SBS TECHNOLOGIES, INC.
INDEMNIFICATION AGREEMENT

 

THIS AGREEMENT is entered into as of ______________ ("Agreement"), between SBS
Technologies, Inc., a New Mexico corporation (the "Corporation"), and __________
("Indemnitee").

Background Statement and Recitals

Highly competent and experienced persons are becoming more reluctant to serve
corporations as directors or in other capacities unless they are provided with
adequate protection through insurance and adequate indemnification against
inordinate risks of claims and actions against them arising out of their service
to and activities on behalf of the corporation.

The Board of Directors of the Corporation (the "Board") has determined that the
inability to attract and retain such persons would be detrimental to the best
interests of the Corporation and its shareholders and that the Corporation
should act to assure such persons that there will be increased certainty of such
protection in the future.

The Board has also determined that it is reasonable, prudent and necessary for
the Corporation, in addition to purchasing and maintaining directors' and
officers' liability insurance (or otherwise providing for adequate arrangements
of self-insurance), contractually to obligate itself to indemnify such persons
to the fullest extent permitted by current and future applicable law so that
they will serve or continue to serve the Corporation free from undue concern
that they will not be so indemnified.

Indemnitee is willing to serve, to continue to serve and to take on additional
service for or on behalf of the Corporation on the condition that Indemnitee be
so indemnified.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the parties hereby agree as follows:

ARTICLE I
CERTAIN DEFINITIONS

As used herein, the following words and terms shall have the following
respective meanings (whether singular or plural):

"Change in Control" means a change in control of the Corporation occurring any
time after the date hereof of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any
similar item on any similar schedule or form) promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), whether or not the
Corporation is then subject to such reporting requirement; provided, however,
that, without limiting the generality of the foregoing, a Change in Control
shall be deemed to have occurred (irrespective of the applicability of the
initial clause of this definition) if at any time after the date hereof (a) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act,
but excluding (i) any employee benefit plan of the Corporation or of any
subsidiary of the Corporation, and (ii) any entity organized, appointed or
established by the Corporation pursuant to the terms of any such plan) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Corporation representing 40%
or more of the combined voting power of the Corporation's then outstanding
securities without the prior approval of at least two-thirds of the members of
the whole Board in office immediately prior to such person attaining such
percentage interest; (b) the Corporation is a party to a merger, consolidation,
share exchange, sale of assets or other reorganization, or a proxy contest (a
"Business Combination"), as a consequence of which (x) members of the Board in
office immediately prior to such transaction or event constitute less than a
majority of the whole Board thereafter or (y) all or substantially all of the
individuals and entities who were the beneficial owners of the Corporation's
then outstanding voting securities immediately prior to such Business
Combination fail to beneficially own, directly or indirectly, more than 50% of
the then outstanding voting securities entitled to vote generally in the
election of directors (or similar body) of the entity resulting from such
Business Combination (including without limitation, an entity which as a result
of such transaction owns the Corporation or all or substantially all of the
Corporation's assets either directly or through one or more subsidiaries) in
proportions not materially different from their ownership, immediately prior to
such Business Combination, of the Corporation's then outstanding voting
securities; or (c) during any period of two consecutive years, individuals who
at the beginning of such period constituted members of the Board (including for
this purpose any new member whose election or nomination for election by the
Corporation's shareholders was approved by a vote of at least two-thirds of the
members of the whole Board then still in office who were members of the Board at
the beginning of such period) cease for any reason to constitute a majority of
the whole Board.

"Claim" means an actual or threatened claim or request for relief.

"Corporate Status" means the status of a person who is or was a director,
nominee for director, officer, employee, agent or fiduciary of the Corporation
(including any predecessors to the Corporation) or of any other corporation,
employee benefit plan, other enterprise or other entity for or in which such
person is or was serving as a director, nominee for director, officer, employee,
agent or fiduciary at the request of or after election or nomination by the
Corporation.

"Disinterested Director," with respect to any request by Indemnitee for
indemnification or advancement of Expenses hereunder, means a director of the
Corporation who neither is nor was a party to the Proceeding or subject to a
Claim, issue or matter in respect of which indemnification or advancement of
Expenses is sought by Indemnitee.

"Expenses" means all attorneys' fees, retainers, court costs, transcript costs,
fees of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees and all other
disbursements or expenses of the types customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend, investigating, being
or preparing to be a witness in, or participating in (including on appeal), a
Proceeding.

"Independent Counsel" means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither contemporaneously is, nor
in the five years theretofore has been, retained to represent (a) the
Corporation or Indemnitee in any matter material to either such party, (b) any
other party to the Proceeding giving rise to a claim for indemnification or
advancement of Expenses hereunder or (c) the beneficial owner, directly or
indirectly, of securities of the Corporation representing 40% or more of the
combined voting power of the Corporation's then outstanding voting securities
(other than, in each such case, with respect to matters concerning the rights of
Indemnitee under this Agreement, or of other indemnitees under similar
indemnification agreements). Notwithstanding the foregoing, the term
"Independent Counsel" shall not include any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Corporation or Indemnitee in an action to
determine Indemnitee's rights under this Agreement.

"person" shall have the meaning ascribed to such term in Sections 13(d) and
14(d) of the Exchange Act.

"Proceeding" means any threatened, pending or completed action, suit,
arbitration, investigation, alternate dispute resolution mechanism,
administrative hearing or any other proceeding, whether civil, criminal,
administrative, arbitrative or investigative and whether or not based upon
events occurring, or actions taken, before the date hereof (except any of the
foregoing initiated by Indemnitee pursuant to Article VI or Section 7.8 to
enforce Indemnitee's rights under this Agreement), and any appeal in or related
to any such action, suit, arbitration, investigation, hearing or proceeding and
any appeal in or related to any such action, suit, arbitration, investigation,
hearing or proceeding and any inquiry or investigation that could lead to, and
any appeal in or related to, any such action, suit, arbitration, alternative
dispute resolution mechanism, hearing or proceeding.

"NMBCA" means the New Mexico Business Corporation Act and any successor statute
thereto as either of them may from time to time be amended.

ARTICLE II
SERVICES BY INDEMNITEE

Section 2.1 Services. Indemnitee agrees to serve, or continue to serve, as a
director of the Corporation. Indemnitee may from time to time also agree to
serve, as the Corporation may request from time to time, as a director, officer,
partner, venturer, proprietor, trustee, employee, agent, fiduciary or similar
functionary of another foreign or domestic corporation, employee benefit plan,
other enterprise or other entity. Indemnitee and the Corporation each
acknowledge that they have entered into this Agreement as a means of inducing
Indemnitee to serve, or continue to serve, the Corporation in such capacities.
Indemnitee may at any time and for any reason resign from such position or
positions (subject to any other contractual obligation or any obligation imposed
by operation of law). The Corporation shall have no obligation under this
Agreement to continue Indemnitee in any such position or positions.

ARTICLE III
INDEMNIFICATION

Section 3.1 General. The Corporation shall indemnify, and advance Expenses to,
Indemnitee to the fullest extent permitted by applicable law in effect on the
date hereof and to such greater extent as applicable law may thereafter from
time to time permit. The rights of Indemnitee provided under the preceding
sentence shall include, but shall not be limited to, the right to be indemnified
and to have Expenses advanced in all Proceedings to the fullest extent permitted
by Section 53-11-4.1 of the NMBCA. The provisions set forth in this Agreement
are provided in addition to and as a means of furtherance and implementation of,
and not in limitation of, the obligations expressed in this Article III. No
requirement, condition or limitation of any right to indemnification under this
Article III, or to advancement of Expenses under Articles III and IV shall in
any way limit the rights of Indemnitee under Section 7.3.

Section 3.2 Additional Indemnity of the Corporation. Indemnitee shall be
entitled to indemnification pursuant to this Section 3.2 if, by reason of
Indemnitee's Corporate Status, Indemnitee was, is or is threatened to be made, a
party to any Proceeding (except to the extent limited by Section 3.3). Pursuant
to this Section 3.2, Indemnitee shall be indemnified against reasonable
Expenses, judgments, penalties (including excise or similar taxes), fines and
amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with any such Expenses, judgments,
penalties, fines and amounts paid in settlement) actually incurred by Indemnitee
or on Indemnitee's behalf in connection with such Proceeding or any Claim, issue
or matter, therein, if (a) Indemnitee acted in good faith; (b) Indemnitee
reasonably believed (i) in the case of conduct in Indemnitee's official capacity
with the Corporation, that Indemnitee's conduct was in the Corporation's best
interest; and (ii) in all other cases, that Indemnitee's conduct was at least
not opposed to the best interests of the Corporation, and (c) in the case of any
criminal Proceeding, Indemnitee had no reasonable cause to believe Indemnitee's
conduct was unlawful. Nothing in this Section 3.2 shall limit the benefits of
Section 3.1 or any other Section hereunder.

Section 3.3 Limitation on Indemnity. The indemnification otherwise available to
an Indemnitee under Section 3.2 shall be limited to the extent set forth in this
Section 3.3. In the event that an Indemnitee is found liable to the Corporation
or is found liable on the basis that personal benefit was improperly received by
the Indemnitee whether or not the benefit resulted from an action taken in
Indemnitee's official capacity the Indemnitee shall, with respect to the Claim,
issue or matter, in the Proceeding in which such finding is made, be indemnified
only against reasonable Expenses actually incurred by Indemnitee in connection
with that Claim, issue or matter therein. Notwithstanding the foregoing, no
indemnification against such Expenses shall be made in respect of any Claim,
issue or matter, in such Proceeding as to which Indemnitee shall have been
adjudged to be liable for willful or intentional misconduct in the performance
of Indemnitee's duty to the Corporation; provided, however, that, if applicable
law so permits, indemnification against such Expenses shall nevertheless be made
by the Corporation in such event if and only to the extent that the court in
which such Proceeding shall have been brought or is pending, shall determine.

ARTICLE IV
EXPENSES

Section 4.1 Expenses of a Party Who Is Wholly or Partly Successful.
Notwithstanding any other provision of this Agreement to the contrary (except as
set forth in Section 7.2(c) or 7.7), and without a requirement for any
determination described in Section 5.2, the Corporation shall indemnify
Indemnitee against all Expenses actually and reasonably incurred by Indemnitee
or on Indemnitee's behalf in connection with any Proceeding to which Indemnitee
was or is a party by reason of Indemnitee's Corporate Status and in which
Indemnitee is wholly successful, on the merits or otherwise, in the defense of
the Proceeding. If Indemnitee is not wholly successful, on the merits or
otherwise, in a Proceeding but is successful, on the merits or otherwise, as to
any Claim, issue or matter in such Proceeding, the Corporation shall indemnify
Indemnitee against all Expenses actually and reasonably incurred by Indemnitee
or on Indemnitee's behalf relating to each successfully resolved Claim, issue or
matter. For purposes of this Section 4.1 and without limitation, the termination
of a Claim, issue or matter in a Proceeding by dismissal, with or without
prejudice, shall be deemed to be a successful result as to such Claim, issue or
matter.

Section 4.2 Expenses of a Witness or Non-Party. Notwithstanding any other
provision of this Agreement to the contrary, to the extent that Indemnitee is,
by reason of Indemnitee's Corporate Status, a witness or otherwise participates
in any Proceeding at a time when Indemnitee is not a party in the Proceeding,
the Corporation shall indemnify Indemnitee against all Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee's behalf in connection
therewith.

Section 4.3 Advancement of Expenses. Except as set forth in Section 5.5, the
Corporation shall pay all reasonable Expenses incurred by or on behalf of
Indemnitee in connection with any Proceeding, whether brought by or in the right
of the Corporation or otherwise, in advance of any determination with respect to
entitlement to indemnification pursuant to Article V within 15 days after the
receipt by the Corporation of (a) a written affirmation by the director of
Indemnitee's good faith belief that Indemnitee has met the standard of conduct
necessary for indemnification under Article III and (b) a written undertaking by
or on behalf of Indemnitee to repay the amount paid or reimbursed if it is
ultimately determined that Indemnitee has not met that standard and a
determination is made pursuant to the procedures set forth in Article V that the
facts then known to those making the determination would not preclude
indemnification under Section 53-11-4.1 of the NMBCA. Such statement or
statements shall reasonably evidence the Expenses incurred by Indemnitee.
Indemnitee hereby undertakes and agrees that Indemnitee will reimburse and repay
the Corporation for any Expenses so advanced to the extent that it shall
ultimately be determined, in a final adjudication by a court from which there is
no further right of appeal, that Indemnitee is not entitled to be indemnified
against such Expenses.

ARTICLE V
PROCEDURE FOR DETERMINATION OF ENTITLEMENT
TO INDEMNIFICATION AND ADVANCEMENT OF EXPENSES

Section 5.1 Request by Indemnitee. To obtain indemnification or an advancement
of Expenses under this Agreement, Indemnitee shall submit to the Corporation a
written request, including therein or therewith with respect to the request for
indemnification only, such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to
what extent Indemnitee is entitled to indemnification. The Secretary or an
Assistant Secretary of the Corporation shall, promptly upon receipt of such a
request for indemnification or an advancement of Expenses, advise the members of
the Board in writing that Indemnitee has requested indemnification or an
advancement of Expenses.

Section 5.2 Determination of Request. Upon written request by Indemnitee for
indemnification pursuant to Section 5.1 or an advancement of Expenses pursuant
to Section 4.3, a determination, if required by applicable law, with respect to
Indemnitee's entitlement thereto shall be made in the specific case as follows:

(a) If a Change in Control shall have occurred, by Independent Counsel (selected
in accordance with Section 5.3) in a written opinion to the Board, a copy of
which shall be delivered to Indemnitee, unless Indemnitee shall request that
such determination be made by the Board, or a committee of the Board, in which
case by the person or persons or in the manner provided for in clause (i) or
(ii) of paragraph (b) below;

(b) If a Change in Control shall not have occurred, (i) by the Board by a
majority vote of a quorum of the Board consisting of Disinterested Directors, or
(ii) if a quorum of the Board consisting of Disinterested Directors is not
obtainable, by a majority vote of a committee of the Board designated to act in
the matter by a majority vote of the entire Board, consisting solely of two or
more Disinterested Directors, (iii) by Independent Counsel selected by the Board
or a committee of the Board by a vote as set forth in clauses (i) or (ii) of
this paragraph (b), or if such quorum is not obtainable or such committee cannot
be established, by a majority vote of all directors, or (iv) if Indemnitee and
the Corporation agree, by the shareholders of the Corporation in a vote that
excludes the shares held by directors who are not Disinterested Directors; or

(c) As provided in Section 5.4(b).

If it is so determined that Indemnitee is entitled to indemnification or an
advancement of Expenses hereunder, payment to Indemnitee shall be made within 15
days after such determination. Indemnitee shall cooperate with the person,
persons or entity making such determination with respect to Indemnitee's
entitlement to indemnification only, including providing to such person, persons
or entity upon reasonable advance request any documentation or information that
is not privileged or otherwise protected from disclosure and that is reasonably
available to Indemnitee and reasonably necessary for such determination. Other
than a written request and reasonable support for Expenses incurred, Indemnitee
shall not be required to cooperate or provide any other documentation or
information with respect to a request or determination with respect to the
advancement of Expenses. Any costs or expenses (including attorneys' fees and
disbursements) incurred by Indemnitee in so cooperating with the person, persons
or entity making such determination shall be borne by the Corporation
(irrespective of the determination as to Indemnitee's entitlement to
indemnification), and the Corporation shall indemnify and hold harmless
Indemnitee therefrom.

Section 5.3 Independent Counsel. If the determination of entitlement to
indemnification or advancement of Expenses is to be made by Independent Counsel,
the Independent Counsel shall be selected (a) by the Board by a majority vote of
a quorum of the Board consisting of Disinterested Directors, or (b) if a quorum
of the Board consisting of Disinterested Directors is not obtainable, by a
majority vote of a committee of the Board designated to select such Independent
Counsel by a majority vote of all directors of the Corporation, consisting
solely of two or more Disinterested Directors, or (c) if such quorum is not
obtainable or such committee cannot be established, by a majority vote of all
directors. The Corporation shall give written notice to Indemnitee, within 10
days after receipt by the Corporation of Indemnitee's request for
indemnification or advancement of Expenses, specifying the identity and address
of the Independent Counsel so selected and (i) such notice to Indemnitee shall
be accompanied by a written affirmation of the Independent Counsel so selected
that it satisfies the requirements of the definition of "Independent Counsel" in
Article I and that it agrees to serve in such capacity and (ii) Indemnitee may,
within seven days after such written notice of selection shall have been given,
deliver to the Corporation a written objection to such selection. Any objection
to selection of Independent Counsel pursuant to this Section 5.3 may be asserted
only on the ground that the Independent Counsel so selected does not meet the
requirements of the definition of "Independent Counsel" in Article I hereof, and
the objection shall set forth with particularity the factual basis of such
assertion. If such written objection is timely made, the Independent Counsel so
selected may not serve as Independent Counsel unless and until a court of
competent jurisdiction (the "Court") has determined that such objection is
without merit. In the event of a timely written objection to a choice of
Independent Counsel, the Corporation shall have seven days to make an alternate
selection of Independent Counsel and to give written notice of such selection to
the Indemnitee, after which time the Indemnitee shall have five days to make a
written objection to such alternate selection. If, within 30 days after
submission of Indemnitee's request for indemnification pursuant to Section 5.1
hereof or an advancement of Expenses pursuant to Section 4.3 hereof, no
Independent Counsel shall have been selected and not objected to, the
Corporation or the Indemnitee may petition the Court for resolution of any
objection that shall have been made by the Indemnitee to the Corporation's
selection of Independent Counsel and/or for the appointment as Independent
Counsel of a person selected by the Court or by such other person as the Court
shall designate, and the person with respect to whom an objection is so resolved
or the person so appointed shall act as Independent Counsel under Section 5.2
hereof. The Corporation shall pay any and all reasonable fees and expenses
incurred by such Independent Counsel in connection with acting pursuant to
Section 5.2, and the Corporation shall pay all reasonable fees and expenses
incident to the procedures of this Section 5.3, regardless of the manner in
which such Independent Counsel was selected or appointed. Upon the due
commencement of any judicial proceeding or arbitration pursuant to Section 6.1,
Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).

Section 5.4 Presumptions and Effect of Certain Proceedings.

(a) The Indemnitee shall be presumed to be entitled to indemnification and
advancement of Expenses under this Agreement upon submission of a request for
indemnification pursuant to Section 5.1 or advancement of Expenses pursuant to
Section 4.3, and thereafter the Corporation shall have the burden of proof in
overcoming that presumption in reaching a determination contrary to that
presumption. Such presumption shall be used by Independent Counsel (or other
person or persons determining entitlement to indemnification or advancement of
Expenses) as a basis for a determination of entitlement to indemnification and
advancement of Expenses unless the Corporation provides information sufficient
to overcome such presumption by clear and convincing evidence.

(b) If the person or persons empowered or selected under this Article V to
determine whether Indemnitee is entitled to indemnification or advancement of
Expenses shall not have made a determination within 60 days after receipt by the
Corporation of Indemnitee's request for indemnification or advancement of
Expenses, as the case may be, the requisite determination of entitlement to
indemnification or advancement of Expenses, as the case may be, shall be deemed
to have been made and Indemnitee shall be entitled to such indemnification or
advancement of Expenses, absent (i) a knowing misstatement by Indemnitee of a
material fact, or knowing omission of a material fact necessary to make
Indemnitee's statement not materially misleading, in connection with
Indemnitee's request for indemnification or advancement of Expenses, as the case
may be, or (ii) a prohibition of such indemnification or advancement of
Expenses, as the case may be, under applicable law; provided, however, that such
60-day period may be extended for a reasonable time, not to exceed an additional
30 days, if the person making the determination with respect to entitlement to
indemnification only (and not with respect to the determination of the
advancement of Expenses) in good faith requires such additional time for the
obtaining or evaluating of documentation and/or information relating to such
determination; provided further, that the 60-day limitation set forth in this
Section 5.4(b) shall not apply and such period shall be extended as necessary
(i) if within 30 days after receipt by the Corporation of Indemnitee's request
for indemnification under Section 5.1 or advancement of Expenses under Section
4.3, as the case may be, Indemnitee and the Corporation have agreed, and the
Board has resolved to submit, such determination to the shareholders of the
Corporation pursuant to Section 5.2(b) for their consideration at an annual
meeting of shareholders to be held within 90 days after such agreement and such
determination is made thereat, or a special meeting of shareholders for the
purpose of making such determination to be held within 60 days after such
agreement and such determination is made thereat, or (ii) if the determination
of entitlement to indemnification or advancement of Expenses is to be made by
Independent Counsel, in which case the applicable period shall be as set forth
in clause (c) of Section 6.1.

(c) The termination of any Proceeding or of any Claim, issue or matter by
judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere or its equivalent, shall not
(except as otherwise expressly provided in this Agreement) by itself adversely
affect the rights of Indemnitee to indemnification or advancement of Expenses,
as the case may be, or create a presumption that Indemnitee did conduct himself
in good faith or in a manner that Indemnitee reasonably believed in the case of
conduct in Indemnitee's official capacity, that was in the best interests of the
Corporation, or, in all other cases, that was not opposed to the best interests
of the Corporation or, with respect to any criminal Proceeding, that Indemnitee
had reasonable cause to believe that Indemnitee's conduct was unlawful.
Indemnitee shall be deemed to have been found liable in respect of any Claim,
issue or matter only after Indemnitee shall have been so adjudged by the Court
after exhaustion of all appeals therefrom.

Section 5.5 Election to Assume Defense. In the event the Corporation shall be
obligated to advance the Expenses of any Proceeding or Claim against the
Indemnitee, the Corporation shall be entitled, in lieu thereof, to assume the
defense of such proceeding upon the delivery to the Indemnitee of written notice
of the Corporation's election to do so, which notice shall contain the name,
address and phone number of counsel engaged by the Corporation to handle such
defense and confirmation that the Corporation has undertaken to pay that
counsel's reasonable fees and expenses therefor. After delivery of such notice,
the Corporation shall not be liable to the Indemnitee under this Agreement for
any fees or expenses of counsel for the Indemnitee (other than the counsel
engaged by the Corporation) subsequently incurred by the Indemnitee with respect
to the same Proceeding or Claim; provided that the fees and expenses of such
counsel for the Indemnitee shall be at the expense of the Corporation if (A) the
employment of separate counsel by the Indemnitee has been previously authorized
by the Corporation, or (B) the Indemnitee shall have reasonably concluded, and
either the Corporation or the counsel engaged by the Corporation shall have
agreed, or Independent Counsel shall have determined, that there may be a
conflict of interest between the Corporation and the Indemnitee in the conduct
of any such defense; and further provided, however, that, the Indemnitee's
counsel shall have been approved by any carrier of an applicable insurance
policy if required under the terms of that policy. Independent Counsel shall be
selected promptly following notice from the Indemnitee to the Corporation of the
Indemnitee's belief that a conflict of interest may exist. Nothing herein shall
limit the right of the Indemnitee to employ counsel at the Indemnitee's sole
expense.

ARTICLE VI
CERTAIN REMEDIES OF INDEMNITEE

Section 6.1 Indemnitee Entitled to Adjudication in an Appropriate Court. If (a)
a determination is made pursuant to Article V that Indemnitee is not entitled to
indemnification or advancement of Expenses under this Agreement, (b) there has
been any failure by the Corporation to make timely payment or advancement of any
amounts due hereunder, or (c) the determination of entitlement to
indemnification or advancement of Expenses is to be made by Independent Counsel
and such determination shall not have been made and delivered in a written
opinion within 90 days after the latest of (i) such Independent Counsel's being
appointed, (ii) the overruling by the Court of objections to such counsel's
selection or (iii) expiration of all periods for the Corporation or Indemnitee
to object to such counsel's selection, Indemnitee shall be entitled to commence
an action seeking an adjudication in the Court, of Indemnitee's entitlement to
such indemnification or advancement of Expenses. Alternatively, Indemnitee, at
Indemnitee's option, may seek an award in arbitration to be conducted by a
single arbitrator pursuant to the commercial arbitration rules of the American
Arbitration Association. Indemnitee shall commence such action seeking an
adjudication or an award in arbitration within 180 days following the date on
which Indemnitee first has the right to commence such action pursuant to this
Section 6.1, or such right shall expire. The Corporation shall not oppose
Indemnitee's right to seek any such adjudication or award in arbitration, but
may oppose Indemnitee's right to indemnification or payment of expenses.

Section 6.2 Adverse Determination Not to Affect any Judicial Proceeding. If a
determination shall have been made pursuant to Article V that Indemnitee is not
entitled to indemnification or advancement of Expenses under this Agreement, any
judicial proceeding or arbitration commenced pursuant to this Article VI shall
be conducted in all respects as a de novo trial or arbitration on the merits,
and Indemnitee shall not be prejudiced by reason of such initial adverse
determination. In any judicial proceeding or arbitration commenced pursuant to
this Article VI, Indemnitee shall be presumed to be entitled to indemnification
or advancement of Expenses, as the case may be, under this Agreement and the
Corporation shall have the burden of proof in overcoming such presumption and to
show by clear and convincing evidence that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.

Section 6.3 Corporation Bound by Determination Favorable to Indemnitee in any
Judicial Proceeding or Arbitration. If a determination shall have been made or
deemed to have been made pursuant to Article V that Indemnitee is entitled to
indemnification or advancement of Expenses, the Corporation shall be irrevocably
bound by such determination in any judicial proceeding or arbitration commenced
pursuant to this Article VI and shall be precluded from asserting that such
determination has not been made or that the procedure by which such
determination was made is not valid, binding and enforceable, in each such case
absent (a) a knowing misstatement by Indemnitee of a material fact, or a knowing
omission of a material fact necessary to make a statement by Indemnitee not
materially misleading, in connection with Indemnitee's request for
indemnification or advancement of Expenses, or (b) a prohibition of such
indemnification or advancement of Expenses under applicable law.

Section 6.4 Corporation Bound by the Agreement. The Corporation shall be
precluded from asserting in any judicial proceeding or arbitration commenced
pursuant to this Article VI that the procedures and presumptions of this
Agreement are not valid, binding and enforceable and shall stipulate in any such
court or before any such arbitrator that the Corporation is bound by all the
provisions of this Agreement.

Section 6.5 Indemnitee Entitled to Expenses of Judicial Proceeding. If
Indemnitee seeks a judicial adjudication of or an award in arbitration to
enforce Indemnitee's rights under, or to recover damages for breach of, this
Agreement, Indemnitee shall be entitled to recover from the Corporation, and the
Corporation shall indemnify Indemnitee against, any and all expenses (of the
types described in the definition of "Expenses" in Article I) actually and
reasonably incurred by Indemnitee in such judicial adjudication or arbitration
but only if Indemnitee prevails therein. If it shall be determined in such
judicial adjudication or arbitration that Indemnitee is entitled to receive part
but not all of the indemnification or advancement of Expenses or other benefit
sought, the expenses incurred by Indemnitee in connection with such judicial
adjudication or arbitration shall be equitably allocated between the Corporation
and Indemnitee. Notwithstanding the foregoing, if a Change in Control shall have
occurred, Indemnitee shall be entitled to indemnification under this Section 6.5
regardless of whether Indemnitee ultimately prevails in such judicial
adjudication or arbitration.

ARTICLE VII
MISCELLANEOUS

Section 7.1 Non-Exclusivity. The rights of Indemnitee to receive indemnification
and advancement of Expenses under this Agreement shall not be deemed exclusive
of any other rights to which Indemnitee may at any time be entitled under
applicable law, the Articles of Incorporation or Bylaws of the Corporation, any
other agreement, vote of shareholders or a resolution of directors, or
otherwise. No amendment or alteration of the Articles of Incorporation or Bylaws
of the Corporation or any provision thereof shall adversely affect Indemnitee's
rights hereunder and such rights shall be in addition to any rights Indemnitee
may have under the Corporation's Articles of Incorporation, Bylaws and the NMBCA
or otherwise. To the extent that there is a change in the NMBCA or other
applicable law (whether by statute or judicial decision) that allows greater
indemnification by agreement than would be afforded currently under the
Corporation's Articles of Incorporation or Bylaws and this Agreement, it is the
intent of the parties hereto that the Indemnitee shall enjoy by virtue of this
Agreement the greater benefit so afforded by such change.

Section 7.2 Insurance and Subrogation.

(a) To the extent the Corporation maintains an insurance policy or policies
providing liability insurance for directors, officers, employees, agents or
fiduciaries of the Corporation or for directors of the Corporation serving at
the request of the Corporation as directors, officers, partners, venturers,
proprietors, trustees, employees, agents, fiduciaries or similar functionaries
of another foreign or domestic corporation, employee benefit plan, other
enterprise or other entity that such person serves at the request of the
Corporation, Indemnitee shall be covered by such policy or policies in
accordance with its or their terms to the maximum extent of the coverage
available for any such director, officer, employee, agent or fiduciary under
such policy or policies.

(b) In the event of any payment by the Corporation under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all papers required and take
all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Corporation to bring suit to enforce
such rights.

(c) The Corporation shall not be liable under this Agreement to make any payment
of amounts otherwise indemnifiable hereunder if and to the extent that
Indemnitee has otherwise actually received such payment under the Corporation's
Articles of Incorporation or Bylaws or any insurance policy, contract, agreement
or otherwise.

Section 7.3 Self Insurance; Other Arrangements. The parties hereto recognize
that the Corporation may, but is not required to, procure or maintain insurance
or other arrangements, at its expense, to protect itself and any person,
including Indemnitee, who is or was a director, officer, employee or agent of
the Corporation or who is or was serving at the request of the Corporation as a
director, officer, partner, venturer, proprietor, trustee, employee, agent or
similar functionary of another foreign or domestic corporation, employee benefit
plan, other enterprise or other entity against any expense, liability or loss
asserted against or incurred by such person, in such a capacity or arising out
of Indemnitee's status as such a person, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or loss.

In considering the cost and availability of such insurance, the Corporation,
(through the exercise of the business judgment of its directors and officers),
may from time to time, purchase insurance which provides for any and all of (a)
deductibles, (b) limits on payments required to be made by the insurer, or (c)
coverage exclusions and/or coverage which may not be as comprehensive as that
which might otherwise be available to the Corporation but which otherwise
available insurance the officers or directors of the Corporation determine is
inadvisable for the Corporation to purchase given the cost involved. The
purchase of insurance with deductibles, limits on payments and coverage
exclusions will be deemed to be in the best interest of the Corporation but may
not be in the best interest of the Indemnitee. As to the Corporation, purchasing
insurance with deductibles, limits on payments and coverage exclusions is
similar to the Corporation's practice of self-insurance in other areas. In order
to protect Indemnitee who would otherwise be more fully or entirely covered
under such policies, the Corporation shall indemnify and hold Indemnitee
harmless to the extent (a) of such deductibles, (b) of amounts exceeding
payments required to be made by an insurer or (c) of coverage under policies of
officer's and director's liability insurance that are available, were available
or which became available to the Corporation or which are generally available to
companies comparable to the Corporation but which the officers or directors of
the Corporation determine is inadvisable for the Corporation to purchase, given
the cost involved. The obligation of the Corporation in the preceding sentence
shall be without regard to whether the Corporation would otherwise be entitled
to indemnify such officer or director under the other provisions of this
Agreement, or under any law, agreement, vote of shareholders or directors or
other arrangement. Notwithstanding the foregoing provisions of this Section 7.3,
the Indemnitee shall not be entitled to indemnification for the results of
Indemnitee's conduct that is intentionally adverse to the interests of the
Corporation. Without limiting the generality of any provision of this Agreement,
the procedures in Article V hereof shall, to the extent applicable, be used for
determining entitlement to indemnification under this Section 7.3. This
Agreement is authorized by Section 53-11-4.1(J) of the NMBCA as in effect on the
date hereof, and further is intended to establish an arrangement of
self-insurance pursuant to that section.

Section 7.4 Certain Settlement Provisions. The Corporation shall have no
obligation to indemnify Indemnitee under this Agreement for amounts paid in
settlement of a Proceeding or Claim without the Corporation's prior written
consent. The Corporation shall not settle any Proceeding or Claim in any manner
that would impose a fine or other obligation on Indemnitee without Indemnitee's
prior written consent, unless the settlement involves only the payment of money
damages indemnified by the Corporation and does not impose an injunction or
other equitable relief upon the Indemnitee. Neither the Corporation nor
Indemnitee shall unreasonably withhold their consent to any proposed settlement.
Notwithstanding any other provision herein to the contrary, the Corporation
shall not be obligated pursuant to the terms of this Agreement to indemnify the
Indemnitee for liabilities in excess of the total amount at which settlement
reasonably could have been made, or for any Expenses incurred by the Indemnitee
following the time such settlement reasonably could have been effected, if the
Indemnitee shall have unreasonably delayed, refused or failed to enter into a
settlement of any Proceeding or Claim (or investigation or appeal thereof)
recommended in good faith, in writing, by the Corporation.

Section 7.5 Duration of Agreement. This Agreement shall continue for so long as
Indemnitee serves as a director, nominee for director, officer, employee, agent
or fiduciary of the Corporation or, at the request of the Corporation, as a
director, nominee for director, officer, employee, agent or fiduciary of another
foreign or domestic corporation, employee benefit plan, other enterprise or
other entity, and thereafter shall survive until and terminate upon the latest
to occur of (a) the expiration of 10 years after the latest date that Indemnitee
shall have ceased to serve in any such capacity; (b) the final termination of
all pending Proceedings in respect of which Indemnitee is granted rights of
indemnification or advancement of Expenses hereunder and of any proceeding
commenced by Indemnitee pursuant to Article VI relating thereto; or (c) the
expiration of all statutes of limitation applicable to possible Claims arising
out of Indemnitee's Corporate Status.

Section 7.6 Notice by Each Party. Indemnitee shall promptly notify the
Corporation in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document or communication relating
to any Proceeding or Claim for which Indemnitee may be entitled to
indemnification or advancement of Expenses hereunder; provided, however, that
any failure of Indemnitee to so notify the Corporation shall not adversely
affect Indemnitee's rights under this Agreement except to the extent the
Corporation shall have been materially prejudiced as a direct result of such
failure. The Corporation shall notify promptly Indemnitee in writing, as to the
pendency of any Proceeding or Claim that may involve a claim against the
Indemnitee for which Indemnitee may be entitled to indemnification or
advancement of Expenses hereunder.

Section 7.7 Certain Persons Not Entitled to Indemnification. Notwithstanding any
other provision of this Agreement to the contrary, Indemnitee shall not be
entitled to (a) indemnification or advancement of Expenses hereunder with
respect to any Proceeding or any Claim, issue or matter therein, brought or made
by Indemnitee against the Corporation or any affiliate of the Corporation,
except as specifically provided in Article V or Article VI hereof, and (b)
indemnification of Expenses hereunder with respect to any Proceeding or Claim
instituted by the Indemnitee to enforce or interpret this Agreement, if the
Corporation is deemed to be the prevailing party in such Proceeding or Claim. In
addition, notwithstanding any other provision herein to the contrary, the
Corporation shall not be obligated pursuant to the terms of this Agreement to
indemnify the Indemnitee for Expenses and liabilities, including without
limitation the disgorgement of profits, arising from the purchase and sale by
the Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any similar or successor statute.

Section 7.8 Enforcement. The Corporation agrees that its execution of this
Agreement shall constitute a stipulation by which it shall be irrevocably bound
in any court or arbitration in which a proceeding by Indemnitee for enforcement
of Indemnitee's rights hereunder shall have been commenced, continued or
appealed, that its obligations set forth in this Agreement are unique and
special, and that failure of the Corporation to comply with the provisions of
this Agreement will cause irreparable and irremediable injury to Indemnitee, for
which a remedy at law will be inadequate. As a result, in addition to any other
right or remedy Indemnitee may have at law or in equity with respect to breach
of this Agreement, Indemnitee shall be entitled to injunctive or mandatory
relief directing specific performance by the Corporation of its obligations
under this Agreement.

Section 7.9 Successors and Assigns. All of the terms and provisions of this
Agreement shall be binding upon, shall inure to the benefit of and shall be
enforceable by the parties hereto and their respective successors, assigns,
heirs, executors, administrators, legal representatives.

Section 7.10 Amendment. This Agreement may not be modified or amended except by
a written instrument executed by or on behalf of each of the parties hereto.

Section 7.11 Waivers. The observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) by the party entitled to enforce such term only by a writing
signed by the party against which such waiver is to be asserted. Unless
otherwise expressly provided herein, no delay on the part of any party hereto in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party hereto of any right,
power or privilege hereunder operate as a waiver of any other right, power or
privilege hereunder nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder.

Section 7.12 Entire Agreement. This Agreement and the documents expressly
referred to herein constitute the entire agreement between the parties hereto
with respect to the matters covered hereby, and any other prior or
contemporaneous oral or written understandings or agreements with respect to the
matters covered hereby are expressly superseded by this Agreement.

Section 7.13 Severability. If any provision of this Agreement (including any
provision within a single section, paragraph or sentence) or the application of
such provision to any person or circumstance, shall be judicially declared to be
invalid, unenforceable or void, such decision will not have the effect of
invalidating or voiding the remainder of this Agreement or affect the
application of such provision to other persons or circumstances, it being the
intent and agreement of the parties that this Agreement shall be deemed amended
by modifying such provision to the extent necessary to render it valid, legal
and enforceable while preserving its intent, or if such modification is not
possible, by substituting therefor another provision that is valid, legal and
unenforceable and that achieves the same objective. Any such finding of
invalidity or unenforceability shall not prevent the enforcement of such
provision in any other jurisdiction to the maximum extent permitted by
applicable law.

Section 7.14 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given upon (a) transmitter's confirmation of a
receipt of a facsimile transmission, (b) confirmed delivery of a standard
overnight courier or when delivered by hand or (c) the expiration of five
business days after the date mailed by certified or registered mail (return
receipt requested), postage prepaid, to the parties at the following addresses
(or at such other addresses for a party as shall be specified by like notice):

If to the Corporation, to:

SBS Technologies, Inc.
2400 Louisiana Blvd. NE
AFC Bldg. 5, Suite 600
Albuquerque, New Mexico 87110
Attention: Clarence Peckham
Facsimile: (505) 875-0404

If to Indemnitee, to:

Facsimile:

Section 7.15 Certain Construction Rules.

(a) The article and section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. As used in this Agreement, unless otherwise
provided to the contrary, (i) all references to days shall be deemed references
to calendar days and (ii) any reference to a "Section" or "Article" shall be
deemed to refer to a section or article of this Agreement. The words "hereof,"
"herein" and "hereunder" and words of similar import referring to this Agreement
refer to this Agreement as a whole and not to any particular provision of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." Unless otherwise specifically provided for herein, the term "or"
shall not be deemed to be exclusive. Whenever the context may require, any
pronoun used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns and verbs
shall include the plural and vice versa.

(b) For purposes of this Agreement, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to any employee benefit plan; references
to "serving at the request of the Corporation" shall include any service as a
director, nominee for director, officer, employee or agent of the Corporation
which imposes duties on, or involves services by, such director, nominee,
officer, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and action taken or omitted by a director with
respect to an employee benefit plan in the performance of Indemnitee's duties
for a purpose reasonably believed by Indemnitee to be in the interest of the
participants and beneficiaries of the employee benefit plan shall be deemed to
be for a purpose that is "not opposed to the best interests of the Corporation"
as referred to in this Agreement.

Section 7.16 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New Mexico, without giving effect
to the conflicts of laws principles thereof.

Section 7.17 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument, notwithstanding that
both parties are not signatories to the original or same counterpart.

 

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered to be
effective as of the date first above written.

SBS TECHNOLOGIES, INC.

 

By:
Name:
Title:

 

INDEMNITEE

 

Name: