-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GtmDBT7tmcf1xJ/vehH6hjUoAZj9NrvDAFD3jG5eYvlamnriI48Vheb6lCBYkqMc 1/Sr9xr/tMzVGzWvmZFpJQ== 0000950131-96-001335.txt : 19960401 0000950131-96-001335.hdr.sgml : 19960401 ACCESSION NUMBER: 0000950131-96-001335 CONFORMED SUBMISSION TYPE: 10KSB40 PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960329 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: GLOBAL MAINTECH CORP CENTRAL INDEX KEY: 0000783738 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 411523657 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10KSB40 SEC ACT: 1934 Act SEC FILE NUMBER: 000-14692 FILM NUMBER: 96542007 BUSINESS ADDRESS: STREET 1: 9220 JAMES AVE SOUTH CITY: BLOOMINGTON STATE: MN ZIP: 55431 BUSINESS PHONE: 6128850400 MAIL ADDRESS: STREET 1: 9220 JAMES AVENUE SOUTH CITY: BLOOMINGTON STATE: MN ZIP: 55431 FORMER COMPANY: FORMER CONFORMED NAME: MIRROR TECHNOLOGIES INC /MN/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: COMPUTER AIDED TIME SHARE INC DATE OF NAME CHANGE: 19900122 10KSB40 1 FORM 10KSB40 U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-KSB ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 1995 Commission File Number 0-14692 GLOBAL MAINTECH CORPORATION f/k/a MIRROR TECHNOLOGIES, INCORPORATED MINNESOTA 41-1523657 State of Incorporation I.R.S. Employer Identification No. 6468 City West Parkway Eden Prairie, MN 55344 (612) 944-0400 Securities registered under Section 12(g) of the Exchange Act: COMMON STOCK, NO PAR VALUE Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Check if there is no disclosure of delinquent filers in response to Item 405 of Regulations S-B is not contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [x] The Company's revenues for the Fiscal Year Ended December 31, 1995 totaled $1,173,744. The aggregate market value of voting stock held by non-affiliates of the registrant as of March 1, 1996 was approximately $2,100,000 based upon the closing bid price on the OTC Bulletin Board on that date. The number of shares of the Company's no par value common stock outstanding as of March 1, 1996 was 45,185,139. Transitional Small Business Disclosure Format (Check One): Yes No X --- --- DOCUMENTS INCORPORATED BY REFERENCE Portions of the Company's Proxy Statement for the Annual Meeting of Shareholders for the year ended December 31, 1995 are incorporated by reference in part III COPIES OF THE COMPANY'S FORMS 10-KSB, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, MAY BE OBTAINED FREE OF CHARGE FROM JAMES GEISER AT THE COMPANY, 6468 CITY WEST PARKWAY, EDEN PRAIRIE, MINNESOTA 55344, PHONE 612-944-0400 PART I ------ ITEM 1. DESCRIPTION OF BUSINESS. General The Company was incorporated under the laws of the State of Minnesota in 1985 as Computer Aided Time Share, Inc. In September 1989, in connection with the Company's merger with Mirror Technologies, Incorporated, the Company's name was changed to Mirror Technologies, Incorporated ("Mirror"). As of March 1, 1996/December 31, 1995, the Company had no paid employees for a period of over one year and its principal subsidiary, Global MAINTECH, Inc., formerly MAINTECH Resources, Inc., a Minnesota corporation ("MAINTECH"), had six paid employees as of March 1, 1996. At the Company's annual shareholders meeting on May 15, 1995, the shareholders approved, among other things, the change of its name to Global MAINTECH Corporation from Mirror Technologies, Incorporated. Effective January 1, 1995, the Company merged with MAINTECH (the "Merger"), pursuant to the terms of an Agreement and Plan of Merger, dated December 6, 1994, as amended (the "Agreement"), among the Company, Mirror Consolidation Company, a Minnesota corporation and wholly owned subsidiary of Mirror ("Mirror Subsidiary"), and MAINTECH. Under the terms of the Agreement, each share of MAINTECH's common stock was converted into 358.75 shares of the Company's common stock. As a result, the Company issued 28,700,001 shares of common stock in exchange for all of the outstanding capital stock of MAINTECH. MAINTECH had four operating units all related to the IBM mainframe computer business which included engineering, brokerage, parts and services to users of IBM mainframe computers ("Brokerage") and a start up unit engaged in the development of software and the sale of a hardware product when sold in combination is designed to automate the operation of large corporate data centers ("ICS"). Effective December 31, 1995, the Company sold its Brokerage business, including over $400,000 in related inventory, to one of the Company's former executives. The Company recorded losses from discontinued operations of approximately $600,000 in connection with the Brokerage business including a loss on the sale. The effect of this loss was partially offset by debt forgiveness of $400,000 by two of the Company's executive officers which was recorded as additional paid-in-capital. Global MAINTECH, Inc., a wholly owned subsidiary of the Company, is the operating entity resulting from the Merger. For the fiscal years 1992, 1993 and 1994 the majority of the Company's activity had been in buying and selling used IBM mainframes, parts and features. During this time the Company changed its business strategy and began to maintain and monitor computer equipment in large data centers. In late 1994, the Company became the exclusive distributor, outside of Japan, of the monitoring system of Circle Corporation of Japan. In 1995, the Company adapted this monitoring system which is oriented to single- unit users and to simple functions, to meet the more complex requirements of the U. S. market. While the Company continues to buy some hardware and software from Circle Corporation, the Company has added significant architecture, compiling and source code. The updated system provides enhanced operational control over computer hardware and software. In 1995, the Company made its first three installations of this system, now called the Intelligent Console System or ICS, in the data centers of a large industrial and financial company. The ICS is a tool designed to automate many of the processes associated with the physical and operational attributes of mainframe-based data centers. It is an external system that monitors and controls the subject mainframe and other data center computers from a workstation quality RISC computer, which is housed separately from the computers it controls. ICS users are able to reduce staffing levels, consolidate all data center operations and technical support functions to a single location regardless of the physical location of the data center(s) and achieve improved levels of operational control and system availability. The ICS competes with internal monitoring systems (which monitor certain pieces of hardware internally) sold by other companies. Sales of internal monitoring systems within the U.S. were estimated at $700 million for 1994. It is believed the market recently has been expanding at a rapid rate, growing over 30% in recent years. The Company believes the ICS is well suited for use in enterprise computing applications. Enterprise computing is the term associated with the hardware and software that enables computers that contain different processors to be linked together. The Company has adapted the ICS and coupled it with proprietary software to form an enterprise 2 computing management system. The market size for computer networking systems, which is one segment of the enterprise computing system market, is $15 billion per year within the U.S. The ICS can also be used to monitor and control desktop and mid-range servers. As a result of discontinuing the Brokerage operations the Company is now engaged solely in the business of manufacturing and selling computer systems that monitor and control large computer data centers. This new business generated over 90% of the Company's revenue in 1995 from one customer. While this concentration on one customer is significant, the Company believes that the credit risk is minimal due to the superior credit worthiness of this customer. ITEM 2. DESCRIPTION OF PROPERTY. MAINTECH conducts its business in a 3,100 square foot office at 6468 City West Parkway, Eden Prairie, MN 55344. The lease for this facility provides for monthly payments through July 31, 1998 without extension or renewal. The parent company also conducts business in a 400 square foot office facility located at 63 South Ninth Street, suite 450, Minneapolis, MN 55402. This facility is leased under a rent-free operating lease. This lease can be terminated by either party with 30 days notice. The Company is responsible for utilities, insurance, and other operating expenses. ITEM 3. LEGAL PROCEEDINGS. On February 21, 1996, MFP Technology Services Inc. ("MFP") commenced a suit against Global MAINTECH, Inc. in Hennepin County District Court for the State of Minnesota. The suit alleges breach of contract arising out of actions occurring in 1994. MFP was the owner of an IBM mainframe which the Company purchased in its computer brokerage business. This contract was subsequently renegotiated to defer payment for the computer. MFP is seeking collection of approximately $100,000 it claims is owed under a contract executed in 1994 in the original amount of $377,000. The Company has recorded liabilities as of December 31, 1995 equal to the claim by MFP. The Company has not responded to this action but intends to contest this claim. The Company currently is consulting with legal counsel with respect to this matter. Management of the Company believes that if the Company was held liable for the claimed amount, such a decision would not have a material adverse effect on the Company's financial position, however it would adversely affect its liquidity and cash flow. The Company is not a party to any other material pending litigation. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There were no matters submitted to a vote of the Company's shareholders during the quarter ended December 31, 1995. 3 PART II ------- ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. The Company's common stock trades on the OTC Bulletin Board under the symbol "GBMT". Prior to May 26, 1995, the Company's common stock traded under the symbol "MIRR". Until June 23, 1994, the Company's common stock traded on the Nasdaq Small Cap Market. The following are the high and low bid quotations for the Company's common stock as reported on the OTC Bulletin Board during each quarter of the fiscal years ended December 31, 1995 and 1994. These quotations represent prices quoted between dealers, without retail mark-up, mark-down or commission, and may not necessarily represent actual transactions.
YEAR ENDED DECEMBER 31, 1995 Common Stock Quarter Low High ---------------------------- First $0.06 $0.13 Second 0.05 0.11 Third 0.03 0.08 Fourth 0.04 0.09 YEAR ENDED DECEMBER 31, 1994 Common Stock Quarter Low High ---------------------------- First $0.16 $0.38 Second 0.19 0.28 Third 0.09 0.25 Fourth 0.06 0.13
As of March 1, 1996, the Company had 494 shareholders of record. The Company has not paid cash dividends on its common stock and does not anticipate paying cash dividends in the forseeable future. ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Results of Operations The consolidated financial statements that accompany this discussion show the operating results of the Company for the years ended December 31, 1995 and 1994. These results include the operations of Global MAINTECH, Inc., a new subsidiary which had been engaged in certain aspects of the mainframe computer business (Brokerage). In December 1995, the Brokerage business was discontinued. The Company continues in the computer monitoring and control systems business. The Company, prior to its merger with MAINTECH had discontinued all of its operations, restructured its balance sheet and planned to merge with an operating company. As a result, the Company merged with Global MAINTECH, Inc. effective January 1, 1995. Although Mirror is the surviving legal entity, for accounting and reporting purposes, MAINTECH is the reporting entity. In the second fiscal quarter of 1995, the Company's name was changed to Global MAINTECH Corporation (the "Company") from Mirror Technologies, Incorporated. Net cash used in operating/discontinued activities for the year ended December 31, 1995 was approximately $650,000 compared to $485,000 in the year ended December 31, 1994. Cash was used to reduce various short term liabilities including accounts payable and deferred revenue of approximately $200,000. Cash was also used to fund an increase in accounts receivable. The net loss includes non-cash charges for depreciation and amortization of approximately $76,000, and a loss on disposal of discontinued operations of approximately $420,000. Cash was provided to MAINTECH by an intercompany advance of approximately $713,000 from its parent. 4 Sales from continuing operations for the year ended December 31, 1995 were approximately $1,174,000 compared to sales of continuing operations of $56,000 of MAINTECH in the year ended December 31, 1994. Continuing sales for the current year ended December 31, 1995 reflect business activity generated by the new business unit, known as the Intelligent Console System or ICS unit. ICS unit sales were just over $1,000,000 with additional sales of approximately $160,000 coming from the Company's remote support facility business. In the year ended December 31, 1994, the remote support facility, which is the only continuing business from fiscal year 1994, generated approximately $56,000 in revenue. The remote facility revenue is related to a remote monitoring process whereby a warning call is initiated by an IBM mainframe when the internal operating software detects a problem. After the Company began to focus on the ICS unit, it reduced its activities in the remote support facility business unit. As a result, further growth in remote support facility revenues is not expected. In the 1995 fiscal year, the gross margin improved substantially due to sales of ICS units and a one-time sale of $166,000 of certain data base maintenance programs. No comparable sales were recorded in the fiscal year ended December 31, 1994. Selling, general and administrative costs for the year ended December 31, 1995 were approximately $765,000 compared to approximately $840,000 for the same period in the prior year. This $75,000 decrease is primarily due to decreases in utilities, depreciation, building rent and insurance expenses. The decrease in utilities, building rent and insurance is related to closing an office in Texas and reduced activities at the corporate level. The decline in depreciation is a function of the depreciation rate decline when using the double declining method. These decreases were partially offset by increases in corporate governance expenses associated with a public company (MAINTECH was privately held in the prior year). Research and development expenses in 1995 relate to the development of the ICS unit and comprise salaries and consulting fees for programming expertise. Non-operating expenses in the year ended December 31, 1995 primarily consisted of interest expense. The decrease is partially due to the elimination of the subordinated notes payable to two officers of the Company and the payment of mortgage debt after the sale of a building owned by MAINTECH. Interest expense includes accrued interest on the Company's convertible subordinated debentures, notes payable to vendors, a bank, and individuals. Total debt outstanding declined approximately $1.2 million from 1994 to 1995. Cash provided by investing activities of approximately $1,400,000 reflects the proceeds received from the sale of the building formerly occupied by MAINTECH and cash received in the merger with Global MAINTECH Corporation (formerly, Mirror Technologies). Both the merger and the building sale occurred in January 1995. The Company sold the office and warehouse owned by MAINTECH producing net cash after payment of the mortgage on the property of approximately $125,000. Cash was used for investing activities in the year ended December 31, 1994 due to the acquisition of office equipment. Cash was used by financing activities partially due to the sale of MAINTECH's building in January 1995, a substantial portion of which was used to repay the mortgage note payable and to reduce other notes payable of the Company. Cash was raised through the sale of common stock at $0.06 per share as follows: (i) by the sale in late August 1995 of 2.5 million shares to a Japanese company affiliated with the ICS product; (ii) by sale pursuant to a private placement memorandum in November and December 1995 in the approximate amount of $200,000; and, (iii) by the conversion of $100,000 of debt to common shares. In the year ended December 31, 1994, MAINTECH raised cash solely through the net issuance of notes payable as previously described. In the year ended 1994 cash was used to pay monthly dividends when MAINTECH was a privately held company. Liquidity and Capital Resources As of December 31, 1995, the Company had negative working capital of approximately $1,019,000 compared to negative working capital of $2,037,000 in the year ended December 31, 1994. The negative working capital as of December 31, 1995 is primarily due to notes payable of $479,000 and the Company's convertible subordinated debentures of approximately $262,000. The scheduled payment of a $190,000 note payable is currently being renegotiated. The remaining notes payable have scheduled payments throughout the next fiscal year and the convertible subordinated debentures have a due date of July 1, 1996. The remaining negative working capital is related to certain large accounts payable to Brokerage vendors and the Japanese vendor for the ICS unit. The Company's vendors have been cooperative throughout the year and it is believed payment schedules for these accounts payable will continue to be worked out in 1996 to match the Company's ability to pay. However, there can be no assurance that the Company will be able to continue to enjoy the forbearance of its creditors and in the event 5 the Company is unable to do so, it may have a material adverse effect on the Company's operations. Due to cash flow constraints the Company has been delinquent under each of the above mentioned contractual liabilities and has been slow to pay certain of its accounts payable at various times since June 1995. As of December 31, 1995 the Company is delinquent under the terms of the $190,000 note payable. The holder of this note has declined to exercise its rights under the note during the renegotiations. The Company expects to conclude these negotiations successfully and expects its working capital will then be sufficient to support cash requirements to June 30, 1996 without obtaining additional sources of capital. However, there can be no assurance that the Company will be successful in these negotiations and in the event the Company is unable to do so, it may have a material adverse effect on the Company's operations. During the 1995 fiscal year the Company renegotiated the payment terms for two of its notes payable. One note holder converted $100,000 of his note into common stock at a conversion price of $.06 per share. Also during the current fiscal year, subordinated debt of $400,000 was forgiven by two of the Company's executive officers and recorded as additional paid-in-capital. The Company's assets are insufficient to satisfy the existing debt schedule. It is believed additional sales of the ICS units will also enhance the Company's ability to raise capital to replace some of its maturing debt. However, no assurances can be given that these events will transpire in accordance with expectations. During the year ended December 31, 1995, the Company used its cash to reduce current liabilities and established new payment terms on certain other liabilities. Cash was used primarily to reduce accounts payable and deferred revenue and to fund an increase in accounts receivable. The cash used by operating activities was funded entirely by cash advances pursuant to an intercompany note from the Company's parent of approximately $713,000. Cash generated from the sale of assets, primarily related to the building sale, and from the issuance of common stock, was used to reduce mortgage and notes payable of approximately $1.2 million. In the year ended December 31, 1994, MAINTECH used cash from its financing activities primarily to fund operating losses, not funded from increases in accounts payable, accrued liabilities and a reduction of inventory In June 1995, the Company settled a lawsuit commenced in 1993 by a competitor of MAINTECH. While the Company strongly contested the lawsuit, it agreed to settle the lawsuit at an amount less than the estimated legal costs associated with the scheduled court procedures. The Company paid $45,000 to the counterparty during 1995. The Company's losses from discontinued operations and its remaining debt obligations, indicate additional capital will be needed to fund the Company's ongoing operations. The Company believes increased sales of its ICS product will provide operating capital to satisfy some of these requirements. However, it is likely additional capital will be needed to satisfy all the obligations as they become due. There can be no assurance that either sufficient sales increases will occur or that additional sources of new capital will be found. If the Company does not succeed in one or both of these areas, the affect on the business could be material and adverse. During the last six months of the year ended December 31, 1995, the Company borrowed from time to time against its accounts receivable from its principal bank and may continue to do so in the future. As of December 31, 1995, the Company had no debt outstanding from its principal bank. During 1995, the Company began to focus its activities on the computer monitoring and control systems operations and to reduce its Brokerage operations. In 1995, the Company discontinued and, effective December 31, 1995, sold its Brokerage operations. In the last six months of 1995, the Company completed the requirements to fulfill the delivery and installation of three ICS units to a large industrial and financial company. The liquidity and capital resources of the Company have been diminished as a result of the discontinued operations and a substantial portion of the accounts payable and current interest bearing obligations that remain with the Company as of December 31, 1995 relate to the Brokerage activities not assumed by the buyer of the discontinued operations. The Company's ability to renegotiate or convert portions of its notes payable and to attract additional capital to facilitate these negotiations is uncertain, as is the timing of the new sales of ICS units. While the Company believes in the viability of its operating plan and currently anticipates that its operating plan will be achieved, there can be no assurances to that effect. To the extent this plan is delayed, the Company will seek the continued forbearance of its lenders. 6 Recent Developments The Company recently entered into a contract with Burlington Northern Railroad Company to provide four ICS units. Delivery of the ICS units will occur in the Company's first and second fiscal quarters. The purchase price for the ICS units totals $800,000. Under the terms of the contract, the Company will provide both software and hardware maintenance for which the Burlington Northern Railroad Company will pay a monthly maintenance fee on a per unit basis beginning the month following installation. 7 ITEM 7. FINANCIAL STATEMENTS. Index to Financial Data Page ---- Independent Auditors' Report 9 Consolidated balance sheets 10 Consolidated statements of operations 12 Consolidated statements of stockholders' equity (deficit) 13 Consolidated statements of cash flows 14 Notes to consolidated financial statements 15 8 INDEPENDENT AUDITORS' REPORT Board of Directors and Stockholders of Global MAINTECH Corporation: We have audited the accompanying consolidated balance sheets of Global MAINTECH Corporation (formerly Mirror Technologies, Incorporated) and subsidiary as of December 31, 1995 and 1994, and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Global MAINTECH Corporation and subsidiary as of December 31, 1995 and 1994, and the results of their operations and their cash flows for the years then ended, in conformity with generally accepted accounting principles. The accompanying consolidated financial statements have been prepared assuming that Global MAINTECH Corporation will continue as a going concern. As discussed in note 3, the Company's 1995 net loss, working capital deficit and accumulated deficit raise substantial doubt about the entity's ability to continue as a going concern. Management's plans in regard to these matters are also described in note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. /S/ KPMG PEAT MARWICK LLP Minneapolis, Minnesota February 23, 1996 9
- -------------------------------------------------------------------------------- PART I. FINANCIAL INFORMATION - -------------------------------------------------------------------------------- ITEM 1. FINANCIAL STATEMENTS GLOBAL MAINTECH CORPORATION CONSOLIDATED BALANCE SHEETS ASSETS December 31, December 31, 1995 1994 ------------ ------------ CURRENT ASSETS Cash and cash equivalents $ 39,364 $ 24,309 Accounts receivable, less allowance for doubtful accounts of $15,000 and $56,000 321,052 222,439 Other receivables 40,218 29,090 Inventory 186,812 - Prepaid expenses and other 21,004 19,551 -------- ---------- Total current assets 608,450 295,389 Assets of discontinued operations (note 4) Inventory - 573,612 -------- ---------- PROPERTY AND EQUIPMENT, NET 16,300 849,932 -------- ---------- $624,750 $1,718,933 ======== ==========
The accompanying notes are an integral part of these consolidated statements. 10 GLOBAL MAINTECH CORPORATION CONSOLIDATED BALANCE SHEETS LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
December 31, December 31, 1995 1994 ------------------------------ CURRENT LIABILITIES Accounts payable $ 808,430 $ 857,400 Current portion of notes payable (note 6) 479,038 588,304 Mortgage note payable (note 6) - 620,000 Convertible subordinated debentures (note 5) 261,750 - Accrued liabilities Compensation and payroll taxes 33,810 19,992 Interest (notes 5 and 6) 38,070 24,163 Other 6,430 73,895 Deferred revenue - 148,000 ----------- ----------- Total current liabilities 1,627,528 2,331,754 ----------- ----------- Notes payable, less current portion (note 6) 58,000 490,531 Subordinated notes payable to officers (note 9) - 400,000 ----------- ----------- Total liabilities 1,685,528 3,222,285 STOCKHOLDERS' EQUITY (DEFICIT) (note 7) Voting, convertible preferred stock - Series A, convertible into one common stock share for each preferred share, no par value; 4,439,900 shares authorized; 4,326,036 shares issued and outstanding; total liquidation preference of outstanding shares-$1,622,000 405,770 - Common stock, no par value; 245,560,100 shares authorized; 52,438,473 shares issued and outstanding - 800 Additional paid-in-capital 906,658 79,200 Accumulated deficit (2,373,206) (1,583,352) ----------- ----------- Total stockholders' deficit (1,060,778) (1,503,352) ----------- ----------- Commitments and contingencies (notes 4, 9 and 11) $ 624,750 $ 1,718,933 =========== ===========
The accompanying notes are an integral part of these consolidated statements. 11
GLOBAL MAINTECH CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS Years Ended December 31 ------------------------------------ 1995 1994 -------------- ---------------- Net sales $ 1,173,744 $ 56,088 Cost of sales 350,585 34,560 ----------- ----------- Gross profit 823,159 21,528 Operating expenses Selling, general and administrative 763,807 838,080 Research and development 113,234 - ----------- ----------- Loss from operations (53,882) (816,552) Other income (expense): Interest expense (134,453) (411,821) Interest income 7,309 156 Other (7,770) 3,280 ----------- ----------- Total other expense, net (134,914) (408,385) ----------- ----------- Loss from continuing operations before income taxes (188,796) (1,224,937) Provision for income taxes 5,850 4,832 ----------- ----------- Loss from continuing operations (194,646) (1,229,769) ----------- ----------- Discontinued operations (note 4) Loss from operations (174,578) (168,530) Loss on disposal (420,630) - ----------- ----------- Loss from discontinued operations (595,208) (168,530) ----------- ----------- Net loss $ (789,854) $(1,398,299) =========== =========== Net earnings (loss) per common and common equivalent share (notes 2, 4 and 7): Continuing operations $ (0.004) $ (0.027) Discontinued operations (0.012) (0.003) ----------- ----------- Net loss (1) $ (0.016) $ (0.030) (1) =========== =========== Weighted average number of common and common equivalent shares outstanding (1) 50,640,491 46,288,331 (1) =========== ===========
(1) Net earnings (loss) per share and weighted average number of common and common equivalent shares outstanding for the year ended, December 31, 1994 assume the merger as described in note 2 had occurred on January 1, 1994 for presentation purposes. The accompanying notes are an integral part of these consolidated statements 12 GLOBAL MAINTECH CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) Years ended December 31, 1995 and 1994
Preferred stock Common stock Additional --------------------------------------- paid-in Accumulated Shares Amount Shares Amount capital deficit Total - --------------------------------------------------------------------------------------------------------------------------- Balance at December 31, 1993 - - 80,000 $ 800 $ 79,200 ($45,053) $ 34,947 Net loss - - - - - (1,398,299) (1,398,299) Distributions to stockholders - - - - - (140,000) (140,000) - ---------------------------------------- --------------------------------------------------------------------------------- Balance at December 31, 1994 - - 80,000 800 79,200 (1,583,352) (1,503,352) Net loss - - - - - (789,854) (789,854) Stockholder debt forgiveness (note 10) - - - - 400,000 - 400,000 Subsidiary common Stock retired in connection with merger (note 2) - - (80,000) (800) - - (800) Commons stock issued in connection with merger (note 2) - - 45,351,806 - 21,471 - 21,471 Common stock issued (note 7) - - 7,790,000 - 456,200 - 456,200 Stock subscriptions receivable (note 7) - - (816,667) - (47,000) - (47,000) Stock issue costs (note 7) - - - - (13,843) - (13,843) Preferred stock related to merger (note 2) 4,439,370 416,400 - - - - 416,400 Converted preferred shares (note 7) (113,334) (10,630) 113,334 - 10,630 - - - --------------------------------------------------------------------------------------------------------------------------- Balance at December 31, 1995 4,326,036 $405,770 52,438,473 - $906,658 ($2,373,206) ($1,060,778) =========================================================================================================================== The accompanying notes are an integral part of these consolidated statements.
13 GLOBAL MAINTECH CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, ------------------------------ 1995 1994 ---------- ---------- Cash flows from operating activities: Net loss $(789,854) $(1,398,299) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 76,253 127,936 Loss on disposal of discontinued operations 420,630 - Changes in operating assets and liabilities: Increase in accounts and other receivables (109,741) (152,473) Increase (decrease) in inventory (33,830) 430,577 Decrease in prepaid expenses 1,453 8,027 Increase (decrease) in accounts payable (48,970) 430,597 Decrease in accrued expenses (39,739) (59,481) Increase (decrease) in deferred revenue (148,000) 129,712 Increase in other 20,467 - --------- ----------- Cash used by operating and discontinued activities (651,331) (483,404) --------- ----------- Cash flows from investing activities: Proceeds (payment) from sale (purchase) of property and equipment 764,454 (7,226) Net cash received in merger 637,071 - --------- ----------- Cash provided (used) by investing activities 1,401,525 (7,226) --------- ----------- Cash flows from financing activities: Proceeds from issuance of common stock 426,658 - Decrease in short-term notes payable (109,266) (324,164) Principal payments on mortgage note payable (620,000) - Increase (decrease) of notes payable (432,531) 830,000 Dividend distribution - (140,000) --------- ----------- Cash provided (used) by financing activities (735,139) 365,836 --------- ----------- Net increase (decrease) in cash 15,055 (124,794) Cash and cash equivalents at beginning of year 24,309 149,103 --------- ----------- Cash and cash equivalents at end of year $ 39,364 $ 24,309 ========= =========== Supplemental disclosures of cash flow information: Cash paid during the year for: Interest $ 125,517 $ 393,112 Taxes $ 8,126 -
Supplemental disclosure of noncash investing and financing activities: During 1995, a $100,000 portion of a note payable was converted to common stock and $400,000 of subordinated notes payable were forgiven. The accompanying notes are an integral part of these consolidated statements. 14 GLOBAL MAINTECH CORPORATION - ------------------------------------------------------------------------------ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ------------------------------------------------------------------------------ NOTE 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF BUSINESS: At the Company's annual shareholders meeting on May 15, 1995, the shareholders approved, among other things, the change of its name to Global MAINTECH Corporation from Mirror Technologies, Incorporated. The renamed Mirror Technologies, Incorporated is the parent company of Global MAINTECH, Inc. Global MAINTECH, Inc. ("MAINTECH") is the operating entity resulting from the merger between MAINTECH and Mirror Technologies, Incorporated ("Mirror") effective January 1, 1995 (see note 2). For the years 1992, 1993 and 1994 the majority of MAINTECH's activity involved buying and selling used IBM mainframes, parts and features. During this time the Company changed its business strategy and began to maintain and monitor computer equipment in large data centers. In late 1994, the Company became the exclusive distributor, outside of Japan, of the monitoring system of Circle Corporation of Japan. In 1995, the Company adapted this monitoring system which is oriented to single-unit users and to simple functions, to meet the more complex requirements of the U. S. market. While the Company continues to buy some hardware and software from Circle Corporation, the Company has added significant architecture, compiling and source code. The updated system provides enhanced operational control over computer hardware and software. In 1995, the Company made its first three installations of this system, now called the Intelligent Console System or ICS, in the data centers of a large industrial and financial company. The ICS is a tool designed to automate many of the processes associated with the physical and operational attributes of mainframe-based data centers. It is an external system that monitors and controls the subject mainframe and other data center computers from a workstation quality RISC computer, which is housed separately from the computers it controls. ICS users are able to reduce staffing levels, consolidate all data center operations and technical support functions to a single location regardless of the physical location of the data center(s) and achieve improved levels of operational control and system availability. PRINCIPLES OF CONSOLIDATION: As a result of the merger described in note 2, the consolidated financial statements represent the historical financial information of MAINTECH and include the accounts of Mirror since the date of the merger. All significant intercompany accounts and transaction have been eliminated in consolidation. CASH AND CASH EQUIVALENTS: The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. INVENTORY: Inventory is stated on a first in, first out (FIFO) basis at the lower of cost or market (net realizable value). PROPERTY AND EQUIPMENT: Property and equipment is recorded at cost. Depreciation is provided for principally using the double declining method, based on the estimated useful lives of the respective assets which generally have lives of three years. Maintenance and repairs are charged to expense as incurred. Renewals and betterments are capitalized and depreciated over their estimated useful service lives. REVENUE RECOGNITION: Revenue is recognized upon shipment. Deferred revenue is recorded when the Company receives customer payments before shipment. The Company sells maintenance agreements which require minor updates of software to be delivered to the customers free of charge. New versions of the Company's software representing a major upgrade are not a part of the maintenance agreements. The Company expenses the costs of minor updates to its software as incurred. RESEARCH AND DEVELOPMENT: Research and development costs are expensed as incurred. 15 GLOBAL MAINTECH CORPORATION - ------------------------------------------------------------------------------ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ------------------------------------------------------------------------------ NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCK: Net loss per share is computed based on the weighted average number of common and common equivalent shares outstanding each period they have a dilutive effect. Common equivalent shares are excluded for 1995 and 1994 because of their anti-dilutive effect. INCOME TAXES: Deferred taxes are provided on a liability method for temporary differences and operating loss and tax credit carryforwards. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. RECLASSIFICATIONS: Certain reclassifications have been made to the 1994 data to conform with the 1995 presentation. USE OF ESTIMATES: Management of the company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with generally accepted accounting principles. Actual results could differ from these estimates. NOTE 2. MERGER TRANSACTION Effective January 1, 1995, Mirror merged with MAINTECH, a Minnesota corporation (the "Merger"), pursuant to the terms of an Agreement and Plan of Merger, dated December 6, 1994, as amended (the "Agreement"). Under the terms of the Agreement, each share of MAINTECH's common stock was converted into 358.75 shares of Mirror's common stock. As a result, Mirror issued 28,700,001 shares of common stock in exchange for all of the outstanding capital stock of MAINTECH. In connection with the Merger, outstanding options of MAINTECH to purchase 68,214 shares of MAINTECH's common stock converted into the right to purchase approximately 24,472,006 shares of Mirror's common stock at an exercise price of $0.03 per share. Stock for the purchase of options covering 24,200,001 shares of Mirror's common stock will vest on June 1, 1999, or earlier, subject to the merged business (the "Company") attaining certain earnings levels. Subsequent to December 1995, options to purchase approximately 3,700,000 shares were canceled due to the departure of an officer of the Company. As a result of this Merger and prior to the dilution of subsequent issues of common stock, the former shareholders of MAINTECH held unregistered stock comprising approximately 58 percent of the common stock and common stock equivalents of the Company and if the options to purchase common stock are exercised, these shareholders will hold approximately 70 percent of the outstanding shares of the Company. The Merger resulted in the former shareholders of MAINTECH having majority common stock ownership and majority board of directors representation in the surviving entity. Accordingly, for financial statement purposes, the transaction has been accounted for as if MAINTECH acquired Mirror. This transaction was accounted for as a reverse acquisition but Mirror will remain as a surviving legal entity. The Merger was accounted for as a purchase of the net assets of Mirror by MAINTECH. Mirror assets consisted principally of cash with book value approximating fair value. Subsequent to the 1995 year end, and in addition to the cancellation of stock options, the former shareholders of MAINTECH voluntarily forfeited 6,700,001 shares of common stock pursuant to an agreement related to the November 1, 1995 Private Placement Memorandum. As a result the percentage currently held by these particular stockholders is approximately 43 percent and 52 percent, respectively compared to the 58 percent and approximate 70 percent listed above. Two of the officers of MAINTECH were elected to the Board of Directors of the Company subsequent to the consummation of the Merger. If the above described merger had occurred effective January 1, 1994, net sales would not have changed and the pro-forma net loss would have been approximately $2,070,000 for the year ended December 31, 1994. 16 GLOBAL MAINTECH CORPORATION - -------------------------------------------------------------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- NOTE 3. GOING CONCERN As of December 31, 1995, the Company had negative working capital of approximately $1,019,000 compared to negative working capital of $2,037,000 at December 31, 1994. Due to cash flow constraints the Company has been delinquent under each of the contractual liabilities in notes 5 and 6 at year end and has been slow to pay certain of its accounts payable during 1995. (At year end the Company is delinquent under one note payable of $190,000.) The Company's assets are insufficient to satisfy the existing debts as they become due. The Company's net losses from operations and its remaining debt obligations, indicate additional capital will be needed to fund the Company's ongoing operations. The Company believes increased sales of its ICS product will provide operating capital to satisfy some of these requirements. But it is likely additional capital will be needed to satisfy all the obligations as they become due. There can be no assurance that either sufficient sales increases will occur or that the Company will be able to raise additional capital. If the Company is not successful in one or both of these areas, the affect on the business would be material and adverse. During the six months ended December 31, 1995, the Company borrowed from time to time against its accounts receivable from its principal bank and may continue to do so in the future. As of December 31, 1995, the Company had no debt outstanding from its principal bank. The Company's ability to renegotiate or convert to equity portions of its notes payable and subordinated debentures and to attract additional capital to facilitate these negotiations is uncertain, as is the timing of any sales of ICS units. While the Company believes in the viability of its operating plan and currently anticipates that its operating plan will be achieved, there can be no assurances to that effect. To the extent this plan is delayed, the Company will seek the continued forbearance of its lenders. NOTE 4. DISCONTINUED OPERATIONS, SALE AND BASIS OF ACCOUNTING During the fourth quarter of 1995, the Company's Board of Directors made the decision to discontinue that portion of the operations which brokers and sells parts for IBM mainframe computers ("Brokerage") due to poor financial performance. In addition, the prospects for future profitablilty were poor. Effective December 31, 1995 the Company sold the Brokerage inventory and certain selected liabilities for a total of $123,000 to Norcom Resources, Inc., a privately held corporation whose sole shareholder is a former officer and a major shareholder of the Company. This sale resulted in a loss on disposal of $420,630. Due to the uncertainty of collection, the Company will treat payments under this sale as income when received. The sales proceeds are secured by approximately 2,080,000 shares of the Company's common stock held by this former officer. In conjunction with the sale, the Company has agreed to remove this former officer as personal guarantor from a certain note payable in the amount of $190,000 prior to March 31, 1997. The Company will issue additional shares of common stock at $0.06 per share to this individual to the extent any debt is still outstanding under this note on which this former officer is guarantor on March 31, 1997. 17 GLOBAL MAINTECH CORPORATION - -------------------------------------------------------------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- Selected financial information for the discontinued operations for the years ended December 31, 1995 and 1994, is as follows:
Year Ended December 31, 1995 1994 ------------------------ Revenue $6,138,316 $22,122,938 Cost of sales 5,590,976 21,108,649 ------------------------ Gross Profit 547,340 1,014,289 Operating expenses 721,918 1,182,819 ------------------------ Operating loss from discontinued operations ($174,578) ($168,530) ========================
NOTE 5. CONVERTIBLE SUBORDINATED DEBENTURES The Company's 11 percent convertible subordinated debentures are due July 1, 1996, with interest due semi-annually, and are redeemable by the Company or convertible at the option of the holder into 209,400 common shares at a price per share of $1.25. During the year the Company purchased at face value bonds totaling $25,000. Expenses associated with the original issuance of the unconverted debentures are being amortized over a period ending July 1, 1996. NOTE 6. NOTES PAYABLE MAINTECH had a mortgage secured by land and building in the amount of $620,000 at 3 1/2% interest at December 31, 1994. The note required monthly interest payments of $1,808 until February 1, 1995 when the entire principal balance was due. On January 17, 1995, the Company sold the land and building and paid the mortgage note in full. The sale transaction resulted in a net gain on sale of $8,200 and cash of approximately $125,000, net of related costs. The cash received was used to pay off the Bank Windsor note included in notes payable in 1994 listed below. Notes payable at December 31, 1995 and 1994 are comprised of the following:
1995 1994 --------------------- --------------------- Interest Interest Amount rate Amount rate --------------------- --------------------- Notes payable to First Bank, due in quarterly installments of $16,750 April 1 1995 and $25,000 through March 31, 1997 $174,750 10.5% $250,000 11.5% Note payable to related party, due in monthly installments beginning January 1, 1995 100,000 13.0% 250,000 13.0% Note payable to vendor, due in monthly installments of $10,267 through March 1, 1996, at which date the remaining balance is due 190,246 13.5% 248,835 13.5% Bank Windsor, due in January, 1995 - 130,000 8.5% Note payable to Mirror (see note 2),
18 GLOBAL MAINTECH CORPORATION - -------------------------------------------------------------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - --------------------------------------------------------------------------------
due in January 1998, secured by accounts receivable. This note is eliminated in consolidation in 1995 - 200,000 12.0% Note payable to vendor due in quarterly installments of $19,000 plus interest until paid 72,042 6.0% -------- --------- 537,038 1,078,835 Less current portion (479,038) (588,304) -------- --------- $ 58,000 $490,531 ======== =========
The interest rate on the note payable to First Bank and note payable to vendor in the amount of $190,246 are based on prime plus 2% and prime plus 5%, respectively. The Company is technically in default pursuant to the terms of note payable of $190,246. The Company is currently renegotiating the terms of this note payable and expects to reach a mutually satisfactory conclusion. This note payable is guaranteed by two of the officers of the Company. The long term portion of the notes payable is due in 1997. NOTE 7. STOCKHOLDERS' EQUITY COMMON STOCK WARRANTS: The Company has or, subsequent to year end, will issue warrants in conjunction with common stock issued pursuant to the Private Placement Memorandum dated November 1, 1995. These warrants are exercisable at $0.072 per share and expire on December 31, 2000. As of December 31, 1995, the Company had issued warrants to purchase 19,200 shares of common stock outstanding and subsequent to year end the Company issued an additional 541,000 such warrants COMMON STOCK OPTIONS: The Company's stock option plan ("Plan"), provides for granting to the Company's employees, directors and consultants, qualified incentive and nonqualified options to purchase common shares of stock. The Plan was amended during 1995 to increase the number of aggregate options which can be issued to 50,000,000 shares of common stock. Qualified incentive options must be granted with exercise prices equal to the fair market value of the stock at the date of grant. Nonqualified options must be granted with exercise prices equal to at least 85% percent of the fair market value of the stock at the date of grant. Information with respect to stock options under the plan are summarized as follows:
Incentive Stock Options Nonqualified Options ---------------------------- ------------------------- Shares Price Range Shares Price Range Outstanding at December 31, 1994 100,000 $0.06 415,000 $1.125 to 1.25 Granted 24,768,000 $0.03 to 0.06 - - Canceled (3,708,000) $0.03 - - ---------------------------- ------------------------- Total outstanding at December 31, 1995 21,160,000 $0.03 to 0.06 415,000 $1.125 to 1.25 ============================ =========================
Options for 1,583,000 shares of common stock were exercisable as of December 31, 1995. No options were exercised in 1995. 19 GLOBAL MAINTECH CORPORATION - -------------------------------------------------------------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- COMMON STOCK ISSUED: In addition to the common stock issued pursuant to the merger described in note 2, the Company issued 7,790,000 shares of common stock some of which are included in stock subscriptions receivable at December 31, 1995. In addition, 113,334 shares of common stock were issued to preferred shareholders on a one-for-one exchange conversion in accordance with terms of the preferred stock series A. Of the 7.8 million shares issued, 3.4 million shares were issued pursuant to a Private Placement Memorandum dated November 1, 1995 and 2.5 million shares were issued to a Japanese company which is an affiliate of the company with which MAINTECH has a distribution agreement. In December an additional 1.67 million shares were issued to a debt holder in exchange for debt in the amount of $100,000 and 200,000 shares were issued to a vendor in cancellation of a trade payable. The 7.8 million shares were issued at an average value per share of $0.06. Subsequent to December 31, 1995 the three former owners of MAINTECH voluntarily canceled 6.7 million shares originally issued in the January 1995 merger with MAINTECH. This share reduction was in consideration for the shares issued pursuant to the Private Placement Memorandum dated November 1, 1995. NOTE 8. INCOME TAXES At December 31, 1995, the Company had a net operating loss carryforward of approximately $9.2 million. As a result of the January 1, 1995 ownership change as described in note 2 and prior ownership changes, approximately $8.4 million of the net operating loss carryforward will be subject to an annual limitation as defined by Section 382 of the Internal Revenue Code. The annual limitation for losses incurred prior to January 1, 1995 is approximately $200,000. Due to this limitation, approximately $5.2 million of the net operating loss will expire prior to utilization. In addition, the utilization of these losses may be further limited by application of the separate return limitation year rules. Subsequent and future stock sales and/or conversion of debt to common stock could further limit these net operating losses available in any one year. The net deferred taxes includes the following as of:
December 31, December 31, 1995 1994 ------------ ------------ Deferred tax asset $1,445,000 $3,694,000 Valuation allowance for deferred tax asset (1,445,000) (3,694,000) ---------- ---------- Net $0 $0 ========== ==========
The tax effects of temporary differences as of December 31, 1995 and 1994 are shown as follows:
Year Ended Year Ended December 31, December 31, 1995 1994 ------------ ------------ Allowance for doubtful accounts $ 5,000 $ 19,000 Net operating loss carryforward 1,440,000 3,675,000 ---------- ---------- Subtotal 1,445,000 3,694,000 Valuation allowance for deferred tax asset (1,445,000) (3,694,000) ---------- ---------- Net $0 $0 ========== ==========
20 GLOBAL MAINTECH CORPORATION - -------------------------------------------------------------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- The reconciliation between the federal income tax provision computed at the statutory rate and the income tax provision recorded is as follows:
Year Ended Year Ended December 31, December 31, 1995 1994 ------------ ------------ Benefit at statutory rate ($268,600) ($475,400) State income tax benefit, net of federal (23,700) (55,900) Change in valuation allowance (2,249,000) 531,300 Effect of change in ownership on net operating loss carryforward 2,541,300 - ---------- --------- Net federal tax provision $0 $0 ========== =========
The state income tax provision for the year ended December 31, 1995 was $5,850 and was $4,832 in the prior year ended December 31, 1994. NOTE 9. OPERATING LEASES The Company has operating leases for an automobile, telephone equipment and its offices. The rental payments under these leases are charged to expense as incurred. All the leases provide that the Company pay taxes, maintenance, insurance, and other operating expenses applicable to the leases. Lease expense in 1995 and 1994 was approximately $154,000 and $132,000, respectively. The future minimum lease payments are approximately $88,000, $40,000 an $19,000 for the years 1996, 1997 and 1998, respectively. NOTE 10. STOCKHOLDER DEBT FORGIVENESS Prior to the merger on January 1, 1995 described in note 2, MAINTECH issued two subordinated notes of $200,000 each for cash received individually from the president of MAINTECH, and an executive vice-president of MAINTECH. Subsequent to December 31, 1995, the executive vice-president left the employ of the Company in connection with the purchase of the Brokerage inventory by Norcom Resources, Inc. During the year ended December 31, 1995 the $400,000 balance due was forgiven by these two individuals for no additional consideration. Accordingly, the Company has reflected the debt forgiveness as an addition to paid-in-capital in the Consolidated Statements of Stockholders' Equity (Deficit). NOTE 11. LITIGATION The Company is a defendant in a suit filed in late February 1996. The suit asks for judgment to collect approximately $100,000 relating to a contract executed in 1994. No action has yet been taken by the Company, due to an extension of time granted by the Plaintiff. However, the amount claimed by the Plaintiff is recorded as a liability of the Company as of December 31, 1995. In the opinion of the Company's management, if the suit continues, an adverse decision would not have a material adverse effect on the Company's financial position, however it would adversely affect its liquidity and cash flow. ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE. The Company has previously reported a change in accountants on Form 10-KSB dated December 31, 1994, (File No. 0-14692) 21 PART III -------- ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT. The information with respect to Directors of the Company under the caption "Election of Board of Directors" contained in the Company's Proxy Statement relating to the Annual Meeting of Shareholders for the year ending December 31, 1995 is incorporated herein by reference. The information with respect to the Executive Officers of the Company under the caption "Executive Officers" contained in the Company's Proxy Statement relating to the Annual Meeting of Shareholders for the year ending December 31, 1995 is incorporated herein by reference. The information contained under the caption "Compliance with Section 16(a) of the Securities Exchange Act of 1934" contained in the Company's Proxy Statement relating to the Annual Meeting of Shareholders for the year ending December 31, 1995 is incorporated herein by reference. ITEM 10. EXECUTIVE COMPENSATION. The information contained under the caption "Executive Compensation" in the Company's Proxy Statement relating to the Annual Meeting of Shareholders for the year ending December 31, 1995 is incorporated herein by reference. ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. The information contained under the caption "Security Ownership of Certain Beneficial Owners and Management" in the Company's Proxy Statement relating to the Annual Meeting of Shareholders for the year ending December 31, 1995 is incorporated herein by reference. ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. The information contained under the caption "Related Transactions" in the Company's Proxy Statement relating to the Annual Meeting of Shareholders for the year ending December 31, 1995 is incorporated herein by reference. ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K. (a) Index of Exhibits Exhibit Description Number ----------- ------- Agreement and Plan of Merger dated December 6, 2 1994, as amended, among the Company, Mirror Consolidation Company, and MAINTECH Resources, Inc. (the Articles of Merger are attached thereto as Exhibit A) (Incorporated herein by reference to Exhibit 2 to the Company's Form 8-K filed with the Commission on January 19, 1995, (File No. 0-14692). Bylaws of the Company, as amended (incorporated 3.2 herein by reference to Exhibit 3.2 to the Registrant's Form S-1 (File No. 33-34894). Restated Articles of Incorporation of the Company, 3.3 as amended in May 15, 1995 annual meeting of common stockholders (corporate name change and increase in authorized stock). 22 Form of 11% Convertible Subordinated Debenture due 4.2 July 1, 1996 (incorporated herein by reference to Exhibit 4.2 to the Company's Annual Report on Form 10-K for the year ended March 31, 1991, (File No. 0-14692). Form of Registration Agreement between the Company 4.3 and holders of the Company's 11% Convertible Subordinated Debentures Due July 1, 1996 (incorporated herein by reference to Exhibit 4.4 to the Registrant's Form 10-K for the year ended March 31, 1991, (File No. 0-14692). Form of Certificate of the Company's Series A 4.4 Convertible Preferred Stock (incorporated herein by reference to the Registrant's Form 10-KSB for the year ended December 31, 1994, (File No. 0-14692). Form of Certificate of the Company's Common Stock 4.5 following change of corporate name change. The Company's 1989 Stock Option Plan (incorporated 10.1 herein by reference to Exhibit 28 to the Company's Registration Statement on Form S-8, File 33-33576). Amendments No. 1 and 2, dated October 17, 1991 and 10.2 April 24, 1992, respectively, to the Company's 1989 Stock Option Plan (incorporated herein by reference to Exhibit 10.1 to the Company's Annual Report on Form 10-K for the year ended March 31, 1992, (File No. 0-14692). Mirror Technologies, Incorporated 401(K) Plan 10.3 effective April 1, 1992 (incorporated herein by reference Exhibit 10.6 to the Company's Annual Report on Form 10-K for the year ended March 31, 1992, (File No. 0-14692). Lease Agreement dated April 22, 1993 between the 10.4 Company and Opus Corporation (incorporated by reference to Exhibit 10.4 to the Company's Annual Report on Form 10-KSB for the year ended March 31, 1993, (File No. 0-14692). Sales Agency Agreement dated January 6, 1994 10.5 between the Company and MacUSA, Inc. (incorporated by reference to the Company's Form 8-K filed on January 21, 1994, (File No. 0-14692). Office Lease Agreement between the Company and 10.6 Jason Bassett Creek Plaza dated March 28, 1994 (incorporated herein by reference to the Company's Form 10-KSB for the fiscal year ended March 31, 1994). Office Lease Agreement between the Company and 10.7 Physician's and Surgeon's Capital Corporation dated October 1, 1994 (incorporated herein by reference to the Registrant's Form 10-KSB for the year ended December 31, 1994, (File No. 0-14692) 23 Office and Warehouse Lease Agreement between 10.8 MAINTECH Resources, Inc. and David D. Heinen dated December 20, 1994 (incorporated herein by reference to the Registrant's Form 10-KSB for the year ended December 31, 1994, (File No. 0-14692). Exclusive Distributor and Licensing Agreement 10.9 between Yutaka Takagi and Circle Corporation and MAINTECH Resources, Inc. and Global MAINTECH, Inc. dated December 20, 1994 (incorporated herein by reference to the Registrant's Form 10-KSB for the year ended December 31, 1994, (File No. 0-14692). Office Lease Agreement between the Company and 10.10 Charles and Sharron Mills dated December 12, 1995. Brokerage Asset Purchase Agreement between Norcom 10.11 Resources, Inc. and Global MAINTECH, Inc. dated December 31, 1995. Amendment No. 3, dated May 15, 1995 to the 10.12 Company's 1989 Stock Option Plan. Subsidiaries of the Registrant 21 Consent of KPMG Peat Marwick LLP 23 Financial data schedule 27 (b) Reports on Form 8-K No Form 8-K was filed in the last quarter of the twelve month period ended December 31, 1995. 24 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Global MAINTECH Corporation Dated: March 27, 1996 By /s/ James Geiser -------------------------- James Geiser Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
NAME TITLE DATE - ---- ----- ---- /s/ David McCaffrey Chief Executive Officer - ----------------------- (Principal Executive Officer) and March 27, 1996 David McCaffrey Director /s/ James Geiser Chief Financial Officer and March 27, 1996 - ----------------------- Secretary (Principal Financial James Geiser and Accounting Officer) /s/ Robert E. Donaldson Director March 27, 1996 - ----------------------- Robert E. Donaldson
25 Exhibit Index
Exhibit Page Description Number Number - --------------------------------------------------------------------- ------- ------ Restated Articles of Incorporation of the Company, as amended in 3.3 27 May 15, 1995 annual meeting of common stockholders (corporate name change and increase in authorized stock). Form of Certificate of the Company's Common Stock 4.5 28 following change of corporate name change. Office Lease Agreement between the Company and Charles and 10.10 30 Sharron Mills dated December 12, 1995. Brokerage Asset Purchase Agreement between Norcom Resources, 10.11 46 Inc. and Global MAINTECH, Inc. dated December 31, 1995. Amendment No. 3, dated May 15, 1995 to the Company's 1989 10.12 83 Stock Option Plan. Consent of KPMG Peat Marwick LLP 23 84 Financial data schedule 27 85
26 EX-3.3 2 CERTIFICATE OF AMENDMENT EXHIBIT 3.3 GLOBAL MAINTECH CORPORATION CERTIFICATE OF AMENDMENT I, James Geiser, Secretary of Global MAINTECH Corporation, formerly, Mirror Technologies, Incorporated, do hereby certify that the following amendments to Articles 1 and 3.1 of the Articles of Incorporation of said corporation have been duly adopted by the shareholders of that corporation. Such amendments were adopted by the shareholders of such corporation on May 15, 1995 and pursuant to Chapter 302A of the Minnesota Business Corporation Act. "Article 1 of the Amended and Restated Articles of Incorporation of Mirror Technologies, Incorporated is amended in its entirety to read as follows: Article 1. Name ---------------- The name of the corporation is Global MAINTECH Corporation. Article 3.1 of the Amended and Restated Articles of Incorporation of Mirror Technologies, Incorporated is amended in its entirety to read as follows: 3.1. Designation and Number. The aggregate number of authorized shares of the corporation is 250,000,000 shares, no par value, of which 4,439,900 shares shall be designated Series A Convertible Preferred Stock, and 245,560,100 shares shall be divisible into such classes and series, have such designations, voting rights, and other rights and preferences and be subject to such restrictions, as the Board of Directors of the corporation may from time to time establish, fix and determine consistent with Articles 4 and 5 of the hereof. Unless otherwise designated in these Restated Articles or by the Board of Directors, all issued shares shall be deemed Common Stock with equal rights and preferences. The rights, preferences, privileges and restrictions granted to and imposed upon the Common Stock and the Series A Convertible Preferred Stock (the "Preferred Stock") are set forth in Article 3." /s/ James Geiser Secretary 1 EX-4.5 3 STOCK CERTIFICATE Exhibit 4.5 [LOGO] Global MAINTECH Corporation NUMBER SHARES M- GLOBAL MAINTECH CORPORATION INCORPORATED UNDER THE LAWS OF THE STATE OF MINNESOTA SEE REVERSE SIDE FOR CERTAIN DEFINITIONS ----------------- CUSIP 379338 10 6 ----------------- THIS CERTIFIES THAT SPECIMEN is the owner of FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, NO PAR VALUE, OF ------------============ GLOBAL MAINTECH CORPORATION ============------------ transferable only on the books of the Corporation by the holder hereof in person or by Attorney upon surrender of this certificate properly endorsed. This certificate is not valid unless countersigned by the Transfer Agent and Registrar. IN WITNESS WHEREOF, the said Corporation has caused this certificate to be signed by facsimile signatures of its duly authorized officers. Dated: /s/ James Geiser /s/ Robert E. Donaldson SECRETARY PRESIDENT Countersigned and Registered: NORWEST BANK MINNESOTA, N.A. Transfer Agent and Registrar By Authorized Signature The Issuer of the securities represented by this certificate will furnish to any shareholder upon request and without charge, a full statement of the designations, preferences, limitations and relative rights of the shares of each class or series authorized to be issued by such issuer, so far as they have been determined, and the authority of the board of directors of such issuer to determine the relative rights and preferences of subsequent classes or series. - -------------------------------------------------------------------------------- The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: UTMA - ________ Custodian __________ TEN COM - as tenants in common (Cust) (Minor) TEN ENT - as tenants by entireties under Uniform Transfer to Minors JT TEN - as joint tenants with right of survivorship and not as tenants Act ______________________________ in common (State) Additional abbreviations may also be used though not in the above list. - -------------------------------------------------------------------------------- For value received ______ hereby sell, assign and transfer unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE - -------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - ----------------------------------------------------------------------- Shares of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint - ----------------------------------------------------------------------- Attorney to transfer the said stock on the books of the within-named Corporation with full power of substitution in the premises. Dated ----------------------------------------- ----------------------------------------- NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER. SIGNATURE GUARANTEED EX-10.10 4 SUB-LEASE AGREEMENT Exhibit 10.10 [GLOBAL MAINTECH LOGO] SUB-LEASE AGREEMENT ------------------- This Agreement is entered into this 12th day of December, l995, between Global MAINTECH, Inc., a Minnesota corporation (MAINTECH), and Art-In-Motion, Inc., a Minnesota corporation ("Art"). WHEREAS, Art has occupied and leased the space at 6468 City West Parkway, Eden Prairie ("space") and seeks to vacate the space; WHEREAS, MAINTECH desires to occupy the space; WHEREAS, Art is in Chapter ll reorganization and is obligated to past rent to Charles C. Mills, the landlord; WHEREAS, Art has the right to sublease the space, and both parties have notified Charles C. Mills and have received verbal acceptance that Art may sublease to MAINTECH; NOW, THEREFORE, the parties mutually agree: l. MAINTECH hereby subleases the space from Art; 2. The terms of the sublease are identical to those of the lease dated June 22, l995 between Art and Charles and Sharron Mills (the owner and landlord of the space) and this lease is attached to and considered a part of this Agreement; 3. The deposit referred in the lease dated June 22, l995 and made by Art is now the property of MAINTECH; 4. MAINTECH is not obligated for any outstanding obligations of Art, including those relating to the space or the lease dated June 22, l995; 5. MAINTECH shall be obligated for lease payments with the time period beginning January l, l996 and continuing to the end of the lease period; 6. MAINTECH is accepting the space on an "as is" basis and has no claims on Art for cleaning or repairs; 7. This Agreement shall be governed by the laws of the State of Minnesota and shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. AGREED BY: Global MAINTECH, Inc. Accepted by by /s/ David McCaffrey /s/ Charles S. Mills --------------------------- --------------------------- its Chief Executive Officer Art-In-Motion, Inc by /s/ John Gulfuss --------------------------- its 1 OFFICE LEASE ------------ THIS AGREEMENT, made this 22nd day of June, 1995, by and between Charles and Sharron Mills, hereinafter called the Lessor or Landlord and Art-In-Motion, Inc. hereinafter called the Tenant. WITNESSETH: That the Lessor, in consideration of the rents and covenants hereinafter mentioned, does hereby demise, lease and let unto the Tenant, and the Tenant does hereby hire and take from the Lessor, the following described premises located in the County of Hennepin and State of Minnesota, more particularly described as comprising approximately 3,106 square feet on the main floor of the Building located at 6468 City West Parkway, which is to be used and occupied as an office for the transaction of the business of Tenant, which is production of visual and audio communications and for no other purpose. TO HAVE AND HOLD said premises just as they are, without any liability or obligation on the part of the Lessor to make any alteration, improvements or repairs of any kind on or about said premises (save and except as otherwise stated herein) for a term of Three Years from and after the 1st day of August, 1995 and terminating on the 31st day of July, 1998. In the event that said premises are not ready for occupancy on the commencement date thereof, this lease shall not be void or voidable, nor shall Lessor be liable to Tenant for any loss or damage resulting therefrom; but in such event there shall be a pro- rata abatement of rent for the period between the aforesaid commencement date of the term and the date when said premises are ready for occupancy. ARTICLE I. BASE RENT The Tenant shall pay to the Lessor as base rent for the premises $2,682.21 per month ($32,186.52 per annum) in advance on the first day of each month during the entire term of this lease. In the event of any fractional months occurring during the term of this lease, Tenant shall pay a pro-rata portion of said fractional month. Said rental is sometimes hereinafter referred to as "annual base rental" or "monthly base rental." Rent will commence September 15, 1995. There will be no rent charge for July 1995, August 1995, or the first two weeks in September 1995. All rental checks shall be made payable to Charles and Sharron Mills, and mailed to 650 S. E. Sixth Avenue, Pompano Beach, FL 33060. ARTICLE II. ADDITIONAL RENTAL In addition to the annual base rental described in the foregoing paragraph of this lease, Tenant shall pay all of its utilities in relation to the premises; water, sewer, rubbish removal, gas, and electricity. ARTICLE III. SECURITY DEPOSIT On or before July 1, 1995, Tenant shall deposit with Lessor the sum of Two Thousand Six Hundred Eighty Two and 21/100 Dollars ($2,682.21) (the"Security Deposit") as security for the full and faithful performance of this Lease to be performed by Tenant. If Tenant defaults with respect to any provision of this Lease, including, without limitation, the provisions relating to the payment of Base Rent, or Additional Rent, the repair of damage to the Premises and/or cleaning or restoring the Premises upon termination of this Lease, Lessor may use, apply or retain all or any part of this security deposit for the payment of any Base Rent, or Additional Rent or other sum in default and any amounts which Lessor may spend or become obligated to spend by reason of Tenant's default to the full extent permitted by law. If any portion of said deposit is so used, applied or retained, Tenant shall, within the (10 days after written demand therefor, deposit cash with Lessor in an amount sufficient to restore the security deposit to an amount equal to one monthly installment of the then-applicable Base Rent, and other charges payable hereunder by Tenant multiplied by the number of months worth of Base Rent represented by the initial security deposit, and Tenant's failure to 2 do so shall be a material default and breach of the Lease. Lessor shall not be required to keep any security deposit separate from its general funds, and Tenant shall not be entitled to interest on any such deposit. If Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, the security deposit or any balance thereof shall be returned to Tenant or to the last assignee of Tenant's interest hereunder within sixty days after the expiration of the Term. ARTICLE IV. OVERDUE AMOUNTS--RENT INDEPENDENT Any installment of Base Rent, or other charges to be paid by Tenant accruing under the provisions of this Lease, which shall not be paid when due, shall bear interest at the rate of eighteen percent (18%) per annum from the date when the same is due until the same shall be paid, but if such rate exceeds the maximum interest rate permitted by law, such rate shall be reduced to the highest rate allowed by law under the circumstances. Tenant's covenants to pay the Base Rent and the Additional Rent are independent of any other covenant, condition, provision or agreement herein contained. ARTICLE V. INSURANCE Lessor shall keep the Building insured for the benefit of Lessor in an amount equivalent to the full replacement value thereof (excluding foundation, grading and excavation costs) against: (a) loss or damage by fire; and (b) such other risk or risks of a similar or dissimilar nature as are now, or may in the future be, customarily covered with respect to buildings and improvements similar in construction, general location, use, occupancy and design to the Building, including, but without limiting the generality of the foregoing, windstorms, hail, explosion, vandalism, malicious mischief, civil commotion, and such other coverage as may be deemed necessary by Lessor, providing such additional coverage is obtainable and providing such additional coverage is such as is customarily carried with respect to buildings and improvements similar in construction, general location, use, occupancy and design to the Building. These insurance provisions shall in no way limit or modify any of the obligations of Tenant under any provision of this Lease Agreement. Lessor agrees that such policy or policies of insurance shall permit releases of liability as provided herein and/or waiver of subrogation clause as to Tenant and Lessor waives, releases and discharges Tenant from all claims or demands whatsoever which Lessor may have or acquire arising out of damage to or destruction of the Building or loss of use thereof occasioned by fire or other casualty, which such claim or demand may arise because of the negligence or fault of Tenant, its agents, employees, customers or business invitees, or otherwise, and Lessor agrees to look to the insurance coverage only in the event of such loss. Notwithstanding the foregoing, Tenant shall be obligated to pay the rental called for hereunder in the event of damage to or destruction of the Premises or the Building if such damage or destruction is occasioned by the negligence or fault of Tenant, its agents or employees. Insurance premiums paid thereon shall be a portion of the "Operating Expenses" described in Rental Adjustment hereof. Tenant shall keep all of its machinery, equipment, furniture, fixtures, personal property (including also property under the care, custody, or control of Tenant) and business interests which may be located in, upon, or about the Premises insured for the benefit of Tenant in an amount equivalent to the full replacement value or insurable value thereof against: (a) loss or damage by fire; and (b) such other risk or risks of a similar or dissimilar nature as are now, or may in the future be, customarily covered with respect to a tenant's machinery, equipment, furniture, fixtures, personal property and business located in a building similar in construction, general location, use, occupancy and design to the Building, including, but without limiting the generality of the foregoing, windstorms, hail, explosions, vandalism, theft, malicious mischief civil commotion, and such other coverage as Tenant may deem appropriate or necessary. Tenant agrees that such policy or policies of insurance shall permit releases of liability as provided herein and/or waiver of subrogation clause as to Lessor and Tenant waives, releases and discharges Lessor, its agents, employees, and contractors from all claims or demands whatsoever which Tenant may have or acquire arising out of damage to or destruction of the machinery, equipment, furniture, fixtures, personal property, and loss of use thereof occasioned by fire or other casualty, whether such claim or demand may arise because of the negligence or fault of Lessor, its agents, employees, contractors or otherwise, and Tenant agrees to look to the insurance coverage only in the event of such loss. 3 Lessor shall, as a portion of the Operating Expenses maintain, for its benefit and the benefit of its managing agent, general public liability insurance against claims for personal injury, death or property damage occurring upon, in or about the Building, such insurance to afford protection to Lessor and its managing agent. Tenant shall, at Tenant's sole cost and expense but for the mutual benefit of Lessor, its managing agent and Tenant, maintain general public liability insurance against claims for personal injury, death or property damage occurring upon, in or about the Premises, such insurance to afford protection to Lessor, its managing agent and Tenant to the limit of not less than One Million and No/100 Dollars ($1,000,000.00) in respect to the injury or death to a single person, and to the limit of not less than One Million and No/100 Dollars ($1,000,000.00) in respect to any one accident, and to the limit of not less than Five Hundred Thousand and No/100 Dollars ($500,000.00) in respect to any property damage. Such policies of insurance shall be written in companies reasonably satisfactory to Lessor, naming Lessor and its managing agent as additional insured thereunder, and such policies, or a memorandum or certificate of such insurance, shall be delivered to Lessor endorsed "Premium Paid" by the company or agency issuing the same or accompanied by other evidence satisfactory to Lessor that the premium thereon has been paid. At such time as insurance limits required of tenants in office buildings in the area in which the Building is located are generally increased to greater amounts, Lessor shall have the right to require such greater limits as my then be customary. Tenant agrees to include in such policy the contractual liability coverage insuring Tenant's indemnification obligations provided for herein. Any such coverage shall be deemed primary to any liability coverage secured by Lessor. Tenant agrees to indemnify and save Lessor and its managing agent harmless against and from any and all claims, loss, damage and expense by or on behalf of any person or persons, firm or firms, corporation or corporations, arising from any breach or default on the part of Tenant in the performance of any covenant or agreement on the part of Tenant to be performed, pursuant to the terms of this Lease, or arising from any act of negligence on the part of Tenant or its agents, contractors, servants, employees or licensees, or arising from any accident, injury or damage to the extent caused by Tenant, its agents, and employees to any person, firm or corporation occurring during the term of this Lease or any renewal thereof, in or about the Premises and the Building, and from and against all costs, reasonable counsel fees, expenses and liabilities incurred in or about any such claim or action or proceeding brought thereon; and in case any action or proceeding be brought against Lessor or its managing agent by reason of any such claim, Tenant, upon notice from Lessor, covenants to resist or defend such action or proceeding by counsel reasonably satisfactory to Lessor. Tenant agrees, to the extent not expressly prohibited by law, that Lessor, its agents, employees and servants shall not be liable, and Tenant waives all claims for damage to property and business sustained during the term of this Lease by Tenant occurring in or about the Building, resulting directly or indirectly from any existing or future condition, defect, matter or thing in the Premises, the Building, or any part thereof, or from equipment or appurtenances becoming out of repair or from accident, or from any occurrence or act or omission of Lessor, its agents, employees or servants, or any tenant or occupant of the building or any other person. This paragraph shall apply especially, but not exclusively, to damage caused as aforesaid or by the flooding of basements or other subsurface areas, or by refrigerators, sprinkling devices, air conditioning apparatus, water, snow, frost, steam, excessive heat or cold, falling plaster, broken glass, sewage, gas, odors or noise, or the bursting or leaking of pipes or plumbing fixtures, and shall apply equally, whether any such damage results from the act or omission of other tenants or occupants in the Building or any other persons, and whether such damage be caused by or result from any of the aforesaid, or shall be caused by or result from other circumstances of a similar or dissimilar nature. Anything therein to the contrary notwithstanding, in the event any damage to the Building results from any act or omission of Tenant, its agents, employees or invitees, and all or any portion of Lessor's loss is "deductible", Tenant shall pay to Lessor the amount of such deductible loss (not to exceed $1,000 per event). All property in the Building or on the Premises belonging to Tenant, its agents, employees, invitees or otherwise located at the Premises, shall be at the risk of Lessee only, and Lessor shall not be liable for damage thereto or theft, misappropriation or loss thereof and Tenant agrees to defend and hold Lessor, its agents, employees and servants harmless and indemnify them against claims and liability for injuries to such property. ARTICLE VI. REPAIRS Tenant agrees to keep the demised premises in as good condition and repair as they were in at the time Tenant took possession of the same, reasonable wear and tear excepted; to keep the leased premises in a clean and sanitary condition; not to commit any nuisance or waste on the leased premises; overload the premises; throw foreign substances in plumbing facilities; or waste any of the utilities furnished by Landlord. If Tenant shall 4 fail to keep and preserve the demised premises in the state or condition required by the provisions of this paragraph, the Lessor may at its option, put or cause the same to be put into the condition and state of repair agreed upon and in such case, the Tenant, on demand, shall pay the cost thereof. Tenant agrees to abide by such rules and regulations as may be reasonably promulgated by the Landlord from time to time. ARTICLE VII. TENANT COVENANTS: A. Tenant as a material part of the consideration to be rendered to Lessor under this lease, hereby waives all claims against Lessor for damages to goods, wares and merchandise, in, upon or about said premises and for injuries to persons in or about said premises, from any cause arising at any time and Tenant will hold Lessor exempt and harmless for and on account of any damage or injury to any person or to the goods, wares and merchandise of any person, arising from the use of the premises by Tenant, or arising from the failure of Tenant to keep the premises in good condition as herein provided. Lessor shall not be liable to Tenant for any damage by or from any act or negligence of any co- tenant or other occupant of the building, or by any owner or occupant of adjoining or contiguous property. Tenant agrees to pay for all damage to the building, as well as all damage to Tenants or occupants thereof caused by Tenant's misuse or neglect of said premises, its apparatus or appurtenances. B. Tenant shall not use, or permit said premises, or any part thereof, to be used, for any purpose or purposes other than the purpose or purposes for which said premises are hereby leased, to wit: production of visual and audio communications and no use shall be made or permitted to be made of said premises, nor acts done, which will increase the existing rate of insurance upon the building in which said premises are located or cause a cancellation of any insurance policy covering said building or any part thereof, nor shall Tenants sell, or permit to be kept, used, or stored in or about said premises any article which may be prohibited by the standard form of fire insurance policy. Tenant shall not commit or suffer to be committed any waste upon the said premises, or any public or private nuisance, or other act or thing which may disturb the quiet enjoyment of any other of any other Tenant in the building in which the premises are located, nor, without limiting the generality of the foregoing, shall Tenant allow said premises to be used for any improper, immoral, unlawful or objectionable purpose and nothing shall be prepared, manufactured or mixed in said premises which might emit an odor in the corridors of said building, nor shall Tenant use any apparatus, machinery or device in or about the demised premises which shall make any noise or set up any vibration, or which shall in any way increase the amount of electricity, water or other service to be furnished or supplied under this lease. Tenant shall comply with all requirements of all municipal, state and federal authorities now in force or which may hereafter be in force pertaining to said premises and shall faithfully observe in the use of the premises all municipal ordinances and state and federal statutes now in force or which may hereafter be in force. Tenant will reimburse Lessor for any expense or damage incurred by Lessor in enforcing any of the covenants set out in this Lease. ARTICLE VIII. ASSIGNMENT AND SUBLETTING Tenant shall not assign this lease or any interest therein, and shall not sublet the said premises or any part thereof, or any right or privilege appurtenant thereto or suffer any other person, firm or corporation to occupy or use the said premises, or any portion thereof, without the written consent of Lessor first had and obtained, and a consent of one assignment, subletting, occupation or use by any other person, firm or corporation, shall not be deemed to be a consent to any subsequent assignment, subletting, occupation or use by any other person, firm or corporation. Any such assignment or subletting without such consent shall be void, and shall, at the option of Lessor, terminate this Lease. This Lease shall not, nor shall any interest therein, be assignable, as to the interest of Tenant by operation of law, without the written consent of Lessor. Lessor's right to assign this lease is and shall remain unqualified. The consent of Lessor to an assignment, subletting, occupation or use shall not be unreasonably withheld. ARTICLE IX. SUBORDINATION This Lease shall be subject and subordinate to any mortgage, deed of trust or ground lease now or hereafter placed upon the Premises, the Building, the Property, or any portion thereof by Lessor, its successors or assigns, and to amendments, replacements, renewals and extensions thereof. Tenant agrees at any time hereafter, upon demand, to execute and deliver any instruments, releases or other documents that may be reasonable required for the purpose of subjecting and subordinating this Lease, as above provided, to the lien of any such mortgage, deed of trust or ground lease. It is agreed, nevertheless, that as long as Tenant is not in default in the payment of Base Rent, Additional Rent, and the payment of other charges to be paid by Tenant under this Lease, and the performance of all covenants, agreements and conditions to be performed by Tenant under this Lease, then neither Tenant's right to quiet enjoyment under this Lease, nor the right of Tenant to continue to occupy the Premises and to conduct its business thereon, in accordance with the terms of this Lease as against any lessor, tenant, mortgagee, trustee, or their successors or assigns shall be interfered with. 5 The above subordination shall be effective without the necessity of the execution and delivery of any further instruments on the part of Tenant to effectuate such subordination. Notwithstanding anything hereinabove constrained in this Article X, in the event the holder of any mortgage, deed of trust or ground lease shall at any time elect to have this Lease constitute a prior and superior lien to this mortgage, deed of trust or ground lease, then, and in such event, upon any such holder or landlord notifying Tenant to that effect in writing, this Lease shall be deemed prior and superior in lien to such mortgage, deed of trust, ground lease, whether this Lease is dated prior to or subsequent to the date of such mortgage, deed of trust or ground lease and Tenant shall execute such attainment agreement as may be reasonably requested by said holder. Tenant agrees, provided the mortgagee, ground lessor or trust deed holder under any mortgage, ground lease, deed of trust or other security instrument shall have notified Tenant in writing (by the way of a notice of assignment of lease or otherwise) of its address, Tenant shall give such mortgagee, ground lessor or trust deed holder, or other secured party, simultaneously with delivery of notice to Lessor, by registered or certified mail, a copy of any such notice of default served upon Lessor. Tenant further agrees that such mortgagee, ground lessor or trust deed holder, or other secured party shall have the right to cure any alleged default during the same period that Lessor has to cure such default. 6 ARTICLE X. INSTALLATION OF IMPROVEMENTS; ALTERATIONS Subject to Tenant's performance of its obligations hereunder, Lessor agrees to install at Lessor's cost and expense the improvements described in Exhibit A attached hereto. All other improvements to the Premises shall be installed at the cost and expense of Tenant (which cost shall be payable on demand by Lessor as Additional Rent), but only in accordance with plans and specifications which have been previously submitted to and approved in writing by Lessor, and only by Lessor or by contractors and subcontractors approved in writing by Lessor (which approval shall not be unreasonably withheld). Tenant shall not be allowed to make any alterations, modifications, improvements, additions, or installations if such action results or would result in a labor dispute or otherwise would materially interfere with Lessor's operation of the building. All alterations, additions, improvements and partitions erected by Tenant shall be and remain the property of Tenant during the term of this Lease and Tenant shall, unless Lessor otherwise elects as hereinafter provided, remove all alterations, additions, improvements and partitions erected by Tenant and restore the Premises to its original condition by the date of expiration or termination of this Lease or upon earlier vacating of the Premises and title shall pass to Lessor under this Lease as by a bill of sale. All such removals and restoration shall be accomplished in a good workmanlike manner by contractors approved in writing by Lessor so as not to damage the primary structure or structural qualities of the Building. All alterations, additions or improvements proposed by Tenant shall be constructed (a) in a first-class manner consistent with the Building; and (b) in accordance with all governmental laws, ordinances, rules and regulations, including, without limitation, the ADA. Tenant shall, prior to construction, provide such assurances to Lessor including but not limited to, waivers of lien, surety company performance and payment bonds and personal guaranties of individuals of substance, as Lessor shall require to assure payment of the costs thereof and to protect Lessor against any loss from mechanics', laborers', materialmen's or other liens. If such improvements are not being performed by Lessor, Tenant shall permit Lessor, if Lessor so desires, to supervise construction operations in connection with such work. Tenant will pay Lessor a reasonable fee for Lessor's inspection and engineering time. In no event will such supervision or right to supervise by Lessor, nor shall any approvals given by Lessor under this Lease, constitute any warranty by Lessor to Tenant of the adequacy of the design, workmanship or quality of such work or materials for Tenant's intended use or impose any liability upon Lessor in connection with the performance of such work. ARTICLE XI. DAMAGE BY FIRE OR OTHER CASUALTY In the event of a partial destruction of said premises during the term of this lease, from any cause, Lessor shall forthwith repair the same, provided such repairs can be made within ninety (90) days and such partial destruction shall in nowise annul or void this Lease, except that Tenant shall be entitled to a proportionate deduction of rent while such repairs are being made, if such repairs shall interfere with the business carried on by Tenant in the said premises. In the event that such repairs cannot be made within such one hundred eighty (180) day period, this Lease may be terminated at the option of either party. In the event that the building in which the demised premises are situated is destroyed to the extent of sixty-five percent (65%) or more of the replacement cost thereof, Lessor may elect to terminate this Lease, whether the demised premises be injured or not. A total destruction of the building in which the said demised premises are situated shall terminate this Lease. In the event of any dispute between Lessor and Tenant relative to the provisions of this paragraph, they shall each select an arbitrator, the two arbitrators so selected shall select a third arbitrator, and the three arbitrators so selected shall hear and determine the controversy and their decision thereon shall be final and binding upon both Lessor and Tenant, who shall bear the cost of such arbitration equally between them. ARTICLE XII. EMINENT DOMAIN If the demised premises are taken by any public authority under the power of eminent domain, then the term of the Lease shall cease as of the date of possession by such public authority, and Lessor shall make a pro-rata refund of any rent that may have been paid in advance. All damages awarded for such taking under the power of eminent domain shall belong to and be the property of Lessor, irrespective of the basis upon which they are awarded. 7 ARTICLE XIII. SURRENDER OF PREMISES A. On the last day of the term of this Lease, or on the sooner termination thereof, Tenant shall peaceably surrender the leased premises in good condition and repair, wear and tear, and damage from fire or other casualty for which insurance is normally procured excepted. On or before the last day of the term of the Lease or the sooner termination thereof, Tenant shall at its expense remove all of its equipment from the Leased premises, and any property not removed shall be deemed abandoned. All alterations, additions and fixtures, other than Tenant's equipment, which have been made or installed by either Lessor or Tenant upon the lease premises shall remain as Lessor's property and shall be surrendered with the leased premises as a part thereof. If the leased premises be not surrendered at the end of the term or sooner termination thereof, Tenant shall indemnify Lessor against loss or liability resulting from delay by Tenant in so surrendering the premises, including, without limitation, claims made by any succeeding Tenant founded on such delay. Tenant shall promptly surrender all keys for the leased premises to Lessor at the place then fixed for the payment of rent and shall inform Lessor of combinations on any locks and safes on the leased premises. B. In the event Tenant remains in possession of the premises herein leased after the expiration of the term of this Lease and without the execution of a new lease, the Tenant shall be deemed to be occupying said premises as a Tenant from month to month, subject to all the conditions, provisions and obligations of this lease insofar as the same can be applicable to a month-to-month tenancy, but the monthly rental set forth on page one of this Lease shall be increased by a sum equal to One Hundred Fifty Percent (150%) of said monthly rental. 8 ARTICLE XIV. NOTICES All notices to be given Tenant shall be given in writing personally or by depositing the same in the United State Mail, postage prepaid and addressed to Tenant at said premises, whether or not Tenant has departed from, abandoned or vacated the premises. All notices to be given to Lessor shall be given in writing personally or by depositing the same in the United State Mail, postage prepaid and addressed to Charles and Sharron Mills, 650 S. E. Sixth Avenue, Pompano Beach, FL 33060. Each term and each provision of this Lease to be performed by Tenant shall be construed to be both a covenant and a condition. All preliminary negotiations are merged into and incorporated in this lease. This lease shall be modified or amended only by an agreement in writing signed by the parties hereto. All provisions hereof shall be binding upon the heirs, personal representatives, successors and assigns of each party hereto. ARTICLE XV. MISCELLANEOUS A. The Lessor or its employees or agents shall have the right to enter the premises at all reasonable times for the purpose of inspection, cleaning, repairing, altering or improving the same or the building of which the premises is a part. Right to enter to be during tenant's business hours with prior notice. B. Tenant agrees to pay all sums of money in respect to any labor, services, materials, supplies or equipment furnished or alleged to have been furnished to Tenant in or about the demised premises which may be secured by any mechanic's lien or other lien against the demised premises or the building in which the demised premises are situated or the Lessor's interest therein and will cause each such lien to be discharged at the time performance of any obligation secured thereby matures, provided that Tenant may contest such lien by depositing with Lessor a deposit of cash in an amount sufficient to satisfy such lien, all attorney's fees thereon and all interest, cost and disbursements thereon, or may make such deposit with the District Court of the County in which the demised premises are situated. The Lessor shall have the right to post and maintain on the demised premises, notices of non-responsibility for mechanics' liens under the laws of the State of Minnesota. C. The appointment of a receiver to take possession of all of the assets of Tenant or a general assignment by Tenant for the benefit of creditors or any action taken or suffered by Tenant under any insolvency or bankruptcy act shall constitute a breach of this lease by Tenant. The Tenant's duty to pay rent shall not terminate if the Tenant abandons the premises, is removed from the premises or if the Lessor re-enters the premises in accordance with the Lease provisions. In addition, Lessor specifically retains and preserves all of its common law rights and remedies. In the event of any breach of this Lease by Tenant, then Lessor, besides other rights or remedies he may have, shall have the immediate right of reentry and may remove all persons and property from the demised premises; such property may be removed and stored in any other place in the building in which the demised premises are situated, or in any other place, of the account of, and at the expense and risk of the Tenant. Tenant hereby waives all claims for damages which may be caused by the re-entry of Lessor and taking possession of the demised premises or removing or storing the furniture and property of Tenant as herein provided, and will save Lessor harmless from any loss, costs or damages occasioned Lessor thereby, and no such re-entry shall be considered or construed to be a forcible entry. Should Lessor elect to re-enter, as herein provided, or should he take possession pursuant to legal proceedings or pursuant to any notice provided for by law, he may either terminated this Lease or he may from time to time, without terminating this Lease, relet said premises or part thereof for such term or terms and at such rental or rentals and upon such other terms and conditions as Lessor in its sole discretion my deem advisable, with the he right to make alterations and repairs to said premises. Rentals received by Lessor from such reletting shall be applied: First, to the payment of any indebtedness other than rent due hereunder from Tenant to Lessor; Second, to the payment of rent due and unpaid hereunder; Third, to the payment of any cost of such reletting; Fourth, to the payment of any cost of any alterations and repairs to the premises; and the residue, if any, shall be held by Lessor and applied in payment of future rent as the same may become due and payable hereunder. Should such rentals received from such reletting during any month be less than that agreed to be paid during that month by Tenant hereunder, then Tenant shall pay such deficiency to Lessor. Such deficiency shall be calculated and paid monthly. No such re-entry or taking possession of said premises by Lessor shall be construed as an election on its part to terminate this Lease unless a written notice of such intention be given to Tenant or unless the termination thereof be decreed by a court of competent jurisdiction. Notwithstanding any such reletting without termination, Lessor may at any time thereafter elect to terminate this lease for such previous breach. Should Lessor at any time terminate this Lease for any breach, in addition to any other remedy he may have, he may recover from Tenant all damages he may incur by reason of such breach, including the cost or recovering the premises, and including the worth at the time of such termination of the excess, if any, of the amount of rent and charges equivalent to rent reserved in 9 this lease for the remainder of the stated term over the then reasonable rental value of the premises for the remainder of the stated term. D. The conditions, covenants and agreements in the foregoing Lease contained to be kept and performed by the parties hereto shall be binding upon said respective parties, their heirs, executors, administrators successors and assigns. E. The Tenant shall pay promptly all taxes and assessments levied on or against Tenant's property on said premises, and all license, permit, occupational and inspection fees assessed or charged against said premises or either party to this Lease by reason of the Tenant's use or occupancy of said premises, and the Tenant shall hold the Lessor free and harmless from any loss, damage or expense arising out of or by reason of any charges specified in this paragraph. 10 F. This Agreement and its attached Exhibits constitutes the entire agreement between the parties, and each party understands that there are no other oral understandings or agreements other than those set out herein. This agreement cannot be added to, altered or amended in any way except by a written agreement signed by both of the parties hereto. IN WITNESS WHEREOF, the parties hereto have executed this Lease Agreement, the day and year first above written. LESSOR IN THE PRESENCE OF: Charles Mills /s/ Charles Mills ---------------------------- ---------------------------- Sharron Mills /s/ Sharron Mills ---------------------------- TENANT Art-In-Motion, Inc. /s/ John Gulfuss ---------------------------- ---------------------------- By: ----------------------- Its: CEO ----------------------- JJD:#6 EXHIBIT "B" HAZARDOUS SUBSTANCES The TENANT, its employees and/or invitees shall not without the prior written consent of LESSOR bring into the Demised Premises or common areas, or permit to be in the Demised Premises or common areas, or release from the Demised Premises or common areas any "HAZARDOUS SUBSTANCES." For Purposes hereof, "HAZARDOUS SUBSTANCES" shall mean any toxic or hazardous substance or waste pollutant or contaminant (including, without limitation, asbestos, urea formaldehyde, the group of organic compounds known as polychlorinated biphenyls petroleum products including gasoline, fuel, oil crude oil and various constituents of such products) and any hazardous substance as defined in any state, local or federal law, regulation, rule, policy or order relating to the protection of the environment. The LESSOR may withhold or condition consent as it sees fit, in its absolute discretion. Notwithstanding any termination of the Lease, the TENANT will indemnify and hold the LESSOR harmless from any cost, expense, or damage resulting from a violation of the Exhibit, and will, upon request from the LESSOR promptly remove at its sole expense any material so brought or released in violation of this Exhibit. The LESSOR may, from time to time inspect the Leased Premises to determine compliance with this Exhibit, and require the TENANT certify to such compliance. A violation of this Exhibit is a breach for which the LESSOR need not provide notice or a period to cure, and any contrary provision in this Lease is hereby modified to so provide. EACH ITEM ON THE FOLLOWING CHECKLIST MUST BE ANSWERED 11 1. Will any chemicals be used or stored on the premises? YES NO x --- --- If yes, list all chemicals that are to be used or stored in the premises. _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ 2. Will any materials be used or stored on the premises that appear on any local, state or federal list of "HAZARDOUS SUBSTANCES" YES NO x If yes, list all items in the space provided. --- --- _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ 3. Do you have any permits to handle, use or store "HAZARDOUS SUBSTANCES?" YES NO x --- --- IF YES, ATTACH COPIES OF THESE PERMITS TO THIS EXHIBIT. 4. Will any flammables be used or stored on the premises? YES NO x --- --- If yes, list type, quantities and how the flammable will be stored. _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ Tenant certifies that the above information is true, complete and correct. Further, Tenant understands and agrees that no substances other than those listed above and approved by the Lessor may be used or stored on the premises and that any additions to the above list must be approved in writing. - ---------- INITIAL 12 EX-10.11 5 BROKERAGE ASSET PURCHASE AGREEMENT Exhibit 10.11 BROKERAGE ASSET PURCHASE AGREEMENT THIS AGREEMENT, is made and entered into this 31st day of December, 1995 by and between Norcom Resources, Inc., a Minnesota corporation ("Buyer") and Global MAINTECH, Inc., a Minnesota corporation ("Seller"). WHEREAS, Seller has been in the mainframe brokerage business for over three years and has determined to exit the mainframe brokerage business ("Brokerage Business"); and, WHEREAS, Buyer or Buyer's executive officer and principal shareholder has had numerous years of experience in this same business and is interested in remaining in this business; and, WHEREAS, the parties hereto mutually agree on the terms of a sale of the Brokerage Business from Seller to Buyer. NOW, THEREFORE, in consideration of the covenants and agreements contained in this Agreement and other good and valuable consideration, the receipt and adequacy of which are acknowledged by Buyer and Seller, the parties agree as follows: ARTICLE 1. PURCHASE OF ASSETS; LIMITED ASSUMPTION OF LIABILITIES ----------------------------------------------------- 1.1 Purchase of Assets from Seller. Subject to the terms and conditions hereof, Seller agrees on the Closing Date (as hereinafter defined) to assign, sell, transfer, convey, and deliver to Buyer, and Buyer agrees on the Closing Date to purchase from Seller, all of the assets and personal property of Seller (excepting only the assets specifically identified as "Excluded Assets" in Section 1.2) related to or used in the operation of its brokerage business, wherever the same may be located (collectively referred to as the "Brokerage Assets"), including without limitation, the following: (a) All of Seller's right title and interest in the brokerage business; (b) Office furniture and warehouse equipment, including those items identified on Exhibit 1.1 (b) ("Equipment"); (c) The vehicle identified as the Infiniti, 4 door model Q45, 1994 model year, serial number JNKNGO1DORM251284 ("Vehicle") and subject to a lease as provided in subsection 3.3(c) hereof. (d) All intangible personal property, business records, customer lists and goodwill related to the brokerage business, provided that Buyer will provide copies thereof or access thereto upon request by Seller for reasonable business purposes, ("Intangible Property"). (e) All inventory, including raw materials, supplies, work in process and finished inventory of the brokerage business as of the date of this Agreement ("Inventory") a partial list of which is attached on Exhibit 1.1 (e). (f) All permits, licensing approvals and notifications, governmental or otherwise, relating to the brokerage business ( "Licenses and Permits"); and (g) All other contract rights related to the brokerage business, subject to the terms and conditions thereof ("Contracts"). 1.2 Excluded Assets. Notwithstanding anything herein to the contrary, Buyer does not purchase, and Seller does not sell, any of the following assets ("Excluded Assets"): (a) Seller's corporate minute book and corporate records (provided that Seller will provide copies thereof relating to the brokerage business to Buyer upon request by Buyer for reasonable business purposes). (b) Any repayments or deposits of obligations which Buyer does not assume under Section 1.3 below. (c) All notes receivable, rights to payment and accounts receivable of the brokerage business as of the date of this Agreement ("Accounts Receivable"). (d) (i) All assumed names under which Seller conducts its business including Maintech and MAINTECH Resources, (ii) All common law tradenames, trademarks or service marks and all goodwill associated therewith ("Trademarks"); It is not the intention of either parties herein to include any assets which are not specifically defined as Brokerage Assets or to include by error any assets defined as Brokerage Assets which the Seller does not own as of the date of this Agreement. Any such assets under lease by Seller to either R. P. Capital Corporation and Data Sales Co. attached hereto as Exhibits 1.2.1 and 1.2.2 are to be used by Buyer and buyer agrees to allow Seller to retake such assets under lease at the end of the lease term or if it can be arranged with Lessor, Seller will allow Buyer to purchase said assets at its cost at the end of the respective lease terms. This right to usage during the lease term does not constitute an assignment of either of said leases. 1.3 Liabilities and Obligations Assumed. Buyer shall not assume any liabilities, obligations or undertakings of Seller of any kind or nature whatsoever, whether fixed or contingent, known or unknown, determined or determinable, due or not yet due (excepting only liabilities and obligations specifically identified on Exhibit 1.3 (a)). By way of example, and not by way of limitation, buyer specifically disclaims responsibility for: (a) Any federal, state or local taxes (or claims for refunds relating to such liabilities) based upon or measured by income or profits from operation of its brokerage business through the date of this Agreement; and (b) Any obligation incurred by Seller for accounting, legal or other professional fees which are related to the consummation of the transaction contemplated herein. 1.4 Sales, Use and Deed Taxes. Seller shall be responsible for payment of any sales, use or deed taxes and related transfer or filing fees assessable with respect to the transfer of the Brokerage Assets contemplated herein. ARTICLE 2. PURCHASE PRICE AND PAYMENT -------------------------- 2.1 Purchase Price. The purchase price for the Brokerage Assets shall be the sum of seventy thousand Dollars ($70,000) and the sum of the liabilities assumed on Exhibit 1.3("Purchase Price"). 2.2 Payment of Purchase Price. The Purchase Price shall be paid as follows: (a) Cash Payment. Buyer shall deliver to Seller at the Closing $1.00 the receipt and sufficiency of which is hereby acknowledged. (b) Notes. Buyer shall deliver its two Notes, in the form attached hereto as: Exhibit 2.2 (i) the first payable to the order of Seller in the amount of $35,000, payable in twelve equal monthly installments beginning March 31, 1996 of two thousand nine hundred sixteen Dollars and sixty- seven cents ($2,916.67), each of which shall be deemed to include interest at the rate of ten and one-quarter percent (10.25%) per annum on the unpaid balance ("Note 1"). Said Note 1 shall provide for Buyer's right to offset against its obligations thereunder any amounts due Buyer from Seller pursuant to this Agreement. Exhibit 2.2 (ii) the second payable to the order of Seller in the amount of $35,000, payable in one installment on March 31, 1997 which payment shall be deemed to include interest at the rate of ten and one-quarter percent (10.25%) per annum on the unpaid balance ("Note 2"). Said Note 2 shall provide for Buyer's right to offset against its obligations thereunder any amounts due Buyer from Seller pursuant to this Agreement. (c) Assumption of certain liabilities. Buyer shall negotiate to pay the third parties, to whom the liabilities listed on Exhibit 1.3 are due, directly with the third party(s). 2.3 Allocation of Purchase Price. The purchase price is hereby allocated among the Brokerage Assets as set forth in Exhibit 2.3. ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF SELLER ---------------------------------------- Seller makes the following representations and warranties to the best of its knowledge to Buyer with the intention that Buyer may rely upon the same and acknowledge that the same shall be true on the date hereof and as of the Closing Date (as if made at the Closing) and shall survive the Closing of this transaction. 3.1 Organization. Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Minnesota, has all requisite power and authority, corporate and otherwise, to own its properties and assets and to conduct its business. 3.2 Financial Statements. Seller has furnished Buyer with a true and complete copy of its balance sheets, statements of changes in financial condition and statements of income for the fiscal year ending December 31, 1994 and for interim quarterly periods ended September 30, 1995 of Buyer's parent company and monthly internal income statements for October and November 1995 referred to as "division allocation of standard operating income/expense" and information sheet known as "spin-off.xls" which serves as an initial issues worksheet for the sale of the Brokerage Assets, all of which are attached hereto as Exhibit 3.2. 3.3 Title to Assets. Except as listed below, Seller holds good and marketable title to the Brokerage Assets free and clear of all liens, encumbrances, licenses or leases: (a) Pursuant to a Secured Promissory Note and Security Agreement dated December 6, 1994 as amended, the holder, Global MAINTECH Corporation, formerly known as Mirror Technologies, Incorporated, has a security interest in the Brokerage Assets. A copy of the release of the security interest in the Brokerage Assets by Global MAINTECH Corporation is attached hereto as Exhibit 3.3 (a). (b) Pursuant to a Promissory Note dated June 15, 1994, Paul F. Burger held a security interest in the Brokerage Assets. Mr. Burger canceled this June 15, 1994 Promissory Note and for value received accepted an unsecured Promissory Note dated December 31, 1995 in the amount of $100,000. A copy of this December 31, 1995 unsecured Promissory Note is attached hereto as Exhibit 3.3 (b). (c) Seller assigns the leases of the Vehicle from Infiniti Financial Services a copy of which is attached hereto as Exhibit 3.3 (c). 3.4 Inventory. The Inventory represents the stock in trade and normal supplies of Seller on hand as of the close of business on the date of this Agreement. Due to the nature of the Inventory and Buyer's extensive experience in selling the Inventory, the Seller makes no representations and warranties as to the merchantability or saleability or condition of the Inventory. 3.5 Licenses and Permits. The Seller is not aware of any permits, licenses, approvals and notifications, governmental or otherwise, the absence of which would have a material adverse effect on its brokerage business. Seller will cooperate with Buyer if any Licenses or Permits owned by Seller as of the Closing Date are required to be transferred to Buyer to reasonably complete this transaction. 3.6 Employee Plans. None of the Seller's employee plans are a part of this Agreement and any employees of Seller relating to the Brokerage Assets are considered to have resigned. Accordingly, Seller makes no representation or warranties as regards its employee plans except that any vested benefits of the resigned employees of the brokerage business are fully funded. 3.7 Insurance. Seller has maintained through the date of this Agreement insurance on Seller's tangible real and personal property and assets, whether owned or leased, against loss or damage by fire or other casualty. 3.8 Binding Obligation. This Agreement constitutes the legal, valid and binding obligation of Seller in accordance with the terms hereof. Seller has all requisite corporate power and authority, including the approval of its Board of Directors, to execute, perform, carry out the provisions of and consummate the transactions contemplated in this Agreement. ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF BUYER --------------------------------------- Buyer makes the following representations and warranties to the best of its knowledge to Seller, with the intention that Seller may rely upon the same, and acknowledge that the same shall be true as of the Closing Date (as if made at the Closing) and shall survive the Closing of this transaction. 4.1 Organization. Buyer is a corporation, duly organized, validly existing in good standing under the laws of the State of Minnesota, and has all requisite power and authority, corporate and otherwise, to own its properties and conduct the business in which it is presently engaged. 4.2 Corporate Authority. Buyer has all requisite power and authority, including the approval of its Board of Directors, to execute, perform and carry out the provisions in this Agreement. 4.3 Breaches of Contracts; Required Consents. Neither the execution and delivery of this Agreement by Buyer, nor compliance by Buyer with the terms and provisions of this Agreement, will: (a) Conflict with or result in a breach of: (i) any of the terms, conditions or provisions of the Articles of Incorporation, Bylaws or other governing instruments of Buyer, (ii) any judgment, order, decree or ruling to which the Buyer is a party, (iii) any injunction of any court or governmental authority to which it is subject, or (iv) any agreement, contract or commitment which is material to the financial condition of Buyer; or (b) Require the affirmative consent or approval of any third party. 4.4 Binding Obligation. This Agreement constitutes the legal, valid and binding obligation of Buyer in accordance with the terms hereof. Buyer is not subject to any charter, mortgage, lien, lease, agreement, contract, instrument, law, rule, regulation, order, judgment or decree, or other restriction of any kind or character, which would prevent the consummation of the transactions contemplated in this Agreement. 4.5 Completeness of Disclosure. No representation in this Article contains any untrue statement of a material fact or omits to state any material fact the omission of which would be misleading. ARTICLE 5. CONDUCT AND TRANSACTIONS OF SELLER'S BUSINESS PRIOR TO CLOSING -------------------------------------------------------------- The principal officer and shareholder of Buyer has also been an executive officer of Seller. Accordingly, Seller and Buyer agree that Buyer will conduct the brokerage business from the date of this Agreement under Buyer's name and any profits or losses arising from the conduct of the business after the date of this Agreement to the Closing Date will accrue to the Buyer. 5.1 Access to Information. From the date of this Agreement to Closing Date, Buyer shall give Seller and Seller's authorized representatives, full access to all of the property, books, contracts, commitments and records relating to its business and shall furnish to Seller during such period all such information concerning its business or the Brokerage Assets as Seller reasonably may request ("Confidential Information"). Requests for business records covering such period may be made any time in the future so long as Seller has a reasonable business reason for making the request. 5.2 Restrictions in Operation of its Business. Buyer represents and covenants that and during the period from the date of this Agreement to the Closing (except as Seller otherwise has consented in writing): (a) The brokerage business will be conducted only in the usual and ordinary manner. (b) Buyer will not sell, dispose, transfer, assign or otherwise remove any of the Brokerage Assets except inventory in the ordinary course of business. (c) Buyer shall use its best efforts to preserve the organization related to the Brokerage Assets and to keep available during such period the employees formerly associated with the Brokerage Assets and the Seller as of the date of this Agreement. After the date of this Agreement the Seller will no longer be responsible for the salaries of Michael Erickson, Jeanne Lechner and Mark Licke and Seller will treat these former employees as having voluntarily resigned. 5.3 No Solicitation of Other Offers. Buyer and Seller agree that without the other's consent, prior to Closing Date or the termination of this Agreement pursuant to Section 6.4, neither Buyer nor Seller nor any representatives of said parties will enter into any negotiations with or solicit any written offer, inquiry or proposal from any other person with respect to the sale, merger or other acquisition of the Brokerage Assets. Such consent by either party will not be unreasonably withheld. ARTICLE 6. CONDITIONS OF CLOSING; ABANDONMENT OF TRANSACTION ------------------------------------------------- 6.1 Conditions to Obligations of Buyer to Proceed on the Closing Date. The obligations of Buyer to proceed on the Closing Date shall be subject (at its discretion) to the satisfaction, on or prior to the Closing, of all of the following conditions: (a) Truth of Representations and Warranties and Compliance with Obligations. The representation and warranties of Seller herein shall be true in all material respects on the Closing Date with the same effect as though made at such time. Seller shall have performed all material obligations and complied with all material covenants and conditions prior to or as of the Closing Date. Seller shall have delivered to Buyer a certificate of Seller in form and substance satisfactory to Buyer dated as of the Closing Date and executed by the any two of the Chief Executive Officer, President or Chief Financial Officer of Seller to all such effects. (b) Assignments. Seller shall have executed and delivered to Buyer documents assigning all of its right, title and interest in the Intangible Property, the Vehicle and related lease. (c) Release Secured Claims. Seller shall have obtained full and complete releases of all security interests, or other encumbrances upon the Brokerage Assets, including those set forth in Exhibit 3.3 (a). (d) Delivery of Documents. Seller shall have delivered all documents required to be delivered at Closing pursuant to Section 7.2 hereof. (e) Litigation Affecting Closing. No suit, action or other proceeding shall be pending or threatened by or before any court or governmental agency in which it is sought to restrain or prohibit or to obtain damages or other relief in connection with this Agreement or the consummation of the transaction contemplated by this Agreement, and no investigation that may result in any such suit, action or other proceeding shall be pending or threatened. 6.2 Conditions to Obligations of Seller to Proceed on the Closing Date. The obligation of Seller to proceed on the Closing Date shall be subject (at its discretion) to the satisfaction, on or before the Closing, of the following conditions: (a) Truth of Representations and Warranties and Compliance with Obligations. The representations and warranties of Buyer herein contained shall be true in all material respects on the Closing Date with the same effect as though made at such times. Buyer shall have performed all material obligations and complied with all material covenants and conditions prior to or as of the Closing Date. Buyer shall have delivered to Seller a certificate in form and substance reasonably satisfactory to Seller dated as of the Closing Date and executed by its President to all such effects. (b) Delivery of Documents. Buyer shall have delivered all documents required to be delivered at Closing pursuant to Section 7.3 hereof. (c) Required Consents. All required consents shall have been received from governmental agencies whose approval is required to consummate the transaction contemplated herein. (d) Litigation Affecting Closing. No suit, action or other proceeding shall be pending or threatened by or before any court or governmental agency in which it is sought to restrain or prohibit or to obtain damages or other relief in connection with this Agreement or the consummation of the transaction contemplated by this Agreement, and no investigation that might eventuate in any such suit, action or other proceeding shall be pending or threatened. 6.3 Absence of Exhibits. The parties acknowledge that Exhibits ??????? are not attached hereto and that only a preliminary version of Exhibits ????? have been attached hereto. The parties agree to use their best efforts to negotiate in good faith the final form of such Exhibits, and no party may decline to proceed at the Closing unless the other party has failed to negotiate in good faith concerning a material portion of any such Exhibit. 6.4 Termination of Agreement. This Agreement and the transactions contemplated herein may be terminated at or prior to the Closing Date as follows: (a) By mutual written consent of all parties. (b) By Buyer pursuant to written notice delivered at or prior to the Closing if Seller has failed in any material respect to satisfy all of the conditions to Closing set forth in Section 6.1 or if the parties have been unable after good faith efforts to reach agreement on any issue arising under Section 6.3. (c) By Seller pursuant to written notice delivered at or prior to the Closing if Buyer has failed in any material respect to satisfy the conditions set forth in Section 6.2 or if the parties have been unable after good faith efforts to reach agreement on any issue arising under Section 6.3. 6.5 Consequences of Termination. In the event of termination of this Agreement, each party will return to the other all documents and materials obtained from the other in connection with the transaction contemplated by this Agreement and will not use and will keep confidential all Confidential Information about the other party obtained pursuant to this Agreement pursuant to the terms of Section 5.1 hereof. However, Seller does not agree to re-hire any employees solely as a result of termination hereunder. ARTICLE 7 CLOSING ------- 7.1 Closing. The closing of the transaction contemplated by this Agreement ("Closing") shall be held at the offices of Buyer on March 20, 1996 at 4:00 p.m., or at such later date or time or place as the parties may mutually agree upon in writing. Such date of Closing is referred to herein as the Closing Date. 7.2 Documents to be Delivered by Seller. Seller agrees to deliver the following documents, duly executed as appropriate, to Buyer at the Closing: (a) Articles of Incorporation of Seller certified by the Secretary of State of Minnesota. (b) Bylaws of Seller certified by the Seller's Secretary. (c) Certificate of Good Standing of Seller dated no earlier than forty (40) days prior to Closing Date. (d) Certified copies of corporate resolutions of Seller authorizing it to enter into this Agreement and to consummate the transactions contemplated herein. (e) A Bill of Sale for the assignment and transfer of the Purchases Assets. (f) Appropriate assignment documents assigning Seller's title and interest in the Equipment and Vehicle Lease. (g) Certificate of Seller's CEO or President and CFO regarding representations and warranties as required under Section 6.1 (a). (h) Such other documents as Buyer may reasonably request for the purpose of assigning, transferring, granting, conveying, and confirming to Buyer or reducing to its possession any and all of the Brokerage Assets. 7.3 Documents Delivered by Buyer. Buyer agrees to deliver the following documents, duly executed as appropriate, to Seller at the Closing: (a) Articles of Incorporation of Buyer certified by the Secretary of State of Minnesota. (b) Bylaws of Buyer certified by the Seller's Secretary. (c) Certificate of Good Standing of Buyer dated no earlier than forty (40) days prior to Closing Date. (d) Certified copies of corporate resolutions of Buyer authorizing it to enter into this Agreement and to consummate the transactions contemplated herein. (e) The sum of $1.00. (f) Certificate of Buyer's CEO or President regarding representations and warranties as required under Section 6.2 (a). (h) Such other documents as Seller may reasonably request to carry out the transactions contemplated under this Agreement. 7.4 Assignment and Assumption of Certain Contracts. Effective upon consummation of all transactions hereon as of the date of this Agreement, Seller hereby assigns to Buyer all of Seller's rights, title and benefit under the Intangible Property and Vehicle and lease associated with the Vehicle. Buyer hereby assumes all risks of ownership related to the Brokerage Assets including all liabilities or obligations arising thereafter with respect to the Brokerage Assets. ARTICLE 8. POST CLOSING OBLIGATIONS ------------------------ 8.1 Further Documents and Assurances. At any time and from time to time after the Closing Date, each party shall, upon request of another party, execute, acknowledge and deliver all such further and other assurances and documents, and will take such action consistent with terms of this Agreement, as may be reasonably requested to carry out the transactions contemplated herein and to permit each party to enjoy its rights and benefits hereunder. If requested by Buyer, Seller further agrees to prosecute or otherwise enforce in its own name for the benefit of Buyer, any claim, right or benefit transferred by this Agreement that may require prosecution or enforcement in Seller's name. Any prosecution or enforcement of claims, rights, or benefits under this provision shall be solely at Buyer's expense (and if requested by Seller, shall be evidenced by a prepayment of such estimated expense), unless the prosecution or enforcement is made necessary by a breach of this Agreement on the part of Seller. ARTICLE 9. INDEMNIFICATION --------------- 9.1 Indemnification by Seller. Subject to the limitations set forth in Section 9.2, Seller shall indemnify and hold Buyer harmless at all times and after the date of this Agreement, against and in respect of all damages, losses, costs and expenses (including reasonable attorneys' fees) which Buyer may suffer or incur in connection with any of the following matters: (a) Any claim, demand, action or proceeding asserted by any person respecting any liabilities of Seller which are not expressly assumed by Buyer under this Agreement. (b) The breach by Seller of any of its representations, warranties or covenants in this Agreement. (c) The rights of Buyer with respect to any claims arising under Section 9.1 shall be limited to recovery of actual losses, costs and expenses (including reasonable attorneys' fees). Buyer hereby waives any remedy or right of rescission arising on the basis of such claims. 9.2 Indemnification by Buyer. Buyer shall indemnify and hold Seller harmless at all times from and after the date of this Agreement, against and in respect of all losses, damages, costs and expenses (including reasonable attorneys' fees) which Seller may suffer or incur in connection with any of the following matters: (a) The breach by Buyer of any representation, warranties or covenants in this Agreement. (b) Any claim, demand, action or proceeding asserted by any person against Seller relating to any obligation or liability assumed by Buyer hereunder or to any obligation or liability relating to its business incurred after the date of this Agreement. 9.3 Third Party Claims. If a claim by a third party is made against any of the indemnified parties, and if any of the indemnified parties intends to seek indemnity with respect to such claim under this Article, such indemnified party shall promptly notify the indemnifying party of such claim. The indemnifying party shall have sixty (60) days after receipt of the above- mentioned notice to undertake, conduct and control, through counsel of such party's own choosing (subject to the consent of the indemnified party, such consent not to be unreasonably withheld) at such party's expense, the settlement or defense of it, and the indemnified party shall cooperate with the indemnifying party in connection with such efforts; provided that: (i) the indemnifying party shall not by this Agreement permit to exist any lien, encumbrance or other adverse charge upon any asset of any indemnified party, (ii) the indemnifying party shall permit the indemnified party to participate in such settlement or defense through counsel chosen by the indemnified party, provided that the fees and expenses of such counsel shall be borne by the indemnified party, and (iii) the indemnifying party shall agree promptly to reimburse the indemnified party for the full amount of any loss resulting from such claim and all related expense incurred by the indemnified party pursuant to this Article. So long as the indemnifying party is reasonably contesting any such claim in good faith, the indemnified party shall not pay or settle any such claim. If the indemnifying party does not notify the indemnified party within sixty (60) days after receipt of the indemnified party's notice of a claim of indemnity under this Article that such party elects to undertake the defense of such claim, the indemnified party shall have the right to contest, settle or compromise the claim in the exercise of the indemnified party's exclusive discretion at the expense of the indemnifying party. 9.4 Prepayment. In the event Seller has a claim against Buyer for indemnification pursuant to this Article, such claim may be made by Seller in the amount of the estimated costs which shall be prepaid or bonded. If not so prepaid, Seller shall have the right to contest, settle or compromise the claim in the exercise of Seller's exclusive discretion at the expense of the Buyer. ARTICLE 11. GENERAL ------- 11.1 Counterparts. This Agreement may be executed in counterparts and by different parties on different counterparts with the same effect as if the signatures thereto were on the same instrument. This Agreement shall be effective and binding upon all parties hereto at such time as all parties have executed a counterpart of this Agreement. 11.2 Exhibits. Each Exhibit delivered pursuant to the terms of this Agreement shall be in writing and shall constitute a part of this Agreement. 11.3 Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be deemed to have been given, when received, if delivered by hand or telegram, or mail, return receipt requested, postage prepaid and addressed to the appropriate party at the following addresses: If to Seller: 6468 City West Parkway Eden Prairie, MN 55344. If to Buyer: 1230 Eagan Industrial Drive Suite 160 Eagan, MN 55121 Addresses may be changed by written notice given pursuant to this Section, however any such notice shall not be effective, if mailed, until three (3) working days after depositing in the mails or when actually received, whichever occurs first. 11.4 Successors and Assigns. Neither Seller or Buyer shall assign or transfer any of its rights or obligations hereunder without the prior written consent of the other party which consent shall not be unreasonably withheld. Provided however, that a merger or acquisition of the entire legal entity of either party hereto shall be permitted without obtaining written consent of the other party. 11.5 Expenses. Except as otherwise provided herein, each party hereto shall each bear and pay for its own costs and expenses incurred by it or on its behalf in connection with the transactions contemplated hereby, including, without limitation, all fees and disbursements of attorneys, accountants and financial consultants incurred through the Closing Date. 11.6 Entire Agreement. This Agreement, together with the Exhibits and the related written agreements specifically referred to herein, represents the only agreement among the parties concerning the subject matter hereof and supersedes all prior agreements whether written or oral, relating thereto. 11.7 Modification and Waiver. No purported amendment, modification or waiver of any provision hereof shall be binding unless set forth in a written document signed by all parties ( in the case of amendments or modifications) or by the party to be charged thereby (in the case of waivers). Any waiver shall be limited to the circumstance or event specifically referenced in the written waiver document and shall not be deemed a waiver of any other term hereof or of the same circumstance or event upon any recurrence thereof. 11.8 Governing Law. This Agreement and the legal relations between the parties shall be governed by and construed in accordance with the laws of the State of Minnesota. 11.9 Knowledge. Knowledge, as used in this Agreement or the instruments, certificates or other documents required under this Agreement, means actual knowledge of a fact or constructive knowledge if a reasonably prudent person in a like position would have known, or should have known, the fact. 11.10 Benefit. Nothing in this Agreement, expressed or implied, is intended to confer on any person other than the parties to this Agreement or their permitted successors or assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement. Each of the parties hereto has caused this Brokerage Asset Purchase Agreement to be executed in the manner appropriate to each, to be effective as of the day and year first above written. Norcom Resources, Inc. (Buyer) Global MAINTECH, Inc. (Seller) By /s/ Michael A. Erickson By /s/ David McCaffrey ----------------------- -------------------- Michael A. Erickson David McCaffrey Its: President Its: Chief Executive Officer BROKERAGE ASSET PURCHASE AGREEMENT PROMISSORY NOTE 1 $35,000 December 31, 1995 FOR VALUE RECEIVED, Norcom Resources, Inc. (hereinafter referred to as "Borrower") promises to pay to the order of Global MAINTECH, Inc. (hereinafter referred to as "Lender") the sum of thirty-fifty thousand Dollars ($35,000) to include interest at the rate of ten and one-quarter percent (10.25%) per annum on the unpaid balance. This Note 1 represents the unpaid balance due arising out of Asset Purchase Agreement dated as of December 31, 1995 ("Agreement") relating to the purchase of inventory and certain equipment. Such inventory and equipment were transferred by said Agreement to Borrower and comprise the principal assets of Borrower. Borrower acknowledges receipt of such inventory and equipment and represents that such inventory and equipment constitute adequate consideration for its assumption of the obligation for the unpaid purchase price thereof in the form of its promise to pay the amounts due hereunder. The term for this Note 1 is 15 months, maturing on March 31, 1997. Beginning March 31, 1996 payments on this Note 1 shall be payable in twelve equal monthly installments of two thousand nine hundred sixteen Dollars and sixty-seven cents ($2,916.67), each of which shall be deemed to include interest at the rate of ten and one-quarter percent (10.25%) per annum on the unpaid balance. The last such payment is due March 31, 1997. Each payment made on this Note 1 shall be applied first against interest and the remainder against principal based on actual days elapsed in a year of 365 days. This Note 1 is secured by a security interest in 600,000 shares of common stock of Global MAINTECH Corporation ("Stock") owned by Michael A. Erickson in accordance with the terms and conditions of a Security Agreement from Borrower dated as of the same date herewith. In the event of default in any covenant or payment herein or in any covenant, term or condition contained in the Security Agreement, the entire outstanding principal balance hereunder and interest accrued hereon shall become immediately due and payable, at the option of Holder hereof and without notice. Provided however, that the Holder may not exercise its right to use its security interest in the common stock of Global MAINTECH Corporation to offset an acceleration of principal arising from a default until the final maturity date of April 1, 1997. The Holder of this Note 1 need not grant nor permit any grace period after default before accelerating the debt created hereby. The Borrower shall have the right to pre-pay the principal balance due under this Note 1 in whole or in part at any time without premium or penalty, and any partial pre-payment(s) shall be applied in reduction of the principal last to mature hereunder. Pre-payment may include the Buyer's right to offset against its obligations hereunder any amounts due Buyer from Seller pursuant to this Agreement. The undersigned hereof: A. Agrees to pay this Note 1 and guarantees payment hereof; B. Waives demand, presentment, protest and notice of dishonor; C. Consents to the extensions and renewals hereof without notice; D. Consents to the extension, renewal, exchange, surrender or release of any collateral securing this Note 1 with or without consideration; E. Agrees in the case of any default to pay all costs of collection, including reasonable attorneys' fees, and interest per annum at the rate of twelve and one-quarter percent (12.25%) or the maximum rate of interest whichever is lower or late charges permitted by law. This Note 1 shall be governed by the laws of the State of Minnesota. Borrower: Norcom Resources, Inc. By: /s/ Michael A. Erickson ----------------------- Michael A. Erickson Its: President As regards the Common Stock Collateral, only By: /s/ Michael A. Erickson ----------------------- Michael A. Erickson BROKERAGE ASSET PURCHASE AGREEMENT ---------------------------------- EXHIBIT 2.2.1 (b) PROMISSORY NOTE 2 $35,000 December 31, 1995 FOR VALUE RECEIVED, Norcom Resources, Inc. (hereinafter referred to as "Borrower") promises to pay to the order of Global MAINTECH, Inc. (hereinafter referred to as "Lender") the sum of thirty-fifty thousand Dollars ($35,000) to include interest at the rate of ten and one-quarter percent (10.25%) per annum on the unpaid balance. This Note 2 represents the unpaid balance due arising out of Asset Purchase Agreement dated as of December 31, 1995 ("Agreement") relating to the purchase of inventory and certain equipment. Such inventory and equipment were transferred by said Agreement to Borrower and comprise the principal assets of Borrower. Borrower acknowledges receipt of such inventory and equipment and represents that such inventory and equipment constitute adequate consideration for its assumption of the obligation for the unpaid purchase price thereof in the form of its promise to pay the amounts due hereunder. The term for this Note 2 is 15 months, maturing on March 31, 1997. One payment on the date of maturity shall be deemed to include interest at the rate of ten and one-quarter percent (10.25%) per annum on the unpaid balance. Payment made on this Note 2 shall be applied first against interest and the remainder against principal based on actual days elapsed in a year of 365 days. This Note 2 is secured by a security interest in 600,000 shares of common stock of Global MAINTECH Corporation owned by Michael A. Erickson in accordance with the terms and conditions of a Security Agreement from Borrower dated as of the same date herewith. In the event of default in any covenant or payment herein or in any covenant, term or condition contained in the Security Agreement, the entire outstanding principal balance hereunder and interest accrued hereon shall become immediately due and payable, at the option of Holder hereof and without notice. Provided however, that the Holder may not exercise its right to use its security interest in the common stock of Global MAINTECH Corporation to offset an acceleration of principal arising from a default until the final maturity date of March 31, 1997. The Holder of this Note 2 need not grant nor permit any grace period after default before accelerating the debt created hereby. The Borrower shall have the right to pre-pay the principal balance due under this Note 2 in whole or in part at any time without premium or penalty, and any partial pre-payment(s) shall be applied in reduction of the principal last to mature hereunder. Pre-payment may include the Buyer's right to offset against its obligations hereunder any amounts due Buyer from Seller pursuant to this Agreement. The undersigned hereof: A. Agrees to pay this Note 2 and guarantees payment hereof; B. Waives demand, presentment, protest and notice of dishonor; C. Consents to the extensions and renewals hereof without notice; D. Consents to the extension, renewal, exchange, surrender or release of any collateral securing this Note 2 with or without consideration; E. Agrees in the case of any default to pay all costs of collection, including reasonable attorneys' fees, and interest per annum at the rate of twelve and one-quarter percent (12.25%) or the maximum rate of interest whichever is lower or late charges permitted by law. This Note 2 shall be governed by the laws of the State of Minnesota. Borrower: Norcom Resources, Inc. By: /s/ Michael A. Erickson ----------------------- Michael A. Erickson Its: President As regards the Common Stock Collateral, only By: /s/ Michael A. Erickson ----------------------- Michael A. Erickson BROKERAGE ASSET PURCHASE AGREEMENT EXHIBIT 2.2.2 (a) SECURITY AGREEMENT NOTE 1 For value received Norcom Resources, Inc., a Minnesota corporation located at 1230 Eagan Industrial Drive, Suite 160, Eagan, MN 55121 (herein referred to as ("Borrower") grants to Global MAINTECH, Inc., (herein referred to as ("Lender"), a security interest to secure the payment of that certain promissory note dated December 31, 1995, executed and delivered by the Borrower to the Lender in the original principal sum of thirty-five thousand Dollars ($35,000), interest and other charges as therein provided (herein referred to as ("Note 1"). This security interest also secures all extensions, renewals, and replacements of Note 1. Such obligations are herein collectively referred to as the ("Secured Obligation"). To secure payment of the Secured Obligation, the Borrower grants the Lender a security interest in the following property (hereinafter referred to as the "Collateral"): 600,000 shares of common stock of Global MAINTECH Corporation ("Stock") owned by Michael A. Erickson. The Collateral shall include all substitutions and replacements for and proceeds of any and all of the foregoing property, and all accessions, accessories, attachments, parts, equipment, and repairs now or hereafter attached or affixed to or used in connection with such Collateral. Borrower warrants, represents, and agrees that: 1. The Collateral will be kept at the following locations 1230 Eagan Industrial Drive, Suite 160, Eagan, MN or 9220 James Avenue South, Bloomington, MN and will not be moved from such locations unless, prior to any such removal, Borrower has given written notice to the Lender of the location or locations to which Borrower desires to remove the Collateral; and the Lender has given its written consent to such removal. 2. Borrower's place of business is located at 1230 Eagan Industrial Drive, suite 160, Eagan, MN; Michael A. Erickson's address is 822 Mayflower Court, Northfield, MN 55057 and Borrower will notify the Lender in writing of any change in location of Borrower's place of business. 3. Borrower, or in the case of the Stock, Michael A. Erickson have title to and will at all times keep the Collateral free of all liens and encumbrances, except the security interest created hereby, and has full power and authority to execute this Security Agreement, to perform Borrower's obligations hereunder, and to subject the Collateral to the security interest created hereby. Borrower will pay all fees, assessments, charges, or taxes arising with respect to the Collateral. There is no encumbrance or security interest with respect to all or any part of the Collateral which either (i) is superior to the Lender's security interest hereunder, or (ii) has not been disclosed to the Lender by the Borrower. All costs of keeping the Collateral free of encumbrances and security interests prohibited by this Agreement and of removing same if they should arise, shall be borne and paid by Borrower. 4. Borrower will at any time or times hereafter execute such financing statements and other documents and instruments and perform such acts as the Lender may from time to time request to establish, maintain, perfect, and enforce a valid security interest in the Collateral, and will pay all costs of filing and recording. 5. Borrower will keep the Collateral in good condition and insure it against loss or damage by fire, theft, physical damage, and against such other risk, in such amounts, in such companies and upon such terms as Lender may reasonably require. Borrower will obtain loss payable endorsements on applicable insurance policies in favor of Borrower and Lender as their interests may appear and at Lender's request will deposit the insurance policies with Lender. Borrower will cause each insured to agree, by policy endorsement or by issuance of Certificate of Insurance or by independent instrument furnished to Lender, that such insurer will give 30 days written notice to Lender before such policy will be altered or canceled. Borrower irrevocably appoints Lender as Borrower's attorney-in-fact to make any claim for, to negotiate settlement of the claims, to receive for and to execute and endorse any documents, checks, or other instruments in payment for loss, theft, or damage under any insurance policy covering the Collateral. 6. Upon default by Borrower in the performance of the obligations hereunder, the Lender shall have the authority, but shall not be obligated to: (i) effect such insurance and pay the premiums thereof; and (ii) pay and discharge any fees, assessments, charges, taxes, liens, and encumbrances on the Collateral. All sums so advanced or paid by the Lender shall be payable by Borrower on demand with interest at the default rate or the maximum rate allowed by law whichever is lower and shall be part of the Secured Obligations. 7. Borrower will not sell, lease, or otherwise dispose of the Collateral other than in the ordinary course of its business thereof. 8. Borrower will keep and maintain accurate records with respect to the Collateral, and with respect to the general business of Borrower, and will make the same available to the Lender at its request for examinations and inspections; and will make and render to the Lender such reports, accounting, and statements as the Lender may from time to time request with respect to the Collateral; will permit any authorized representative of the Lender to examine and inspect, during normal business hours, any and all premises where the Collateral is or may be kept or located. 9. The occurrence of any of the following events will constitute a Default: (a) failure of Borrower to pay when due any amount payable under any of the secured obligations; (b) failure to perform any agreement of borrower contained herein or in any other agreement with the Lender; (c) any statement, representation of warranty of Borrower made herein or at any time furnished to the Lender is untrue in any respect as of the date made; (d) entry of any judgment against Borrower; (e) borrower becomes insolvent or is generally not paying its debts as such debts become due; (f) appointment of or assignment to a custodian, as that term is defined in the United States Bankruptcy Code, or loss, substantial damage to, destruction, theft, encumbrance, levy, seizure, or attachment of any portion of the Collateral; (g) commencement of any proceeding or filing of a petition by or against Borrower under the provisions of the United States Bankruptcy Code or under any insolvency law or other statute or law providing for the modification or adjustments of the rights of creditors; or, (h) dissolution, or transfer of a substantial part of the property of Borrower. 10. Whenever a default shall exist, the Lender may at its option and without demand or notice declare all or any part of the secured obligation immediately due and payable; and the Lender may exercise, in addition to the rights and remedies granted hereby, all rights and remedies of the secured party under the Uniform Commercial Code or any other applicable law. Provided however, that the Holder may not exercise its right to use its security interest in the common stock of Global MAINTECH Corporation to offset an acceleration of principal arising from a default until the final maturity date of March 31, 1997. 11. Borrower agrees in the event of default, to make the Collateral available to the Lender at a place or places to be designated by the Lender, which is reasonably convenient to both parties, and to pay all costs of the Lender, including reasonable attorneys fees in the collection of any of the secured obligations and the enforcement of any of the Lender's rights. If any notification of intended disposition of any of the Collateral is required by law, such notification shall be deemed properly given if mailed a reasonable time before such disposition, postage prepaid, addressed to the Borrower at the address shown above. The Lender's duty of care with respect to the Collateral in its possession such be deemed fulfilled if the Lender exercises reasonable care in physically safekeeping such Collateral, and the Lender need not otherwise preserve, protect, insure, or care for any Collateral. The Lender shall not be obligated to preserve any rights the Borrower may have against prior parties, to realize on the Collateral at all or in any particular manner or order, or to apply any cash proceeds of Collateral in any particular order of application. No delay or failure by the Lender in the exercise of any right or remedy shall preclude other or further exercise thereof or the exercise of any other rightful remedy. 12. This Agreement is governed by the laws of the State of Minnesota. Executed this 20th day of March, 1996. Borrower: Norcom Resources, Inc. By:/s/ Michael A. Erickson ----------------------- Michael A. Erickson Its: President As regards the Common Stock Collateral, only By: /s/ Michael A. Erickson ----------------------- Michael A. Erickson BROKERAGE ASSET PURCHASE AGREEMENT EXHIBIT 2.2.2 (b) SECURITY AGREEMENT NOTE 2 For value received Norcom Resources, Inc., a Minnesota corporation located at 1230 Eagan Industrial Drive, Suite 160, Eagan, MN 55121 (herein referred to as ("Borrower") grants to Global MAINTECH, Inc., (herein referred to as ("Lender"), a security interest to secure the payment of that certain promissory note dated December 31, 1995, executed and delivered by the Borrower to the Lender in the original principal sum of thirty-five thousand Dollars ($35,000), interest and other charges as therein provided (herein referred to as ("Note 2"). This security interest also secures all extensions, renewals, and replacements of Note 2. Such obligations are herein collectively referred to as the ("Secured Obligation"). To secure payment of the Secured Obligation, the Borrower grants the Lender a security interest in the following property (hereinafter referred to as the "Collateral"): 600,000 shares of common stock of Global MAINTECH Corporation ("Stock") owned by Michael A. Erickson. The Collateral shall include all substitutions and replacements for and proceeds of any and all of the foregoing property, now or hereafter attached or affixed to or used in connection with such Collateral. Borrower warrants, represents, and agrees that: 1. The Collateral will be kept at the following locations 1230 Eagan Industrial Drive, Suite 160, Eagan, MN or 9220 James Avenue South, Bloomington, MN and will not be moved from such locations unless, prior to any such removal, Borrower has given written notice to the Lender of the location or locations to which Borrower desires to remove the Collateral; and the Lender has given its written consent to such removal. 2. Borrower's place of business is located at 1230 Eagan Industrial Drive, suite 160, Eagan, MN; Michael A. Erickson's address is 822 Mayflower Court, Northfield, MN 55057 and Borrower will notify the Lender in writing of any change in location of Borrower's place of business. 3. Borrower, or in the case of the Stock, Michael A. Erickson have title to and will at all times keep the Collateral free of all liens and encumbrances, except the security interest created hereby, and has full power and authority to execute this Security Agreement, to perform Borrower's obligations hereunder, and to subject the Collateral to the security interest created hereby. Borrower will pay all fees, assessments, charges, or taxes arising with respect to the Collateral. There is no encumbrance or security interest with respect to all or any part of the Collateral which either (i) is superior to the Lender's security interest hereunder, or (ii) has not been disclosed to the Lender by the Borrower. All costs of keeping the Collateral free of encumbrances and security interests prohibited by this Agreement and of removing same if they should arise, shall be borne and paid by Borrower. 4. Borrower will at any time or times hereafter execute such financing statements and other documents and instruments and perform such acts as the Lender may from time to time request to establish, maintain, perfect, and enforce a valid security interest in the Collateral, and will pay all costs of filing and recording. 5. Borrower will keep the Collateral in good condition and insure it against loss or damage by fire, theft, physical damage, and against such other risk, in such amounts, in such companies and upon such terms as Lender may reasonably require. Borrower will obtain loss payable endorsements on applicable insurance policies in favor of Borrower and Lender as their interests may appear and at Lender's request will deposit the insurance policies with Lender. Borrower will cause each insured to agree, by policy endorsement or by issuance of Certificate of Insurance or by independent instrument furnished to Lender, that such insurer will give 30 days written notice to Lender before such policy will be altered or canceled. Borrower irrevocably appoints Lender as Borrower's attorney-in-fact to make any claim for, to negotiate settlement of the claims, to receive for and to execute and endorse any documents, checks, or other instruments in payment for loss, theft, or damage under any insurance policy covering the Collateral. 6. Upon default by Borrower in the performance of the obligations hereunder, the Lender shall have the authority, but shall not be obligated to: (i) effect such insurance and pay the premiums thereof; and (ii) pay and discharge any fees, assessments, charges, taxes, liens, and encumbrances on the Collateral. All sums so advanced or paid by the Lender shall be payable by Borrower on demand with interest at the default rate or the maximum rate allowed by law whichever is lower and shall be part of the Secured Obligations. 7. Borrower will not sell, lease, or otherwise dispose of the Collateral other than in the ordinary course of its business thereof. 8. Borrower will keep and maintain accurate records with respect to the Collateral, and with respect to the general business of Borrower, and will make the same available to the Lender at its request for examinations and inspections; and will make and render to the Lender such reports, accounting, and statements as the Lender may from time to time request with respect to the Collateral; will permit any authorized representative of the Lender to examine and inspect, during normal business hours, any and all premises where the Collateral is or may be kept or located. 9. The occurrence of any of the following events will constitute a Default: (a) failure of Borrower to pay when due any amount payable under any of the secured obligations; (b) failure to perform any agreement of borrower contained herein or in any other agreement with the Lender; (c) any statement, representation of warranty of Borrower made herein or at any time furnished to the Lender is untrue in any respect as of the date made; (d) entry of any judgment against Borrower; (e) borrower becomes insolvent or is generally not paying its debts as such debts become due; (f) appointment of or assignment to a custodian, as that term is defined in the United States Bankruptcy Code, or loss, substantial damage to, destruction, theft, encumbrance, levy, seizure, or attachment of any portion of the Collateral; (g) commencement of any proceeding or filing of a petition by or against Borrower under the provisions of the United States Bankruptcy Code or under any insolvency law or other statute or law providing for the modification or adjustments of the rights of creditors; or, (h) dissolution, or transfer of a substantial part of the property of Borrower. 10. Whenever a default shall exist, the Lender may at its option and without demand or notice declare all or any part of the secured obligation immediately due and payable; and the Lender may exercise, in addition to the rights and remedies granted hereby, all rights and remedies of the secured party under the Uniform Commercial Code or any other applicable law. Provided however, that the Holder may not exercise its right to use its security interest in the common stock of Global MAINTECH Corporation to offset an acceleration of principal arising from a default until the final maturity date of March 31, 1997. 11. Borrower agrees in the event of default, to make the Collateral available to the Lender at a place or places to be designated by the Lender, which is reasonably convenient to both parties, and to pay all costs of the Lender, including reasonable attorneys fees in the collection of any of the secured obligations and the enforcement of any of the Lender's rights. If any notification of intended disposition of any of the Collateral is required by law, such notification shall be deemed properly given if mailed a reasonable time before such disposition, postage prepaid, addressed to the Borrower at the address shown above. The Lender's duty of care with respect to the Collateral in its possession such be deemed fulfilled if the Lender exercises reasonable care in physically safekeeping such Collateral, and the Lender need not otherwise preserve, protect, insure, or care for any Collateral. The Lender shall not be obligated to preserve any rights the Borrower may have against prior parties, to realize on the Collateral at all or in any particular manner or order, or to apply any cash proceeds of Collateral in any particular order of application. No delay or failure by the Lender in the exercise of any right or remedy shall preclude other or further exercise thereof or the exercise of any other rightful remedy. 12. This Agreement is governed by the laws of the State of Minnesota. Executed this 20th day of March, 1996. Borrower: Norcom Resources, Inc. By:/s/ Michael A. Erickson ----------------------- Michael A. Erickson Its: President As regards the Common Stock Collateral, only By: /s/ Michael A. Erickson ----------------------- Michael A. Erickson BROKERAGE ASSET PURCHASE AGREEMENT EXHIBIT 1.1 (b) EQUIPMENT LIST Office desks, chairs and file storage for five offices. Four desktop personal computers, one portable personal computer, and computer networking equipment. Warehouse equipment: One banding tool; One-half ownership interest or residual interest in forklift; and, All other equipment located in warehouse at 9220 James Avenue South on December 31, 1995. All of the above which may be subject to lease (attached hereto on Exhibits 1.2.1 and 1.2.2) shall remain on lease and are not being assigned to Buyer. Buyer agrees to be maintain such equipment in good condition normal wear and tear excepted. BROKERAGE ASSET PURCHASE AGREEMENT EXHIBIT 1.1 (c) VEHICLE LEASE BROKERAGE ASSET PURCHASE AGREEMENT EXHIBIT 1.1 (e) PARTIAL LIST OF INVENTORY BROKERAGE ASSET PURCHASE AGREEMENT EXHIBIT 1.2.1 LEASE WITH R.P. CAPITAL CORPORATION BROKERAGE ASSET PURCHASE AGREEMENT EXHIBIT 1.2.2 LEASE WITH DATA SALES CO. BROKERAGE ASSET PURCHASE AGREEMENT EXHIBIT 1.3 (a) LIABILITIES ASSUMED BY BUYER AS OF DECEMBER 31, 1995 The following three liabilities are assumed by Buyer: 1. That certain Vehicle lease attached as Exhibit 3.3 (c). 2. Broward County/MLC penalty (project # s-495-1731) in the amount of $28,000 at December 31, 1995. 3. Liability to Forsythe McArthur for HH TCM ( broker Tony DeFalco) in the amount of $25,000 at December 31, 1995. All other known liabilities identified on the financial statements of Seller as of December 31, 1995 shall remain the obligation of Seller. If however, Seller remains an obligor for items 2 and/or 3 above, Buyer agrees to grant Seller a security interest in an additional 883,334 shares of common stock owned by Michael A. Erickson which security interest will be recorded in a form substantially equal to the form used in Exhibit's 2.2.2 (a) and (b). The terms of the security interest will allow Seller to offset any payments made by seller on or before March 31, 1997 or any obligations remaining of items 2 or 3 above, as verified by the third party, as of March 31, 1997 to which Seller remains obligated ("Third Party Obligation"), against the common stock collateral. The offset will be calculated as the Third Party Obligation divided by a common share price of $.06 and will be determined as of March 31, 1997. Seller and Buyer agree that at the time of Closing herein, neither party can determine if the third parties in item 2 or 3 above will agree to release Seller of these obligations. And further agree to make this determination by April 30, 1996. If by that time Seller does not have in its possession a signed release of liability, then, for these purposes, it will be deemed to be still liable for items 2 and 3 above and the security interest described above will be documented by the Seller and Buyer. NOTE: In exchange for the liabilities assumed by Buyer in this Exhibit 1.3(a) Global MAINTECH, Inc. agrees to: (i) reduce the original debt from Buyer from $100,000 to $70,000; and, (ii) reduce the financial exposure to Data Sales Co. from $190,000, before accrued interest to $70,000. This reduces the joint and several liability of Mike Erickson, one of the two guarantors of the Data Sales Co. note. Global MAINTECH, Inc. is more reasonably assured of meeting the payment requirements on the remaining $70,000 of Data Sales debt. Approval and acceptance of terms on the 20th day of March 1996: Global MAINTECH, Inc. Norcom Resources, Inc. As regards the Common Stock Collateral, only /s/ David McCaffrey /s/ Michael A. Erickson /s/ Michael A. Erickson - ------------------- ----------------------- ----------------------- Name: David McCaffrey Name: Michael A. Erickson Name: Michael A. Erickson Title: CEO Title: President BROKERAGE ASSET PURCHASE AGREEMENT EXHIBIT 2.3 ALLOCATION OF PURCHASE PRICE Both parties to this Agreement agree the Purchase Price shall be allocated entirely to the Inventory. BROKERAGE ASSET PURCHASE AGREEMENT EXHIBIT 3.2 FINANCIAL STATEMENTS 1. Exhibit 3.2.1 financial statements of Seller as of and for the year ended December 31, 1994. 2. Exhibit 3.2.2 interim quarterly financial statements as of and for the nine months ended September 30, 1995 of Seller's parent company. 3. Exhibit 3.2.3 monthly internal incomes statements for October and November 1995 (division allocation of standard operating income/expense). 4. Exhibit 3.2.4 Brokerage spin-off issues named "Spin-off.xls". BROKERAGE ASSET PURCHASE AGREEMENT EXHIBIT 3.3 (a) RELEASE OF SECURITY INTEREST Global MAINTECH Corporation which possesses a security interest in the Inventory, as defined in the Brokerage Asset Purchase Agreement dated December 31, 1995, pursuant to that certain Secured Promissory Note dated December 6, 1994 between Global MAINTECH Corporation (f/k/a Mirror Technologies, Incorporated) and Global MAINTECH, Inc., as amended, hereby renounces and releases said security interest as regards the Inventory. /s/ James Geiser /s/ Michael A. Erickson ---------------- ----------------------- James Geiser, CFO David McCaffrey, CEO BROKERAGE ASSET PURCHASE AGREEMENT EXHIBIT 3.3 (b) Burger Note BROKERAGE ASSET PURCHASE AGREEMENT OFFICERS' CERTIFICATE OF SELLER The undersigned, David McCaffrey and James Geiser, being the duly appointed Chief Executive Officer and Chief Financial Officer, respectively of Global MAINTECH, Inc. ("Seller") hereby certify, on behalf of Seller , pursuant to Section 6.1 (a) of that certain Brokerage Asset Purchase Agreement between Buyer and Seller dated December 31, 1995, that as of March 20, 1996, the Closing Date: (a) The representations and warranties of Seller therein are true in all material respects to the best of its knowledge on the Closing Date with the same effect as though made at such time. (b) Seller has performed all material obligations and complied with all material covenants and conditions prior to or as of the Closing Date. IN WITNESS WHEREOF, the undersigned has executed this Certificate as of this 20th day of March, 1996. /s/ David McCaffrey ------------------- David McCaffrey, CEO /s/ James Geiser ---------------- James Geiser, CFO BROKERAGE ASSET PURCHASE AGREEMENT OFFICERS' CERTIFICATE OF BUYER The undersigned, Michael A. Erickson, being the duly appointed President, Norcom Resources, Inc. ("Buyer") hereby certifies, on behalf of Seller , pursuant to Section 6.2 (a) of that certain Brokerage Asset Purchase Agreement between Buyer and Seller dated December 31, 1995, that as of March 20, 1996, the Closing Date: (a) The representations and warranties of Buyer therein are true in all material respects to the best of its knowledge on the Closing Date with the same effect as though made at such time. (b) Buyer has performed all material obligations and complied with all material covenants and conditions prior to or as of the Closing Date. IN WITNESS WHEREOF, the undersigned has executed this Certificate as of this 20th day of March, 1996. /s/ Michael A. Erickson ----------------------- Michael A. Erickson, President BROKERAGE ASSET PURCHASE AGREEMENT ASSIGNMENT PURSUANT TO SUBSECTION 6.1 (b) Seller hereby assigns its rights, interests and obligations pursuant to that certain lease of the Vehicle as defined with Infiniti Financial Services attached to the Brokerage Asset Purchase Agreement as Exhibit 3.3 (c) to Buyer. Seller also assigns its right, title and interest in the Intangible Property, as defined, to Buyer. Excluded from the Intangible Property, as defined, are those intangibles listed in subsection 1.2 (d) (i) & (ii). Global MAINTECH, Inc. /s/ David McCaffrey ------------------- David McCaffrey, CEO /s/ James Geiser ---------------- James Geis er, CFO BROKERAGE ASSET PURCHASE AGREEMENT BILL OF SALE For good and valuable consideration, the receipt of which is hereby acknowledged, Global MAINTECH, Inc. ("Seller") does hereby sell, transfer and convey to Norcom Resources, Inc. ("Buyer") its entire right, title and interest in and to the Inventory, as defined, pursuant to the terms of the Brokerage Asset Purchase Agreement between Buyer and Seller dated December 31, 1995 and described below: All inventory, including raw materials, supplies, work in process and finished inventory of the brokerage business as of December 31, 1995 a partial list of which is attached on Exhibit 1.1 (e) of the Brokerage Asset Purchase Agreement. ("Inventory"). Seller makes no warranty or representation, either express or implied, as to title to, as to the design or condition of, or as to quality of the material, equipment or workmanship in, the Inventory, and Seller makes no warranty of merchantability or fitness of the Inventory for any particular purpose or any component thereof, or any other representation or warranty, express or implied, with respect to any item of Inventory, either upon delivery thereof to Buyer, or otherwise, except that Seller warrants that it has conveyed to Buyer all of its right, title and interest in and to the Inventory and that the Inventory is free and clear of encumbrances created by Seller unrelated to the transactions contemplated by the Brokerage Asset Purchase Agreement. Seller agrees to perform, upon the request and at the expense of Buyer, such further acts and to execute such additional documents as may be necessary to give effect to the transfer of the Inventory to Buyer in accordance with the terms of this Bill of Sale. Global MAINTECH, Inc. By:/s/ David McCaffrey ------------------- David McCaffrey Its: CEO Dated: March 20, 1996 EX-10.12 6 CERTIFICATE OF AMENDMENT Exhibit 10.12 GLOBAL MAINTECH CORPORATION CERTIFICATE OF AMENDMENT I, James Geiser, Secretary of Global MAINTECH Corporation do hereby certify that the following amendment to the 1989 Stock Option Plan was duly adopted by the shareholders of that corporation. This amendment was adopted by the shareholders of such corporation on May 15, 1995.: "Section 2 of the 1989 Stock Option Plan shall be amended in its entirety to read as follows: 2. Stock Subject to Plan. ---------------------- Subject to the provisions of Section 12 hereof, the stock to be subject to options under the Plan shall be the Company's authorized Common Stock, no par value per share. Such shares may be either authorized but unissued shares, or issued shares which have been reacquired by the Company. subject to adjustment as provided in Section 12 hereof, the maximum number of shares on which options may be exercised under this Plan shall be 50,000,000 shares. If an option under the Plan expires, or for any reason is terminated or unexercised with respect to any shares, such shares shall again be available for options thereafter granted during the term of the Plan." /s/ James Geiser Secretary 1 EX-23 7 CONSENT OF KPMG PEAT MARWICK LLP Exhibit 23 INDEPENDENT AUDITORS' CONSENT The Board of Directors Global MAINTECH Corporation: We consent to incorporation by reference in the registration statement No. 33-33576, on Form S-8 of Global MAINTECH Corporation of our report dated February 23, 1996, relating to the consolidated balance sheets of Global MAINTECH Corporation and subsidiary as of December 31, 1995, and 1994, and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, which report appears in the December 31, 1995 annual report on Form 10-KSB of Global MAINTECH Corporation. Our report dated February 23, 1996, contains an explanatory paragraph that states that the Company has suffered losses from operations and has a working capital deficit and accumulated deficit, which raise substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of that uncertainty. /s/ KPMG Peat Marwick LLP Minneapolis, Minnesota March 29, 1996 EX-27 8 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE DECEMBER 31, 1995 FORM 10-KSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 12-MOS 12-MOS DEC-31-1995 DEC-31-1994 JAN-01-1995 JAN-01-1994 DEC-01-1995 DEC-01-1994 39 24 0 0 321 222 0 0 187 0 608 295 16 850 0 0 625 1,719 1,628 2,332 58 891 0 0 406 0 907 80 (2,373) (1,583) 625 1,719 1,174 56 1,174 56 351 35 0 0 877 838 0 0 134 412 (189) (1,225) 6 5 (195) (1,230) (595) (169) 0 0 0 0 (790) (1,398) (0.02) (0.03) (0.02) (0.03) Net earnings (loss) per share and weighted average number of common and common equivalent shares outstanding for the year ended, December 31, 1994 assume the merger as described in note 2 had occurred on January 1, 1994 for presentation purposes.
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