Exhibit 7(1)
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT, dated as of April 7, 1998 (this
"Agreement"), is made and entered into by and among the shareholders whose names
appear on the signature pages of this Agreement (each individually, a
"Shareholder" and, collectively, the "Shareholders"), CompuCom Systems, Inc., a
Delaware corporation ("CompuCom"), and CIC Acquisition Corp., a Delaware
corporation and wholly-owned subsidiary of CompuCom ("Purchaser").
RECITALS:
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A. CompuCom, Purchaser and Computer Integration Corp., a Delaware
corporation ("CIC" and together with its wholly owned subsidiary CIC Systems,
Inc., a Delaware corporation, collectively, the "Company"), are entering into an
Agreement and Plan of Merger (the "Merger Agreement") providing for the merger
of Purchaser with and into the Company (the "Merger") on the terms and subject
to the conditions set forth in the Merger Agreement and the conversion of each
issued and outstanding share of Common Stock, par value $.001 per share, of the
Company (the "Company Common Stock"), other than shares of Company Common Stock
owned by the Company or by CompuCom or Purchaser or any wholly owned subsidiary
of Purchaser (and shares of Company Common Stock held by shareholders who
perfect any appraisal rights that they may have under Delaware law), into the
right to receive an amount in cash equal to the Purchase Price (hereinafter
defined) per share of Company Common Stock payable as provided in the Merger
Agreement. In addition, pursuant to the Merger Agreement each issued and
outstanding share (other than shares of the Series D Preferred Stock
(hereinafter defined) and Series E Preferred Stock (hereinafter defined) held by
stockholders who perfect any appraisal rights they may have under Delaware law)
(a) of the Company's Series D, 9% Cumulative Convertible Redeemable Preferred
Stock (the "Series D Preferred Stock") shall be converted into and represent the
right to receive $100 per share in cash, without interest thereon, and (b) of
the Company's Series E, 9% Cumulative Convertible Redeemable Preferred Stock
(the "Series E Preferred Stock") shall be converted into and shall represent the
right to receive $4,000 per share in cash, without interest thereon.
B. The Shareholders desire to sell to Purchaser, and Purchaser desires to
purchase from the Shareholders, (a) all of the shares of Company Common Stock
now or hereafter owned by the Shareholders (collectively, the "Shares") and (b)
all of the shares of Series D Preferred Stock or Series E Preferred Stock
(collectively, the "Preferred Shares") now or hereafter owned by the
Shareholders, in each case on the terms and subject to the conditions set forth
in this Agreement.
C. Each Shareholder presently owns the number of Shares and Preferred
Shares set forth below such Shareholder's name on the signature pages of this
Agreement, and such Shares in aggregate represent not less than 56% of the
issued and outstanding shares of the Company Common Stock.
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The Shareholders and Purchaser hereby agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1 Purchase and Sale.
(a) On the terms and subject to the conditions set forth in this
Agreement, at the Closing (as defined in Section 1.2 hereof) the Shareholders
shall sell, assign, transfer and deliver to Purchaser, and Purchaser shall
purchase, accept and receive from the Shareholders, all of the Shares for the
purchase price per Share as determined pursuant to subparagraph (b) (the
"Purchase Price").
(b) The Purchase Price per Share shall be equal to $17,250,000.00 (i)
minus (a) $1,903,600.00, the amount to be paid to the holders of the Series D
Preferred Stock; minus (b) $500,000.00, the amount to be paid to the holders of
the Series E Preferred Stock; minus (c) an amount not to exceed $195,000.00 to
be paid to X.X. Xxxxxxxx & Co., the Company's financial advisor, in connection
with the transactions contemplated by this Agreement and the Merger Agreement;
minus (d) an amount not to exceed $500,000.00 to be paid to Current Exchange,
Inc. (f/k/a Cedar Computer Center, Inc.) ("Current Exchange") in full and
complete satisfaction of a contractual price guarantee pursuant to which the
Company is obligated to pay to Current Exchange on July 2, 1998, with respect to
515,000 shares of Company Common Stock held by Current Exchange, the difference
between the closing market price of Company Common Stock on that date and
$10.00; minus (e) an amount not to exceed $550,000.00 in the aggregate necessary
for the Company to satisfy certain severance payment obligations of the Company
to each of Xxxx Xxxxx, Xxxxx Xxxxxx, Xxxx Xxxxxxx, Xx Xxxxxxx, Xxxx Patch, Xxxx
Xxxxxxx and Xxx XxXxxxxxx if their employment with the Company is terminated
after Closing; and minus (f) an amount not to exceed $700,000.00 necessary for
the Company to pay any prepayment or other fees owing to Congress Financial
Corporation ("Congress") for termination of the Company's credit facility with
Congress; and (ii) divided by the sum of (a) 14,046,010, representing the total
number of issued and outstanding shares of Company Common Stock plus (b) the
number of Option and Warrant Shares (as defined in the Merger Agreement) for
which payment is to be made to such optionholders or warrantholders pursuant to
the Merger Agreement.
(c) At the Closing, a portion of the Purchase Price per Share to be
paid to each of the Shareholders shall be placed in escrow with a bank, trust
company or other entity designated by CompuCom and reasonably satisfactory to
the Company to act as escrow agent (the "Escrow Agent") pursuant to that certain
Escrow Agreement provided for in the Merger Agreement to be entered into at
Closing for the purpose of providing for adjustments to the Purchase Price per
Share as hereinafter provided. The portion of the Purchase Price per Share to
be deposited with the Escrow Agent (the "Contingent Amount per Share") shall be
equal to $2,750,000 divided by the sum of (a) 14,046,010, representing the total
number of issued and outstanding shares of Company Common Stock plus (b) the
number of Option and Warrant Shares for which payment is to be made to
optionholders or warrantholders pursuant to the Merger Agreement. The Purchase
Price per Share minus the Contingent Amount per Share shall be payable to the
Shareholders in cash, without interest, at the Closing.
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(d) At the Closing, Purchaser shall pay to each Shareholder the sum of
$100 per share for each share of Series D Preferred Stock held by such
Shareholder and $4,000 per share for each share of Series E Preferred Stock held
by such Shareholder.
1.2 The Closing.
(a) Subject to Section 1.2(d) hereof, the closing of the purchase and
sale of the Shares and the Preferred Shares hereunder (the "Closing") shall take
place at the offices of Xxxxxxxxxxx & Price, L.L.P., 000 Xxxx Xxxxxx, Xxxxxx,
Xxxxx at 10 a.m. Dallas, Texas time, or such other place as Purchaser and the
Shareholders may agree, on the earlier of (i) June 30, 1998, (ii) the Effective
Time, as defined in the Merger Agreement, (iii) subject to Purchaser's election
in subparagraph (d) below, consummation of a transaction pursuant to a Superior
Proposal (as defined in the Merger Agreement) and (iv) such other date, if any,
as Purchaser may specify to the Shareholder Representative, appointed pursuant
to Section 7.12, upon at least five business day's prior written notice (the
earlier of such dates being referred to as the "Closing Date").
(b) At the Closing, the Shareholders shall deliver to Purchaser
certificates representing all of the Shares and Preferred Shares, accompanied by
stock powers duly executed in blank for transfer by the record holders thereof,
together with such other documents and instruments, if any, as may be necessary
to permit Purchaser to acquire the Shares and Preferred Shares free and clear of
any and all claims, liens, pledges, charges, encumbrances, security interests,
options, trusts, commitments and voting or other restrictions of any kind
whatsoever adverse to Purchaser (collectively, "Encumbrances"), except for those
obligations created by this Agreement.
(c) At the Closing, Purchaser shall pay (i) to each Shareholder by
wire transfer in immediately available funds to an account or accounts
designated by the Shareholder by written notice to Purchaser (A) an aggregate
amount for the Shares being purchased from such Shareholder equal to the product
of (x) the Purchase Price per Share minus the Contingent Amount per Share
multiplied by (y) the number of Shares to be purchased from such Shareholder
pursuant to this Agreement, (B) an aggregate amount for the Series D Preferred
Stock equal to the product of (x) $100 per share multiplied by (y) the number of
shares of Series D Preferred Common Stock to be purchased from such Shareholder
pursuant to this Agreement and (C) an aggregate amount for the Series E
Preferred Stock equal to the product of (x) $4,000 per share multiplied by (y)
the number of shares of Series E Preferred Common Stock to be purchased from
such Shareholder pursuant to this Agreement and (ii) to the Escrow Agent an
aggregate amount for the Shares being purchased from such Shareholder equal to
the product of (A) the Contingent Amount per Share multiplied by (B) the number
of Shares to be purchased from such Shareholder pursuant to this Agreement.
(d) The Purchaser and the Shareholders will use their best effort to
consummate the Closing on or before June 30, 1998; provided, however,
notwithstanding anything to the contrary in this Agreement, if the Closing Date
has not occurred on or before June 30, 1998, because the Company is pursuing a
Superior Proposal (as defined in the Merger Agreement) pursuant to advice from
Holland & Knight LLP, counsel to the Company, that it is obligated to pursue
such Superior Proposal, the Closing Date shall be delayed until the final
termination or consummation of a transaction pursuant to a Superior Proposal.
If the Company enters into a binding agreement providing for a transaction
pursuant to a Superior Proposal, then the Purchaser shall have the right to
purchase the Shares and the Preferred Shares from the Shareholders pursuant to
this Agreement
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and participate in such transaction on the same basis as any other stockholder.
In the event the Purchaser so elects to purchase Shares and Preferred Shares
under this Agreement in connection with a transaction consummated pursuant to a
Superior Proposal, the provisions of Section 1.1(c) relating to the escrow and
the provisions of Sections 1.3 and 1.4 will not apply and the total Purchase
Price per Share due to the Shareholders and the purchase price per each
Preferred Share due to the Shareholders shall be due and payable by the
Purchaser contemporaneously with the consummation of the sale by the Purchaser
in such transaction and receipt of the proceeds for such sale. Notwithstanding
anything contained in the preceding sentences of this Section 1.2(d) to the
contrary, if the Company enters into a binding agreement providing for a
transaction pursuant to a Superior Proposal, Codinvest Ltd. shall not be
obligated to sell its Shares to Purchaser pursuant to this Agreement and shall
be free to participate in the sale pursuant to the Superior Proposal.
1.3 Escrowed Funds.
The moneys deposited under the Escrow Agreement and all interest
earnings thereon (collectively, the "Escrowed Funds") shall be applied as
provided in the Escrow Agreement and this Agreement. The portion of the
Escrowed Funds applicable to the Shares, less any amounts applicable to such
portion applied to any adjustments of the Purchase Price, shall be delivered to
the Shareholders following the expiration of the escrow period and the
resolution of any unresolved matters relating to adjustments of the Purchase
Price and distributions of the Escrowed Funds all as provided in the Escrow
Agreement. The Escrowed Funds shall be held for a period not to exceed twelve
months from the Closing Date (the "Escrow Period"). At the end of the Escrow
Period, any Escrowed Funds which have not previously been distributed and which
are not the subject of any objection with respect to the distribution thereof as
provided in the Escrow Agreement, shall be distributed pro rata to the former
holders of the Company Common Stock and to the former holders of any stock
options or warrants with respect to shares of Company Common Stock who received
payment for such options or warrants pursuant to the Merger Agreement.
1.4 Adjustments to Purchase Price.
(a) The Purchase Price per Share shall be adjusted as provided in this
Section 1.4.
(b) Following the Merger, the Surviving Corporation (as defined in the
Merger Agreement) at its expense shall cause to be prepared a balance sheet of
the Company as of the close of business on the Closing Date. Such balance
sheet, as finally agreed upon or determined as provided in subparagraph (d)
below, is referred to herein as the "Closing Balance Sheet." The Closing
Balance Sheet shall include the assets and liabilities of the Company as of the
Closing Date and shall be prepared in accordance with generally accepted
accounting principles consistently applied and consistent with the Company's
past practices, and shall not reflect any income tax benefit for operating
losses of the Company subsequent to December 31, 1997. The Closing Balance
Sheet shall not reflect any reduction in any deferred tax assets that were
listed on the balance sheet of the Company included in the Form 10-Q of the
Company filed with the Securities Exchange Commission for the quarterly period
ended December 31, 1997. The Closing Balance Sheet shall not reflect any
accrual for payments to be made by the Company with respect to the matters
described in Sections 5.2(f), 5.2(g), 5.2(h) or 5.2(i). The inventory to be
shown on the Closing Balance Sheet shall be based on a physical count of all
product and parts inventory of the Company as of the close of business on the
day preceding the Closing Date using appropriate cut-off
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procedures and using a valuation method consistent with generally accepted
accounting principles consistently applied and consistent with the Company's
past practices, which is mutually agreeable to the Surviving Corporation and the
Escrow Committee (as defined in subparagraph (c)).
(c) The Closing Balance Sheet shall be prepared and delivered by the
Surviving Corporation to a committee consisting of Xxxxxx Xxxxxxxx and Xxxxx
Xxxxxxx (the "Escrow Committee") no later than one hundred twenty days after the
Closing Date. If practicable, the Surviving Corporation shall prepare and
deliver a preliminary Closing Balance Sheet to the Escrow Committee within
ninety days after the Closing Date. The members of the Escrow Committee shall
be designated in writing by the Shareholders to Purchaser at or prior to the
Closing. The Escrow Committee may review and examine the Closing Balance Sheet
and shall have complete access to the work papers used by the Surviving
Corporation in preparing the Closing Balance Sheet and relevant records of the
Company. The Escrow Committee shall have the right to employ an independent
accounting firm to assist it in reviewing the Closing Balance Sheet and any of
the matters described in subparagraph (f) below for which the Surviving
Corporation seeks distribution from the Escrowed Funds. The reasonable cost and
expenses of any such independent accounting firm shall be paid from the Escrowed
Funds.
(d) If the Escrow Committee agrees with the Closing Balance Sheet, it
shall so notify the Surviving Corporation in writing not more than 30 days after
receipt of the Closing Balance Sheet from the Surviving Corporation. The Escrow
Committee shall also have the right to object, by written notice to the
Surviving Corporation delivered within 30 days of receipt of the Closing Balance
Sheet from the Surviving Corporation, to the Closing Balance Sheet; and if the
Surviving Corporation and the Escrow Committee are unable to resolve such
objections within 20 days, all such objections shall be referred for resolution
to the Dallas office of an independent accounting firm of national reputation
mutually acceptable to Purchaser and the Escrow Committee (the "Neutral
Arbitrator").
(e) If the stockholders' equity of the Company set forth on the
Closing Balance Sheet is less than $2,300,000, then the Surviving Corporation
shall be entitled to receive a distribution from the Escrowed Funds of an amount
equal to the difference between $2,300,000 and the stockholders' equity of the
Company as set forth on the Closing Balance Sheet.
(f) The Surviving Corporation shall also be entitled to distributions
from the Escrowed Funds with respect to each of the following matters: (i) for
the amount of any payments made by the Surviving Corporation within the twelve-
month period following Closing with respect to any claims, suits, actions or
proceedings asserted against the Surviving Corporation relating to actions,
occurrences or omissions of the Company occurring prior to Closing which are not
reserved for on the Closing Balance Sheet, plus the amount of any reserves which
the Surviving Corporation may establish in the exercise of its reasonable
judgment with respect to any such matters within the twelve-month period
following Closing, (ii) for any accounts payable or any other liabilities of the
Company relating to the period prior to Closing which may be asserted against
the Surviving Corporation after Closing which have not been reflected or accrued
for on the Closing Balance Sheet, plus the amount of any accruals which the
Surviving Corporation may establish in the exercise of its reasonable judgment
with respect to any such matters within the twelve-month period following
Closing, and (iii) for the amount of any sales or income tax liability which may
be asserted against the Surviving Corporation after Closing with respect to the
operations of the Company prior
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to Closing which have not been reflected or accrued for on the Closing Balance
Sheet, plus the amount of any accruals which the Surviving Corporation may
establish in the exercise of its reasonable judgment with respect to any such
matters within the twelve-month period following Closing.
(g) The Surviving Corporation shall give written notice to the Escrow
Agent and the Escrow Committee if the Surviving Corporation believes it is
entitled to distributions from the Escrow Fund with respect to any of the
matters set forth in subparagraphs (e) or (f) above. The Surviving Corporation
shall use commercially reasonable efforts to give such notice with respect to
any matters for which it believes it is entitled to distributions from the
Escrowed Funds not later than ten months after the Closing Date; provided,
however that the Surviving Corporation shall give such notice with respect to
the matters referred to in Section 10.4(e) at the time the Closing Balance Sheet
is delivered to the Escrow Committee and the Surviving Corporation shall give
notice with respect to the matters set forth in Section 10.4(f) on no more than
two occasions during the Escrow Period. If the Escrow Committee has not
objected to the Closing Balance Sheet within the time period specified for
raising objections or if the Neutral Arbitrator has rendered its decision with
respect to any objections to the Closing Balance Sheet which may have been
referred to it for resolution, the Escrow Committee shall not have the right to
object to distributions requested by the Surviving Corporation pursuant to
subparagraph (e) above. The Escrow Committee shall have the right to object, by
written notice delivered within 30 days after the Surviving Corporation's notice
is received, to the Surviving Corporation and the Escrow Agent to any such
proposed distributions under subparagraph (f) above; and if the Surviving
Corporation and the Escrow Committee are unable to resolve such objections
within 20 days, such objections shall be referred to the Neutral Arbitrator for
decision.
(h) If the Escrow Committee does not consent or object within the time
periods and in the manner provided herein, the Escrow Committee shall be deemed
to have consented to the Closing Balance Sheet or the proposed distribution of
the Escrowed Funds, as the case may be. The decisions and agreements of the
Escrow Committee and Purchaser shall be binding on the Shareholders, and the
decisions of the Neutral Arbitrator with respect to any matters referred to it
for resolution shall be binding on the Escrow Committee, the Shareholders and
the Purchaser. THE SHAREHOLDERS ACKNOWLEDGE THAT THE ESCROW COMMITTEE IS ACTING
ON THEIR BEHALF AND HEREBY RELEASE THE MEMBERS OF THE ESCROW COMMITTEE FROM ANY
AND ALL LIABILITY WITH RESPECT TO ACTIONS TAKEN UNDER THIS AGREEMENT EXCEPT FOR
ANY ACTIONS RELATING TO SUCH MEMBERS' WILFUL MISCONDUCT OR GROSS NEGLIGENCE.
The fees and expenses of the Neutral Arbitrator shall be paid by CompuCom if the
Escrow Committee is the substantially prevailing party and shall be paid from
the Escrowed Funds if Purchaser is the substantially prevailing party. If the
Neutral Arbitrator determines that neither party is the substantially prevailing
party, such fees and expenses shall be paid from the Escrowed Funds.
(i) Each member of the Escrow Committee shall be entitled to a fee of
$750 for reviewing each notice given by the Surviving Corporation requesting a
distribution from the Escrowed Funds and to reimbursement for any reasonable
out-of-pocket expenses incurred by such member in performing his services as a
member of the Escrow Committee. Such fees and reimbursements shall be paid out
of the Escrowed Funds. The members of the Escrow Committee may also purchase a
policy of liability insurance in an amount not to exceed $3,000,000 insuring
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them against any claims by former shareholders, optionholders and warrantholders
of the Company which may be asserted against the members of the Escrow Committee
in performing their duties as set forth in this Section 1.4 provided that the
premium for such policy is reasonable. The costs and expenses of such insurance
policy and any deductible applicable to such insurance policy shall be paid from
the Escrowed Funds to the extent there are funds available and otherwise by
CompuCom.
(j) The consent of the Escrow Committee, the lack of objection by the
Escrow Committee within the time periods and in the manner provided herein, and
the decision of the Neutral Arbitrator shall be sufficient and full authority
for the Escrow Agent to distribute Escrowed Funds to Purchaser. The Escrowed
Funds shall be distributed by the Escrow Agent as provided in this Agreement and
the Escrow Agreement. If there is a conflict between this Agreement and the
Escrow Agreement, the Escrow Agreement shall control.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF COMPUCOM AND PURCHASER
CompuCom and Purchaser, jointly and severally, hereby represent and warrant
to the Shareholders as follows:
2.1 Organization, Standing, etc., of CompuCom. CompuCom is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to own its
assets and to carry on its business as presently conducted. CompuCom has all
requisite corporate power and authority to execute and deliver, and perform its
obligations under, this Agreement and to consummate the transactions
contemplated hereby.
2.2 Organization, Standing, etc., of Purchaser.
(a) The Purchaser is a newly formed corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to own its assets and to
carry on its business as presently conducted. The Purchaser has all requisite
corporate power and authority to execute and deliver, and perform its
obligations under, this Agreement and to consummate the transactions
contemplated hereby.
(b) At the Effective Time, the duly authorized capital stock of the
Purchaser will consist of 1,000 shares of common stock, $.001 par value, 1,000
shares of which will be validly issued, fully paid and nonassessable and owned
of record and beneficially by CompuCom. There are no outstanding options,
warrants or other rights to subscribe for or purchase capital stock (or
securities convertible into or exchangeable for capital stock) of the Purchaser.
The Purchaser has not engaged in any activities other than as contemplated by
the terms of this Agreement.
2.3 Authorization and Execution. The execution and delivery of this
Agreement and the performance of each of CompuCom and the Purchaser of this
Agreement and the consummation by each of them of the transactions contemplated
hereby have been duly and validly authorized by all
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necessary corporate action on the part of CompuCom and the Purchaser. This
Agreement has been duly and validly executed and delivered by each of CompuCom
and the Purchaser and constitutes a legal, valid and binding agreement of each
of CompuCom and the Purchaser enforceable against CompuCom and the Purchaser, as
applicable, in accordance with its terms, assuming this Agreement is enforceable
against the Company, except to the extent that enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws or
by general principles of equity.
2.4 Absence of Conflicts; Governmental Authorizations.
(a) The execution and delivery by each of CompuCom and the Purchaser
of this Agreement, the performance by each of them of their respective
obligations hereunder and the consummation by each of them of the transactions
contemplated hereby will not (i) conflict with or result in any violation of any
provision of the Certificate of Incorporation of CompuCom or the Purchaser, as
applicable, or the Bylaws of CompuCom or the Purchaser, each as amended to
date; (ii) materially conflict with, result in any material violation or
material breach of, constitute a default under, give rise to any right of
termination or acceleration (with or without notice or the lapse of time or
both) pursuant to, or result in being declared void or voidable, any term or
provision of any note, bond, mortgage, indenture, lease, license, contract or
other instrument to which CompuCom or the Purchaser is a party or by which any
of their respective properties or assets are or may be bound; (iii) materially
violate any term of any legal requirement applicable to CompuCom or the
Purchaser or their respective properties or assets; or (iv) result in the
creation of, or impose on CompuCom or the Purchaser the obligation to create,
any Encumbrance upon any properties or assets of CompuCom or the Purchaser.
(b) Except for applicable requirements, if any, of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the premerger
notification requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the "HSR Act"), the Nasdaq National Market, the filing and
recordation of appropriate merger documents as required by the Delaware General
Corporation Law (the "DGCL"), filings required pursuant to any state securities
or "blue sky" laws, and such other notices, reports or other filings the failure
of which to be made would not, individually or in the aggregate, have a material
adverse effect on CompuCom or prevent or materially impair the consummation of
the transactions contemplated hereby, CompuCom is not required to submit any
notice, report or other filing to any court, governmental authority or other
regulatory or administrative agency or commission, domestic or foreign
("Governmental Entity"), in connection with the execution, delivery or
performance of this Agreement or the consummation of the transactions
contemplated hereby.
2.5 Financing. CompuCom possesses, or has access to, all funds necessary
to pay the Purchase Price and related fees and expenses, and has the financial
capacity to perform its other obligations under this Agreement. Upon the terms
and subject to the conditions of this Agreement, CompuCom will pay the Purchase
Price.
2.6 Investment Intent. Purchaser shall acquire the Shares for its
own account and not with a view to or for sale in connection with any
distribution thereof, and Purchaser shall not sell or otherwise dispose of the
Shares except in compliance with the Securities Act of 1933, as amended, and
applicable state securities laws.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
Each Shareholder hereby represents and warrants to Purchaser that:
3.1 Authority; Binding Effect. Such Shareholder has the requisite
capacity, power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by such Shareholder, and constitutes a valid and binding
obligation of such Shareholder, enforceable against such Shareholder in
accordance with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws or by general principles of equity.
3.2 Consent and Approvals; No Violation. Neither the execution and
delivery of this Agreement by such Shareholder nor the consummation by such
Shareholder of the transactions contemplated hereby will (a) conflict with or
result in any breach or violation of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the creation of an Encumbrance on any of the Shares or Preferred
Shares under, any note, pledge, trust, irrevocable proxy, commitment, agreement
or other instrument or obligation to which such Shareholder is a party or by
which it or any of the Shares or Preferred Shares is bound, (b) except for
filings under the HSR Act require any consent, approval, authorization or permit
of, or filing with or notification to, any Governmental Entity, or (iii) violate
any statute or any order, decree, injunction, rule or regulation of any
Governmental Entity applicable to such Shareholder or any of the Shares or
Preferred Shares.
3.3 Ownership of Shares; Title. The number of Shares and Preferred
Shares set forth on the signature pages hereto under the name of such
Shareholder constitutes all of the shares of Company Common Stock and Preferred
Shares owned beneficially or of record by such Shareholder, and such Shareholder
has no options, warrants or other rights to purchase or subscribe for any shares
of capital stock of the Company. On the date hereof, such Shareholder has, and
as of the Closing Date such Shareholder will have, good and valid title to all
of such Shares and Preferred Shares, free and clear of all Encumbrances, and
sole and unrestricted voting power and power of disposition with respect to all
of such Shares and Preferred Shares. There are no options or rights to purchase
or acquire, or agreements, arrangements, commitments or understandings relating
to, any of such Shares and Preferred Shares except pursuant to this Agreement.
Upon delivery of such Shares and Preferred Shares to Purchaser at the Closing
against payment therefore as contemplated hereby, Purchaser will have the entire
record and beneficial ownership of, and good and valid title to, all of such
Shares and Preferred Shares, free and clear of any and all Encumbrances.
The representations and warranties being made by each Shareholder in this
Agreement are being made by such Shareholder severally and not jointly and
severally. No Shareholder shall have any liability to Purchaser as a result of
the breach of any representation and warranty by another Shareholder.
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ARTICLE IV
COVENANTS
4.1 Interim Actions. Except as expressly provided for herein, no
Shareholder shall, directly or indirectly:
(a) sell, offer for sale, transfer, assign, pledge, hypothecate or
otherwise dispose of or encumber in any manner or limit its right to vote in any
manner any of the Shares or Preferred Shares or any interest therein or permit
any such action to occur or continue;
(b) grant any proxies or execute any consents with respect to any of
the Shares or Preferred Shares, deposit any of the Shares or Preferred Shares
into a voting trust or otherwise subject any of the Shares or Preferred Shares
to any agreement or arrangement regarding the voting of such Shares or Preferred
Shares or the taking of any action by consent of the shareholders of the
Company;
(c) solicit or initiate or engage in negotiations or discussions
concerning any proposal or offer from any person relating to any acquisition or
purchase of a material amount of the assets of, or any securities of, or any
merger, consolidation, business combination with, the Company or any of its
subsidiaries; or
(d) take any action or omit to take any action that would be
reasonably likely to cause any representation or warranty of any Shareholder
contained in this Agreement to be untrue or incorrect or that would be
reasonably likely to prevent the performance of any covenant or the satisfaction
of any condition contained in this Agreement.
4.2 Shareholder Consents.
Each Shareholder, by this Agreement, with respect to those Shares and
Preferred Shares that such Shareholder owns of record, does hereby agree, so
long as this Agreement shall remain in effect, to vote each of such Shares and
Preferred Shares and to execute any consent, certificate or other document that
the DGCL may permit or require, (a) in favor of the approval and adoption of the
Merger Agreement and approval of the Merger and the other transactions
contemplated by the Merger Agreement, (b) against any proposal for any
recapitalization, merger, sale of assets, or other business combination between
the Company and any person or entity (other than the Merger) or any other action
or agreement that would result in a breach of any covenant, representation or
warranty or any other obligation or agreement of the Company under the Merger
Agreement or which could result in any of the conditions to the Merger Agreement
not being fulfilled or which could adversely affect the ability of the Company
to consummate the Merger and the other transactions contemplated by the Merger
Agreement, and (c) in favor of any other matter relating to consummation of the
transactions contemplated by the Merger Agreement. Each Shareholder further
agrees to cause the record holder of any Shares and Preferred Shares owned by
such Shareholder beneficially but not of record to execute a consent or vote in
accordance with the foregoing.
- 10 -
4.3 Delivery to Custodian.
(a) Promptly following the execution of this Agreement, the
Shareholders shall deliver all certificates representing the Shares and
Preferred Shares, accompanied by stock powers duly executed in blank for
transfer by the record owners thereof, to Xxxx X. Xxxxx (the "Custodian"), who
will hold such certificates and stock powers in accordance with the terms of
this Agreement. Upon request, the Custodian shall confirm in writing to
Purchaser its possession of such share certificates and stock powers and make
them available for inspection by Purchaser or its representatives.
(b) Prior to the termination of this Agreement, the Custodian shall
not release any of the share certificates or stock powers referred to in Section
4.3(a) hereof, except (i) to Purchaser, at the Closing, (ii) to the Paying Agent
(as defined in the Merger Agreement), if the Merger becomes effective prior to
the Closing, or (iii) with the express written consent of Purchaser and
Shareholder.
(c) If this Agreement shall terminate prior to the Closing and the
effectiveness of the Merger, the Custodian shall promptly return the share
certificates and stock powers referred to in Section 4.3(a) hereof to the
Shareholders.
(d) The Shareholders shall cause the Company to issue an appropriate
stop-transfer instruction to the Company's transfer agent and registrar to the
effect that the Shares and Preferred Shares are subject to the terms of this
Agreement and may not be sold or otherwise disposed of except in accordance with
the terms hereof.
4.4 Equitable Adjustments. If there shall be any change in the
Company Common Stock as a result of any merger, consolidation, reorganization,
recapitalization or other similar event, or if there shall be any dividend upon
the Company Common Stock payable in Company Common Stock or a stock split,
combination of shares or other change in the capital structure of the Company,
the number and kind of shares and the purchase price hereunder shall be
equitably adjusted so as to prevent dilution or enlargement of the rights of the
parties hereto; provided, however, that nothing herein contained shall
constitute a waiver of any right or remedy of Purchaser under this Agreement or
the Merger Agreement with respect to any of the foregoing events.
4.5 Additional Agreements. Subject to the terms and conditions
herein provided, each of the parties hereto shall use its best efforts to take
promptly, or cause to be taken, all actions and to do promptly, or cause to be
done, all things necessary, proper or advisable under applicable law and
regulations to consummate and make effective the transactions contemplated by
this Agreement and the Merger Agreement, including using its best efforts to
obtain all necessary actions or non-actions, extensions, waivers, consents and
approvals from all applicable Governmental Entity, effecting all necessary
registrations and filings (including without limitation filings under the HSR
Act) and obtaining any required contractual consents.
- 11 -
ARTICLE V
CONDITIONS
5.1 Conditions. The obligations of Purchaser and the Shareholders to
consummate the purchase and sale of the Shares and Preferred contemplated hereby
are subject to the satisfaction, at or before the Closing, of each of the
following conditions, as applicable thereto: (a) consummation of the
transactions contemplated by this Agreement and the Merger Agreement (the
"Transaction") shall not violate any order of any court or any governmental
department, commission, board, agency, or instrumentality of the United States
and no action or proceeding shall have been instituted by any person or
threatened by any person which, in either such case, in the good faith judgment
of the Shareholders or the Purchaser has a reasonable probability of resulting
in an order restraining, prohibiting or rendering unlawful the consummation of
the Transaction, (b) the Company and CompuCom shall have made the necessary
filings to comply with the HSR Act, and all applicable waiting periods under the
HSR Act shall have expired or otherwise been terminated, (c) the Company shall
have received the opinion of X. X. Xxxxxxxx & Co. to the effect that the
consideration to be paid pursuant to the Transaction to the holders of Company
Common Stock is fair from a financial point of view and (d) the Shareholders
shall have executed a consent as permitted under the DGCL with respect to, or
otherwise voted in favor of, the approval and adoption of the Merger Agreement
and approval of the Merger and the other transactions contemplated by the Merger
Agreement.
5.2 Additional Conditions to Obligations of Purchaser. The obligations
of Purchaser to consummate the purchase and sale of the Shares and Preferred
Shares contemplated hereby shall be further subject to the satisfaction of the
additional conditions that (a) the representations and warranties of the Company
in the Merger Agreement and of the Shareholders in this Agreement that are
qualified as to materiality shall have been true and correct and such
representations and warranties that are not so qualified shall have been true
and correct in all material respects, in each case as of the date of this
Agreement, except in the case of any representation and warranty that speaks as
of a particular date, which shall be true and correct or true and correct in all
material respects, as applicable, as of such date, (b) the Company shall have
performed in all material respects its material obligations, and complied in all
material respects with its material covenants and agreements, under the Merger
Agreement, (c) the Shareholders shall have performed in all material respects
each of the covenants of the Shareholders contained herein to be performed by
them at or before the Closing, (d) the Merger Agreement shall not have been
terminated pursuant to Section 9.01 thereof, (e) CompuCom shall have completed
its examination of the financial condition, properties and business of the
Company and such examination shall not have revealed the existence of any fact,
matter, claim (whether existing prior to the date of the Merger Agreement or
arising after the date thereof) or circumstance not previously disclosed by the
Company to CompuCom which, in CompuCom's judgment materially and adversely
affects the Company including, without limitation, (i) that the Company's
business has been conducted other than in the ordinary course from July 1, 1997
to the Closing, (ii) that since such date, the Company has increased the
compensation of its employees except in the ordinary course of business
consistent with past practices, (iii) that since such date, the Company has paid
dividends in excess of $110,000 to its shareholders or (iv) that since such
date, the Company increased its indebtedness for borrowed money or paid bonuses
to its employees except in the ordinary course of business consistent with past
practices, (f) at least five days prior to the Closing, the Company shall have
entered into agreements with each of Xxxx Xxxxx,
- 12 -
Xxxxx Xxxxxx, Xxxx Xxxxxxx, Xx Xxxxxxx, Xxxx Patch, Xxxx Xxxxxxx and Xxx
XxXxxxxxx, to whom it has severance payment obligations if such individuals'
employment with the Company is terminated after Closing to accept an aggregate
of not more than $550,000 in full satisfaction of all severance obligations
owing to such individuals, (g) at least five days prior to the Closing, the
Company shall have received written confirmation that any prepayment or other
fees owing to Congress as a result of the termination of the Company's credit
facility with Congress shall not exceed $700,000, (h) at least five days prior
to the Closing, the Company shall have received the written agreement of X. X.
Xxxxxxxx & Co. that its fee in connection with the consummation of the
Transaction shall not exceed $195,000 and (i) at least five days prior to the
Closing, the Company shall have entered into an agreement with Current Exchange,
Inc. (f/k/a Cedar Computer Center, Inc.) ("Current Exchange") providing for the
Company to pay an amount not to exceed $500,000 to Current Exchange in full and
complete satisfaction of a contractual price guarantee pursuant to which the
Company is obligated to pay to Current Exchange on July 2, 1998, with respect to
515,000 shares of Company Common Stock held by Current Exchange, the difference
between the closing market price of Company Common Stock on that date and
$10.00.
5.3 Additional Conditions to Obligations of the Shareholders. The
obligations of the Shareholders to consummate the purchase and sale of the
Shares and Preferred Shares contemplated hereby shall be further subject to the
satisfaction of the additional conditions that (a) CompuCom and Purchaser shall
have performed in all material respects their obligations, and shall have
complied in all material respects with their material covenants and agreements,
under this Agreement and (b) the Merger Agreement shall not have been terminated
pursuant to subparagraphs (a) or (d) of Section 9.01 thereof.
ARTICLE VI
FURTHER COVENANTS
6.1 Account Receivable Collections. The Surviving Corporation shall use
commercially reasonable efforts to collect the accounts receivable of the
Company reflected on the Closing Balance Sheet which shall include at a minimum,
those efforts employed by the Company in collecting its accounts receivable
prior to the Closing.
6.2 CompuCom to Cause Purchaser and Surviving Corporation to Perform.
CompuCom shall cause Purchaser prior to the Merger and the Surviving Corporation
after the Merger to perform their obligations and comply with their covenants
and agreements under this Agreement and the Merger Agreement.
ARTICLE VII
MISCELLANEOUS
7.1 Termination.
(a) This Agreement may be terminated and the purchase and sale of the
Shares contemplated hereby may be abandoned at any time prior to the earlier of
the Closing and the effectiveness of the Merger:
- 13 -
(i) by the mutual consent of Purchaser and Shareholders;
(ii) subject to Section 1.2(d), by either Purchaser, on the one
hand, or the Shareholder Representative, on the other hand, if neither the
Closing nor the effectiveness of the Merger shall have occurred prior to June
30, 1998 (provided that the right to terminate this Agreement under this Section
7.1(a)(ii) shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in, the
failure of the Closing or the effectiveness of the Merger to occur on or before
such date); or
(iii) by Purchaser if (A) any of the representations and
warranties of any Shareholder contained in this Agreement shall not have been,
or shall cease to be, true and correct in all material respects (whether because
of circumstances or events occurring in whole or in part prior to, on or after
the date of this Agreement) or (B) any Shareholder shall have breached or failed
to perform in any material respect any covenant or agreement to be performed by
it pursuant to this Agreement.
(b) In the event of any termination and abandonment pursuant to this
Section 7.1, no party hereto (or any of its directors or officers) shall have
any liability or further obligation to any other party to this Agreement, except
that nothing herein shall relieve any party from liability for any breach of
this Agreement.
7.2 Survival of Representations and Warranties. All representations
and warranties made by the parties pursuant to this Agreement shall expire and
be terminated upon Closing except that the representations made by the
Shareholders in Sections 3.1, 3.2 and 3.3 shall survive the Closing Date until
the expiration of the applicable statute of limitations.
7.3 Entire Agreement. This Agreement contains the entire agreement
among CompuCom, Purchaser and the Shareholders with respect to the transactions
contemplated hereby and supersedes all prior agreements among the parties with
respect to such matters.
7.4 Applicable Law. This Agreement shall be construed in accordance with,
and the rights of the parties shall be governed by, the substantive laws of the
State of Delaware, without giving effect to any choice-of-law rules that may
require the application of the laws of another jurisdiction. All actions and
proceedings arising out of or relating to this Agreement shall be heard and
determined in any Delaware state court or in any federal court sitting in
Delaware.
7.5 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (which is
confirmed), sent by overnight courier (provided proof of delivery) or mailed by
registered or certified mail (return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be specified
by written notice):
- 14 -
If to a Shareholder:
To the Shareholder Representative:
Xxxx X. Xxxxx
Computer Integration Corp.
15720 Xxxx X. Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Fax No.: (000) 000-0000
With a copy (which shall not constitute effective notice) to:
Holland & Knight LLP
Xxx Xxxx Xxxxxxx Xxxxxxxxx
X.X. Xxx 00000
Ft. Xxxxxxxxxx, Xxxxxxx 00000
Attn.: Xxxx Xxxxxx, Esq.
Fax No.: (000) 000-0000
If to Purchaser or CompuCom:
CompuCom Systems, Inc.
0000 Xxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attn.: Lazane Xxxxx, Sr. Vice President, Finance and Chief Financial
Officer
Fax No.: (000) 000-0000
With a copy (which shall not constitute effective notice) to:
Xxxxxxxxxxx & Price, L.L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn.: Xxxxxxxxx X. Xxxxxx, Esq.
Fax No.: (000) 000-0000
7.6 Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original and all of which taken together shall
constitute one instrument binding on all the parties, notwithstanding that all
the parties are not signatories to the original or the same counterpart.
7.7 Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties and their respective successors, heirs,
executors, administrators, legal representatives and permitted assigns, provided
that neither this Agreement nor any rights or obligations hereunder may be
assigned without the written consent of the other parties except that (i)
CompuCom may assign any or all of its rights hereunder to any affiliate of
CompuCom, and (ii) the Purchaser may assign any or all of its rights hereunder
to any other newly organized corporation under the laws of the State of
Delaware, all of the capital stock of which is owned
- 15 -
directly or indirectly by CompuCom; provided, however, CompuCom shall remain
liable on a direct and primary basis for the performance of any such direct or
indirect subsidiary. Nothing in this Agreement, express or implied, is intended
to or shall confer upon any person, corporation, partnership or other entity
(other than the parties hereto and any permitted assignee) any rights, benefits
or remedies of any nature whatsoever under or by reason of this Agreement, and
no person, corporation, partnership or other entity (other than as so specified)
shall be deemed a third party beneficiary under or by reason of this Agreement.
7.8 Expenses. Whether or not the Closing occurs or the Merger becomes
effective, all costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the party incurring such
expense.
7.9 Specific Performance. All remedies, either under this Agreement or by
law or otherwise afforded to any party hereto, shall be cumulative and not
alternative. Each party hereto acknowledges and agrees to any breach of the
agreements and covenants contained in this Agreement would cause irreparable
injury to the other parties hereto for which such parties would have no adequate
remedy at law. In addition to any other remedy to which any party hereto may be
entitled, each party hereto agrees that temporary and permanent injunctive and
other equitable relief and specific performance may be granted without proof of
actual damages or inadequacy of legal remedy in any proceeding that may be
brought to enforce any of the provisions of this Agreement.
7.10 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced, this Agreement shall
nevertheless remain in full force and effect. Upon any such determination that
any term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated by this
Agreement are consummated to the extent possible.
7.11 Appointment by Shareholders' Representative.
(a) Each of the Shareholders hereby designates and appoints Xxxx X.
Xxxxx as the attorney-in-fact, representative and agent of all of the
Shareholders (the "Shareholder Representative"), and Xxxx X. Xxxxxx hereby
accept such designation and appointment, and by such designation and
appointment, each of the Shareholders authorizes and directs the Shareholder
Representative to act for and on behalf of such Shareholders whenever any
consent, notice or approval is to be given or any covenant, agreement or other
action is to be performed hereunder by one or more of the Shareholders
(including, without limitation, the execution and delivery of any agreements,
instrument or other documents to be executed and delivered by one or more of the
Shareholders hereunder).
(b) Delivery to the Shareholder Representative of any amount, notice,
document or instrument which is to be given, delivered or paid to any of the
Shareholders shall be deemed to be (and shall be effective as) delivery to such
Shareholders. Each of the Shareholders hereby expressly acknowledges that
neither the Purchaser, CompuCom nor any of their Affiliates (as defined in the
Merger Agreement) will have any liability or obligation to any Shareholders as a
result of any action taken or omitted by the Shareholder Representative.
- 16 -
(c) In the event that Xxxx X. Xxxxx is unable or unwilling for any
reason whatsoever to fulfill his duties as Shareholder Representative as
provided herein, Xxx XxXxxxxxx shall be deemed to succeed Xxxx X. Xxxxx as the
Shareholder Representative, without any action, vote, decision or appointment
whatsoever, and such successor shall succeed to all the duties, rights, powers
and authority of the Shareholder Representative as provided hereinabove.
7.12 JURY WAIVER. EACH OF THE SHAREHOLDERS, THE SHAREHOLDER REPRESENTATIVE
AND PURCHASER WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING ANY
MATTER IN ANY WAY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED
HEREUNDER.
IN WITNESS WHEREOF, Purchaser and CompuCom have caused this Agreement to be
executed by their respective officers thereunto duly authorized and each of the
Shareholders have executed this Agreement or caused this Agreement to be
executed by its officer, general partner, trustee or other person thereunto duly
authorized, as of the date first written above.
CIC ACQUISITION CORP.
By: /s/ X. Xxxxxx Xxxxx
------------------------------------
Its: X. Xxxxxx Xxxxx
--------------------------------
Title: President
------------------------------
COMPUCOM SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Its: Xxxxxx Xxxxxxxx
--------------------------------
Title: CEO
------------------------------
- 17 -
SHAREHOLDERS
CHARTWELL PARTNERS XXXXX XXXXXXXX IRREVOCABLE TRUST
No. of Shares: 101,350 No. of Shares: 285,732
By: /s/ Xxxxxxx Pounds By: /s/ Xxxxx Xxxxxxxx, Trustee
-------------------- ----------------------------
Its: President of the Gen Partner Xxxxx Xxxxxxxx
------------------------------- Its: Trustee
CODINVEST LTD. /s/ Xxxxxxxx Xxxxxxxx Xxxxxxxxx
No. of Shares: 4,672,897 --------------------------------
XXXXXXXX XXXXXXXX XXXXXXXXX
By: /s/ Xxxxxxx X. Xxxxxx No. of Shares: 11,000
-----------------------
Its: Attorney in Fact
----------------- XXXXX XXXXXXXX IRREVOCABLE TRUST
No. of Shares: 280,732
/s/ Xxxxxx Xxxxxxxx
-------------------- By: /s/ Xxxxx Xxxxxxxx, Trustee
XXXXXX XXXXXXXX ----------------------------
No. of Shares: 1,805,000 Xxxxx Xxxxxxxx
No. of Shares of Series D Preferred Its: Trustee
Stock: 11,400
No. of Shares of Series E Preferred
Stock: 125 XXXXXXX XXXXXX 1994 TRUST
No. of Shares: 12,000
No. of Shares of Series D Preferred
/s/ Xxxxx Xxxxxxxx Stock: 200
-------------------
XXXXX XXXXXXXX
No. of Shares: 4,000 By: /s/ Xxxxxx Xxxxxxxx
------------------------
Xxxxxx Xxxxxxxx
XXXX XXXXXXXX 1994 TRUST Its: Trustee
No. of Shares: 11,885
No. of Shares of Series D Preferred
Stock: 200 /s/ Xxx XxXxxxxxx
-------------------------
XXX XXXXXXXXX
By: /s/ Xxxxxx Xxxxxxxx No. of Shares: 186,034
--------------------
Xxxxxx Xxxxxxxx
Its: Trustee /s/ Xxxxx XxXxxxxxx
------------------------
XXXXX XXXXXXXXX
No. of Shares: 10,000
- 18 -
/s/ Xxxxx XxXxxxxxx /s/ Xxxxxx Xxxxxxx
-------------------- -------------------
XXXXX XXXXXXXXX XXXXXX XXXXXXX
No. of Shares: 10,000 No. of Shares: 200,000
/s/ Xxxx XxXxxxxxx /s/ Xxxxx Xxxxxxx
------------------- ------------------
XXXX XXXXXXXXX XXXXX XXXXXXX
No. of Shares: 50,000 No. of Shares: 195,864
/s/ Xxxxxx XxXxxxxxx /s/ Xxxxxxx Xxxxxxx
--------------------- --------------------
XXXXXX XXXXXXXXX XXXXXXX XXXXXXX
No. of Shares: 10,000 No. of Shares: 62,829
/s/ Xxxx X. XxXxxxxxx /s/ Xxxxxxx Xxxxxxx
---------------------- --------------------
XXXX X. XXXXXXXXX XXXXXXX XXXXXXX
No. of Shares: 5,000 No. of Shares: 76,329
/s/ Xxxxx Xxxxxxxxxx, Jr.
--------------------------
XXXXX XXXXXXXXXX, JR.
No. of Shares: 5,000
ACCEPTED AND AGREED TO, solely with respect to the provisions of Sections
4.3 and Section 7.11.
/s/ Xxxx Xxxxx
-------------------------------
Xxxx X. Xxxxx, as Custodian
and Shareholder Representative
- 19 -
