EXHIBIT 10.5
AFFILIATE'S AGREEMENT
THIS AFFILIATE'S AGREEMENT ("Affiliate's Agreement") is made as of the
4th day of April, 1996 between Rom Tech, Inc., a Pennsylvania corporation
("Parent"), Virtual Reality Laboratories, Inc., a California corporation (the
"Company"), and the undersigned shareholder (the "Shareholder") of the Company.
The Company, Parent, and VR Acquisition Corporation, a Pennsylvania
corporation and a wholly-owned subsidiary of Parent ("Sub"), have entered into
an Agreement and Plan of Reorganization dated as of April 4, 1996 (the
"Reorganization Agreement"), and Parent, Sub and the Company have entered into a
related Agreement and Plan of Merger dated as of April 4, 1996 (the "Merger
Agreement"), providing for the merger of the Company with and into Sub (the
"Merger"). Upon the consummation of the Merger and in connection therewith, the
undersigned Shareholder will become the owner of common shares of Parent (the
"Parent Shares"). It is intended that the Merger will be treated as a "pooling
of interests" in accordance with generally accepted accounting principles and
the applicable General Rules and Regulations published by the Securities and
Exchange Commission (the "SEC").
1. The undersigned Shareholder hereby represents, warrants and agrees
that:
(a) The undersigned Shareholder may be deemed to be an "affiliate"
of the Company within the meaning of Rule 144 under the Securities Act of 1933,
as amended (the "Securities Act"), and Accounting Series Release No. 130, as
amended, of the SEC ("Release No. 130").
(b) The undersigned Shareholder has not sold, exchanged,
transferred, pledged, disposed of or otherwise reduced his relative risk to any
shares of the Parent owned by the undersigned (the "Parent Shares") in violation
of Accounting Series Release No. 135, as amended by Staff Accounting Bulletins
No. 65 and 76 within 30 days prior to the Effective Time of the Merger (as
defined in the Merger Agreement).
(c) The undersigned Shareholder will not sell, exchange, transfer,
pledge or dispose of the Parent Shares or any part thereof until such time after
the Effective Time of the Merger as financial results covering at least thirty
(30) days of the combined operations of Parent and the Company after the
Effective Time of the Merger have been, within the meaning of Release No. 130,
filed by Parent with the SEC or published by Parent in an Annual Report on Form
10-KSB, a Quarterly Report on Form 10-QSB, a Current Report on Form 8-K, a
quarterly earnings report, a press release or other public issuance which
includes combined sales and income of the Company and Parent. Parent agrees to
make such filing or publication as soon as practicable after thirty (30) days
after the Effective Time of the Merger.
(d) Subject to the limitations set forth in paragraph 1(c) above,
the undersigned Shareholder also agrees not to offer, sell, exchange, transfer,
pledge or otherwise dispose of any of the Parent Shares unless at that time
either:
(i) such transaction shall be permitted pursuant to the
provisions of Rule 144 under the Securities Act; or
(ii) counsel representing the undersigned Shareholder,
satisfactory to Parent, shall have advised Parent in a
written opinion letter reasonably satisfactory to Parent
and Parent's counsel, and upon which Parent and its
counsel may rely, that no registration under the
Securities Act would be required in connection with the
proposed sale or other transfer; or
(iii) a registration statement under the Securities Act
covering the Parent Shares proposed to be sold or
otherwise transferred, describing the manner and terms of
the proposed sale or other transfer, and containing a
current prospectus, shall have been filed with the SEC
and declared effective under the Securities Act; or
(iv) an authorized representative of the SEC shall have
rendered written advice to the undersigned Shareholder
(sought by the undersigned Shareholder or counsel to the
undersigned Shareholder, with a copy thereof and of all
other related communications delivered to Parent) to the
effect that the SEC would take no actions, or that the
staff of the SEC would not recommend that the SEC take
action, with respect to the proposed sale or other
transfer if consummated.
(e) All certificates representing the Parent Shares deliverable to
the undersigned Shareholder pursuant to the Merger Agreement and in connection
with the Merger and any certificates subsequently issued to the undersigned
Shareholder with respect thereto or in substitution therefor shall, unless one
or more of the alternative conditions set forth in subparagraphs (i) - (iv) of
paragraph (d) of this Section 1 shall have occurred, bear a legend substantially
as follows:
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"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED, SOLD,
OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE REQUIREMENTS OF
THE SECURITIES ACT OF 1933, AS AMENDED, AND THE OTHER CONDITIONS
SPECIFIED IN THAT CERTAIN AFFILIATE'S AGREEMENT DATED AS OF APRIL __,
1996 AMONG ROM TECH, INC., VIRTUAL REALITY LABORATORIES, INC., AND
CERTAIN OF THE SHAREHOLDERS OF VIRTUAL REALITY LABORATORIES, INC. A
COPY OF SUCH AFFILIATE'S AGREEMENT MAY BE INSPECTED BY THE HOLDER OF
THIS CERTIFICATE AT THE OFFICES OF ROM TECH, INC., OR ROM TECH, INC.
WILL FURNISH, WITHOUT CHARGE, A COPY THEREOF TO THE HOLDER OF THIS
CERTIFICATE UPON WRITTEN REQUEST THEREFOR."
Parent, at its discretion, may cause stop transfer orders to be placed
with its transfer agent(s) with respect to the certificates for the Parent
Shares but not as to the certificates for any part of the Parent Shares as to
which the foregoing legend is no longer appropriate when one or more of the
alternative conditions set forth in subparagraphs (i)-(iv) of paragraph (d) of
this Section 1 shall have occurred. Parent covenants that upon the request of
the undersigned Shareholder, it will remove the foregoing legend when one or
more of the alternative conditions set forth in subparagraphs (i)-(iv) of
paragraph (d) of this Section 1 shall have occurred.
(f) The undersigned Shareholder will observe and comply with the
Securities Act and the General Rules and Regulations thereunder, as now in
effect and as from time to time amended and including those hereafter enacted or
promulgated, in connection with any offer, sale, pledge, transfer or other
disposition of the Parent Shares or any part thereof.
2. Reports. From and after the Effective Time of the Merger and for so
long as necessary in order to permit the undersigned Shareholder to sell the
Parent Shares pursuant to Rule 144 under the Securities Act, to the extent
applicable, Parent will use its best efforts to file on a timely basis all
reports required to be filed by it pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended, referred to in paragraph (c)(1) of Rule 144
under the Securities Act (or, if applicable, Parent will use its best efforts to
make publicly available the information regarding itself referred to in
paragraph (c)(2) of Rule 144), in order to permit the undersigned Shareholder
to sell, pursuant to the applicable provisions of Rule 144, the Parent Shares.
3. Waiver. No waiver by any party hereto of any condition or of any
breach of any provision of this Affiliate's Agreement shall be effective unless
in writing.
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4. Notices. All notices, requests, demands or other communications
which are required or may be given pursuant to the terms of this Affiliate's
Agreement shall be in writing and shall be deemed to have been duly given if
delivered by hand or (except where receipt thereof is specifically required for
purposes of this Affiliate's Agreement) mailed by registered or certified mail,
postage prepaid, as follows:
4.1 If to the Shareholder, at the address set forth below the
Shareholder's signature at the end hereof.
4.2 If to Parent:
Rom Tech, Inc.
2000 Cabot Blvd., Suite 110
Langhorne, PA 19047
Attention: Joseph A. Falsetti
With a copy to:
McCausland, Keen & Buckman
Five Radnor Corporate Center
100 Matsonford Road
Radnor, Pennsylvania 19087
Attention: Ellen Pulver Flatt, Esquire
4.3 If to the Company:
Virtual Reality Laboratories, Inc.
3534 Empleo, Suite A
San Luis Obispo, California 93401
Attention: Lance H. Woeltjen
With a copy to:
Annis & Spievak
701 "B" Street, Suite 2200
San Diego, California 92101
Attention: James R. Spievak, Esquire
or to such other address as any party hereto may designate for itself by notice
given as herein provided.
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5. Counterparts. For the convenience of the parties hereto, this
Affiliate's Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same agreement.
6. Successors and Assigns. This Affiliate's Agreement shall be
enforceable by, and shall inure to the benefit of and be binding upon, the
parties hereto and their respective successors and assigns. As used herein, the
term "successors and assigns" shall mean, where the context so permits, heirs,
executors, administrators, trustees and successor trustees, and personal and
other representatives.
7. Governing Law. This Affiliate's Agreement shall be governed by and
construed, interpreted and enforced in accordance with the laws of the
Commonwealth of Pennsylvania without regard to its rules and principles relating
to conflicts of laws.
8. Severability. This Affiliate's Agreement shall become effective at
the Effective Time of the Merger. If a court of competent jurisdiction
determines that any provision of this Affiliate's Agreement is not enforceable
or enforceable only if limited in time and/or scope, this Affiliate's Agreement
shall continue in full force and effect with such provisions stricken or so
limited.
9. Attorneys' Fees. In the event of any legal action or proceeding to
enforce or interpret the provisions hereof, the prevailing party shall be
entitled to reasonable attorneys' fees, whether or not the proceeding results in
a final judgment.
10. Effect of Headings. The section headings herein are for convenience
only and shall not affect the construction or interpretation of this Affiliate's
Agreement.
11. Definitions. All capitalized terms used herein shall have the
meaning defined in the Reorganization Agreement, unless otherwise defined
herein.
12. Third Party Reliance. Counsel to and accountants for the parties
shall be entitled to rely upon this Affiliate's Agreement as needed.
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IN WITNESS WHEREOF, the parties have caused this Affiliate's Agreement
to be executed as of the date first set forth above.
ROM TECH, INC.
By:
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Name: Joseph A. Falsetti
Title: Chief Executive Officer
VIRTUAL REALITY LABORATORIES,
INC.
By:
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Name:
Title: President
SHAREHOLDER
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Name:
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