ESCROW AGREEMENT
This
Escrow Agreement (as the same may be amended or modified from time to time
and
including any and all written instructions given to “Escrow
Agent”
(hereinafter defined) pursuant hereto, this “Agreement”)
is
made and entered into as of July 20, 2006, by and among Perficient, Inc., a
Delaware corporation (“Parent”),
Perficient DCSS, Inc., a Delaware corporation (“Buyer”),
Digital Consulting & Software Services, Inc., a Texas corporation
(“Seller”),
and
Continental Stock Transfer & Trust Company, as escrow agent (“Escrow
Agent”).
WITNESSETH:
WHEREAS,
Parent, Buyer and Seller are parties to that certain Asset Purchase Agreement
dated as of July 20, 2006 (the “Asset
Purchase Agreement”)
pursuant to which Seller will receive cash and shares of common stock, par
value
$0.001 per share, of Parent (“Parent
Common Stock”)
in
connection with the closing of the transactions contemplated by the Asset
Purchase Agreement (the “Closing”);
and
WHEREAS,
at the Closing, Parent, Buyer and Seller have agreed to deposit into escrow
with
the Escrow Agent one or more certificates in the name of Seller evidencing
an
aggregate number of shares of Parent Common Stock equal to $1,912,500 divided
by
the Parent Stock Per Share Price (the “Escrowed
Shares”),
to be
held by the Escrow Agent pursuant to the terms and conditions set forth in
this
Agreement and the Asset Purchase Agreement pending the occurrence of certain
events set forth herein and therein; and
WHEREAS,
the purpose of the Escrowed Shares is to secure claims under Article IX of
the
Asset Purchase Agreement (“Indemnification
Claims”);
and
WHEREAS,
Escrow Agent is willing to serve in such capacity on the terms and conditions
hereinafter set forth.
NOW,
THEREFORE, in consideration of the foregoing and of the mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Definitions.
Unless
otherwise defined herein, each capitalized term used in this Agreement shall
have the meaning ascribed to such term in the Asset Purchase
Agreement.
2. Appointment
of Escrow Agent.
Each of
Parent, Buyer and Seller hereby appoints and designates Escrow Agent as the
escrow agent for the purposes and upon the terms set forth herein, and Escrow
Agent hereby accepts such appointment and agrees to act as escrow agent
hereunder for the purposes and upon the terms set forth herein.
3. Action
by the Escrow Agent.
Notwithstanding any provision of this Agreement, the parties acknowledge and
agree that the Escrow Agent shall not take any action required of it pursuant
to
this Agreement until the Escrow Agent has received joint written instructions
by
Parent, Buyer and Seller. The parties further acknowledge and agree that such
written instructions shall specify the number of shares, if any, of Parent
Common Stock to be distributed from the Escrowed Shares (calculated in
accordance with Section 8(d)).
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4. Authority
of Parent.
Each of
the parties hereto agrees that Parent shall have authority to settle all
Indemnification Claims in accordance with Article IX of the Asset Purchase
Agreement on behalf of Buyer, or any of the affiliates of Parent or Buyer.
Unless the context otherwise requires, any references to Parent contained herein
shall be deemed to be references to Parent and Buyer, and each of their
respective affiliates.
5. Seller
Representative.
If
after the Closing and prior to the distribution of the Escrowed Shares, Seller
transfers record ownership of or assigns the Escrowed Shares to any of the
Seller Interest Holders, each of the parties hereto agree that Seller shall
have
authority to settle all claims under this Agreement or the Asset Purchase
Agreement on behalf of any Seller Interest Holders who are entitled to receive
a
part of the Escrowed Shares upon the release and distribution from this escrow.
Unless the context otherwise requires, any references to Seller contained herein
shall be deemed to be references to Seller and to the Seller Interest Holders
to
the extent Escrowed Shares have been transferred or assigned to the Seller
Interest Holders.
6. Deposit
of Escrowed Shares.
(a) Escrow
Fund.
On the
Closing Date, (i) Parent shall issue one or more certificates in the name of
Seller evidencing the Escrowed Shares to be held in escrow pursuant to the
terms
and conditions of this Agreement and (ii) Seller shall deliver to Parent an
original stock power endorsed by Seller in blank with medallion signature
guarantee (“stock
powers”).
If
Seller transfers record ownership of, or assigns the Escrowed Shares after
the
Closing to the Seller Interest Holders, Seller will deliver or cause to be
delivered a stock power to Parent endorsed by each Seller Interest Holder to
whom the Escrowed Shares have been transferred or assigned. As soon as
reasonably practicable after receipt of such stock power, Parent shall issue
certificates for the Escrowed Shares registered in the name of the Seller
Interest Holder to be held in escrow pursuant to the terms and conditions of
this Agreement. The Escrowed Shares shall constitute an escrow fund (the
“Escrow
Fund”)
with
respect to Indemnification Claims of the Purchaser Indemnitees under the Asset
Purchase Agreement. The Escrow Fund shall be held as a trust fund and shall
not
be subject to any lien, attachment, trustee process or any other judicial
process of any creditor of Seller or of any other Person, including any party
hereto. The Escrow Agent agrees to accept delivery of the Escrow Fund and stock
powers and to hold the Escrowed Shares and stock powers in an escrow account
(the “Escrow
Account”),
subject to the terms and conditions of this Agreement.
(b) Voting
of Escrowed Shares; Sale of Escrowed Shares.
Each
record owner of the Escrowed Shares shall be entitled to exercise all voting
rights with respect to such owner’s Escrowed Shares.
(c) Dividends,
Etc.
Parent
and Seller agree between themselves, for the benefit of Parent and the Escrow
Agent, that any securities or other property distributable (whether by way
of
dividend, stock split or otherwise) in respect of or in exchange for any
Escrowed Shares shall not be distributed to the record owners of such Escrowed
Shares, but rather shall be distributed to and held by the Escrow Agent in
the
Escrow Account. Ordinary cash dividends will be paid by Parent directly to
Seller or other record owners of such Escrowed Shares and not to the Escrow
Agent. Unless and until the Escrow Agent shall actually receive such additional
securities or other property, it may assume without inquiry that the
Escrowed
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Shares
currently being held by it in the Escrow Account are all that the Escrow Agent
is required to hold. At the time any Escrowed Shares are required to be released
from the Escrow Account to any Person pursuant to this Agreement, any securities
or other property previously received by the Escrow Agent in respect of or
in
exchange for such Escrowed Shares shall be released from the Escrow to such
Person.
7. Release
Date.
For
purposes of this Agreement, the “Release
Date”
shall
be the day that is one year after the Closing Date.
8. Administration
of Escrow Account.
Except
as otherwise provided herein, the Escrow Agent shall administer the Escrow
Account as follows:
(a) If,
as of
the Release Date, the Escrow Agent has not received written notice of any
Indemnification Claims, then the Escrowed Shares shall promptly (and in any
event no later than 5 business days thereafter) be released to
Seller.
(b) Subject
to the terms and conditions set forth in Section 9.04 of the Asset Purchase
Agreement, if, at any time on or prior to the Release Date, Parent desires
to
make a claim against the Escrowed Shares with respect to any Indemnification
Claim, then Parent shall, on or prior to the Release Date, deliver a written
claim notice (a “Claim
Notice”)
to
Seller and to the Escrow Agent. Such Claim Notice shall (i) state that Parent
believes in good faith that it is entitled to all or any portion of the Escrowed
Shares and certify that all requirements set forth in Article IX of the Asset
Purchase Agreement with respect to such indemnification have been satisfied;
(ii) contain a reasonably detailed description of the circumstances supporting
such belief; and (iii) indicate the good faith claimed amount of Damages
necessary to satisfy such Indemnification Claim (the “Claimed
Amount”)
and
what portion of the Escrowed Shares are expected in good faith to be necessary
to satisfy such Indemnification Claim. The number of Escrowed Shares, if any,
to
be released shall be determined in accordance with Section 8(d)
below.
(c) Within
30
days after receipt by Seller of a Claim Notice, Seller may deliver to Parent
and
to the Escrow Agent a written response (the “Response
Notice”)
in
which Seller may: (i) agree that a whole number of Escrowed Shares equal to
the
full Claimed Amount may be released from the Escrow Account to Parent; (ii)
agree that Escrowed Shares equal to part, but not all, of the Claimed Amount
(the “Agreed
Amount”)
may be
released from the Escrow Account to Parent; or (iii) indicate that no part
of
the Claimed Amount may be released from the Escrow Account to Parent. Any part
of the Claimed Amount that is not to be released to Parent shall be the
“Contested
Amount.”
(A) If
Seller
does not deliver a Response Notice within such 30-day period, then Seller shall
be deemed to have indicated that the entire Claimed Amount may be released
from
Escrow Account to Parent.
(B) If
Seller
delivers a Response Notice agreeing that Escrowed Shares equal to the full
Claimed Amount may be released from the Escrow Account to Parent, the Escrow
Agent shall promptly following the receipt of the Response Notice, deliver
to
Parent such number of Escrowed Shares equal to the Claimed
Amount.
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(C) If
Seller
delivers a Response Notice agreeing that Escrowed Shares equal to part, but
not
all, of the Claimed Amount may be released from the Escrow Account to Parent,
the Escrow Agent shall promptly following the receipt of the Response Notice
deliver to Parent such number of Escrowed Shares equal to the Agreed
Amount.
(D) If
Seller
delivers a Response Notice indicating that there is a Contested Amount, Seller
and Parent shall attempt in good faith to resolve the dispute related to the
Contested Amount. If Parent and Seller shall resolve such dispute, such
resolution shall be binding on Seller and Parent and any other Seller Indemnitee
and Purchaser Indemnitee, as applicable, and a settlement agreement shall be
signed by Parent and Seller and sent to the Escrow Agent, who shall, upon
receipt thereof, if applicable, release Escrowed Shares from the Escrow Account
in accordance with the specific instructions provided in such agreement.
(E) If
Seller
and Parent are unable to resolve the dispute relating to any Contested Amount
within 45 days after the delivery of the Claim Notice, the settlement of such
Contested Amount shall take place by arbitration, in accordance with the below
procedures, and then Escrow Agent shall continue to hold the Contested Amount
until Escrow Agent receives either: (i) a written notice signed by Parent and
Seller, providing specific instructions regarding the delivery of the Contested
Amount, if any, to be released from the Escrow Account; or (ii) a final
arbitration decision providing specific instructions regarding the delivery
of
any or all of such Contested Amount. The Contested Amount shall be settled
by
arbitration conducted by one arbitrator to be mutually agreed to by the parties;
provided, however, that if the parties cannot mutually agree on an arbitrator
within 15 days of any such written notice, then the arbitration shall be
conducted by a panel of three arbitrators, one selected jointly by Parent and
Buyer, the second selected by Seller and the third to be mutually agreed upon
by
the arbitrator selected by Parent and Buyer and the arbitrator selected by
Seller. The decision of the arbitrator(s), which, except as set forth below,
shall relate solely
to
whether Parent is entitled to receive the Contested Amount (or a portion
thereof) from the Escrow Fund pursuant to the applicable terms of the Asset
Purchase Agreement and this Agreement,
shall
be written and (a) shall be supported by written findings of fact and
conclusions of law which shall set forth the basis for the decision of the
arbitrator(s) and (b) shall provide specific instructions regarding the delivery
of any or all of the Contested Amount. The costs of any such arbitration
proceeding shall be shared equally by the parties unless otherwise determined
by
the arbitrator(s). The arbitrator(s) will also determine if the prevailing
party
is entitled to any award of attorneys’ fees and costs, which award, if any, will
be paid by the non-prevailing party. The decision of the arbitrator(s) shall
be
binding and conclusive upon the parties to this Agreement. Any such arbitration
shall be held in Xxxxxx County, Texas under the expedited procedures of the
commercial arbitration rules then in effect of the American Arbitration
Association.
(d) The
number of Escrowed Shares to be released in payment and settlement of any
Claimed Amount, Agreed Amount or all or any portion of the Contested Amount
which may be awarded to Parent pursuant to Section 8(c)(E) above shall be
determined by dividing such Claimed Amount, Agreed Amount or award, as
applicable, by the average closing sales price of one share of Parent Common
Stock as reported on the Nasdaq Global Market for the thirty (30) consecutive
trading days ending on the date that is one (1) trading day immediately
preceding the release of such shares (as adjusted as appropriate to reflect
any
stock splits, stock dividends, combinations, reorganizations, reclassifications
or similar events).
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9. No
Merger.
Nothing in this Agreement shall derogate from, or modify in any respect any
of
the terms and provisions of the Asset Purchase Agreement, including Article
IX
thereof, with respect to indemnification.
10. Escrow
Agent Compensation.
Except
as hereinafter provided, Escrow Agent shall be reimbursed solely by Parent
for
all actual out-of-pocket expenses incurred in performing the services required
hereunder. The fees of the Escrow Agent (which shall not exceed $200 per month
in the aggregate) and any replacement Escrow Agent shall be paid solely by
Parent.
11. Limitation
of Escrow Agent’s Liability.
(a) Except
for Escrow Agent’s gross negligence or willful misconduct, Escrow Agent shall
not be responsible or liable in any manner whatsoever for the sufficiency,
correctness, genuineness or validity of any instrument deposited with it, or
any
notice or demand given to it or for the form of execution of any such
instrument, notice or demand or for the identification, authority or rights
of
any person executing, depositing or giving the same or for the terms and
conditions of any instrument, pursuant to which the parties may
act.
(b) Escrow
Agent shall not have any duties or responsibilities except those expressly
set
forth in this Agreement and shall not incur any liability: (i) in acting upon
any signature, notice, demand, request, waiver, consent, receipt or other paper
or document reasonably believed by Escrow Agent to be genuine and Escrow Agent
may assume that any Person purporting to give it any notice on behalf of any
party in accordance with the provisions hereof has been duly authorized to
do
so; or (ii) in otherwise acting or failing to act under this Agreement, except
in the case of Escrow Agent’s gross negligence or willful
misconduct.
(c) Escrow
Agent shall not be bound by any modification, cancellation or rescission of
this
Agreement unless the same is in writing and signed by the other parties hereto
and a copy thereof has been received by Escrow Agent.
(d) Escrow
Agent has executed this Agreement for the sole purpose of agreeing to act as
such in accordance with the terms of this Agreement.
(e) Subject
to Section 8 hereof, the parties hereto further agree to jointly and severally
indemnify Escrow Agent from and against any and all Damages, including
reasonable attorneys’ fees which may be asserted against it or to which it may
be exposed or may incur by reason of its performance hereunder, except when
such
performance was grossly or willfully negligent.
12. Successor
Escrow Agent.
In the
event the Escrow Agent becomes unavailable or unwilling to continue as escrow
agent under this Agreement, the Escrow Agent may resign and be discharged from
its duties and obligations hereunder by giving its written resignation to the
parties to this Agreement. Such resignation shall take effect not less than
30
days after it is given to all parties hereto; provided, however, that such
resignation shall in no event take effect before the successor to the Escrow
Agent shall have been appointed pursuant to this Section 12. Parent and Seller
shall designate a successor to the Escrow Agent prior to the expiration of
such
30-day period by giving written notice to the Escrow Agent. The Escrow Agent
shall promptly transfer all assets in the Escrow Account to such designated
successor. If no successor Escrow Agent is
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designated
prior to the expiration of such 30-day period, the Escrow Agent can apply to
a
court of competent jurisdiction for the appointment of a successor Escrow Agent
or for other appropriate relief. Parent may appoint a successor Escrow Agent
only with the consent of Seller (which consent shall not be unreasonably
withheld or delayed). The Escrow Agent shall act in accordance with written
instructions from Parent and Seller as to the transfer of the Escrow Fund to
a
successor escrow agent.
13. Removal
of Escrow Agent.
The
Escrow Agent may be removed at any time by mutual agreement of Parent and Buyer,
on the one hand, and Seller, on the other hand, by giving not less than 30
days’
prior written notice to the Escrow Agent. Prior to the expiration of such 30-day
period, Parent and Buyer, on the one hand, and Seller, on the other hand, shall
designate, by mutual consent, a successor escrow agent. If no successor escrow
agent is appointed within such 30-day period, the Escrow Agent may deposit
the
amounts remaining in the Escrow Fund with a court of competent jurisdiction
located in Austin, Texas, whereupon the Escrow Agent shall be discharged of
all
duties and obligations hereunder.
14. Miscellaneous.
(a) Notice.
All
notices hereunder shall be given in accordance with the notice provisions of
the
Asset Purchase Agreement. In addition, notices to Escrow Agent shall be
addressed to it at:
Continental
Stock Transfer & Trust Company
00
Xxxxxxx Xxxxx, 0xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Compliance
In
addition, notices to Seller shall be addressed to:
Digital
Consulting & Software Services, Inc.
Xxx
Xxxxx
Xxxxx Xxxxxx Xxxx., Xxxxx 000
Xxxxx
Xxxx, Xxxxx 00000-0000
Attention:
Chief Financial Officer
Phone:
(000) 000-0000
Facsimile:
(000) 000-0000
with
a
copy (which shall not constitute notice) to:
Mayer,
Brown, Xxxx & Maw LLP
000
Xxxxxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
Attention:
Xxxxxx X. Xxxx, Xx.
Phone:
(000) 000-0000
Facsimile:
(000) 000-0000
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Notices
to Parent or Buyer shall be addressed to:
Perficient,
Inc.
1120
South Capital of Xxxxx Xxxxxxx
Xxxxxxxx
0, Xxxxx 000
Xxxxxx,
Xxxxx 00000
Attention:
Xxxx X. XxXxxxxx, Chief Executive Officer
Phone:
(000) 000-0000
Facsimile:
(000) 000-0000
with
a
copy (which shall not constitute notice) to:
Xxxxxx
& Xxxxxx LLP
The
Terrace 7
0000
Xxx
Xxxxxxx, Xxxxx 000
Xxxxxx,
Xxxxx 00000
Attention:
X. Xxxxx Xxx III, Esq.
Phone:
(000) 000-0000
Facsimile:
(000) 000-0000
(b) Successors
and Assigns.
This
Agreement shall be binding upon each of the parties hereto and each of their
respective successors and assigns, if any. Nothing in this Agreement is intended
to confer, or shall be deemed to confer, any rights or remedies upon any person
or entity other than the parties hereto and their successors and assigns. This
Agreement shall inure to the benefit of: Seller, Parent, Escrow Agent and their
respective successors and assigns, if any, of the foregoing.
(c) Amendments.
This
Agreement may not be amended, modified, altered or supplemented other than
by
means of a written instrument duly executed and delivered on behalf of all
of
the parties hereto.
(d) Entire
Agreement.
This
Agreement and the other agreements referred to herein set forth the entire
understanding of the parties hereto relating to the subject matter hereof and
thereof and supersede all prior agreements and understandings among or between
any of the parties relating to the subject matter hereof and
thereof.
(e) Tax
Reporting Information and Certification of Tax Identification
Numbers.
(i) The
parties hereto agree that, for tax reporting purposes, all dividends or other
income, if any, attributable to the Escrowed Shares or any other amount held
in
escrow by the Escrow Agent pursuant to this Agreement shall be allocable to
Seller or, upon notice to the Escrow Agent, the record holders of the Escrowed
Shares on a proportionate basis. The parties agree to report the deposit of
the
Escrowed Shares into escrow or the deposit of any other amount held in escrow
by
the Escrow Agent, and the release of such amounts pursuant to
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Sections
7 and 8, as an installment sale, to be taken into account under the installment
method described in section 453 of the Internal Revenue Code of 1986, as
amended.
(ii) The
parties agree to provide the Escrow Agent with certified tax identification
numbers for each of them by furnishing appropriate forms W-9 (or Forms W-8,
in
the case of non-U.S. persons) and other forms and documents that the Escrow
Agent may reasonably request (collectively, “Tax
Reporting Documentation”)
to the
Escrow Agent within 30 days after the date hereof. Upon any transfer of the
record ownership of the Escrowed Shares by Seller to the Seller Interest
Holders, the appropriate Tax Reporting Documentation shall be provided to Escrow
Agent by the Seller Interest Holders. The parties hereto understand that, if
such Tax Reporting Documentation is not so certified to the Escrow Agent, the
Escrow Agent may be required by the Internal Revenue Code, as it may be amended
from time to time, to withhold a portion of any interest or other income earned
on the investment of monies or other property held by the Escrow Agent pursuant
to this Agreement.
(iii) The
Escrow Agent shall comply with all applicable filing or reporting requirements
attributable to the deposit of the Escrowed Shares into escrow or the deposit
of
any other amount held in escrow by the Escrow Agent.
(f) Construction.
(i) For
purposes of this Agreement, whenever the context requires: the singular number
shall include the plural, and vice versa; the masculine gender shall include
the
feminine and neuter genders; the feminine gender shall include the masculine
and
neuter genders; and the neuter gender shall include the masculine and feminine
genders.
(ii) The
parties hereto agree that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not be applied
in the construction or interpretation of this Agreement.
(iii) As
used
in this Agreement, the words “include” and “including,” and variations thereof,
shall not be deemed to be terms of limitation, but rather shall be deemed to
be
followed by the words “without limitation.”
(iv) This
Agreement shall be construed pursuant to the laws of the State of Texas in
effect at the time of such construction without giving effect to conflicts
of
laws principles.
(v) Nothing
in this Agreement shall be construed to limit or abridge the rights and
obligations of Parent, Buyer, the Company or Seller under the Asset Purchase
Agreement.
(g) Termination.
This
Agreement shall terminate upon the earliest occurrence of any of the following
events: (i) the written agreement of Parent, Buyer and Seller; or (ii)
upon
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the
delivery by Escrow Agent of all of the Escrowed Shares in accordance with the
terms of this Agreement; provided, however, that Section 8(c) shall survive
any
termination of this Agreement.
(h) Incorporation.
The
preamble to this Agreement is incorporated herein by this
reference.
(i) Severability.
In the
event any provision of this Agreement shall be held invalid or unenforceable
by
any court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision of this Agreement and each and every other
provision of this Agreement shall continue in full force and
effect.
(j) Waiver
of Breach.
The
waiver by any party hereto of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any other or subsequent breach by
any
party.
(k) Section
Headings.
Section
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this
Agreement.
(l) Counterparts
and Facsimile Signatures.
This
Agreement may be executed in one or more counterparts in which event all of
said
counterparts shall be deemed to constitute one original of this Agreement.
Furthermore, this Agreement may be executed by the facsimile signature of any
party hereto, it being agreed that facsimile signature of any party hereto
shall
be deemed an ink-signed original for all purposes.
[Signature
page follows.]
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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
|
Parent
Perficient,
Inc.
|
Seller
Digital
Consulting & Software Services, Inc.
|
|
|
By:
/s/ Xxxx X. XxXxxxxx
|
/s/
Xxxxxx Xxxxxxxxx
|
|
|
Printed
Name: Xxxx X. XxXxxxxx
|
Printed
Name: Xxxxxx Xxxxxxxxx
|
|
|
Title:
Chief Executive Officer
|
Title:
Chief Operating Officer
|
|
|
Buyer
Perficient
DCSS, Inc.
|
Escrow
Agent
Continental
Stock Transfer & Trust Company
|
|
|
By:
/s/ Xxxx X. XxXxxxxx
|
By:
/s/ Xxxxx X. XxXxxxx
|
|
|
Printed
Name: Xxxx X. XxXxxxxx
|
Printed
Name:Xxxxx X. XxXxxxx
|
|
|
Title:
Chief Executive Officer
|
Title:
CFO
|
|
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