waiver or estoppel is sought. Any written
waiver shall not be deemed a continuing waiver unless specifically stated, shall
operate only as to the specific term or condition for the future or as to any
act other than that specifically waived.
10.6 Heading. The headings of paragraphs in this Agreement
are solely for convenience of reference and shall not control the meaning or
interpretation of any provisions of this Agreement.
[remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, this Agreement is executed effective as of the date
first set forth above.
GOLDEN EAGLE SYSTEMS, INC.
-----------------------------------------
Randy W. Furr, President
SANMINA CORPORATION
-----------------------------------------
Randy W. Furr, Vice President and
Chief Financial Officer
EXECUTIVE
---------------------------------------------
Daniel Vick
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EXHIBIT C
GOLDEN EAGLE SYSTEMS, INC.
PERFORMANCE INCENTIVE PLAN
I. Purposes of the Plan.
The Golden Eagle Systems, Inc. (the "Company") Performance Incentive
Plan (the "Plan") provides for the potential payment of cash bonuses as an
incentive to Company management to meet or exceed annual performance targets
based on operating profits before income taxes.
II. Definitions.
A. "Board" means the Board of Directors of the Company.
B. "GAAP" means generally accepted accounting principles,
consistently applied.
C. "Profits" means the Company's net income before income
taxes, determined in accordance with GAAP and without regard to (i) allocations
of corporate overhead from Sanmina Corporation ("Sanmina") or any of its
affiliates to the Company, if any (other than allocations of corporate overhead
reflecting services or functions performed by Sanmina or any of its affiliates
on behalf of the Company) and (ii) payments made under this Plan. Without
limiting the generality of the foregoing, (i) interest expense and other
non-operating charges and expenses shall be taken into account in determining
net income before taxes and (ii) corporate overhead shall include, but not be
limited to, charges for financial and administrative services, insurance,
marketing and other services or functions provided by Sanmina.
III. Administration of the Plan.
The Plan shall be administered by the Board or such person or committee
as is designated by the Board (the "Administrator"). Subject to Section VI
herein, the Administrator shall have the discretionary authority to construe and
interpret the terms of the Plan, to determine eligibility for benefits, to
reasonably construe and interpret the definition of profits herein and to
determine amounts available under the Plan. The Administrator's determination
with regard to any provision of the Plan shall be conclusive and binding on all
participants.
IV. Term of Plan.
The Plan shall become effective upon the "Effective Time," as such term
is defined in the Agreement and Plan of Reorganization by and among Sanmina,
SANM Acquisition Subsidiary, Inc., and the Company dated as of December 14, 1995
(the "Reorganization Agreement"), and shall terminate upon completion of the
Company's separate financial statements for the Company's fiscal
59
quarter ending December 31, 1997 and payment of any performance bonuses due
hereunder with respect to such calendar year or earlier as otherwise provided
herein.
V. Eligibility.
The persons eligible to participate in the cash bonus component of the
Plan shall be those key management employees of the Company listed on Exhibit A
hereto.
VI. Cash Bonuses Allocation.
Plan participants shall be eligible to receive cash bonuses for the
applicable calendar year (1996 or 1997, as the case may be) determined under
Section VIII below ("Cash Bonuses") subject to such Plan participants' continued
employment with the Company, its parent, or any affiliates through the end of
the calendar year to which the Cash Bonus relates. The Cash Bonuses shall be
allocated among the Plan participants according to the percentages stated next
to each participant's name on Exhibit A. Except as set forth in the next
paragraph, any Plan participant not employed at the end of the calendar year
shall not be entitled to any Cash Bonuses with respect to such calendar year. If
any individuals listed on Exhibit A are not entitled to receive Cash Bonuses by
virtue of the termination of their employment with the Company, its parent, or
any affiliates prior to the end of the applicable calendar year or new
participants are added to the list of key management employees, Exhibit A shall
be amended to reflect the most current allocation rates. The Cash Bonuses shall
be paid to Plan participants (net of withholding) in one or more allotments
within ninety (90) days (the timing of which allotments shall be at the
discretion of the Board) following the calendar year-end. The amount available
for distribution as Cash Bonuses hereunder shall be determined in accordance
with Section VIII herein. The timing of Cash Bonus payments shall be structured
such that the amount of Cash Bonus and other consideration paid to each Plan
participant for any one fiscal year of Sanmina shall not exceed the maximum
amount allowed to be deducted for federal corporate income tax purposes under
Section 162(m) of the Internal Revenue Code of 1986, as amended.
Notwithstanding the foregoing, in the event that a Plan participant's
employment with the Company is terminated by the Company without Justifiable
Cause (as defined below), the Plan participant shall be entitled to any Cash
Bonuses that such Plan participant would have been entitled to hereunder had
such Plan participant been employed with the Company on the last day of the
calendar year in which such termination occurred. For purposes hereof,
"Justifiable Cause" shall mean a determination by the board of directors of the
Company or Sanmina, made in good faith in the exercise of reasonable business
judgment, that (i) Golden Eagle has failed to meet annual net income targets
established by the boards of directors of Golden Eagle or Sanmina in
consultation with the Plan participants or that Plan participant (ii) has
engaged in any act of fraud, gross negligence, willful misconduct, theft,
dishonesty or falsification of business records, (iii) has improperly disclosed
confidential or proprietary information of the Company or Sanmina, (iv) has or
is failing to devote adequate time to the duties of his position with the
Company, (v) has or is failing to comply with the Company's or Sanmina's rules,
regulations or financial controls or (vi) has engaged or is engaging in other
activity which has a significant detrimental effect on the business, prospects
or reputation of the Company or Sanmina.
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VII. Threshold Trigger.
Cash Bonuses shall only be made under the Plan for the calendar year
1996 or 1997, as the case may be, in which the Company's Profits, determined in
accordance with GAAP, are at least $5,060,000 or $6,840,000, respectively (the
"Threshold Trigger"). If the Threshold Trigger is not met, no Cash Bonuses shall
be made hereunder for the relevant calendar year.
VIII. Determination of Annual Cash Bonus Amounts.
For each of the 1996 or 1997 calendar years in which the Threshold
Trigger has been satisfied, the Company shall make available for distribution as
Cash Bonuses pursuant to Section VI above an amount based on the Company's
Profits for such year. For the calendar year 1996, if the Company's Profits are
greater than or equal to $5,060,000 but less than $5,960,000, a Cash Bonus
payment totaling $1,000,000 will be made to the Plan participants. If the
Company's Profits for the calendar year 1996 are greater than or equal to
$5,960,000, a Cash Bonus payment totaling $1,500,000 shall be made to the Plan
participants. For the calendar year 1997, if the Company's Profits are greater
than or equal to $6,840,000 but less than $7,980,000, a Cash Bonus payment
totaling $2,000,000 will be made to the Plan participants. If the Company's
Profits for the calendar year 1997 are greater than or equal to $7,980,000, a
Cash Bonus payment totaling $2,500,000 will be made to the Plan participants.
IX. Merger or Asset Sale.
In the event of a material transaction involving the Company, including
but not limited to the merger of the Company with or into another corporation or
Sanmina or a subsidiary of Sanmina, the sale of substantially all of the assets
of the Company, or the acquisition by the Company of another corporation or
other business entity, the Plan and all obligations hereunder may be terminated
by the Board; provided, however, that such termination shall be conditioned upon
the Board, after good faith consultation with the senior management of the
Company, providing for a replacement plan offering benefits or compensation
comparable to the benefits or compensation that otherwise would have been
probable to have been earned under the Plan (as determined in the sole
discretion of the Board) had such merger or asset sale not occurred. Any
decision by the Board pursuant to this Section IX shall be final and binding on
all participants.
X. Amendment and Termination of the Plan.
Subject to Section IX hereof, the Board may amend, suspend or terminate
the Plan at any time with the written consent of the Plan participants. In
taking any such action, however, the Board shall use its good faith efforts to
be fair and equitable to participants and shall have due regard for the original
intent behind establishment of this Plan.
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XI. Limitations.
Neither the Plan nor the transactions authorized under the Plan
constitute an express or implied promise of continued employment for any period
whatsoever.
XII. Governing Law.
The Plan shall be governed by the laws of the State of California.
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EXHIBIT A
Percentage of
Name Bonus Allocation
- - ----------------------------------------------------- --------------------
Daniel Vick 50%
Nolan Egbert 50%
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EXHIBIT E
OPINION OF COUNSEL TO GOLDEN EAGLE
To be Dated the Merger Date
The opinion, which will be addressed to SANM and SANM Sub, will be the
following effect, with such qualifications as to the scope of the opinion as
counsel to SANM and SANM Sub shall reasonably deem to be acceptable:
1. Golden Eagle is a corporation duly organized, validly existing and in
good standing under the laws of the State of Texas. Golden Eagle has
all requisite corporate power and authority to own, operate and lease
its properties and assets and to carry on its business as presently
conducted. Golden Eagle is not qualified to do business as a foreign
corporation in any jurisdiction.
2. The authorized, issued and outstanding capital stock of Golden Eagle is
as set forth in Section 2.2 of the Reorganization Agreement. All of the
issued and outstanding shares of Golden Eagle Common Stock have been
duly authorized and validly issued and are fully paid and
non-assessable. To such counsel's knowledge, there are no options,
warrants, or agreements of any character to which Golden Eagle is a
party, obligating Golden Eagle to issue additional shares of Golden
Eagle Common Stock or any rights to subscribe for or purchase Golden
Eagle Common Stock.
3. Golden Eagle has full corporate power to execute, deliver and perform
the Reorganization Agreement and Merger Agreement. The execution,
delivery and performance of the Reorganization Agreement and the Merger
Agreement have been duly authorized by all necessary corporate action
on the part of Golden Eagle and the shareholders of Golden Eagle. The
Reorganization Agreement and the Merger Agreement have been duly and
validly executed and delivered by Golden Eagle and are valid, binding
and enforceable obligations of Golden Eagle, enforceable against Golden
Eagle in accordance with their terms.
4. Except for the filing of the Merger Agreement and the officers'
certificates attached thereto with the Secretary of State of the State
of Texas, no authorization, consent or approval of or designation,
declaration or filing with any public body or authority on the part of
Golden Eagle is necessary in connection with the execution, delivery
and performance of the Reorganization Agreement and the Merger
Agreement.
5. The execution, delivery and performance of the Reorganization Agreement
and the Merger Agreement do not and will not constitute or result in a
breach, violation or default under (i) the Articles of Incorporation or
Bylaws of Golden Eagle, as amended to date, (ii) to such counsel's
knowledge, any applicable law, rule, regulation, judgment or decree to
which Golden Eagle is subject, or (iii) to such counsel's knowledge,
any agreement or instrument
64
listed identified in the Golden Eagle Disclosure Schedule delivered
pursuant to Article 3 of the Reorganization Agreement.
65
EXHIBIT F
OPINION OF COUNSEL TO SANM AND SUB
To be Dated the Merger Date
The opinion, which will be addressed to Golden Eagle, will be to the
following effect, with such qualifications as to the scope of the opinion as
counsel to Golden Eagle shall be reasonably deem to be acceptable:
1. SANM and SANM Sub are corporations duly organized, validly
existing, and in good standing under the laws of the States of Delaware and
Texas, respectively. SANM has all requisite corporate power and authority to
own, operate and lease its properties and assets and to carry on its business as
presently conducted.
2. SANM and SANM Sub have all requisite corporate power and
authority to execute and deliver the Agreements and to carry out the
transactions contemplated on the part of SANM and SANM Sub in the Reorganization
Agreement and Merger Agreement. The execution and delivery by SANM and SANM Sub
of the Reorganization Agreement and Merger Agreement and the consummation by
SANM and SANM Sub of the transactions contemplated thereby have been duly
authorized by their respective boards of directors and by the shareholder of
SANM Sub. All corporate action required to be taken by or on the part of SANM
and SANM Sub to authorize it to execute and deliver the Reorganization Agreement
and Merger Agreement, and to consummate the transactions contemplated thereby,
have been duly and validly taken. The Reorganization Agreement and Merger
Agreement have been duly executed and delivered by SANM and SANM Sub and
constitute valid and binding obligations of SANM and SANM Sub, enforceable in
accordance with their terms.
3. Except for the filing of the Merger Agreement and the
officers' certificates attached thereto with the Secretary of State of the State
of Texas, no consent, authorization, order, or approval of, or filing or
registration with any governmental commission, board, or other regulatory body
is required by SANM or SANM Sub for or in connection with the execution and
delivery of the Reorganization Agreement and Merger Agreement and the
consummation by SANM and SANM Sub of the transactions contemplated thereby.
4. The execution, delivery and performance of the Reorganization
Agreement and Merger Agreement do not and will not constitute or result in a
breach, violation or default under (i) the Articles of Incorporation or Bylaws
of SANM or SANM Sub, as amended to date, (ii) to such counsel's knowledge, any
applicable law, rule, regulation, judgment or decree to which SANM or SANM Sub
are subject, or (iii) to such counsel's knowledge , under any material
agreement, instrument, contract, note, bond, indenture or obligation to which
SANM or SANM Sub is a party or by which SANM or SANM Sub is bound.