EXHIBIT 10.17
***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 BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***
STOCK PURCHASE AGREEMENT
BY AND AMONG
GLOBAL IMAGING SYSTEMS INC.,
COPY SERVICE & SUPPLY, INC.,
OFFICE FURNITURE CONCEPTS, INC.,
CSS LEASING, L.L.C.
AND
XXXXX X. XXXXX
and
XXXXXXX X. XXXXX
DATED JUNE 27, 1996
TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS
1.1 Definitions.............................................................. 1
ARTICLE II
AGREEMENT OF PURCHASE AND SALE; CLOSING
2.1 Agreement to Sell and Purchase........................................... 5
2.2 Purchase Price........................................................... 5
2.3 Payment of Purchase Price................................................ 5
2.4 Closing.................................................................. 5
2.5 Purchase Price Adjustments............................................... 5
2.6 Closing Audit............................................................ 5
2.7 Post-Closing Purchase Price Adjustment................................... 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANIES AND SELLER
3.1 Capitalization........................................................... 6
3.2 No Liens on Shares....................................................... 6
3.3 Other Rights to Acquire Capital Stock or Membership Interests............ 7
3.4 Due Organization......................................................... 7
3.5 No Subsidiaries.......................................................... 7
3.6 Due Authorization........................................................ 7
3.7 Financial Statements..................................................... 7
3.8 Certain Actions.......................................................... 8
3.9 Properties............................................................... 9
3.10 Licenses and Permits..................................................... 9
3.11 Intellectual Property.................................................... 10
3.12 Compliance with Laws..................................................... 10
3.13 Insurance................................................................ 10
3.14 Employee Benefit Plans................................................... 11
(a) Employee Welfare Benefit Plans...................................... 11
(b) Employee Pension Benefit Plans...................................... 11
(c) Employment and Non-Tax Qualified Deferred Compensation Arrangements. 11
3.15 Contracts and Agreements................................................. 11
3.16 Claims and Proceedings................................................... 12
3.17 Taxes.................................................................... 12
3.18 Personnel................................................................ 13
3.19 Business Relations....................................................... 13
3.20 Accounts Receivable........................................................ 14
3.21 Bank Accounts.............................................................. 14
3.22 Warranties................................................................. 14
3.23 Brokers.................................................................... 14
3.24 Interest in Competitors, Suppliers, Customers, Etc......................... 14
3.25 Indebtedness To and From Officers, Directors, Shareholders, and Employees.. 14
3.26 Undisclosed Liabilities.................................................... 15
3.27 Information Furnished...................................................... 15
ARTICLE IV
GLOBAL'S REPRESENTATIONS AND WARRANTIES
4.1 Due Organization........................................................... 15
4.2 Due Authorization.......................................................... 15
4.3 No Brokers................................................................. 16
ARTICLE V
COVENANTS OF THE COMPANIES AND SELLER
5.1 Consents of Others......................................................... 16
5.2 Seller's Efforts........................................................... 16
5.3 Powers of Attorney......................................................... 16
ARTICLE VI
POST-CLOSING COVENANTS
6.1 General.................................................................... 16
6.2 Transition................................................................. 17
6.3 Confidentiality............................................................ 17
6.4 Covenant Not to Compete.................................................... 17
ARTICLE VII
CONDITIONS TO OBLIGATION OF PARTIES TO CONSUMMATE CLOSING
7.1 Conditions to Global's Obligations......................................... 18
(a) Covenants, Representations and Warranties............................. 18
(b) Consents.............................................................. 18
(c) Leases................................................................ 18
(d) Discharge of Indebtedness and Liens................................... 18
(e) Material Adverse Change............................................... 19
(f) Transfer Taxes........................................................ 19
(g) Financial Condition................................................... 19
(h) Documents to be Delivered by Sellers and the Companies................ 19
(i) Opinion of Sellers' Counsel...................................... 19
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(ii) Certificates............................................................. 19
(iii) Release.................................................................. 19
(iv) Employment Agreement..................................................... 19
(v) Office Lease............................................................. 19
(vi) Stock Certificates....................................................... 20
7.2 Conditions to Sellers and the Companies' Obligations................................... 20
(a) Covenants, Representations and Warranties......................................... 20
(b) Consents.......................................................................... 20
(c) Documents to be Delivered by Global............................................... 20
(i) Opinion of Global's Counsel.............................................. 20
(ii) Certificates............................................................. 20
(iii) Employment Agreement..................................................... 20
(iv) Office Lease............................................................. 21
(v) Purchase Price........................................................... 21
(d) .................................................................................. 21
Right of Reinvestment............................................................. 21
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification of Global.............................................................. 21
8.2 Defense of Claims...................................................................... 21
8.3 Tax Audits, Etc........................................................................ 22
8.4 Indemnification of Seller.............................................................. 22
8.5 General Right of Offset................................................................ 22
8.6 Limits on Indemnification.............................................................. 22
ARTICLE IX
MISCELLANEOUS
9.1 Modifications.......................................................................... 23
9.2 Notices................................................................................ 23
9.3 Counterparts........................................................................... 24
9.4 Expenses............................................................................... 24
9.5 Binding Effect; Assignment............................................................. 24
9.6 Entire and Sole Agreement.............................................................. 24
9.7 Governing Law.......................................................................... 25
9.8 Survival of Representations, Warranties and Covenants.................................. 25
9.9 Invalid Provisions..................................................................... 25
9.10 Public Announcements................................................................... 25
9.11 Remedies Cumulative.................................................................... 25
9.12 Waiver................................................................................. 25
9.13 DISPUTE RESOLUTION..................................................................... 25
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LIST OF EXHIBITS
Exhibit A Form of Seller Note
Exhibit B [RESERVED]
Exhibit C-1 Form of Office Leases
Exhibit C-2 Form of OFC Office Lease
Exhibit D Opinion of Sellers' Counsel
Exhibit E Sellers' Certificates
Exhibit F Release
Exhibit G Xxxxx X. Xxxxx Executive Agreement
Exhibit H Global Certificates
Exhibit I Opinion of Global's Counsel
LIST OF SCHEDULES
Schedule 2.3 Sellers' Accounts
Schedule 2.6 Holders of Funded Indebtedness
Schedule 3.1 Ownership of Shares
Schedule 3.4 Articles and Bylaws
Schedule 3.7 Financial Statements
Schedule 3.8A Certain Actions
Schedule 3.8B Material Changes
Schedule 3.9 Properties
Schedule 3.10 Licenses and Permits
Schedule 3.11 Patents and Trademarks
Schedule 3.13 Insurance
Schedule 3.14 Employee Benefit Plans
Schedule 3.15 Contracts and Agreements
Schedule 3.16 Claims and Proceedings
Schedule 3.18 Personnel
Schedule 3.20 Accounts Receivable
Schedule 3.21 Bank Accounts
Schedule 3.22 Warranties
Schedule 3.25 Indebtedness with Officers, Directors and Shareholders
Schedule 3.26 Undisclosed Liabilities
Schedule 3.27 Information Furnished
Schedule 7.1(d) Indebtedness
The Exhibits and Schedules to this Stock 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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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "AGREEMENT") is entered into as of
June 27, 1996, and effective as of June 1, 1996, by and among GLOBAL IMAGING
SYSTEMS INC., a Delaware corporation ("GLOBAL"), COPY SERVICE & SUPPLY, INC., a
North Carolina corporation ("COPY SERVICE"); OFFICE FURNITURE CONCEPTS, INC., a
North Carolina corporation ("OFC"); and CSS LEASING, L.L.C., a North Carolina
limited liability company ("CSS"), (Copy Service, OFC and CSS are sometimes
referred to collectively as the "COMPANIES") and XXXXX X. XXXXX and XXXXXXX X.
XXXXX (each individually a "SELLER" and collectively "SELLERS").
W I T N E S S E T H:
WHEREAS, the Companies are engaged in the office equipment dealer and
service industry in the State of North Carolina (the "BUSINESS"); and
WHEREAS, Sellers own an aggregate of (i) 10,000 shares of the
outstanding Common Stock, par value $1.00 per share, of Copy Service, (ii) 1,000
shares of the outstanding Common Stock, no par value per share, of OFC; and
(iii) all of the outstanding membership interests of CSS consisting of 1,000
units (collectively, the "SHARES"), which Shares constitute all of the issued
and outstanding capital stock or membership interests of the Companies; and
WHEREAS, Global desires to purchase from Sellers and Sellers desire to
sell to Global hereby all of the Shares owned by Sellers, all on the terms and
subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual premises and covenants
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto covenant and agree
as follows:
ARTICLE I
DEFINITIONS
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1.1 DEFINITIONS. In this Agreement, the following terms have the
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meanings specified or referred to in this Section 1.1 and shall be equally
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applicable to both the singular and plural forms. Any agreement referred to
below shall mean such agreement as amended, supplemented and modified from time
to time to the extent permitted by the applicable provisions thereof and by this
Agreement.
"AFFILIATE" means, with respect to any Person, any other Person which
directly or indirectly controls, is controlled by or is under common control
with such Person.
"AUDITED CLOSING BALANCE SHEET" has the meaning specified in
Section 2.6.
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"BUILDINGS" shall mean the Companies' office buildings and
warehouses located in Statesville, Xxxxxxxxx, Xxxxxxxxx, Hickory, and
Wilkesboro, North Carolina.
"BUSINESS" has the meaning specified in the first recital of the
Agreement
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. (S)(S) 9601 et seq., any amendments
-- ---
thereto, any successor statutes, and any regulations promulgated thereunder.
"CLOSING" means the closing of the transfer of the Shares from
the Sellers to Global.
"CLOSING DATE" has the meaning specified in Section 2.4.
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"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANIES" has the meaning specified in the first paragraph of
this Agreement.
"CONFIDENTIAL INFORMATION" means all confidential information and
trade secrets of the Companies including, without limitation, the identity,
lists or descriptions of any customers, referral sources or organizations;
financial statements, cost reports or other financial information; contract
proposals, or bidding information; business plans and training and operations
methods and manuals; personnel records; fee structure; and management systems,
policies or procedures, including related forms and manuals. Confidential
Information shall not include any information (i) which is disclosed pursuant to
subpoena or other legal process, (ii) which has been publicly disclosed, (iii)
which subsequently becomes known to a third party not subject to a
confidentiality agreement with Global or the Companies, or (iv) which is
subsequently disclosed by any third party not in breach of a confidentiality
agreement.
"CONTRACTS" has the meaning specified in Section 3.15.
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"COURT ORDER" means any judgment, order, award or decree of any
foreign, federal, state, local or other court or tribunal and any award in any
arbitration proceeding.
"EMPLOYMENT AGREEMENT" shall mean the executive agreement with
Xxxxx X. Xxxxx to be entered into at Closing in the form of Exhibit G.
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"ENCUMBRANCE" means any lien, claim, charge, security interest,
mortgage, pledge, easement, conditional sale or other title retention agreement,
defect in title, covenant or other restrictions of any kind.
"ENVIRONMENTAL OBLIGATIONS" has the meaning specified in Section
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3.12.
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"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"FINANCIAL STATEMENTS" has the meaning specified in Section 3.7.
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"FUNDED INDEBTEDNESS" means all (i) indebtedness of such Person
for borrowed money or other interest-bearing indebtedness; (ii) capital lease
obligations of such Person; (iii) obligations of such Person to pay the deferred
purchase or acquisition price for goods or services, other than trade accounts
payable or accrued expenses in the ordinary course of business; (iv)
indebtedness of others guaranteed by such Person or secured by an Encumbrance on
such Person's property; or (v) extended credit terms from manufacturers provided
to such Person.
"GAAP" shall mean generally accepted accounting principles,
consistently applied.
"GLOBAL" has the meaning specified in the first paragraph of this
Agreement.
"GOVERNMENTAL BODY" means any foreign, federal, state, local or
other governmental authority or regulatory body.
"GOVERNMENTAL PERMITS" has meaning specified in Section 3.10.
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"INDEMNIFIABLE COSTS" has the meaning specified in Section 8.1.
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"INDEMNIFIED PARTIES" has the meaning specified in Section 8.1.
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"INDEPENDENT ACCOUNTANTS" has the meaning specified in Section
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2.6.
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"INTELLECTUAL PROPERTY" has the meaning specified in Section
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3.11.
"IRS" means the Internal Revenue Service.
"MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" means a
material adverse change or effect on the assets, properties, Business or the
operations, liabilities, or conditions (financial or otherwise) of the
Companies.
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"OSHA" means the Occupational Safety and Health Act, 29 U.S.C.
(S)(S) 651 et seq., any amendment thereto, and any regulations promulgated
-- ---
thereunder.
"PERMITTED EXCEPTION" means (a) liens for Taxes and other
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 and (d) such statement of facts shown on any title insurance
policies delivered to Global.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or Governmental Body.
"PRELIMINARY CLOSING BALANCE SHEET" shall mean the Companies'
best estimate of the Companies' balance sheet as of the Closing Date. The
Preliminary Closing Balance Sheet shall be delivered to Global not less than two
(2) nor more than seven (7) days prior to the Closing Date.
"PURCHASE PRICE" has the meaning specified in Section 2.2.
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"RCRA" means the Resource Conservation and Recovery Act, 42
U.S.C. (S)(S) 6901 et seq., and any successor statute, and any regulations
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promulgated thereunder.
"REQUIREMENTS OF LAWS" means any foreign, federal, state and
local laws, statutes, regulations, rules, codes or ordinances enacted, adopted,
issued or promulgated by any Governmental Body (including, without limitation,
those pertaining to electrical, building, zoning, environmental and occupational
safety and health requirements) or common law.
"SELLER" or "SELLERS" have the meanings set forth in the first
paragraph of this Agreement.
"SELLER NOTE" has the meaning specified in Section 2.3(c).
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"SHARES" means all of the issued and outstanding shares of the
capital stock or membership interests of the Companies.
"TAX" or "TAXES" means any federal, state, local or foreign
income, alternative or add-on minimum, gross income, gross receipts, windfall
profits, severance, property, production, sales, use, transfer, gains, license,
excise, employment, payroll, withholding or minimum tax, transfer, goods and
services, or any other tax, custom, duty,
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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.]
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest or any penalty, addition to tax or additional amount
imposed by any Governmental Body.
"TAX RETURN" means any return, report or similar statement
required to be filed with respect to any Taxes (including any attached
schedules), including, without limitation, any information return, claim for
refund, amended return and declaration of estimated Tax.
"WORKING CAPITAL" shall mean the difference between the
Companies' current assets and its current liabilities as calculated in
accordance with GAAP, and as adjusted pursuant to the terms of this Agreement.
ARTICLE II
AGREEMENT OF PURCHASE AND SALE; CLOSING
2.1 AGREEMENT TO SELL AND PURCHASE. Upon the basis of the
------------------------------
representations and warranties, for the consideration, and subject to the terms
and conditions set forth in this Agreement, Sellers agree to sell the Shares to
Global and Global agrees to purchase the Shares from Sellers.
2.2 PURCHASE PRICE. The total purchase price for the Shares (the
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"PURCHASE PRICE") shall be equal to [**] and as otherwise adjusted pursuant to
Section 2.5 below.
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2.3 PAYMENT OF PURCHASE PRICE. The Purchase Price shall be payable
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by Global at the Closing (hereinafter defined) as follows:
(A) [**] of the Purchase Price will be paid in cash by wire
transfer of funds or by cashier's checks to the Sellers' accounts specified in
Schedule 2.3 (including the payment of [**] for the covenant not to compete
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provided in Section 6.4);
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(B) [**] of the Purchase Price will be paid in cash by wire
transfer of funds to the Companies' lenders;
(C) [**] of the Purchase Price shall be paid in the form of a
seller note (the "SELLER NOTE") in the form of Exhibit A hereto, which bears
interest at the rate of 8% per annum for a period of one year; and
(D) [**] of the Purchase Price shall be paid in the form of [**]
shares of Global's Class A Common Stock and [**] shares of Global's Class B
Common Stock in exchange for all of the outstanding capital stock of OFC.
2.4 CLOSING. The Closing of the purchase and sale of the Shares
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contemplated by this Agreement shall take place at 11:00 a.m., North Carolina
time, at the offices of Xxxxxx X.
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Xxxxxx, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxx Xxxxxxxx, xx July 3, 1996, or
at such other date and time as the parties shall agree (the "CLOSING DATE").
2.5 PURCHASE PRICE ADJUSTMENTS. The Purchase Price will be reduced
--------------------------
by a sum equal to the amount, if any, by which the adjusted Working Capital as
reflected on the Preliminary Closing Balance Sheet is less than $440,000 (the
amount which is $25,000 less than the average Working Capital balances of the
Companies at the end of each of the six months ending December 31, 1995).
2.6 CLOSING AUDIT. Within ninety (90) days following the Closing
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Date, there shall be delivered to Global and to Sellers an audit of the
Preliminary Closing Balance Sheet (the "AUDITED CLOSING BALANCE SHEET") of the
Companies at and as of the Closing Date. The Preliminary Closing Balance Sheet
shall be audited by Ernst & Young in accordance with GAAP. The cost of the
Audited Closing Balance Sheet shall be paid by Global. In the event that
Sellers dispute any items on such Audited Closing Balance Sheet within ten days
after Sellers' receipt thereof, the parties shall jointly select and retain an
independent "Big Six" accounting firm (the "INDEPENDENT ACCOUNTANTS") to review
the disputed item(s) on the Audited Closing Balance Sheet. The final
determination of such disputed item(s) by the Independent Accountants shall be
reflected on the Audited Closing Balance Sheet. The cost of retaining the
Independent Accountants shall be borne equally by Sellers and Global.
2.7 POST-CLOSING PURCHASE PRICE ADJUSTMENT. In the event that the
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Working Capital as reflected on the Audited Closing Balance Sheet is less than
$440,000, then the Purchase Price will be adjusted downward, on a dollar-for-
dollar basis, to reflect the lesser of (i) the decrease, if any, in the total
Working Capital as reflected on the Audited Closing Balance Sheet from the
amount of Working Capital reflected on the Preliminary Closing Balance Sheet or
(ii) the amount by which the Working Capital reflected on the Audited Closing
Balance Sheet is less than $440,000. Conversely, the Purchase Price will be
adjusted upward, on a dollar-for dollar basis, to reflect the increase if any,
in the total Working Capital as reflected on the Audited Closing Balance Sheet
from the amount of Working Capital reflected on the Preliminary Closing Balance
Sheet, provided, however, that in no event shall such adjustment exceed the
total amount of any adjustment to the Purchase Price made pursuant to Section
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2.5 above. The post-closing adjustment to the Purchase Price, if any, shall be
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paid by Sellers to Global or by Global to Sellers, as the case may be, in
immediately available funds within ten (10) days of delivery of the Audited
Closing Balance Sheet.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANIES AND SELLERS
The Companies and Sellers, jointly and severally, represent and
warrant to Global that:
3.1 CAPITALIZATION. The authorized capital stock of (i) Copy Service
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consists of 100,000 shares of Common Stock, $1.00 par value, 10,000 of which are
issued and outstanding and (ii) OFC consists of 1,000 shares of Common Stock, no
par value, 1,000 of which are issued and outstanding. All of the Shares are
duly authorized, validly issued, fully paid, and nonassessable. All of the
Shares are owned of record and beneficially by Sellers in the amounts specified
in Schedule 3.1 hereto. None of the Shares was issued or will be transferred
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under this Agreement in violation of any preemptive or preferential rights of
any Person. The Sellers own all of the issued and outstanding capital stock of
Copy Service and OFC and all of the membership interests of CSS.
3.2 NO LIENS ON SHARES. Sellers collectively own the Shares, free
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and clear of any Encumbrances other than the rights and obligations arising
under this Agreement, and none of the Shares is subject to any outstanding
option, warrant, call, or similar right of any other Person to acquire the same,
and none of the Shares is subject to any restriction on transfer thereof except
for restrictions imposed by applicable federal and state securities laws.
Sellers have full power and authority to convey good and marketable title to the
Shares, free and clear of any Encumbrances.
3.3 OTHER RIGHTS TO ACQUIRE CAPITAL STOCK OR MEMBERSHIP INTERESTS.
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Except as set forth in this Agreement, there are no authorized or outstanding
warrants, options, or rights of any kind to acquire from the Companies any
equity or debt securities of the Companies, or securities convertible into or
exchangeable for equity or debt securities of the Companies, and there are no
shares of capital stock or membership interests of the Companies reserved for
issuance for any purpose nor any contracts, commitments, understandings or
arrangements which require the Companies to issue, sell or deliver any
additional shares of its capital stock.
3.4 DUE ORGANIZATION. Copy Service and OFC are each a corporation
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duly organized, validly existing and in good standing, under the laws of the
State of North Carolina and CSS is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of North
Carolina and each has full corporate or company power and authority to carry on
the Business as now conducted and as proposed to be conducted through Closing.
Complete and correct copies of the Certificate of Incorporation and Bylaws of
the Companies, and all amendments thereto, have been heretofore delivered to
Global and are attached hereto as Schedule 3.4. The Companies are duly
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qualified to do business in each jurisdiction in which the nature of the
Business or the ownership of its properties requires such
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qualification except where the failure to be so qualified does not and would not
have a Material Adverse Effect.
3.5 NO SUBSIDIARIES. The Companies do not directly or indirectly
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have any subsidiaries or any direct or indirect ownership interests in any
Person. The Sellers do not own any other Person engaged in the Business.
3.6 DUE AUTHORIZATION. The Companies and the Sellers each has full
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power and authority to execute, deliver and perform this Agreement and to carry
out the transactions contemplated hereby. The execution, delivery, and
performance of this Agreement and the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action of the Companies.
This Agreement has been duly and validly executed and delivered by the Companies
and Sellers and constitutes the valid and binding obligations of the Companies
and Sellers, enforceable in accordance with its terms. The execution, delivery,
and performance of this Agreement (as well as all other instruments, agreements,
certificates, or other documents contemplated hereby) by the Companies and
Sellers, do not (a) violate any Requirements of Laws or any Court Order of any
Governmental Body applicable to the Companies or Sellers, or their respective
property, (b) violate or conflict with, or permit the cancellation of, or
constitute a default under, any agreement to which the Companies or Sellers are
a party, or by which any of them or any of their respective property is bound,
(c) permit the acceleration of the maturity of any indebtedness of, or
indebtedness secured by the property of, the Companies or Sellers, or (d)
violate or conflict with any provision of the charter, certificate of formation,
operating agreement or bylaws of the Companies.
3.7 FINANCIAL STATEMENTS. The following Financial Statements (herein
--------------------
so called) of the Companies have been delivered to Global by Sellers and the
Companies:
balance sheets of the Companies as of December 31, 1993, December
31, 1994, December 31, 1995, and May 31, 1996, and
statements of income of the Companies for the fiscal years ended
December 31, 1993, December 31, 1994 and December 31, 1995 and for the
five month period ending May 31, 1996.
Except as disclosed on Schedule 3.7, the Financial Statements have been prepared
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in accordance with GAAP throughout the periods indicated and fairly present the
financial position, results of operations and changes in financial position of
the Companies as of the indicated dates and for the indicated periods, subject
(in the case of the five month Financial Statements) to year end accruals made
in the ordinary course of the Business which are not adversely material and
which are consistent with past practices. Except to the extent reflected or
provided for in the Financial Statements or the notes thereto and except as
disclosed in Schedule 3.7, the Companies have no liabilities, nor any
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obligations (whether absolute, contingent, or otherwise) which are (individually
or in the aggregate) material (in amount or to the conduct of the Business); and
neither the Companies nor Sellers have knowledge of any basis for the assertion
of any such
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liability or obligation. Since December 31, 1995, there has been no Material
Adverse Change, and neither the Companies nor Seller have any reason to believe
there has been any Material Adverse Change in the prospects of the Companies.
3.8 CERTAIN ACTIONS. Since December 31, 1995, the Companies have
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not, except as disclosed on Schedule 3.8A hereto: (a) discharged or satisfied
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any Encumbrance or paid any obligation or liability, absolute or contingent,
other than current liabilities incurred and paid in the ordinary course of the
Business; (b) paid or declared any dividends or distributions, or purchased,
redeemed, acquired, or retired any stock or indebtedness from any stockholder or
member other than (i) the personal vehicles listed on Schedule 3.8A hereto and
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(ii) the office furniture listed on Schedule 3.8A hereto, each as agreed to by
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Global; (c) made or agreed to make any loans or advances or guaranteed or agreed
to guarantee any loans or advances to any party whatsoever; (d) suffered or
permitted any Encumbrance to arise or be granted or created against or upon any
of its assets, real or personal, tangible or intangible; (e) cancelled, waived,
or released or agreed to cancel, waive, or release any of its debts, rights, or
claims against third parties in excess of $10,000 individually or $50,000 in the
aggregate; (f) sold, assigned, pledged, mortgaged, or otherwise transferred, or
suffered any damage, destruction, or loss (whether or not covered by insurance)
to, any assets (except in the ordinary course of the Business); (g) amended its
charter or bylaws; (h) paid or made a commitment to pay any severance or
termination payment to any employee or consultant; (i) made any change in its
method of management or operation or method of accounting; (j) made any capital
expenditures, including, without limitation, replacements of equipment in the
ordinary course of the Business, or entered into commitments therefor, except
for capital expenditures or commitments therefor which do not, in the aggregate,
exceed $50,000; (k) made any investment or commitment therefor in any Person;
(l) made any payment or contracted for the payment of any bonus, gratuity, or
other compensation or personal expenses, other than (A) wages and salaries and
business expenses paid in the ordinary course of the Business, and (B) wage and
salary adjustments made in the ordinary course of the Business for employees who
are not officers, directors, members or shareholders of the Companies; (m) made,
amended, or entered into any written employment contract or created or made any
material change in any bonus, stock option, pension, retirement, profit sharing
or other employee benefit plan or arrangement; (n) amended or experienced a
termination of any material contract, agreement, lease, franchise or license to
which the Companies are a party, except in the ordinary course of the Business;
or (o) entered into any other material transactions except in the ordinary
course of the Business. Since December 31, 1995, except as disclosed on
Schedule 3.8B hereto, there has not been (a) any Material Adverse Change
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including, but not limited to, the loss of any material customers or suppliers
of the Companies, or in any material assets of the Companies, (b) any
extraordinary contracts, commitments, orders or rebates, (c) any strike,
material slowdown, or demand for recognition by a labor organization by or with
respect to any of the employees of the Companies, or (d) any shutdown, material
slow-down, or cessation of any material operations conducted by, or constituting
part of, the Companies, nor have the Companies agreed to do any of the
foregoing.
3.9 PROPERTIES. Attached hereto as Schedule 3.9 is a list containing
---------- ------------
a description of all interests in real property (including, without limitation,
leasehold interests) and
-9-
personal property utilized by the Companies in the conduct of the Business
having a book value in excess of $10,000 as of the date hereof. Except as
expressly set forth on Schedule 3.9, such real and personal properties are free
------------
and clear of Encumbrances. Sellers and the Companies have delivered to Global a
central UCC lien search of all of the Companies' real and personal property in
the State of North Carolina from the State of North Carolina. All of the
properties and assets necessary in the Business as currently conducted
(including, without limitation, all books, records, computers and computer
software and data processing systems) are owned, leased or licensed by the
Companies and are suitable for the purposes for which they are currently being
used. With the exception of used equipment and inventory valued at no more than
$1.00 on the Companies' Financial Statements, the physical properties of the
Companies, including the real properties leased by the Companies, are in good
operating condition and repair, normal wear and tear excepted, and are free from
any defects of a material nature. Except as otherwise set forth on Schedule 3.9,
------------
the Companies have full and unrestricted legal and equitable title to all such
properties and assets. The operation of the properties and Business of the
Companies in the manner in which they are now and have been operated does not
violate any zoning ordinances, municipal regulations, or other Requirements of
Laws, except for any such violations which would not, individually or in the
aggregate, have a Material Adverse Effect. Except as set forth on Schedule 3.9,
------------
no covenants, easements, rights-of-way, or regulations of record impair the uses
of the properties of the Companies for the purposes for which they are now
operated. All leases of real or personal property by the Companies are legal,
valid, binding, enforceable and in full force and effect and will remain legal,
valid, binding, enforceable and in full force and effect on identical terms
immediately following the Closing. All facilities owned or leased by the
Companies have received all approvals of any Governmental Body (including
Governmental Permits) required in connection with the operation thereof and have
been operated and maintained in accordance with all Requirements of Laws.
3.10 LICENSES AND PERMITS. Attached hereto as Schedule 3.10 is a list
-------------------- -------------
of all licenses, certificates, privileges, immunities, approvals, franchises,
authorizations and permits held or applied for by the Companies from any
Governmental Body (herein collectively called "GOVERNMENTAL PERMITS") the
absence of which to the best knowledge of Sellers could have a Material Adverse
Effect. The Companies have complied in all material respects with the terms and
conditions of all such Governmental Permits, and no violation of any such
Governmental Permit or the Requirements of Laws governing the issuance or
continued validity thereof has occurred other than violations (if any) which
would not individually or in the aggregate have a Material Adverse Effect. No
additional Government Permit is required from any Governmental Body thereof in
connection with the conduct of the Business which Governmental Permit, if not
obtained, would have a Material Adverse Effect.
3.11 INTELLECTUAL PROPERTY. Attached hereto as Schedule 3.11 is a
--------------------- -------------
list and brief description of all patents, trademarks, tradenames, copyrights,
licenses, computer software or data (other than general commercial software),
trade secrets, or applications therefor owned by or registered in the name of
the Companies or in which the Companies have any rights, licenses, or immunities
(collectively, the "INTELLECTUAL PROPERTY"). The Companies have furnished
Global with copies of all license agreements to which the Companies are a party,
either as licensor or
-10-
licensee, with respect to any Intellectual Property. Except as described on
Schedule 3.11 hereto, the Companies have good and marketable title to or the
-------------
right to use such Intellectual Property and all inventions, processes, designs,
formulae, trade secrets and know-how necessary for the conduct of their
Business, in their Business as presently conducted without the payment of any
royalty or similar payment, and the Companies are not infringing on any patent
right, tradename, copyright or trademark right or other Intellectual Property
right of others, and neither the Companies nor Sellers are aware of any
infringement by others of any such rights owned by the Companies.
3.12 COMPLIANCE WITH LAWS. The Companies have (i) complied in all
--------------------
material respects with all Requirements of Laws, Governmental Permits and Court
Orders applicable to the Business and have filed with the proper Governmental
Bodies all statements and reports required by all Requirements of Laws,
Governmental Permits and Court Orders to which the Companies or any of its
employees (because of their activities on behalf of the Companies) are subject
and (ii) conducted the Business and are in compliance in all material respects
with all federal, state and local energy, public utility, health, safety and
environmental Requirements of Laws, Governmental Permits and Court Orders
including the Clean Air Act, the Clean Water Act, RCRA, the Safe Drinking Water
Act, CERCLA, OSHA, the Toxic Substances Control Act and any similar state, local
or foreign laws (collectively "ENVIRONMENTAL OBLIGATIONS") and all other
federal, state, local or foreign governmental and regulatory requirements,
except where any such failure to comply would not, in the aggregate, have a
Material Adverse Effect. No claim has been made by any Governmental Body (and,
to the best knowledge of the Companies and Sellers, no such claim is
anticipated) to the effect that the Business fails to comply, in any respect,
with any Requirements of Laws, Governmental Permit or Environmental Obligation
or that a Governmental Permit or Court Order is necessary in respect thereto.
3.13 INSURANCE. Attached hereto as Schedule 3.13 is a list of all
--------- -------------
policies of fire, liability, or other forms of insurance and all fidelity bonds
held by or applicable to the Companies, which Schedule sets forth in respect of
each such policy the policy name, policy number, carrier, term, type of
coverage, deductible amount or self-insured retention amount, limits of coverage
and annual premium. Copies of all such insurance policies have been delivered
to Global. No event relating to the Companies have occurred which will result
in (i) cancellation of any such insurance policies; (ii) a retroactive upward
adjustment of premiums under any such insurance policies; or (iii) any
prospective upward adjustment in such premiums. All of such insurance policies
will remain in full force and effect following the Closing.
-11-
3.14 EMPLOYEE BENEFIT PLANS.
----------------------
(A) EMPLOYEE WELFARE BENEFIT PLANS. Except as disclosed on
------------------------------
Schedule 3.14, the Companies do not maintain or contribute to any "employee
-------------
welfare benefit plan" as such term is defined in Section 3(1) of ERISA. With
respect to each such plan, (i) the plan is in material compliance with ERISA;
(ii) the plan has been administered in accordance with its governing documents;
(iii) neither the plan, nor any fiduciary with respect to the plan, has engaged
in any "prohibited transaction" as defined in Section 406 of ERISA other than
any transaction subject to a statutory or administrative exemption; (iv) except
for the processing of routine claims in the ordinary course of administration,
there is no material litigation, arbitration or disputed claim outstanding; and
(v) all premiums due on any insurance contract through which the plan is funded
have been paid.
(B) EMPLOYEE PENSION BENEFIT PLANS. Except as disclosed in
------------------------------
Schedule 3.14, the Companies do not maintain or contribute to any arrangement
-------------
that is or may be an "employee pension benefit plan" relating to employees, as
such term is defined in Section 3(2) of ERISA. With respect to each such plan:
(i) the plan is qualified under Section 401(a) of the Code, and any trust
through which the plan is funded meets the requirements to be exempt from
federal income tax under Section 501(a) of the Code; (ii) the plan is in
material compliance with ERISA; (iii) the plan has been administered in
accordance with its governing documents as modified by applicable law; (iv) the
plan has not suffered an "accumulated funding deficiency" as defined in Section
412(a) of the Code; (v) the plan has not engaged in, nor has any fiduciary with
respect to the plan engaged in, any "prohibited transaction" as defined in
Section 406 of ERISA or Section 4975 of the Code other than a transaction
subject to statutory or administrative exemption; (vi) the plan has not been
subject to a "reportable event" (as defined in Section 4043(b) of ERISA), the
reporting of which has not been waived by regulation of the Pension Benefit
Guaranty Corporation; (vii) no termination or partial termination of the plan
has occurred within the meaning of Section 411(d)(3) of the Code; (viii) all
contributions required to be made to the plan or under any applicable collective
bargaining agreement have been made to or on behalf of the plan; (ix) there is
no material litigation, arbitration or disputed claim outstanding; and (x) all
applicable premiums due to the Pension Benefit Guaranty Corporation for plan
termination insurance have been paid in full on a timely basis.
(C) EMPLOYMENT AND NON-TAX QUALIFIED DEFERRED COMPENSATION
------------------------------------------------------
ARRANGEMENTS. Except as disclosed in Schedule 3.14, the Companies do not
------------ -------------
maintain or contribute to any retirement or deferred or incentive compensation
or stock purchase, stock grant or stock option arrangement entered into between
the Companies and any current or former officer, consultant, director or
employee of the Companies that is not intended to be a tax qualified arrangement
under Section 401(a) of the Code.
3.15 CONTRACTS AND AGREEMENTS. Attached hereto as Schedule 3.15 is a
------------------------ -------------
list and brief description of all written or oral contracts, commitments,
leases, and other agreements (including, without limitation, promissory notes,
loan agreements, and other evidences of
-12-
indebtedness, guarantees, agreements with distributors, suppliers, dealers,
franchisors and customers, and service agreements) to which the Companies are a
party or by which the Companies or its properties are bound pursuant to which
the obligations thereunder of either party thereto are, or are contemplated as
being, $25,000 or greater (collectively, the "CONTRACTS"). The Companies are not
and, to the best knowledge of Sellers and the Companies, no other party thereto
is in default (and no event has occurred which, with the passage of time or the
giving of notice, or both, would constitute a default) under any of the
Contracts, and the Companies have not waived any right under any of the
Contracts. All of the Contracts to which the Companies are a party are legal,
valid, binding, enforceable and in full force and effect and will remain legal,
valid, binding, enforceable and in full force and effect on identical terms
immediately after the Closing. Except as set forth in Schedule 3.15, the
-------------
Companies have not guaranteed any obligations of any other Person.
3.16 CLAIMS AND PROCEEDINGS. Attached hereto as Schedule 3.16 is a
---------------------- -------------
list and brief description of all claims, actions, suits, proceedings, or
investigations pending or threatened against or affecting the Companies or any
of their properties or assets, at law or in equity, or before or by any court,
municipality or other Governmental Body. Except as set forth on Schedule 3.16,
-------------
none of such claims, actions, suits, proceedings, or investigations will result
in any liability or loss to the Companies. The Companies have not been and the
Companies are not now, subject to any Court Order, stipulation, or consent of or
with any court or Governmental Body. No inquiry, action or proceeding has been
asserted, threatened or instituted to restrain or prohibit the carrying out of
the transactions contemplated by this Agreement or to challenge the validity of
such transactions or any part thereof or seeking damages on account thereof. To
the best knowledge of the Companies and Sellers, except as set forth on Schedule
--------
3.16, there is no basis for any such valid claim or action.
----
3.17 TAXES.
-----
(A) All Federal, foreign, state, county and local income, gross
receipts, excise, property, franchise, license, sales, use, withholding, and
other Taxes and all Tax Returns which are required to be filed by the Companies
or Sellers on or before the date hereof have been filed within the time and in
the manner provided by law, and all such Tax Returns are true and correct and
accurately reflect the Tax liabilities of the Companies. Except for the 1995 Tax
Return of Sellers, no Tax Returns of the Companies or any of the Sellers are
presently subject to an extension of the time to file. All Taxes, assessments,
penalties, and interest of the Companies which have become due pursuant to such
Tax Returns or any assessments received have been paid or adequately accrued on
the Companies' Financial Statements. The provisions for Taxes reflected on the
balance sheets contained in the Financial Statements are adequate to cover all
of the Companies' Tax liabilities for the respective periods then ended and all
prior periods. The Companies have not executed any presently effective waiver or
extension of any statute of limitations against assessments and collection of
Taxes, and there are no pending or threatened claims, assessments, notices,
proposals to assess, deficiencies, or audits with respect to any such Taxes. For
Governmental Bodies with respect to which the Companies do not file Tax Returns,
no such government body has claimed that any of the
-13-
Companies are or may be subject to taxation by that government body. The
Companies have withheld and paid all Taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee, shareholder,
creditor, independent contractor or other party. There are no tax liens on any
of the property or assets of the Companies.
(B) Neither the Companies nor any other corporation has filed an
election under Section 341(f) of the Code that is applicable to the Companies or
any assets held by the Companies. The Companies have not made any payments, is
not obligated to make any payments, and is not a party to any agreement that
under certain circumstances could obligate it to make any payments that will not
be deductible under Code Sec. 280G. The Companies have not been a United States
real property holding corporation within the meaning of Code Sec. 897(c)(2)
during the applicable period specified in Code Sec. 897(c)(1)(A)(ii). The
Companies are not a party to any Tax allocation or sharing agreement. The
Companies have not and have never been (nor does the Companies have any
liability for unpaid Taxes because it once was) a member of an affiliated group
during any part of which return year any corporation other than the Companies
also was a member of the affiliated group. Except for OFC, which has made an
election to be taxed under subchapter S of the Code (which election is valid and
in full force and effect), none the Companies have never made an election to be
taxed under subchapter S of the Code.
(C) No transaction contemplated by this Agreement is subject to
withholding under Section 1445 of the Code and no stock transfer taxes, real
estate transfer taxes or similar taxes will be imposed upon the transfer and
sale of the Shares pursuant to this Agreement.
3.18 PERSONNEL. Attached hereto as Schedule 3.18 is a list of the
--------- -------------
names and annual rates of compensation of the directors and executive officers
of the Companies, and of the employees of the Companies whose annual rates of
compensation during the fiscal year ended December 31, 1995 (including base
salary, bonus and incentive pay) exceed (or by December 31, 1996 are expected to
exceed) $50,000. Schedule 3.18 also summarizes the bonus, profit sharing,
-------------
percentage compensation, company automobile, club membership, and other like
benefits, if any, paid or payable to such directors, officers, member and
employees during the Companies' fiscal year ended December 31, 1995 and to the
date hereof. Schedule 3.18 also contains a brief description of all material
-------------
terms of employment agreements to which the Companies are a party and all
severance benefits which any director, officer or employee of the Companies are
or may be entitled to receive. The employee relations of the Companies are good
and there is no pending or, to the best knowledge of Sellers or the Companies,
threatened labor dispute or union organization campaign. None of the employees
of the Companies are represented by any labor union or organization. The
Companies are in compliance in all material respects with all Requirements of
Laws respecting employment and employment practices, terms and conditions of
employment, and wages and hours, and are not engaged in any unfair labor
practices. Neither the Companies or Sellers have been advised, or has any
reason to believe, that any of the persons whose names are set forth on Schedule
--------
3.18 or any other employee will not agree to remain employed by the Companies
----
after the consummation of the
-14-
transactions contemplated hereby. There is no unfair labor practice claim
against the Companies before the National Labor Relations Board, or any strike,
dispute, slowdown, or stoppage pending or, to the best knowledge of the
Companies and Sellers, threatened against or involving the Companies, and none
has occurred.
3.19 BUSINESS RELATIONS. Neither the Companies nor Sellers knows or
------------------
has any reason to believe that any customer or supplier of the Companies will
cease to do business with the Companies after the consummation of the
transactions contemplated hereby in the same manner and at the same levels as
previously conducted with the Companies except for any reductions which do not
result in a Material Adverse Change. Neither Sellers or the Companies have
received any notice of any material disruption (including delayed deliveries or
allocations by suppliers) in the availability of any material portion of the
materials used by the Companies nor are the Companies or Sellers aware of any
facts which could lead them to believe that the Business will be subject to any
such material disruption.
3.20 ACCOUNTS RECEIVABLE. All of the accounts, notes, and loans
-------------------
receivable that have been recorded on the books of the Companies are bona fide
and represent amounts validly due for goods sold or services rendered and all
such amounts (net of any allowance for doubtful accounts) will be collected in
full within 180 days following the Closing Date. Except as disclosed on
Schedule 3.20 hereto (a) all of such accounts, notes, and loans receivable are
-------------
free and clear of any Encumbrances; (b) none of such accounts, notes, or loans
receivable is subject to any offsets or claims of offset; and (c) none of the
obligors of such accounts, notes, or loans receivable has given notice that it
will or may refuse to pay the full amount or any portion thereof.
3.21 BANK ACCOUNTS. Attached hereto as Schedule 3.21 is a list of all
------------- -------------
banks or other financial institutions with which the Companies have an account
or maintain a safe deposit box, showing the type and account number of each such
account and safe deposit box and the names of the persons authorized as
signatories thereon or to act or deal in connection therewith.
3.22 WARRANTIES. Except as set forth on Schedule 3.22 and except for
---------- -------------
warranty claims that are typical and in the ordinary course of the Business, no
claim for breach of product or service warranty to any customer has been made
against the Companies since January 1, 1996. To the best knowledge of Sellers
and the Companies, no state of facts exists, and no event has occurred, which
may form the basis of any present claim against the Companies for liability on
account of any express or implied warranty to any third party in connection with
products sold or services rendered by the Companies.
3.23 BROKERS. Neither the Companies nor Sellers have engaged, or
-------
caused to be incurred any liability to any finder, broker, or sales agent in
connection with the origin, negotiation, execution, delivery, or performance of
this Agreement or the transactions contemplated hereby.
-15-
3.24 INTEREST IN COMPETITORS, SUPPLIERS, CUSTOMERS, ETC. No officer,
--------------------------------------------------
director, or shareholder of the Companies or any affiliate of any such officer,
director, or shareholder, has any ownership interest in any competitor,
supplier, or customer of the Companies (other than ownership of securities of a
publicly-held corporation of which such Person owns, or has real or contingent
rights to own, less than one percent of any class of outstanding securities) or
any property used in the operation of the Business.
3.25 INDEBTEDNESS TO AND FROM OFFICERS, DIRECTORS, SHAREHOLDERS, AND
---------------------------------------------------------------
EMPLOYEES. Attached hereto as Schedule 3.25 is a list and brief description of
--------- -------------
the payment terms of all indebtedness of the Companies to officers, directors,
shareholders, members and employees of the Companies and all indebtedness of
officers, directors, shareholders, and employees of the Companies to the
Companies, excluding indebtedness for travel advances or similar advances for
expenses incurred on behalf of and in the ordinary course of the Business,
consistent with past practices.
3.26 UNDISCLOSED LIABILITIES. Except as indicated in Schedule 3.26
----------------------- -------------
and the other Schedules hereto, the Companies do not have any material
liabilities (whether absolute, accrued, contingent or otherwise), of a nature
required by GAAP to be reflected on a corporate balance sheet or disclosed in
the notes thereto, except such liabilities which are accrued or reserved against
in the Financial Statements or disclosed in the notes thereto, including without
limitation any accounts payable or service liabilities of the Companies incurred
prior to the Closing Date.
3.27 INFORMATION FURNISHED. The Companies and Sellers have made
---------------------
available to Global true and correct copies of all material corporate records of
the Companies and all agreements, documents, and other items listed on the
Schedules to this Agreement or referred to in Section 2 of this Agreement and
---------
except as disclosed in Schedule 3.27 hereto, neither this Agreement, the
-------------
Schedules hereto, nor any information, instrument, or document delivered to
Global pursuant to this Agreement contains any untrue statement of a material
fact or omits any material fact necessary to make the statements herein or
therein, as the case may be, not misleading.
In making the representations and warranties set forth above, the term
"material" shall be deemed to mean an amount of money greater than $10,000, 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 Companies, taken
as a whole, in excess of $10,000 per occurrence or $15,000 in the aggregate.
The term "knowledge" shall mean actual knowledge after reasonable investigation.
-16-
ARTICLE IV
GLOBAL'S REPRESENTATIONS AND WARRANTIES
Global represents and warrants to Sellers as follows:
4.1 DUE ORGANIZATION. Global is a corporation duly organized,
----------------
validly existing, and in good standing under the laws of the State of Delaware
and has full corporate power and authority to enter into and perform this
Agreement.
4.2 DUE AUTHORIZATION. The execution, delivery and performance of
-----------------
this Agreement has been duly authorized by all necessary corporate action of
Global, and the Agreement has been duly and validly executed and delivered by
Global and constitutes the valid and binding obligation of Global, enforceable
in accordance with its terms. The execution, delivery, and performance of this
Agreement (as well as all other instruments, agreements, certificates or other
documents contemplated hereby) by Global, shall not (a) violate any Requirements
of Laws or Court Order of any Governmental Body applicable to Global or its
property, (b) violate or conflict with, or permit the cancellation of, or
constitute a default under any agreement to which Global 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, Global, or (d)
violate or conflict with any provision of the charter or bylaws of Global.
4.3 NO BROKERS. Global has not engaged, or caused to be incurred any
----------
liability to any finder, broker or sales agent in connection with the origin,
negotiation, execution, delivery, or performance of this Agreement or the
transactions contemplated hereby.
4.4 INVESTMENT. Global will acquire the Shares for investment and
----------
for its own account and not with a view to the distribution thereof.
ARTICLE V
COVENANTS OF THE COMPANIES AND SELLERS
5.1 CONSENTS OF OTHERS. Prior to the Closing, the Companies and
------------------
Sellers shall use their best efforts to obtain and to cause the Companies to
obtain all authorizations, consents and permits required of the Companies and
Sellers to permit them to consummate the transactions contemplated by this
Agreement.
5.2 SELLER'S EFFORTS. The Companies and Sellers shall use all
----------------
reasonable efforts to cause all conditions for the Closing to be met.
5.3 POWERS OF ATTORNEY. The Companies and Sellers shall cause the
------------------
Companies to terminate at or prior to Closing all powers of attorney granted by
the Companies, other than those relating to service of process, qualification or
pursuant to governmental
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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.]
regulatory or licensing agreements, or representation before the IRS or other
government agencies.
ARTICLE VI
POST-CLOSING COVENANTS
6.1 GENERAL. In case at any time after the Closing any further
-------
action is legally necessary or reasonably desirable to carry out the purposes of
this Agreement, each of the parties will take such further action (including the
execution and delivery of such further instruments and documents) as any other
party reasonably may request, all at the sole cost and expense of the requesting
party (unless the requesting party is entitled to indemnification therefor under
Article VIII below). The Sellers acknowledge and agree that from and after the
Closing Global will be entitled to possession of all documents, books, records,
agreements, and financial data of any sort relating to the Companies, which
shall be maintained at the chief executive office of the Companies; provided,
--------
however, that Sellers shall be entitled to reasonable access to and to make
-------
copies of such books and records at their sole cost and expense and Global will
maintain the books, records and material financial data relating to the
Companies for a period of at least three (3) years. After such date, the
Companies will offer such documentation to Sellers before disposal thereof.
6.2 TRANSITION. For a period of three (3) years following Closing,
----------
the Sellers will not take any action that primarily is designed or intended to
have the effect of discouraging any lessor, licensor, customer, supplier, or
other business associate of the Companies from maintaining the same business
relations with the Companies after the Closing as it maintained with the
Companies prior to the Closing. For a period of three (3) years following
Closing, the Sellers will refer all customer inquiries relating to the Business
to the Companies or Global.
6.3 CONFIDENTIALITY. The Sellers will treat and hold as such all
---------------
Confidential Information, refrain from using any of the Confidential Information
except in connection with this Agreement for a period of three (3) years from
the Closing, and deliver promptly to Global or destroy, at the request and
option of Global, all tangible embodiments (and all copies) of the Confidential
Information which are in its possession except as otherwise permitted herein.
In the event that any Seller is requested or required (by oral question or
request for information or documents in any legal proceeding, interrogatory,
subpoena, civil investigative demand, or similar process) to disclose any
Confidential Information, that Seller will notify Global promptly of the request
or requirement.
6.4 COVENANT NOT TO COMPETE. For and in consideration of the
-----------------------
allocation of [**] of the Purchase Price paid to the Sellers by Global, Sellers
each covenant and agree, for a period of three years from and after the Closing
Date, that they will not, individually or jointly, directly or indirectly, nor
with any member of their immediate family, without the prior written consent of
Global, for or on behalf of any entity:
-18-
(A) become interested or engaged in any manner, directly or
indirectly, or become a shareholder, bondholder, creditor, officer, director,
partner, agent, contractor with, employer or representative of, or in any manner
associated with, or give financial, technical or other assistance to, any
Person, firm or corporation for the purpose of engaging in the copier/ office
equipment dealer or service business within the greater of (i) a 100 mile radius
of the Companies' existing office facilities in North Carolina or (ii) in any
geographic area in which the Companies and/or its subsidiaries currently conduct
business; provided, however, that no owner of less than 1% of the outstanding
-------- -------
stock of any publicly-traded corporation (other than Global) shall be deemed to
be so engaged solely by reason thereof in the copier/office equipment dealer or
service business;
(B) enter into any agreement with, service, assist or solicit
the business of any customers of the Companies for the purpose of providing
office equipment sales or service to such customers or to cause them to reduce
or end their business with the Companies; or
(C) enter into any agreement with, or solicit the employment of
employees, consultants or representatives of the Companies for the purpose of
causing them to leave the employment of the Companies.
ARTICLE VII
CONDITIONS TO OBLIGATION OF PARTIES TO CONSUMMATE CLOSING
7.1 CONDITIONS TO GLOBAL'S OBLIGATIONS. The obligation of Global
----------------------------------
under this Agreement to consummate the closing is subject to the conditions
that:
(A) COVENANTS, REPRESENTATIONS AND WARRANTIES. The Companies
-----------------------------------------
and Seller shall have performed in all material respects all obligations and
agreements and complied in all material respects with all covenants contained in
this Agreement to be performed and complied with by each of them prior to or at
the Closing Date. The representations and warranties of the Companies and
Sellers set forth in this Agreement shall be accurate in all material respects
at and as of the Closing Date with the same force and effect as though made on
and as of the Closing Date except for any changes resulting from activities or
transactions which may have taken place after the date hereof and which are
permitted or contemplated by the Agreement or which have been entered into in
the ordinary course of business and except to the extent that such
representations and warranties are expressly made as of another specified date
and, as to such representation, the same shall be true as of such specified
date.
(B) CONSENTS. All statutory requirements for the valid
--------
consummation by the Companies and Sellers of the transactions contemplated by
this Agreement shall have been fulfilled and all authorizations, consents and
approvals, including those of all federal, state, local and foreign governmental
agencies and regulatory authorities required to be obtained in order to permit
the consummation of the transactions contemplated hereby shall have been
obtained in
-19-
form and substance reasonably satisfactory to Global unless such failure shall
not have a Material Adverse Effect. All approvals of the Board of Directors and
shareholders of the Companies necessary for the consummation of this Agreement
and the transactions contemplated hereby shall have been obtained.
(C) LEASES. The Companies and Xxxxx X. Xxxxx shall have entered
------
into (i) a three-year lease of the Buildings on lease terms acceptable to Global
in the form of Exhibit C-1 hereto and (ii) a one-year lease of the OFC building
-----------
at current market rates in the form of Exhibit C-2 hereto. All other leases of
-----------
buildings and equipment by the Companies shall be on terms reasonably acceptable
to Global and shall remain valid and in full force and effect without the
occurrence of any event of default following the Closing.
(D) DISCHARGE OF INDEBTEDNESS AND LIENS. Sellers and the
-----------------------------------
Companies shall have provided for the payment in full of all Funded Indebtedness
of the Companies and all extended credit from vendors at the Closing (other than
customary accounts payable of the Companies in accordance with past practices).
Such Funded Indebtedness as of May 31, 1996, is listed on Schedule 7.1(d)
---------------
hereto. Sellers shall have also provided for the termination of all
Encumbrances of record on the properties of the Companies, except for Permitted
Encumbrances. Also, prior to the Closing, Xxxxx X. Xxxxx shall take title to
the Mercedes, the Xxxx Deere Tractor, the Toyota Camary and the Chevrolet
Suburban, and Xxxxx X. Xxxxx shall assume all vehicle loans totaling
approximately $22,000, for which he will pay Copy Service $9,000. In addition,
the following indebtedness shall be paid at closing, and all security interests
thereon shall be released as of the Closing:
(i) the $355,000 shareholder note of Xxxxx X. Xxxxx; and
(ii) the $83,000 note owed by Xxxxx X. Xxxxx in connection
with the transfer to him of the Danka stock.
(E) MATERIAL ADVERSE CHANGE. There has been no Material Adverse
-----------------------
Change.
(F) TRANSFER TAXES. Sellers shall be responsible for and shall
--------------
have paid or set aside sufficient funds to pay all stock transfer or gains taxes
incurred in connection with this Agreement.
(G) FINANCIAL CONDITION. The Companies' total adjusted Net
-------------------
Worth as projected at the Closing shall be greater than $580,000 and the
Companies shall continue to have sufficient cash on hand (included in Working
Capital) at the Closing (in an amount not less than $100,000 excluding any
repayment of the shareholder debt and the repayment of the Danka stock note
referred in Section 7.1(d) above), to continue to operate the Business in the
--------------
ordinary course.
-20-
(H) DOCUMENTS TO BE DELIVERED BY SELLERS AND THE COMPANIES. The
------------------------------------------------------
following documents shall be delivered at the Closing by Sellers and the
Companies:
(I) OPINION OF SELLERS' COUNSEL. Global shall have
---------------------------
received an opinion of Xxxxxx X. Xxxxxx, Esq. counsel to Sellers,
dated the Closing Date, in substantially the same form as the form of
opinion that is Exhibit D hereto.
---------
(II) CERTIFICATES. Global shall have received an officer's
------------
certificate and a secretary's certificate of the Companies executed by
officers of the Companies, dated the Closing Date, in substantially
the same forms as the forms of certificates that are Exhibit E hereto.
---------
(III) RELEASE. Sellers shall have furnished the Companies
-------
with a general release of liabilities, excluding compensation and
employee benefits as well as obligations pursuant to this Agreement,
in the form attached as Exhibit F hereto.
---------
(IV) EMPLOYMENT AGREEMENT. Xxxxx X. Xxxxx shall have duly
--------------------
executed and delivered the Employment Agreement in substantially the
same form attached as Exhibit G hereto, pursuant to which he will be
---------
employed by the Companies following the Closing.
(V) OFFICE LEASE. The Companies and Xxxxx X. Xxxxx shall
------------
have entered into (i) a three-year lease of the Buildings on lease
terms acceptable to Global in the form of Exhibit C-1 hereto and (ii)
-----------
a one-year lease of the OFC building at current market rates in the
form of Exhibit C-2 hereto.
-----------
(VI) STOCK CERTIFICATES. Sellers shall have delivered the
------------------
Shares accompanied by duly executed stock powers, together with any
stock transfer stamps or receipts for any transfer taxes required to
be paid thereon.
7.2 CONDITIONS TO SELLERS AND THE COMPANIES' OBLIGATIONS. The
----------------------------------------------------
obligation of Sellers and the Companies under this Agreement to consummate the
Closing is subject to the conditions that:
(A) COVENANTS, REPRESENTATIONS AND WARRANTIES. Global shall
-----------------------------------------
have performed in all material respects all obligations and agreements and
complied in all material respects with all covenants contained in this Agreement
to be performed and complied with by Global prior to or at the Closing and the
representations and warranties of Global set forth in Article IV hereof shall be
accurate in all material respects, at and as of the Closing Date, with the same
force and effect as though made on and as of the Closing Date except for any
changes resulting from activities or transactions which may have taken place
after the date hereof and which are permitted or contemplated by the Agreement
or which have been entered into in the ordinary course of the Business and
except to the extent that such representations and warranties
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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.]
are expressly made as of another specified date and, as to such representations,
the same shall be true as of such specified date.
(B) CONSENTS. All statutory requirements for the valid
--------
consummation by Global of the transactions contemplated by this Agreement shall
have been fulfilled and all authorizations, consents and approvals, including
those of all federal, state, local and foreign governmental agencies and
regulatory authorities required to be obtained in order to permit the
consummation by Global of the transactions contemplated hereby shall have been
obtained unless such failure shall not have a material adverse effect on the
Business. Global shall have used its reasonable best efforts to have obtained
the release of the Seller from all personal guarantees with respect to the
Companies.
(C) DOCUMENTS TO BE DELIVERED BY GLOBAL. The following
-----------------------------------
documents shall be delivered at the Closing by Global:
(I) OPINION OF GLOBAL'S COUNSEL. Sellers shall have
---------------------------
received an opinion of Xxxxx, Xxxxxx & Xxxxxx, L.L.C., counsel to
Global, dated the Closing Date, in substantially the same form as the
form of opinion that is Exhibit H hereto.
---------
(II) CERTIFICATES. Sellers shall have received an
------------
officers' certificate and a secretary's certificate executed by
officers of Global, dated the Closing Date, in substantially the same
forms as the forms of certificates that are Exhibit I hereto.
---------
(III) EMPLOYMENT AGREEMENT. Global shall have caused the
--------------------
Companies to duly execute and deliver the Employment Agreement with
Xxxxx X. Xxxxx in substantially the same form attached as Exhibit G
---------
hereto, pursuant to which he will be employed by the Companies
following the Closing.
(IV) OFFICE LEASE. Global shall have caused the Companies
------------
to duly execute and deliver to Xxxxx X. Xxxxx the lease for the
Buildings in substantially the same forms attached as Exhibit C-1 and
-----------
C-2 hereto.
---
(V) PURCHASE PRICE. Sellers shall have received the
--------------
Purchase Price for the Shares.
(D) RIGHT OF REINVESTMENT. Xxxxx Xxxx shall have been offered
---------------------
the right to invest up to [**] in cash in the capital stock of Global on the
same terms provided to other outside investors in Global.
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ARTICLE VIII
INDEMNIFICATION
8.1 INDEMNIFICATION OF GLOBAL. Sellers agree to jointly and
-------------------------
severally indemnify and hold harmless Global and each officer, director, and
affiliate of Global, including without limitation the Companies or any successor
of the Companies (collectively, the "INDEMNIFIED PARTIES") from and against any
and all damages, losses, claims, liabilities, demands, charges, suits,
penalties, costs and expenses (including court costs and reasonable attorneys'
fees and expenses incurred in investigating and preparing for any litigation or
proceeding) (collectively, the "INDEMNIFIABLE COSTS"), which any of the
Indemnified Parties may sustain, or to which any of the Indemnified Parties may
be subjected, arising out of (A) any misrepresentation, breach or default by
Sellers or the Companies of or under any of the representations, covenants,
agreements or other provisions of this Agreement or any agreement or document
executed in connection herewith; (B) the assertion and final determination of
any claim or liability against the Companies or any of the Indemnified Parties
by any Person based upon the facts which form the alleged basis for any
litigation to the extent it should have been, but was not, reserved for in the
Financial Statements in accordance with GAAP; and (C) the Companies' tortious
acts or omissions to act prior to Closing for which the Companies did not carry
liability insurance for themselves as the insured party, whether or not such
acts or omissions to act result in a breach or violation of any representation
or warranty.
8.2 DEFENSE OF CLAIMS. If any legal proceeding shall be instituted,
-----------------
or any claim or demand made, against any Indemnified Party in respect of which
Sellers may be liable hereunder, such Indemnified Party shall give prompt
written notice thereof to Sellers and, except as otherwise provided in Section
-------
8.3 below, Sellers shall have the right to defend, or cause the Companies or its
---
successors to defend, any litigation, action, suit, demand, or claim for which
it may seek indemnification unless, in the reasonable judgment of Global, such
litigation, action, suit, demand, or claim, or the resolution thereof, would
have an ongoing effect on Global, the Companies or its successors, and such
Indemnified Party shall extend reasonable cooperation in connection with such
defense, which shall be at Sellers' expense. In the event Sellers fail or
refuse to defend the same within a reasonable length of time, the Indemnified
Parties shall be entitled to assume the defense thereof, and Sellers shall be
jointly and severally liable to repay the Indemnified Parties for all expenses
reasonably incurred in connection with said defense (including reasonable
attorneys' fees and settlement payments) if it is determined that such request
for indemnification was proper. If Sellers shall not have the right to assume
the defense of any litigation, action, suit, demand, or claim in accordance with
either of the two preceding sentences, the Indemnified Parties shall have the
absolute right to control the defense of and to settle, in their sole discretion
and without the consent of Sellers, such litigation, action, suit, demand, or
claim, but Sellers shall be entitled, at their own expense, to participate in
such litigation, action, suit, demand, or claim.
8.3 TAX AUDITS, ETC. In the event of an audit of a Tax Return of the
---------------
Companies with respect to which an Indemnified Party might be entitled to
indemnification
-23-
pursuant to this Article VIII, Global shall have the right to control any and
all such audits which may result in the assessment of additional Taxes against
the Companies and any and all subsequent proceedings in connection therewith,
including appeals (subject to the prior written consent of Sellers, which shall
not unreasonably be withheld and subject to the right of Sellers to have their
accountant consult with Global on such audits or procedures at Sellers'
expense). Sellers shall cooperate fully in all matters relating to any such
audit or other Tax proceeding (including according access to all records
pertaining thereto), and will execute and file any and all consents, powers of
attorney, and other documents as shall be reasonably necessary in connection
therewith. If additional Taxes are payable by the Companies as a result of any
such audit or other proceeding, Seller shall be responsible for and shall
promptly pay all Taxes, interest, and penalties to which any of the Indemnified
Parties shall be entitled to indemnification.
8.4 INDEMNIFICATION OF SELLERS. Global agrees to indemnify and hold
--------------------------
harmless Sellers and the Companies and each officer, director, stockholder or
affiliate of the Companies, from and against any Indemnifiable Costs arising out
of (A) any material misrepresentation, breach or default by Global of or under
any of the covenants, agreements or other provisions of this Agreement or any
agreement or document executed in connection herewith and (B) any tortious acts
or omissions by Global or the Companies after the Closing. In addition, the
Companies and Global shall indemnify the Sellers for any payment or satisfaction
of any guarantees by Sellers of the Companies' obligations occurring after the
Closing Date.
8.5 GENERAL RIGHT OF OFFSET. In lieu of receiving a cash payment
-----------------------
from the Sellers, Global, in good faith, may elect to offset against payments
under the Seller Note, the amount of any Indemnifiable Costs or any other
payments to which Global may become entitled to by reason of the provisions of
this Agreement. In the event that Global offsets more than the amount of any
Indemnifiable Costs (as finally determined), Global shall be responsible to
Sellers for such sums which should not have been subject to an offset, together
with interest at the rate of 8% per annum.
8.6 LIMITS ON INDEMNIFICATION. All Indemnifiable Costs sought by any
-------------------------
party hereunder shall be net of any insurance proceeds received by such Person
with respect to such claim (less the present value of any premium increases
occurring as a result of such claim). Except for any claims for breach of the
representations and warranties of the Sellers under Sections 3.1, 3.2, 3.3 or
-------------------------
3.17 hereof (the indemnification for which shall expire on the expiration of the
----
applicable statute of limitations), the indemnification provided under this
Article VIII shall expire on the third anniversary of the Closing Date. The
Sellers shall not be obligated to pay any amounts for indemnification under this
Article VIII until the aggregate indemnification obligation hereunder exceeds
$10,000, whereupon Sellers shall be liable for all amounts for which
indemnification may be sought. Notwithstanding the foregoing, in no event shall
the aggregate liability of Sellers to Global exceed the Purchase Price (except
for claims made for any breach of the representations and warranties of Sellers
under Sections 3.1, 3.2, 3.3, or 3.17 hereof). However nothing in this Article
---------------------- ----
VIII shall limit Global in any way in exercising or securing any remedies
provided by applicable common law with respect to the
-24-
conduct of Sellers in connection with this Agreement or in the amount of damages
that it can recover from the Sellers in the event that Global successfully
proves intentional fraud or intentional fraudulent conduct in connection with
this Agreement.
ARTICLE IX
MISCELLANEOUS
9.1 MODIFICATIONS. Any amendment, change or modification of this
-------------
Agreement shall be void unless in writing and signed by all parties hereto. No
failure or delay by any party hereto in exercising any right, power or privilege
hereunder (and no course of dealing between or among any of the parties) shall
operate as a waiver of any such right, power or privilege. No waiver of any
default on any one occasion shall constitute a waiver of any subsequent or other
default. No single or partial exercise of any such right, power or privilege
shall preclude the further or full exercise thereof.
9.2 NOTICES. All notices and other communications hereunder shall be
-------
in writing and shall be deemed to have been duly given when personally
delivered, or 48 hours after deposited in the United States mail, first-class,
postage prepaid, or by facsimile addressed to the respective parties hereto as
follows:
Global:
------
Global Imaging Systems Inc.
X.X. Xxx 000000
Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxx, President
Fax No.: (000) 000-0000
Tel No.: (000) 000-0000
With a copy to:
Xxxxx, Xxxxxx & Xxxxxx, L.L.C.
Suite 1200
0000 Xxx Xxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxxxxxxxx X. Xxxxx
Fax No.: (000) 000-0000
Tel No.: (000) 000-0000
-25-
The Companies or Sellers:
------------------------
Copy Service & Supply, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxx, President
Fax No.: (000) 000-0000
Tel No.: (000) 000-0000
With a copy to:
Law Offices of Xxxxxx X. Xxxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxx, Esq.
Fax No.: (000) 000-0000
Tel No.: (000) 000-0000
or to such other address as to any party hereto as such party shall designate by
like notice to the other parties hereto.
9.3 COUNTERPARTS. This Agreement may be executed in several
------------
counterparts, each of which shall be deemed an original but all of which
counterparts collectively shall constitute one instrument, and in making proof
of this Agreement, it shall never be necessary to produce or account for more
than one such counterpart.
9.4 EXPENSES. Each of the parties hereto will bear all costs,
--------
charges and expenses incurred by such party in connection with this Agreement
and the consummation of the transactions contemplated herein, provided, however,
that Sellers shall bear all costs and expenses of (i) any broker involved in
this transaction and (ii) all legal expenses of Sellers or the Companies with
respect to this Agreement and the transactions contemplated hereby.
9.5 BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon
--------------------------
and inure to the benefit of the Companies, Global and Sellers, their heirs,
representatives, successors, and permitted assigns, in accordance with the
terms hereof. This Agreement shall not be assignable by the Companies or
Sellers without the prior written consent of Global. This Agreement shall be
assignable by Global to a wholly-owned subsidiary of Global without the prior
written consent of Sellers.
9.6 ENTIRE AND SOLE AGREEMENT. This Agreement and the other
-------------------------
schedules and agreements referred to herein, constitute the entire agreement
between the parties hereto and supersede all prior agreements, representations,
warranties, statements, promises, information,
-26-
arrangements and understandings, whether oral or written, express or implied,
with respect to the subject matter hereof.
9.7 GOVERNING LAW. This Agreement and its validity, construction,
-------------
enforcement, and interpretation shall be governed by the substantive laws of the
State of North Carolina.
9.8 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
-----------------------------------------------------
Regardless of any investigation at any time made by or on behalf of any party
hereto or of any information any party may have in respect thereof, all
covenants, agreements, representations, and warranties and the related
indemnities made hereunder or pursuant hereto or in connection with the
transactions contemplated hereby shall survive the Closing for a period of three
years, provided (a) the representations and warranties contained in Section 3.17
------------
of this Agreement, and the related indemnities, shall survive the Closing until
the expiration of the applicable statutes of limitations for determining or
contesting Tax liabilities and (b) the representations and warranties contained
in Sections 3.1, 3.2 and 3.3 of this Agreement, and the related indemnities,
-------------------------
shall survive the Closing indefinitely.
9.9 INVALID PROVISIONS. If any provision of this Agreement is deemed
------------------
or held to be illegal, invalid or unenforceable, this Agreement shall be
considered divisible and inoperative as to such provision to the extent it is
deemed to be illegal, invalid or unenforceable, and in all other respects this
Agreement shall remain in full force and effect; provided, however, that if any
provision of this Agreement is deemed or held to be illegal, invalid or
unenforceable there shall be added hereto automatically a provision as similar
as possible to such illegal, invalid or unenforceable provision and be legal,
valid and enforceable. Further, should any provision contained in this
Agreement ever be reformed or rewritten by any judicial body of competent
jurisdiction, such provision as so reformed or rewritten shall be binding upon
all parties hereto.
9.10 PUBLIC ANNOUNCEMENTS. Neither party shall make any public
--------------------
announcement of the transactions contemplated hereby without the prior written
consent of the other party, which consent shall not be unreasonably withheld.
9.11 REMEDIES CUMULATIVE. The remedies of the parties under this
-------------------
Agreement are cumulative and shall not exclude any other remedies to which any
party may be lawfully entitled.
9.12 WAIVER. No failure or delay on the part of any party in
------
exercising any right, power, or privilege hereunder or under any of the
documents delivered in connection with this Agreement shall operate as a waiver
of such right, power, or privilege; nor shall any single or partial exercise of
any such right, power, or privilege preclude any other or further exercise
thereof or the exercise of any other right, power, or privilege.
9.13 DISPUTE RESOLUTION. ALL DISPUTES BETWEEN SELLERS AND GLOBAL WITH
------------------
RESPECT TO ANY PROVISION OF THIS AGREEMENT OR
-27-
THE RIGHTS AND OBLIGATIONS OF SELLERS AND GLOBAL HEREUNDER (OTHER THAN DISPUTES
INVOLVING ALLEGATIONS OF INTENTIONAL FRAUD), WHICH CANNOT BE RESOLVED BY MUTUAL
AGREEMENT, WILL BE RESOLVED BY BINDING ARBITRATION IN ACCORDANCE WITH THE RULES
OF THE AMERICAN ARBITRATION ASSOCIATION IN THE STATE OF NORTH CAROLINA OR BY ANY
OTHER MEANS OF ALTERNATIVE DISPUTE RESOLUTION MUTUALLY AGREED UPON BY THE
PARTIES.
* * * *
-28-
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed as of the date and year first above written.
GLOBAL:
------
GLOBAL IMAGING SYSTEMS INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
THE COMPANIES:
-------------
COPY SERVICE & SUPPLY, INC.
Attest:
/s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxx
---------------------- ---------------------
Secretary Title: President
---------------------
OFFICE FURNITURE CONCEPTS, INC.
Attest:
/s/ Xxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxx
---------------------- ---------------------
Secretary Title: President
---------------------
CSS LEASING, L.L.C.
/s/ Xxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxx
---------------------- ---------------------
Member Manager Title: Member-Manager
---------------------
SELLERS:
-------
/s/ Xxxxx X. Xxxxx
------------------
XXXXX X. XXXXX
/s/ Xxxxxxx X. Xxxxx
--------------------
XXXXXXX X. XXXXX
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