EXHIBIT 10.19
***PORTIONS OF THIS EXHIBIT MARKED BY BRACKETS ("[**]") OR OTHERWISE IDENTIFIED
HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. A COMPLETE
VERSION OF THIS EXHIBIT HAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***
ASSET PURCHASE AGREEMENT
DATED AS OF NOVEMBER 13, 1996
BY AND AMONG
ATS-ATLANTA ONE, L.L.C.,
A GEORGIA LIMITED LIABILITY COMPANY,
ATS-ATLANTA ONE, INC.,
A DELAWARE CORPORATION,
AND
ATS-ATLANTA, INC.,
XXXX X. XXXXX
AND
XXXXXX X. XXXXX
COVERING THE PURCHASE OF CERTAIN ASSETS OF
ATS-ATLANTA ONE, L.L.C.
TABLE OF CONTENTS
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PAGE
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1. GENERAL DEFINITIONS..................................................... 1
2. PURCHASE AND SALE OF THE ASSETS; CLOSING DATE........................... 2
2.1 Purchase and Sale.................................................. 2
2.2 Delivery of Assets and Transfer Documents.......................... 3
2.3 Closing; Closing Date.............................................. 3
3. PURCHASE PRICE.......................................................... 3
3.1 Price and Payment.................................................. 3
3.2 Excluded Assets.................................................... 3
3.3 Assumed Obligations................................................ 3
3.4 Excluded Liabilities and Obligations............................... 3
3.5 Transfer Taxes..................................................... 4
3.6 Allocation of Purchase Price....................................... 4
4. REPRESENTATIONS AND WARRANTIES OF SELLER................................ 4
4.1 Organization....................................................... 4
4.2 Ownership.......................................................... 4
4.3 Financial Statements............................................... 4
4.4 Events Since the Balance Sheet Date................................ 5
4.5 Competing Interests................................................ 6
4.6 Taxes and Governmental Returns..................................... 6
4.7 Employee Matters................................................... 7
4.8 Contracts and Agreements........................................... 7
4.9 Effect of Agreement................................................ 8
4.10 Properties, Assets and Leasehold Estates........................... 9
4.11 Intangible Property................................................ 9
4.12 Suits, Actions and Claims.......................................... 9
4.13 Licenses and Permits; Compliance with
Governmental Regulations........................................... 10
4.14 Authorization...................................................... 10
4.15 No Untrue Statements............................................... 10
4.16 Records............................................................ 10
4.17 Brokers and Finders................................................ 10
4.18 Deposits........................................................... 11
4.19 Telephone Numbers.................................................. 11
4.20 Customer List...................................................... 11
4.21 No Royalties....................................................... 11
4.22 Subsidiaries....................................................... 11
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5. REPRESENTATIONS AND WARRANTIES OF PURCHASER....................... 12
5.1 Incorporation................................................ 12
5.2 Authorization................................................ 12
5.3 Brokers and Finders.......................................... 12
6. PRE-CLOSING COVENANTS............................................. 12
6.1 General...................................................... 12
6.2 Notices and Consents......................................... 12
6.3 Operation of Business........................................ 13
6.4 Preservation of Business..................................... 13
6.5 Full Access.................................................. 13
6.6 Notice of Developments....................................... 13
6.7 Exclusivity.................................................. 13
7. CONDITIONS TO OBLIGATION TO CLOSE................................. 13
7.1 Conditions to Obligation of the Purchaser.................... 13
7.2 Conditions to Obligation of the Seller....................... 15
8. TERMINATION....................................................... 16
8.1 Termination of Agreement..................................... 16
8.2 Effect of Termination........................................ 16
9. NATURE OF STATEMENTS AND SURVIVAL OF REPRESENTATIONS
AND WARRANTIES OF SELLER.......................................... 16
10. SPECIAL CLOSING AND POST-CLOSING COVENANTS........................ 16
10.1 Delivery of Funds and Other Assets Collected by Seller;
Power of Attorney............................................ 16
10.2 Change of Name of Seller..................................... 17
11. LEASE AGREEMENT................................................... 17
12. NON-COMPETITION AGREEMENTS........................................ 17
13. NONDISCLOSURE OF CONFIDENTIAL INFORMATION......................... 18
14. ASSIGNMENT OF CONTRACTS........................................... 18
15. SPECIAL PROVISIONS REGARDING EMPLOYEES OF SELLER.................. 19
15.1 New Employees of Purchaser................................... 19
15.2 Hiring of Employees.......................................... 19
15.2 Indemnity Concerning Accrued Benefits........................ 19
16. EXPENSES.......................................................... 19
17. FURTHER ACTIONS................................................... 19
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18. NOTICES............................................................. 19
19. GENERAL PROVISIONS.................................................. 20
19.1 GOVERNING LAW; INTERPRETATION; SECTION HEADINGS................ 20
19.2 Severability................................................... 21
19.3 Entire Agreement............................................... 21
19.5 Assignment..................................................... 21
19.6 Amendment; Waiver.............................................. 21
19.7 Gender; Numbers................................................ 22
19.8 Counterparts................................................... 22
19.9 Telecopy Execution and Delivery................................ 22
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LIST OF SCHEDULES AND ATTACHMENTS
SCHEDULES
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Schedule 2.1 List of Assets
Schedule 3.3 Assumed Liabilities
Schedule 3.6 Allocation of Purchase Price
Schedule 4.2 Ownership of Seller
Schedule 4.3(A) Financial Statements
Schedule 4.3(B) Exceptions to GAAP on Financial Statements
Schedule 4.4 Events Since the Balance Sheet Date
Schedule 4.5 Competing Interests
Schedule 4.6 Tax Returns, Information Returns and Governmental Reports
Pending
Schedule 4.7(A) Employees
Schedule 4.7(B) Employee Benefit Plans
Schedule 4.8(A) Contracts and Agreements
Schedule 4.8(B) Non-Assignable Contracts and Agreement
Schedule 4.11 Intangible Property
Schedule 4.12 Suits, Actions and Claims
Schedule 4.13 Licenses and Permits
Schedule 4.20 Customer List
ATTACHMENTS
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Attachment 2.2 General Warranty, Xxxx of Sale
The Exhibits and Schedules to this Asset Purchase Agreement are not included
with this Registration Statement on Form S-1. Global will provide these exhibits
and schedules upon the request of the Securities and Exchange Commission.
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "AGREEMENT") is made and entered into
this 13th day of November, 1996, by and among ATS-ATLANTA ONE, L.L.C., a Georgia
limited liability company ("SELLER"), ATS-ATLANTA ONE, INC., a Delaware
corporation ("PURCHASER"), and ATS-ATLANTA, INC., a Georgia corporation ("AAI"),
XXXX X. XXXXX ("XXXXX") and XXXXXX X. XXXXX ("XXXXX;" collectively, AAI, Xxxxx
and Xxxxx are referred to as the "MEMBERS").
W I T N E S S E T H
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WHEREAS, Seller is the owner of all right, title and interest in and to the
assets described on Schedule 2.1 hereto (the "ASSETS"), with such assets being
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substantially all of the assets currently used in the network consulting and
management business operated by the Seller (the "BUSINESS");
WHEREAS, Seller desires to sell the Assets to Purchaser and Purchaser
desires to acquire the Assets from Seller, all pursuant to this Agreement as
hereinafter provided; and
WHEREAS, the parties hereto desire to set forth certain representations,
warranties and covenants made by each to the other as an inducement to the
execution and delivery of this Agreement, and to set forth certain additional
agreements related to the transactions contemplated hereby;
AGREEMENT
---------
NOW, THEREFORE, for and in consideration of the premises, the mutual
representations, warranties and covenants herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. GENERAL DEFINITIONS. For purposes of this Agreement, the following
-------------------
terms shall have the respective meanings set forth below:
1.1 GOVERNMENTAL AUTHORITY shall mean any and all foreign, federal,
----------------------
state or local governments, governmental institutions, public authorities and
governmental entities of any nature whatsoever, and any subdivisions or
instrumentalities thereof, including, but not limited to, departments, boards,
bureaus, commissions, agencies, courts, administrations and panels, and any
divisions or instrumentalities thereof, whether permanent or ad hoc and whether
now or hereafter constituted and/or existing.
1.2 GOVERNMENTAL REQUIREMENT shall mean any and all laws (including,
------------------------
but not limited to, applicable common law principles), statutes, ordinances,
codes, rules, regulations, interpretations, guidelines, directions, orders,
judgments, writs, injunctions, decrees, decisions or similar items or
pronouncements, promulgated, issued, passed or set forth by any Governmental
Authority.
1.3 PERMITTED EXCEPTION means (a) liens for Taxes and other
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governmental charges and assessments which are not yet due and payable, (b)
liens of landlords and liens of carriers, warehousemen, mechanics and
materialmen and other like liens arising in the ordinary course of business for
sums not yet due and payable, (c) other liens or imperfections on property which
are not material in amount or do not materially detract from the value of or
materially the existing use of the property affected by such lien or
imperfection, (d) such statement of facts shown on any customary title insurance
policies delivered to Purchaser, (e) purchase money security interest liens in
favor of Canon U.S.A., Inc. and (f) those encumbrances identified on Exhibit A
---------
hereto.
1.4 PERSON shall mean any natural person, any Governmental Authority
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and any entity the separate existence of which is recognized by any Governmental
Authority or Governmental Requirement, including, but not limited to,
corporations, partnerships, joint ventures, joint stock companies, trusts,
estates, companies and associations, whether organized for profit or otherwise.
1.5 TAXES. "TAX" and "TAXES" shall mean any and all income, excise,
-----
franchise or other taxes and all other charges or fees imposed or collected by
any Governmental Authority or pursuant to any Governmental Requirement, and
shall also include any and all penalties, interest, deficiencies, assessments
and other charges with respect thereto.
1.6 AFFILIATE of any Person shall mean any Person Controlling,
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Controlled by or under common Control with such Person.
1.7 CONTROL and all derivations thereof shall mean the possession,
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direct or indirect, of either (i) the ownership of or ability to direct the
voting of, as the case may be, fifty percent (50%) or more of the equity
interests, value or voting power in any Person or (ii) the power to direct or
cause the direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.
2. PURCHASE AND SALE OF THE ASSETS; CLOSING DATE.
---------------------------------------------
2.1 PURCHASE AND SALE. Seller hereby sells, assigns, transfers and
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delivers to Purchaser all right, title and interest in and to the Assets (as
more fully described on Schedule 2.1 hereto), free and clear of any liens or
------------
encumbrances of any nature whatsoever (except for Permitted Exceptions and any
liens, encumbrances or obligations, if any, expressly assumed by Purchaser
hereunder). Purchaser hereby purchases from Seller the Assets in consideration
for the Purchase Price (as hereinafter defined) payable as set forth in Section
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3 below.
-
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[******Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.]
2.2 DELIVERY OF ASSETS AND TRANSFER DOCUMENTS. At the Closing
-----------------------------------------
(hereinafter defined in Section 2.3), Seller shall have taken all steps
-----------
necessary to put Purchaser in possession of the Assets, free and clear of any
liens or encumbrances of any nature whatsoever (except for Permitted Exceptions
and liens, encumbrances or obligations, if any, expressly assumed by Purchaser
hereunder), and have delivered to Purchaser (i) a duly executed general warranty
xxxx of sale covering the Assets, in the form of and containing the same terms
and provisions as the General Warranty Xxxx of Sale attached hereto as
Attachment 2.2, (ii) duly executed assignments for all accounts receivable,
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patents, trademarks, trade names and similar intangible property included in the
Assets, in form and substance acceptable to Purchaser and in recordable form as
appropriate, and (iii) such other duly executed transfer and release documents
which Purchaser has reasonably requested to evidence the transfer of the Assets
to Purchaser free and clear of any liens or encumbrances of any nature
whatsoever (except for Permitted Exceptions and liens, encumbrances or
obligations, if any, expressly assumed by Purchaser hereunder).
2.3 CLOSING; CLOSING DATE. Subject to the terms and conditions herein
---------------------
contained, the consummation of the transactions referred to above shall take
place (the "CLOSING") at the offices of Xxxx, Xxxxx & Xxxxxx in Atlanta,
Georgia, commencing at 9:00 a.m. local time on November __, 1996, or such other
date as the parties may mutually determine (the "CLOSING DATE").
3. PURCHASE PRICE.
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3.1 PRICE AND PAYMENT. The aggregate consideration for the Assets and
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the Non-Competition Provisions (set forth in Section 12 below) shall be an
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amount equal to [**] payable by wire transfer or delivery of other immediately
available funds (the "PURCHASE PRICE"). At the Closing, the Purchaser shall
cause the Purchase Price to be paid as directed by the Seller.
3.2 EXCLUDED ASSETS. The Purchased Assets shall not include any of
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the assets listed on Exhibit A-1 to Schedule 2.1 hereto (collectively, the
----------- ------------
"EXCLUDED ASSETS").
3.3 ASSUMED OBLIGATIONS. Purchaser hereby assumes the obligations of
-------------------
Seller that are listed and described on Schedule 3.3 hereto (the "ASSUMED
------------
LIABILITIES AND OBLIGATIONS"); provided that Purchaser specifically does not
assume any liabilities of Seller under such contracts or agreements with respect
to any breaches of such contracts or agreements occurring on or before the
Closing Date or any damages to third parties resulting from acts, events or
omissions occurring on or before the Closing Date or any liability for any
funded indebtedness of the Seller.
3.4 EXCLUDED LIABILITIES AND OBLIGATIONS.
------------------------------------
(A) Except as expressly set forth in Section 3.3 above, the
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Purchase shall not assume and shall not be liable or responsible for any debt,
obligation or liability of the Business or the Seller, or any claim against any
of the foregoing parties, of any kind, whether known or unknown, contingent,
absolute or otherwise.
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(B) Except for the Assumed Liabilities and Obligations expressly
provided for in Section 3.4 hereof, the Seller and the Members shall jointly and
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severally forever defend, indemnify and hold harmless the Purchaser from and
against any and all liabilities, obligations, losses, claims, damages (including
incidentals and consequential damages), costs and expenses (including court
costs and reasonable attorney's fees) related to or arising from the Business
prior to the Closing Date.
3.5 TRANSFER TAXES. Purchaser and Seller acknowledge and agree that
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the consideration (including, without limitation, the Purchase Price and any
adjustments thereto) is deemed to have been paid for any sales, use, transfer or
other similar tax purposes by Purchaser to Seller, pursuant to this Agreement,
includes and is inclusive of any and all sales, use, transfer or other similar
tax imposed as a result of the consummation of the transactions contemplated by
this Agreement, and Seller and the Members hereby agree to pay and discharge,
and to indemnify Purchaser against, and protect, save and hold Purchaser
harmless, from, any liability, obligation, claim, assessment or deficiency
(whether or not ultimately successful) for any and all sales, use, transfer or
other similar taxes (and any and all interest, penalties, additions to tax and
fines thereon or related thereto) resulting or arising from or incurred in
connection with the consummation of the transactions contemplated by this
Agreement.
3.6 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be
----------------------------
allocated as set forth in Schedule 3.6 attached hereto, and made a part hereof.
------------
4. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller and the Members,
----------------------------------------
jointly and severally, hereby represent and warrant to Purchaser as
follows:
4.1 ORGANIZATION. Seller is a limited liability company duly
------------
organized, validly existing and in good standing under the laws of the state of
Georgia, and is duly authorized, qualified and licensed under all applicable
Governmental Requirements to carry on its business in the places and in the
manner as now conducted. Seller is qualified to do business in every
jurisdiction in which the failure to so qualify might reasonably be excepted to
have a material adverse effect on the financial condition, operation results,
assets, or business prospects of Seller.
4.2 OWNERSHIP. The Members own, in the aggregate, all of the
---------
outstanding membership interests of Seller. Except as listed on Schedule 4.2
------------
hereto, there are no options, rights or other grants currently outstanding for
the acquisition or purchase of any membership interests of the Seller.
4.3 FINANCIAL STATEMENTS. Seller has delivered to Purchaser copies
--------------------
of the following financial statements for Seller, all of which financial
statements are included in Schedule 4.3(A) hereto:
---------------
(a) Reviewed Balance Sheet of Seller (the "REFERENCE BALANCE
SHEET") as of December 31, 1995 (the "BALANCE SHEET DATE") and Reviewed Income
Statements of Seller for the twelve-month period ended on the Balance Sheet
Date;
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(B) Reviewed Balance Sheet and Income Statement of Seller for
Seller's three (3) most recent fiscal years; and
(C) Unaudited Balance Sheet and Income Statement of Seller as of
and for the nine (9) months ended September 30, 1996.
All financial statements supplied to Purchaser by Seller, whether or not
included in Schedule 4.3(A) hereto, are true and accurate in all respects and,
---------------
except as set forth on Schedule 4.3(B) hereto, have been prepared in all
---------------
material respects in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated, and present
fairly the financial condition of Seller as of the dates and for the periods
indicated thereon. The Reference Balance Sheet reflects, as of the Balance
Sheet Date, all liabilities, debts and obligations of any nature of Seller,
whether accrued, absolute, contingent or otherwise, and whether due, or to
become due, including, but not limited to, liabilities, debts or obligations on
account of Taxes or other governmental charges, or penalties, interest or fines
thereon or in respect thereof, to the extent such items are required to be
reflected on such balance sheet under generally acceptable accounting
principles, consistently applied.
4.4 EVENTS SINCE THE BALANCE SHEET DATE. Except as set forth on
-----------------------------------
Schedule 4.4 hereto, since the Balance Sheet Date, there has not been:
------------
(A) any material change in the condition (financial or
otherwise) or in the properties, assets, liabilities, business or prospects of
the Business, except normal and usual changes in the ordinary course of
business, none of which has been adverse and all of which in the aggregate have
not been adverse;
(B) any labor trouble, strike or any other occurrence, event or
condition affecting the employees of Seller that adversely affects the condition
(financial or otherwise) of the Assets or the Business.
(C) any breach or default by Seller or, to the best knowledge
of Seller and the Members, by and other party, under any agreement or obligation
included in the Assets or by which any of the Assets are bound;
(D) any damage, destruction or loss (whether or not covered by
insurance) adversely affecting the Assets or the Business;
(E) any change in the types, nature, composition or quality of
the services of the Business, any material adverse change in the contributions
of any of the service lines of the Business to the revenues or net income of
such Business, or any material adverse change in the sales, revenue or net
income of the Business;
(F) any transaction related to or affecting the Assets or the
Business other the transactions in the ordinary course of business of Seller; or
-5-
(g) any other occurrence, event or condition that has
materially and adversely affected (or can reasonably be expected to adversely
affect) the Assets or the Business.
4.5 COMPETING INTERESTS. Except as set forth on Schedule 4.5
------------------- ------------
hereto and except for interests in Southern Business Communications, Inc.
("SBC") and Southern Business Communications of D.C., Inc. and except for
interests in real estate and related improvements leased by Seller, neither
Seller nor the Members, nor, to the best knowledge of Seller and the Members,
any member, manager or officer of, or consultant to, Seller, and no Associate
(as hereinafter defined) of Seller:
(A) owns, directly or indirectly, any equity interests in,
or is a director, officer or employee of, or consultant to, any entity which is
a competitor, supplier or customer of the Business, or, to the best knowledge of
Seller and the Members, a competitor, supplier or customer of Purchaser or an
Associate of Purchaser (except for ownership, if any, of less than one percent
(1%) by value of the outstanding capital stock of any corporation the capital
stock of which is traded on a nationally recognized securities exchange); or,
(B) owns, directly or indirectly, in whole or in part, any
property, asset or right which is associated with the Assets or the Business,
or which Seller is presently operating or using in connection with or the use of
which is necessary for or material to the operation of the Business.
For purposes of this Agreement, the term "Associate" shall mean:
(i) with respect to an individual:
(A) the spouse of the individual and all
ancestors and lineal descendants of the individual and the
spouse,
(B) any trust in which the individual or any
person described in (i) above has an interest or any trustee
of such a trust, and
(C) any Person which is directly or indirectly
Controlled by any of the foregoing; and
(ii) with respect to a Person (other than an
individual), any Person Controlling, Controlled by or under
common Control with such Person, and any director or officer of
such Person and any Associate of any such Person.
4.6 TAXES AND GOVERNMENTAL RETURNS. Except as set forth on
------------------------------
Schedule 4.6 hereto, as of the date hereof, all Tax returns, information returns
------------
and governmental reports of every nature required by any Governmental Authority
or Governmental Requirement to be filed by Seller or which include or should
include Seller, including, but not limited to, those relating to Taxes of any
nature to which Seller, the Members or any of the Business is subject
("GOVERNMENTAL RETURNS"), have been filed for all periods ending on or before
the date hereof, and all Taxes shown to be due and payable on such Governmental
Returns or on any assessments
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related to such Governmental Returns have been paid. All such Governmental
Returns and reports and the information and data contained therein have been
properly and accurately compiled and completed, fairly present the information
purported to be shown therein, and reflect all Tax liabilities of Seller and
Members for the periods covered by such Governmental Returns. Except as
specifically disclosed in this Agreement or the Schedules hereto, Seller and/or
Members have no material unpaid liability for any Taxes of any nature whatsoever
for any period prior to the date hereof. The Governmental Returns of Seller or
that include Seller have not been audited, and are now under audit, by any
Governmental Authority. There are not agreements, waivers or other arrangements
providing for an extension of time with respect to the assessment of any Taxes
of any nature against Seller or Members or with respect to any Taxes filed
Seller or Members or that include Seller, or any suits or other actions,
proceedings, investigations or claims now pending or threatened against Seller
or Members with respect to any Taxes or any matters under discussion with any
Governmental Authority relating to any Taxes, or any claims for additional Taxes
asserted by any Governmental Authority.
4.7 EMPLOYEE MATTERS. Schedule 4.7(A) hereto set forth a true and
---------------- ---------------
complete list of the names of and current annual compensation paid by Seller to
each corporate or administrative (non-temporary) employee of Seller utilized in
connection with the operation of the Business. Except as specifically described
on Schedule 4.7(B) hereto, Seller has no employee benefit plans (including, but
---------------
not limited to, pension plans and health or welfare plans), arrangements or
understandings, whether formal or informal. Purchaser will have no liability
with respect to any such plans as a result of the transactions contemplated by
this Agreement. Seller does not now and has never contributed to a "multi-
employer plan" as defined in section 4001(a)(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). Seller has complied in all
material respects with all applicable provisions of ERISA and all rules and
regulations promulgated thereunder and neither Seller nor any trustee,
administrator, fiduciary, agent or employee thereof has at any time been
involved in a transaction that would constitute a "prohibited transaction"
within the meaning of Section 406 of ERISA. Seller is not a party to any
collective bargaining or other union agreements. Seller has not, within the last
five (5) years, had or been threatened with any union activities, work stoppage
or other labor trouble with respect to its employees which had nor might have
had a material adverse effect on the Business. Other than wage increases in the
ordinary course of business, since the Balance Sheet Date, Seller has not made
any commitment or agreement to increase the wages or modify the conditions or
terms of employment of any of the corporate or administrative (non-temporary)
employees of Seller used in connection with the Business.
4.8 CONTRACTS AND AGREEMENTS. Schedule 4.8(A) hereto, sets forth a
------------------------ ---------------
true and complete list of and briefly describes (including termination date)
all of the "Contracts" (as such term is defined in Section 3.15 of that certain
Stock Purchase Agreement (the "SBC Agreement") among Global Imaging Systems
Inc., SBC and the stockholders of SBC) that relate to the Assets or the Business
(including all amendments, supplements and modifications thereto), together with
the following:
(A) all profit-sharing, pension, stock option, severance pay,
retirement, bonus, deferred compensation, group life and health insurance or
other employee benefit plans,
-7-
agreements, arrangements or commitments of any nature whatsoever, whether or
not legally binding, and all agreements with any present or former officer,
member or manager of Seller;
(B) all loan or credit agreements, indentures, guarantees
(other than endorsements made for collection), mortgages, pledges, conditional
sales or other title retention agreements, and all equipment financing
obligations, lease and lease-purchase agreements relating to or affecting the
Assets or the Business;
(C) all leases related to the Assets or the Business, and
all other contracts, agreements or legally enforceable commitments relating to
or affecting the Assets or the Business;
(D) all performance bonds, surety bonds and the like, all
contracts and bids covered by such bonds, and all letters of credit and
guaranties; and
(E) all consent decrees and other judgments, decrees or
orders, settlement agreements and agreements relating to competitive activities,
requiring or prohibiting and future action.
All of such contracts, agreements, leases, licenses, plans, arrangements, and
commitments and all other such items included in the Assets, but not
specifically described above, (collectively, the "CONTRACTS") are valid, binding
and in full force and effect in accordance with their terms and conditions and
there is no existing default thereunder or breach thereof by Seller, or, to the
best knowledge of Seller and the Members, by any other party to the Contracts,
or any conditions which, with the passage of time or the giving of notice or
both, might constitute such a default by Seller, or, to the best knowledge of
Seller and the Members, by any other party to the Contracts, and, except as set
forth in Schedule 4.8(B), the Contracts will not be breached by or give any
---------------
other party a right of termination as a result of the transactions contemplated
by this Agreement. Seller is not aware of any reason why any of the Contracts
(i) will result in a material loss to Purchaser on completion by performance or
(ii) cannot readily be fulfilled or performed by Purchaser with the Assets on
time without undue or unusual expenditure of money or effort. Copies of all the
documents (or in the case of oral commitments, descriptions of the material
terms thereof) relevant to the Contracts listed in Schedule 4.8(A) hereto, have
---------------
been delivered by Seller to Purchaser, and such copies and descriptions are
true, complete and accurate and include all amendments, supplements or
modifications thereto. All of the Contracts, other than the Seller's operating
agreement, as amended, and Seller's loan agreements with SunTrust Bank and the
Small Business Administration, are and shall be included in the Assets. To the
best knowledge of Seller, no purchaser of services under any Contract will stop
or decrease its rate of buying services (on an annualized basis) from Seller
prior to the Closing Date, or under any Contract assigned to Purchaser by
Seller pursuant to the transactions contemplated by this Agreement, from
Purchaser after the Closing Date. Except as set forth on Schedule 4.8(B)
---------------
hereto, all of the Contracts may be assigned to Purchaser without the approval
or consent of any Person.
4.9 EFFECT OF AGREEMENT. Except as set forth on Schedule
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4.8(B), the execution and delivery of this Agreement and the consummation of the
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transactions contemplated
-8-
hereby will not (i) result in any breach of any of the terms or conditions of,
or constitute a default under, the Seller's certificate of limited liability
company or its operating agreement or other governing documents of Seller, or
any commitment, mortgage, note, bond, debenture, deed of trust, contract,
agreement, license or other instrument or obligation to which Seller is now a
party or by which Seller or any of its properties or assets may be bound or
affected; (ii) result in any violation of any Governmental Requirement; (iii)
cause Purchaser to lose the benefit of any right or privilege included in the
Assets; (iv) relieve any Person of any obligation (whether contractual or
otherwise) or enable any Person to terminate any such obligation or any right or
benefit enjoyed by Seller or to exercise any right under any agreement in
respect of the Assets or the Business; or (v) require notice to or the consent,
authorization, approval or order of any Person. To the best knowledge of Seller
and the Members, the business relationships of clients, customers and suppliers
of the Business will not be adversely affected by the execution and delivery of
this Agreement or the consummation of the transactions contemplated hereby.
4.10 PROPERTIES, ASSETS AND LEASEHOLD ESTATES. Seller has good
----------------------------------------
and marketable title to all the Assets, free and clear of all mortgages, liens,
pledges, conditional sales agreements, charges, easements, covenants,
assessments, options, restrictions and encumbrances of any nature whatsoever
other than Permitted Exceptions and liens, encumbrances or obligations expressly
assumed by Purchaser hereunder. All leases to which real property is leased in
connection with the Business are in good standing, valid and enforceable with
respect to their terms.
4.11 INTANGIBLE PROPERTY. Except as set forth on Schedule 4.11
------------------- -------------
hereto, the operation of the Business as now conducted by Seller does not
require the use of or consist of any rights under any patents, inventions,
trademarks, trade names, brand names or copyrights. Seller owns or licenses and
has the full and exclusive right to use in connection with the Business all of
the items listed on Schedule 4.11 hereto, which items are in full force and
-------------
effect. Except for Permitted Exceptions, Seller has not transferred, encumbered
or licensed to any Person any rights to own or use any portion of the items
listed on Schedule 4.11 hereto or any other intangible property included in the
-------------
Assets. None of (i) the items listed on Schedule 4.11, (ii) any other
-------------
intangible property included in the Assets, or (iii) the operation of the
Business as presently conducted, violates or infringes upon any patents,
inventions, trademarks, trade names, brand names or copyrights owned by others.
To the best knowledge of Seller and the Members, none of the items listed on
Schedule 4.11 hereto or any other intangible property included in the Assets is
-------------
being infringed upon by any Person.
4.12 SUITS, ACTIONS AND CLAIMS. Except as set forth in Schedule
------------------------- --------
4.12 hereto, (i) there are no suits, actions, claims, inquires or investigations
----
by any Person, or any legal, administrative or arbitrative proceedings in which
Seller is engaged or which are pending or, to the best knowledge of Seller and
the Members, threatened against or affecting Seller or any of its properties,
assets or business, or to which Seller is or might become a party, or which
question the validity or legality of the transactions contemplated hereby, (ii)
to the best knowledge of Seller and the Members, no basis or grounds for any
such suit, action, claim, inquiry, investigation or proceeding exists, and (iii)
there is no outstanding order, writ, injunction or decree of any Governmental
Authority against or affecting Seller or its properties, assets or business.
-9-
4.13 LICENSES AND PERMITS; COMPLIANCE WITH GOVERNMENTAL
--------------------------------------------------
REGULATIONS. Schedule 4.13 hereto, sets forth a true and complete list of all
----------- -------------
licenses and permits necessary for the conduct of the Business. Seller has all
such licenses and permits validly issued to it and in its name, and all such
licenses and permits are in full force and effect. True and correct copies of
all such licenses and permits are included in Schedule 4.13 hereto. No
-------------
violations are or have been recorded in respect of such licenses or permits and
no proceeding is pending or, to the best knowledge of Seller and the Members,
threatened seeking the revocation or limitation of any of such licenses or
permits. All such licenses and permits that are subject to transfer are included
in the Assets. Seller has complied with all Governmental Requirements applicable
to the Business, and all Governmental Requirements with respect to the
distribution and sale of products and services by it.
4.14 AUTHORIZATION. Seller has full legal right, power and
-------------
authority to enter into and deliver this Agreement and to consummate the
transactions set forth herein and to perform all the terms and conditions hereto
to be performed by it. The execution and delivery of this Agreement by Seller
and the performance by it of the transactions contemplated herein has been duly
and validly authorized by all requisite action of Seller, and this Agreement has
been duly and validly executed and delivered by Seller and is the legal, valid
and binding obligation of Seller, enforceable against it in accordance with its
terms, except as limited by applicable bankruptcy, moratorium, insolvency or
other similar laws affecting generally the rights of creditors or by principles
of equity.
4.15 NO UNTRUE STATEMENTS. There is no fact that is not
--------------------
disclosed to Purchaser in this Agreement or the Schedules hereto that materially
and adversely affects or, so far as Seller and the Members can now reasonably
foresee, could materially and adversely affect the condition (financial or
otherwise) of any of the Assets or the Business or the ability of Seller to
perform its obligations under the Agreement.
4.16 RECORDS. The books, records and minutes kept by Seller
-------
with respect to the Assets and the Business, including, but not limited to, all
customer files, service agreements quotations, correspondence and historic
revenue data of Seller since November 1, 1993, have been kept properly and
contain records of all matters required to be included therein by any
Governmental Requirement, and such books, records and minutes are true, accurate
and complete in all material respects and (except for corporate minute books and
stock records) are included in the Assets. Purchaser agrees to store for a
period of at least three (3) years from the Closing Date all of Seller's tax and
accounting records for the three (3) year period prior to the Closing Date. Such
records shall be made available for inspection and copying by Seller to Members
upon reasonable advance notice and during reasonable business hours. Purchaser
further agrees that if Purchaser intends to destroy any of such tax or
accounting records during the period ending six (6) years after the Closing
Date, Purchaser will fist notify Seller and Members and provide Seller and
Members with an opportunity to take possession of such records within a period
of not less than thirty (30) days following such notice.
4.17 BROKERS AND FINDERS. No broker or finder has acted for
-------------------
Seller or the Members in connection with this Agreement or the transactions
contemplated by this Agreement and no broker or finder is entitled to any
brokage or finder's fee or to any commission in
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respect thereof based in any way on agreements, arrangements or understandings
made by or on behalf of Seller or the Members.
4.18 DEPOSITS. Except as disclosed on Schedule 4.18, Seller does not
-------- -------------
now hold, nor does Seller expect to receive between the date hereof and the
Closing Date, any deposits or prepayments by third parties with respect to any
of the Assets or the Business which are not reflected as liabilities on August
31, 1996.
4.19 TELEPHONE NUMBERS. All telephone numbers used by Seller in
-----------------
connection with the Business are included in the Assets and are fully
transferable to Purchaser.
4.20 CUSTOMER LIST. Schedule 4.20 hereto sets forth a true, correct
------------- -------------
and complete list of the 20 largest customers of the Business to which the
Seller has sold products or provided services during the fiscal year ending
December 31, 1995. This list provides an accurate statement of the gross
revenues received from each such customer by the Business during fiscal year
ended December 31, 1995. To the Best Knowledge of Seller, no customer listed on
Schedule 4.20 hereto currently intends to stop or decrease its rate of buying
-------------
products or services (on an annualized basis) from Seller prior to the Closing
Date, or to the extent any such customer becomes a customer of Purchaser
pursuant to the transactions contemplated by this Agreement, from Purchaser
after the Closing Date.
4.21 NO ROYALTIES. No royalty or similar item or amount is being paid
------------
or is owing by Seller, nor is any such item accruing, with respect to the
operation, ownership or use of the Business of the Assets.
4.22 SUBSIDIARIES. The Seller does not own any Subsidiaries. As used
------------
in this Agreement, the word "SUBSIDIARY" means any corporation or other
organization, whether incorporated or unincorporated, of which such party or any
other Subsidiary of such party is a general partner, or at least a majority of
the securities or other interests having by their terms ordinary voting power to
elect a majority of the Board of Directors or others performing similar
functions with respect to such corporation or other organization is directly or
indirectly owned or controlled by such party or by any one or more of its
Subsidiaries, or by such party and one or more of its Subsidiaries. The Members
have good and marketable title to all of the membership interests of the Seller,
free and clear of all mortgages, liens, pledges, equity, security interests,
restrictions and charges of any nature whatsoever.
In making the representations and warranties set forth above, the term
"material" shall be deemed to mean an amount of money greater than $15,000, the
terms "material adverse change," "material adverse trend," "material adverse
effect," or any other term of like import, shall mean the occurrence of any
single event, or any series of related events, or set of related circumstances,
which proximately causes an actual, direct economic loss to the Company, taken
as a whole, in excess of $15,000 per occurrence or $20,000 in the aggregate. The
term "knowledge" shall mean actual knowledge after reasonable investigation.
-11-
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents and
-------------------------------------------
warrants to Seller and the Members as follows:
5.1 INCORPORATION. Purchaser is a corporation duly organized, validly
-------------
existing and in good standing under the laws of the State of Delaware.
5.2 AUTHORIZATION. Purchaser has full legal right and corporate power
-------------
to enter into and deliver this Agreement and to consummate the transactions set
forth herein and to perform all the terms and conditions hereof to be performed
by it. This Agreement, and all of the agreements, documents and instruments
contemplated herby which have been or will be executed by Purchaser, have been
duly executed and delivered by Purchaser and constitute the legal, valid and
binding obligation of Purchaser enforceable in accordance with their respective
terms, except as limited by applicable bankruptcy, moratorium, insolvency, or
other laws affecting generally the rights of creditors or by principals of
equity. The execution and delivery of this Agreement by Purchaser and the
performance by Purchaser of the transactions contemplated herein have been duly
and validly authorized by all requisite corporate action of Purchaser. The
execution, delivery, and performance of this Agreement (as well as all other
instruments, agreements, certificates or other documents contemplated hereby) by
Purchaser, will not (a) violate any material requirements of laws or court order
of any Governmental Authority applicable to Purchaser or its property, (b)
violate or conflict with, or permit the cancellation of, or constitute a default
under any agreement to which Purchaser is a party or by which it or its property
is bound, (c) permit the acceleration of the maturity of any indebtedness of, or
any indebtedness secured by the property of, Purchaser, or (d) violate or
conflict with any provision of the charter or bylaws of Purchaser.
5.3 BROKERS AND FINDERS. No broker or finder has acted for Purchaser
-------------------
in connection with this Agreement or the transactions contemplated by this
Agreement and, no broker or finder is entitled to any brokerage or finder's
fee or to any commission in respect thereof based in any way on agreements,
arrangements or understandings made by or on behalf of Purchaser.
6. PRE-CLOSING COVENANTS. The parties agree as follows with respect to
----------------------
the period between the execution of this Agreement and the Closing.
6.1 GENERAL. Each of the parties will use its best efforts to take
-------
all action and to do all things necessary, proper, or advisable to consummate
and make effective the transactions contemplated by this Agreement (including
satisfying the closing conditions set forth in Section 7 below).
---------
6.2 NOTICES AND CONSENTS. The Seller will give any notices to third
--------------------
parties, and the Seller will use its best efforts to obtain any third party
consents that the Purchaser may request in connection with the matters
pertaining to the Seller disclosed or required to be disclosed by this
Agreement. Each of the parties will take any additional action that may be
necessary, proper or advisable in connection with any other notices to, filings
with, and
-12-
authorizations, consents, and approvals of governments, governmental agencies,
and third parties that it may be required to give, make or obtain.
6.3 OPERATION OF BUSINESS. The Seller will not engage in any practice,
---------------------
take any action, embark on any course of inaction, or enter into any transaction
outside the ordinary course of business. Without limiting the generality of the
foregoing, the Seller will not engage in any practice, take any action, embark
on any course of inaction, or enter into any transaction of the sort described
in Section 4.4 hereof.
-----------
6.4 PRESERVATION OF BUSINESS. The Seller will keep the business and
------------------------
properties substantially intact, including its present operations, physical
facilities, working conditions, and relationships with lessors, licensors,
suppliers, customers, and employees.
6.5 FULL ACCESS. The Seller will permit representatives of the Purchaser
-----------
to have full access at all reasonable times, and in a manner so as not to
interfere with the normal business operations of the Seller, to all premises,
properties, books, records, contracts, tax records, and documents of or
pertaining to the Seller.
6.6 NOTICE OF DEVELOPMENTS. The Seller will give prompt written notice to
----------------------
the Purchaser of any material development affecting the assets, liabilities,
business, financial condition, operations, results of operations, or future
prospects of the Seller taken as a whole. Each party will give prompt written
notice to the other of any material development affecting the ability of the
parties to consummate the transactions contemplated by this Agreement. No
disclosure by any party pursuant to this Section 6.6, however, shall be deemed
-----------
to amend or supplement the Schedules or Attachments hereto, or to prevent or
cure any misrepresentation, breach of warranty, or breach of covenant.
6.7 EXCLUSIVITY. The Seller and the Members will not (i) solicit,
-----------
initiate or encourage the submission of any proposal or offer from any person
relating to any (A) liquidation, dissolution, or recapitalization, (B) merger or
consolidation, (C) acquisition or purchase of securities or assets, or (D)
similar transaction or business combination involving Seller or SBC, or (ii)
participate in any discussions or negotiations regarding, furnish any
information with respect to, assist or participate in, or facilitate in any
other manner any effort or attempt by any person to do or seek any of the
foregoing. The Seller and the Members will notify the Purchaser immediately if
any person makes any proposal, offer, inquiry, or contact with respect to any of
the foregoing.
7. CONDITIONS TO OBLIGATION TO CLOSE.
---------------------------------
7.1 CONDITIONS TO OBLIGATION OF THE PURCHASER. The obligations of
-----------------------------------------
the Purchaser to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:
(A) the representations and warranties set forth in Section 4
---------
hereof shall be true and correct in all material respects at and as of the
Closing Date;
-13-
(B) the Seller and Members shall have performed and complied
with all of their covenants hereunder in all material respects through the
Closing;
(C) the Seller shall have procured all of the third party
consents specified in Section 6 above;
---------
(D) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction wherein an unfavorable judgment,
order, decree, stipulation, injunction, or charge would (i) prevent consummation
of any of the transactions contemplated by this Agreement, (ii) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, or (iii) affect adversely the right of the Purchaser to own,
operate, or control the Assets (and no such judgment, order decree, stipulation,
injunction, or charge shall be in effect):
(E) the Seller shall have delivered to the Purchaser a
certificate (without qualification as to knowledge or materiality or otherwise
except for Section 7.1(d) above) to the effect that each of the conditions
--------------
specified above in Sections 7.1 (a), (b) and (d) is satisfied in all respects;
---------------- --- ---
(F) the Purchaser shall have received all other authorizations,
consents, and approvals of governments and governmental agencies set forth in
this Agreement;
(G) the Purchaser shall have received from Xxxxx Xxxxxxx an
executed Employment Agreement in substantially the form and substance attached
hereto as Attachment 7.1(g);
-----------------
(H) all actions and approvals to be taken by the Seller or
Members in connection with consummation of the transactions contemplated hereby
and all certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be satisfactory in form and
substance to the Purchaser;
(I) the Purchaser shall have received from Xxxx, Xxxxx & Xxxxxx,
P.C., counsel for the Seller, an opinion addressed to Purchaser dated the date
of the Closing, and in form and substance attached hereto as Attachment 7.1(i);
-----------------
(J) the Purchaser shall have obtained the approval of its Board
of Directors and lenders for the transactions contemplated by this Agreement;
(K) the Purchaser shall have obtained a satisfactory three-year
lease for the Atlanta facility from the Seller on terms which would have no
adverse effect on the operations of the Purchaser or the current expense level
of the Business (such monthly rent to be initially equivalent to the monthly
depreciation rate on such facility);
(L) the Purchaser shall have received from the Seller its
reviewed financial statements (balance sheets and income statements for fiscal
years 1993, 1994 and 1995) and federal income tax returns for the same period
that have been prepared and/or filed; and
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[******Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.]
(M) the Purchaser shall have received evidence that the Seller will
change its name to one without the name "ATS-Atlanta One."
The Purchaser may waive any condition specified in this Section 7 if it
---------
executes a writing so stating at or prior to the Closing.
7.2 CONDITIONS TO OBLIGATION OF THE SELLER. The obligation of the Seller
--------------------------------------
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(A) the representations and warranties set forth in Section 5 above
shall be true and correct in all material respects at and as of the Closing
Date;
(B) the Purchaser shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(C) no action, suit, or proceeding shall be pending before any court
or quasi-judicial or administrative agency of any federal, state, local, or
foreign jurisdiction wherein an unfavorable judgment, order, decree,
stipulation, injunction, or charge would (i) prevent consummation of any of the
transactions contemplated by this Agreement or (ii) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation (and no such judgment, order, decree, stipulation, injunction, or
charge shall be in effect);
(D) the Purchaser shall have delivered to Seller a certificate
(without qualification as to knowledge or materiality or otherwise) to the
effect that each of the conditions specified above in Section 7.2(a)-(c) is
------------------
satisfied in all respects;
(E) the Seller shall have received from Xxxxx, Xxxxxx & Xxxxxx LLP,
an opinion addressed to Seller and dated as of the Closing Date in form and
substance attached hereto as Schedule 7.2(e);
---------------
(F) Xxxxx Xxxxxxx shall have been given the option to invest up to
[**] on substantially the same terms provided to other recent outside investors
in Global; and
(G) the Purchaser shall have delivered to Xxxxx Xxxxxxx an executed
Employment Agreement in substantially the form and substance attached hereto as
Attachment 7.1(g).
-----------------
The Seller may waive any condition specified in this Section 7 if it
---------
executes a writing so stating at or prior to the Closing.
-15-
8. TERMINATION.
-----------
8.1 TERMINATION OF AGREEMENT. Certain of the parties may terminate
------------------------
this Agreement as provided below:
(A) the Purchaser and the Seller may terminate this Agreement by
mutual written consent at any time prior to the Closing;
(B) the Purchaser may terminate this Agreement by giving written
notice to the Seller at any time prior to the Closing in the event the Seller
are in breach.
(C) the Purchaser may terminate this Agreement by giving written
notice to the Seller at any time prior to the Closing if the Closing shall not
have occurred on or before November 30, 1996 by reason of the failure of any
condition precedent under Section 7 hereof (unless the failure results
---------
primarily from the Purchaser itself breaching any representation, warranty, or
covenant contained in this Agreement); and
(D) the Seller may terminate this Agreement by giving written
notice to the Purchaser at any time prior to the Closing if the Closing shall
not have occurred on or before November 30, 1996 by reason of the failure of any
condition precedent under Section 7 hereof (unless the failure results primarily
---------
from the Seller or Members breaching any representation, warranty, or covenant
contained in this Agreement).
8.2 EFFECT OF TERMINATION. If any party terminates this Agreement
---------------------
pursuant to Section 8.1 above, all obligations of the parties hereunder shall
-----------
terminate without any liability of any party to any other party (except for any
liability of any party then in breach of this Agreement.
9. NATURE OF STATEMENTS AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF
----------------------------------------------------------------------
SELLER. All statements of fact contained in this Agreement or in any written
------
statement (including financial statements), certificate, schedule or other
document delivered by or on behalf of Seller pursuant to this Agreement or in
connection with the transactions contemplated hereby shall be deemed
representations and warranties of Seller and/or the Members hereunder. Except
for the provisions of Sections 4.2, 4.6 and 4.7 which shall survive until the
statute of limitations, all representations and warranties made by Seller and/or
the Member hereunder or pursuant hereto or in connection with the transactions
contemplated hereby shall survive the Closing for a period of one year and one
day from the Closing Date, regardless of any investigation at any time made by
on or behalf of Purchaser.
10. SPECIAL CLOSING AND POST-CLOSING COVENANTS.
------------------------------------------
10.1 DELIVERY OF FUNDS AND OTHER ASSETS COLLECTED BY SELLER: POWER OF
-----------------------------------------------------------------
ATTORNEY. To the extent Seller receives any funds or other assets in payment
--------
of receivables or work-in-process incurred on or after the Closing Date, or in
connection with any other Assets being sold to Purchaser hereto, Seller shall
immediately deliver such funds and assets to SBC
-16-
[******Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.]
and take all steps necessary to vest title to such funds and assets in SBC.
Seller hereby designates SBC and its officers as Seller's true and lawful
attorney-in-fact, with full power of substitution, to execute or endorse for the
benefit of SBC any checks, notes or other documents received by SBC in payment
of or in substitution or exchange for any of the Assets. Seller hereby
acknowledges and agrees that the power of attorney set forth in the preceding
sentence is coupled with an interest, and further agrees to execute and deliver
to SBC from time to time any documents or instruments reasonably requested by
Purchaser to evidence such power of attorney.
10.2 CHANGE OF NAME OF SELLER. Immediately upon the occurrence of the
------------------------
Closing, Seller shall cease using the phrase "ATS-Atlanta One" and all
derivations thereof. Seller and the Members each covenant and each agree that
after the Closing it will not, directly or indirectly, use the name "ATS-Atlanta
One" or any derivations thereof in connection with any business enterprise.
11. LEASE AGREEMENT. Purchaser shall assume the leases for the office
---------------
space currently used by Seller in Atlanta, Georgia in connection with the
operation of the Business on the terms set forth in Section 7.1 (l) hereto.
---------------
Purchaser will, from and after Closing, hold harmless Seller and Members from
any liability thereunder accruing after Closing.
12. NON-COMPETITION AGREEMENT. As an inducement for Purchaser to enter
-------------------------
into this Agreement and in return for the payment of [**] as provided by Section
-------
3.1(a), the parties hereby agree to the provisions of this Section 12. For a
------ ----------
period commencing on the date hereof through the second anniversary of the
Closing Date, neither Seller nor any affiliate of Seller (including the Members
and Xxxxx Xxxxxxx), shall (i) within the territorial boundaries of the
continental United States, where the Business of Seller is now conducted,
compete directly or indirectly with any business engaged in by Purchaser or its
Affiliates to the extent it is similar to any business engaged in by the Seller
as of the date hereof, (ii) solicit directly or indirectly any of the Accounts
(as hereinafter defined) of Seller or of Purchaser or its Affiliates, or (iii)
be employed by or otherwise render services to, or own any interest in, any
Person that directly or indirectly (a) competes with any business engaged in by
Purchaser or its Affiliates within the United States, to the extent it is
similar to any business engaged in by Seller as of the date hereof, or (b)
solicits directly or indirectly any of the Accounts of Seller or of Purchaser or
its Affiliates. For purposes of this Section 12, the term "ACCOUNTS" shall mean
----------
any Person located in the United States of America for which Seller has
performed services or Purchaser or its Affiliates does perform services during
the period beginning three (3) years prior to the date hereof and ending on the
second anniversary of the Closing Date. Seller and Members agree that the
limitations set forth herein on the rights of them and their Affiliates to
compete with Purchaser and its Affiliates are reasonable and necessary for the
protection of the Purchaser. In this regard, Seller and Members specifically
agree that the limitations as to period of time and geographic area, as well as
all other restrictions on its activities specified herein, are reasonable and
necessary for the protection of the Purchaser. Seller and Members further
recognize and agree that violation of any of the agreements contained in this
Section 12 will cause irreparable damage or injury to Purchaser, the exact
----------
amount of which may be impossible to ascertain, and that, for such reason,
among others, Purchaser and its Affiliates shall be
-17-
entitled to an injunction, without the necessity of posting a bond, restraining
any further violation of such agreements. Such rights to any injunction shall
be in addition to, and not in limitation of, any other rights and remedies
Purchaser and its Affiliates may have against Seller, the Members or their
Affiliates, including, but not limited to, the recovery of damages. Further, it
is agreed by Seller and the Members that in the event the provisions of this
Agreement should ever be deemed to exceed the time or geographic limitations
permitted by applicable law, then such provisions shall be reformed to the
maximum time or geographic limitations permitted.
13. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. Seller and Members
-----------------------------------------
recognize and acknowledge that they have and will have access to certain
confidential information of Seller that is included in the Assets (including,
but not limited to, list of customers, and costs and financial information) that
after the consummation of the transactions contemplated hereby will be
valuable, special and unique property of Purchaser. Seller and Members each
agree that it will not disclose, and it will use its best efforts to prevent
disclosure by any other Person of, any such confidential information to any
Person, except to authorized representatives of Purchaser. Seller and Members
recognize and agree that violation of any of the agreements contained in this
Section 13 will cause irreparable damage or injury to Purchaser, the exact
----------
amount of which may be impossible to ascertain, and that, for such reason, among
others, Purchaser shall be entitled to an injunction, without the necessity of
posting bond, therefor, restraining any further violation of such agreements.
Such rights to any injunction shall be in addition to, and not in limitation of,
any other rights and remedies Purchaser may have against Seller or the Members.
14. ASSIGNMENTS OF CONTRACTS. Notwithstanding any other provision of this
------------------------
Agreement, nothing in this Agreement or any related document shall be construed
as an attempt to assign (i) any contract which, as a matter of law or by its
terms, is nonassignable without the consent of the other parties thereto unless
such consent has been given, or (ii) any contract or claims as to which all of
the remedies for the enforcement thereof enjoyed by Seller would not, as a
matter of law or by its terms, pass to Purchaser as an incident of the transfers
and assignments to be made under this Agreement. In order, however, that the
full value of every contract and claim of the character described in clauses (i)
and (ii) above and all claims and demands on such contracts may be realized for
the benefit of Purchaser, Seller, at the request and expense and under the
direction of Purchaser, shall take all such action and do or cause to be done
all such things as will, in the opinion of Purchaser, be necessary or proper in
order that the obligations of Seller under such contracts may be performed in
such manner that the value of such contract will be preserved and will inure to
the benefit of Purchaser, and for, and to facilitate, the collection of the
monies due and payable and to become due and payable thereunder to Purchaser in
and under every such contract and claim incurred after the Closing. Seller shall
promptly pay over to Purchaser all monies collected by or paid to it in respect
of every such contract, claim or demand to the extent such monies are earned by
the Purchaser on or after the Closing Date. Nothing in this Section 14 shall
----------
relieve Seller of its obligation to obtain any consents required for the
transfer of the Assets and all rights thereunder to Purchaser.
-18-
15. SPECIAL PROVISIONS REGARDING EMPLOYEES OF SELLER.
------------------------------------------------
15.1 NEW EMPLOYEES OF PURCHASER. It is the intention of Purchaser to
--------------------------
hire all employees of seller, and Seller hereby acknowledges and agrees with
such position and that any employees of Seller that Purchaser hires will be new
employees of Purchaser as of the Closing Date or the date of hire, whichever is
later. Such new employees shall initially be entitled to the same compensation
and employee benefits as provided by Seller.
15.2 HIRING OF EMPLOYEES.
-------------------
(A) Purchaser through Xxxx X. Xxxxx will use its reasonable
efforts to hire the existing employees of Seller in connection with its
purchase of the Assets: provided however, that Purchaser shall be entitled to
review employee records, conduct employee interviews and employee screening
procedures used by Purchaser in its business, and may refuse to offer employment
to any employee of Seller if such employee fails to meet the hiring criteria of
Purchaser as determined by Xxxx X. Xxxxx in good faith.
(B) As a condition to their employment by Purchaser, all
existing key employees of Seller shall execute and deliver to Purchaser a
confidentiality and non-competition agreement in a form and substance
acceptable to Purchaser.
15.3 INDEMNITY CONCERNING ACCRUED BENEFITS. Seller and the Members
-------------------------------------
agree to indemnify and hold harmless Purchaser from and against any and all
accrued and outstanding employee benefits, salary, vacation pay, bonuses,
commissions and other emoluments of its employees and from any other employee
related matters or liabilities with respect to its employees but only to the
extent not reserved for in the Seller's financial statements delivered to
Purchaser hereunder or in the working capital adjustment made pursuant to the
SBC Agreement.
16. EXPENSES. Whether or not the transactions contemplated hereby are
--------
consummated, Seller will pay all of its costs and expenses and Purchaser will
pay all of its costs and expenses, incurred in connection with the preparation
of and execution of this Agreement and the consummation of the transactions
contemplated hereby.
17. FURTHER ACTIONS. From time to time, at the request of any party
---------------
hereto, the other parties hereto shall execute and deliver such instruments and
take such action as may be reasonably request to evidence the transactions
contemplated hereby.
18. NOTICES. All notices, requests, demands and other communications
-------
required or permitted to be given hereunder shall be writing and shall be deemed
to have been duly given if delivered personally, given by prepaid telex or
telegram or by facsimile or other similar instantaneous electronic transmission
device or mailing first class, postage prepaid, certified United States mail,
return receipt requested, as follows:
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(A) If to Purchaser, at:
c/o Global Imaging Systems Inc.
00000 Xxxxx Xxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
With a copy to:
Xxxxx, Xxxxxx & Xxxxxx LLP
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxxxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
(B) If to Seller, at:
Southern Business Communications, Inc.
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxx
Facsimile No.: (000) 000-0000
With a copy to
Xxxx Xxxxxxx, Esq.
Xxxx, Xxxxx & Xxxxxx
Five Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
provided that any party may change its address for notice by giving to the other
party written notice of such change. Any notice given under this Section 19
----------
shall be effective (i) if delivered personally, when delivered, (ii) if sent by
telex or telegram or by facsimile or other similar instantaneous electronic
transmission device, twenty-four (24) hours after sending, and (iii) if mailed,
seventy-two (72) hours after mailing.
19. GENERAL PROVISIONS
------------------
19.1 GOVERNING LAW: INTERPRETATION: SECTION HEADINGS. THIS AGREEMENT
-----------------------------------------------
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF GEORGIA, WITHOUT REGARD TO CONFLICT-OF-LAWS RULES AS APPLIED IN
GEORGIA. THE SECTION HEADINGS CONTAINED HEREIN ARE FOR PURPOSES OF
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CONVENIENCE ONLY, AND SHALL NOT BE DEEMED TO CONSTITUTE A PART OF THIS AGREEMENT
OR TO AFFECT THE MEANING OR INTERPRETATION OF THIS AGREEMENT IN ANY WAY.
19.2 SEVERABILITY. Should any provision of this Agreement be held
------------
unenforceable or invalid under the laws of the United States of America or the
State of Georgia, or under any other applicable laws of any other jurisdiction,
then the parties hereto agree that such provision shall be deemed modified for
purposes of performance of this Agreement in such jurisdiction to the extent
necessary to render it lawful and enforceable, or if such a modification is not
possible without materially altering the intention of the parties hereto, then
such provision shall be severed herefrom for purposes of performance of this
Agreement in such jurisdiction. The validity of the remaining provisions of this
Agreement shall not be affected by any such modification or severance, except
that if any severance materially alters the intentions of the parties hereto as
expressed herein (a modification being permitted only if there is no material
alteration), then the parties hereto shall use their best reasonable effort to
agree to appropriate equitable amendments to this Agreement in light of such
severance, and if no such agreement can be reached within a reasonable time, any
party hereto may initiate arbitration under the then current rules of the
American Arbitration Association to determine and effect such appropriate
equitable amendments.
19.3 ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
----------------
and understanding of the parties hereto with respect to the transactions
contemplated hereby and supersedes all prior agreements, arrangements and
understandings related to the subject matter hereof. No representation, promise,
inducement or statement of intention has been made by any party hereto which is
not embodied in this Agreement, and no party hereto shall be bound by or liable
for any alleged representation, promise, inducement or statement of intention
not so set forth.
19.4 BINDING EFFECT. All the terms, provisions, covenants and
--------------
conditions of this Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective heirs, executors,
administrators, representatives, successors and assigns.
19.5 ASSIGNMENT. This Agreement and the rights and obligations of the
----------
parties hereto shall not be assigned or delegated by any party hereto without
the prior written consent of the other parties hereto.
19.6 AMENDMENT; WAIVER. This Agreement may be amended, modified,
-----------------
superseded or canceled, and any of the terms, provisions, representations,
warranties, covenants, or conditions hereof may be waived, only by a written
instrument executed by all parties hereto, or, in the case of a waiver, by the
party waiving compliance. The failure of any party at any time or times to
require performance of any provision hereof shall in no manner affect the right
to enforce the same. No waiver by any party of any condition contained in this
Agreement, or of the breach of any term, provisions, representation, warranty or
covenant contained in this Agreement, in any one or more instances, shall be
deemed to be or construed as a further or
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continuing waiver of any such condition or breach, or as a waiver of any other
condition or of the breach of any other term, provision, representation,
warranty or covenant.
19.7 GENDER; NUMBERS. All references on this Agreement to the
---------------
masculine, feminine or neuter genders shall, where appropriate, be deemed to
include all other genders. All plurals used in this Agreement shall, where
appropriate, be deemed to be singular, and vice versa.
19.8 COUNTERPARTS. This Agreement may be executed simultaneously in
-------------
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement
shall be binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of the parties reflected hereon as
signatories.
19.9 TELECOPY EXECUTION AND DELIVERY. A facsimile, telecopy or other
-------------------------------
reproduction of this Agreement may be executed by one or more parties hereto,
and an executed copy of this Agreement may be delivered by one or more parties
hereto by facsimile or similar instantaneous electronic transmission device
pursuant to which the signature of or on behalf of such party can be seen, and
such execution and delivery shall be considered valid, binding and effective for
all purposes. At the request of any party hereto, all parties hereto agree to
execute an original of this Agreement as well as any facsimile, telecopy or
other reproduction hereof.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
"PURCHASER"
ATS-ATLANTA ONE, INC.
--------------------
ATTEST:
By: /s/ Xxx Xxxxxxxxx
-----------------------
/s/ Xxxxxxxxxxx X. Xxxxx Name: Xxx Xxxxxxxxx
------------------------
Secretary: Title: V.P., Secretary and
Treasurer
[Corporate Seal]
"SELLER"
ATS-ATLANTA ONE, L.L.C.
ATTEST:
By: /s/ Xxxxx X. Xxxxxxx
-------------------------
/s/ Xxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxxx
------------------------
Secretary: Title:
[Corporate Seal]
"MEMBERS"
ATS ATLANTA, INC.
ATTEST:
By: /s/ Xxxxx X. Xxxxxxx
-------------------------
/s/ Xxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxxx
------------------------
Secretary: Title:
[Corporate Seal]
/s/ Xxxx X. Xxxxx
-----------------------------
XXXX X. XXXXX
/s/ Xxxxxx X. Xxxxx
-----------------------------
XXXXXX X. XXXXX
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